EXHIBIT 10.18
PLEDGE AND ESCROW
AGREEMENT
Dated as of May 13, 1998
from
AMERICAN CELLULAR CORPORATION
as Pledgor
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to
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
as Trustee
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TABLE OF CONTENTS
SECTION 1. Definitions...................................................................... 2
SECTION 2. Security Interest................................................................ 5
2.1 Pledge and Grant of Security Interest.................................................. 5
2.2 Secured Obligations.................................................................... 7
SECTION 3. Establishment and Maintenance of Initial Escrow and Pledge Account;
Investment and Liquidation of Funds in the Initial Escrow and Pledge
Account.......................................................................... 7
3.1 Delivery of Initial Collateral......................................................... 7
3.2 Maintaining the Initial Escrow and Pledge Account...................................... 7
3.3 Allowable Investments.................................................................. 8
3.4 Interest............................................................................... 9
SECTION 4. Disposition of Initial Collateral Upon Certain Events............................ 9
4.1 Transfer of Funds for the Merger....................................................... 9
4.2 Conditions to Release of Funds.........................................................10
4.3 Release of Security Interest...........................................................10
4.4 Special Mandatory Redemption...........................................................11
SECTION 5. Deposit of Subsequent Funds; Deposit and Investment; Cash Collateral
Account; Subsequent Collateral Investments.......................................11
5.1 Deposit of Subsequent Funds...........................................................11
5.2 Maintaining the Cash Collateral Account...............................................12
5.3 Investing of Amounts in the Cash Collateral Account...................................12
5.4 Delivery of Subsequent Collateral.....................................................13
SECTION 6. Disbursements of Subsequent Collateral...........................................15
SECTION 7. Representations and Warranties...................................................17
SECTION 8. Further Assurances...............................................................19
SECTION 9. Covenants........................................................................20
SECTION 10. Power of Attorney................................................................20
SECTION 11. Trustee May Perform..............................................................21
SECTION 12. No Assumption of Duties; Reasonable Care.........................................21
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SECTION 13. Indemnity.................................................................. 22
SECTION 14. Remedies upon Event of Default............................................. 22
SECTION 15. Expenses................................................................... 23
SECTION 16. Security Interest Absolute................................................. 24
SECTION 17. Miscellaneous Provisions................................................... 24
17.1 Notices.......................................................................... 24
17.2 No Adverse Interpretation of Other Agreements.................................... 25
17.3 Severability..................................................................... 25
17.4 Headings......................................................................... 26
17.5 Counterpart Originals............................................................ 26
17.6 Benefits of Pledge Agreement..................................................... 26
17.7 Amendments, Waivers and Consents................................................. 26
17.8 Interpretation of Agreement...................................................... 26
17.9 Continuing Security Interest; Termination....................................... 27
17.10 Survival Provisions............................................................. 27
17.11 Waivers......................................................................... 27
17.12 Authority of the Trustee........................................................ 27
17.13 Final Expression................................................................ 28
17.14 Rights of Holders of the Notes.................................................. 28
17.15 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
Damages........................................................................ 28
17.16 Consequential Damages........................................................... 29
17.17 Wire Transfers.................................................................. 30
EXHIBIT A: Form of Preliminary Release Certificate..................................... A-1
EXHIBIT B: Form of Merger Extension Notice Certificate Required
by Section 3.3.............................................................. B-1
EXHIBIT C: Form of Xxxxxx & Xxxxxxx Opinion............................................ C-1
EXHIBIT D: Form of Release Certificate................................................. D-1
EXHIBIT E: Form of Release of Security Interest........................................ E-1
EXHIBIT F: Form of Extension Certificate Required by Section 4.4....................... F-1
EXHIBIT G: Independent Public Accountants' Report...................................... G-1
EXHIBIT H: Form of Representations and Warranties Bring-down Certificate............... H-1
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EXHIBIT I: Form of Subsequent Collateral Investments Account Letter................ I-1
EXHIBIT J: Officer's Certificate................................................... J-1
EXHIBIT K: Independent Public Accountants' Report.................................. K-1
EXHIBIT L: Wire Transfer Confirmation Contacts..................................... L-1
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PLEDGE AND ESCROW AGREEMENT
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This PLEDGE AND ESCROW AGREEMENT (the "Pledge Agreement") is made and
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entered into as of May 13, 1998 by and among AMERICAN CELLULAR CORPORATION, a
Delaware corporation (the "Pledgor"), having its principal office at 1336
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Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxxx, Xxxxxxxx 00000, and CHASE MANHATTAN BANK
AND TRUST COMPANY, NATIONAL ASSOCIATION, a trust company duly organized and
existing under the laws of the United States of America, having its principal
corporate trust office at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, as trustee (the "Trustee") for the holders (the "Holders") of
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the Notes (as defined herein) issued by the Pledgor under the Indenture referred
to below.
W I T N E S S E T H
WHEREAS, the Pledgor and the Initial Purchasers are parties to a
Purchase Agreement dated May 6, 1998 (the "Purchase Agreement"), pursuant to
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which the Pledgor will issue and sell to the Initial Purchasers $285,000,000 in
aggregate principal amount of 10 1/2% Senior Notes due 2008, Series A (the
"Series A Notes") which will be exchangeable into 10 1/2% Senior Notes due 2008,
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Series B (the "Series B Notes"), containing terms identical to the Series A
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Notes in all material respects (except for references to certain interest rate
provisions, restrictions on transfers and restrictive legends) (the Series A
Notes and the Series B Notes being collectively referred to as the "Notes");
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WHEREAS, the Pledgor and the Trustee have entered into that certain
indenture dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
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Pledgor is issuing the Notes on the date hereof;
WHEREAS, pursuant to the Indenture, simultaneously with receipt of
payment for the Series A Notes (the "Deposit Time"), (i) all of the proceeds
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from the sale of the Series A Notes after payment of the Initial Purchasers'
Discount and (ii) an equity contribution from the Equity Investors of $20.0
million in cash (the funds referred to in clauses (i) and (ii) being
collectively referred to as the "Initial Funds") will be deposited into a
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segregated trust account in the name of Chase Manhattan Bank and Trust Company,
National Association, as Trustee, for American Cellular Corporation Senior Note
Holders (the "Initial Escrow and Pledge Account").
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WHEREAS, this Pledge Agreement and the Initial Collateral (as defined
below) initially secure the Initial Secured Obligations (as defined below).
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WHEREAS, the parties hereto desire to set forth their agreement with
regard to the administration of the Initial Escrow and Pledge Account, the
creation of a security interest in the Initial Collateral and the conditions
upon which a portion of the Initial Collateral will be released from the Initial
Escrow and Pledge Account;
WHEREAS, pursuant to the Indenture, upon release of a portion of the
Initial Collateral, the Pledgor is required to use the balance of funds (the
"Subsequent Funds") in the Initial Escrow and Pledge Account to cause the
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Trustee to purchase and hold in the Subsequent Collateral Investment Account (as
defined below) or other account in pledge for the benefit of the Holders of the
Notes a portfolio of securities initially consisting of Government Securities
(as defined below) in an amount as will be sufficient upon receipt of scheduled
interest and principal payments of such securities, in the opinion of a
nationally recognized firm of independent public accountants selected by the
Pledgor, to provide for payment in full of the first six scheduled interest
payments due on the Notes (unless and to the extent already paid) at the stated
rate of 10 1/2% (excluding Additional Interest, if any) (the "First Six
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Scheduled Interest Payments");
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WHEREAS, the Pledgor will also open an interest bearing account (the
"Cash Collateral Account") with the Trustee at its office in New York, New York,
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which will be in the name of the Trustee for the benefit of the Pledgor but
under the sole dominion and control of the Trustee and subject to the terms of
this Pledge Agreement;
WHEREAS, this Pledge Agreement and the Subsequent Collateral (as
defined below) secures the Subsequent Secured Obligations; and
Whereas, the parties hereto desire to set forth their agreement with
regard to the administration of Cash Collateral Account, the creation and
perfection of a Security Interest in the Subsequent Collateral, the termination
of this Pledge Agreement and other matters.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Indenture.
AGREEMENT
NOW, THEREFORE, in consideration of the premises herein contained, and
in order to induce the Holders of the Notes to purchase the Notes, the Pledgor
and the Trustee hereby agree, for the benefit of the Trustee and for the ratable
benefit of the Holders of the Notes, as follows:
SECTION 1. Definitions.
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"Anticipated Merger Date" shall have the meaning specified in Section
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3.3
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hereof.
"Cash Collateral Account" shall have the meaning specified in the
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Recitals.
"Cash Equivalents" shall have the meaning specified in Section 3.3
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hereof.
"Collateral" means and includes the Initial Collateral and the
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Subsequent Collateral, as the case may be.
"Event of Default" shall have the meaning specified in Section 14
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hereof.
"Financing Condition" shall have the meaning specified in Section 4.2
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hereof.
"First Six Scheduled Interest Payments" shall have the meaning
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specified in the Recitals.
"FRBNY" shall have the meaning specified in Section 5.4 hereof.
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"Government Securities" means direct obligations of, or obligations
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guaranteed by, the United States of America for the payment of which obligations
or guarantee the full faith and credit of the United States is pledged and which
have the remaining weighted average life to maturity of not more than the date
of the interest payment as to which such Investment in the Government Security
is intended to pay.
"Holders" shall have the meaning specified in the Recitals.
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"Indenture" shall have the meaning specified in the Recitals.
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"Initial Collateral" shall have the meaning specified in Section 2.1
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hereof.
"Initial Escrow and Pledge Account" shall have the meaning specified
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in the Recitals.
"Initial Funds" shall have the meaning specified in the Recitals.
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"Initial Secured Obligations" means all obligations and indebtedness
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of the Pledgor, whether now or hereafter existing, under the Notes, the
Indenture and this Pledge Agreement (whether at maturity, upon acceleration or
otherwise), and including without limitation, all principal, premium and
interest (whether accrued before or after the commencement of a bankruptcy,
insolvency or other similar proceeding) on the Notes.
"Issuer Order" shall have the meaning specified in Section 6 hereof.
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"Marketable U.S. Securities" means: (i) Government Securities; (ii)
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any
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time deposit account, money market deposit and certificate of deposit maturing
not more than 270 days after the date of acquisition issued by, or time deposit
of, an Eligible Institution; (iii) commercial paper maturing not more than 270
days after the date of acquisition issued by a corporation (other than an
Affiliate of the Pledgor) with a rating, at the time as of which any investment
therein is made, of "P-1" or higher according to Xxxxx'x Investors Service,
Inc., "A-1" or higher according to Standard & Poor's Ratings Group or "A-1" or
higher according to Duff & Xxxxxx Credit Rating Co. (or such similar equivalent
rating by at least one "nationally recognized statistical rating organization"
(as defined in Rule 436 under the Securities Act)); (iv) any banker's
acceptances or money market deposit accounts issued or offered by an Eligible
Institution; and (v) any fund investing exclusively in investment of the types
described in clauses (i) through (iv) above, including funds for which the
Trustee, its parent holding company or any affiliates or subsidiaries of the
Trustee or such holding company provide investment advisory or other management
services.
"Merger Date" shall have the meaning specified in Section 4.2 hereof.
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"New Anticipated Merger Date" shall have the meaning specified in
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Section 3.3 hereof.
"Notes" shall have the meaning specified in the Recitals.
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"Pledge Agreement" shall have the meaning specified in the Recitals.
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"Pledgor" means the party named as such in this Pledge Agreement until
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a successor replaces it pursuant to the Pledge Agreement, and thereafter means
such successor.
"Pledgor Funds" shall have the meaning specified in Section 6 hereof.
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"Pledgor's Designee" shall have the meaning specified in Section 6
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hereof.
"Purchase Agreement" shall have the meaning specified in the Recitals.
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"Release Conditions" shall have meaning specified in Section 4.1
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hereof.
"Release Time" shall have the meaning specified in Section 4.3 hereof.
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"Secured Obligations" means and includes the Initial Secured
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Obligations and the Subsequent Secured Obligations, as the case may be.
"Series A Notes" shall have the meaning specified in the Recitals.
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"Series B Notes" shall have the meaning specified in the Recitals.
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"Subsequent Collateral" shall have the meaning specified in Section
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2.1 hereof.
"Subsequent Collateral Investments" shall have the meaning specified
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in Section 5.3 hereof.
"Subsequent Collateral Investments Account" shall have the meaning
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specified in Section 5.4 hereof.
"Subsequent Funds" shall have the meaning specified in the Recitals.
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"Subsequent Secured Obligations" means the Pledgor's obligations to
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(i) pay in full the First Six Scheduled Interest Payments and (ii) repay the
principal, premium and interest (whether accrued before or after the
commencement of a bankruptcy, insolvency or other similar proceeding) on the
Notes in the event that the Notes become due and payable prior to such time as
the First Six Scheduled Interest Payments shall have been paid in full.
"Trustee" shall mean the Person named as the "Trustee" in the first
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paragraph of this Pledge Agreement until a successor Trustee shall have become
such, and thereafter "Trustee" shall mean the Person who is then the Trustee
hereunder
"UCC" means the Uniform Commercial Code as in effect on the date
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hereof in New York State.
Unless otherwise defined herein or in the Indenture, terms used herein
which are defined in the UCC are used herein as therein defined.
SECTION 2. Security Interest.
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2.1 Pledge and Grant of Security Interest. The Pledgor hereby
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irrevocably pledges, assigns and sets over to the Trustee, and grants to the
Trustee, for the ratable benefit of the Holders of the Notes, a first priority
continuing security interest in, all of the Pledgor's right, title and interest
to all of the Initial Collateral and all of the Subsequent Collateral, whether
now owned or existing or hereafter acquired or created.
"Initial Collateral" means and includes (whether characterized as
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investment property, deposit accounts, cash or otherwise):
(a) the Initial Escrow and Pledge Account;
(b) all funds from time to time deposited or held in the
Initial Escrow and Pledge Account, including, without limitation, the Initial
Funds and all certificates and instruments, if any, from time to time,
representing or evidencing the Initial Escrow and Pledge Account or the Initial
Funds;
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(c) all Cash Equivalents, whether the same shall constitute
certificated securities, uncertificated securities, investment property,
instruments, general intangibles or otherwise held by or registered in the name
of the Trustee or its nominees and all certificates and instruments, if any,
from time to time representing or evidencing the Cash Equivalents;
(d) all notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time hereafter delivered to or
otherwise possessed by the Trustee or its nominees;
(e) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Initial
Collateral; and
(f) all proceeds of the foregoing, including, without
limitation, cash proceeds.
"Subsequent Collateral" means and includes (whether characterized as
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investment property, deposit accounts, cash or otherwise):
(a) the Cash Collateral Account, all funds from time to time deposited
or held therein and all certificates and instruments, if any, from time to time
representing or evidencing the Cash Collateral Account;
(b) all Subsequent Collateral Investments and all certificates and
instruments, if any, representing or evidencing the Subsequent Collateral
Investments, and any and all security entitlement to the Subsequent Collateral
Investments, and any and all related securities accounts in which any security
entitlement to the Subsequent Collateral Investments is carried, including,
without limitation the Subsequent Collateral Investments Account;
(c) all notes, certificates of deposit, deposit accounts, checks and
other instruments, if any, from time to time hereafter delivered to or otherwise
possessed by the Trustee or its nominees for or on behalf of the Pledgor in
substitution for or in addition to any or all the then existing Subsequent
Collateral;
(d) all interest, dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Subsequent Collateral; and
(e) all proceeds of the foregoing, including, without
limitation, cash proceeds.
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2.2 Secured Obligations. This Pledge Agreement, in accordance
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with its terms and the terms of the Indenture, initially secures the due and
punctual payment and performance of the Initial Secured Obligations, and after
the Release Time, secures the due and punctual payment and performance of the
Subsequent Secured Obligations.
SECTION 3. Establishment and Maintenance of Initial Escrow and Pledge
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Account; Investment and Liquidation of Funds in the Initial
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Escrow and Pledge Account.
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3.1 Delivery of Initial Collateral. All certificates or
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instruments, if any, representing or evidencing the Initial Collateral shall be
held by or on behalf of the Trustee pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignments in blank, all in form and substance
reasonably satisfactory to the Trustee. All securities in uncertificated or
book-entry form, if any, representing or evidencing the Initial Collateral shall
be registered in the name of the Trustee or any of its nominees by book-entry or
as otherwise appropriate so as to properly identify the interest of the Trustee
therein. In addition, the Trustee shall have the right, at any time following
the occurrence of an Event of Default, in its discretion to transfer to or to
register in the name of the Trustee or any of its nominees any or all other
Initial Collateral. Except as otherwise provided herein, all Initial Collateral
shall be deposited and held in the Initial Escrow and Pledge Account. The
Trustee shall have the right at any time to exchange certificates or instruments
representing or evidencing all or any portion of the Initial Collateral for
certificates or instruments of smaller or larger denominations in the same
aggregate amount.
3.2 Maintaining the Initial Escrow and Pledge Account.
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(a) The Pledgor shall establish and maintain the Initial
Escrow and Pledge Account with the Trustee in New York, New York, and the
Initial Escrow and Pledge Account shall at all times remain under the exclusive
dominion and control of the Trustee.
(b) It shall be a term and condition of the Initial Escrow
and Pledge Account, notwithstanding any term or condition to the contrary in any
other agreement relating to the Initial Escrow and Pledge Account and except as
otherwise provided by the provisions of Section 4 of this Pledge Agreement, that
no amount (including, without limitation, interest on or other proceeds of the
Initial Escrow and Pledge Account or on any Cash Equivalents held therein) shall
be paid or released to or for the account of, or withdrawn by or for the account
of, the Pledgor or any other person or entity other than the Trustee or its
designated agent from the Initial Escrow and Pledge Account (other than
customary brokerage or similar fees, discounts or commissions payable in
connection with investments of funds pursuant to Section 3.3).
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3.3 Allowable Investments. Funds held by the Trustee in the
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Initial Escrow and Pledge Account may, at the written direction of the Pledgor
or an agent appointed by the Pledgor, be invested and reinvested in the
following ("Cash Equivalents"):
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(a) Securities issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) in each case
maturing no later than June 15, 1998, (b) time deposits and
certificates of deposit and commercial paper issued by the parent
corporation of any domestic commercial bank of recognized
standing having capital and surplus in excess of $500 million and
commercial paper issued by others rated at least A-2 or at least
the equivalent thereof by Standard & Poor's Corporation or at
least P-2 or the equivalent thereof by Xxxxx'x Investor Service,
Inc. and in each case maturing no later than June 15, 1998, (c)
investments in money market funds substantially all of whose
assets comprise securities of the types described in clauses (a)
and (b) above, including funds for which the Trustee, its parent
holding company or any affiliates or subsidiaries of the Trustee
or such holding company provide investment advisory or other
management services, and (d) U.S. dollars.
Investment instructions from the Pledgor may instruct the Trustee to
purchase or sell specific securities to or from specific persons and/or on
specific terms negotiated by the Pledgor or its agent. If the Pledgor or such
agent fails to give written investment instructions to the Trustee by 9:00 a.m.
(New York time) on any Business Day on which there is uninvested cash and/or
maturing Cash Equivalents in the Initial Escrow and Pledge Account, the Trustee
is hereby authorized and directed to invest any such cash or the proceeds of any
maturing Cash Equivalents in Cash Equivalents maturing on the next Business Day.
The Pledgor's or such agent's failure to give such investment instructions shall
not constitute a default or an event of default hereunder. The Trustee may act
as principal or agent in the acquisition or disposition of investments. The
Trustee shall not be responsible for any loss of any investment made in
accordance herewith.
All of the Cash Equivalents in the Initial Escrow and Pledge Account
shall mature on or prior to June 15, 1998; provided, however, that if the
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Trustee receives
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from the Pledgor a certificate substantially in the form of Exhibit A hereto (a
"Preliminary Release Certificate") that: (x) sets forth the date (the
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"Anticipated Merger Date") set for the consummation of the Merger, which shall
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not be earlier than five (5) Business Days (unless agreed to by the Trustee)
after receipt by the Trustee of such Preliminary Release Certificate; (y) states
that the Pledgor reasonably believes that the Merger will be consummated on the
specified Anticipated Merger Date; and (z) directs the liquidation of all of the
Cash Equivalents in accordance with Section 4.1, the Trustee shall invest in
Cash Equivalents such that the funds held in the Initial Escrow and Pledge
Account will be available for release no later than 9:00 a.m. (New York time) on
the Anticipated Merger Date.
If the Pledgor determines that the Merger will not occur on or prior
to June 15, 1998 (or such later date specified in the most recent Merger
Extension Notice Certificate), the Pledgor shall deliver to the Trustee a
certificate substantially in the form of Exhibit B hereto (a "Merger Extension
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Notice Certificate") stating that (1) the Merger will be consummated after June
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15, 1998 (or such later date specified in the most recent Merger Extension
Notice Certificate), (2) the Merger will not be consummated prior to a
certain date (the "New Anticipated Merger Date") and (3) the Trustee is
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authorized to invest the Initial Funds in Cash Equivalents that mature on or
prior to the New Anticipated Merger Date, in which each of the Cash Equivalents
in the Initial Escrow and Pledge Account shall mature on or prior to the New
Anticipated Merger Date.
3.4 Interest. All interest earned on funds invested in Cash
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Equivalents shall be held in the Initial Escrow and Pledge Account and
reinvested in accordance with the terms hereof and will be subject to the
security interest granted hereunder to the Trustee.
SECTION 4. Disposition of Initial Collateral Upon Certain Events.
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4.1 Transfer of Funds for the Merger. Upon delivery by the
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Pledgor to the Trustee of a Preliminary Release Certificate stating the Merger
Date (as defined below), the Trustee shall liquidate, within five (5) Business
Days (or such earlier time as the Trustee may agree to) after the Trustee's
receipt of such Preliminary Release Certificate, all of the Cash Equivalents in
the Initial Escrow and Pledge Account. At the Release Time (as defined below),
the Trustee shall purchase in accordance with Section 5.3 hereof for the benefit
of the Holders of the Notes a portfolio of securities initially consisting of
Government Securities in an amount equal to the Subsequent Funds (as such amount
is verified by the report of an independent public accountant in Exhibit K
delivered to the Trustee); and on the Merger Date, upon satisfaction of the
Release Conditions (as defined below), the Trustee shall transfer the funds in
the Initial Escrow and Pledge Account in excess of the Subsequent Funds as
directed by the Pledgor by wire transfer of immediately available funds to such
entity as designated by the Pledgor, and
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the Trustee hereby agrees to liquidate such amount of Cash Equivalents and to
make such purchase and funds transfer.
4.2 Conditions to Release of Funds. On the date of the
consummation of the Merger (the "Merger Date"), the Pledgor shall deliver to the
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Trustee (x) confirmation in writing of the amounts required to be used to
purchase securities and to be transferred by the Trustee pursuant to the second
sentence of Section 4.1, (y) an opinion of Xxxxxx & Xxxxxxx, counsel to the
Pledgor, in the form of Exhibit C hereto and addressed to the Trustee and the
Initial Purchasers and (z) a certificate substantially in the form of Exhibit D
hereto (a "Release Certificate") stating that (1) all conditions to the
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consummation of the Merger have been satisfied or waived, (2) upon consummation
of the Merger and related transactions (a) the Pledgor shall have received the
Equity Contribution of at least $350 million, (b) the Pledgor (on a consolidated
basis) shall have incurred or assumed no greater than $925 million (plus the
amount of any (I) Old Notes which have been properly defeased and (II) Equity
Contribution in excess of $350 million) and no less than $750 million of
Indebtedness under the Credit Facility and the Old Notes, and (c) the Pledgor
(on a consolidated basis) shall not have outstanding more than $25 million of
Indebtedness (other than the Notes, the Credit Facility, the Old Notes and the
Convertible Notes) (the condition in this clause (2) being referred to as the
"Financing Condition") and (3) no Event of Default (as defined in the Indenture)
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has occurred and is continuing or will occur as a result of the release of funds
contemplated hereby, and instructing the Trustee to release the appropriate
dollar amount of the Initial Collateral in accordance with Section 4.1. The
delivery of the items identified in (x) and (y) above shall be the only
conditions (the "Release Conditions") precedent to the release of funds pursuant
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to Section 4.1.
4.3 Release of Security Interest. If the Release Conditions are
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satisfied, the Trustee shall deliver to the Pledgor a release of security
interest, with respect to the funds released pursuant to the Release Certificate
at the time of release of such funds (the "Release Time"), in the form of
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Exhibit E hereto, duly executed by the Trustee, and the Trustee shall take all
further actions, if any, that are reasonably deemed necessary by the Pledgor to
terminate the Trustee's security interest in all funds transferred by the
Trustee in accordance with the provisions of Section 4.1 (which shall
automatically be deemed to be free and clear of the Trustee's security interest
provided herein).
4.4 Special Mandatory Redemption. Upon the earlier to occur of
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(i) termination of the Merger Agreement or (ii) 150 days after the Issue Date if
the Initial Funds have not been released by that time (provided that the 150-day
period may be extended at the option of the Pledgor by written notice to the
Trustee up to an additional 120 days if the Pledgor delivers to the Trustee a
certificate, substantially in the form of Exhibit F hereto (an "Extension
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Certificate") stating that (a) the Pledgor shall have deposited an additional
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amount (to be reasonably determined by the Initial Purchasers on
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the same basis as the determination of the Additional Escrow Amount) in the
Initial Escrow and Pledge Account for the benefit of the holders of the Notes,
(b) the basis under which the Merger Agreement is not satisfied on such 150th
day relates to pending FCC or other governmental or regulatory approvals, (c)
the lenders under the Credit Facility shall have extended their commitment to
lend to a date no earlier than the date to which such escrow has been extended,
and (d) the Pledgor shall have issued a press release in a reasonably commercial
manner and notified the Trustee with respect to such extension of the escrow
period (clauses (a)-(d) being referred to herein as the "Extension Condition")),
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the Pledgor shall deliver a notice to the Trustee that all of the outstanding
Notes will be subject to a Special Mandatory Redemption in accordance with the
terms of the Indenture, and the Trustee shall without any further notice,
direction or authorization: (a) promptly liquidate all of the Cash Equivalents
in the Initial Escrow and Pledge Account to obtain net cash proceeds by no later
than 9:00 a.m. (New York time) on the date that is five (5) Business Days after
such date specified in clause (i) or (ii) above, as applicable, and (b) transfer
such dollar amount to the Paying Agent to be used to redeem Notes in accordance
with Section 3.8 of the Indenture, and the Trustee hereby agrees to liquidate
such investments and to make such funds transfer. Upon such date as all Initial
Funds have been released to the Paying Agent in accordance with this Section 4.4
and upon receipt of a request by the Pledgor, the Trustee shall transfer by wire
transfer of immediately available funds any funds remaining in the Initial
Escrow and Pledge Account to an account designated by the Pledgor. The Trustee
shall not be deemed to have notice of the termination of the Merger Agreement
unless it shall have received written notification thereof from the Pledgor.
SECTION 5. Deposit of Subsequent Funds; Deposit and Investment; Cash
---------------------------------------------------------
Collateral Account; Subsequent Collateral Investments.
-----------------------------------------------------
5.1 Deposit of Subsequent Funds. At the Release Time the Trustee
---------------------------
shall deposit, or cause to be deposited, all Subsequent Funds into the Cash
Collateral Account.
5.2 Maintaining the Cash Collateral Account. So long as any
---------------------------------------
Subsequent Secured Obligation shall remain unpaid:
(a) The Pledgor will maintain the Cash Collateral Account
with Chase Manhattan Bank and Trust Company, National Association; and
(b) It shall be a term and condition of the Cash Collateral
Account, notwithstanding any term or condition to the contrary in any other
agreement relating to the Cash Collateral Account, and except as otherwise
provided by the provisions of Section 5.3, Section 6 and Section 14, that no
amount (including interest on or other proceeds of the Subsequent Collateral
Investments) shall be paid or released to or for the account of, or withdrawn by
or for the account of, the Pledgor or any other Person
-11-
other than the Trustee or its designated agent from the Cash Collateral Account
(other than customary, brokerage or similar fees, discounts or commissions
payable in connection with investments of funds pursuant to Section 5.3);
provided that notwithstanding the foregoing no withdrawals may be made by
--------
Pledgor under Section 5.3, Section 6 or Section 14.
The Cash Collateral Account shall be subject to such applicable laws,
and such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other appropriate banking or governmental authority, as may
now or hereafter be in effect.
5.3 Investing of Amounts in the Cash Collateral Account.
---------------------------------------------------
(a) As soon as practicable upon deposit of the Subsequent
Funds, the Trustee shall invest all amounts on deposit in the Cash Collateral
Account in such Government Securities, in the name of the Trustee, as the
Pledgor may select in an amount sufficient to pay the First Six Scheduled
Interest Payments. If requested in writing by the Pledgor, the Trustee will,
subject to the provisions of Section 6 and Section 14, from time to time (i)
invest amounts on deposit in the Cash Collateral Account in such Cash
Equivalents in the name of the Trustee as the Pledgor may select and (ii) invest
interest paid on the Cash Equivalents referred to in clause (i) above, and
reinvest other proceeds of any such Cash Equivalents that may mature or be sold,
in each case in such Cash Equivalents in the name of the Trustee, as the Pledgor
may select and the Trustee may approve (the Cash Equivalents referred to in
clauses (i) and (ii) above being collectively "Subsequent Collateral
---------------------
Investments"); provided, however, in providing directions hereunder the Pledgor
----------- -------- -------
shall assure that the amount on deposit in the Subsequent Collateral Investments
Account (as defined below) and the Cash Collateral Account, collectively, at any
time during the terms of this Pledge Agreement, are sufficient to provide for
the payment in full of the First Six Scheduled Interest Payments remaining
unpaid at such time on the Notes. Interest and proceeds that are not invested or
reinvested in Subsequent Collateral Investments as provided above shall be
deposited and held in the Cash Collateral Account. The Trustee may act as
principal or agent in the acquisition or disposition of investments. The Trustee
shall not be responsible for any loss of any investment made in accordance
herewith.
(b) At any time while this Pledge Agreement is in force, the
Pledgor may substitute Marketable U.S. Securities for the Government Securities
pledged as Collateral hereunder; provided, however, that the Marketable U.S.
-------- -------
Securities so substituted must have a fair market value (measured at the date of
substitution) as certified to the Trustee, in the opinion of a nationally
recognized firm of independent public accountants selected by the Pledgor in the
form of Exhibit G hereto, at least equal to 125.0% of the amount of any of the
First Six Scheduled Interest Payments that are unpaid (or the pro rata portion
of such interest payments equal to the percentage of such
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interest payments to be secured by such Marketable U.S. Securities) as of the
date such Marketable U.S. Securities are proposed to be substituted as
Subsequent Collateral hereunder. Concurrently with such substitution, the
Pledgor shall (i) deliver a certificate in the form of Exhibit H hereto
reaffirming the representations and warranties set forth in Section 7 hereof,
(ii) deliver an Opinion of Counsel stating that the Trustee has a perfected lien
in such Marketable U.S. Securities and (iii) deliver the accountants' opinion in
the form of Exhibit G hereto. The Pledgor hereby pledges and the Trustee shall
hold a security interest in, for the benefit of the Holders of the Notes, any
Marketable U.S. Securities received by the Trustee in the accordance with this
Section 5.3(b).
5.4 Delivery of Subsequent Collateral. (a) If and to the extent
---------------------------------
the Subsequent Collateral is represented or evidenced by certificates or
instruments, all such certificates or instruments representing or evidencing the
Subsequent Collateral, including, without limitation, amounts invested as
provided in Section 5.3, shall be delivered to and held by or on behalf of the
Trustee pursuant hereto and shall be in suitable form for transfer by delivery,
or shall be accompanied by duly executed instruments of transfer or assignment
in blank, all in form and substance sufficient to convey a valid security
interest in such Subsequent Collateral to the Trustee or shall be credited to a
securities account (the " Subsequent Collateral Investments Account") designated
-----------------------------------------
by the Trustee. For the better perfection of the Trustee's rights in and to the
Subsequent Collateral, the Pledgor shall forthwith, upon the pledge of any
Subsequent Collateral hereunder, cause all such Subsequent Collateral, including
the Subsequent Collateral Investments Account and all other accounts
representing a security entitlement to or containing any Subsequent Collateral
(including, without limitation, any Subsequent Collateral Investments) to be
registered in the name of the Trustee or such of its nominees as the Trustee
shall direct and the Pledgor shall approve (which approval shall not be
unreasonably withheld), and to be under the sole dominion and control of the
Trustee, which dominion and control shall be agreed to and acknowledged by any
securities intermediary holding any such account in an acknowledgment in the
form of Exhibit I hereto, subject only to the revocable rights specified in
Section 6. In addition, the Trustee shall have the right at any time to exchange
certificates or instruments representing or evidencing the Subsequent Collateral
for certificates or instruments of smaller or larger denominations.
(b) The Trustee shall become the holder or entitlement
holder, as the case may be, of the Subsequent Collateral Investments and of any
and all security entitlements to the Subsequent Collateral Investments, through
action by the Federal Reserve Bank of New York ("FRBNY") or another securities
-----
intermediary, as confirmed (in writing or electronically or otherwise in
accordance with standard industry practice) to the Trustee by FRBNY or such
other securities intermediary (i) indicating by book-entry that the Subsequent
Collateral Investments or a security entitlement thereto has been credited to
the Subsequent Collateral Investments Account, or (ii) acquiring the
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Subsequent Collateral Investments or a security entitlement thereto for the
Trustee and accepting the same for credit to the Subsequent Collateral
Investments Account.
(c) Prior to the acquisition by the Trustee of Subsequent
Collateral Investments (or acquisition by the Trustee of any security
entitlement thereto), as provided in subsection (a) or (b) of this Section 5.4,
the Trustee shall establish the Subsequent Collateral Investments Account on its
books as an account segregated from all other custodial or collateral accounts
at its office at 55 Water Street, Room 000, Xxxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000. Upon acquisition of the Subsequent Collateral Investments by the Trustee
(or the Trustee's acquisition of a security entitlement thereto), as confirmed
to the Trustee by FRBNY or another securities intermediary), the Trustee shall
make appropriate book entries indicating that the Subsequent Collateral
Investments and/or such security entitlement have been credited to and are held
in the Subsequent Collateral Investments Account. Subject to the other terms and
conditions of this Pledge Agreement, all Subsequent Collateral Investments held
by the Trustee pursuant to this Pledge Agreement shall be held in the Subsequent
Collateral Investments Account subject (except as expressly provided in Section
6 hereof) to the exclusive dominion and control of the Trustee and exclusively
for the benefit of the Trustee and for the ratable benefit of the Holders of the
Notes and segregated from all other funds or other property otherwise held by
the Trustee.
(d) All Subsequent Collateral shall be retained in the Cash
Collateral Account and the Subsequent Collateral Investments Account pending
disbursement pursuant to the terms hereof.
(e) On the Merger Date, the Trustee shall deliver to the
Pledgor and the Initial Purchasers a duly executed certificate, in the form of
Exhibit J hereto, of an officer of the Trustee, confirming the Trustee's
establishment and maintenance of the Cash Collateral Account and the Subsequent
Collateral Investments Account and its receipt and holding of the Subsequent
Funds and the Subsequent Collateral Investments or a security entitlement
thereto and the crediting of the Subsequent Funds and the Subsequent Collateral
Investments or such security entitlement to the Cash Collateral Account and the
Subsequent Collateral Investments Account, all in accordance with this Pledge
Agreement.
(f) On the Merger Date, the Pledgor shall deliver to the
Trustee an opinion of a nationally recognized firm of independent public
accountants, selected by the Pledgor, substantially in the form of Exhibit K
hereto.
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SECTION 6. Disbursements of Subsequent Collateral. The Trustee shall
--------------------------------------
hold the assets in the Cash Collateral Account and the Subsequent Collateral
Investments Account and release the same, or a portion thereof, only as follows:
(a) At least one Business Day prior to the due date of any of the
First Six Scheduled Interest Payments, the Trustee shall release from the
Cash Collateral Account and/or liquidate Subsequent Collateral in the
Subsequent Collateral Investments Account, and transfer to the Trustee, as
Paying Agent in order to pay to the Holders of the Notes proceeds
sufficient to provide for payment in full of such interest then due on the
Notes; provided that in the event Subsequent Collateral is not required to
be liquidated, the Pledgor will give the Trustee at least three Business
Days notice pursuant to written instructions executed by the Pledgor (an
"Issuer Order") The Trustee will take any action necessary to provide for
the payment of the interest on the Notes to the Holders of the Notes in
accordance with the payment provisions of the Indenture from (and to the
extent of) proceeds of the Subsequent Funds in the Cash Collateral Account
or the Subsequent Collateral Investments Account, as the case may be.
Nothing in this Section 6 shall affect the Trustee's rights to apply the
Subsequent Collateral to the payments of amounts due on the Notes upon
acceleration thereof.
(b) If the Pledgor makes any payment or portion of payment of the
First Six Scheduled Interest Payments from a source of funds other than the
Cash Collateral Account or the Subsequent Collateral Investments Account
("Pledgor Funds"), the Pledgor may, after payment in full of such interest
---------------
payment or portion thereof from proceeds of such Pledgor Funds, direct the
Trustee in writing to release to the Pledgor or to another party at the
direction of the Pledgor (the "Pledgor's Designee") proceeds from the Cash
------------------
Collateral Account or the Subsequent Collateral Investments Account in an
amount less than or equal to the amount of Pledgor Funds applied to such
interest payment. Upon receipt of an Issuer Order by the Trustee, the
Trustee shall pay over to the Pledgor or the Pledgor's Designee, as the
case may be, the requested amount from proceeds in the Cash Collateral
Account or the Subsequent Collateral Investments Account, as the case may
be. Concurrently with any release of funds requested by the Pledgor
pursuant to this Section 6(b), the Pledgor shall deliver to the Trustee a
certificate signed by an officer of the Pledgor stating that such release
has been authorized by the Pledgor and will not contravene any provision of
applicable law or the certificate of incorporation or the by-laws of the
Pledgor or any material agreement or other material instrument binding upon
the Pledgor or any of its subsidiaries or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the Pledgor
or any of its subsidiaries or result in the creation or imposition of any
Lien on any assets of the Pledgor, except for the security interest granted
under the Pledge Agreement.
-15-
(c) At least one Business Day prior to the due date of any of the
First Six Scheduled Interest Payments, the Pledgor covenants to give the
Trustee (by Issuer Order) notice as to whether payment of interest will be
made pursuant to Section 6(a) or 6(b) and as to the respective amounts of
interest that will be paid pursuant to Section 6(a) or 6(b); provided that,
--------
in the event Subsequent Collateral is not required to be liquidated, the
Pledgor will give the Trustee at least three Business Days notice pursuant
to an Issuer Order. If no such notice is given, the Trustee will act
pursuant to Section 6(a) as if it had received an Issuer Order pursuant to
this paragraph for the payment in full of the interest then due.
(d) The Trustee shall liquidate Subsequent Collateral Investments
pursuant to Section 6(a) in order to make any scheduled payment of interest
or any release hereunder unless instructed to not do so by Issuer Order or
pursuant to Section 16 hereof.
(e) In the event that the Subsequent Collateral held in the Cash
Collateral Account and the Subsequent Collateral Investments Account
exceeds the amount sufficient, in the opinion of a nationally recognized
firm of independent public accountants selected by the Pledgor (an
"Accountants Opinion"), to provide for payment in full of the First Six
Scheduled Interest Payments (or, in the event an interest payment or
payments have been made, an amount sufficient to provide for payment in
full of the First Six Scheduled Interest Payments remaining unpaid at such
time, the Trustee shall release to the Pledgor at the Pledgor's and upon
receipt of an Accountant's Opinion request any such excess Subsequent
Collateral.
(f) Upon the release of any Subsequent Collateral from the Cash
Collateral Account or the Subsequent Collateral Investments Account, in
accordance with the terms of this Pledge Agreement, the security interest
evidenced by this Pledge Agreement in such released Subsequent Collateral
will automatically terminate and be of no further force and effect.
(g) Nothing contained in Section 5, this Section 6 or any other
provision of this Pledge Agreement shall (i) afford the Pledgor any right
to issue entitlement orders with respect to any security entitlement to the
Subsequent Collateral Investments or any securities account in which any
such security entitlement may be carried, or otherwise afford the Pledgor
control of any such security entitlement or (ii) otherwise give rise to any
rights of the Pledgor with respect to the Subsequent Collateral
Investments, any security entitlement thereto or any securities account in
which any such security entitlement may be carried, other than the
Pledgor's rights under this Pledge Agreement as the beneficial owner of
collateral pledged to and subject to the exclusive dominion and control
(except as expressly provided in this Section 6) of the Trustee in its
capacity as such (and not
-16-
as a securities intermediary). The Pledgor acknowledges, confirms and
agrees that the Trustee holds a security entitlement to the Subsequent
Collateral Investments solely as trustee for the Holders of the Notes and
not as a securities intermediary.
SECTION 7. Representations and Warranties. The Pledgor hereby
------------------------------
represents and warrants, as of the date hereof, that:
(a) The execution and delivery by the Pledgor of, and the performance
by the Pledgor of its obligations under, this Pledge Agreement have been
duly authorized by all necessary corporate action and will not contravene
or constitute a default under any provision of applicable law or the
certificate of incorporation or the by-laws of the Pledgor or any material
agreement or other material instrument binding upon the Pledgor or any of
its subsidiaries or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Pledgor or any of its
subsidiaries, or result in the creation or imposition of any Lien on any
assets of the Pledgor, except for the security interests granted under this
Pledge Agreement; no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required (i) for the
performance by the Pledgor of its obligations under this Pledge Agreement,
(ii) for the pledge by the Pledgor of the Initial Collateral and the
Subsequent Collateral pursuant to this Pledge Agreement or (iii) except for
any such consents, approvals, authorizations or orders required to be
obtained by the Trustee (or the Holders) for reasons other than the
consummation of this transaction, for the exercise by the Trustee of the
rights provided for in this Pledge Agreement or the remedies in respect of
the Initial Collateral and the Subsequent Collateral pursuant to this
Pledge Agreement.
(b) The Pledgor is the beneficial owner of the Initial Collateral and
will be the beneficial owner of the Subsequent Collateral, free and clear
of any Lien or claims of any person or entity (except for the security
interests granted under this Pledge Agreement). No financing statement
covering the Pledgor's interest in the Initial Collateral is on file in any
public office other than any Financing Statements filed pursuant to this
Pledge Agreement and no Financing Statement covering the Pledgor's interest
in the Subsequent Collateral will be on file in any public office other
than any Financing Statement filed pursuant to this Pledge Agreement.
(c) This Pledge Agreement has been duly authorized, validly executed
and delivered by the Pledgor and (assuming the due authorization and valid
execution and delivery of this Pledge Agreement by the Trustee and
enforceability of the Pledge Agreement against the Trustee in accordance
with its terms) constitutes a valid and binding agreement of the Pledgor,
enforceable against the Pledgor in accordance with its terms, except as (i)
the enforceability hereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, preference,
-17-
reorganization, moratorium or similar laws now or hereafter in effect
relating to or affecting creditors' rights or remedies generally, (ii) the
availability of equitable remedies may be limited by equitable principles
of general applicability and the discretion of the court before which any
proceeding therefor may be brought, (iii) the exculpation provisions and
rights to indemnification hereunder may be limited by U.S. federal and
state securities laws and public policy considerations and (iv) the waiver
of rights and defenses contained in Section 14(b), Section 17.11 and
Section 17.15 hereof may be limited by applicable law.
(d) Upon the delivery to the Trustee of the certificates or
instruments, if any, representing or evidencing the Initial Collateral, and
the transfer and pledge to the Trustee of the Initial Collateral or the
acquisition by the Trustee of a security entitlement thereto, in accordance
with Section 2, the pledge of and grant of a security interest in the
Initial Collateral securing the payment of the Initial Secured Obligations
for the benefit of the Trustee and the Holders of the Notes will constitute
a first priority perfected security interest in such Initial Collateral
(except, with respect to proceeds, only to the extent permitted by Section
9-306 of the UCC), enforceable as such against all creditors of the Pledgor
and any persons purporting to purchase any of the Initial Collateral from
the Pledgor, except in each case as enforcement may be affected by general
equitable principles (whether considered in a proceeding in equity or at
law) and other than as permitted by the Indenture.
(e) Upon the delivery to the Trustee of the certificates or
instruments, if any, representing or evidencing the Subsequent Collateral,
and the transfer and pledge to the Trustee of the Subsequent Collateral and
the acquisition by the Trustee of a security entitlement thereto, in
accordance with Section 5.4(a), the pledge of and grant of a security
interest in the Subsequent Collateral securing the payment of the
Subsequent Secured Obligations for the benefit of the Trustee and the
Holders of the Notes will constitute a first priority perfected security
interest in such Subsequent Collateral (except, with respect to proceeds,
only to the extent permitted by Section 9-306 of the UCC), enforceable as
such against all creditors of the Pledgor and any persons purporting to
purchase any of the Subsequent Collateral from the Pledgor, except in each
case as enforcement may be affected by general equitable principles
(whether considered in a proceeding in equity or at law) and other than as
permitted by the Indenture.
(f) There are no legal or governmental proceedings pending or, to the
best of the Pledgor's knowledge, threatened to which the Pledgor or any of
its subsidiaries is a party or to which any of the properties of the
Pledgor or any of its subsidiaries is subject that would materially
adversely affect the power or ability of the Pledgor to perform its
obligations under this Pledge Agreement or to consummate the transactions
contemplated hereby.
-18-
(g) The pledge of the Initial Collateral and the Subsequent Collateral
pursuant to this Pledge Agreement is not prohibited by law or governmental
regulation (including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System) applicable to the
Pledgor.
(h) No Event of Default (as defined herein) exists.
SECTION 8. Further Assurances. The Pledgor will, promptly upon
------------------
request by the Trustee (which request the Trustee may submit in its discretion
or at the direction of the Holders of a majority in principal amount of the
Notes then outstanding), execute and deliver or cause to be executed and
delivered, or use its reasonable best efforts to procure, all assignments,
instruments and other documents, deliver any instruments to the Trustee and take
any other actions that are necessary or desirable to perfect, continue the
perfection of, or protect the first priority of the Trustee's security interest
in and to the Initial Collateral and the Subsequent Collateral, to protect the
Initial Collateral and the Subsequent Collateral against the rights, claims, or
interests of third persons (other than any such rights, claims or interests
created by or arising through the Trustee), or to enable the Trustee to exercise
and enforce its rights and remedies hereunder with respect to any Collateral or
to otherwise effect the purposes of this Pledge Agreement. The Pledgor also
agrees, whether or not requested by the Trustee, to take all actions that are
necessary to perfect or continue the perfection of, or to protect the first
priority of, the Trustee's security interest in and to the Initial Collateral
and the Subsequent Collateral, and to protect the Initial Collateral and the
Subsequent Collateral against the rights, claims or interests of third persons
(other than any such rights, claims or interests created by or arising through
the Trustee).
SECTION 9. Covenants. The Pledgor covenants and agrees with the
---------
Trustee and the Holders of the Notes that from and after the date of this Pledge
Agreement until the payment in full in cash of the Secured Obligations:
(a) that (i) it will not (and will not purport to) sell, assign or
otherwise dispose of, or grant any option or warrant with respect to, any
of the Initial Collateral or the Subsequent Collateral or (ii) it will not
create or permit to exist any Lien upon or with respect to any of the
Initial Collateral or the Subsequent Collateral (except for the security
interests granted under this Pledge Agreement and any Lien created by or
arising through the Trustee) and at all times will be the sole beneficial
owner of the Initial Collateral and the Subsequent Collateral; or
(b) that it will not (i) enter into any agreement or understanding
that restricts or inhibits or purports to restrict or inhibit the Trustee's
rights or remedies hereunder, including, without limitation, the Trustee's
right to sell or otherwise dispose of the Initial Collateral or the
Subsequent Collateral or (ii) fail to pay or discharge any tax, assessment
or levy of any nature with respect to the Initial
-19-
Collateral or the Subsequent Collateral not later than five days prior to
the date of any proposed sale under any judgment, writ or warrant of
attachment with respect to the Initial Collateral or the Subsequent
Collateral.
SECTION 10. Power of Attorney. The Pledgor hereby irrevocably
-----------------
appoints the Trustee as the Pledgor's attorney-in-fact, coupled with an
interest, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Trustee's discretion
to take any action and to execute any instrument which the Trustee may deem
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including, without limitation, to receive, endorse and collect all instruments
made payable to the Pledgor representing any interest payment, dividend or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same, and the expenses of the Trustee incurred in connection
therewith shall be payable by the Pledgor. This power of attorney is coupled
with an interest and is irrevocable by the Pledgor.
In addition to all of the powers granted to the Trustee pursuant to
the Indenture, the Pledgor hereby appoints and constitutes the Trustee to
exercise to the fullest extent permitted by law all of the following powers upon
and at any time after the occurrence and during the continuance of an Event of
Default: (a) collection of proceeds of any Initial Collateral or Subsequent
Collateral; (b) conveyance of any item of Initial Collateral or Subsequent
Collateral to any purchaser thereof; (c) giving of any notices or recording of
any Liens under Section 8 hereof; and (d) paying or discharging taxes or Liens
levied or placed upon the Initial Collateral or the Subsequent Collateral, the
legality or validity thereof and the amounts necessary to discharge the same to
be determined by the Trustee in its sole reasonable discretion, and such
payments made by the Trustee to become part of the Initial Secured Obligations
or the Subsequent Secured Obligations of the Pledgor to the Trustee, due and
payable immediately upon demand.
The Trustee's authority under this Section 10 shall include, without
limitation, the authority to endorse and negotiate any checks or instruments
representing proceeds of the Initial Collateral and the Subsequent Collateral in
the name of the Pledgor, execute and give receipt for any certificate of
ownership or any document constituting Initial Collateral or Subsequent
Collateral, transfer title to any item of Initial Collateral or Subsequent
Collateral, sign the Pledgor's name on all financing statements (to the extent
permitted by applicable law) or any other documents deemed necessary or
appropriate by the Trustee to preserve, protect or perfect the security interest
in the Initial Collateral or the Subsequent Collateral and to file the same,
prepare, file and sign the Pledgor's name on any notice of Lien, and to take any
other actions arising from or incident to the powers granted to the Trustee in
this Pledge Agreement.
SECTION 11. Trustee May Perform. Without limiting the authority
-------------------
granted under Section 10 and except with respect to the failure of the Pledgor
to deliver
-20-
investment instructions (which shall be governed by the other terms of this
Pledge Agreement), if the Pledgor fails to perform any agreement contained
herein, the Trustee may, but shall not be obligated to, itself perform, or cause
performance of, such agreement, and the expenses of the Trustee incurred in
connection therewith shall be payable by the Pledgor.
SECTION 12. No Assumption of Duties; Reasonable Care. The rights and
----------------------------------------
powers granted to the Trustee hereunder are being granted in order to preserve
and protect the security interest of the Trustee and the Holders of the Notes in
and to the Initial Collateral and the Subsequent Collateral granted hereby and
shall not be interpreted to, and shall not impose any duties on the Trustee in
connection therewith other than those expressly provided herein or imposed under
applicable law. Except as provided by applicable law or by the Indenture, the
Trustee shall be deemed to have exercised reasonable care in the custody and
preservation of the Initial Collateral and the Subsequent Collateral in its
possession if the Initial Collateral and the Subsequent Collateral is accorded
treatment substantially equal to that which the Trustee accords similar property
held by the Trustee for similar accounts, it being understood that the Trustee
in its capacity as such shall not have any responsibility for (a) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities or
other matters relative to any Initial Collateral or Subsequent Collateral,
whether or not the Trustee has or is deemed to have knowledge of such matters,
(b) taking any necessary steps to preserve rights against any parties with
respect to any Initial Collateral or Subsequent Collateral, (c) investing or
reinvesting any of the Initial Collateral or the Subsequent Collateral or (d)
the validity, sufficiency or priority of the Initial Collateral or Subsequent
Collateral or the perfection or the maintenance of the perfection of any
security interest granted hereby, provided, however, that nothing contained in
this Pledge Agreement shall relieve the Trustee of any responsibilities as a
securities intermediary under applicable law. In no event shall the Trustee have
any liability to the Pledgor or any other person for investing the funds from
time to time in the Initial Escrow and Pledge Account, the Cash Collateral
Account or the Subsequent Collateral Investments Account in accordance with the
provisions of this Pledge Agreement, regardless of whether greater income or a
higher yield could have been obtained had the Trustee invested such funds in
different investments, or for any loss associated with the sale or liquidation
of such investments in accordance with the terms of this Pledge Agreement. The
rights and limits of liability afforded to the Trustee under the Indenture shall
apply to its role hereunder as if fully stated herein.
SECTION 13. Indemnity. The Pledgor shall indemnify, hold harmless
---------
and defend the Trustee and its directors, officers, agents and employees, from
and against any and all claims, actions, obligations, liabilities and expenses,
including reasonable defense costs, reasonable investigative fees and costs, and
reasonable legal fees and damages arising from the Trustee's performance as
Trustee under this Pledge Agreement, except to the extent that such claim,
action, obligation, liability or expense is directly attributable to
-21-
the bad faith, gross negligence or willful misconduct of such indemnified
person. The provisions of this Section 13 shall survive termination of this
Pledge Agreement and the registration and removal of the Trustee.
SECTION 14. Remedies upon Event of Default. If any Event of Default
------------------------------
under the Indenture or default hereunder (any such Event of Default or default
being referred to in this Pledge Agreement as an "Event of Default") shall have
----------------
occurred and be continuing:
(a) The Trustee may, without notice to the Pledgor except as required
by law and at any time or from time to time, liquidate all Cash Equivalents
and transfer all funds in the Initial Escrow and Pledge Account to the
Paying Agent to apply such funds in accordance with Section 3.8 of the
Indenture.
(b) The Trustee and the Holders of the Notes shall have, in addition
to all other rights given by law or by this Pledge Agreement or the
Indenture, all of the rights and remedies with respect to the Initial
Collateral and the Subsequent Collateral of a secured party under the UCC.
In addition, with respect to any Initial Collateral or Subsequent
Collateral that shall then be in or shall thereafter come into the
possession or custody of the Trustee, the Trustee may and, at the direction
of the Holders of a majority in principal amount of the Notes then
outstanding, shall appoint a broker or other expert to sell or cause the
same to be sold at any broker's board or at public or private sale, in one
or more sales or lots, at such price or prices such broker or other expert
may deem best, for cash or on credit or for future delivery, without
assumption of any credit risk. The purchaser of any or all of the Initial
Collateral or Subsequent Collateral so sold shall thereafter hold the same
absolutely, free from any claim, encumbrance or right of any kind
whatsoever created by or through the Pledgor. The Trustee will give the
Pledgor reasonable notice of the time and place of any public sale thereof,
or of the time after which any private sale or other intended disposition
is to be made. Any sale of the Initial Collateral or the Subsequent
Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, commercial finance companies, or other
financial institutions disposing of property similar to the Initial
Collateral and the Subsequent Collateral shall be deemed to be commercially
reasonable. Any requirements of reasonable notice shall be met if such
notice is mailed to the Pledgor as provided in Section 17.1 hereof at least
ten (10) days before the time of the sale or disposition. The Trustee or
any Holder of Notes may, in its own name or in the name of a designee or
nominee, buy any of the Initial Collateral or the Subsequent Collateral at
any public sale and, if permitted by applicable law, at any private sale.
All expenses (including court costs and reasonable attorneys' fees,
expenses and disbursements) of, or incident to, the enforcement of any of
the provisions hereof shall be
-22-
recoverable from the proceeds of the sale or other disposition of the
Initial Collateral or the Subsequent Collateral.
(c) The Pledgor further agrees to use its reasonable best efforts to
do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Initial Collateral or the
Subsequent Collateral pursuant to this Section 14 valid and binding and in
compliance with any and all other applicable requirements of law. The
Pledgor further agrees that a breach of any of the covenants contained in
this Section 14 will cause irreparable injury to the Trustee and the
Holders of the Notes, that the Trustee and the Holders of the Notes have no
adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 14 shall be
specifically enforceable against the Pledgor, and the Pledgor hereby waives
and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default
has occurred.
SECTION 15. Expenses. The Pledgor will upon demand pay to the
--------
Trustee the amount of any and all reasonable expenses, including, without
limitation, the reasonable fees, expenses and disbursements of its counsel,
experts and agents retained by the Trustee, that the Trustee may incur in
connection with (a) the review, negotiation and administration of this Pledge
Agreement, (b) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Initial Collateral or the Subsequent
Collateral, (c) the exercise or enforcement of any of the rights of the Trustee
and the Holders of the Notes hereunder or (d) the failure by the Pledgor to
perform or observe any of the provisions hereof.
SECTION 16. Security Interest Absolute. All rights of the Trustee
--------------------------
and the Holders of the Notes and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Initial Secured Obligations or the
Subsequent Secured Obligations, or any other amendment or waiver of or any
consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any Liens on
any other collateral for all or any of the Initial Secured Obligations or
the Subsequent Secured Obligations; or
(d) to the extent permitted by applicable law, any other circumstance
which might otherwise constitute a defense available to, or a discharge of,
the
-23-
Pledgor in respect of the Initial Secured Obligations or the Subsequent
Secured Obligations or of this Pledge Agreement.
SECTION 17. Miscellaneous Provisions.
------------------------
17.1 Notices. Any notice or communication shall be sufficiently
-------
given if in writing and delivered in person or mailed by first class mail,
commercial courier service or telecopier c ommunication, addressed as follows:
if to the Pledgor:
-----------------
American Cellular Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx X
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to:
--------------
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxx, Esq.
if to the Trustee:
-----------------
Chase Manhattan Bank and Trust Company, National Association
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Corporate Trust Department
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
--------------
Lillick & Xxxxxxx LLP
0 Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
-24-
17.2 No Adverse Interpretation of Other Agreements. This Pledge
---------------------------------------------
Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the Indenture) may be used to interpret this Pledge
Agreement.
17.3 Severability. The provisions of this Pledge Agreement are
------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provisions, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Pledge Agreement in any jurisdiction.
17.4 Headings. The headings in this Pledge Agreement have been
--------
inserted for convenience of reference only, are not to be considered a part
thereof and shall in no way modify or restrict any of the terms or provisions
hereof.
17.5 Counterpart Originals. This Pledge Agreement may be signed
---------------------
in two or more counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same agreement.
17.6 Benefits of Pledge Agreement. Nothing in this Pledge
----------------------------
Agreement, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders of the Notes, any benefit
or any legal or equitable right, remedy or claim under this Pledge Agreement.
17.7 Amendments, Waivers and Consents. Any amendment or waiver
--------------------------------
of any provision of this Pledge Agreement and any consent to any departure by
the Pledgor from any provision of this Pledge Agreement shall be effective only
if made or duly given in compliance with all of the terms and provisions of the
Indenture, and neither the Trustee nor any Holder of Notes shall be deemed, by
any act, delay, indulgence, omission or otherwise, to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. Failure of the Trustee or
any Holder of Notes to exercise, or delay in exercising, any right, power or
privilege hereunder shall not preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Trustee or
any Holder of the Notes of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Trustee or such
Holder of Notes would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any rights or remedies provided by law.
17.8 Interpretation of Agreement. To the extent a term or
---------------------------
provision of this Pledge Agreement conflicts with the Indenture, the Indenture
shall control with respect to the subject matter of such term or provision.
Acceptance of or
-25-
acquiescence in a course of performance rendered under this Pledge Agreement
shall not be relevant to determine the meaning of this Pledge Agreement even
though the accepting or acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
17.9 Continuing Security Interest; Termination. (a) This Pledge
-----------------------------------------
Agreement shall create a continuing security interest in and to the Initial
Collateral and the Subsequent Collateral and shall, unless otherwise provided in
the Indenture or in this Pledge Agreement, remain in full force and effect until
the payment in full in cash of the Initial Secured Obligations and the
Subsequent Secured Obligations. This Pledge Agreement shall be binding upon the
Pledgor, its transferees, successors and assigns, and shall inure, together with
the rights and remedies of the Trustee hereunder, to the benefit of the Trustee,
the Holders of the Notes and their respective successors, transferees and
assigns.
(b) This Pledge Agreement shall terminate upon the payment in
full in cash of the Subsequent Secured Obligations or the consummation of a
Special Mandatory Redemption. At such time, the Trustee shall, pursuant to an
Issuer Order, reassign and redeliver to the Pledgor all of the Subsequent
Collateral hereunder that has not been sold, disposed of, retained or applied by
the Trustee in accordance with the terms of this Pledge Agreement and the
Indenture. Such reassignment and redelivery shall be without warranty by or
recourse to the Trustee in its capacity as such, except as to the absence of any
Liens on the Subsequent Collateral created by or arising through the Trustee,
and shall be at the reasonable expense of the Pledgor.
17.10 Survival Provisions. All representations, warranties and
-------------------
covenants of the Pledgor contained herein shall survive the execution and
delivery of this Pledge Agreement, and shall terminate only upon the termination
of this Pledge Agreement. The obligations of the Pledgor under Sections 13 and
15 hereof shall survive the termination of this Pledge Agreement.
17.11 Waivers. The Pledgor waives presentment and demand for
-------
payment of any of the Initial Secured Obligations or the Subsequent Secured
Obligations, protest and notice of dishonor or default with respect to any of
the Initial Secured Obligations or the Subsequent Secured Obligations, and all
other notices to which the Pledgor might otherwise be entitled, except as
otherwise expressly provided herein or in the Indenture.
17.12 Authority of the Trustee. (a) The Trustee shall have and
------------------------
be entitled to exercise all powers hereunder that are specifically granted to
the Trustee by the terms hereof, together with such powers as are reasonably
incident thereto. The Trustee may perform any of its duties hereunder or in
connection with the Initial Collateral or the Subsequent Collateral by or though
agents or employees and shall be entitled to retain
-26-
counsel and to act in reliance upon the advice of counsel concerning all such
matters. Except as otherwise expressly provided in this Pledge Agreement or the
Indenture, neither the Trustee nor any director, officer, employee, attorney or
agent of the Trustee shall be liable to the Pledgor for any action taken or
omitted to be taken by the Trustee, in its capacity as Trustee, hereunder,
except for its own bad faith, gross negligence or willful misconduct , and the
Trustee shall not be responsible for the validity, effectiveness, sufficiency or
priority hereof or of any document or security furnished pursuant hereto. The
Trustee and its directors, officers, employees, attorneys and agents shall be
entitled to rely on any communication, instrument or document believed by it or
them to be genuine and correct and to have been signed or sent by the proper
person or persons. The Trustee shall have no duty to cause any financing
statement or continuation statement to be filed in respect of the Initial
Collateral or the Subsequent Collateral.
(b) The Pledgor acknowledges that the rights and responsibilities of
the Trustee under this Pledge Agreement with respect to any action taken by the
Trustee or the exercise or non-exercise by the Trustee of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Pledge Agreement shall, as between the Trustee and the
Holders of the Notes, be governed by the Indenture and by such other agreements
with respect thereto as may exist from time to time among them, but, as between
the Trustee and the Pledgor, the Trustee shall be conclusively presumed to be
acting as agent for the Holders of the Notes with full and valid authority so to
act or refrain from acting, and the Pledgor shall not be obligated or entitled
to make any inquiry respecting such authority.
17.13 Final Expression. This Pledge Agreement, together with
----------------
the Indenture and any other agreement executed in connection herewith, is
intended by the parties as a final expression of this Pledge Agreement and is
intended as a complete and exclusive statement of the terms and conditions
thereof.
17.14 Rights of Holders of the Notes. No Holder of Notes shall
------------------------------
have any independent rights hereunder other than those rights granted to
individual Holders of the Notes pursuant to Section 6.8 of the Indenture;
provided that nothing in this subsection shall limit any rights granted to the
--------
Trustee under the Notes or the Indenture.
17.15 Governing Law; Submission to Jurisdiction; Waiver of Jury
---------------------------------------------------------
Trial; Waiver of Damages.
------------------------
(a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED UNDER THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE PLEDGOR, THE TRUSTEE AND THE HOLDERS OF THE NOTES IN
-27-
CONNECTION WITH THIS PLEDGE AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. NOTWITHSTANDING
THE FOREGOING: THE MATTERS IDENTIFIED IN 31 C.F.R. (S)(S) 357.10 AND 357.11 (AS
IN EFFECT ON THE DATE OF THIS AGREEMENT) SHALL BE GOVERNED SOLELY BY THE LAWS
SPECIFIED THEREIN.
(b) THE PLEDGOR AGREES THAT NEITHER ANY HOLDER OF NOTES
NOR (EXCEPT AS OTHERWISE PROVIDE IN THIS PLEDGE AGREEMENT OR THE INDENTURE) THE
TRUSTEE IN ITS CAPACITY AS TRUSTEE SHALL HAVE ANY LIABILITY TO THE PLEDGOR
(WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE
PLEDGOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS PLEDGE
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS
BINDING ON THE TRUSTEE OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH
LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE TRUSTEE OR SUCH
HOLDERS OF NOTES, AS THE CASE MAY BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR
WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER
OF NOTES IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY
JUDGMENT OR OTHER COURT ORDER PERTAINING TO THIS PLEDGE AGREEMENT OR ANY RELATED
AGREEMENT OR DOCUMENT ENTERED IN FAVOR OF THE TRUSTEE OR ANY HOLDER OF NOTES, OR
TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY
OR PERMANENT INJUNCTION, THIS PLEDGE AGREEMENT OR ANY RELATED AGREEMENT OR
DOCUMENT BETWEEN THE PLDEGOR ON THE ONE HAND AND THE TRUSTEE AND/OR THE HOLDERS
OF THE NOTES ON THE OTHER HAND.
17.16 Consequential Damages. In no event shall the Trustee
---------------------
hereunder be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Trustee
has been advised of the likelihood of such loss or damage and regardless of the
form of action.
-28-
17.17 Wire Transfers. (a) The Trustee is authorized to seek
--------------
confirmation of fund transfer instructions by telephone call-back to the person
or persons designated on Exhibit L hereto, and the Trustee may rely upon the
confirmations of any one purporting to be the person or persons so designated.
The persons and telephone numbers for call-backs may be changed only in a
writing actually received and acknowledged by the Trustee. The parties to this
Pledge Agreement acknowledge that such security procedure is commercially
reasonable.
(b) It is understood that the Trustee and the beneficiary's bank in
any funds transfer may rely solely upon any account numbers or similar
identifying number provided by either of the other parties hereto to identify
(i) the beneficiary, (ii) the beneficiary's bank, or (iii) an order it executes
using any such identifying number, even where its use may result in a person
other than the beneficiary being paid, or the transfer of funds to a bank other
than the beneficiary's bank or an intermediary bank designated.
-29-
IN WITNESS WHEREOF, the Pledgor and the Trustee have each caused this
Pledge Agreement to be duly executed and delivered as of the date first above
written.
Pledgor:
AMERICAN CELLULR CORPORATION
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
Trustee:
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Assistant Vice President
EXHIBIT A
---------
[Form of Preliminary Release Certificate]
AMERICAN CELLULAR CORPORATION
Date:
The undersigned officer of American Cellular Corporation, a Delaware
corporation (the "Pledgor"), hereby certifies to the Trustee, pursuant to
Section 3.3 of the Pledge and Escrow Agreement dated as of May 13, 1998 (the
"Pledge Agreement") between the Pledgor and Chase Manhattan Bank and Trust
Company, National Association, as trustee (the "Trustee") under the Indenture
dated as of May 13, 1998 (the "Indenture") between the Pledgor and the Trustee,
as follows:
The consummation of the Merger (as defined in the Indenture) and related
transactions including the financing thereof is scheduled to occur on _________,
1998 (the "Anticipated Merger Date").
The Pledgor reasonably believes that the Merger will be consummated on the
Anticipated Merger Date.
The Pledgor hereby requests and directs the Trustee to liquidate all of the
Cash Equivalents (as defined in the Pledge Agreement) by no later than 9:00 a.m.
(New York time) on the Anticipated Merger Date.
By: ____________________________________
Name:
Title:
A-1
EXHIBIT B
---------
[Form of Merger Extension Notice Certificate]
AMERICAN CELLULAR CORPORATION
Date:
The undersigned officer of American Cellular Corporation, a Delaware
corporation (the "Pledgor"), hereby certifies to the Trustee, pursuant to
Section 3.3 of the Pledge and Escrow Agreement dated as of May 13, 1998 (the
"Pledge Agreement") between the Pledgor and Chase Manhattan Bank and Trust
Company, National Association as trustee (the "Trustee") under the Indenture
dated as of May 13, 1998 (the "Indenture") between the Pledgor and the Trustee,
as follows:
1. The Merger will be consummated after June 15, 1998.
2. The Pledgor believes that the Merger will not be consummated prior to
____________.
The Pledgor hereby authorizes the Trustee to invest the Initial Funds in
Cash Equivalents (as defined in the Pledge Agreement) that mature on or prior to
________________.
By: _____________________________
Name:
Title:
B-1
EXHIBIT C
---------
[Form of Xxxxxx & Xxxxxxx Opinion]
The consummation of the Merger and the assumption by PriCellular of the
Notes and the obligations under the Registration Rights Agreement and the Pledge
Agreement and the entering into by PriCellular of the Credit Facility will not
result in the violation by the Company, PriCellular, Wireless (or any other
entity which is the borrower under the Credit Facility of their respective
Certificates of Incorporation or bylaws or any federal or New York statute or
the Delaware GCL, rule or regulation or any judgment, order, writ or decree of
any United States federal, New York or Delaware court or governmental
instrumentality or do not and will not conflict with or result in the breach or
default, whether with or without the passage of time or both, including any
repayment event, under any of the material agreements identified on Schedule A
hereto or any other material agreements entered into after the Pledge Agreement
and known to us on the date of delivery of the opinion; and, no consent,
approval, license, authorization or order of, or filing with, any federal, New
York or Delaware court or governmental agency or body is required for the
consummation of the Merger and the assumption by PriCellular of the Notes and
the obligations under the Registration Rights Agreement and the Pledge Agreement
and the entering into by PriCellular of the Credit Facility.
Such opinion may be subject to the same exceptions and assumptions as
contained in the opinion delivered to the Lenders under the Credit Facility with
respect to similar matters and acceptable to the Trustee.
C-1
Schedule A
----------
Material Agreements
-------------------
1. Contribution Agreement by and among Texas/Illinois Cellular Limited
Partnership, a Delaware limited partnership, Southwestern Xxxx Mobile
Systems, Inc., a Delaware and Virginia corporation, the Pledgor, Cellular
Information Systems of Laredo, Inc., a Texas corporation, dated as of April
10, 1995.
2. Asset Acquisition Agreement dated as of October 15, 1996 among PriCellular,
Cellular Information Systems of Xxxxxxxx, Inc. and Horizon Cellular
Telephone Company of Central Kentucky, L.P.
3. Indenture to 14% Senior Subordinated Discount Notes due 2001 among
PriCellular, PriCellular Wireless Corporation and Bank of Montreal Trust
Company, as trustee.
4. Indenture of 12 1/4% Senior Subordinated Notes due 2003 among PriCellular,
Wireless and Bank of Montreal Trust Company, trustee.
5. Indenture to 10 3/4% Senior Subordinated Convertible Discount Notes due 2004
between PriCellular and Bank of Montreal Trust Company, as trustee.
6. Indenture to 10 3/4% Senior Notes due 2004 between Wireless and Bank of
Montreal Trust Company, as trustee.
7. Stockholders' Agreement, dated as of April 28, 1995, by and among
PriCellular and the parties named therein
8. Voting Agreement, dated as of December 28, 1995 by and among PriCellular and
the parties named therein
9. Operating Agreement dated as of April 28, 1994 by and between PriCellular
and XxXxx.
10. Warrant Agreement between PriCellular and Price Communications Corporation
11. Employment Agreement dated as of December 28, 1995 by and between
PriCellular and Xxxxxx Xxxxx
12. Agreement and Plan of Merger dated as of March 6, 1998 between PriCellular
and the Pledgor.
13. Voting Agreement dated as of March 6, 1998, among the Pledgor, PriCellular
and shareholders of the Pledgor.
14. Spectrum Letter, dated March 6, 1998.
15. Consent and Waiver dated as of March 6, 1998 between PriCellular and AT&T
Wireless Services, Inc.
C-2
16. Stock Purchase Agreement dated as of March 5, 1998 among the Pledgor and the
parties listed on Exhibit A to such agreement.
17. Stockholders Agreement dated as of March 5, 1998 by and among the Pledgor
and the parties listed on Exhibit A to such agreement.
18. Registration Rights Agreement dated as of March 5, 1998 by and among the
Pledgor and each of the parties listed on Exhibit A to such agreement.
19. Asset Purchase Agreement dated as of October 31, 1997 by and among
PriCellular, Xxxx Cellular Corporation and Tennessee 04 Partners, L.P.
C-3
EXHIBIT D
---------
[Form of Release Certificate]
AMERICAN CELLULAR CORPORATION
Date:
The undersigned officer of American Cellular Corporation, a Delaware
corporation (the "Pledgor"), hereby certifies, pursuant to Section 4.2 of the
Pledge and Escrow Agreement dated as of May 13, 1998 (the "Pledge Agreement")
between the Pledgor and Chase Manhattan Bank and Trust Company, National
Association as trustee (the "Trustee") under the Indenture dated as of May 13,
1998 (the "Indenture") between the Pledgor and the Trustee, as follows:
1. All of the conditions to the consummation of the Merger (as defined in
the Indenture) have been satisfied or waived as of the date hereof.
2. The Merger will be consummated on the date hereof and (a) the Pledgor
shall have received the Equity Contribution of at least $350 million, (b) the
Pledgor (on a consolidated basis) shall have incurred or assumed, after giving
effect to the Merger, no greater than $925 million (plus the amount of any (I)
Old Notes which have been properly defeased and (II) Equity Contribution in
excess of $350 million) and no less than $750 million of Indebtedness under the
Credit Facility and the Old Notes and (c) the Pledgor (on a consolidated basis)
shall not have outstanding more than $25 million of Indebtedness (other than the
Notes, the Credit Facility, the Old Notes and the Convertible Notes), after
giving effect to the Merger.
3. No Event of Default (as defined in the Indenture) has occurred and is
continuing or will occur as a result of the release of funds contemplated
hereby.
Unless otherwise indicated, capitalized terms used herein without
definition shall have the meanings specified in the Pledge Agreement.
The Pledgor hereby requests the Trustee to release $__________, which
amount is the funds in excess of the Subsequent Funds held by it in the Initial
Escrow and Pledge Account at Chase Manhattan Bank and Trust Company, National
Association and to terminate and release its pledge and assignment of, and
security interest in, the Initial Collateral under the Pledge Agreement (but not
the Subsequent Collateral) in accordance with Section 4.3 thereof. As soon as
practicable, such funds should be deposited in immediately available funds in
the following account or accounts at [Insert Bank] in the amounts indicated.
By: ______________________________
Name:
Title:
D-1
EXHIBIT E
---------
[Form of Release of Security Interest]
[To be typed on Trustee's letterhead]
Date:
VIA FACSIMILE AND FEDERAL EXPRESS
American Cellular Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx X
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: [ ]
Re: Release of Security Interest
Ladies and Gentlemen:
Reference is hereby made to that certain Pledge and Escrow Agreement dated
as of May 13, 1998 by and among American Cellular Corporation and Chase
Manhattan Bank and Trust Company, National Association, as Trustee (as amended,
supplemented or modified from time to time in accordance with the terms thereof,
the "Pledge Agreement").
By its signature below, the Trustee hereby terminates and releases its
pledge and assignment of, and security interest in, all of the Initial
Collateral under the Pledge Agreement (but not the Subsequent Collateral), which
amount has been delivered to you on your order on the date hereof.
This release may be executed in one or more counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute
one and the same instrument.
Very truly yours,
Chase Manhattan Bank and Trust Company,
National Association
as Trustee
By: ______________________________
Name:
Title:
E-1
EXHIBIT F
---------
[Form Of Extension Certificate]
AMERICAN CELLULAR CORPORATION
Date:
The undersigned officer of American Cellular Corporation, a Delaware
corporation (the "Pledgor"), hereby certifies to the Trustee, pursuant to
Section 3.4 of the Pledge and Escrow Agreement dated as of May 13, 1998 (the
"Pledge Agreement") between the Pledgor and Chase Manhattan Bank and Trust
Company, National Association, as trustee (the "Trustee") under the Indenture
dated as of May 13, 1998 (the "Indenture") between the Pledgor and the Trustee,
as follows:
1. The Pledgor has deposited $_________ in the Initial Escrow and
Pledge Account for the benefit of the holders of the Notes.
2. The basis under which the Merger Agreement has not been satisfied
as of the date hereof relates to pending FCC or other governmental or regulatory
approvals.
3. The lenders under the Credit Facility have extended their
commitment to lend to [no earlier than the Extension Date].
4. The Pledgor has issued a press release in a reasonably commercial
manner and notified the Trustee with respect to the extension of the escrow
period.
By: _______________________________
Name:
Title:
F-1
EXHIBIT G
---------
[Letterhead]
[ ], 1998
Independent Public Accountants' Report
on Sufficiency of Marketable U.S. Securities
To [ ]:
We understand that $285,000,000 American Cellular Corporation 10 1/2% Senior
Notes due 2008 (the "Notes") were issued on May 13, 1998. We also understand
-----
the Trustee currently holds the Government Securities listed on the attached
schedule (the "Government Securities") pursuant to Section 5.4 of the Pledge and
---------------------
Escrow Agreement, dated May 13, 1998 (the "Pledge Agreement"). We also
----------------
understand that at any time while the Pledge Agreement is in force, the Pledgor
may substitute Marketable U.S. Securities (the "Marketable U.S. Securities") for
--------------------------
the Government Securities pledged as Subsequent Collateral pursuant to Section
5.3(b) of the Pledge Agreement.
We have been requested to verify the mathematical correctness of the
computations shown on the attached schedule that the Marketable U.S. Securities
substituted for the Government Securities pledged as Subsequent Collateral
pursuant to the Pledge Agreement have a fair market value (measured at the date
of substitution) at least equal to 125.0% of the amount of any of the first six
scheduled interest payments on the Notes that are unpaid (or the pro rata
portion of such interest payments equal to the percentage of such interest
payments to be secured by such Marketable U.S. Securities) as of the date such
Marketable U.S. Securities are proposed to be substituted as Subsequent
Collateral pursuant to Section 5.3(b) of the Pledge Agreement.
We have performed the procedures enumerated below, which were agreed to by
American Cellular Corporation (the "Issuer") solely to assist you with respect
------
to verifying the mathematical correctness of the above mentioned computations.
This engagement to apply agreed-upon procedures was performed in accordance with
standards established by the American Institute of Certified Public Accountants.
The sufficiency of the procedures is solely the responsibility of the specified
users of the report. Consequently, we make no representation regarding the
sufficiency of the procedures described below either for the purpose for which
this report has been requested or for any other purpose.
G-1
1. We have verified the computations of the amount of any of the first six
scheduled interest payments on the Notes that are unpaid (or the pro rata
portion of such interest payments equal to the percentage of such interest
payments to be secured by such Marketable U.S. Securities) as of the date
such Marketable U.S. Securities are proposed to be substituted as
Subsequent Collateral.
2. We have verified the fair market value of the Marketable U.S. Securities to
be substituted as Subsequent Collateral.
3. We have recomputed the computation of the fair market value (measured at
the date of substitution) of the Marketable U.S. Securities, which are
proposed to be substituted as Subsequent Collateral, and the fair market
value is at least equal to 125.0% of the amount of any of the first six
scheduled interest payments on the Notes that are unpaid (or the pro rata
portion of such interest payments equal to the percentage of such interest
payments to be secured by such Marketable U.S. Securities) as of the date
such Marketable U.S. Securities are proposed to be substituted as
Subsequent Collateral.
In performing the above calculations, we have relied solely on the data set
forth in the attached schedule, furnished by Xxxxxxx Xxxxx & Co. The scope of
our engagement did not include the verification of any underlying data,
assumptions or definitions necessary to derive the financial calculations, which
include, but are not limited to, the following:
1. The principal amounts, coupon rates, and the related maturity for the
Securities and the Notes.
2. Interest start dates, delivery dates and first interest payment dates for
the Securities and the Notes.
Our engagement was limited to the procedures enumerated above. Accordingly, we
express no opinion or any form of assurance relating to the occurrence of future
events or to the attainability of the assumptions.
The data presented in the accompanying attached schedule indicate that the
Securities will be sufficient upon receipt of scheduled interest and principal
payments on such Securities to provide for payment in full of the first six
scheduled interest payments due on all of the Notes.
G-2
This letter is solely for the information of, and assistance to, Chase Manhattan
Bank and Trust Company, National Association, as Trustee under the Pledge
Agreement, and, without our prior consent, is not to be used, circulated, quoted
or otherwise referred to for any other purpose.
By: _____________________________
Name:
Title:
G-3
EXHIBIT H
---------
[Form of Representations and Warranties Bring-down Certificate]
AMERICAN CELLULAR CORPORATION
The undersigned officer of American Cellular Corporation, a Delaware
corporation (the "Pledgor"), hereby certifies to the Trustee, pursuant to
Section 5.3(b) of the Pledge and Escrow Agreement dated as of May 13, 1998 (the
"Pledge Agreement") between the Pledgor and Chase Manhattan Bank and Trust
Company, National Association, as trustee (the "Trustee") under the Indenture
dated as of May 13, 1998 (the "Indenture") between the Pledgor and the Trustee,
as follows:
The representations and warranties of the Pledgor set forth in Section
7 of the Pledge Agreement are true and correct as of the day hereof.
By: ____________________________
Name:
Title:
H-1
EXHIBIT I
---------
[Form of Subsequent Collateral Investments Account Letter]
[ ], 1998
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
American Cellular Corporation
-----------------------------
Dear Sir or Madam:
Reference is made to Subsequent Collateral Investments Account No. [
] into which certain securities, instruments and other properties are deposited
from time to time (the "Subsequent Collateral Investments Account") maintained
-----------------------------------------
by you (the "Trustee"). Pursuant to the Pledge and Escrow Agreement, dated May
-------
13, 1998 (the "Pledge Agreement"), American Cellular Corporation (the
----------------
"Pledgor"), has granted to the Trustee for the holders of Notes referred to in
-------
the Indenture dated as of May 13, 1998 (the "Indenture"), between the Trustee
---------
and the Pledgor, a security interest in certain property of the Pledgor,
including, among other things, the following (the "Subsequent Collateral
---------------------
Investments"): (a) the Subsequent Collateral Investments Account, (b) all
-----------
certificates and instruments, if any, representing or evidencing the Subsequent
Collateral Investments, (c) any and all securities entitlements to the
Subsequent Collateral Investments, (d) any and all related securities accounts
in which security entitlements to the Subsequent Collateral Investments are
carried, (e) all notes, certificates of deposit, deposit accounts, checks and
other instruments from time to time hereafter delivered to or otherwise
possessed by the Trustee for or on behalf of the Pledgor in substitution for or
in addition to any or all the then existing Subsequent Collateral Investments,
(f) all interest, dividends, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the then existing Subsequent Collateral Investments, and (g)
all proceeds of any and all of the foregoing Subsequent Collateral (including,
without limitation, proceeds that constitute property of the types described in
clauses (a) - (f) of this paragraph) and, to the extent not otherwise included,
all cash. It is a condition to the continued maintenance of the Subsequent
Collateral Investments Account with you that you agree to this letter agreement.
By signing this letter agreement, you acknowledge notice of, and
consent to the terms and provisions of, the Pledge Agreement, a copy of which is
attached hereto,
I-1
and confirm to the Trustee that the description of the Subsequent Collateral
Investments Account set forth on Schedule 1 hereof is correct and that you have
received no notice of any other pledge or assignment of the Subsequent
Collateral Investments Account. Further, you hereby agree with the Trustee that:
(a) Notwithstanding anything to the contrary in any other agreement
relating to the Subsequent Collateral Investments Account, the Subsequent
Collateral Investments Account is and will be subject to the terms and
conditions of the Pledge Agreement, will be maintained solely for the
benefit of the Trustee, will be entitled "AMERICAN CELLULAR Subsequent
Collateral Investments Account" and will be subject to written instructions
only from an officer of the Trustee. You hereby agree to comply with all
instructions (including, without limitation, any instructions to liquidate
all or less than all the Subsequent Collateral Investments and transfer the
proceeds thereof to the Trustee), originated by the Trustee relating to the
Subsequent Collateral Investments Account without further consent from any
other person (including, without limitation, the Pledgor), and not to
comply with any instructions originated by any person other than the
Trustee.
(b) You will maintain a record of all securities, instruments, checks
and other remittance items received in the Subsequent Collateral
Investments Account and, in addition to providing the Trustee and the
Pledgor with a report describing the contents on the Subsequent Collateral
Investments Account on a regular basis (or upon Trustee's or Pledgor's
request), furnish to the Trustee a monthly statement of the Subsequent
Collateral Investments Account to be transmitted electronically to the
Trustee at (000) 000-0000, Attention: Xxxx Xxxxxx.
(c) You will transfer, in same day funds, as soon as practicable upon
receipt, all amounts collected from the Collateral Investments Account on
such day to the following account (the "Cash Collateral Account"):
-----------------------
American Cellular Corporation
Account No. [ ]
[ ]
[ ]
[ ]
Attention: [ ]
(d) All transfers referred to in paragraph (c) above shall be made by
you irrespective of, and without deduction for, any counterclaim,
defense, recoupment or set-off and shall be final, and you will not
seek to recover from the Trustee for any reason any such payment once
made.
I-2
(e) All service charges and fees with respect to the Subsequent
Collateral Investments Account shall be payable by the Pledgor.
(f) The Trustee shall be entitled to exercise any and all rights of
the Pledgor in respect of the Subsequent Collateral Investments Account in
accordance with the terms of the Pledge Agreement, and the undersigned
shall comply in all respects with such exercise.
This letter agreement shall be binding upon you and your successors
and assigns and shall inure to the benefit of the Trustee, the holders of the
Notes and their successors, transferees and assigns. You may terminate this
letter agreement only upon thirty days' prior written notice to the Pledgor and
the Trustee. Upon such termination you shall close the Subsequent Collateral
Investments Account and transfer all funds in the Subsequent Collateral
Investments Account to the Cash Collateral Account. After any such termination,
you shall nonetheless remain obligated promptly to transfer to the Cash
Collateral Account all securities, instruments, funds and other property
received in respect of the Subsequent Collateral Investments Account.
I-3
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to choice-of-law
principles.
Very truly yours,
AMERICAN CELLULAR CORPORATION
By: ______________________________
Name:
Title:
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By: ______________________________
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
[ ]
By: __________________________
Name:
Title:
I-4
EXHIBIT J
---------
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE
Pursuant to the Pledge and Escrow Agreement (the "Pledge Agreement")
----------------
dated as of May 13, 1998 by and between American Cellular Corporation (the
"Pledgor") and Chase Manhattan Bank and Trust Company, National Association as
--------
trustee (the "Trustee") for the holders of the Pledgor's 10 1/2% Senior Notes
-------
Due 2008, the undersigned officer of the Trustee, on behalf of the Trustee,
makes the following certifications to the Pledgor and the Initial Purchasers.
Capitalized terms used and not defined in this Officer's Certificate have the
meanings set forth or referred to in the Pledge Agreement.
1. Substantially contemporaneously with the execution and delivery of
this Officer's Certificate, the Trustee has established with The Chase Manhattan
Bank a cash collateral account (the "Cash Collateral Account") and, as
-----------------------
securities intermediary, a securities account in the name of "AMERICAN CELLULAR
Subsequent Collateral Investments Account" (the "Subsequent Collateral
---------------------
Investments Account") with respect to which the Trustee is the entitlement
-------------------
holder and through which the Trustee has acquired a security entitlement to
certain Cash Equivalents (the "Subsequent Collateral Investments"), and has made
---------------------------------
appropriate book entries in its records establishing that the Subsequent Funds
and the Subsequent Collateral Investments and the Trustee's securities
entitlement thereto have been credited to and are held in the Cash Collateral
Account or the Subsequent Collateral Investments Account, as the case may be.
2. The Trustee has established and maintained and will maintain the
Cash Collateral Account and the Subsequent Collateral Investments Account and
all securities entitlements and other positions carried in the Cash Collateral
Account or the Subsequent Collateral Investments Account solely in its capacity
as Trustee and has not asserted and will not assert any claim to or interest in
the Cash Collateral Account or the Subsequent Collateral Investments Account or
any such securities entitlements or other positions except in such capacity.
3. The Trustee has acquired its security entitlement to the
Subsequent Collateral Investments directly through a "securities account" (as
defined in Section 8-501(a) of the UCC) maintained by The Chase Manhattan Bank
for the benefit of Chase Manhattan Bank and Trust Company, National Association
at the Federal Reserve Bank of New York, as securities intermediary, for value
and without notice of any adverse claim thereto. Without limiting the generality
of the foregoing, the Cash Collateral Account and the Subsequent Collateral
Investments are not and the Trustee's security entitlement to the Subsequent
Collateral Investments is not, to the Trustee's knowledge, subject to any Lien
granted by or to arising through or in favor of any securities
J-1
intermediary (including, without limitation, The Chase Manhattan Bank or the
Federal Reserve Bank of New York) through which the Trustee derives its security
entitlement to the Subsequent Collateral Investments.
4. The Trustee has not caused or permitted the Cash Collateral
Account or the Subsequent Collateral Investments or its security entitlement
hereto to become subject to any Lien created by or arising through the Trustee.
IN WITNESS WHEREOF, the undersigned officer has executed this
Officer's Certificate on behalf of Chase Manhattan Bank and Trust Company,
National Association as Trustee this [ ] day of [ ], 1998.
CHASE MANHATTAN BANK AND
TRUST COMPANY, NATIONAL ASSOCIATION
By: _______________________________
Name:
Title:
J-2
EXHIBIT K
---------
[Letterhead]
[ ], 1998
Independent Public Accountants' Report
on Applying Agreed-Upon Procedures
To [ ]:
We understand that $285,000,000 American Cellular Corporation 10 1/2% Senior
Notes due 2008 (the "Notes") were issued on May 13, 1998. We also understand
-----
the Trustee will hold the Securities listed on the attached schedule (the
"Securities") pursuant to Section 5.4 of the Pledge and Escrow Agreement, dated
-----------
May 13, 1998 (the "Pledge Agreement").
----------------
We have been requested to verify the mathematical correctness of the
computations shown on the attached schedule that the Securities will be
sufficient upon receipt of scheduled interest and principal payments on such
securities to provide for payment in full of the first six scheduled interest
payments due on all of the Notes.
We have performed the procedures enumerated below, which were agreed to by
American Cellular Corporation (the "Issuer") solely to assist you with respect
------
to verifying the mathematical correctness of the above mentioned computations.
This engagement to apply agreed-upon procedures was performed in accordance with
standards established by the American Institute of Certified Public Accountants.
The sufficiency of the procedures is solely the responsibility of the specified
users of the report. Consequently, we make no representation regarding the
sufficiency of the procedures described below either for the purpose for which
this report has been requested or for any other purpose.
1. We have verified the computations of the payments in full of the first six
scheduled interest payments on all of the Notes, as shown on the attached
schedule.
2. We have verified the computations of the cash flow shown on the attached
schedule.
3. We recomputed the computations of the payments of interest on the Notes and
the amount of the payments of maturing principal and interest to be
received from the
K-1
Securities to meet the first six scheduled interest payments on all of the
Notes all as set forth in the attached schedule, and found them to be
mathematically correct.
In performing the above calculations, we have relied solely on the data set
forth in the attached schedule, furnished by Xxxxxxx Xxxxx & Co.. The scope of
our engagement did not include the verification of any underlying data,
assumptions or definitions necessary to derive the financial calculations, which
include, but are not limited to, the following:
1. The principal amounts, coupon rates, and the related maturity for the
Securities and the Notes.
2. Interest start dates, delivery dates and first interest payment dates for
the Securities and the Notes.
Our engagement was limited to the procedures enumerated above. Accordingly, we
express no opinion or any form of assurance relating to the occurrence of future
events or to the attainability of the assumptions.
The data presented in the accompanying attached schedule indicate that the
Securities will be sufficient upon receipt of scheduled interest and principal
payments on such Securities to provide for payment in full of the first six
scheduled interest payments due on all of the Notes.
This letter is solely for the information of, and assistance to, Chase Manhattan
Bank and Trust Company, National Association, as Trustee under the Pledge
Agreement, and, without our prior consent, is not to be used, circulated, quoted
or otherwise referred to for any other purpose.
By: _________________________
Name:
Title:
K-2
EXHIBIT L
Telephone Number(s) for Call-Backs and
Person(s) Designated to Confirm Funds Transfer Instructions
-----------------------------------------------------------
If to Pledgor:
Name Telephone Number
---- ----------------
1. Xxxx Xxxxx (000) 000-0000
2. Xxxxx XxXxxxxx (000) 000-0000
L-1