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EXHIBIT 4.5
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XXXXXXXX XXXXXXX X.X.,
XXXXXX XXXXXX TRUST COMPANY OF NEW YORK,
as Escrow Agent and
Securities Intermediary
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
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ESCROW AGREEMENT
Dated as of May 27, 1998
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225,000 Units Consisting of 13 1/4% Senior Notes due 2008
and Warrants to Purchase 1,500,000 Ordinary Shares
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ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement"), dated as of May 27, 1998,
among United States Trust Company of New York, a New York banking corporation,
as escrow agent and securities intermediary (in such capacities, the "Escrow
Agent"), United States Trust Company of New York, as Trustee (in such capacity,
the "Trustee") under the Indenture (as defined herein), and VersaTel Telecom
B.V., a company organized under the laws of The Netherlands (the "Company").
WITNESSETH:
WHEREAS, pursuant to the Unit Agreement, dated as of May 27, 1998 (the "Unit
Agreement"), between the Company and United States Trust Company of New York, as
Unit Agent (in such capacity, the "Unit Agent"), VersaTel is issuing 225,000
Units (the "Units") consisting of $1,000 aggregate principal amount of its 13
1/4% Senior Notes due 2008 (the "Notes") and one warrant to purchase 6.667
ordinary shares of the Company, par value NLG 0.10 per share (the "Common
Stock"). The Notes are to be issued under an indenture, dated as of May 27, 1998
(the "Indenture"), between the Company and the Trustee. The warrants are to be
issued under a Warrant Agreement, dated as of May 27, 1998, between the Company
and United States Trust Company of New York, as Warrant Agent.
WHEREAS, as security for its obligations under the Notes and the
Indenture, the Company hereby grants to the Trustee and any predecessor Trustee
under the Indenture (any such Trustee acting in the name and on behalf of the
Beneficiaries (as defined herein)) for the benefit of the Beneficiaries, a
security interest in and lien upon the Escrow Account (as defined herein).
WHEREAS, the parties have entered into this Agreement in order to set
forth the conditions upon which, and the manner in which, funds will be
disbursed from the Escrow Account (as defined herein) and released from the
security interest and lien described above.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. All terms used but not defined herein shall have the
meanings ascribed to them in the Indenture. All terms defined in the UCC (as
defined herein) and not otherwise defined herein shall have the respective
meanings given to those terms in the UCC, except where the context otherwise
requires. In addition to any other defined terms used herein, the following
terms shall constitute defined terms for purposes of this Agreement and shall
have the meanings set forth below:
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"Agent" means, with respect to the Escrow Account at any date, any
investment advisor or advisors appointed by the Company from time to time, with
notice in writing to the Escrow Agent and the Trustee. Only those persons
identified in an Officers' Certificate of the Agent delivered to the Escrow
Agent at the time of notice of appointment as Agent, or any such persons
identified in a further certificate delivered by an authorized person at the
Agent to the Escrow Agent, shall be authorized to instruct the Escrow Agent
pursuant to the terms of this Agreement.
"Applied" means that disbursed funds have been applied (i) to the
payment of interest on the Notes, (ii) pursuant to Section 3(c) hereof or (iii)
pursuant to Section 6(b)(iii) hereof.
"Available Funds" mean, with respect to each Escrow Account at any
date, (A) the sum of (i) the Pledged Securities and any funds or Cash
Equivalents and (ii) interest earned or dividends paid on the Pledged Securities
and any funds or Cash Equivalents, less (B) the aggregate disbursements made
prior to such date in accordance with the terms of this Agreement.
"Beneficiaries" shall have the meaning set forth in Section 2(b)(ii).
"Cash Equivalents" mean, with respect to the Escrow Account, (i) U.S.
dollars and (ii) U.S. Government Securities having maturities of not later than
May 15, 2001.
"Collateral" shall have the meaning set forth in Section 6(a).
"Escrow Account" means the escrow account established for the benefit
of the Trustee, any predecessor Trustee under the Indenture and the holders of
the Notes pursuant to Section 2(b)(i).
"entitlement holder" means a Person which is both an "entitlement
holder" (as defined in UCC Section 8-102(a)(7)) and an "entitlement holder" (as
defined in 31 C.F.R. Section 357.2 or, as applicable, the corresponding Federal
Book-Entry Regulations).
"Escrow Funds" shall have the meaning set forth in Section 6(c).
"Federal Book-Entry Regulations" means (a) the federal regulations
contained in Subpart B ("Treasury/Revenue Automated Debt Entry System (TRADES)"
governing Book-Entry Securities consisting of U.S. Treasury bonds, notes and
bills) and Subpart D ("Additional Provisions") of 31 C.F.R Part 357, 31 C.F.R.
Section 357.10 through Section 357.14 and Section 357.41 through Section 357.44
(including related defined terms in 31 C.F.R. Section 357.2); and (b) to the
extent substantially identical to the federal regulations referred to in clause
(a) above (as in effect from time to time), the federal regulations governing
other U.S. Government Securities.
"Initial Escrow Amount" means $81,554,215.56.
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"Interest Payment Date" means May 15 and November 15 of each year,
commencing on November 15, 1998 until the Notes are paid in full.
"Issue Date" means the date on which the Notes are originally issued
under the Indenture.
"Payment Notice and Disbursement Request" means a notice signed by an
Officer of the Company sent by the Company to the Escrow Agent requesting a
disbursement of funds from an Escrow Account, in substantially the form of
Exhibit A hereto.
"Pledged Securities" mean, the U.S. Government Securities purchased by
the Company with a portion of the net proceeds from the Offering and deposited
in the Escrow Account.
"Secured Obligations" shall have the meaning set forth in Section 6(a).
"securities intermediary" means a Person that is both a "securities
intermediary" (as defined in UCC Section 8-102(a)(14)) and a "securities
intermediary" (as defined in 31 C.F.R. Section 357.2 or, as applicable, the
corresponding Federal Book-Entry Regulations).
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York.
"U.S. Government Securities" mean direct obligations of, or obligations
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 are
not callable or redeemable at the option of the issuer thereof, which
obligations in each case, are governed by the Federal Book-Entry Regulations.
2. Escrow Account; Escrow Agent.
(a) Appointment of Escrow Agent. The Company and the Trustee hereby
appoint United States Trust Company of New York, as the Escrow Agent, and United
States Trust Company of New York, hereby accepts such appointment under the
terms and conditions of this Agreement.
(b) Establishment of the Escrow Account.
(i) On the Issue Date, the Escrow Agent shall establish an escrow
account in the name of the Trustee entitled the "Escrow Account pledged by
VersaTel Telecom B.V. to United States Trust Company of New York, as Trustee,
acting in the name and on behalf of the Beneficiaries" at its office located at
United States Trust Company of New York, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX. The
Escrow Account shall be a "securities account" as such term is defined in the
UCC.
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(ii) All U.S. dollar funds, including the Initial Escrow Amount,
Pledged Securities and any Cash Equivalents accepted by the Escrow Agent
pursuant to this Agreement shall be held by the Escrow Agent for the Trustee for
the exclusive benefit of the holders of the Notes, as secured parties hereunder
(collectively, the "Beneficiaries"). All such funds shall be held in the Escrow
Account until disbursed or paid in accordance with the terms hereof.
(iii) On the Issue Date, the Company shall deliver, or cause the
delivery of, either (x) the Initial Escrow Amount to the Escrow Agent for
deposit into the Escrow Account against the Escrow Agent's written
acknowledgement and receipt of the Initial Escrow Amount, and the Escrow Agent
shall purchase pursuant to written instructions of the Company or its Agent,
Pledged Securities, with all or a portion of the Initial Escrow Amounts, or (y)
the Pledged Securities and deliver or cause to be delivered such Pledged
Securities to the Escrow Agent for deposit into the Escrow Account against the
Escrow Agent's written acknowledgement and receipt of such Pledged Securities.
Such Pledged Securities shall be held by the Escrow Agent acting in the name and
on behalf of the Beneficiaries and deposited into the Escrow Account for the
exclusive benefit of the Beneficiaries. All payments of interest and principal
on the Pledged Securities shall be deposited into the Escrow Account to be paid
or disbursed in accordance with the terms hereof or, to the extent permitted by
Section 2(d)(i) hereof, reinvested in Cash Equivalents.
(c) Escrow Agent Compensation. The Company shall pay to the Escrow
Agent such compensation for services to be performed by it under this Agreement
as the Company and the Escrow Agent may agree in writing from time to time. The
Escrow Agent shall be paid any compensation owed to it directly by the Company
and shall not disburse from the Escrow Account any such amounts nor shall the
Escrow Agent have any interest in the Escrow Account with respect to such
amounts.
The Company shall reimburse the Escrow Agent upon request for all
reasonable expenses, disbursements and advances incurred or made by the Escrow
Agent in implementing any of the provisions of this Agreement, including
compensation and the reasonable expenses and disbursements of its counsel. The
Escrow Agent shall be paid any such expenses owed to it directly by the Company
and shall not disburse from any of the Escrow Account any such amounts nor shall
the Escrow Agent have any interest in the Escrow Account with respect to such
amounts.
(d) Investment of Funds in the Escrow Account. Any funds on deposit in
the Escrow Account which are not invested may be invested or reinvested, at the
Company's option, only upon the following terms and conditions:
(i) Acceptable Investments with respect to the Escrow Account. All
funds deposited or held in the Escrow Account at any time shall be invested by
the Escrow Agent in Cash Equivalents in accordance with the written instructions
of the Company or its Agent from time to time to the Escrow Agent; provided,
however, that (A) the Company or its Agent shall only designate investment of
funds in Cash Equivalents maturing in an amount sufficient to
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and/or generating interest income sufficient to, when added to the balance of
funds held in the Escrow Account, provide for the payment of interest on the
outstanding Notes on each Interest Payment Date beginning on and including
November 15, 1998 and through and including the Interest Payment Date on May 15,
2001, and the Company or its Agent shall designate, and hereby designates, that
all cash which may from time to time be placed or deposited in or credited,
transferred or delivered to such Escrow Account, be invested as promptly and to
the fullest extent practicable in U.S. Government Securities; and (B) any such
written instructions shall specify the particular investment to be made, shall
state that such investment is authorized to be made hereby and in particular
satisfies the requirements of the preceding clause (A) of this proviso, shall
contain the certification referred to in Section 2(d)(ii), if required, and
shall be executed by an Officer of the Company. The Escrow Agent shall have no
responsibility for determining whether funds held in the Escrow Account shall
have been invested in such a manner so as to comply with the requirements of
this clause (i). All such Cash Equivalents shall be assigned to and held in the
possession of, or, in the case of Cash Equivalents maintained in book entry form
with the Federal Reserve Bank, transferred to a book entry account in the name
of the Escrow Agent for the benefit of the Beneficiaries, except that Cash
Equivalents maintained in book entry form with the Federal Reserve Bank shall be
transferred to a book entry account in the name of the Escrow Agent at the
Federal Reserve Bank that includes only Cash Equivalents held by the Escrow
Agent for its customers and segregated by separate recordation in the books and
records of the Escrow Agent. The Escrow Agent shall not be liable for losses on
any investments made by it pursuant to and in compliance with such written
instructions. In the absence of instructions from the Company that meet the
requirements of this Section 2(d)(i), the Escrow Agent shall have no obligation
to invest funds held in the Escrow Account.
(ii) Security Interest in Investments. No investment of funds in the
Escrow Account shall be made unless the Company has certified to the Escrow
Agent and the Trustee that, upon such investment, the Trustee (acting in the
name and on behalf of the Beneficiaries as appropriate) will have a first
priority perfected security interest in the applicable investment. On the date
of this Agreement, and on each anniversary thereof (upon receipt of written
notice from the Escrow Agent), until the date upon which the balance of the
Available Funds with respect to each Escrow Account shall have been reduced to
zero, each of the Trustee and the Escrow Agent shall receive an Opinion of
Counsel to the Company, dated such date as applicable, which opinion shall
confirm the foregoing and in respect to the Escrow Account, shall meet the
requirements of Section 314(b) of the United States Trust Indenture Act of 1939,
as amended (the "TIA") and shall comply with Sections 11.4 and 11.5 of the
Indenture. If a certificate or opinion as to a class of investments has been
provided to the Escrow Agent, a certificate or opinion need not be issued with
respect to individual investments in securities in that class if the certificate
or opinion applicable to the class remains accurate with respect to such
individual investments, which continued accuracy the Escrow Agent may
conclusively assume.
(iii) Interest and Dividends. All interest earned and dividends paid on
the Pledged Securities in the Escrow Account or any funds invested in Cash
Equivalents in the
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Escrow Account shall be deposited in the Escrow Account as additional Collateral
for the exclusive benefit of the Beneficiaries and, if not required to be
disbursed in accordance with the terms hereof, subject to subsections 6(b)(iii),
6(e) and 6(f), shall be reinvested in accordance with paragraph 2(d)(i) above,
acknowledged by the Trustee, in accordance with the terms hereof unless the
Trustee has provided written notice to the Escrow Agent that a Default or Event
of Default under the Indenture has occurred or the Trustee has notified the
Escrow Agent that it should only take direction from the Trustee or should no
longer take direction from the Company in which case the Escrow Agent shall take
directions from the Trustee.
(iv) Limitation on the Escrow Agent's Responsibilities. The Escrow
Agent's sole responsibilities under this Section 2 shall be (A) to retain
possession of certificated Cash Equivalents and to be the registered or
designated owner of the Pledged Securities and any Cash Equivalents which are
not certificated, (B) to follow written instructions of the Company or its Agent
given in accordance with Section 2(d)(i), (C) to invest and reinvest funds
pursuant to this Section 2(d) and (D) to use reasonable efforts to reduce to
cash such Cash Equivalents as may be required to fund any disbursement or
payment in accordance with Section 3. In connection with clause (d)(iv)(A)
above, the Escrow Agent will maintain continuous possession in the jurisdiction
of its principal place of business of certificated Cash Equivalents and cash
included in the Collateral and will cause the Pledged Securities and any
uncertificated dollar Cash Equivalents to be registered in the book-entry system
of, and transferred to an account of the Escrow Agent or a sub-agent of the
Escrow Agent at, any Federal Reserve Bank. Except as provided in Section 6, the
Escrow Agent shall have no other responsibilities with respect to perfecting or
maintaining the perfection of the security interest in the Collateral and shall
not be required to file any instrument, document or notice in any public office
at any time or times. In connection with clause (d)(iv)(A) above and subject to
the following sentence, the Escrow Agent shall not be required to reduce to cash
any Cash Equivalents to fund any disbursement or payment in accordance with
Section 3 in the absence of written instructions signed by an Officer of the
Company specifying the particular investment to liquidate. If no such written
instructions are received, the Escrow Agent may liquidate those Cash Equivalents
having the lowest interest rate per annum or if none such exist, those having
the nearest maturity.
(e) Substitution of the Escrow Agent. The Escrow Agent may resign by
giving no less than 20 Business Days prior written notice to the Company and the
Trustee. Such resignation shall take effect upon the later to occur of (i)
delivery of all funds, the Pledged Securities and any Cash Equivalents
maintained by the Escrow Agent hereunder and copies of all books, records, plans
and other documents in the Escrow Agent's possession relating to such funds, the
Pledged Securities or any Cash Equivalents or this Agreement to a successor
escrow agent mutually approved by the Company and the Trustee (which approvals
shall not be unreasonably withheld or delayed) and (ii) the Company, the Trustee
and such successor escrow agent entering into this Agreement or any written
successor agreement no less favorable to the interests of the holders of the
Notes and the Trustee than this Agreement and the taking of such other steps as
may be necessary to give the successor escrow agent a first priority security
interest in the Pledged Securities, and the Escrow Agent shall thereupon
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be discharged of all obligations under this Agreement and shall have no further
duties, obligations or responsibilities in connection herewith, except as set
forth in Section 4. If a successor escrow agent has not been appointed or has
not accepted such appointment within 30 Business Days after notice of
resignation is given to the Company, the Escrow Agent may apply to a court of
competent jurisdiction for the appointment of a successor escrow agent.
(f) Escrow Account Statement. At least 30 days prior to each Interest
Payment Date, the Escrow Agent shall deliver to the Company and the Trustee a
statement setting forth with reasonable particularity the balance of funds then
in the Escrow Account and the manner in which such funds are invested. The
parties hereto irrevocably instruct the Escrow Agent that on the first date upon
which the balance in the Escrow Account (including the holdings of all Cash
Equivalents) is reduced to zero, the Escrow Agent shall deliver to the Company
and to the Trustee a notice that the balance in the Escrow Account has been
reduced to zero.
3. Disbursements
(a) Payment Notice and Disbursement Request, Disbursements. No later
than five Business Days prior to an Interest Payment Date, the Company shall
submit to the Escrow Agent with respect to the Notes, acknowledged by the
Trustee, a completed Payment Notice and Disbursement Request substantially in
the form of Exhibit A hereto.
The Escrow Agent's disbursement pursuant to any Payment Notice and
Disbursement Request shall be subject to the satisfaction of the applicable
conditions set forth in Section 3(b). Provided such Payment Notice and
Disbursement Request is not rejected by it, the Escrow Agent, as soon as
reasonably practicable on the Interest Payment Date, but in no event later than
11:00 a.m. (New York City time) on the Interest Payment Date, shall disburse the
funds requested in such Payment Notice and Disbursement Request by wire or
book-entry transfer of immediately available funds to the account of the Trustee
for the benefit of the Beneficiaries. The Escrow Agent shall notify the Trustee
as soon as reasonably practicable (but not later than two (2) Business Days from
the date of receipt of the Payment Notice and Disbursement Request) if any
Payment Notice and Disbursement Request is rejected and the reasons(s) therefor.
In the event such rejection is based upon nonsatisfaction of the condition in
Section 3(b)(I), the Company shall thereupon resubmit the Payment Notice and
Disbursement Request with appropriate changes.
(b) Conditions Precedent to Disbursement. The Escrow Agent's payment of
any disbursement shall be made only if: (I) the Company shall have submitted, in
accordance with the provisions of Section 3(a), a completed Payment Notice and
Disbursement Request to the Escrow Agent substantially in the form of Exhibit A
with blanks appropriately filled in, and (II) the Escrow Agent shall not have
received any written notice from the Trustee that as a result of an Event of
Default under the Indenture the indebtedness represented by the Notes has been
accelerated and has become due and payable (in which event the Escrow Agent
shall apply all Available Funds as required by Section 6(b)(iii)).
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(c) Company Payments. If the Company makes any interest payment or
portion of an interest payment on the Notes from a source of funds other than
the Escrow Account ("Company Funds"), the Company may, after payment in full of
such interest payment, direct the Escrow Agent to release to the Company or at
the direction of the Company an amount of funds from the Escrow Account less
than or equal to the amount of Company Funds so expended. Upon receipt of a
request from the Company (including the certificate described in the following
sentence), the Escrow Agent will pay over to the Company the requested amount.
Concurrently with any release of funds to the Company pursuant to this Section
3(c), the Company will deliver to the Escrow Agent an Officers' Certificate
stating that such release has been duly authorized by all necessary corporate
action, and does not contravene, or constitute a default under, any provision of
applicable law or regulation or of the Articles of Association of the Company or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Company or result in the creation or imposition of any Lien on
any assets of the Company.
(d) If at any time the principal of and interest on the Collateral
exceeds 101% of the amount sufficient, in the written opinion of an
internationally recognized firm of independent accountants selected by the
Company and delivered to the Escrow Agent and the Trustee, to provide for
payment in full of the interest on the outstanding Notes on each Interest
Payment Date beginning on and including November 15, 1998 and through and
including the Interest Payment Date on May 15, 2001 (or, in the event one or
more interest payments have been made thereon, an amount sufficient to provide
for the payment in full of any and all interest payments on the Notes then
remaining, up to and including the sixth scheduled interest payment), the
Company may direct the Escrow Agent and the Trustee to release any such
overfunded amount to the Company or to such other party as the Company may
direct. Upon receipt of written instructions executed by the Company in the form
of an Officers' Certificate, the Escrow Agent shall pay, or shall cause the
payment, over to the Company or the Company's designee, as the case may be, any
such overfunded amount.
(e) It is understood that the Escrow Agent 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 in accordance
with the provisions of this Agreement to identify (i) the Beneficiary, (ii) the
Beneficiary's bank, or (iii) an intermediary bank. The Escrow Agent may apply
any of the Escrow Collateral under its control for any payment 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 a designated intermediary bank.
4. Escrow Agent.
(a) Limitation of the Escrow Agent's Liability; Responsibilities of the
Escrow Agent. Except as otherwise provided herein (and in any event, without
prejudice to the Escrow Agent's representations, warranties, covenants and
agreements in its capacity as securities intermediary contained herein), the
Escrow Agent's responsibility and liability under
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this Agreement shall be limited as follows: (i) the Escrow Agent does not
represent, warrant or guaranty to the holders of the Notes from time to time the
performance of the Company; (ii) the Escrow Agent shall have no responsibility
to the Company or holders of the Notes or the Trustee from time to time as a
consequence of performance or non-performance by the Escrow Agent hereunder,
except for any bad faith, gross negligence or wilful misconduct of the Escrow
Agent; (iii) the Company shall remain solely responsible for all aspects of the
Company's business and conduct; and (iv) the Escrow Agent is not obligated to
supervise, inspect or inform the Company or any third party of any matter
referred to above. In no event shall the Escrow Agent be liable (x) for acting
in accordance with or relying upon any instruction, notice, demand, certificate
or document from the Company or any entity acting on behalf of the Company
delivered in accordance with the terms hereof, (y) for any consequential,
punitive or special damages or (Z) for an amount in excess of the value of the
Escrow Account valued as of the date of deposit.
No implied covenants or obligations shall be inferred from this
Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by the
provisions of any agreement beyond the specific terms hereof. Specifically and
without limiting the foregoing, the Escrow Agent shall in no event have any
liability in connection with its investment, reinvestment or liquidation, in
good faith and in accordance with the terms hereof, of any funds, the Pledged
Securities or Cash Equivalents held by it hereunder, including without
limitation any liability for any delay not resulting from bad faith, gross
negligence or wilful misconduct in such investment, reinvestment or liquidation,
or for any loss of principal or income incident to any such delay.
The Escrow Agent shall be entitled to rely upon any judicial or
administrative order or judgment, upon any opinion of counsel or upon any
certification, instruction, notice or other writing delivered to it by the
Company or the Trustee in compliance with the provisions of this Agreement
without being required to determine the authenticity or the correctness of any
fact stated therein or the propriety or validity of service thereof. The Escrow
Agent may act or refrain from acting in reliance upon any instrument comporting
with the provisions of this Agreement or signature believed by it to be genuine
and may assume that any Person purporting to give notice or receipt or advice or
make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so.
At any time the Escrow Agent may request in writing an instruction in
writing from the Company (other than with respect to any disbursement pursuant
to Section 6(b)(iii)), and may at its own option but in no case is obliged to,
include in such request the course of action it proposes to take and the date on
which it proposes to act, regarding any matter arising in connection with its
duties and obligations hereunder; provided, however, that the Escrow Agent shall
state in such request that it believes in good faith that such proposed course
of action is consistent with another identified provision of this Agreement. The
Escrow Agent shall not be liable to the Company for acting without the Company's
consent in accordance with such a proposal on or after the date specified
therein if (i) the specified date is at least two Business Days after the
Company received the Escrow Agent's request for instructions and its
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proposed course of action, and (ii) prior to so acting, the Escrow Agent has not
received the written instruction requested from the Company.
At the expense of the Company, the Escrow Agent may act pursuant to the
advice of counsel chosen by it with respect to any matter relating to this
Agreement and (subject to clause (ii) of the preceding paragraph) shall not be
liable for any action taken or omitted in good faith and without gross
negligence or wilful misconduct in accordance with such advice.
The Escrow Agent shall not be called upon to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder.
In the event of any ambiguity in the provisions of this Agreement with
respect to any funds, securities or property deposited hereunder, the Escrow
Agent shall be entitled to refuse to comply with any and all claims, demands or
instructions with respect to such funds, securities or property, and the Escrow
Agent shall not be or become liable for its failure or refusal to comply with
conflicting claims, demands or instructions. The Escrow Agent shall be entitled
to refuse to act until either any conflicting or adverse claims or demands shall
have been finally determined by a court of competent jurisdiction or settled by
agreement between the conflicting claimants as evidenced in a writing,
satisfactory to the Escrow Agent, or the Escrow Agent shall have received
security or an indemnity satisfactory to the Escrow Agent sufficient to hold the
Escrow Agent harmless from and against any and all loss, liability or expense
which the Escrow Agent may incur by reason of its acting. The Escrow Agent may
in addition elect in its sole option to commence an interpleader action or seek
other judicial relief or orders as the Escrow Agent may deem necessary. The
costs and expenses (including reasonable attorney's fees and expenses) incurred
in connection with such proceedings shall be paid by, and shall be deemed an
obligation of, the Company.
No provision of this Agreement shall require the Escrow Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
The Escrow Agent shall not incur any liability for not performing any
act or fulfilling any duty, obligation or responsibility hereunder by reason of
any occurrence beyond the control of the Escrow Agent (including but not limited
to any act or provision of any present or future law or regulation or
governmental authority, any act of God or war, or the unavailability of the
Federal Reserve Bank wire).
5. Indemnity. The Company shall indemnify, hold harmless and, if
required or requested by the Trustee or the Escrow Agent, defend the Trustee and
the Escrow Agent, as the case may be, and their respective directors, officers,
agents, employees and controlling Persons, from and against any and all claims,
actions, obligations, liabilities and expenses, including reasonable defense
costs, reasonable investigative fees and costs, reasonable legal
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fees, and claims for damages, arising from the Trustee's or the Escrow Agent's
performance or non-performance, or in connection with the Escrow Agent's
acceptance of appointment as Escrow Agent under this Agreement, except (i) to
the extent that such liability, expense or claim is solely and directly
attributable to the bad faith, gross negligence or wilful misconduct of any of
the foregoing Persons or (ii) to the extent that any such claim, action,
obligation, liability or expense arises from the Escrow Agent's performance or
non-performance (including, without limitation, its failure to perform or
observe its obligations) as securities intermediary hereunder, to the extent
that such liability, expense or claim is solely and directly attributable to the
bad faith, negligence or wilful misconduct of the Escrow Agent. The provisions
of Section 2(c) and this Section 5 shall survive any termination, satisfaction
or discharge of this Agreement as well as the resignation or removal of the
Escrow Agent.
6. Grant of Security Interest, Instructions to the Escrow Agent.
(a) The Company hereby irrevocably grants a first priority security
interest in and lien on, and pledges, assigns, transfers and sets over to the
Trustee for the ratable benefit of the Beneficiaries, all of the Company's
right, title and interest in the Escrow Account and all property now or
hereafter placed or deposited in, or credited to, or transferred or delivered to
the Escrow Agent for placement or deposit in, or credit to the Escrow Account,
including, without limitation, all of the following (whether consisting of
certificated or uncertificated securities, accounts, chattel paper, documents,
financial assets, security entitlements, other investment property, general
intangibles, instruments, deposit accounts, bank accounts, securities accounts
or other collateral accounts, money, proceeds or other items comprising such
property), whether now owned by the Company or hereafter acquired and whether
now existing or hereafter coming into existence; the Pledged Securities, all
funds held therein, all Cash Equivalents held by (or otherwise maintained in the
name of) the Escrow Agent pursuant to Section 2, all rights of the Company under
this Agreement and all proceeds of the Collateral (including, without
limitation, all interest, dividends or other earnings, income, collections and
distributions from or in respect of investments or reinvestments, of the
Collateral) (collectively, the "Collateral"), in order to secure all obligations
and indebtedness of the Company under the Indenture, the Notes and any other
obligation, now or hereafter arising, of every kind and nature, owed by the
Company under the Indenture or the Notes to the holders of the Notes or to the
Trustee or any predecessor Trustee (the "Secured Obligations"). The Escrow Agent
hereby acknowledges the Trustee's security interest and lien as set forth above.
The Company shall take all actions necessary on its part to insure the
continuance of a first priority security interest in the Collateral in favor of
the Trustee in order to secure all such obligations and indebtedness.
(b) The Company and the Trustee hereby irrevocably instruct the
Escrow Agent to, and the Escrow Agent shall:
(i) in respect of the Collateral, (A) maintain the Escrow Account
for the sole dominion and control (including, without limitation, "control"
within the meaning of UCC Section 9-115) of the Trustee, in the name and on
behalf of the Beneficiaries, over the Pledged
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Securities, any Cash Equivalents and any and all other property in the Escrow
Account for the benefit of the Trustee, (B) maintain, or cause its agent within
the jurisdiction of its principal place of business to maintain, possession of
all certificated Cash Equivalents purchased hereunder that are physically
possessed by the Escrow Agent in order for the Trustee to enjoy a continuous
perfected first priority security interest therein under the laws of the State
of New York pursuant hereto and pursuant to any instructions received pursuant
hereto (the Company hereby agreeing that in the event any certificated Cash
Equivalents are in the possession of the Company or a third party, the Company
shall use its best efforts to deliver all such certificates to the Escrow
Agent), (C) take all reasonable steps specified by the Company pursuant to
paragraphs (a) and (b) of this Section 6 to cause the Trustee, acting in the
name and on behalf of the Beneficiaries, to enjoy a continuous perfected first
priority security interest under any applicable law of the State of New York in
all Cash Equivalents purchased hereunder that are not certificated and (D) use
its best efforts to maintain the Collateral free and clear of any security
interests senior to the security interest created hereby in favor of the Trustee
and use reasonable efforts to maintain the Collateral free and clear of all
liens, security interests, safekeeping or other charges, demands and claims
against the Escrow Agent of any nature now or hereafter existing in favor of
anyone other than the Trustee;
(ii) promptly notify the Trustee if the Escrow Agent receives
written notice that any Person has a lien or security interest upon any portion
of the Collateral other than the liens created hereby;
(iii) in addition to disbursing amounts held in escrow pursuant to
any Payment Notice and Disbursement Requests given to it pursuant to Section 3,
upon receipt of written notice from the Trustee of the acceleration of maturity
of the Notes, and direction from the Trustee to disburse all Available Funds to
the Trustee, as promptly as is practicable, disburse all funds held in the
Escrow Account to the Trustee and transfer title to all Cash Equivalents held by
the Escrow Agent hereunder to the Trustee. In addition, upon an Event of Default
under the Indenture and for so long as such Event of Default continues, the
Trustee may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party under the UCC or other applicable law, and the
Trustee may also upon obtaining possession of the Collateral as set forth
herein, without notice to the Company except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of the Trustee's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as the
Trustee may deem commercially reasonable. The Company acknowledges and agrees
that any such private sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale. The Company agrees that, to
the extent notice of sale shall be required by law, at least ten (10) days'
notice to the Company of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Trustee shall not be obligated to make any sale regardless of notice of sale
having been given. The Trustee may adjourn any public or private sale from time
to time by announcement at the time and place
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fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned; and
(iv) comply in all respects with its covenants and agreements
contained in Section 8.
The lien and security interest provided for by this Section 6 shall
automatically terminate and cease as to, and shall not extend or apply to, and
the Trustee and the Escrow Agent shall have no security interest in, any funds
disbursed by the Escrow Agent whether for payment of interest on the Notes or to
the Company pursuant to this Agreement to the extent not inconsistent with the
terms hereof. Notwithstanding any other provision contained in this Agreement,
the Escrow Agent shall act solely as the Trustee's agent in connection with its
duties herein relating to the Escrow Account or the Pledged Securities or any
funds or Cash Equivalents held thereunder. The Escrow Agent shall not have any
right to receive compensation from the Trustee and shall have no authority to
obligate the Trustee or to compromise or pledge its security interest hereunder.
Accordingly, the Escrow Agent is hereby directed to cooperate with the Trustee
in the exercise of its rights in the Collateral provided for herein.
(c) Any money and Cash Equivalents collected by the Trustee
pursuant to Section 6(b)(iii) shall be applied as provided in Section 6.13 of
the Indenture. Any surplus of such cash or cash proceeds held by the Trustee and
remaining after indefeasible payment in full of all the obligations under the
Indenture (the "Escrow Funds") shall be paid over to the Company or as a court
of competent jurisdiction may direct.
(d) The Company will execute and deliver or cause to be executed
and delivered, or use its best efforts to procure, all stock powers, proxies,
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 Collateral, to protect the Collateral against
the rights, claims, or interests of third parties or to effect the purposes of
this Agreement. The Company also hereby authorizes the Trustee to file any
financing or continuation statements with respect to the Collateral without the
signature of the Company (to extent permitted by applicable law). The Company
will pay all reasonable costs incurred in connection with any of the foregoing.
It being understood that the Trustee has no duty to determine whether to file or
record any document or instrument relating to Collateral.
(e) The Company hereby appoints the Trustee as its attorney-in-fact
with full power of substitution to do any act which the Company is obligated
hereby to do, and the Trustee may, but shall not be obligated to, exercise such
rights as the Company might exercise with respect to the Collateral and take any
action in the Company's name to protect the Trustee's security interest
hereunder.
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(f) If at any time the Escrow Agent shall receive an "entitlement
order" (within the meaning of Section 8-102(a)(8) of the UCC) issued by the
Trustee and relating to the Escrow Account, the Escrow Agent shall comply with
such entitlement order without further consent by the Company or any other
Person.
7. Termination. This Agreement and the security interest in the
Collateral evidenced by this Agreement shall terminate automatically and be of
no further force or effect upon the payment in full in cash of all interest
(including any Additional Amounts, if any and Liquidated Damages, if any) due
through the Interest Payment Date occurring on May 15, 2001, and the remaining
Collateral, if any, shall promptly be paid over and transferred to the Company;
provided, however, that the obligations of the Company under Section 2(c),
Section 5 and Section 13 (and any existing claims thereunder) shall survive
termination of this Agreement and the resignation of the Escrow Agent. At such
time, the Escrow Agent shall, pursuant to an Officer's Certificate stating that
no Default or Event of Default is then continuing and that all required payments
have been made delivered by the Company, reassign and redeliver to the Company
all of the Collateral hereunder that has not been sold, disposed of, retained or
applied by the Escrow Agent in accordance with the terms of this Agreement. Such
reassignment and delivery shall be without warranty by or recourse to the Escrow
Agent in its capacity as such, except as to the absence of any Liens on the
Collateral created by the Escrow Agent, and shall be at the sole expense of the
Company.
8. Representations and Warranties.
(a) The Company hereby represents and warrants that:
(i) The execution, delivery and performance by the Company of
this Agreement are within the Company's corporate powers, have been
duly authorized by all necessary corporate action, and do not
contravene, or constitute a default under, any provision applicable law
or regulation or the Articles of Association of the Company or any
agreement, judgment, injunction, order, decree or other instrument
binding upon the Company or result in the creation or imposition of any
Lien on any assets of the Company, except for the security interests
granted under this Agreement.
(ii) Prior to delivering the same pursuant hereto, the Company
is the beneficial owner of the Collateral, free and clear of any Lien
or claims of any Person or entity (except for the security interest,
granted under this Agreement). No financing statement covering the
Collateral is on file in any public office other than the financing
statements, if any, filed pursuant to this Agreement.
(iii) This Agreement has been duly executed and delivered by
the Company and assuming the due authorization and valid execution and
delivery of this Agreement by the Trustee and the Escrow Agent and
enforceability of this Agreement against the Escrow Agent and the
Trustee in accordance
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with its terms, constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except that the enforcement thereof may be limited by (w) the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally, (x) general
principles of equity (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing, (y) 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 15 (j) hereof.
(iv) The Company will deliver, or cause to be delivered, such
Pledged Securities to the Escrow Agent in such amount as shall be
sufficient upon scheduled interest and principal payments of such
Pledged Securities to provide for the payment in full of the first six
scheduled interest payments on the Notes (excluding any Additional
Amounts or Liquidated Damages).
(v) Upon the delivery to the Escrow Agent of the certificates
or instruments, if any, representing the Collateral and the filing of
financing statements, if any, required by the UCC and the transfer and
pledge to the Escrow Agent of the Collateral and the acquisition by the
Escrow Agent of a security entitlement thereto in accordance with
Section 6, the pledge of the Collateral pursuant to this Agreement
creates a valid and perfected first priority security interest in and
to the Collateral, securing the payment of the Company's Secured
Obligations for the benefit of the Beneficiaries, enforceable as such
against all creditors of the Company and any Persons purporting to
purchase any of the Collateral from the Company other than as permitted
by the Indenture.
(vi) No consent of any other Person and no consent,
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required either
(x) for the pledge by the Company of the Collateral pursuant to this
Agreement or for the execution, delivery or performance of this
Agreement by the Company (except for any filings necessary to perfect
Liens on the Collateral) or (y) for the exercise by the Trustee of the
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except, in each case, as may be
required in connection with such disposition by laws affecting the
offering and sale of securities.
(vii) No litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the
knowledge of the Company, threatened by or against the Company with
respect to this Agreement or any of the transactions contemplated
hereby, other than as described in the Offering Memorandum, dated May
20, 1998.
(viii) The pledge of the Collateral pursuant to this Agreement
is not prohibited by any applicable law or governmental regulation,
release, interpretation or opinion of
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the Board of Governors of the Federal Reserve System or other
regulatory agency (including, without limitation, Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System) or any
comparable or other laws, regulations or rules of any other government
or governmental agency or body in The Netherlands.
(b) The Escrow Agent represents, warrants, covenants and agrees:
(i) the Escrow Agent is a securities intermediary and it shall act as
such with respect to the Escrow Account, the Collateral and the Trustee, which
is (and which the Escrow Agent as securities intermediary shall treat as) the
entitlement holder and has (and which the Escrow Agent as securities
intermediary shall treat as the person with) sole dominion and control
(including, without limitation, "control" within the meaning of UCC Section
9-115) over the Escrow Account and the Collateral.
(ii) all Collateral (other than cash) will be deemed to constitute
"financial assets" (as defined in UCC Section 8-102(a)(7) and the Trustee will
be entitled to all rights and remedies to which an entitlement holder or a
person in control of financial assets is entitled pursuant to Part 5 of UCC
Article 8 and UCC Article 9.
(iii) the Escrow Agent, as securities intermediary, (x) agrees to
credit to the Escrow Account any and all assets and properties (but only the
assets and properties) required to be transferred, placed, delivered or credited
therein or thereto, (y) represents, warrants, covenants and agrees (a) that it
is and will remain a "Participant", and (b) that it maintains and will continue
to be eligible to maintain and to maintain a "Participant's Securities Account"
(as such terms are defined in 31 C.F.R. Section 357.2 or, as applicable, the
corresponding Federal Book-Entry Regulations) with the Federal Reserve Bank of
New York.
(iv) the Escrow Agent will maintain the Escrow Account and the
Collateral in the State of New York.
9. Covenants.
(a) The Company covenants and agrees with the Beneficiaries from
and after the date of this Agreement until the earlier of payment in
full in cash of (1) all interest due through the Interest Payment Date
occurring on May 15, 2001 or (2) all obligations due and owing under
the Indenture and the Notes in the event such obligations become due
and payable prior to the payment of the first six scheduled interest
payments on the Notes:
(A) The Company agrees that it will not (i) sell or
otherwise dispose of, or grant any option or warrant with
respect to, any of the Collateral or (ii) create or permit
to exist any Lien upon or with respect to any of the
Collateral (except for the Lien created pursuant to this
Agreement) and at all times will be the sole beneficial
owner of the Collateral.
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(B) The Company agrees that it will not (i) enter into any
agreement or understanding that purports to or may restrict
or inhibit the Trustee's rights or remedies hereunder,
including, without limitation, the Trustee's right to sell
or otherwise dispose of the Collateral or (ii) fail to pay
or discharge any tax, assessment or levy of any nature not
later than five days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment with
regard to the Collateral.
(b) The Company covenants and agrees with the Beneficiaries that
it will promptly make all filings which may be necessary or appropriate
in the United States which are or may be required to create a valid and
perfected first priority security interest in and to the Collateral.
10. Power of Attorney.
In addition to all of the powers granted to the Trustee pursuant
to Article 7 of the Indenture, the Company hereby appoints and constitutes the
Trustee as the Company's attorney-in-fact 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: (i) collection of
proceeds of any Collateral; (ii) conveyance of any item of Collateral to any
purchaser thereof; (iii) giving of any notices or recording of any Liens under
Section 6; (iv) making of any payments or taking any acts under Section 11; and
(v) paying or discharging taxes or Liens levied or placed upon the Collateral,
the legality or validity thereof and the amounts necessary to discharge the same
to be determined by the Trustee in its sole discretion, and such payments made
by the Trustee to become the obligations of the Company to the Trustee, due and
payable immediately upon demand. The Trustee's authority hereunder shall
include, without limitation, the authority to endorse and negotiate any checks
or instruments representing proceeds of Collateral in the name of the Company,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, sign the
Company'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 this security interest in the Collateral
and to file the same, prepare, file and sign the Company's name of any notice of
Lien, to take any other actions arising from or incident to the powers granted
to the Trustee in this Agreement. This power of attorney is coupled with an
interest and is irrevocable by the Company.
11. Trustee May Perform.
If the Company fails to perform any agreement contained herein,
the Trustee may itself perform, but shall not be obligated to, or cause
performance of, such agreement, and the reasonable expenses of the Trustee
incurred in connection therewith shall be payable by the Company under Section
13 hereof.
12. No Assumption of Duties; Reasonable Care.
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The rights and powers granted to the Trustee and Escrow Agent
hereunder are being granted in order to preserve and protect the Trustee's and
the holders' of Notes security interest in and to the Collateral granted hereby
and shall not be interpreted to, and shall not, impose any duties on the Trustee
and Escrow Agent in connection therewith other than those imposed under
applicable law. Except as provided by applicable law or by the Indenture, the
Trustee and Escrow Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the Trustee
accords similar property in similar situations, it being understood that the
Trustee and Escrow Agent shall not have any responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not the Trustee
or Escrow Agent has or is deemed to have knowledge of such matters or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral.
13. Expenses.
The Company 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 (i) the administration of
this Agreement, (ii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Beneficiaries hereunder or (iv) the
failure by the Company to perform or observe any of the provisions hereof.
14. Security Interest Absolute.
To the extent permitted by applicable law, all rights of the
Beneficiaries and security interests hereunder, and all obligations of the
Company 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 Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the
Indenture;
(c) any exchange, surrender, release or nonperfection of any Liens
on any other collateral for all or any of the 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 Company in respect of the Secured Obligations or
of this Agreement.
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15. Miscellaneous.
(a) Waiver. Any party hereto may specifically waive any breach of
this Agreement by any other party, but no such waiver shall be deemed
to have been given unless such waiver is in writing, signed by the
waiving party and specifically designating the breach waived, nor shall
any such waiver constitute a continuing waiver of or for similar or
other breaches.
(b) Invalidity. If for any reason whatsoever any one or more of
the provisions of this Agreement shall be held or deemed to be
inoperative, unenforceable or invalid in a particular case or in all
cases, such circumstances shall not have the effect of rendering any of
the other provisions of this Agreement inoperative, unenforceable or
invalid, and the inoperative, unenforceable or invalid provision shall
be construed as if it were written so as to effect, to the maximum
extent possible, the parties' intent.
(c) Assignment. This Agreement is personal to the parties hereto,
and the rights and duties of any party hereunder shall not be
assignable except with the prior written consent of the other parties.
Notwithstanding the foregoing, this Agreement shall inure to and be
binding upon the parties and their successors and permitted assigns.
(d) Benefit. The parties hereto and their successors and permitted
assigns, but no others, shall be bound hereby and entitled to the
benefits hereof; provided, however, that the Beneficiaries (including
holders of the Notes) and their assigns shall be entitled to the
benefits hereof and to enforce this Agreement.
(e) Time. Time is of the essence with respect to each provision of
this Agreement.
(f) Entire Agreement; Amendments. This Agreement and, with respect
to the Trustee and the Company, the Indenture, contain the entire
agreement among the parties with respect to the subject matter hereof
and supersede any and all prior agreements, understandings and
commitments, whether oral or written. Any amendment or waiver of any
provision of this Agreement and any consent to any departure by the
Company from any provision of this Agreement shall be effective only if
made or duly given in compliance with all of the terms and provisions
of the Indenture, and none of the Escrow Agent, the Trustee or any
Holder of Notes shall be deemed, by any act, delay, indulgence,
omission or otherwise, to have waived any right to remedy hereunder or
to have acquiesced in any Default or Event of Default under the
Indenture or in any breach of any of the terms and conditions hereof.
Failure of the Escrow Agent, the Trustee or any holder of Notes to
exercise, or delay in exercising, any right, power or privilege
hereunder shall not operate as a waiver thereof. Written notice of any
amendment shall be promptly provided by the Company
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to its Agent. No single or partial exercise of any right, power or
privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any
right, power or privilege. A waiver by the Escrow Agent, the Trustee or
any holder of 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 Escrow Agent, 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.
(g) Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telecopier or first-class mail,
postage prepaid, addressed as follows:
if to the Company:
VersaTel Telecom B.V.
Xxxxxxxxxxxxx 00
0000 XX Xxxxxxxxx-X.X.
Xxx Xxxxxxxxxxx
Facsimile No: 00-00-000-00-00
Attention: Xxx Xxxxxxxxx
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: 212-848-7179
Attention: Xxxx X. Xxxxxxxx, Xx. Esq.
if to the Escrow Agent or Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Administration
Each of the Company, the Escrow Agent and the Trustee by written
notice to each other such Person may designate additional or different addresses
for notices to such Person. Any notice or communication to the Company, the
Escrow Agent and the Trustee, shall be deemed to have been given or made as of
the date so delivered if personally delivered;
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when receipt is acknowledged, if telecopied; and five (5) calendar days after
mailing if sent by first class mail, postage prepaid (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee). All notices with respect to the Escrow Agent will be deemed
to have been given on the date received by the Escrow Agent.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
(i) Captions. Captions in this Agreement are for convenience only and
shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(j) GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
WAIVER OF DAMAGES.
(i) EACH PARTY HERETO AGREES THAT, FOR ALL PURPOSES OF THIS AGREEMENT
(INCLUDING, WITHOUT LIMITATION, FOR PURPOSES OF AND WITHIN THE
MEANING OF XXX XXXXXXX 0- 000, XXX SECTIONS 9-103(6) AND 31
C.F.R.Section 357.11 (OR, AS APPLICABLE, THE CORRESPONDING FEDERAL
BOOK-ENTRY REGULATIONS), THIS AGREEMENT (INCLUDING, WITHOUT
LIMITATION, THE CREATION, PERFECTION, EFFECTS OF PERFECTION AND
PRIORITY OF THE LIENS AND SECURITY INTERESTS OF THE TRUSTEE ON AND
IN THE ESCROW ACCOUNT AND THE COLLATERAL AND THE ESTABLISHMENT AND
MAINTENANCE OF THE ESCROW AGENT'S PARTICIPANT'S SECURITIES ACCOUNT
AND THE ACCOUNTS) AND THE RIGHTS, INTEREST, DUTIES AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK,
EXCLUDING (TO THE GREATEST EXTENT PERMITTED BY LAW) ANY RULE OF
LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK. EACH PARTY HERETO
IRREVOCABLY WAIVES ANY OBJECTION ON THE GROUNDS OF VENUE, FORUM
NON- CONVENIENS OR ANY SIMILAR GROUNDS. THE COMPANY HEREBY
IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION (THE
"AUTHORIZED AGENT"), AS ITS AUTHORIZED AGENT UPON WHOM PROCESS MAY
BE SERVED IN ANY SUCH SUIT OR PROCEEDING. THE COMPANY REPRESENTS
THAT IT HAS NOTIFIED THE AUTHORIZED AGENT OF SUCH DESIGNATION AND
APPOINTMENT AND THAT THE AUTHORIZED AGENT HAS ACCEPTED THE SAME IN
WRITING. THE COMPANY HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS ITS
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AUTHORIZED AGENT TO ACCEPT SUCH SERVICE. THE COMPANY FURTHER
AGREES THAT SERVICE OF PROCESS UPON ITS AUTHORIZED AGENT AND
WRITTEN NOTICE OF SAID SERVICE TO THE COMPANY MAILED BY FIRST
CLASS MAIL OR DELIVERED TO ITS AUTHORIZED AGENT SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE COMPANY IN ANY
SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY PERSON TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
FEDERAL OR STATE COURT IN THE BOROUGH OF MANHATTAN IN THE CITY XX
XXX XXXX, XXXXXX XXX XXXXX XX XXX XXXX, XXXXXX XXXXXX OF AMERICA,
IN ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS ESCROW
AGREEMENT, AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN ANY SUCH COURT.
(ii) THE COMPANY AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS THE
TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE
THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED
AGAINST THE COMPANY OR ITS PROPERTY IN A COURT IN ANY LOCATION
REASONABLY SELECTED IN GOOD FAITH (AND HAVING PERSONAL OR IN REM
JURISDICTION OVER THE COMPANY OR ITS PROPERTY, AS THE CASE MAY BE)
TO ENABLE THE TRUSTEE TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE. THE
COMPANY AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS, SETOFFS
OR CROSSCLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE
ON SUCH PROPERTY OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF THE TRUSTEE, EXCEPT FOR SUCH COUNTERCLAIMS, SETOFFS OR
CROSSCLAIMS WHICH, IF NOT ASSERTED IN ANY SUCH PROCEEDING, COULD
NOT OTHERWISE BE BROUGHT OR ASSERTED. THE COMPANY WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH
THE TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
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(iii) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY AND THE
TRUSTEE EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(iv) THE COMPANY AGREES THAT NONE OF THE ESCROW AGENT, THE TRUSTEE OR
ANY HOLDER OF NOTES SHALL HAVE ANY LIABILITY TO THE COMPANY
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES
SUFFERED BY THE COMPANY IN CONNECTION WITH, ARISING OUT OF, OR IN
ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE
RELATIONSHIP ESTABLISHED BY THIS 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 ESCROW AGENT, 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 ESCROW AGENT, THE TRUSTEE OR
SUCH HOLDER OF NOTES, AS THE CASE MAY BE, CONSTITUTING BAD FAITH,
GROSS NEGLIGENCE OR WILFUL MISCONDUCT.
(v) TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT, THE COMPANY WAIVES ALL
RIGHTS OF NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY
THE TRUSTEE OR ANY HOLDER OF NOTES OF ITS RIGHTS DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS THE COLLATERAL
WITH JUDICIAL PROCESSOR TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE SECURED OBLIGATIONS. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY WAIVES THE
POSTING OF ANY BOND OTHERWISE REQUIRED OF THE ESCROW AGENT, THE
TRUSTEE OR ANY HOLDER OF NOTES IN CONNECTION WITH ANY JUDICIAL
PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR
LEVY UPON THE COLLATERAL OR OTHER SECURITY FOR THE SECURED
OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF THE ESCROW AGENT, THE TRUSTEE OR ANY HOLDER OF NOTES,
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OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING
ORDER OR PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT OR
ANY OTHER AGREEMENT OR DOCUMENT BETWEEN THE COMPANY ON THE ONE
HAND AND THE ESCROW AGENT, THE TRUSTEE AND/OR THE HOLDERS OF
NOTES ON THE OTHER HAND.
(vi) IN FURTHERANCE OF THE FOREGOING, EACH PARTY HERETO AGREES THAT
REGARDLESS OF ANY PROVISION IN ANY OTHER AGREEMENT, THE
"SECURITIES INTERMEDIARY'S JURISDICTION" (WITHIN THE MEANING OF
UCC SECTIONS 8-110 AND 9-103(b) AND 31 C.F.R.Section 357.11 (OR,
AS APPLICABLE, THE CORRESPONDING FEDERAL BOOK-ENTRY REGULATIONS)
OF THE ESCROW AGENT WITH RESPECT TO THE ESCROW ACCOUNT AND THE
COLLATERAL IS THE STATE OF NEW YORK.
(vii) THE PROVISIONS OF THIS SECTION 15(J) ARE INTENDED TO BE EFFECTIVE
UPON THE EXECUTION OF THIS ESCROW AGREEMENT WITHOUT ANY FURTHER
ACTION BY THE COMPANY, THE ESCROW AGENT OR THE TRUSTEE AND THE
INTRODUCTION OF A TRUE COPY OF THIS ESCROW AGREEMENT INTO
EVIDENCE SHALL BE CONCLUSIVE AND FINAL EVIDENCE AS TO SUCH
MATTERS.
(k) No Adverse Interpretation of Other Agreements. This Agreement may
not be used to interpret another pledge, security or debt agreement of
the Company or any subsidiary thereof. No such pledge, security or debt
agreement may be used to interpret this Agreement.
(l) Benefits of Agreement. Nothing in this Agreement, express or
implied, shall give to any Person, other than the parties hereto and
their successors hereunder, and the Holders of Notes, any benefit or
any legal or equitable right, remedy or claim under this Agreement.
(m) Interpretation of Agreement. All terms not defined herein or in the
Indenture shall have the meaning set forth in the UCC, except where the
context otherwise requires. To the extent a term or provision of this
Agreement conflicts with the Indenture, the Indenture shall control
with respect to the subject matter of such term or provision.
Acceptance of or acquiescence in a course of performance rendered under
this Agreement shall not be relevant to determine the meaning of this
Agreement even though the accepting or acquiescing party had knowledge
of the nature of the performance and opportunity for objection.
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(n) Survival of Provisions. All representations, warranties and
covenants of the Company contained herein shall survive the execution
and delivery of this Agreement, and shall terminate only upon the
termination of this Agreement.
(o) Waivers. The Company waives presentment and demand for payment of
any of the Company's Secured Obligations, protest and notice of
dishonor or default with respect to any of the Company's Secured
Obligations, and all other notices to which the Company might otherwise
be entitled, except as otherwise expressly provided herein or in the
Indenture.
(p) Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the
Company (i) acknowledges that it has, by separate written instruments,
designated and appointed CT Corporation System, 0000 Xxxxxxxx, Xxx
Xxxx, XX 00000 ("CT Corporation System") (and any successor entity), as
its authorized agent upon which process may be served in any suit or
proceeding arising out of or relating to this Agreement that may be
instituted in any federal or state court in the Borough of Manhattan,
City of New York, State of New York or brought under federal or state
securities laws, and represent and warrant that CT Corporation System
has accepted such designation, (ii) submits to the jurisdiction
of any such court in any such suit or proceeding and (iii) agree that
service of process upon CT Corporation System and written notice of
said service to the Company in accordance with the provisions of this
Agreement shall be deemed in every respect to be effective service of
process upon the Company in any such suit or proceeding. The Company
further agrees to take any and all action, including the execution and
filing of any and all such documents and instruments, as may be
necessary to continue such designation and appointment of CT
Corporation System in full force and effect for as long as any of the
Notes remain outstanding (subject to the limitation set forth in clause
(i)); provided, however, that the Company may, and to the extent CT
Corporation System ceases to be able to be served on the basis
contemplated herein shall, by written notice to the Escrow Agent and
the Trustee, designate such additional or alternative agent for service
of process that (i) maintains an office located in the Borough of
Manhattan, City of New York, State of New York, and (ii) is either (x)
United States counsel for the Company or (y) a corporate service
company which acts as agent for service of process for other Persons in
the ordinary course of its business. Such written notice shall identify
the name of such agent for service of process and the address of the
office of such agent for service of process in the Borough of
Manhattan, City of New York, State of New York.
To the extent that the Company has or hereafter may acquire
any immunity from jurisdiction of any court of (i) any jurisdiction in
which the Company owns or leases property or assets, (ii) United States
or the State of New York or (iii) The Netherlands or from any legal
process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property and assets or this Agreement or the
Escrow Account or actions
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to enforce judgments in respect of any thereof, the Company hereby
irrevocably waives such immunity in respect of its obligations under
the above-referenced documents, to the extent permitted by law.
(q) U.S. Dollar Judgment Currency. U.S. dollars are the sole currency
of account and payment for all sums payable by the Company under or in
connection with the Escrow Account including damages. Any amount
received or recovered in a currency other than dollars (whether as a
result of, or the enforcement of, a judgment or order of a court of any
jurisdiction, in the winding-up or dissolution of the Company or
otherwise) by the Escrow Agent or the Trustee in respect of any sum
expressed to be due to it from the Company shall only constitute a
discharge to the Company to the extent of the dollar amount which the
recipient is able to purchase with the amount so received or recovered
in that other currency on the date of that receipt or recovery (or, if
it is not practicable to make that purchase on that date, on the first
date on which it is practicable to do so). If that dollar amount is
less than the dollar amount expressed to be due to the recipient under
this Agreement, the Company shall indemnify it against any loss
sustained by it as a result. If that dollar amount is greater than the
dollar amount expressed to be due to the recipient under this
Agreement, the Company shall be entitled to the amount of such excess.
In any event, the Company shall indemnify the recipient against the
cost of making any such purchase. For the purposes of this paragraph,
it will be sufficient for the Escrow Agent or Trustee to certify in a
satisfactory manner (indicating the sources of information used) that
it would have suffered a loss had an actual purchase of dollars been
made with the amount so received in that other currency on the date of
receipt or recovery (or, if a purchase of dollars on such date had not
been practicable, on the first date on which it would have been
practicable, it being required that the need for a change of date be
certified in the manner mentioned above). These indemnities constitute
a separate and independent obligation from the Company's other
obligations, shall give rise to a separate and independent cause of
action, shall apply irrespective of any indulgence granted by the
Escrow Agent and Trustee, and shall continue in full force and effect
despite any other judgment, order, claim or proof for a liquidated
amount in respect of any sum due under the Escrow Account.
(r) Notwithstanding any other provision of this Agreement, in no
event shall the Escrow Agent be liable for special, indirect or consequential
losses or damages of any kind whatsoever (including but not limited to lost
profits), even if the Escrow Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action.
(s) Each party hereto, except the Escrow Agent, shall provide the
Escrow Agent, as soon as practicable, with their Tax Identification Number as
assigned by the Internal Revenue Service. All interest or other income earned
under the Escrow Agreement shall be allocated and paid as provided herein and
reported by the recipient to the Internal Revenue Service as having been so
allocated and paid.
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(t) Notwithstanding any other provision of this Agreement, prior
to termination hereof as contemplated by Section 7, any instruction by the
Company to the Escrow Agent with respect to the Escrow Account or the Collateral
shall be effective only to the extent acknowledged or expressly permitted (in
each case, in writing by notice of the Trustee to the Escrow Agent) by the
Trustee.
SECTION 16. Successors. All agreements of the Company in this
Agreement shall bind its successors. All agreements of the Escrow Agent in this
Agreements shall bind its successors.
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IN WITNESS WHEREOF, the parties have executed and delivered
this Escrow Agreement as of the day first above written.
VERSATEL TELECOM B.V.
By: OPEN SKIES INTERNATIONAL, INC., as
Managing Director
By: ______________________________
Name: R. Xxxx Xxxxx
Title: President and Treasurer
UNITED STATES TRUST COMPANY OF NEW
YORK, as Escrow Agent and Securities
Intermediary
By: ______________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee
By: ______________________________
Name:
Title:
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EXHIBIT A
Form of Payment Notice and Disbursement Request
[Letterhead of the Company]
{Date}
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Disbursement Request No. ____
Ladies and Gentlemen:
We refer to the Escrow Agreement, dated as of May 27, 1998 (the "Escrow
Agreement"), among you (the "Escrow Agent"), United States Trust Company of New
York, as the Trustee (the "Trustee"), and VersaTel Telecom B.V., a company
organized under the laws of The Netherlands (the "Company"). Capitalized terms
used herein shall have the meaning given in the Escrow Agreement.
This letter constitutes a Payment Notice and Disbursement Request under
the Escrow Agreement.
{choose one or more of the following, as applicable}
{The undersigned hereby notifies you that a scheduled interest payment
in the amount of $________ is due and payable on __________, ___ with respect to
the Notes and requests a disbursement of funds contained in the Escrow Account
in such amount to the Trustee.}
{The undersigned hereby notifies you and certifies to you that the
release of [$________ of funds from the Escrow Account] to the Company (to an
account designated by the Company in writing), is currently permitted to be
released in accordance with Section 3(c) of the Escrow Agreement, a duly
executed Officers' Certificate which complies with the requirements of the
applicable Section of the Escrow Agreement and with the Indenture is attached
hereto, and such amount shall be so remitted to the Company.}
{The undersigned hereby notifies you that the Escrow Agreement has been
terminated in accordance with Section 7 thereof, a duly executed Officers'
Certificate which complies with the requirements of the applicable Section of
the Escrow Agreement and with the Indenture is attached hereto, and requests
that you release the remaining Collateral contained in the Escrow Account to the
Company.}
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{The undersigned hereby notifies you that there has been an
acceleration of the maturity of the Notes. Accordingly, you are hereby requested
to disburse all remaining funds contained in the Escrow Account to the Trustee
such that the balance in the Escrow Account is reduced to zero.}
In connection with the requested disbursement, the undersigned hereby
notifies you that:
1. {The Notes have not, as a result of an Event of Default under the
Indenture, been accelerated and become due and payable.}
2. {All prior disbursements from the Escrow Account have been
Applied.}
3. {add wire instructions}
The Escrow Agent is entitled to rely on the foregoing in disbursing
funds relating to this Payment Notice and Disbursement Request.
VERSATEL TELECOM B.V.
By: _________________________
Name:
Title:
ACKNOWLEDGED BY
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By: ________________________
Name:
Title:
