EXHIBIT 4.6
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement"), dated as of February 21,
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1997, among Fleet National Bank, as escrow agent (in such capacity, the "Escrow
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Agent"), Fleet National Bank, as Trustee (in such capacity, the "Trustee") under
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the Indenture (as defined herein), and UNIFI Communications, Inc., a Delaware
corporation (the "Company").
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RECITALS
A. Pursuant to the Indenture, dated as of February 21, 1997 (the
"Indenture"), between the Company and the Trustee, the Company is issuing
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$175,000,000 aggregate principal amount of its 14% Senior Notes due 2004, Series
A and Series B (the "Notes").
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B. As security for its obligations under the Notes and the
Indenture, the Company hereby grants to the Trustee, for the benefit of the
holders of the Notes, a security interest in and lien upon the Escrow Account
(as defined herein).
C. The parties have entered into this Agreement in order to set
forth the conditions upon which, and the manner in which, funds will be
disbursed from the Escrow Account and released from the security interest and
lien described above.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS. In addition to any other defined terms used
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herein, the following terms shall constitute defined terms for purposes of this
Agreement and shall have the meanings set forth below:
"ADDITIONAL INTEREST" shall have the meaning ascribed to that term in
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the Registration Rights Agreement relating to the Notes, dated as of February
21, 1997, between the Company and Xxxxx Xxxxxx Inc., as initial purchaser of the
Notes.
"AFFILIATE" of any specified person means (i) any other person which,
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directly or indirectly, is in control of, is controlled by or is under common
control with such specified person or (ii) any other person who is a director or
officer
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(A) of such specified person, (B) of any subsidiary of such specified person or
(C) of any person described in clause (i) above or (iii) any person in which
such person has, directly or indirectly, a 5% or greater voting or economic
interest or the power to control. For purposes of this definition, control of a
person means the power, directly or indirectly, to direct or cause the direction
of the management or policies of such person whether through the ownership of
voting securities or by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"APPLIED" means that disbursed funds have been applied (i) to the
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payment of interest on the Notes, (ii) pursuant to Section 3(c) or (iii)
pursuant to Section 6(b)(iii).
"AVAILABLE FUNDS" means (A) the sum of (i) the Initial Escrow Amount
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and (ii) interest earned on the funds in the Escrow Account (including holdings
of U.S. Government Securities), less (B) the aggregate disbursements previously
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made pursuant to this Agreement.
"COLLATERAL" shall have the meaning given in Section 6(a) hereof.
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"ESCROW ACCOUNT" shall mean the escrow account established pursuant to
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Section 2.
"ESCROW ACCOUNT STATEMENT" shall have the meaning given in Section
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2(f).
"INITIAL ESCROW AMOUNT" shall mean approximately $46 million.
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"INTEREST PAYMENT DATE" means each of September 1, 1997, March 1,
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1998, September 1, 1998 and March 1, 1999.
"ISSUE DATE" has the meaning set forth in the Indenture.
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"PAYMENT NOTICE AND DISBURSEMENT REQUEST" means a notice sent by the
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Trustee to the Escrow Agent requesting a disbursement of funds from the Escrow
Account, in substantially the form of Exhibit A hereto. Each Payment Notice and
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Disbursement Request shall be signed by an officer of the Trustee.
"REVISED ARTICLE 8" means Uniform Commercial Code, Revised Article 8,
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Investment Securities (with conforming
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Amendments to Articles 1, 3, 4, 5, 9 and 10) 1994, Official Text, regardless of
whether Revised Article 8 has been enacted by the State of New York or any other
applicable jurisdiction.
"U.S. GOVERNMENT SECURITIES" means security entitlements (as defined
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in Revised Article 8) and securities that are (x) direct obligations of the
United States of America for the payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any such U.S. Government obligation or a specific
payment of principal of or interest on any such U.S. Government obligation held
by such custodian for the account of the holder of such depository receipt;
provided that (except as required by law) such custodian is not authorized to
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make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government obligation or the specific payment of principal of or interest on the
U.S. Government obligation evidenced by such depository receipt.
2. ESCROW ACCOUNT; ESCROW AGENT.
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(a) Appointment of Escrow Agent. The Company and the Trustee hereby
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appoint the Escrow Agent, and the Escrow Agent hereby accepts appointment, as
escrow agent, under the terms and conditions of this Agreement.
(b) Establishment of Escrow Account. Concurrently with the execution
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and delivery hereof, the Escrow Agent shall establish an Escrow Account entitled
the "Fleet National Bank, as Escrow Agent for UNIFI Escrow Account" pledged by
the Company to Fleet National Bank, as Trustee (the "Escrow Account") at its
office located at Rochester, New York. All funds accepted by the Escrow Agent
pursuant to this Agreement shall be held for the exclusive benefit of the
Trustee and the ratable benefit of the holders of the Notes. All such funds
shall be held in the Escrow Account until disbursed or paid in accordance with
the terms hereof. The Escrow Account, the funds held therein and any U.S.
Government Securities held by the Escrow Agent shall be under the sole dominion
and control of the Escrow Agent for the benefit of the Trustee and the ratable
benefit of the holders of the Notes. On the Issue Date, the Company shall
deliver the Initial Escrow
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Amount in immediately available funds to the Escrow Agent for deposit into the
Escrow Account against the Escrow Agent's written acknowledgment and receipt of
the Initial Escrow Amount.
(c) Escrow Agent Compensation. The Company shall pay to the Escrow
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Agent such compensation for services to be performed by it under this Agreement
as the Company and the Escrow Agent may agree in writing from time to time. The
Escrow Agent shall be paid any compensation owed to it directly by the Company
and shall not disburse from the Escrow Account any such amounts.
The Company shall reimburse the Escrow Agent upon request for all
reasonable expenses, disbursements, and advances incurred or made by the Escrow
Agent in implementing any of the provisions of this Agreement, including
compensation and the reasonable expenses and disbursements of its counsel. The
Escrow Agent shall be paid any such expenses owed to it directly by the Company
and shall not disburse from the Escrow Account any such amounts.
(d) Investment of Funds in Escrow Account. Funds deposited in the
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Escrow Account shall be invested and reinvested only upon the following terms
and conditions:
(i) Acceptable Investments. All funds deposited or held in the
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Escrow Account at any time shall be invested by the Escrow Agent in U.S.
Government Securities in accordance with the Company's written instructions
from time to time to the Escrow Agent; provided, however, that the Company
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shall only designate investment of funds in U.S. Government Securities
maturing in an amount sufficient to and/or generating interest income
sufficient to, when added to the balance of funds held in the Escrow
Account, provide for the payment of interest on the outstanding Notes on
the Interest Payment Date beginning on and including September 1, 1997 and
through and including the Interest Payment Date on March 1, 1999; provided,
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further, however, that any such written instruction shall specify the
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particular investment to be made, shall state that such investment is
authorized to be made hereby and in particular satisfies the requirements
of the preceding proviso, shall contain the certification referred to in
Section 2(d)(ii), if required, and shall be executed by any officer of the
Company. All U.S. Government Securities shall be assigned to and held in
the possession of, or, in the case of U.S. Government Securities maintained
in book-entry form with the Federal Reserve Bank, transferred to a book-
entry account in the
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name of, the Escrow Agent, for the benefit of the Trustee and the ratable
benefit of the holders of the Notes, except that U.S. Government Securities
maintained in book-entry form with the Federal Reserve Bank shall be
transferred to a book-entry account in the name of the Escrow Agent at the
Federal Reserve Bank that includes only U.S. Government Securities held by
the Escrow Agent for its customers and segregated by separate recordation
in the books and records of the Escrow Agent.
(ii) Security Interest in Investments. No investment of funds in
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the Escrow Account shall be made unless the Company has certified to the
Escrow Agent and the Trustee that, upon such investment, the Trustee will
have a first priority perfected security interest in the applicable
investment. On the Issue Date, and on each Interest Payment Date
thereafter until the date upon which the balance of the Available Funds
shall have been reduced to zero, each of the Trustee and the Escrow Agent
shall receive an Opinion of Counsel (as such term is defined in the
Indenture) to the Company, dated each such date as applicable, which
opinion shall meet the requirements of Section 314(b) of the Trust
Indenture Act of 1939, as amended (the "TIA") and shall comply with Section
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10.02 of the Indenture.
(iii) Principal and Interest. All principal and interest earned
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on funds invested in U.S. Government Securities shall be deposited in the
Escrow Account as additional Collateral for the benefit of the Trustee and
the ratable benefit of the holders of the Notes and shall be reinvested in
accordance with the terms hereof at the Company's written instruction.
(iv) Limitation on Escrow Agent's Responsibilities. The Escrow
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Agent's sole responsibilities under this Section 2 shall be (A) to retain
possession of certificated U.S. Government Securities and to be the
registered or designated owner of U.S. Government Securities which are not
certificated, if any, (B) to follow the Company's written instructions
given in accordance with Section 2(d)(i), (C) to invest and reinvest funds
pursuant to this Section 2(d), (D) to maintain possession of, and dominion
and control over, the Escrow Account and the funds and U.S. Government
Securities therein, unless and until such funds are permitted to be
released or disbursed in accordance with the terms of this Agreement and
(E) to use reasonable efforts to reduce to cash such U.S. Government
Securities as may be required to fund any disbursement or payment in
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accordance with Section 3. In connection with clause (A) above, the Escrow
Agent will maintain continuous possession in the State of New York of
certificated U.S. Government Securities and cash included in the Collateral
and will cause uncertificated U.S. Government Securities, if any, to be
registered in the book-entry system of, and transferred to an account of
the Escrow Agent or a sub-agent of the Escrow Agent at, the Federal Reserve
Bank of New York. Except as provided in Section 6, the Escrow Agent shall
have no other responsibilities with respect to perfecting or maintaining
the perfection of the Escrow Agent's security interest in the Collateral
and shall not be required to file any instrument, document or notice in any
public office at any time or times. In connection with clause (D) above,
and subject to the following sentence, the Escrow Agent shall not be
required to reduce to cash any U.S. Government Securities to fund any
disbursement or payment in accordance with Section 3 in the absence of
written instructions signed by an officer of the Company specifying the
particular investment to liquidate. If no such written instructions are
received, the Escrow Agent shall liquidate those U.S. Government Securities
having the lowest interest rate per annum or if none such exist, those
having the nearest maturity.
(v) Manner of Investment. Funds deposited in the Escrow Account
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shall initially be invested in a manner such that there will be sufficient
funds available without any further investment by the Company to cover all
interest due on the outstanding Notes, as such interest becomes due, for
each Interest Payment Date occurring from the Issue Date and ending on (and
including) March 1, 1999, provided that such investments shall have such
maturities and/or interest payment dates such that funds will be available
with respect to each such Interest Payment Date no later than the time the
Escrow Agent is required to distribute such funds to the Trustee pursuant
to Section 3(a). The Escrow Agent shall have no responsibility for
determining whether funds held in the Escrow Account shall have been
invested in such a manner so as to comply with the requirements of this
clause (v).
(e) Substitution of Escrow Agent. The Escrow Agent may resign by
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giving no less than 30 days' prior written notice to the Company and the
Trustee. Such resignation shall take effect upon the later to occur of (i)
delivery of all funds and U.S. Government Securities maintained by the Escrow
Agent hereunder and copies of all books, records, plans and other
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documents in the Escrow Agent's possession relating to such funds or U.S.
Government Securities or this Agreement to a successor escrow agent mutually
approved by the Company and the Trustee (which approvals shall not be
unreasonably withheld or delayed) and (ii) the Company, the Trustee and such
successor escrow agent entering into this Agreement or any written successor
agreement no less favorable to the interests of the holders of the Notes and the
Trustee than this Agreement; and the Escrow Agent shall thereupon be discharged
of all obligations under this Agreement and shall have no further duties,
obligations or responsibilities in connection herewith, except as set forth in
Section 4. If a successor escrow agent has not been appointed or has not
accepted such appointment within 30 days after notice of resignation is given to
the Company, the Escrow Agent may apply to a court of competent jurisdiction for
the appointment of a successor escrow agent.
(f) Escrow Account Statement. At least 30 days prior to each Interest
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Payment Date, the Escrow Agent shall deliver to the Company and the Trustee a
statement signed by the Escrow Agent setting forth with reasonable particularity
the balance of funds then in the Escrow Account and the manner in which such
funds are invested ("Escrow Account Statement"). The parties hereto irrevocably
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instruct the Escrow Agent that on the first date upon which the balance in the
Escrow Account (including the holdings of all U.S. Government Securities) is
reduced to zero, the Escrow Agent shall deliver to the Company and to the
Trustee a notice that the balance in the Escrow Account has been reduced to
zero.
3. DISBURSEMENTS.
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(a) Payment Notice and Disbursement Request; Disbursements. The
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Company shall give written notice to the Trustee and the Escrow Agent at least
seven (7) business days prior to an Interest Payment Date as to whether the
related interest payment on the Notes is to be made pursuant to a disbursement
from the Escrow Account; and the Trustee shall, at least five (5) business days
prior to an Interest Payment Date, submit to the Escrow Agent a completed
Payment Notice and Disbursement Request substantially in the form of Exhibit A
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hereto with blanks appropriately filed in.
The Escrow Agent's disbursement pursuant to any Payment Notice and
Disbursement Request shall be subject to the satisfaction of the applicable
conditions set forth in Section 3(b). Provided such Payment Notice and
Disbursement Request is not rejected by it, the Escrow Agent, in no event later
than
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10:00 a.m. on the Interest Payment Date, shall disburse the funds requested
in such Payment Notice and Disbursement Request by wire or book-entry transfer
of immediately available funds to the account of the Trustee for the benefit of
the holders of the Notes. The Escrow Agent shall notify the Trustee as soon as
reasonably possible (but not later than two (2) business days from the date of
receipt of the Payment Notice and Disbursement Request) if any Payment Notice
and Disbursement Request is rejected and the reason(s) therefor. In the event
such rejection is based upon nonsatisfaction of the condition in Section 3(b)(I)
below, the Trustee shall thereupon resubmit the Payment Notice and Disbursement
Request with appropriate changes.
(b) Conditions Precedent to Disbursement. The Escrow Agent's payment
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of any disbursement shall be made only if: (I) the Trustee shall have
submitted, in accordance with the provisions of Section 3(a) herein, a completed
Payment Notice and Disbursement Request to the Escrow Agent substantially in the
form of Exhibit A with blanks appropriately filled in and (II) the Escrow Agent
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shall not have received any notice from the Trustee that as a result of an Event
of Default (as defined in the Indenture) the indebtedness represented by the
Notes has been accelerated and has become due and payable (in which event the
Escrow Agent shall apply all Available Funds as required by Section 6(b)(iii)).
(c) Retired Notes. In the event a portion of the Notes has been
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retired by the Company and submitted to the Trustee for cancellation and there
is no Default or Event of Default under the Indenture and no Additional Interest
is accruing or remains unpaid, funds representing the lesser of (A) the excess
of the amount sufficient to pay interest through and including March 1, 1999 on
the Notes not so retired and (B) the interest payments which have not previously
been made on such retired Notes for each Interest Payment Date through the
Interest Payment Date to occur on March 1, 1999 shall, upon the written request
of the Company to the Escrow Agent and the Trustee, be paid to the Company upon
compliance with the release of collateral provisions of the TIA (such compliance
to be determined as set forth in an Opinion of Counsel reasonably satisfactory
to the Escrow Agent) and upon receipt by an Escrow Agent of a notice relating
thereto from the Trustee.
(d) Satisfaction of Obligations on Interest Payment Date(s). Upon
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written notice from the Trustee that the Company has satisfied all of its
obligations under the Indenture to pay interest on the Notes on an Interest
Payment Date, if no Default has occurred and is continuing under the Indenture
and no
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Additional Interest is accruing or remains unpaid, the Escrow Agent shall
upon written request of the Company, release to the Company the amount set forth
in the Notice and Disbursement Request as funds in the Escrow Account equal to
the amount that would have been required to pay interest on all outstanding
Notes on such Interest Payment Date. Upon written notice from the Trustee that
the Company has satisfied all of its obligations under the Indenture to pay
interest on the Notes on all Interest Payment Dates, if no Default or Event of
Default has occurred and is continuing under the Indenture and no Additional
Interest is accruing or remains unpaid, the Escrow Agent shall, upon request of
the Company, release all remaining funds in the Escrow Account to the Company.
(e) Excess of Available Funds. Upon written notice from the Trustee
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that the Available Funds exceed the amount sufficient, in the opinion of a
nationally recognized firm of independent public accountants selected by the
Company or the Company's regular independent public accountants, to provide for
payment in full of the first four scheduled interest payments due on the Notes
(or, in the event an interest payment or payments have been made, an amount
sufficient to provide for payment in full of any interest payments remaining, up
to and including the fourth scheduled interest payment) if no Default has
occurred and is continuing under the Indenture and no Additional Interest is
accruing or remains unpaid, the Escrow Agent shall, upon written request of the
Company, release to the Company the amount set forth in the Notice and
Disbursement Request as funds in the Escrow Account equal to the amount of such
excess Available Funds.
4. LIMITATION OF THE ESCROW AGENT'S LIABILITY; RESPONSIBILITIES OF
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THE ESCROW AGENT. The Escrow Agent's responsibility and liability under this
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Agreement shall be limited as follows: (i) the Escrow Agent does not represent,
warrant or guaranty to the holders of the Notes from time to time the
performance of the Company; (ii) the Escrow Agent shall have no responsibility
to the Company or the holders of the Notes or the Trustee from time to time as a
consequence of performance or non-performance by the Escrow Agent hereunder,
except for any gross negligence or willful misconduct of the Escrow Agent; (iii)
the Company shall remain solely responsible for all aspects of the Company's
business and conduct; and (iv) the Escrow Agent is not obligated to supervise,
inspect or inform the Company or any third party of any matter referred to
above; provided that nothing contained in this Section 4 shall limit the
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liability of the Escrow Agent for breach of its responsibilities as provided in
this Agreement.
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No implied covenants or obligations shall be inferred from this
Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by the
provisions of any agreement beyond the specific terms hereof. Specifically and
without limiting the foregoing, the Escrow Agent shall in no event have any
liability in connection with its investment, reinvestment or liquidation, in
good faith and in accordance with the terms hereof, of any funds or U.S.
Government Securities held by it hereunder, including without limitation any
liability for any delay not resulting from gross negligence or willful
misconduct in such investment, reinvestment or liquidation, or for any loss of
principal or income incident to any such delay. In addition to the extent the
Escrow Agent has not received written investment instructions from the Company
it shall have no duty to invest any funds deposited in the Escrow Account, and
it shall not be liable for any lost interest as a result thereof.
The Escrow Agent shall be entitled to rely upon any judicial order or
judgment, upon any written opinion of counsel or upon any certification,
instruction, notice, or other writing delivered to it by the Company or the
Trustee in compliance with the provisions of this Agreement without being
required to determine the authenticity or the correctness of any fact stated
therein or the propriety or validity of service thereof. The Escrow Agent may
act in reliance upon any instrument comporting with the provisions of this
Agreement or signature believed by it to be genuine and may assume that any
person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so.
At any time, the Escrow Agent may request in writing an instruction in
writing from the Company, and may at its own option include in such request the
course of action it proposes to take and the date on which it proposes to act,
regarding any matter arising in connection with its duties and obligations
hereunder; provided, however, that the Escrow Agent shall state in such request
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that it believes in good faith that such proposed course of action is consistent
with another identified provision of this Agreement. The Escrow Agent shall not
be liable to the Company for acting without the Company's consent in accordance
with such a proposal on or after the date specified therein if (i) the specified
date is at least two business days after the Company receives the Escrow Agent's
request for instructions and its proposed course of action, and (ii) prior to so
acting, the Escrow Agent has not received the written instructions requested
from the Company.
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The Escrow Agent may act pursuant to the written advice of counsel
chosen by it with respect to any matter relating to this Agreement and (subject
to Section 4(a)(ii)) shall not be liable for any action taken or omitted in
accordance with such advice.
The Escrow Agent shall not be called upon to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder.
In the event of any ambiguity in the provisions of this Agreement with
respect to any funds or property deposited hereunder, the Escrow Agent shall be
entitled to refuse to comply with any and all claims, demands or instructions
with respect to such funds or property, and the Escrow Agent shall not be or
become liable for its failure or refusal to comply with conflicting claims,
demands or instructions. The Escrow Agent shall be entitled to refuse to act
until either any conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by agreement
between the conflicting claimants as evidenced in a writing, satisfactory to the
Escrow Agent, or the Escrow Agent shall have received security or an indemnity
satisfactory to the Escrow Agent sufficient to save the Escrow Agent harmless
from and against any and all loss, liability or expense which the Escrow Agent
may incur by reason of its acting. The Escrow Agent may in addition elect in
its sole option to commence an interpleader action or seek other judicial relief
or orders as the Escrow Agent may deem necessary.
No provision of this Agreement shall require the Escrow Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
5. INDEMNITY. The Company shall indemnify, hold harmless and defend
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the Escrow Agent and its directors, officers, agents, employees and controlling
persons, from and against any and all claims, actions, obligations, liabilities
and expenses, including defense costs, investigative fees and costs, legal fees,
and claims for damages, arising from the Escrow Agent's performance under this
Agreement, except to the extent that such liability, expense or claim is
directly attributable to the gross negligence or willful misconduct of any of
the foregoing persons. The provisions of this Section shall survive any
termination, satisfaction or discharge of this Agreement as well as the
resignation or removal of the Escrow Agent.
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6. GRANT OF SECURITY INTEREST; INSTRUCTIONS TO ESCROW AGENT.
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(a) The Company hereby irrevocably grants a first priority security
interest in and pledges, assigns and sets over to the Trustee for the benefit of
the Trustee and the ratable benefit of the holders of the Notes all of the
Company's right, title and interest in the following investment property and
other personal property of the Escrow Account, and all property now or hereafter
placed or deposited in, or delivered to the Escrow Agent for placement or
deposit in, the Escrow Account, including, without limitation, all funds held
therein, all U.S. Government Securities held by (or otherwise maintained in the
name of) the Escrow Agent pursuant to Section 2, as well as all rights of the
Company under this Agreement and the proceeds of all of the foregoing
(collectively, the "Collateral"), in order to secure all obligations and
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indebtedness of the Company under the Notes and any other obligation, now or
hereafter arising, of every kind and nature, owed by the Company under the
Indenture to the Trustee or the holders of the Notes or to the Trustee. The
Escrow Agent hereby acknowledges the Trustee's security interest (but not as to
priority) as set forth above. The Company shall take all actions necessary on
its part to insure the continuance of a first priority security interest in the
Collateral in favor of the Trustee in order to secure all such obligations and
indebtedness. As used herein, the term "investment property" shall have the
meaning assigned to that term in Revised Article 8. In addition to the
foregoing, it is the intention of the parties that the Escrow Account constitute
a "securities account" (as defined in Revised Article 8) subject to the
"control" (as defined in Revised Article 8) of the Escrow Agreement.
(b) The Company and the Trustee hereby irrevocably instruct the Escrow
Agent to, and the Escrow Agent shall (i) (A) maintain sole dominion and control
over funds and U.S. Government Securities in the Escrow Account for the benefit
of the Trustee to the extent specifically required herein, (B) maintain, or
cause its agent within the State of New York to maintain, possession of all
certificated U.S. Government Securities purchased hereunder that are physically
possessed by the Escrow Agent in order for the Trustee to enjoy a continuous
perfected
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first priority security interest therein under the law of the State of New York
(the Company hereby agreeing that in the event any certificated U.S. Government
Securities are in the possession of the Company or a third party, the Company
shall undertake to deliver all such certificates to the Escrow Agent), (C) take
all steps specified by the Company pursuant to paragraph (a) above to cause the
Trustee to enjoy a continuous perfected first priority security interest under
the New York Uniform Commercial Code and any applicable law of the State of New
York in all U.S. Government Securities purchased hereunder that are not
certificated, if any, and (D) maintain the Collateral free and clear of all
liens, security interests, safekeeping or other charges, demands and claims
against the Escrow Agent of any nature now or hereafter existing in favor of
anyone other than the Trustee and the holders of the Notes; (ii) promptly notify
the Trustee if the Escrow Agent receives written notice that any person other
than the Trustee has a lien or security interest upon any portion of the
Collateral and (iii) in addition to disbursing amounts held in escrow pursuant
to any Payment Notice and Disbursement Requests given to it by the Trustee
pursuant to Section 3, upon receipt of written notice from the Trustee of the
acceleration of the maturity of the Notes, and direction from the Trustee to
disburse all Available Funds to the Trustee, as promptly as practicable, after
following, if it so chooses, the procedures set forth in the fourth paragraph of
Section 4(a), disburse all funds held in the Escrow Account to the Trustee and
transfer title to all U.S. Government Securities held by the Escrow Agent
hereunder to the Trustee. The lien and security interest provided for by this
Section 6 shall automatically terminate and cease as to, and shall not extend or
apply to, and the Trustee shall have no security interest in, any funds
disbursed by the Escrow Agent to the Company pursuant to this Agreement to the
extent not inconsistent with the terms hereof. Not withstanding any other
provisions contained in this Agreement, the Escrow Agent shall act solely as the
Trustee's agent in connection with its duties under this Section 6 or any other
duties herein relating to the Escrow Account or any funds or U.S. Government
Securities held thereunder. The Escrow Agent shall not have any right to receive
compensation from the Trustee and shall have no authority to obligate the
Trustee or to subordinate, compromise or pledge its security interest hereunder.
Accordingly, the Escrow Agent is hereby directed to cooperate with the Trustee
in the exercise of its rights in the Collateral provided for herein.
(c) Any money and U.S. Government Securities collected by the Trustee
pursuant to Section 6(b)(iii) shall be applied as provided in Section 6.10 of
the Indenture. Any surplus of such cash or cash proceeds held by the Trustee
and remaining after the 91st day after payment in full of all the obligations
under the Indenture shall be paid over to the Company or to whomsoever may be
lawfully entitled to receive such surplus or as a court of competent
jurisdiction may direct.
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(d) Upon demand, the Company will execute and deliver to the Trustee
such instruments and documents as the Trustee may reasonably deem necessary or
advisable to confirm or perfect the rights of the Trustee under this Agreement
and the Trustee's interest in the Collateral. The Trustee shall be entitled to
take all necessary action to preserve and protect the security interest created
hereby as a lien and encumbrance upon the Collateral.
(e) The Company hereby appoints the Trustee as its attorney-in-fact
with full power of substitution to do any act which the Company is obligated
hereto to do, and the Trustee may exercise such rights as the Company might
exercise with respect to the Collateral and take any action in the Company's
name to protect the Trustee's security interest hereunder. In addition to the
rights provided under Section 6(b)(iii) hereof, upon an Event of Default as
defined in the Indenture and for so long as such Event of Default continues, the
Trustee may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party under the Uniform Commercial Code of the State
of New York or other applicable law, and the Trustee may also upon obtaining
possession of the Collateral as set forth herein, without notice to the Company
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's board or at
any of the Trustee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Trustee may deem commercially
reasonable. The Company acknowledges and agrees that any such private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale. The Company agrees that, to the extent notice of sale shall
be required by law, at least ten (10) days' notice to the Company of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Trustee shall not be
obligated to make any sale regardless of notice of sale having been given. The
Trustee may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
7. TERMINATION. This Agreement shall terminate automatically ten
-----------
(10) days following disbursement of all funds remaining in the Escrow Account
(including U.S. Government Securities), unless sooner terminated by agreement of
the parties hereto (in accordance with the terms hereof and not in violation of
the Indenture; provided, that the Trustee may not agree to terminate unless it
--------
has received the consent of 100% of the
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holders of all of the Notes outstanding); provided, however, that the
-------- -------
obligations of the Company under Section 2(c) and Section 5 (and any existing
claims thereunder) shall survive termination of this Agreement or the
resignation of the Escrow Agent; provided, further, however, that until
-------- ------- -------
such tenth day, the Company will cause this Agreement (or any
permitted successor agreement) to remain in effect and will cause there to be an
escrow agent (including any permitted successor thereto) acting hereunder (or
under any such permitted successor agreement).
8. MISCELLANEOUS.
-------------
(a) Waiver. Any party hereto may specifically waive any breach of
------
this Agreement by any other party, but no such waiver shall be deemed to have
been given unless such waiver is in writing, signed by the waiving party and
specifically designating the breach waived, nor shall any such waiver constitute
a continuing waiver of similar or other breaches.
(b) Invalidity. If for any reason whatsoever any one or more of the
----------
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
(c) Assignment. This Agreement is personal to the parties hereto, and
----------
the rights and duties of any party hereunder shall not be assignable except with
the prior written consent of the other parties. Notwithstanding the foregoing,
this Agreement shall inure to and be binding upon the parties and their
successors and permitted assigns.
(d) Benefit. The parties hereto and their successors and permitted
-------
assigns, but no others, shall be bound hereby and entitled to the benefits
hereof; provided, however, that the holders of the Notes and their permitted
-------- -------
assigns shall be entitled to the benefits hereof and to enforce this Agreement.
(e) Time. Time is of the essence with respect to each provision of
----
this Agreement.
(f) Entire Agreement; Amendments. This Agreement, the Notes and the
----------------------------
Indenture contain the entire agreement among the parties with respect to the
subject matter hereof and supersede
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any and all prior agreements, understandings and commitments, whether oral or
written. This Agreement may be amended only in accordance with Article Nine of
the Indenture and further by a writing signed by a duly authorized
representative of each party hereto.
(g) Notices. All notices and other communications required or
-------
permitted to be given or made under this Agreement shall be in writing and shall
be deemed to have been duly given and received, regardless of when and whether
received, either: (a) on the day of hand delivery; (b) three business days
following the day sent, when sent by United States certified mail, postage and
certification fee prepaid, return receipt requested, addressed as set forth
below; (c) when transmitted by telecopy with verbal confirmation of receipt by
the telecopy operator to the telecopy number set forth below; or (d) one
business day following the day timely delivered to a next-day air courier
addressed as set forth below:
To the Escrow Agent:
Fleet National Bank
0 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Corporate Trustee
Administration Department
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
To the Trustee:
Fleet National Bank
0 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Corporate Trustee
Administration Department
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
To the Company:
UNIFI Communications, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Chief Financial Officer
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Telecopy: (000) 000-0000
Telephone: (000) 000-0000
or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section.
(h) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) Captions. Captions in this Agreement are for convenience only and
--------
shall not be considered or referred to in resolving questions of interpretation
of this Agreement.
(j) Choice of Law. The existence, validity, construction, operation
-------------
and effect of any and all terms and provisions of this Agreement shall be
determined in accordance with and governed by the laws of the State of New York,
without regard to principles of conflicts of laws, except to the extent that
Federal law requires Revised Article 8 to be applied. The parties to this
Agreement hereby agree that jurisdiction over such parties and over the subject
matter of any action or proceeding arising under this Agreement may be exercised
by a competent Court of the State of New York, or by a United States Court,
sitting in New York City. The Company hereby submits to the personal
jurisdiction of such courts, hereby waives personal service of process upon it
and consents that any such service of process may be made by certified or
registered mail, return-receipt requested, directed to the Company at its
address last specified for notices hereunder, and service so made shall be
deemed completed five (5) days after the same shall have been so mailed, AND
HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH THE
ESCROW AGENT. All actions and proceedings brought by the Company against the
Escrow Agent relating to or arising from, directly or indirectly, this Agreement
shall be litigated only in courts within the State of New York.
(k) The Company hereby represents and warrants that this Agreement has
been duly authorized, executed and delivered on its behalf and constitutes the
legal, valid and binding obligation of the Company. The execution, delivery and
performance of this Agreement by the Company does not violate any applicable law
or regulation to which the Company is subject and does not require the consent
of any governmental or other regulatory body to which the Company is subject,
except for such
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consents and approvals as have been obtained and are in full force and effect.
(l) Each of the Escrow Agent and the Trustee hereby represents and
warrants that this Agreement has been duly authorized, executed and delivered
on its behalf and constitutes its legal, valid and binding obligation.
IN WITNESS WHEREOF, the parties have executed and delivered this
Escrow Agreement as of the day first above written.
ESCROW AGENT: FLEET NATIONAL BANK, as Escrow Agent
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name:
Title:
TRUSTEE: FLEET NATIONAL BANK, as Trustee
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name:
Title:
COMPANY: UNIFI COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Name:
Title:
EXHIBIT A
---------
Form of Payment Notice and Disbursement Request
[Letterhead of the Trustee]
[Date]
Fleet National Bank
[ ]
[ ]
Attention: Corporate Trustee
Administration Department
Re: Disbursement Request No. ____
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Escrow Agreement, dated as of February 21, 1997 (the
"Escrow Agreement") among you (the "Escrow Agent"), the undersigned as Trustee,
and UNIFI COMMUNICATIONS, INC., a Delaware corporation (the "Company").
Capitalized terms used herein shall have the meanings given in the Escrow
Agreement.
This letter constitutes a Payment Notice and Disbursement Request
under the Escrow Agreement.
[choose one of the following, as applicable]
[The undersigned hereby notifies you that a scheduled interest payment
in the amount of $__________ is due and payable on __________ , 199[7][8][9]
and requests a disbursement of funds contained in the Escrow Account in such
amount to the Trustee.]
[The undersigned hereby notifies you that Notes equalling $__________
in aggregate principal amount have been retired and authorizes you to release
$__________ of funds in the Escrow Account to the Company (to an account
designated by the Company in writing), which amount represents the amount
permitted to be released in accordance with Section 3(c) of the Escrow
Agreement.]
[The undersigned hereby notifies you that there has been an
acceleration of the maturity of the Notes. Accordingly, you are hereby
requested to disburse all remaining funds contained in the Escrow Account to
the Trustee such that the balance in the Escrow Account is reduced to zero.]
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[The undersigned hereby notifies you that the Company has satisfied
[all of] its obligations under the Indenture to pay interest on the Notes on
[all] [the] Interest Payment Date[s] on [[ ], 199[7][8][9]] and
authorizes you to rebate [$[ ]] [all remaining sums in the Escrow Account]
to the Company (to an account designated by the Company in writing), which
amount represents the amount permitted to be released in accordance with Section
3(d) of the Escrow Agreement.]
[The undersigned hereby notifies you that it has received from the
Company an opinion of [nationally recognized firm of independent public
accountants] stating that the amount of all remaining funds in the Escrow
Account is in excess of the amount sufficient to meet the Company's obligations
under the Indenture to pay interest on the Notes on [all] [the] Interest Payment
Date[s] on [[ ], 199[7][8][9]] and authorizes you to rebate $[ ] to the
Company (to an account designated by the Company in writing), which amount
represents the amount permitted to be released in accordance with Section 3(e)
of the Escrow Agreement.]
In connection with the requested disbursement, the undersigned hereby
notifies you that:
1. [The Notes have not, as a result of an Event of Default (as defined
in the Indenture), been accelerated and become due and payable.]
2. All prior disbursements from the Escrow Account have been Applied.
3. [add wire instructions]
The Escrow Agent is entitled to rely on the foregoing in disbursing
funds relating to this Payment Notice and Disbursement Request.
FLEET NATIONAL BANK, as Trustee
By: __________________________________________
Name:
Title:
