Exhibit 10.7
PROFESSIONAL SERVICES FEE SUBORDINATION AGREEMENT
THIS PROFESSIONAL SERVICES FEE SUBORDINATION AGREEMENT (this
"Agreement") is entered into as of April 14, 2004 among CITICORP NORTH AMERICA,
INC., in its capacity as Administrative Agent for the benefit of Lenders (as
defined in the Credit Agreement referred to herein) and Providence Equity
Partners IV, Inc., Xxxxxxxxx & Xxxxxxxx, Inc. and Xxxxxxx X. Xxxxxxx (the
"Professionals").
RECITALS
A. Consolidated Communications Acquisition Texas, Inc. (the "TXU
Borrower"), a Delaware corporation and Consolidated Communications, Inc. (the
"CCI Borrower"), an Illinois corporation, Citigroup North America, Inc., as
Administrative Agent, and certain other Agents and Lenders named therein have
entered into a Credit Agreement, dated as of April 14, 2004 (as amended,
modified, supplemented, or restated from time to time, the "Credit Agreement")
(terms used without definition herein having the meaning given to such terms by
the Credit Agreement);
B. Professionals are parties to the Professional Services Fee
Agreements (as defined in the Credit Agreement) pursuant to which they have
agreed to cause the Borrower's to pay certain fees to Professionals or their
affiliates;
C. This Agreement is integral to the transactions contemplated by
the Loan Documents, and the execution and delivery thereof is a condition
precedent to Lenders' obligations to extend credit under the Loan Documents;
ACCORDINGLY, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Administrative Agent and the Professionals
agree as follows:
1. Unless otherwise defined herein, or the context hereof otherwise
requires, each term defined in the Credit Agreement is used in this Agreement
with the same meaning. As used herein, the following terms have the meanings:
"Senior Debt" means, whether now or hereafter arising, the
Obligations referred to in the Credit Agreement and the Notes, including,
without limitation, interest thereon after the commencement of any
proceedings under any debtor relief law.
"Subordinated Debt" means all present and future obligations of any
Loan Party with respect to any fee payable by any Loan Party to any
Professional or any affiliate of any Professional (other than an affiliate
that is a member of the Restricted Group) pursuant to any Professional
Services Fee Agreement (as defined in the Credit Agreement).
2. The payment of any and all Subordinated Debt is hereby expressly
subordinated to all Senior Debt to the extent and in the manner set forth in
this Agreement.
3. Except as expressly set forth herein, no Professional shall
accelerate, demand, xxx for, commence any collection or enforcement action or
proceeding, take, receive, accept, or retain any payment or distribution of any
character, whether in cash, securities or other property, in respect of the
principal of, premium on, or interest on, the Subordinated Debt, until all
Senior Debt shall have been paid in full with interest, including, without
limitation, interest during any bankruptcy or similar proceeding involving any
Loan Party from the date of the filing thereof to the date of distribution
(notwithstanding any statute, including without limitation the United States
Bankruptcy Code, any rule of law, or bankruptcy procedures to the contrary).
4. In the event of the institution of and in connection with any
proceeding against any Borrower pursuant to any debtor relief law, and unless or
until the Senior Debt is paid in full:
(a) All Senior Debt shall first be paid in full before any payment
or distribution of any character, whether in cash, securities, or other
property, shall be made in respect of any Subordinated Debt;
(b) Any payment or distribution of any character, whether in cash,
securities, or other property, which would otherwise (but for the terms
hereof) be payable or deliverable in respect of any Subordinated Debt
shall be paid or delivered directly to the Administrative Agent, for the
benefit of the parties to which Senior Debt is owed, until all Senior Debt
shall have been paid in full, and each Professional irrevocably
authorizes, empowers and directs all receivers, trustees, liquidators,
conservators, and others having authority to effect all such payments and
deliveries;
(c) The Administrative Agent, on behalf of the Lenders, may, as
attorney-in-fact for each Professional, take such action on behalf of any
Professional, and each Professional hereby appoints the Administrative
Agent, on behalf of the Lenders, as its attorney-in-fact, to demand, xxx
for, collect and receive any and all such moneys, dividends, or other
assets and give acquittance therefor and to file any claim, proof of
claim, or other instrument of similar character and to take such other
proceedings in the name of such Professional as the Administrative Agent
may deem necessary or advisable for the enforcement of this Agreement; and
(d) Each Professional agrees, upon request, to execute and deliver
to the Administrative Agent, for the benefit of the Lenders, all such
further instruments confirming the authorization referred to in the
foregoing clauses (b) and (c) and all such proofs of claim, assignments of
claim and other instruments and shall take all such other actions as may
be reasonably requested by the Administrative Agent in order to enable the
Administrative Agent to enforce all rights of the Lenders and the
Administrative Agent hereunder and all claims of the Administrative Agent
or any Lender upon or in respect of the Subordinated Debt, and failing
execution of such instruments or taking of such actions by any
Professional, the Administrative Agent, for the benefit of the Lenders, is
hereby authorized and empowered to execute and perform the same on behalf
of such Professional.
5. In the event any payment or distribution of any character,
whether in cash, securities or other property, is received by any Professional
in contravention of the terms of this
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Agreement, and before all Senior Debt shall have been paid in full, such payment
or distribution shall be held by such Professional, as trustee of an express
trust, in trust for the benefit of, and shall be paid over or delivered and
transferred to the Administrative Agent for application to all Senior Debt
remaining unpaid until such Senior Debt shall have been paid in full. Each
Professional hereby assigns to the Administrative Agent, for the benefit of the
Lenders, all its rights to any such payments or distributions, which the
Administrative Agent may exercise in the Administrative Agent's name or in the
name of the applicable Professional, and agrees to execute such instruments as
may be required by the Administrative Agent to enable the Administrative Agent,
for the benefit of the Lenders, to enforce such claims. Any payments or
distributions received in excess of the amount sufficient to pay all Senior Debt
in full shall be returned by the Administrative Agent to the applicable
Professional.
6. Notwithstanding anything to the contrary contained in this
Agreement, the Loan Parties may pay, and each Professional may accept and
retain, payments of professional services fees; provided that such payment is
permitted pursuant to Section 6.07(iii) of the Credit Agreement.
7. The Administrative Agent or the Lenders may, at any time and from
time to time, without the consent of or notice to any Professional, without
incurring responsibility to any Professional, and without impairing or releasing
any of the Administrative Agent's rights, or any of the obligations of any
Professional hereunder, (a) change the amount, manner, place or terms of payment
of, or change or extend the time of payment of or renew or alter all or any part
of, the Senior Debt or amend, modify, supplement or restate, any of the Loan
Documents in any manner whatsoever, (b) sell, exchange, release or otherwise
deal with all or any part of any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, all or any part of the Senior Debt,
(c) release anyone liable in any manner for the payment or collection of all or
any part of the Senior Debt, (d) exercise or refrain from exercising any rights
against the Loan Parties and others (including the undersigned) and (e) apply
any sums, by whomsoever paid or however realized, to the Senior Debt.
8. Notwithstanding anything to the contrary contained in any other
instrument or document delivered in connection with the Subordinated Debt or
otherwise, including, without limitation, any prior perfection of a security
interest or Lien, any security interests and Liens now or hereafter held by any
Professional in any Collateral for the Subordinated Debt shall be released in
their entirety and to the extent not released shall be junior and subordinate to
any security interests and Liens now or hereafter held by the Administrative
Agent, for the benefit of the Lenders, in the same Collateral. So long as the
Senior Debt shall remain unpaid, the Administrative Agent may at all times in
its sole discretion exercise any and all powers and rights which it now has or
may hereafter acquire with respect to any of the Collateral securing the Senior
Debt, all without the necessity of obtaining any consent or approval of any
Professional.
9. Each Professional represents and warrants, as to itself only,
that it is duly organized, validly existing and in good standing under the laws
of its state of organization and has the power and authority under the laws of
such state and under its articles of incorporation and bylaws or other
organizational documents to enter into this Agreement; all actions necessary or
appropriate for its execution and performance of this Agreement have been taken
and upon its
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execution, this Agreement will constitute its valid and binding obligation
enforceable in accordance with its terms; and the making and performance of this
Agreement will not violate any law or its articles of incorporation or bylaws or
other organizational documents, or result in any violation of or constitute a
default under any agreement by which it or any of its property is bound.
10. This Agreement is a continuing agreement of subordination and
the Lenders may continue to make Loans to or otherwise accept the obligations of
the Loan Parties in reliance hereon, without notice to any Professional.
11. While this Agreement remains in effect, each Professional
covenants and agrees that it will not and will not permit its controlled
affiliates to take or enjoy the benefit of any security interest to secure the
Subordinated Debt.
12. No amendment, waiver, or discharge to or under this Agreement is
valid unless it is in writing and is signed by the party against whom it is
sought to be enforced and is otherwise in conformity with the requirements of
Section 9.08 of the Credit Agreement. Each Professional hereby waives all
notices with respect to the subject matter hereof, including, but not limited
to, notice of acceptance of this Agreement, of the making of loans or advances
to the Borrowers or any extensions, renewals, or modifications thereof, releases
of collateral security or guarantors or other indulgences of any character, or
of the occurrence or declaration of any default or the taking of any collection
or enforcement action. This Agreement shall be governed by and construed
according to the laws of the State of New York.
13. This Agreement shall inure to the benefit of the Administrative
Agent, the Issuing Bank, the Lenders and their respective successors and
assigns, and the rights under this Agreement may be assigned in accordance with
the terms of the Loan Documents in whole or in part in connection with any
partial or complete assignment or transfer of the Senior Debt. The
Administrative Agent is the Administrative Agent for each Lender, and the
Administrative Agent may, without the joinder of any Lender, exercise any and
all rights in favor of the Lenders hereunder. The rights of each Lender
vis-a-vis the Administrative Agent and each other Lender may be subject to one
or more separate agreements between or among such parties, but the Professionals
need not inquire about any such agreement or be subject to any terms thereof
unless a Professional specifically joins therein; and, consequently, neither the
Professionals nor their respective heirs, personal representatives, successors
or assigns are entitled to any benefits or provisions of any such separate
agreements or are entitled to rely upon or raise as a defense, in any manner
whatsoever, the failure or refusal of any party thereto to comply with the
provisions thereof. This Agreement binds the Professionals and their respective
successors and assigns, and each Professional will advise each future holder of
all or any part of the Subordinated Debt transferred by such Professional that
the Subordinated Debt is subordinated to the Senior Debt in the manner and to
the extent set forth in this Agreement.
14. This Agreement may be executed in a number of identical
counterparts, each of which is deemed an original for all purposes and all of
which constitute, collectively, one agreement; but, in making proof of this
Agreement, it is not necessary to produce or account for more than one
counterpart.
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15. Subject to the provisions of this Agreement and the rights of
the Administrative Agent hereunder, as between the Loan Parties and the
Professionals, nothing herein contained shall impair the obligation of the Loan
Parties to pay the Subordinated Debt as and when the same shall become due and
payable in accordance with the terms thereof, or prevent the Professionals, upon
default with respect to the Subordinated Debt, from exercising all rights,
powers and remedies otherwise provided therein or by applicable law.
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EXECUTED on the date first stated in this Professional Services Fee
Subordination Agreement.
PROVIDENCE EQUITY PARTNERS IV, INC., as
Professional
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
XXXXXXXXX & XXXXXXXX, INC., as Professional
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title:
XXXXXXX X. XXXXXXX, as Professional
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: /s/ Xxxxxx Xxxxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Director
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Each of the undersigned acknowledges that the payment of fees by the
undersigned pursuant to the terms of the applicable Professional Fee Services
Letter is subject to the terms of this Agreement.
CONSOLIDATED COMMUNICATIONS ACQUISITION
TEXAS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
CONSOLIDATED COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
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