THIRD AMENDMENT dated as of November 29, 2001 (this
"AMENDMENT"), to the Credit Agreement (the "CREDIT
AGREEMENT") dated as of May 31, 2000, as amended, modified
and supplemented pursuant to a First Amendment dated as of
December 7, 2000, a Second Amendment dated as of January
11, 2001, and a Waiver dated as of August 29, 2001, among
McLEODUSA INCORPORATED, a Delaware corporation (the
"BORROWER"); the lenders party thereto (the "LENDERS");
JPMORGAN CHASE BANK (formerly known as The Chase Manhattan
Bank), a New York banking corporation, as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") and as
collateral agent (in such capacity, the "COLLATERAL
AGENT"); Xxxxxxx Xxxxx Xxxxxx Inc., as syndication agent
(in such capacity, the "SYNDICATION AGENT"); and Bank of
America, N.A. and Xxxxxxx Sachs Credit Partners L.P., as
co-documentation agents (in such capacities, the
"CO-DOCUMENTATION AGENTS").
PREAMBLE
The Borrower has advised the Lenders that the Borrower is
considering pursuing a restructuring on terms and conditions not materially
inconsistent with those described in Annex I attached hereto, as such Annex
may be amended from time to time in accordance with its terms (the
"RESTRUCTURING") which the Borrower may implement either through an out-of
court series of transactions, including an exchange offer (the "EXCHANGE
OFFER") for the Indenture Debt and a proxy statement and consent solicitation
(the "OUT-OF-COURT ALTERNATIVE") or through an in-court Bankruptcy Proceeding
(the "IN-COURT ALTERNATIVE"). Certain capitalized terms used herein are
defined on Annex II hereto. Capitalized terms used and not defined herein
(including on Annex II hereto) have the meanings defined in the Credit
Agreement as amended hereby.
In connection with the foregoing, the Borrower has requested that
the Lenders agree to amend or waive certain provisions of the Loan Documents.
The Lenders party hereto are willing to grant such consent and agree to such
amendments and waivers, in each case on the terms and subject to the
conditions set forth herein.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. CONDITIONS TO THE EFFECTIVENESS OF THIS AMENDMENT.
Immediately upon the satisfaction of the following conditions, this Amendment
shall become effective (the date on which such conditions are satisfied,
being the "THIRD AMENDMENT EFFECTIVE DATE"):
(i) the Administrative Agent shall have received counterparts of
this Amendment that, when taken together, bear the signatures of the
Borrower, each Subsidiary Loan Party that is a party to the Subsidiary
Guarantee Agreement on the Third Amendment Effective Date and the Required
Lenders;
2
(ii) the FL Standby Purchase Agreement (other than those
agreements, documents, certificates and instruments to be executed and
delivered on the closing date of the sale of the Publishing Assets) shall
have been executed and delivered by the parties thereto and shall provide for
a cash purchase price for the Publishing Assets of not less than
$535,000,000; and
(iii) the FL New Preferred Stock Purchase Agreement (other than
those agreements, documents, certificates and instruments to be executed and
delivered on the closing date of the Forstmann Little investment) shall have
been executed and delivered by the parties thereto and shall provide for a
$100,000,000 all cash investment in the New Preferred Stock by Forstmann
Little.
SECTION 2. CERTAIN AMENDMENTS, AGREEMENTS AND WAIVERS.
Immediately upon the Third Amendment Effective Date, the following
amendments, agreements and waivers shall become operative:
(a) AMENDMENTS TO LOAN DOCUMENTS. The Credit Agreement and other
Loan Documents are hereby amended as follows:
(i) Section 1.01 of the Credit Agreement is amended by adding the
following definitions in appropriate alphabetical order:
"'BANKRUPTCY COURT' means the United States Bankruptcy Court
for the District in which any Bankruptcy Proceeding is pending."
"'BANKRUPTCY PROCEEDING' means a voluntary or involuntary case
commenced in respect of (i) the Borrower or (ii) the Borrower and
one or more Subsidiaries of the Borrower under Chapter 11 or
Chapter 7 of the United States Bankruptcy Code 11 U.S.C.
Section101, ET SEQ. (the "BANKRUPTCY CODE"); PROVIDED that any
such proceeding shall cease to be a Bankruptcy Proceeding for
purposes of this definition if in connection with such proceeding
any of the following requirements is not or ceases to be
satisfied: (a) the order for relief is entered not later than 20
days after commencement of the case, (b) in the event a
post-petition solicitation is to be undertaken in respect of
holders of any claims or interests of any class impaired by the
Reorganization Plan, the Bankruptcy Court shall have entered an
order on or prior to June 1, 2002 approving a disclosure
statement to solicit acceptances of the Reorganization Plan from
such holders, (c) the Reorganization Plan shall have been
substantially consummated not later than August 1, 2002, and (d)
the Borrower is continuing in good faith to seek consummation of
the Restructuring."
"'DIP AGENT' mean JPMorgan Chase Bank, as Administrative Agent
under the New Interim Facility."
"'ICTC ASSETS' means the capital stock of Illinois
Consolidated Telephone Company or substantially all its assets,
liabilities and business, and such other assets of the Borrower
and its Subsidiaries as may be directly related to, and used in
and necessary to, the operation of such business."
3
"'NEW INTERIM FACILITY' means a debtor-in-possession financing
facility of the Borrower in a principal amount not in excess of
$50,000,000 among the Borrower, the DIP Agent and one or more
lenders identified therein, which facility shall be approved
pursuant to a Qualifying DIP Order in the Bankruptcy Proceeding
on terms and conditions not materially inconsistent with those
set forth in Annex VI to the Third Amendment."
"'NEW INTERIM FACILITY OBLIGATIONS' means the obligations of
the Borrower and its Subsidiaries under the New Interim Facility
and the related documents, instruments and agreements executed in
connection therewith, including payment of principal and interest
and all other amounts payable thereunder."
"'NEW POST-RESTRUCTURING FACILITY' means a financing facility
of the Borrower that becomes effective not earlier than the date
of consummation of the Restructuring in a principal amount not in
excess of $160,000,000 (of which $10,000,000 shall be reserved
and made available to the Borrower on a dollar for dollar basis
as LC Exposure is reduced under this Agreement) on terms and
conditions substantially as set forth in Annex III to the Third
Amendment."
"'NEW POST-RESTRUCTURING FACILITY OBLIGATIONS' means the
obligations of the Borrower and its Subsidiaries under the New
Post-Restructuring Facility and the related documents,
instruments and agreements executed in connection therewith,
including payment of principal and interest and all other amounts
payable thereunder."
"'NON-CORE ASSETS' means the assets and businesses specified on
Schedule 2.11(c) hereto (including the Capital Stock of any
Subsidiary engaged exclusively in any such business or businesses
specified on Schedule 2.11(c) and not owning any assets other
than Non-Core Assets), and, with respect to any business
specified on Schedule 2.11(c), such other assets of the Borrower
and its Subsidiaries as may be directly related to, and used in
and necessary to, the operation of such business."
"'PROGRESS CONDITIONS' means the conditions set forth in Annex
IV to the Third Amendment."
"'PUBLISHING ASSETS' means the Capital Stock of McLeodUSA
Media Group, Inc. or substantially all its assets, liabilities
and business (including the Capital Stock, assets, business and
liabilities of its direct and indirect Subsidiaries and such
other assets of the Borrower and its Subsidiaries as may be
directly related to, and used in and necessary to, the operation
of such business, which other assets shall include McLeodUSA
Technology Building 1 (which currently serves as headquarters for
McLeodUSA Media Group, Inc.)."
"'QUALIFYING CASH COLLATERAL ORDER' means an interim or final
order of the Bankruptcy Court (i) approving use by the Borrower
and one or more of its
4
Subsidiaries, as debtors in possession, of cash collateral
during the pendency of the Bankruptcy Proceedings and (ii)
affording the lenders under the New Interim Facility, the DIP
Agent, the Lenders, the Administrative Agent and the
Collateral Agent protections not materially inconsistent with
those contemplated by the form of order set forth in Annex V
to the Third Amendment, as determined by the DIP Agent and the
Administrative Agent, which order shall not have been stayed
or revoked and shall otherwise be in full force and effect."
"'QUALIFYING DIP ORDER' means an interim or final order of the
Bankruptcy Court (i) approving the New Interim Facility in the
Bankruptcy Proceedings and (ii) affording the lenders thereunder,
the DIP Agent, the Lenders, the Administrative Agent and the
Collateral Agent protections not materially inconsistent with
those contemplated by the form of order set forth in Annex VI to
the Third Amendment, as determined by the DIP Agent and the
Administrative Agent, which order shall not have been stayed or
revoked and shall otherwise be in full force and effect."
"'REORGANIZATION CONSUMMATION DATE' means the date of the
substantial consummation (as defined in section 1101 of the
Bankruptcy Code) of a Reorganization Plan of the Borrower that
has been confirmed by an order of the Bankruptcy Court that has
not been revoked or stayed and is otherwise in full force and
effect at the time of such substantial consummation."
"'REORGANIZATION PLAN' means a plan of reorganization of (i)
the Borrower or (ii) the Borrower and one or more of its
Subsidiaries that may become debtors in a Bankruptcy Proceeding,
which plan is in accordance with Annex I to the Third Amendment."
"'RESTRUCTURING' means the "RESTRUCTURING" as defined in the
Third Amendment."
"'RESTRUCTURING DATE' means either (i) in the event the
Restructuring is implemented pursuant to the In-Court Alternative
(as defined in the Third Amendment), the Reorganization
Consummation Date or (ii) in the event the Restructuring is
implemented pursuant to the Out-of-Court Alternative (as defined
in the Third Amendment), the date on which the Borrower has
consummated the transactions contemplated by Annex I to the Third
Amendment, in each case pursuant to and in accordance with the
terms of the Restructuring."
"'THIRD AMENDMENT' means the Third Amendment dated as of
November 29, 2001, to this Agreement."
"'THIRD AMENDMENT EFFECTIVE DATE' has the meaning provided in
the Third Amendment."
5
(ii) Section 2.03 of the Credit Agreement is hereby amended by
adding the words "be made by a Financial Officer and shall" immediately
prior to the words "specify the following information in compliance
with Section 2.02:" in the third sentence of such section.
(iii) Section 2.05(e) of the Credit Agreement is hereby amended by
adding a second proviso to the end of the first sentence thereof
immediately prior to the period as follows:
"; PROVIDED FURTHER that, during the pendency of any Bankruptcy
Proceeding, any such LC Disbursement shall, notwithstanding the
provisions contained herein as to minimum borrowings or the
fulfillment of any of the conditions to borrowing set forth
herein, automatically be converted to an ABR Revolving Borrowing
in an equivalent amount and the Borrower's obligation to make
such payment shall be discharged and replaced by the resulting
ABR Revolving Borrowing."
(iv) Section 3.05(d) of the Credit Agreement is hereby amended by
adding, immediately prior to the period at the end thereof, the words
"except in connection with sales and other dispositions permitted
hereunder".
(v) Section 3.15 of the Credit Agreement is hereby amended by (A)
deleting the words "first priority" as the same appear in subsection
(a) thereof, (B) adding, immediately after the words "prior and
superior in right to any other Person" as same appear in subsection (a)
thereof, the phrase "(other than, unless any Progress Condition has not
been satisfied on a timely basis, Liens granted to the secured parties
under the New Interim Facility and the New Post-Restructuring Facility
and the respective related documents, instruments and agreements
executed in connection therewith)", (C) adding, immediately after the
words "prior and superior in right to any other Person" as same appear
in subsection (b) thereof, the phrase "(other than, unless any Progress
Condition has not been satisfied on a timely basis, Liens granted to
the secured parties under the New Interim Facility and the New
Post-Restructuring Facility and the respective related documents,
instruments and agreements executed in connection therewith)", (D)
adding, immediately after the words "prior and superior in right to any
other Person" as the same appear in subsection (c) thereof, the phrase
"(other than, unless any Progress Condition has not been satisfied on a
timely basis, Liens granted to the secured parties under the New
Interim Facility and the New Post-Restructuring Facility and the
respective related documents, instruments and agreements executed in
connection therewith)" and (E) by adding, immediately after the words
"Permitted Encumbrances" as they appear in subsection (d) thereof, the
words "and, unless any Progress Condition has not been satisfied on a
timely basis, Liens granted to the secured parties under the New
Interim Facility and the New Post-Restructuring Facility and the
respective related documents, instruments and agreements executed in
connection therewith."
(vi) Section 6.01(a)(v) of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"(v) Indebtedness of the Borrower incurred to finance the
acquisition, construction, installation, development or
improvement of any fixed or capital assets, including Capital
Lease Obligations and any Indebtedness assumed in connection
6
with the acquisition of any such assets or secured by a Lien
on any such assets prior to the acquisition thereof; PROVIDED
that (A) such Indebtedness is incurred prior to or within 270
days after such acquisition or the completion of such
construction, installation, development or improvement, (B)
the Borrower and the Restricted Subsidiaries are in
compliance, on a pro forma basis after giving effect to the
incurrence of such Indebtedness, with the financial covenants
contained in Sections 6.13, 6.14, 6.16, 6.17 and 6.18 to the
extent then applicable and (C) (1) with respect to any such
Indebtedness incurred prior to the Restructuring Date (if a
Restructuring Date occurs), the aggregate amount of such
secured Indebtedness incurred under this clause (v)(C)(1)
shall not exceed $500,000,000 less the principal amount of
such Indebtedness refinanced under Section 6.01(vii) at any
time outstanding and (2) with respect to any such Indebtedness
incurred on or after the Restructuring Date (if a
Restructuring Date occurs) (a) such Indebtedness shall
constitute either (x) third party equipment financing in an
aggregate amount at any time outstanding not to exceed
$100,000,000 or (y) other Indebtedness constituting Capital
Lease Obligations in an aggregate amount at any time
outstanding not to exceed $50,000,000 and (b) the actual or
implicit interest rate under any purchase money financing,
installment sale, conditional sale or capital lease entered
into in reliance on this clause (v)(C)(2) shall not be
substantially higher than the interest rate(s) then available
to the Borrower under this Agreement;"
(vii) Section 6.01(a) is hereby amended by deleting the word "and"
at the end of clause (viii), renumbering existing clause (ix) as clause
(xi) and adding new clauses (ix) and (x) as follows:
"(ix) unless any Progress Condition has not been satisfied on
a timely basis, Indebtedness under the New Interim Facility in an
aggregate principal amount not to exceed $50,000,000;
(x) unless any Progress Condition has not been satisfied on a
timely basis, on and after the Reorganization Consummation Date,
Indebtedness under the New Post-Restructuring Facility in an
aggregate principal amount not to exceed $160,000,000 (of which
$10,000,000 shall be reserved and made available to the Borrower
on a dollar for dollar basis as LC Exposure is reduced under this
Agreement); and"
(viii) Section 6.02 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of clause (vii), replacing the
period at the end of clause (viii) with a semicolon and adding new
clauses (ix) and (x) as follows:
"(ix) unless any Progress Condition has not been satisfied on
a timely basis, Guarantees by any Restricted Subsidiary of the
New Interim Facility Obligations; and
(x) unless any Progress Condition has not been satisfied on a
timely basis, Guarantees by any Restricted Subsidiary of the New
Post-Restructuring Facility Obligations."
7
(ix) Section 6.03 of the Credit Agreement is hereby amended by
amending and restating clause (vii) thereof in its entirety as follows:
"(vii) Liens securing Indebtedness permitted by Section 6.01(v)
and Section 6.02(vii) and, unless any Progress Condition has not
been satisfied on a timely basis, Sections 6.01(a)(ix) and (x)
and Sections 6.02(ix) and (x)."
(x) Section 6.05 of the Credit Agreement is amended by adding a new
paragraph at the end thereof, which shall read in its entirety as
follows:
"Nothing contained in subsections (a), (b) or (c) above shall
prevent the Borrower or any of its Subsidiaries from consummating
any transaction permitted under Section 6.07 hereof."
(xi) Sections 6.06(k) and (l) of the Credit Agreement are hereby
amended by adding the words "prior to the Third Amendment Effective
Date," at the beginning of each such Section.
(xii) Clause (i) of the proviso to Section 6.11 of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"(i) unless any Progress Condition has not been satisfied on a
timely basis, the foregoing shall not apply to restrictions and
conditions imposed by law or by any Loan Document, the New
Interim Facility or the New Post-Restructuring Facility or,
unless the Restructuring Date shall have occurred, imposed by the
Indentures or any provisions restricting or imposing conditions
upon Liens as may be contained in future indentures governing
unsecured indebtedness issued by the Borrower after the Effective
Date provided that such provisions are no more restrictive than
the provisions restricting or imposing conditions upon Liens
contained in the Indentures on May 31, 2000,".
(xiii) Section 9.15 of the Credit Agreement is hereby amended by (A)
redesignating subsections (b) and (c) thereof as subsections (d) and
(e) thereof, respectively, and (B) adding new subsections (b) and (c)
thereto, which shall read in their entirety as follows:
"(b) If any of the Collateral shall be sold or disposed
of by any Loan Party to a Person other than the Borrower or
a Subsidiary of the Borrower in a transaction permitted
under the Credit Agreement or consented to by the Required
Lenders (or such greater number of Lenders the consent of
which is required hereunder), such Collateral shall be
automatically released from the Lien created under the Loan
Documents.
(c) If all of the capital stock of any Subsidiary Loan
Party shall be sold or disposed of to a Person other than
the Borrower or a Subsidiary of the Borrower in a
transaction permitted under the Credit Agreement or
consented to by the Required Lenders (or such greater
number of Lenders
8
the consent of which is required hereunder), such
Subsidiary Loan Party shall be automatically released
from its obligations under the Loan Documents to which
it is a party."
(xiv) Section 3.03 of the Borrower Security Agreement is amended by
deleting the final sentence appearing therein and inserting the
following sentence in lieu thereof:
"The Security Interest is and shall be prior to any other Lien on
any of the Borrower Collateral, other than, unless any Progress
Condition has not been satisfied on a timely basis, Liens granted
to the secured parties under the New Interim Facility and the New
Post-Restructuring Facility and the respective related documents,
instruments and agreements executed in connection therewith and
Liens permitted under Sections 6.03(ii) through (v), inclusive,
of the Credit Agreement."
(xv) Section 4.01(a) of the Borrower Security Agreement is amended
by deleting the words "first priority" appearing in the second sentence
thereof and adding the following words to the end of such sentence:
"prior in right to any other Person (other than, unless any Progress
Condition has not been satisfied on a timely basis, Liens granted to
the secured parties under the New Interim Facility and the New
Post-Restructuring Facility and the respective related documents,
instruments and agreements executed in connection therewith and Liens
permitted under Section 6.03(ii) through (v), inclusive, of the Credit
Agreement)".
(xvi) Section 7.14 of the Borrower Security Agreement is amended by
adding a new paragraph at the end thereof which shall read in its
entirety as follows:
"If any of the Borrower Collateral shall be sold or disposed
of to any Person other than a Subsidiary of the Borrower in a
transaction (a) permitted under the Credit Agreement, (b)
consented to by the Required Lenders (or such greater number of
Lenders the consent of which is required under the Credit
Agreement) or (c) consummated on terms no less favorable than
contemplated by the Restructuring either (i) during the pendency
of Bankruptcy Proceedings unless any Progress Condition has not
been satisfied on a timely basis or (ii) after the effective date
of the Reorganization Plan, PROVIDED, HOWEVER, in each case under
this clause (c) that the proceeds of such transaction are applied
in the manner contemplated by the Restructuring, such Borrower
Collateral shall be automatically released from the Lien created
hereunder and, in connection therewith, the Collateral Agent, at
the request and sole expense of the Borrower, shall execute and
deliver to the Borrower all releases or other documents
reasonably necessary or desirable for the release of the Lien
created hereby on such Borrower Collateral; PROVIDED, FURTHER,
HOWEVER, that notwithstanding the foregoing, no Lien on the
Publishing Assets or the proceeds thereof constituting Borrower
Collateral shall be released prior to the Restructuring Date."
9
(xvii) Section 3.03 of the Subsidiary Security Agreement is amended
by deleting the final sentence appearing therein and inserting the
following sentence in lieu thereof:
"The Security Interest is and shall be prior to any other Lien on
any of the Guaranteed Obligations Collateral, other than, unless
any Progress Condition has not been satisfied on a timely basis,
Liens granted to the secured parties under the New Interim
Facility and the New Post-Restructuring Facility and the
respective related documents, instruments and agreements executed
in connection therewith and Liens permitted under Section
6.03(ii) through (v), inclusive, of the Credit Agreement."
(xviii) Section 4.01(a) of the Subsidiary Security Agreement is
amended by deleting the words "first priority" appearing in the second
sentence thereof and adding the following words to the end of such
sentence: "prior in right to any other Person (other than, unless any
Progress Condition has not been satisfied on a timely basis, Liens
granted to the secured parties under the New Interim Facility and the
New Post-Restructuring Facility and the respective related documents,
instruments and agreements executed in connection therewith and Liens
permitted under Section 6.03(ii) through (v), inclusive, of the Credit
Agreement).
(xix) Section 7.14 of the Subsidiary Security Agreement is amended
by adding a new paragraph at the end thereof which shall read in its
entirety as follows:
"If any of the Guaranteed Obligations Collateral shall be sold
or disposed of to a Person other than the Borrower or a
Subsidiary of the Borrower in a transaction (a) permitted under
the Credit Agreement, (b) consented to by the Required Lenders
(or such greater number of Lenders the consent of which is
required under the Credit Agreement) or (c) consummated on terms
no less favorable than contemplated by the Restructuring either
(i) during the pendency of Bankruptcy Proceedings unless any
Progress Condition has not been satisfied on a timely basis or
(ii) after the effective date of the Reorganization Plan,
PROVIDED, HOWEVER, in each case under this clause (c) that the
proceeds of such transaction are applied in the manner
contemplated by the Restructuring, such Guaranteed Obligations
Collateral shall be automatically released from the Lien created
hereunder and, in connection therewith, the Collateral Agent, at
the request and sole expense of the relevant Subsidiary Grantor,
shall execute and deliver to such Subsidiary Grantor all releases
or other documents reasonably necessary or desirable for the
release of the Lien created hereby on such Guaranteed Obligations
Collateral; PROVIDED, FURTHER, HOWEVER, that notwithstanding the
foregoing, no Lien on the Publishing Assets or the proceeds
thereof constituting Guaranteed Obligations Collateral shall be
released prior to the Restructuring Date."
(xx) Section 3(b) of the Borrower Pledge Agreement is amended by
inserting the words "and, unless any Progress Condition has not been
satisfied on a timely basis, except for Liens securing the New Interim
Facility Obligations and/or the New Post-Restructuring Facility
Obligations" after the words "except for the security interest granted
hereunder" appearing therein.
10
(xxi) Section 3(c)(ii) of the Borrower Pledge Agreement is amended
by inserting the words "and, unless any Progress Condition has not been
satisfied on a timely basis, Liens securing the New Interim Facility
Obligations and/or the New Post-Restructuring Facility Obligations"
after the words "other than the Lien created by this Agreement"
appearing therein.
(xxii) Section 3(e) of the Borrower Pledge Agreement is amended by
deleting the word "first" appearing therein, deleting the semicolon at
the end thereof, and inserting the following text in lieu of such
semicolon:
"with priority over all Liens other than, unless any Progress
Condition has not been satisfied on a timely basis, Liens
securing the New Interim Facility Obligations and/or the New
Post-Restructuring Facility Obligations;"
(xxiii) Section 3(b) of the Subsidiary Pledge Agreement is amended
by inserting the words "and, unless any Progress Condition has not been
satisfied on a timely basis, except for Liens securing the New Interim
Facility Obligations and/or the New Post-Restructuring Facility
Obligations" after the words "except for the security interest granted
hereunder" appearing therein.
(xxiv) Section 3(c)(ii) of the Subsidiary Pledge Agreement is
amended by inserting the words "and, unless any Progress Condition has
not been satisfied on a timely basis, Liens securing the New Interim
Facility Obligations and/or the New Post-Restructuring Facility
Obligations" after the words "other than the Lien created by this
Agreement" appearing therein.
(xxv) Section 3(e) of the Subsidiary Pledge Agreement is amended by
deleting the word "first" appearing therein, deleting the semicolon at
the end thereof, and inserting the following text in lieu of such
semicolon:
"with priority over all Liens other than, unless any Progress
Condition has not been satisfied on a timely basis, Liens
securing the New Interim Facility Obligations and/or the New
Post-Restructuring Obligations;"
(xxvi) Section 3.03 of the Intercompany Security Agreement is
amended by deleting the final sentence appearing therein and inserting
the following sentence in lieu thereof:
"The Security Interest is and shall be prior to any other Lien on
any of the Intercompany Collateral, other than, unless any
Progress Condition has not been satisfied on a timely basis,
Liens granted to the secured parties under the New Interim
Facility and the New Post-Restructuring Facility and the
respective related documents, instruments and agreements executed
in connection therewith and Liens permitted under Section
6.03(ii) through (v), inclusive, of the Credit Agreement."
(xxvii) Section 6.14 of the Intercompany Security Agreement is
amended by adding a new paragraph at the end thereof which shall read
in its entirety as follows:
11
"If any of the Intercompany Collateral shall be sold or
disposed of to a Person other than the Borrower or a Subsidiary
of the Borrower in a transaction (a) permitted under the Credit
Agreement, (b) consented to by the Required Lenders (or such
greater number of Lenders the consent of which is required under
the Credit Agreement) or (c) consummated on terms no less
favorable than contemplated by the Restructuring either (i)
during the pendency of Bankruptcy Proceedings unless any Progress
Condition has not been satisfied on a timely basis or (ii) after
the effective date of the Reorganization Plan, PROVIDED, HOWEVER,
in each case under this clause (c) that the proceeds of such
transaction are applied in the manner contemplated by the
Restructuring, such Intercompany Collateral shall be
automatically released from the Lien created hereunder and, in
connection therewith, the Parent shall execute and deliver to the
appropriate Subsidiary Grantor all releases or other documents
reasonably necessary or desirable for the release of the Lien
created hereby on such Intercompany Collateral; PROVIDED,
FURTHER, HOWEVER, that notwithstanding the foregoing, no Lien on
the Publishing Assets or the proceeds thereof constituting
Intercompany Collateral shall be released prior to the
Restructuring Date."
(b) LIMITATION ON BORROWINGS. On and after the Third Amendment
Effective Date and through and including the earliest of the date of
commencement of any Bankruptcy Proceeding, the date the Borrower consummates the
Out-of-Court Alternative (the "OUT-OF-COURT CONSUMMATION DATE") and the date the
Borrower shall have determined not to proceed with the transactions contemplated
hereby and shall have so advised the Administrative Agent in writing, the
Borrower agrees that the total Revolving Exposure shall not exceed $160,000,000
in the aggregate at any time outstanding and any requests for Borrowings or
issuances of Letters of Credit in excess thereof delivered during such period
shall be ineffective. Any unused Revolving Commitments shall terminate on the
date of commencement of any proceeding under any bankruptcy, insolvency or other
similar law in respect of the Borrower or any Subsidiary (whether or not such
proceedings are Bankruptcy Proceedings).
(c) AGREEMENT NOT TO EXERCISE REMEDIES. So long as no Event of
Default (other than any Event of Default waived hereunder) shall have occurred
and be continuing under the Credit Agreement, as amended from time to time,
neither the Administrative Agent, the Collateral Agent nor any Lender shall make
any demand under the Subsidiary Guarantee Agreement or otherwise exercise any
remedies under the Subsidiary Security Documents, other than in respect of
unpaid principal, interest, fees and other amounts that shall be due and payable
under the terms of the Loan Documents, PROVIDED, HOWEVER, that the foregoing
limitation on the exercise of remedies shall cease to be effective if any
Progress Condition is not satisfied on a timely basis.
(d) CONSENTS OF THE REQUIRED LENDERS. The Lenders hereby consent, in
the event the Bankruptcy Proceeding is commenced, to the entry of a Qualifying
Cash Collateral Order and a Qualifying DIP Order, subject to a "Carve-Out" to be
specified therein, in each case reasonably acceptable to the Administrative
Agent.
(e) WAIVER OF CERTAIN BANKRUPTCY-RELATED EVENTS OF DEFAULT. The
Lenders hereby waive, solely to the extent the events specified below occur
during the period from the Third
12
Amendment Effective Date to the earliest of the Out-of-Court Consummation
Date, the Reorganization Consummation Date, August 1, 2002 and the date the
Borrower shall have determined not to proceed with the transactions
contemplated hereby and shall have so advised the Administrative Agent in
writing (i) any Default or Event of Default under the Credit Agreement or any
other Loan Document (x) attributable solely to the filing by or against the
Borrower or any of its Subsidiaries of any Bankruptcy Proceeding or (y)
resulting from actions the Borrower or any of its Subsidiaries are not
permitted to take by virtue of their status as debtors in a Bankruptcy
Proceeding (other than in the case of this clause (y) any failure to pay
principal, interest or fees to the Administrative Agent or the Lenders), (ii)
any Default or Event of Default under clause (g) of Article VII of the Credit
Agreement attributable solely to a Default or Event of Default under Material
Indebtedness arising solely from the filing by or against the Borrower or any
of its Subsidiaries of any Bankruptcy Proceeding or resulting from actions
the Borrower or any of its Subsidiaries are not permitted to take by virtue
of their status as debtors in a Bankruptcy Proceeding and (iii) any Default
or Event of Default under clause (l) of Article VII of the Credit Agreement
attributable solely to the occurrence of an event specified in clauses (a),
(b) or (c) of the definition of ERISA Event arising solely from the filing of
any Bankruptcy Proceeding, PROVIDED that the waivers contained in this
subsection (e) shall be of no force and effect if any Progress Condition has
not been satisfied on a timely basis.
(f) WAIVER OF CERTAIN PAYMENT CROSS-DEFAULTS. The Lenders hereby
waive, solely to the extent such failure occurs during the period from the
Third Amendment Effective Date to the earliest of the Out-of-Court
Consummation Date, the Reorganization Consummation Date, August 1, 2002 and
the date the Borrower shall have determined not to proceed with the
transactions contemplated hereby and shall have so advised the Administrative
Agent in writing, any Default or Event of Default under the Credit Agreement
or any other Loan Document attributable solely to the failure of the Borrower
to pay any amounts constituting Indenture Debt when due, PROVIDED that the
waivers contained in this subsection (f) shall be of no force and effect if
any applicable Progress Condition has not been satisfied on a timely basis.
(g) WAIVER OF SECTION 5.01(A). The Lenders hereby waive
compliance by the Borrower with the Section 5.01(a) of the Credit Agreement
solely with respect to (i) any "going concern" or like qualification or
exception attributable solely to the Borrower's pursuit of the Restructuring
that may be set forth in the report of the Borrower's independent public
accountants with respect to the Borrower's financial statements for the
fiscal year ending December 31, 2001 and (ii) any failure by the Borrower to
deliver its financial statements for the fiscal year ending December 31, 2001
within 100 days after the end of such fiscal year, provided that such
financial statements are delivered in the manner required by Section 5.01(a)
(subject to the waiver contained in clause (i) above) within 105 days after
the end of such fiscal year, PROVIDED that the waivers contained in this
subsection (g) shall be of no force and effect if any Progress Condition has
not been satisfied on a timely basis.
(h) WAIVER OF SECTION 5.13. The Lenders hereby waive compliance
by the Borrower and its Restricted Subsidiaries with the provisions of
Section 5.13 of the Credit Agreement solely with respect to any provision
contained therein that would require Xxxxxx County Partners, Inc. (i) to
satisfy the Collateral and Guarantee Requirement or (ii) to be or become a
party to any Security
13
Document or the Intercompany Security Agreement, or to grant any of the Liens
provided for therein or in such Section 5.13.
(i) WAIVER OF SECTION 6.07. The Lenders hereby waive compliance
by the Borrower and its Restricted Subsidiaries with the provisions of
Section 6.07 of the Credit Agreement (other than the proviso contained
therein) solely with respect to any sale, transfer or other disposition,
during the period from the Third Amendment Effective Date through the
earliest to occur of the Restructuring Date, August 1, 2002 and the date the
Borrower shall have determined not to proceed with the transactions
contemplated hereby and shall have so advised the Administrative Agent in
writing, of the ICTC Assets, the Non-Core Assets or the Publishing Assets,
PROVIDED, that the proceeds of such transactions are applied in the manner
contemplated by the Restructuring and PROVIDED, FURTHER that the waivers
contained in this subsection (i) shall be of no force and effect if any
applicable Progress Condition has not been satisfied on a timely basis.
(j) WAIVER OF SECTION 6.09. The Lenders hereby waive compliance
by the Borrower with the provisions of Section 6.09(b) of the Credit
Agreement solely to the extent necessary to permit the Borrower to enter into
agreements in connection with the Restructuring, PROVIDED, that nothing
contained in this Section 2(j) shall permit the Borrower to consummate
transactions under such agreements if the consummation of such transactions
would otherwise violate the terms of Section 6.09(b) of the Credit Agreement
(except to the extent waived under any provision of this Amendment).
(k) WAIVER OF SECTION 6.10. The Lenders hereby waive compliance
by the Borrower with the provisions of Section 6.10 of the Credit Agreement
solely to the extent necessary to permit the Borrower to enter into the FL
Standby Purchase Agreement, the FL New Preferred Stock Purchase Agreement or
any agreement, document or instrument entered into in connection with either
such agreement, PROVIDED that nothing contained in the Section 2(k) shall
permit the Borrower to consummate transactions under such agreements if the
consummation of such transactions would otherwise violate the terms of
Section 6.10 of the Credit Agreement (except to the extent waived under any
provision of this Amendment).
(l) SALE OF PUBLISHING ASSETS. The Borrower agrees to use
commercially reasonable efforts consistent with the timetable contemplated
hereby for the Restructuring to obtain higher and better (compared with the
offer of Forstmann Little set forth in the FL Standby Purchase Agreement) all
cash offers to purchase the Publishing Assets.
(m) CANCELATION OF INTERCOMPANY INDEBTEDNESS. Notwithstanding
anything contained in the Credit Agreement or the other Loan Documents to the
contrary, the Borrower and its Subsidiaries may cancel or forgive any
Intercompany Indebtedness of, by or to any Subsidiary in connection with the
sale or disposition of the Capital Stock or all or substantially all of the
assets of any such Subsidiary to the extent such sale or disposition is
permitted under the Credit Agreement. As used herein, (i) "INTERCOMPANY
INDEBTEDNESS" means (A) indebtedness and other obligations of the Borrower to
any of its Subsidiaries and (B) indebtedness and other obligations of any
Subsidiary to the Borrower or any other Subsidiary and (ii) "CANCEL OR FOREGIVE"
means the cancelation or foregiveness of Indebtedness or, in the case of
Indebtedness owed by a Subsidiary of the Borrower,
14
the conversion of such Indebtedness to equity of such Subsidiary, the
contribution of such Indebtedness to the capital of such Subsidiary or any
similar transaction.
(n) SALE AND LEASE-BACK OF EFFINGHAM, ILLINOIS BUILDING. The
Lenders hereby waive the provisions of Sections 6.01, 6.02, 6.03 and 6.04 of
the Credit Agreement to the extent necessary to permit the Borrower and its
Restricted Subsidiaries to enter into a sale and lease-back transaction with
respect to the Loan Parties' Effingham, Illinois building; PROVIDED that
Attributable Debt in respect of any lease of the Borrower and its Restricted
Subsidiaries entered into as part of such sale and lease-back shall not
exceed $2,700,000 in the aggregate.
SECTION 3. AMENDMENTS, WAIVERS AND AGREEMENTS THAT BECOME
OPERATIVE ON THE RESTRUCTURING DATE. The following amendments, waivers and
agreements shall (in the case of Section (b), to the extent contemplated
therein) become operative immediately upon satisfaction of the conditions set
forth in Section 4:
(a) AMENDMENTS TO THE CREDIT AGREEMENT.
(i) Section 1.01 of the Credit Agreement is hereby amended as
follows:
(A) The definition of "Applicable Rate" is hereby
amended to replace the table set forth therein with the
following:
----------------------------------------------------------------------------------------------------
Level Ratings LIBOR Spread for ABR Spread for LIBOR Spread ABR Spread
Revolving Loans and Revolving Loans and for Tranche B for Tranche B
Tranche A Term Loans Tranche A Term Loans Term Loans Term Loans
----------------------------------------------------------------------------------------------------
V >=BBB-/Baa3 2.00% 1.00% 3.75% 2.75%
----------------------------------------------------------------------------------------------------
IV BB+/Ba1 2.50% 1.50% 3.75% 2.75%
----------------------------------------------------------------------------------------------------
III BB/Ba2 3.00% 2.00% 4.00% 3.00%
----------------------------------------------------------------------------------------------------
II BB-/Ba3 3.25% 2.25% 4.00% 3.00%
----------------------------------------------------------------------------------------------------
I BB-/Ba3 3.50% 2.50% 4.25% 3.25%
----------------------------------------------------------------------------------------------------
PROVIDED, that during any period after the second anniversary of the
Restructuring Date on which the ICTC Sale Conditions have not been met (an
"ADDITIONAL INTEREST PERIOD"), $225,000,000 in principal amount of Term Loans
shall bear additional interest hereunder (the "ADDITIONAL INTEREST") at a
rate equal to 1.50% per annum. During any such Additional Interest Period,
such Additional Interest shall be applied to that portion of each Lender's
Term Loans equal to the proportion that $225,000,000 bears to the aggregate
of all Term Loans outstanding at such time. As used herein, "ICTC SALE
CONDITIONS" means a sale or other disposition of the Capital Stock of ICTC or
substantially all of the ICTC Assets has been consummated.
15
(B) The definition of "Indentures" is hereby amended and
restated in its entirety as follows:
"'INDENTURES' means (a) the Indenture dated as of
March 4, 1997, between the Borrower (as successor to
XxXxxx, Inc.) and United States Trust Company of
New York,
as Trustee, in respect of $500,000,000 10-1/2% Senior
Discount Notes due 2007, (b) the Indenture dated as of July
21, 0000, xxxxxxx xxx Xxxxxxxx xxx Xxxxxx Xxxxxx Trust
Company of
New York, as Trustee, in respect of $225,000,000
9-1/4% Senior Notes due 2007, (c) the Indenture dated as of
March 16, 0000, xxxxxxx xxx Xxxxxxxx xxx Xxxxxx Xxxxxx
Trust Company of
New York, as Trustee, in respect of
$300,000,000 8 3/8% Senior Notes due 2008, (d) the
Indenture dated as of October 30, 0000, xxxxxxx xxx
Xxxxxxxx xxx Xxxxxx Xxxxxx Trust Company of
New York, as
Trustee, in respect of $300,000,000 9 1/2% Senior Notes
due 2008, (e) the Indenture dated as of February 22, 0000,
xxxxxxx xxx Xxxxxxxx xxx Xxxxxx Xxxxxx Trust Company of
New York, as Trustee, in respect of $500,000,000 8 1/8%
Senior Notes due 2009, (f) the Indenture dated
December 14, 0000, xxxxxxx xxx Xxxxxxxx xxx Xxxxxx Xxxxxx
Trust Company of
New York, as Trustee, in respect of
$150,000,000 12% Senior Notes Due 2008, (g) the Indenture
dated December 14, 0000, xxxxxxx xxx Xxxxxxxx xxx Xxxxxx
Xxxxxx Trust Company of
New York, as Trustee, with respect
to $210,000,000 of 11 1/2% Senior Notes Due 2009, and (h)
the Senior Debt Securities Indenture dated January 15,
0000, xxxxxxx xxx Xxxxxxxx xxx Xxxxxx Xxxxxx Trust Company
of
New York, as Trustee, and the First Supplemental
Indenture, dated January 15, 2001, thereunder, with respect
to $750,000,000 11 3/8% Senior Notes Due 2009."
(C) The definitions of "Borrower Secured Obligations"
and "Guaranteed Obligations" shall be deleted and the
definition of "Obligations" shall be amended and restated
in its entirety as follows:
"'OBLIGATIONS' means (i) the due and punctual
payment by the Borrower of (A) the principal of and
premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the
Loans and the Swingline Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (B) each payment required to be
made by the Borrower under this Agreement in respect of any
Letter of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon
and obligations to provide cash collateral and (C) all
other monetary obligations, including fees, costs, expenses
and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such
proceeding), of the Borrower to the Secured
16
Parties under this Agreement or the other Loan
Documents, (ii) the due and punctual performance of all
covenants, agreements, obligations and liabilities of
the Borrower and the other Loan Parties under or
pursuant to this Agreement and the other Loan Documents
and (iii) the due and punctual payment and performance
of all obligations of any Loan Party under each
Designated Hedging Agreement entered into with a
counterparty that was a Lender (or an Affiliate of a
Lender) at the time such Designated Hedging Agreement
was entered into (or, if later, on the date of this
Agreement)."
(D) The definition of "Permitted Holders" is hereby
amended and restated in its entirety as follows:
"'PERMITTED HOLDERS' means (i) Xxxxx X. and Xxxx X.
XxXxxx and foundations and trusts controlled by them or
either of them, and Affiliates (other than the Borrower
and the Restricted Subsidiaries) of each of the
foregoing and (ii) (x) Forstmann Little & Co., Forstmann
Little & Co. Equity Partnership-V, L.P., Forstmann
Little & Co. Equity Partnership-VII, L.P., Forstmann
Little & Co. Subordinated Debt and Equity Management
Buyout Partnership-VI, L.P., Forstmann Little & Co.
Subordinated Debt and Equity Management Buyout
Partnership-VII, L.P. and Forstmann Little & Co.
Subordinated Debt and Equity Management Buyout
Partnership-VIII, L.P. and (y) any other investment fund
Controlled and managed by the same general partner or
investment manager as any of the investment funds
referred to in clause (x)."
(E) Section 1.01 of the Credit Agreement is hereby
amended by amending and restating in its entirety the
definition of "Prepayment Event" as follows:
"'PREPAYMENT EVENT' means:
(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction) of any
property or asset of the Borrower or any Restricted
Subsidiary, other than (i) dispositions described in
clauses (a) and (b) of Section 6.07 and (ii) other
dispositions resulting in aggregate Net Proceeds not
exceeding $5,000,000 during any fiscal year of the
Borrower;
(b) any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or
similar proceeding of, any property or asset of the
Borrower or any Restricted Subsidiary, but only to the
extent that the Net Proceeds therefrom have not been
applied to repair, restore or replace such property or
asset or to purchase Telecommunications Assets within
twelve months after such event; or
(c) the incurrence by the Borrower of any Indebtedness,
other than Indebtedness permitted by Sections 6.01(a)(i)
through (xi), inclusive."
17
(F) The definitions of "Financed Telecommunications
Assets", "Purchase Money Revolving Loans" and "Non-Purchase
Money Loans" are hereby deleted.
(G) The following definitions shall be added in
appropriate alphabetical order:
"'CAPITAL EXPENDITURES" means, for any period and
without duplication, (a) the additions to property, plant
and equipment and other capital expenditures of Borrower
and the Restricted Subsidiaries that are (or would be) set
forth in a consolidated statement of cash flows of the
Borrower for such period prepared in accordance with GAAP
and (b) Capital Lease Obligations incurred by the Borrower
and the Restricted Subsidiaries during such period."
"'FORSTMANN LITTLE' means Forstmann Little &
Co. or any Affiliate thereof."
(ii) Section 2.03 of the Credit Agreement is hereby amended by
adding the word "and" immediately following the semicolon at the
end of clause (v), replacing "; and" at the end of clause (vi)
with a period and deleting the clause immediately following
clause (vi).
(iii) Section 2.11(c) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
"(c) In the event and on each occasion that any
Net Proceeds are received by or on behalf of the Borrower
or any Subsidiary in respect of any Prepayment Event, the
Borrower shall, immediately after such Net Proceeds are
received, prepay Term Borrowings in an aggregate amount
equal to such Net Proceeds; PROVIDED that, notwithstanding
the foregoing (i) in the case of any Net Proceeds received
by or on behalf of the Borrower or any Subsidiary in
respect of any sale, transfer or other disposition of the
Publishing Assets, no prepayment shall be required pursuant
to this paragraph in respect of such Net Proceeds to the
extent that (A) the first $535,000,000 of the gross
proceeds therefrom have been applied to pay Indebtedness
under the Indentures pursuant to the Restructuring and (B)
the excess of such Net Proceeds received by the Borrower or
any of its Subsidiaries over $535,000,000 (including Net
Proceeds received in the event that Forstmann Little shall
enter into a definitive agreement within 12 months of the
Restructuring Date to sell such assets in a transaction
that requires a payment by Forstmann Little to the Borrower
or any such Subsidiary) up to a maximum of $25,000,000
shall be applied by the Borrower to the prepayment of the
Term Borrowings (it being understood that the Borrower and
its Subsidiaries may retain Net Proceeds in excess of
$560,000,000 (including Net Proceeds received in the event
that Forstmann
18
Little shall resell (or enter into a definitive agreement
to resell) such assets within 12 months of the
Restructuring Date in a transaction that requires a
payment by Forstmann Little to the Borrower or any of
its Subsidiaries) resulting from any sale, transfer or
other disposition of the Publishing Assets for working
capital and general corporate purposes, including
capital expenditures, and may apply all or any portion
of such excess to pay Indebtedness under the Indentures
pursuant to the Restructuring), (ii) in the event Net
Proceeds are received by or on behalf of the Borrower or
any Subsidiary in respect of any sale, transfer or other
disposition of the ICTC Assets, the Borrower shall,
immediately after such Net Proceeds are received, prepay
Term Borrowings with the initial $225,000,000 (it being
understood that if the sale, transfer or other
disposition of the ICTC Assets yields less that
$225,000,000 in Net Proceeds, the entire amount of such
Net Proceeds shall be used to repay the Term Loan
Borrowings and there shall be no further prepayment with
respect to such ICTC Assets) of such Net Proceeds and
the Borrower and its Subsidiaries shall be entitled to
retain any Net Proceeds in excess of such $225,000,000
for working capital and general corporate purposes,
including permitted Capital Expenditures, and (iii) in
the event Net Proceeds are received by or on behalf of
the Borrower or any Subsidiary in respect of any sale,
transfer or other disposition of Non-Core Assets, no
prepayment shall be required pursuant to this paragraph
in respect of such Net Proceeds and the Borrower and its
Subsidiaries shall be entitled to retain such Net
Proceeds for working capital and general corporate
purposes, including permitted Capital Expenditures."
(iv) Section 2.11 of the Credit Agreement is hereby further
amended by adding a new paragraph (f) as follows:
"(f) Voluntary and mandatory prepayments (other
than any mandatory prepayment pursuant to Section 3(d) of
the Third Amendment, any mandatory prepayment from the
proceeds of the New Preferred Stock, resulting from a
disposition of the ICTC Assets or the Publishing Assets or
resulting from the resale of the Publishing Assets by
Forstmann Little as set forth in Section 2.11(c)) of
Tranche A Term Loans or Tranche B Term Loans and repayments
of Tranche A Term Loans or Tranche B Term Loans as a result
of acceleration upon an Event of Default resulting from the
occurrence of a Change in Control, in each case made after
the Restructuring Date and prior to the third anniversary
of the Restructuring Date, shall be accompanied by payment
of a prepayment fee as follows:
(A) if such prepayment or repayment is made on or before
the first anniversary of the Restructuring Date, a
fee equal to 3% of the amount or such prepayment or
repayment; and
19
(B) if such prepayment or repayment is made after the
first anniversary but on or before the second
anniversary of the Restructuring Date, a fee equal to
2% of the amount of such prepayment or repayment; and
(C) if such prepayment or repayment is made after the
second anniversary but on or before the third
anniversary of the Restructuring Date, a fee equal to
1% of the amount of such prepayment or repayment."
(v) Section 2.20 of the Credit Agreement is hereby deleted.
(vi) Section 5.11 of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"The proceeds of the Loans and the issuance of
Letters of Credit will be used by the Borrower for working
capital and general corporate purposes, including the
construction, expansion, development or acquisition of
Telecommunications Assets and Telecommunications
Businesses. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board,
including Regulations U and X."
(vii) The Credit Agreement is amended by adding a new Section
5.16 thereto, which shall read in its entirety as follows:
"SECTION 5.16. DISPOSITION OF ICTC. The Borrower agrees
that it will, either directly or through its Subsidiaries
and on or before the fourteen-month anniversary of the
Restructuring Date, have either (a) sold or otherwise
disposed of substantially all of the ICTC Assets through an
asset sale, stock sale, merger or similar transaction or
(b) entered into a purchase, sale or merger or similar
agreement providing for the sale or other disposition of
the Capital Stock of ICTC or substantially all of the ICTC
Assets, which agreement shall be subject only to receipt of
necessary regulatory approvals, continued accuracy of
customary representations and warranties, compliance with
customary covenants and other customary closing
documentation conditions of a ministerial nature."
(viii) Section 6.01(a) is hereby amended by deleting the word
"and" at the end of clause (x) and amending and restating in its
entirety clause (xi) and adding a new clause (xii) as follows:
"(xi) so long as the Borrower and the Restricted
Subsidiaries are in compliance, on a pro forma basis after
giving effect to the incurrence of such Indebtedness, with
the financial covenants contained in Sections 6.13, 6.14,
6.16, 6.17 and 6.18 to the extent then applicable, other
senior unsecured Indebtedness, ranked pari passu with the
Indebtedness of the Borrower under
20
the Loan Documents, in an aggregate principal amount at
any time outstanding not to exceed $50,000,000; and
(xii) so long as the Borrower and the Restricted
Subsidiaries are in compliance, on a pro forma basis after
giving effect to the incurrence of such Indebtedness, with
the financial covenants contained in Sections 6.13, 6.14,
6.16, 6.17 and 6.18 to the extent then applicable, other
unsecured Indebtedness subordinated to the Obligations in a
manner reasonably satisfactory to the Required Lenders."
(ix) Section 6.02(v) of the Credit Agreement is hereby amended
by adding immediately after the words "after the date hereof" as
the same appear therein, the words "as a result of a Permitted
Business Acquisition permitted under Section 6.06(e)".
(x) Section 6.03(iv) of the Credit Agreement is hereby amended
by adding immediately after the words "prior to the time such
Person becomes a Restricted Subsidiary" as the same appear
therein, the words ", in each case as a result of a Permitted
Business Acquisition permitted under Section 6.06(e)".
(xi) Section 6.06(d) of the Credit Agreement is hereby amended
by deleting the reference to "(i)" in the proviso, inserting a
comma immediately after the word "shall" in the proviso and
deleting the following words "and (ii) in the case of loans to be
used to acquire Financed Telecommunications Assets, be made
pursuant to the Intercompany Loan Agreement".
(xii) Section 6.06(e) of the Credit Agreement is hereby
amended by adding the words ", PROVIDED that the Leverage Ratio
immediately before and after giving effect to any such Permitted
Business Acquisition made after the Restructuring Date shall be
equal to or less than 4.00 to 1.00" at the end of such clause
immediately prior to the semicolon.
(xiii) Section 6.07(a) of the Credit Agreement is hereby
amended by adding the words "(including in the case of inventory,
sales of inventory in bulk)" at the end thereof immediately prior
to the semicolon.
(xiv) Section 6.07(c) is hereby amended and restated in its
entirety as follows:
"(c) sales, transfers and other dispositions of assets
(including Capital Stock of Subsidiaries) that are not
permitted by any other clause of this Section; PROVIDED
that the Net Proceeds from (i) sales, transfers and other
dispositions of Non-Core Assets are utilized by the
Borrower for working capital and general corporate
purposes, including permitted Capital Expenditures and (ii)
sales, transfers and other dispositions of other assets
21
permitted by this clause (c) are applied in accordance with
the provisions of Section 2.11(c);"
(xv) Section 6.13 of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"SECTION 6.13. LEVERAGE RATIO . The Borrower will
not permit the Leverage Ratio as of any date during any
period set forth below to exceed the ratio set forth
opposite such period:
PERIOD RATIO
------ -----
January 1, 2003 to December 31, 2003 11.00 to 1.00
January 1, 2004 to March 31, 2004 10.00 to 1.00
April 1, 2004 to June 30, 2004 8.50 to 1.00
July 1, 2004 to September 30, 2004 7.00 to 1.00
October 1, 2004 to March 31, 2005 6.00 to 1.00
April 1, 2005 to September 30, 2005 5.00 to 1.00
October 1, 2005 and thereafter 4.00 to 1.00"
(xvi) Section 6.14 of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"SECTION 6.14. CAPITAL EXPENDITURE LIMITATION. The
Borrower shall not permit the Capital Expenditures of the
Borrower and the Restricted Subsidiaries for any fiscal
year of the Borrower to exceed the sum of (i) with respect
to the fiscal years ending December 31, 2002, 2006 and
thereafter, $350,000,000 and with respect to the fiscal
years ending December 31, 2003, 2004 and 2005, $300,000,000
and (ii) an amount equal to the Applicable Capex
Carryforward for such fiscal year. For the purpose for any
fiscal year commencing with the Borrower's fiscal year
2002, the "APPLICABLE CAPEX CARRYFORWARD" means an amount,
not in excess of $50,000,000, equal to the difference
between (x) the product of (A) with respect to the fiscal
years ending December 31, 2002, 2006 and thereafter,
$350,000,000 and with respect to the fiscal years ending
December 31, 2003, 2004 and 2005, $300,000,000 MULTIPLIED
BY (B) the number of fiscal years of the Borrower then
elapsed since, and including, fiscal year 2001 through the
fiscal year most recently ended (the "CALCULATION PERIOD")
MINUS (y) the aggregate amount of actual Capital
Expenditures actually made during the Calculation Period."
(xvii) Section 6.15 of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"SECTION 6.15. [Intentionally Omitted.]"
22
(xviii) Section 6.16 of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"SECTION 6.16. MINIMUM ACCESS LINES IN SERVICE.
The Borrower will not permit the Access Lines in Service as
of any of the dates set forth below to be less than the
minimum amount indicated opposite to such date:
DATE MINIMUM
---- -------
December 31, 2001 900,000
March 31, 2002 900,000
June 30, 2002 900,000
September 30, 2002 900,000
December 31, 2002 900,000
March 31, 2003 1,000,0000
June 30, 2003 1,000,0000
September 30, 2003 1,000,0000
December 31, 2003 1,000,0000
March 31, 2004 and thereafter no minimum"
(xix) Section 6.17 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"SECTION 6.17. INTEREST EXPENSE COVERAGE RATIO .
The Borrower will not permit the ratio of (a) Consolidated
EBITDA to (b) Consolidated Cash Interest Expense, in each
case for any period of four consecutive fiscal quarters
ending during any period set forth below to be less than
the ratio set forth opposite such period:
PERIOD RATIO
------ -----
January 1, 2003 to March 31, 2004 1.00 to 1.00
April 1, 2004 to June 30, 2004 1.25 to 1.00
July 1, 2004 to December 31, 2004 1.50 to 1.00
January 1, 2005 to June 30, 2005 2.00 to 1.00
July 1, 2005 and thereafter 2.50 to 1.00"
(xx) Section 6.18 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"SECTION 6.18. MINIMUM CONSOLIDATED REVENUE . The
Borrower will not permit Consolidated Revenue for any
period of four consecutive fiscal quarters ending during
any period set forth below, to be less than the amount set
forth opposite such period:
23
PERIOD MINIMUM
------ -------
December 31, 2000 to $1,100,000,000
December 31, 2001
January 1, 2002 to $1,300,000,000
June 30, 2002
July 1, 2002 to $1,200,000,000
September 30, 2002
October 1, 2002 to $1,100,000,000
December 31, 2002
January 1, 2003 to $900,000,000
December 31, 2003
January 1, 2004 to $1,000,000,000
December 31, 2004
January 1, 2005 and thereafter no minimum"
(xxi) The Credit Agreement is amended by deleting all
references to Section 6.15 contained therein.
(xxii) The Credit Agreement is amended by adding a new
Schedule 2.11(c) in the form of Annex VII hereto.
(b) AMENDMENTS TO THE CREDIT AGREEMENT THAT BECOME OPERATIVE IN THE
EVENT OF THE CONSUMMATION OF THE OUT-OF-COURT ALTERNATIVE. In the event that the
Restructuring is consummated through the Out-of-Court Alternative, the following
amendment to the Credit Agreement shall become operative immediately upon
satisfaction of the conditions subsequent set forth in Section 4:
(i) The parties hereto agree that immediately upon the occurrence of
the Restructuring Date the Revolving Commitments of the Revolving
Lenders will be permanently reduced by $140,000,000, and each Revolving
Lender party hereto hereby waives any prior notice of such reduction
required under Section 2.08(d) of the Credit Agreement.
(c) WAIVERS TO PERMIT RESTRUCTURING. The Lenders hereby agree (i)
that the provisions of Sections 2.11(c) (as in effect prior to the Restructuring
Date), 6.01(b), 6.07, 6.09, 6.10 and 6.12 of the Credit Agreement are hereby
waived to the extent, but only to the extent, necessary to permit consummation
of the transactions contemplated to be effected on the Restructuring Date
pursuant to the Restructuring (including the execution, delivery and performance
of a publishing, branding and operating agreement to be executed pursuant to the
FL Standby Purchase Agreement) and (ii) the provisions of Section 6.09 of the
Credit Agreement are hereby waived to the extent, but
24
only to the extent, necessary to permit the conversion of the New Preferred
Stock to New Common Stock pursuant to the terms of the New Preferred Stock;
PROVIDED that the waivers contained in this subsection (c) shall be of no
force and effect if any applicable Progress Condition has not been satisfied
on a timely basis.
(d) PREPAYMENT OF TERM BORROWINGS. The parties hereto agree that
immediately upon the occurrence of the Restructuring Date the Borrower shall
prepay Term Borrowings in an amount not less than $35,000,000, such prepayment
to be allocated ratably between the Tranche A Term Borrowings and Tranche B Term
Borrowings outstanding at such time, and each Lender party hereto hereby waives
any prior notice of such prepayment required under Section 2.11(e) of the Credit
Agreement.
SECTION 4. CONDITIONS. The provisions of Section 3 shall become
operative on the date the following conditions are satisfied:
(a) the Restructuring shall have been consummated prior to the
failure of any applicable Progress Condition to be satisfied on a timely
basis;
(b) the Borrower shall have paid an amendment fee to the
Administrative Agent for distribution to each Lender that has delivered an
executed counterpart of this Amendment to the Administrative Agent by November
29, 2001, equal to 1.00% of the aggregate amount (existing immediately prior to
execution of this Amendment) of such Lender's Term Loans, Revolving Exposure and
unutilized Commitments (such payment to be made by wire transfer of immediately
available funds to the Administrative Agent for the respective accounts of such
Lenders);
(c) the Credit Agreement and the Security Documents shall have
been amended, and such amendments shall have become effective, to provide (i)
that the Obligations will be unconditionally guaranteed (the "GUARANTEES")
subject to no stated limitations as to amount, on a senior basis by each
existing and subsequently acquired or organized Subsidiary of the Borrower
and (ii) that the Obligations and the Guarantees will be secured by
substantially all the assets of the Borrower and each existing and
subsequently acquired or organized Subsidiary of the Borrower, including but
not limited to (a) a priority (subject only to the prior Lien of the New
Interim Facility Obligations, if any, and the New Post-Restructuring Facility
Obligations, if any) pledge of all the capital stock, and any other equity
interests, and intercompany indebtedness held by the Borrower and by each
existing or subsequently acquired or organized (direct or indirect)
Subsidiary of the Borrower (limited, in the case of foreign Subsidiaries, to
65% of the capital stock of foreign Subsidiaries directly owned by domestic
Subsidiaries), and (b) perfected priority (subject only to the prior Lien of
the New Interim Facility Obligations, if any, and the New Post-Restructuring
Facility Obligations, if any) security interests in, and mortgages on,
substantially all other tangible and intangible assets of the Borrower and
each existing or subsequently acquired or organized domestic Subsidiary of
the Borrower (including but not limited to accounts receivable, inventory,
real property, equipment, trademarks, other intellectual property, licensing
agreements, cash, investments, contract rights and proceeds of the foregoing)
subject to Liens permitted under Sections 6.03(ii) through (v), inclusive, of
the Credit Agreement and reasonable exceptions if, in the reasonable judgment
of the Administrative Agent in consultation with the Borrower, the expense of
taking a security interest or mortgage would not, in light of the benefits to
accrue to the Lenders, economically justify taking such
25
security interest or mortgage. All filings, recordations and other actions
necessary or advisable, in the judgment of the Administrative Agent, to
perfect such security interests shall have been made or taken and all taxes
and fees in connection therewith shall have been paid. The Lenders shall have
received such favorable opinions of outside and internal counsel as it may
reasonably request with respect to the foregoing matters;
(d) On the Restructuring Date, the negative covenants in each of
the Indentures relating to indebtedness, liens and restrictive agreements of
subsidiaries shall cease to be applicable to the Borrower and each of its
Subsidiaries and the terms referred to in paragraph (c) of this Section shall
not violate any contractual agreements of the Borrower or any of its
Subsidiaries; and
(e) All fees of and all reasonable out-of-pocket expenses
incurred by the Arrangers, the Administrative Agent and the Collateral Agent
in connection with this Amendment or any of the other transactions
contemplated hereby, including all reasonable fees, disbursements and other
charges of Cravath, Swaine & Xxxxx and Xxxxx Xxxx & Xxxxxxxx, counsel to the
Administrative Agent, and Xxxxx Xxxx LLP, counsel to the DIP Agent, in each
case for which invoices shall have been submitted to the Borrower at least
three Business Days prior to the Restructuring Date, shall have been paid.
SECTION 5. TERMINATION OF THE AMENDMENT. This Amendment shall
terminate and the amendments, waivers and agreements set forth herein shall
be deemed null and void (other than with respect to the amendments contained
in Sections 2(a)(ii), (iv), (vi), (xi), (xiii) and, in each case disregarding
clause (c) thereof, (xvi), (xix) and (xxvii), the waivers contained in
Sections 2(h), (j), (k), (m) and (n) hereof, and the provisions of Section 7
which amendment, waivers and agreements shall survive the termination of this
Amendment) if:
(a) the conditions set forth in Section 4 shall not have been
satisfied on or prior to August 1, 2002; or
(b) any Progress Condition to the extent applicable shall fail
to be satisfied on a timely basis.
SECTION 6. REPRESENTATIONS AND WARRANTIES. To induce the other
parties hereto to enter into this Amendment, the Borrower represents and
warrants to each of the Lenders, the Administrative Agent and the Collateral
Agent that, as of the Amendment Effective Date:
(a) The representations and warranties set forth in Article III of
the Credit Agreement are true and correct in all material respects on and as of
the Amendment Effective Date with the same effect as though made on and as of
the Amendment Effective Date, except to the extent such representations and
warranties expressly relate to an earlier date.
(b) After giving effect to the agreements and waivers contained
herein, no Default or Event of Default has occurred and is continuing.
SECTION 7. (a) GENERAL RELEASE. In consideration of, among other
things, the forbearance provided for herein, the Borrower, on behalf of itself
and its Subsidiaries and its and their
26
successors and assigns (collectively, "RELEASORS"), hereby forever waives,
releases and discharges to the fullest extent permitted by law any and all
claims (including, without limitation, crossclaims, counterclaims, defenses,
rights of set-off and recoupment), causes of action, demands, suits, costs,
expenses and damages (collectively, the "CLAIMS"), that any Releasor now has,
of whatsoever nature and kind, whether known or unknown, whether arising at
law or in equity, against any or all of the Administrative Agent, the
Collateral Agent, the Issuing Bank and any Lender and their respective
Related Parties, and their respective successors and assigns and each and all
of the officers, directors, employees, agents, attorneys and other
representatives of each of the foregoing (collectively, the "RELEASEES"),
based in whole or in part on facts, whether or not now known, existing on or
before the execution of this Amendment relating to the Credit Agreement or
any of the other Loan Documents or any act or omission of the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Lender in connection
with the credit extended thereunder; PROVIDED that the releases contained
herein shall not affect, excuse or absolve the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender from performing its
obligations under the Credit Agreement or any of the other Loan Documents.
Acceptance by the Borrower of this Amendment, any Loans or other financial
accommodations made by the Administrative Agent or any Lender after the date
hereof shall constitute a ratification, adoption and confirmation by
Releasors of the foregoing general release of all Claims against any Releasee
that are based in whole or in part on facts, whether or not now known or
unknown, existing on or prior to the date of this Amendment. In entering into
this Amendment, the Borrower has consulted with and been represented by
counsel and expressly disclaims any reliance on any representations, acts or
omissions by any of the Releasees and hereby agrees and acknowledges that the
validity and effectiveness of the release set forth above do not depend in
any way on any such representations, acts and/or omissions or the accuracy,
completeness or validity thereof. The provisions of this Section shall be
operative as of the Third Amendment Effective Date and shall survive the
termination of this Amendment, the Credit Agreement and the other Loan
Documents and payment in full of all amounts owing thereunder.
(b) THE ARRANGERS. The parties hereto agree that the expense
reimbursement and indemnification provisions of Section 9.03 of the Credit
Agreement shall, subject to the limitations contained therein, apply to the
Arrangers, their Affiliates and Related Parties, including in connection with
the arrangement of this Amendment, the preparation and administration of this
Amendment or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall
be consummated), the execution or delivery of this Amendment or any other
agreement or instrument contemplated hereby, the performance by the parties
to this Amendment of their respective obligations hereunder, the consummation
of the transactions contemplated hereby and any acts or omissions of the
Arrangers in exercising their rights and duties as set forth in this
Amendment. Any reference in Section 9.03 of the Credit Agreement to "the
Administrative Agent" shall also be deemed a reference to each Arranger. No
Arranger shall be liable for any action or omission of such Arranger made in
good faith in connection with the matters expressly delegated herein (or in
the Annexes attached hereto) to the discretion of the Arrangers. Any Arranger
may at any time resign as Arranger hereunder. Upon resignation of any
Arranger, the remaining Arrangers may in their discretion request that the
Borrower appoint a replacement Arranger to be selected by the Borrower in its
sole and absolute discretion (but which in any event shall be a Lender). The
Borrower agrees to consider in good faith such request but shall be under no
obligation to appoint a replacement Arranger. To the extent a replacement
Arranger is not appointed, the remaining Arrangers shall continue to act as
the Arrangers hereunder.
27
SECTION 8. EFFECT OF AMENDMENT. Except as expressly set forth
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of or otherwise affect the rights and remedies of the
Lenders, the Administrative Agent, the Collateral Agent or any Loan Party
under the Credit Agreement or any other Loan Document, and shall not alter,
modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other
provision of the Credit Agreement or any other Loan Document, all of which
are ratified and affirmed in all respects and shall continue in full force
and effect. Nothing herein shall be deemed to entitle the Borrower to a
consent to, or a waiver, amendment, modification or other change of, any of
the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other Loan Document in similar or different
circumstances. This Amendment shall apply and be effective only with respect
to the provisions of the Credit Agreement and other Loan Documents
specifically referred to herein.
SECTION 9. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. Delivery of any executed counterpart of a signature page of
this Amendment by facsimile transmission shall be as effective as delivery of
a manually executed counterpart hereof.
SECTION 10. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 11. HEADINGS. The headings of this Amendment are for
purposes of reference only and shall not limit or otherwise affect the
meaning hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers, all as of the date and year
first above written.
McLEODUSA INCORPORATED
by /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Operating & Financial
Officer
Acknowledged and Agreed:
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I TO THE SUBSIDIARY GUARANTEE
AGREEMENT.
by /s/ Xxxxx X. Xxxxx
-----------------------------------
Name:
Title: Authorized Officer
JPMORGAN CHASE BANK,
Individually and as Administrative
Agent,
by /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Name of Institution: Citicorp USA, Inc.
------------------
by /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Managing Director
Name of Institution: Credit Suisse First Boston
--------------------------
by /s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx Xxxxxxx Xxxxx
Title: Vice President Associate
Name of Institution: Citicorp USA, Inc.
---------------------------
by /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
ADDISON CDO, LIMITED (ACCT 1279)
By: Pacific Investment Management Company LLC,
as its Investment Advisor
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxxxx
Executive Vice President
CAPTIVA III FINANCE LTD. (ACCT. 275),
as advised by Pacific Investment Management
Company LLC
By: /s/ Xxxxx Xxxx
------------------------------------
Name: Xxxxx Xxxx
Title: Director
CAPTIVA IV FINANCE LTD. (ACCT. 1275),
as advised by Pacific Investment Management
Company LLC
By: /s/ Xxxxx Xxxx
------------------------------------
Name: Xxxxx Xxxx
Title: Director
DELANO COMPANY (ACCT 274)
By: Pacific Investment Management Company LLC,
as its Investment Advisor
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxxxx
Executive Vice President
JISSEKIKUN FUNDING, LTD. (ACCT 1288)
By: Pacific Investment Management Company LLC,
as its Investment Advisor
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxxxx
Executive Vice President
ROYALTON COMPANY (ACCT 280)
By: Pacific Investment Management Company LLC,
as its Investment Advisor
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxxxx
Executive Vice President
Name of Institution: Sankary High Yield Asset Partners, L.P.
--------------------------------------
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
Name of Institution: Sankary High Yield Partners II, L.P.
------------------------------------------
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
Name of Institution: Sankary High Yield Partners III, L.P.
-------------------------------------------
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
Sankary Advisors, LLC as Collateral
Manager for Great Point CLO 1999-1
Name of Institution: LTD., as Term Lender
------------------------------------------
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
Sankary Advisors, Inc., as Collateral
Manager for Xxxxx Point CBO
Name of Institution: 1999-1 LTD., as Term Lender
------------------------------------------
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
Sankary Advisors, LLC, as Collateral
Manager for Xxxxx Point II CBO 2000-1
Name of Institution: LTD., as Term Lender
------------------------------------------
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Portfolio Manager
NAME OF INSTITUTION: KZH CYPRESSTREE-1 LLC
------------------------------
By: /s/ Xxxxx Xxxxxx-Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx-Xxxxxx
Title: Authorized Agent
NAME OF INSTITUTION: KZH ING-1 LLC
------------------------------
By: /s/ Xxxxx Xxxxxx-Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx-Xxxxxx
Title: Authorized Agent
NAME OF INSTITUTION: KZH ING-2 LLC
------------------------------
By: /s/ Xxxxx Xxxxxx-Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx-Xxxxxx
Title: Authorized Agent
NAME OF INSTITUTION: KZH ING-3 LLC
------------------------------
By: /s/ Xxxxx Xxxxxx-Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx-Xxxxxx
Title: Authorized Agent
Name of Institution: KZH PONDVIEW LLC
--------------------
by
/s/ Xxxxx Xxxxxx-Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx-Xxxxxx
Title: Authorized Agent
Name of Institution: KZH STERLING LLC
--------------------
by
/s/ Xxxxx Xxxxxx-Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx-Xxxxxx
Title: Authorized Agent
Name of Institution: KZH WATERSIDE LLC
--------------------
by
/s/ Xxxxx Xxxxxx-Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx-Xxxxxx
Title: Authorized Agent
Name of Institution: CITIBANK, N.A.
------------------------
by /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
MOUNTAIN CAPITAL CLO I, LTD.
By /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: Director
MOUNTAIN CAPITAL CLO II, LTD.
By /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: Director
Name of Institution: XXXXXX TRUST & SAVINGS BANK
---------------------------
by /s/ Xxxxx X. Xxxx
--------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
Name of Institution: Carlyle High Yield Partners II, Ltd.
------------------------------------
by /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
Sequils, Centurion V, Ltd.
American Express Asset Management Group Inc.
as Collateral Manager
Name of Institution:
--------------------------------------------
by /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
Centurion CDO II, Ltd.
By: American Express Asset Management
Group Inc. as Collateral Manager
Name of Institution:
--------------------------------------------
by /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
Centurion CDO III, Limited
American Express Asset Management Group Inc.
as Collateral Manager
Name of Institution:
--------------------------------------------
by /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
Seaboard CLO 2000 Ltd.
By: ORIX Capital Markets, LLC
Name of Institution: Its Collateral Manager
------------------------------
by /s/ Xxxxxxxx X.X. Xxxxx, Xx.
------------------------------------------
Name: Xxxxxxxx X.X. Xxxxx, Xx.
Title: Managing Director
Name of Institution: CREDIT AGRICOLE INDOSUEZ
------------------------------
by /s/ Xxxx XxXxxxxx /s/ Xxxx XxXxxxx
------------------------------------------
Name: Xxxx XxXxxxxx Xxxx XxXxxxx
Title: FVP VP
ML CLO XII PILGRIM
AMERICA (CAYMAN) Ltd.
By: ING Pilgrim Investments
Name of Institution: as its investment manager
------------------------------
by /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
SEQUILS PILGRIM-1 Ltd.
By: ING Pilgrim Investments
Name of Institution: as its investment manager
------------------------------
by /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PILGRIM CLO 1999-1 Ltd.
By: ING Pilgrim Investments
Name of Institution: as its investment manager
------------------------------
by /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PILGRIM AMERICA HIGH INCOME INVESTMENTS INC. LTD.
By: ING Pilgrim Investments
Name of Institution: as its investment manager
------------------------------
by /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
ML CLO XV PILGRIM
AMERICA (CAYMAN) Ltd.
By: ING Pilgrim Investments
Name of Institution: as its investment manager
------------------------------
by /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Name of Institution: Goldentree High Yield
Opportunities I, L.P.
------------------------------
by /s/ Xxxxxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
Name of Institution: Xxxxxx Financial, Inc.
------------------------------
by: Xxxxxx Financial Asset
Management LLC
by /s/ K. Xxxxx Xxxxxxxxx
------------------------------------------
Name: K. Xxxxx Xxxxxxxxx
Title: Senior Vice President
Name of Institution: Xxxxxxx Bank
------------------------------
by /s/ Xxxxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Vice President
Name of Institution: ERSTE BANK
--------------------
by /s/ Xxxx Xxx
-----------------------------------
Name: XXXX XXX
Title: VICE PRESIDENT
ERSTE BANK NEW YORK BRANCH
/s/ Xxxx X. [ILLEGIBLE]
-----------------------------------
Name: XXXX X. [ILLEGIBLE]
Title: MANAGING DIRECTOR
ERSTE BANK NEW YORK BRANCH
Name of Institution: The Bank of Nova Scotia
-----------------------
by /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: XXXXXXX X. XXXX
Title: AUTHORIZED SIGNATORY
Name of Institution: TEXTRON FINANCIAL CORPORATION
by /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director
Name of Institution: IBM CREDIT CORPORATION
------------------------------
by /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Manager of Credit
Name of Institution: KATONAH I, LTD.
-----------------------
by /s/ XXXXX XXXXX XXXXX
------------------------------------
Name: XXXXX XXXXX XXXXX
Title: AUTHORIZED OFFICER
KATONAH CAPITAL, LLC.
AS MANAGER
Name of Institution: KATONAH II, LTD.
-----------------------
by /s/ XXXXX XXXXX XXXXX
------------------------------------
Name: XXXXX XXXXX XXXXX
Title: AUTHORIZED OFFICER
KATONAH CAPITAL, LLC.
AS MANAGER
Name of Institution: TORONTO DOMINION (NEW YORK), INC.
---------------------------------
by /s/ Xxxxx Xxxxx
------------------------------------
Name: XXXXX XXXXX
Title: VICE PRESIDENT
XXX XXXXXX
PRIME RATE INCOME TRUST
BY: XXX XXXXXX INVESTMENT ADVISORY CORP.
by /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: XXXXXXX X. XXXXX
Title: VICE PRESIDENT
XXX XXXXXX
SENIOR INCOME TRUST
BY: XXX XXXXXX INVESTMENT ADVISORY CORP.
by /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: XXXXXXX X. XXXXX
Title: VICE PRESIDENT
XXX XXXXXX
SENIOR FLOATING RATE FUND
BY: XXX XXXXXX INVESTMENT ADVISORY CORP.
by /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: XXXXXXX X. XXXXX
Title: VICE PRESIDENT
XXX XXXXXX CLO I, LIMITED
BY: XXX XXXXXX MANAGEMENT,
INC.
as Collateral Manager
by /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: XXXXXXX X. XXXXX
Title: VICE PRESIDENT
XXX XXXXXX CLO II, LIMITED
BY: XXX XXXXXX MANAGEMENT,
INC.
as Collateral Manager
by /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: XXXXXXX X. XXXXX
Title: VICE PRESIDENT
Name of Institution: PINEHURST TRADING, INC.
-----------------------
by /s/ Xxx X. Xxxxxx
--------------------------
Name: XXX X. XXXXXX
Title: ASST. VICE PRESIDENT
Name of Institution: MUIRFIELD TRADING LLC
---------------------
by /s/ Xxx X. Xxxxxx
--------------------------
Name: XXX X. XXXXXX
Title: ASST. VICE PRESIDENT
Name of Institution: OLYMPIC FUNDING TRUST,
SERIES 1999-1
-----------------------
by /s/ Xxx X. Xxxxxx
--------------------------
Name: XXX X. XXXXXX
Title: AUTHORIZED AGENT
Name of Institution: BANK OF TOKYO--
MITSUBISHI TRUST COMPANY
-----------------------
by /s/ [ILLEGIBLE] Xxxxxxxx
--------------------------
Name: X. XXXXXXXX
Title: VICE PRESIDENT
GENERAL ELECTRIC CAPITAL CORPORATION,
by /s/ T. Rodney [ILLEGIBLE]
--------------------------
Name: T. RODNEY [ILLEGIBLE]
Title: MANAGER--OPERATIONS
Name of Institution: XXXXXXX XXXXX
CREDIT PARTNERS LP.
-----------------------
by /s/ Xxxxxxx X. Xxxx
--------------------------
Name: XXXXXXX X. XXXX
Title: AUTHORIZED SIGNATORY
Name of Institution: CHARTER VIEW PORTFOLIO
By: INVESCO Senior
Secured Management, Inc.
As Investment Advisor
by /s/ Xxxxxx X. X. Xxxxx
--------------------------
Name: XXXXXX X. X. XXXXX
Title: AUTHORIZED SIGNATORY
Name of Institution: AIM FLOATING RATE FUND
By: INVESCO Senior
Secured Management, Inc.
As Attorney in fact
by /s/ Xxxxxx X. X. Xxxxx
--------------------------
Name: XXXXXX X. X. XXXXX
Title: AUTHORIZED SIGNATORY
AMMC CDO II, LIMITED
By: American Money Management Corp.,
Name of Institution: as Collateral Manager
-------------------------
by /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
NATIONAL WESTMINSTER BANK PLC
By: NatWest Capital Markets Limited, its Agent
By: Greenwich Captial Markets, Inc., its Agent
Name of Institution -------------------------
by /s/ Xxxxx Xxxxxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: AVP
ARCHIMEDES FUNDING III, LTD.
By: ING Captial Advisors LLC,
as Collateral Manager
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
SEQUILS-ING I (HBDGM), LTD.
By: ING Capital Advisors LLC
As Collateral Manager
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
The ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, LP.
By: ING Capital Advisors LLC.
As Investment Advisor
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Name of Institution: CSAM FUNDING I
----------------
by /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: XXXXXX X. XXXXXXX
Title: AUTHORIZED SIGNATORY
Name of Institution: FIRST DOMINION FUNDING I
-------------------------
by /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: XXXXXX X. XXXXXXX
Title: AUTHORIZED SIGNATORY
Name of Institution: XXXXX CLO LTD. 2000-1
-------------------------
by /s/ Xxxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Director
Name of Institution: APEX (IDM) CDO I, LTD.
-------------------------
by /s/ Xxxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Director
Name of Institution: ELC (CAYMAN) LTD.
-------------------------
by /s/ Xxxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Director
Name of Institution: ELC (Cayman) Ltd. 2000-1
---------------------------------
by /s/ Xxxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Director
Name of Institution: Salomon Brothers Holding
Company, Inc.
---------------------------------
by /s/ Xxxxxx X.X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx X.X. Xxxxxxxxxx
Title: Managing Director
INDOSUEZ CAPITAL FUNDING IIA, LIMITED
By: Indosuez Capital as Portfolio Advisor
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
Title: Principal
INDOSUEZ CAPTIAL FUNDING III, LIMITED
By: Indosuez Capital as Portfolio Advisor
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
Title: Principal
INDOSUEZ CAPITAL FUNDING IV, L.P.
By: Indosuez Capital as Portfolio Advisor
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
Title: Principal
INDOSUEZ CAPITAL FUNDING VI, LIMITED
By: Indosuez Capital as Collateral Manager
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
Title: Principal
Name of Institution: U.S. Bank National Association
---------------------------------
by /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Name of Institution: AIMCO CDO Series 2000-A
---------------------------------
by /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
by /s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
Authorized Signatory
Name of Institution: ALLSTATE LIFE INSURANCE COMPANY
---------------------------------
by /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
by /s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
Authorized Signatory
Name of Institution: Pacifica Partners I, L.P.
Improved Credit Asset Management
as its investment manager
---------------------------------
by /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Name of Institution: ING (U.S.) CAPITAL LLC
---------------------------------
by /s/ Xxx Xxxxx
-----------------------------------
Name: Xxx Xxxxx
Title: Director
ARES Leveraged Investment Fund II, L.P.
By: ARES Management II, L.P.
Its: General Partner
By: /s/ Xxxx Xxxxx
-----------------------------------
Title: Xxxx Xxxxx
Vice President
ARES III CLO Ltd.
By: ARES CLO Management LLC,
Investment Manager
By: /s/ Xxxx Xxxxx
-----------------------------------
Title: Xxxx Xxxxx
Vice President
ARES IV CLO LTD.
By: Ares CLO Management IV, L.P.,
Investment Manager
By: Ares CLO XX XX, LLC,
Its Managing Member
By: /s/ Xxxx Xxxxx
---------------------------------
Name: XXXX XXXXX
Title: VICE PRESIDENT
ARES V CLO LTD.
By: Ares CLO Management V, L.P.,
Investment Manager
By: Ares CLO GP V, LLC,
Its Managing Member
By: /s/ Xxxx Xxxxx
---------------------------------
Name: XXXX XXXXX
Title: VICE PRESIDENT
by: PPM America Inc., as
Attorney-in-fact, on behalf of
Xxxxxxx National Life Insurance
Company
Name of Institution:
------------------------
By: /s/ Xxxx [ILLEGIBLE]
---------------------------------
Name: Xxxx [ILLEGIBLE]
Title: SENIOR MANAGING DIRECTOR
Name of Institution: SEQUILS -- CUMBERLAND I, LTD.
------------------------
By: Deerfield Capital Management LLC
as its Collateral Manager
by: /s/ Xxxx X. Xxxxxxxxx
---------------------------------
Name: XXXX X. XXXXXXXXX
Title: SR. VICE PRESIDENT
OCTAGON INVESTMENT PARTNERS II, LLC
By: Octagon Credit Investors, LLC
as sub-investment manager
by: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: XXXXXX X. XXXXXX
Title: PORTFOLIO MANAGER
OCTAGON INVESTMENT PARTNERS III, LTD.
By: Octagon Credit Investors, LLC
as Portfolio Manager
by: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: XXXXXX X. XXXXXX
Title: PORTFOLIO MANAGER
OCTAGON INVESTMENT PARTNERS IV, LTD.
By: Octagon Credit Investors, LLC
as collateral manager
by: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: XXXXXX X. XXXXXX
Title: PORTFOLIO MANAGER
Name of Institution: FLEET NATIONAL BANK
------------------------
by: /s/ Xxx X. Xxxxxxxx
---------------------------------
Name: XXX X. XXXXXXXX
Title: VICE PRESIDENT
Name of Institution: BANK OF MONTREAL
------------------------
By: /s/ X. Xxxxx
---------------------------------
Name: X. XXXXX
Title: Managing Director
Name of Institution: LIBERTY - XXXXX XXX ADVISOR
FLOATING RATE ADVANTAGE FUND
by XXXXX XXX & XXXXXXX
INCORPORATED, AS ADVISOR
------------------------
by: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: XXXXX X. XXXXXXX
Title: SR. VICE PRESIDENT &
PORTFOLIO MANAGER
Name of Institution: Xxxxx Xxx Floating Rate Limited Liability Company
-------------------------------------------------
by /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Xxxxx Xxx & Xxxxxxx Incorporated,
As Advisor To The Xxxxx Xxx Floating Rate
Limited Liability Company
Name of Institution: The Sumitomo Trust and Banking Co., Ltd.,
New York Branch
-----------------------------------------
by /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice-President
McLeodUSA Incorporated
Third Amendment
Name of Institution: Xxxxxxx Floating Rate Fund
-----------------------------------------
by /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Sr. Vice President
Xxxxxxxxx Arbitrage CDO, LTD.
BY: Xxxxxxxxx Capital Partners LLC
Name of Institution: As Its Collateral Manager
-----------------------------------------
by /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Partner
Xxxxxxxxx/RMF Transatlantic CDO, LTD.
BY: Xxxxxxxxx Capital Partners LLC
Name of Institution: As Its Collateral Manager
-----------------------------------------
by /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Partner
Xxxxxxxxx CLO, LTD.
BY: Xxxxxxxxx Capital Partners LLC
Name of Institution: As Its Collateral Manager
-----------------------------------------
by /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Partner
Windsor Loan Funding, Limited
BY: Xxxxxxxxx Capital Partners LLC
Name of Institution: As Its Investment Manager
-----------------------------------------
by /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Partner
Name of Institution: five finance Corp.
-----------------------------------------
by /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Alternative Investment Strategies
Name of Institution: BANKERS TRUST COMPANY
-----------------------------------------
by /s/ Xxxxxxxxx Xxxxxx-Papazogiou
-------------------------------------
Name: Xxxxxxxxx Xxxxxx-Papazogiou
Title: Director
ANNEX I
PRINCIPAL TERMS OF RESTRUCTURING
The following is a description of the principal terms for the restructuring
of the Borrower's Balance Sheet:
1. The Borrower will (A) sell its directory publishing business to either
(i) Forstmann Little & Co. or its affiliates for a cash purchase price of
at least $535,000,000 or (ii) such other person that submits a higher
and better all cash offer and (B) use (i) the first $535,000,000 of the
gross cash proceeds of such sale and (ii) at the Borrower's option, use
the gross cash proceeds in excess of $560,000,000 to redeem the
outstanding Indenture Debt;
2. The FL Standby Purchase Agreement shall not provide for any break-up fee
or any expense reimbursement in favor of the purchaser;
3. In the event that the Restructuring is consummated through the
Out-of-Court Alternative, the Indentures governing the Indenture Debt
will be amended to remove all lien, indebtedness and restrictive
subsidiary agreements restrictions;
4. Any disclosure statement soliciting the votes of the holders of the
Indenture Debt for the In-Court Alternative will disclose the related
amendments to the Credit Agreement and will disclose that during the
pendency of a Bankruptcy Proceeding the Borrower intends to pay, on a
current basis, all interest, commitment fees, letter of credit
participation fees and fronting fees when due pursuant to the terms of
the Credit Agreement and related documentation and all fees and expenses
payable to the Administrative Agent thereunder, including the reasonable
fees and disbursements of counsel;
5. In the event that the Restructuring is consummated through the In-Court
Alternative, all interest, commitment fees, letter of credit
participation fees and fronting fees under the Credit Agreement and
related documentation and all fees and expenses payable to the
Administrative Agent thereunder, including the reasonable fees and
disbursements of counsel, will be paid on a current basis in accordance
with the terms of the Credit Agreement;
6. The outstanding shares of Series A Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock and existing common stock of the
Borrower will be converted to common stock (the "NEW COMMON STOCK") of
the restructured Borrower;
7. Forstmann Little & Co. ("FORSTMANN LITTLE") and its affiliates will make
a $100,000,000 all cash investment in a new series of preferred stock of
the restructured Borrower, $25,000,000 of such investment will be used
to pay the Borrower's Indenture Debt, $35,000,000 of such investment
will be used to prepay the Term Borrowings and $40,000,000 of such
investment will be retained by the Borrower and used for general
corporate purposes, including capital expenditures. Such preferred stock
shall be mandatorily convertible into common stock of the Borrower
within 60 days of the issuance of;
2
8. The Borrower may implement the Restructuring either out-of-court through
an exchange offer for the Indenture Debt and the Borrower's Series A, D
and E Preferred Stock or in-court through a proceeding under Chapter 11
of the United States Bankruptcy Code, which in either case shall be
consummated on or prior to August 1, 2002;
9. If the Restructuring is accomplished through the In-Court Alternative,
the plan of reorganization for the Restructuring shall be confirmed on
or prior to August 1, 2002 and shall provide that the liens and claims
of the Lenders under the Credit Agreement will be unimpaired within the
meaning of Section 1124 of the Bankruptcy Code;
10. The Borrower will redeem at least 95% of its outstanding Indenture Debt
for (i) cash in the amount of $560,000,000; (ii) common equity of the
restructured Borrower in an amount acceptable to the Arrangers; and
(iii) at the Borrower's discretion, the excess, if any, of the gross
sales proceeds received by the Borrower in the sale of its directory
publishing business over $560,000,000; and
11. Upon consummation of the Restructuring, (i) Forstmann Little and its
affiliates will be entitled to at least two representatives on the
restructured Borrower's Board of Directors; (ii) Forstmann Little and
its affiliates will own common stock and warrants of the restructured
Borrower in an amount representing approximately 40% of the equity
ownership of the restructured Borrower; and (iii) Xxxxxxxx X. Xxxxxxxxx
will be chairman of the Executive Committee of the restructured Borrower.
The actions or events referred to in clauses 1, 3, 6, 7 (other than the
conversion of the preferred stock referenced therein to common stock of the
restructured Borrower), 10 and 11 will be taken or consummated (subject only
to the completion of certain ministerial acts to be consummated promptly
thereafter) on or before the Restructuring Date.
The Borrower shall be entitled to amend the terms of this Annex I without the
consent of the Lenders provided that the terms of the amended Annex I are not
materially inconsistent with the terms set forth above and provided further
that the amendment does not have an adverse effect on the Lenders. All other
amendments to this Annex I shall require the consent of the Required Lenders.
Prior to consummation of a restructuring on terms inconsistent (whether or not
material) with the terms of this Annex I, the Borrower shall notify the
Arrangers of the terms of such restructuring. In the event that a dispute
arises as to whether changes in the terms of the Restructuring set forth in
clause 10 or 11 above result in an amended Annex I being materially
inconsistent with the terms set forth above, the dispute shall be settled by
the following dispute resolution mechanism: (i) the Borrower shall notify the
Administrative Agent that it is invoking this dispute resolution mechanism;
(ii) upon receipt of such notice, the Administrative Agent shall, within five
Business Days of receipt of such notice, commence a meeting among the Borrower
and the Arrangers at which the Borrower will present the Arrangers with the
principal terms of the revised Restructuring and request a determination that
such terms are not materially inconsistent with this Annex I; and (iii)
within five Business Days following such presentation, all of the Arrangers
shall determine whether or not the terms of the revised Restructuring are
materially inconsistent with the terms of Annex I described above and shall
inform the Borrower of such determination in writing. Such determination
shall be binding on all parties.
2
3
The Restructuring will in any event be subject to all provisions of the
Credit Agreement, as amended.
ANNEX II
DEFINITIONS
"ARRANGERS" means JPMorgan Chase Bank, Bank of America, N.A. and
Citicorp USA, Inc.
"FL STANDBY PURCHASE AGREEMENT" means the standby purchase agreement
entered into among Forstmann Little, certain of its affiliates and the
Borrower on or about the Third Amendment Effective Date and each other
agreement, document, certificate or instrument delivered or to be delivered
in connection therewith, pursuant to which Forstmann Little or any of such
affiliates will, in the event that the Borrower has not received and accepted
a higher and better all cash offer for the sale of the Publishing Assets on
or prior to the Restructuring Date, purchase the Publishing Assets for cash
consideration of $535,000,000 on or prior to the Restructuring Date.
"FL NEW PREFERRED STOCK PURCHASE AGREEMENT" means the stock purchase
agreement entered into among Forstmann Little, certain of its affiliates and
the Borrower on or about the Third Amendment Effective Date and each other
agreement, document, certificate or instrument delivered or to be delivered in
connection therewith, pursuant to which Forstmann Little and such affiliates
will make an investment in a new series of preferred stock (the "New
Preferred Stock") of the restructured Borrower as described in Annex I.
"FORSTMANN LITTLE" is defined in Annex I.
"INDENTURE DEBT" means the outstanding Indebtedness of the Borrower
under the Indentures.
"NEW COMMON STOCK" is defined in Annex I.
ANNEX III
XXXXXX USA INCORPORATED
SENIOR SECURED CREDIT FACILITY
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS
BORROWER:
McLeodUSA Incorporated (the "Borrower").
ADMINISTRATIVE AND JPMorgan Chase Bank ("JPMorgan") will act as sole
COLLATERAL AGENT: administrative agent and collateral agent
(collectively the "Agent") for the Facility and
will perform the duties customarily associated
with such roles.
ADVISOR, ARRANGER AND X.X. Xxxxxx Securities Inc. will act as advisor,
BOOKRUNNER: lead arranger and sole bookrunner for the
Facility (the "Arranger") and will perform the
duties customarily associated with such roles.
OTHER AGENTS: To be determined.
LENDERS: A syndicate of financial institutions reasonably
satisfactory to the Agent, the Arranger and the
Borrower (the "Lenders").
FACILITY: Senior Secured Revolving Credit Facility in an
aggregate principal amount of up to $160,000,000
(of which $10,000,000 shall be reserved and made
available to the Borrower on a dollar for dollar
basis as LC Exposure (as defined in the Existing
Credit Agreement referred to below) is reduced
under the Existing Credit Agreement) (the
"Facility") of which an amount to be agreed will
be available in the form of letters of credit.
PURPOSE: The proceeds of loans under the Facility and the
issuance of
letters of credit shall be used to prepay all
outstanding loans under any New Interim Facility
(as defined in the Third Amendment referred to
below) and for working capital and other general
corporate purposes of the Borrower and its
subsidiaries.
AVAILABILITY: Loans under the Facility will be available at
any time prior to the final maturity of the
Facility. Amounts repaid under the Facility may be
reborrowed to the extent of the available
commitments.
FINAL MATURITY: The Facility will mature and the commitments
thereunder will terminate on May 31, 2007.
GUARANTEES: All obligations of the Borrower in respect of
the Facility (collectively, the "Obligations")
will be unconditionally and irrevocably
guaranteed on a senior basis (the "Guarantees")
by each existing and subsequently acquired or
organized domestic subsidiary (which term shall
include any indirect subsidiary) of the Borrower
other than the Excluded Subsidiaries (as defined
below) and subsidiaries with de minimus business,
assets or operations and other than subsequently
acquired or organized subsidiaries that the
Borrower may designate at the time of such
acquisition or organization as unrestricted in
accordance with criteria to be agreed (each such
unrestricted subsidiary, an "Unrestricted
Subsidiary"; all other subsidiaries of the
Borrower are "Restricted Subsidiaries"). The
following domestic Subsidiaries shall be excluded
from the collateral and guarantee
7
requirements of the Facility: Xxxxxx County
Partners, Inc., Midwest Cellular Associates and
Illinois Consolidated Telephone Company (the
"Excluded Subsidiaries").
SECURITY: The Obligations and the Guarantees, will be
secured by (i) a first priority pledge of all
the capital stock, and any other equity
interests, and intercompany indebtedness owned
by the Borrower or any domestic subsidiary of
each existing and each subsequently acquired or
organized direct or indirect subsidiary of the
Borrower (other than stock of Excluded
Subsidiaries and subsidiaries with de minimus
business, assets or operations and limited, in
the case of foreign subsidiaries, to 65% of the
capital stock of foreign subsidiaries directly
owned by domestic subsidiaries), and (ii) a
perfected first priority security interest in,
and mortgages on, substantially all the tangible
and intangible assets of the Borrower and each
existing and each subsequently acquired or
organized domestic subsidiary of the Borrower
other than Excluded Subsidiaries (including but
not limited to accounts receivable, inventory,
real property, equipment, trademarks, other
intellectual property, licensing agreements, cash,
investments, contract rights and proceeds of the
foregoing), subject to exceptions to be agreed
(collectively, the "Collateral").
All the above-described security interests shall
be created on terms, and pursuant to
8
documentation, reasonably satisfactory to the
Lenders and the Borrower, and on the Closing
Date such security interests shall have become
perfected and the Agent shall have received
satisfactory evidence as to the priority
(subject to customary exceptions) thereof. None
of the Collateral shall be subject to any other
pledges, security interests, mortgages or other
liens, except as permitted by the definitive
credit documentation; PROVIDED that the
Collateral shall also secure, subject only to
the prior lien securing the Obligations under
the Facility, all obligations under the Existing
Credit Agreement and the related loan, guarantee
and security documents and any hedging agreement
facilities provided by any lender under the
Existing Credit Agreement or its affiliates to
the Borrower and designated by the Borrower as a
secured obligation.
Notwithstanding the foregoing, the Agent may
agree to exclude particular assets from the
Collateral where it determines that such assets
are not significant or the cost or
impracticality of including such assets would be
excessive in relation to the benefits to the
Lenders, and may grant extensions of time for
the perfection of liens on particular assets
where perfection cannot be accomplished by the
Closing Date.
INTEREST RATES AND FEES: As set forth on Annex I hereto.
VOLUNTARY COMMITMENT Voluntary prepayments of borrowings under the
REDUCTIONS/ Facility, and voluntary
9
PREPAYMENTS: reductions of the unutilized portion of the
Facility commitments, will be permitted at any
time, in whole or in part, in minimum principal
amounts to be agreed upon, without premium or
penalty but subject to reimbursement of the
Lenders' breakage costs in the event any such
reduction results in a prepayment of Adjusted
LIBOR borrowings other than on the last day of
the relevant interest period.
Any reduction of the commitments under the
Facility shall be accompanied by prepayment of
the loans under the Facility to the extent such
loans exceed the amount of the commitments under
the Facility as so reduced.
DOCUMENTATION: A credit agreement (the "Credit Agreement") and
other loan, guarantee and security documentation
substantially in the form of the Credit
Agreement dated as of May 31, 2000, as amended
through the Third Amendment (the "Third
Amendment") dated as of November 29, 2001 (the
"Existing Credit Agreement"), among the
Borrower, the lenders party thereto and
JPMorgan, as agent, and the related loan,
guarantee and security documents, incorporating
the terms contained herein, other customary
terms and provisions and such other provisions
not inconsistent with the terms contained herein
as the Agent and the Borrower may reasonably
agree in the context of the transactions
contemplated hereby.
10
REPRESENTATIONS AND Substantially similar to those set forth in the
WARRANTIES: Existing Credit Agreement (to be applicable to
the Borrower and its Restricted Subsidiaries),
including, but not limited to: accuracy of
financial statements; no material adverse
change; absence of material litigation;
effectiveness and no violation of agreements or
instruments; existence and validity of
governmental consents and permits; compliance
with laws (including but not limited to ERISA,
margin regulations and communications and
environmental laws and regulations); payment of
taxes; ownership of properties and subsidiaries;
insurance; inapplicability of the Investment
Company Act and Public Utility Holding Company
Act; effectiveness of regulatory approvals;
labor matters; environmental matters; accuracy
of information; and validity, priority and
perfection (subject to customary qualifications)
of security interests.
CONDITIONS PRECEDENT TO Substantially similar to those set forth in the
INITIAL BORROWING: Existing Credit Agreement, including but not
limited to: delivery of satisfactory legal
opinions; delivery of financial statements and
other financial information to be agreed upon;
execution and delivery to the Agent of
satisfactory security documents to create the liens
on the Collateral, completion of all filings and
other actions as are necessary to perfect such
liens; absence of material adverse change in the
business, assets, operations, financial condition
or material agreements of the Borrower and its
subsidiaries,
11
taken as a whole; absence of defaults,
prepayment events or creation of liens under
debt instruments or other agreements as a result
of the transactions contemplated hereby;
evidence of authority; all necessary consents;
and payments of fees and expenses.
The Restructuring (as defined in the Third
Amendment) of the Borrower shall have been
consummated on the terms set forth on Annex I to
the Third Amendment, as amended in accordance
with its terms.
The Reorganization Consummation Date (as defined
in the Third Amendment) shall have occurred.
The Third Amendment shall be in full force and
effect and all conditions set forth in Section 4
thereof shall have been satisfied.
No Default or Event of Default (each as defined
in the Existing Credit Agreement) shall have
occurred and be continuing under the Existing
Credit Agreement.
The Lenders shall have received a pro forma
consolidated balance sheet of the Borrower as of
the closing of the Facility, which shall not be
materially inconsistent with the 8-year business
plan provided to the Lenders in connection with
the Third Amendment.
The Borrower shall, on a pro forma basis, be in
compliance with all financial covenants under
the Facility.
12
CONDITIONS TO EACH Delivery of a borrowing notice, accuracy in all
BORROWING: material respects of all representations and
warranties, and absence of defaults and events
of default at the time of, and after giving
effect to, such borrowing; PROVIDED that the
accuracy of any representation or warranty
regarding a material adverse change will only be
made for Borrowings that increase the principal
amount of outstanding Loans.
AFFIRMATIVE COVENANTS: Substantially similar to those set forth in the
Existing Credit Agreement (to be applicable to
the Borrower and its Restricted Subsidiaries),
including the maintenance of existence and
material rights and licenses; performance of
obligations; delivery of audited annual
financial statements, unaudited quarterly
financial statements, annual budgets (prepared
on a quarterly basis), certain revenue,
subscriber and churn information on a quarterly
basis, other financial and operating information
to be agreed, and notices of defaults,
litigation and other adverse matters;
maintenance of properties in good working order
as reasonably necessary for the conduct of the
Borrower's business; maintenance of insurance in
accordance with prevailing industry standards;
compliance with applicable laws and regulations;
inspection of books and properties; agreement to
cause each domestic subsidiary of the Borrower
acquired or organized after the closing to
guarantee the Guaranteed Obligations and provide
Collateral as required by the
13
credit documentation; further assurances; and
payment of taxes.
NEGATIVE COVENANTS: Substantially similar to those set forth in the
Existing Credit Agreement (to be applicable to
the Borrower and its Restricted Subsidiaries),
including limitations on dividends and
distributions on, and redemptions and
repurchases of, capital stock and other similar
payments; prohibition on voluntary prepayments,
redemptions and repurchases of other debt;
limitations on liens and sale-leaseback
transactions; limitations on loans and
investments; limitations on debt and
guarantees of the Borrower and separate
limitations on debt and guarantees of subsidiaries
(PROVIDED that Splitrock will be permitted to
maintain the indebtedness under its existing
capital lease obligations in an amount not to
exceed the current outstanding amount thereof);
limitations on mergers, acquisitions and asset
sales and dispositions (PROVIDED that mergers and
similar transactions among wholly owned Restricted
Subsidiaries will be permitted); limitations on
transactions with affiliates; limitations on
changes in business conducted; and limitations
on amendments and waivers of debt and other
material agreements in a manner adverse in any
significant respect to the interests of the
Lenders.
FINANCIAL COVENANTS: The Credit Agreement will contain financial
covenants substantially similar to those set
forth in the
14
Existing Credit Agreement, including:
(a) MINIMUM ACCESS LINES IN SERVICE.
Not to be less than the amounts indicated
below:
YEAR MINIMUM
---- -------
2001 900,000
2002 900,000
2003 1,000,000
2004 and
thereafter No Minimum
(d) TOTAL LEVERAGE.
The ratio, on any date on or after January
1, 2003, of Total Debt to EBITDA for the
trailing four fiscal quarters ended during
any period set forth below not to be greater
than the ratio indicated below opposite such
period:
PERIOD RATIO
------ -----
1/1/03-12/31/03 11.00:1.00
1/1/04-3/31/04 10.00:1.00
4/1/04-6/30/04 8.50:1.00
7/1/04-9/30/04 7.00:1.00
10/1/04-3/31/05 6.00:1.00
4/1/05-9/30/05 5.00:1.00
10/1/05 and
thereafter 4.00:1.00
(e) MINIMUM REVENUE.
The Consolidated Revenue of the Borrower
and the Restricted Subsidiaries for the
trailing four fiscal quarters ended during
any
15
period set forth below not to be less than
the amounts indicated below opposite such
period:
PERIOD MINIMUM
------ -------
12/31/00-12/31/01 $1,100,000,000
1/1/02-6/30/02 $1,300,000,000
7/1/02-9/30/02 $1,200,000,000
10/1/02-12/31/02 $1,100,000,000
1/1/03-12/31/03 $900,000,000
1/1/04-12/31/04 $1,000,000,000
1/1/05 and thereafter no minimum
(f) INTEREST COVERAGE.
The ratio of Consolidated EBITDA to
Consolidated Cash Interest Expense for the
trailing four fiscal quarters ended during
any period set forth below not to be less
than the ratio indicated below opposite
such period:
PERIOD RATIO
------ -----
1/1/03-3/31/04 1.00:1.00
4/1/04-6/30/04 1.25:1.00
7/1/04-12/31/04 1.50:1.00
1/1/05-6/30/05 2.00:1.00
7/1/05 and
thereafter 2.50:1.00
(g) CAPITAL EXPENDITURES. The Borrower shall
not permit the Capital Expenditures of the
Borrower and the Restricted Subsidiaries
for any fiscal
16
year of the Borrower to exceed the sum of
(i) with respect to the fiscal years ending
December 31, 2002, 2006 and thereafter,
$350,000,000 and with respect to the fiscal
years ending December 31, 2003, 2004 and
2005, $300,000,000 and (ii) an amount equal
to the Applicable Capex Carryforward for
such fiscal year. For the purpose for any
fiscal year commencing with the Borrower's
fiscal year 2002, the "APPLICABLE CAPEX
CARRYFORWARD" means an amount, not in
excess of $50,000,000, equal to the
difference between (x) the product of (A)
with respect to the fiscal years ending
December 31, 2002, 2006 and thereafter,
$350,000,000 and with respect to the fiscal
years ending December 31, 2003, 2004 and
2005, $300,000,000 MULTIPLIED BY (B) the
number of fiscal years of the Borrower then
elapsed since, and including, fiscal year
2001 through the fiscal year most recently
ended (the "CALCULATION PERIOD") MINUS (y)
the aggregate amount of actual Capital
Expenditures actually made during the
Calculation Period.
EVENTS OF DEFAULT: Substantially similar to those set forth in the
Existing Credit Agreement, including: non-payment
of principal or (subject to a five-day grace
period) interest, fees or other amounts,
violation of covenants, incorrectness of
representations and warranties in any material
respect, cross default
17
and cross acceleration to other material
indebtedness, bankruptcy, material judgments,
certain ERISA events, actual or asserted (by the
Borrower or any of its affiliates) invalidity of
loan or security documents, and Change in
Control.
VOTING: Amendments and waivers of the Credit Agreement
and the other definitive loan, guarantee and
security documentation will require the approval
of Lenders holding more than 50% of the
aggregate amount of the loans and commitments
under the Facility, except that the consent of
each Lender adversely affected thereby shall be
required with respect to, among other things,
(i) increases in commitments, (ii) reductions of
principal, interest or fees, (iii) extensions of
final maturity and (iv) releases of
substantially all the Collateral or any
Guarantee (other than in connection with any
sale of Collateral or a subsidiary permitted by
the Credit Agreement.)
COST AND YIELD PROTECTION: Usual for facilities and transactions of this
type.
ASSIGNMENTS AND The Lenders will be permitted to assign loans and
PARTICIPATIONS: commitments to other Lenders (or their
affiliates) without restriction, or to other
financial institutions with the consent of the
Borrower and the Agent, in each case not to be
unreasonably withheld. Each assignment (except
to other Lenders or their affiliates) will be in
a minimum aggregate principal amount of
$5,000,000. The Agent will receive a processing
and recordation fee of $3,500, payable
18
by the assignor and/or the assignee, with each
assignment.
The Lenders will be permitted to participate
loans and commitments without restriction.
Voting rights of participants shall be limited
to matters in respect of (i) increases in
commitments, (ii) reductions of principal,
interest or fees, (iii) extensions of final
maturity and (iv) releases of substantially all
of the Collateral or any Guarantees (other than
in connection with any sale of Collateral or a
subsidiary permitted by the Credit Agreement).
EXPENSES AND All reasonable out-of-pocket expenses (including
INDEMNIFICATION: but not limited to expenses incurred in
connection with due diligence) of the Agent and
the Arranger associated with the initial
syndication of the Facility and with the
preparation, execution and delivery, waiver or
modification and enforcement of the Credit
Agreement and the other documentation
contemplated hereby and thereby (including but
not limited to the reasonable fees, disbursements
and other charges of counsel) are to be paid by
the Borrower. In addition, all reasonable
out-of-pocket expenses of the Lenders for
enforcement costs and documentary taxes
associated with the Facility are to be paid by
the Borrower.
The Borrower will indemnify the Agent, the
Arranger and the Lenders and their officers,
directors, agents, advisors, controlling persons
and affiliates and hold them harmless from and
against all reasonable costs, expenses
19
(including but not limited to reasonable fees,
disbursements and other charges of counsel) and
liabilities of any such indemnified person
arising out of or relating to any claim or any
litigation or other proceedings (regardless of
whether such indemnified person is a party
thereto) that relate to the Facility or the
transactions contemplated hereby; PROVIDED that
no indemnified person will be indemnified for
its own gross negligence or wilful misconduct.
Each indemnified person will provide
the Borrower with prompt written notification of
any claim for which indemnification may be
sought; PROVIDED that the failure of any
indemnified person to give such notice shall not
affect the Borrower's indemnity obligations
under the Facility. The Borrower will, upon
confirming in writing to such indemnitee that the
Borrower assumes full liability for all such claims
and related costs and damages, have the right to
control the defense of any such claim (other than
a claim by the Borrower against such indemnified
person) with counsel selected by it that is
satisfactory to such indemnified person; PROVIDED
that such indemnified person shall have the right
to employ separate counsel if (i) the Borrower
consents, (ii) the Borrower's chosen counsel has
a conflict of interest or (iii) the defendants in
such action may include that the Borrower and such
indemnified person, and such indemnified person
reasonably concludes that it has additional or
different legal defenses to such action.
20
COUNSEL FOR THE AGENT Cravath, Swaine & Xxxxx
AND THE ARRANGER:
GOVERNING LAW AND
FORUM: New York.
ANNEX I
INTEREST RATES: The interest rates under the Facility will be as
follows:
At the Borrower's option, LIBOR or ABR plus, in
each case, the applicable spread shown in the
pricing grid at the end of this Annex I.
The Borrower may elect interest periods of 1, 2, 3
or 6 months (or, if available from all Lenders,
of 9 or 12 months) for LIBOR borrowings
including 1-month interest periods if an Event
of Default has occurred and is continuing.
Calculation of interest and fees shall be on the
basis of actual days elapsed in a year of 360
days (or 365 or 366 days, as the case may be, in
the case of ABR loans based on the Prime Rate).
Interest shall be payable at the end of each
interest period and, in any event, at least every
3 months.
Interest on overdue amounts will accrue, in the
case of principal, at the otherwise applicable
rate plus 2% and in the case of other amounts at
the interest rate applicable to ABR loans plus
2%.
LIBOR is the London interbank offered rate for
eurodollar deposits for the relevant interest
period, as reflected on the applicable Telerate
screen. At the request of any Lender,
LIBOR-based interest will be adjusted to reflect
statutory reserves under Regulation D for
eurocurrency liabilities applicable to such
Lender.
ABR is the Alternate Base Rate, which is the
highest of JPMorgan's Prime
2
Rate and the Federal Funds Effective Rate plus
1/2 of 1%.
COMMITMENT FEES: A commitment fee on the undrawn portion of the
commitment of each Lender (including JPMorgan)
to the Facility will accrue at the applicable
rate shown in the pricing grid at the end of
this Annex I commencing on the Closing Date and
will be payable quarterly in arrears and upon
any termination of such Lender's commitment.
PRICING GRID(1)
Level Ratings LIBOR Spread ABR Spread
----- ------- ------------ ----------
V >=BBB-/Baa3 2.00% 1.00%
-------------------------------------------------------
IV BB+/Ba1 2.50% 1.50%
-------------------------------------------------------
III BB/Ba2 3.00% 2.00%
-------------------------------------------------------
II BB-/Ba3 3.25% 2.25%
-------------------------------------------------------
I < BB-/Ba3 3.50% 2.50%
-------------------------------------------------------
Revolver Usage Commitment Fee
---------------------------------------------------
< 25% Used 100.0 bps.
---------------------------------------------------
25-50% Used 75.0 bps.
---------------------------------------------------
> 50% Used 50.0 bps.
---------------------------------------------------
--------------------------
(1) Interest rate spreads will be determined based upon the ratings (the
"Ratings") assigned to the Borrower's senior secured debt made by
Xxxxx'x and Standard & Poor's. In the event of split Ratings, spreads
shall be determined by reference to the lower of the two Ratings;
PROVIDED that if the split in Ratings is greater than one, spreads shall
be determined by reference to the Rating one above the lower of the two
Ratings. Any change in interest rate spreads based on a change in the
Ratings shall be effective on the date such change in Ratings is
publicly announced.
ANNEX IV
PROGRESS CONDITIONS
1. The Restructuring Date shall have occurred on or before August 1, 2002.
2. If proceedings are commenced with respect to the Borrower or any
subsidiary under the Bankruptcy Code, such proceedings shall at all times be
Bankruptcy Proceedings, as such term is defined in the Agreement.
3. In connection with any Bankruptcy Proceedings with respect to the
Borrower or any subsidiary:
(a) all orders submitted to the Bankruptcy Court by the debtor
contemporaneously with the commencement of such debtor's
Bankruptcy Proceedings shall be reasonably satisfactory in form
and substance to the DIP Agent and the Administrative Agent;
(b) a Qualifying Cash Collateral Order shall have been entered not
later than 10 days following the date on which an order for relief
is entered into the Bankruptcy Proceedings, and, from and after
the date of entry of such order, a Qualifying Cash Collateral
Order shall at all times be in full force and effect and shall not
have been stayed in such Bankruptcy Proceedings;
(c) in the event a debtor in possession financing is obtained in
the Bankruptcy Proceedings, the order in the Bankruptcy
Proceedings approving such debtor in possession financing shall
at all times be a Qualifying DIP Order, and such order shall
remain in full force and effect and shall not have been stayed in
such Bankruptcy Proceedings;
(d) no order approving the use of cash collateral of the Lenders,
providing adequate protection to the Lenders, or authorizing any
debtor in possession financing (a "LENDER ORDER") shall be
reversed, revoked, altered or modified without the consent of the
Administrative Agent and, in the case of any order approving a
debtor in possession financing, the DIP Agent, each its sole
discretion;
(e) relief from the automatic stay shall not have been granted with
respect to any claims exceeding in the aggregate $10 million; and
(f) the Bankruptcy Proceedings shall not have been dismissed or
converted to proceedings under Chapter 7 of the Bankruptcy Code,
no trustee shall have been appointed in the Bankruptcy
Proceedings, the exclusive period of the debtor to file a plan of
reorganization in the case shall at all times remain in full force
and effect, and no motion or application seeking any of the
foregoing shall have been made or threatened.
4. (a) No any action or proceeding challenging the validity or perfection
of any Lien purported to be created under any Security Document or
the priority thereof required by the applicable Security Document
or any claim of any Lender, the
2
Administrative Agent, the Collateral Agent or any Arranger, or
seeking any legal or equitable relief against any Lender, the
Administrative Agent, the Collateral Agent or any Arranger with
respect to the Credit Agreement or the Borrower (including,
without limitation, pursuant to any avoidance power under the
Bankruptcy Code or state law)(any such action or proceeding
being referred to herein as a "LENDER LITIGATION") shall have
been commenced by the Borrower or any Subsidiary (as debtor or
otherwise or in the name of any such entity).
(b) Any Lender Litigation commenced by a party other than the
Borrower or a Subsidiary shall be dismissed or withdrawn, in
either case with prejudice, on or prior to the earlier of the
Restructuring Date and August 1, 2002 and shall be resolved
without adverse consequences for the Lenders. The Lenders shall
be reimbursed by the Borrower promptly after written demand
therefor for all reasonable costs and expenses (including the
reasonable fees and expenses of counsel) incurred in connection
with any Lender Litigation.
5. In the event a case shall at any time be commenced under the
Bankruptcy Code with respect to any direct or indirect subsidiary of the
Borrower, any order providing for adequate protection of the Lenders
(including, without limitation, any Qualifying Cash Collateral Order or any
Qualifying DIP Order and in any event consistent with the limitations set
forth in the Subsidiary Guarantee Agreement) in effect in the Bankruptcy
Proceedings of the Borrower shall be made applicable to the case involving
such subsidiary on substantially the same terms as such order applies in the
Bankruptcy Proceedings of the Borrower within 10 days after the date of the
order for relief in the case of such subsidiary.
6. In the event a case shall at any time be commenced under the
Bankruptcy Code with respect to any direct or indirect subsidiary of the
Borrower, the venue of such case shall be maintained in the same Bankruptcy
Court as the Bankruptcy Proceedings with respect to the Borrower and not
later than two Business Days subsequent to the order for relief entered in
such case shall have been administratively consolidated with the Bankruptcy
Proceedings of the Borrower before the same judge.
7. (a) No event shall have occurred that is an Event of Default under
the Credit Agreement (whether or not the effect of such Event of Default is
stayed as a consequence of the pendency of any Bankruptcy Proceedings).
(b) No event shall have occurred that would have become an Event of
Default under the Credit Agreement after the commencement of Bankruptcy
Proceedings had notice thereof been given when the Borrower first became
aware of the occurrence of such event (whether or not such notice was given),
PROVIDED, HOWEVER, that this paragraph (b) shall not apply to any event that
all of the Arrangers agree in writing to exclude from this paragraph. In
agreeing to exclude an event referred to in the preceding sentence, the
Arrangers shall be entitled to rely, without further responsibility,
liability or inquiry, on Non-Objection of the Lenders (as defined in
paragraph 9 below).
3
8. No Event of Default under the New Interim Facility shall have
occurred which has not been cured or waived.
9. For purposes hereof, with respect to any action proposed to be taken
by the Arrangers, "NON-OBJECTION OF THE LENDERS" shall be conclusively deemed
to have occurred if, within 5 business days after notice has been sent by the
Administrative Agent to the Lenders of the intention of the Arrangers to take
such action, the Required Lenders shall have failed to notify the
Administrative Agent in writing that they object to the taking of such
action by the Arrangers. Notice to the Lenders shall be given in accordance
with the provisions of Section 9.01 of the Credit Agreement.
ANNEX V
FORM OF QUALIFYING CASH COLLATERAL ORDER
UNITED STATES BANKRUPTCY COURT
_______ DISTRICT OF _______
______________________________
In re ) Case No.________
)
McLEODUSA INCORPORATED, ) Chapter 11
XxXXXX PURCHASING, LLC, )
)
Debtors. )
)
______________________________)
[INTERIM] [FINAL] ORDER AUTHORIZING USE OF
CASH COLLATERAL AND PROVIDING
ADEQUATE PROTECTION UNDER 11 U.S.C. 105, 361 AND 363
UPON THE MOTION (the "MOTION"), dated ______________, of [Debtor] (the
"BORROWER") and [Other Debtor] ("[NAME]"), each as Debtor and
Debtor-in-Possession (together, the "DEBTORS"), pursuant to Xxxxxxxx 000,
000, xxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, 11 U.S.C. Sections 101, ET
SEQ. (the "CODE"), and Rule 4001 of the Federal Rules of Bankruptcy Procedure
(the "BANKRUPTCY RULES") seeking, among other things:
(1) to authorize the use of cash collateral, pursuant to
section 363 of the Bankruptcy Code and subject to the terms and
conditions set forth herein, which secures obligations owing to the
lenders (the "PRE-PETITION SECURED LENDERS") under or in connection
with that certain Credit
2
Agreement, dated as of May 31, 2000 (as heretofore amended,
supplemented or otherwise modified, the "PRE-PETITION CREDIT
AGREEMENT"), among the Borrower, the banks listed therein, the letter
of credit issuing banks named therein, and XX Xxxxxx Xxxxx Bank
(formerly known as The Chase Manhattan Bank) ("XXXXXX"), as
administrative agent and collateral agent for the Pre-Petition
Secured Lenders (in such capacity, the "PRE-PETITION AGENT"); Xxxxxxx
Xxxxx Barney Inc., as syndication agent (in such capacity, the
"SYNDICATION AGENT"); and Bank of America, N.A. and Xxxxxxx Xxxxx
Credit Partners, L.P., as co-documentation agents (in such capacity,
the "CO-DOCUMENTATION AGENTS") and together with the Pre-Petition
Agent and the Syndication Agent, the "AGENTS"); and
(2) the granting of adequate protection to the
Pre-Petition Secured Lenders and the Agents in respect of the liens
securing the Pre-Petition Credit Agreement and the Subsidiary
Guarantee Agreement dated as of May 31, 2000 among each Subsidiary of
McLeodUSA Incorporated listed on Schedule I thereto (each a
"GUARANTOR") and The Chase Manhattan Bank, as collateral agent for
the Secured Parties (the "SUBSIDIARY GUARANTEE AGREEMENT") (the
Pre-Petition Credit Agreement, the Subsidiary Guarantee Agreement and
the related security agreements, mortgages, deeds of trust, security
documents and other loan
3
documentation being collectively referred to herein as the "EXISTING
AGREEMENTS"); and
DUE NOTICE of the Motion, and the [Interim] Hearing thereon having been
given by the Debtors to the twenty largest unsecured creditors of each of the
Debtors, the Pre-Petition Agent, the Pre-Petition Secured Lenders and the
United States Trustee for the District of_______________; and
THE [INTERIM] HEARING having been held on [DATE]; and
UPON THE RECORD made by the Debtors at the [Interim] Hearing, and after
due deliberation and consideration and sufficient cause appearing therefor;
IT IS FOUND, DETERMINED, ORDERED AND ADJUDGED, that:
(d) JURISDICTION. The Court has core jurisdiction over these
proceedings and the parties and property affected hereby pursuant to
28 U.S.C. Sections 157(b) and 1334.
(e) NOTICE. The notice given by the Debtors of the Motion and the
[Interim] Hearing constitutes due and sufficient notice of the Motion
and the Interim Hearing.
(f) DEBTORS' STIPULATIONS. Without prejudice to the rights of any
other party, the Debtors have stipulated and agreed that:
(1) in accordance with the terms of the Existing Agreements and as
of the date hereof and as of the filing of the Debtors' chapter 11 petitions
herein (the "PETITION DATE"), the Borrower was truly and justly indebted and
liable to the Pre-Petition Secured
4
Lenders, without defense, counterclaim or offset of any kind, in the aggregate
principal amount of approximately $[AMOUNT] in respect of loans made and in
the aggregate principal amount of approximately $[AMOUNT] in respect of
letters of credit issued, in each case, by the Pre-Petition Secured Lenders
pursuant to the Existing Agreements, plus interest thereon and fees and
expenses incurred in connection therewith as provided in the Existing
Agreements (collectively, together with the obligations of the Guarantors
under the Existing Agreements, the "PRE-PETITION DEBT"), and the Subsidiary
Guaranty Agreements constitute valid, binding non-voidable obligations of the
Guarantors, enforceable in accordance with their terms;
(2) the liens and security interests granted to the Pre-Petition
Agent pursuant to the security agreements and the mortgages, deeds of trust
and other security documents executed by any of the Debtors or the Guarantors
in favor of the Pre-Petition Agent in connection with the Existing
Agreements, are valid, perfected, enforceable, non-voidable first-priority
liens and security interests in the personal and real property described in
such agreements, mortgages, deeds of trust and security documents (the
"PRE-PETITION COLLATERAL") subject only to liens permitted under the Existing
Agreements; and
(3) the aggregate value of the Pre-Petition Collateral
substantially exceeds the aggregate amount of the Pre-Petition Debt.
(g) THE CASH COLLATERAL. All funds of the Debtors (including any
funds of the Debtors on deposit at the Pre-Petition Secured Lenders
or at any other
5
institution) as of the Petition Date are cash collateral of the
Pre-Petition Secured Lenders within the meaning of Section 363(a)
of the Code. In addition, all cash proceeds of Pre-Petition
Collateral received after the Petition Date are cash collateral of
the Pre-Petition Secured Lenders within the meaning of Section
363(a) of the Code. Furthermore, to the extent, as of the Petition
Date, any funds were on deposit with the Pre-Petition Secured
Lenders, such funds were subject to rights of set-off. By virtue of
such set-off rights, such funds are subject to a lien in favor of
such Pre-Petition Secured Lenders pursuant to Sections 506(a) and
553 of the Code. The Pre-Petition Secured Lenders are obligated, to
the extent provided for in the Existing Agreements, to share the
benefit of such liens with the other Pre-Petition Secured Lenders
party to such Existing Agreements based upon their respective PRO
RATA shares of the obligations under such Existing Agreements. All
such cash collateral (including without limitation, funds subject
to such setoff rights) are referred to herein as "CASH COLLATERAL."
(h) USE OF CASH COLLATERAL. (a) Except as otherwise set
forth herein, the Debtors are hereby authorized to use all Cash
Collateral of the Pre-Petition Secured Lenders other than
Disposition Proceeds (as hereinafter defined), PROVIDED that the
Pre-Petition Secured Lenders are granted adequate protection as
hereinafter set forth, and PROVIDED FURTHER that, absent the
written consent of the Required Lenders (as defined in the
Pre-Petition
6
Credit Agreement), the Debtors shall cease to be
authorized to use Cash Collateral pursuant to this Order upon the
failure to satisfy any condition set forth in Annex I to this Order
(the "PROGRESS CONDITIONS") on a timely basis (the date on which
such authorization terminates being referred to herein as the
"TERMINATION DATE"). In furtherance of and subject to the
foregoing, until the Termination Date, Pre-Petition Secured Lenders
are directed promptly upon request of the Debtor for whose account
the Cash Collateral is held to turn over to the Debtors all cash
collateral within the meaning of Section 363(a) of the Code
received or held by them.
(b) Notwithstanding the foregoing authorization to use Cash Collateral,
all proceeds of any sale or other disposition of assets of the Borrower or
any Guarantor outside the ordinary course of business ("DISPOSITION
PROCEEDS") shall be segregated and invested, subject to further order of the
Court or disposition pursuant to a plan of reorganization, PROVIDED, HOWEVER,
that any Disposition Proceeds from the sale of Non-Core Assets (as defined in
the Credit Agreement) received prior to the Termination Date may be retained
or applied in accordance with the terms of the Credit Agreement.
(i) ADEQUATE PROTECTION. The Pre-Petition Secured Lenders are
entitled, pursuant to Sections 361 and 363(e) of the Code, to
adequate protection of their interest in the Pre-Petition
Collateral, including the Cash Collateral, for any diminution in
value of the Pre-Petition Secured Lenders' interests in the
Pre-Petition Collateral, including, without limitation, any such
diminution
7
resulting from the use by the Debtors of Cash Collateral and any
other Pre-Petition Collateral, and the imposition of the automatic
stay pursuant to Section 362 of the Code.
(1) ADEQUATE PROTECTION LIENS. As adequate protection for any
diminution in the value of the Pre-Petition Collateral, effective upon the
date of this Order and without the necessity of the execution by the Debtors
of mortgages, security agreements or otherwise, the following security
interests and liens are hereby granted to the Pre-Petition Secured Lenders
(all property identified below in this paragraph (1) being collectively
referred to as the "COLLATERAL," and such security interests and liens being
collectively referred to as the "LIENS"), subject only to (a) valid and
perfected non-voidable liens in existence on the Petition Date and (b) valid
liens in existence on the Petition Date that are perfected subsequent to the
Petition Date as permitted by Section 546(b) of the Code, (c) liens, if any,
granted pursuant to a Qualifying DIP Order (as defined in the Pre-Petition
Credit Agreement) entered by this Court prior to the Termination Date, and
(d) applicable provisions of the Carve-Out:
(i) a perfected first priority senior security interest in and
lien upon all cash of the Debtors (whether maintained with the Agents
or otherwise) and any investment of the funds of the Debtors, whether
existing on the Petition Date or thereafter acquired (all of such
property referred to in this clause (i) being hereinafter referred to
as the "CREDIT AGREEMENT CASH COLLATERAL"), and
8
(ii) a perfected first priority security interest in and lien
upon all other pre- and post-petition property of the Debtors, whether
existing on the Petition Date or thereafter acquired, including,
without limitation, accounts receivable, contracts, documents,
equipment, general intangibles, instruments, inventory, interests in
leaseholds, real property and the capital stock of the subsidiaries
of the Debtors and the proceeds of all of the foregoing (but not
including the proceeds of causes of action arising solely under the
Code or incorporated thereunder pursuant to section 544(b)(1)
thereof).
Notwithstanding the foregoing, in the event the Restructuring is
consummated prior to the Termination Date and the Pre-Petition Lenders timely
receive all payments and other distributions to which they are entitled in
accordance with the terms of the Restructuring and of the Credit Agreement,
the Pre-Petition Lenders shall not receive any further cash payments in
respect of the foregoing adequate protection liens.
(2) SECTION 507(b) CLAIM. The Pre-Petition Agent and the
Pre-Petition Secured Lenders are hereby granted, subject to the payment of
the Carve-Out, a superpriority claim as provided for in Section 507(b) of the
Code.
(3) INTEREST, FEES AND EXPENSES. The Agents and the Pre-Petition
Secured Lenders shall receive (a) cash payments in the amount of all accrued
and unpaid letter of credit fees and interest on the Pre-Petition Debt at the
rate provided for in the Existing Agreements, and all other accrued and
unpaid fees and disbursements (including, but not limited to, fees owed to
the Pre-Petition Agent) incurred prior to the Petition Date owing
9
under the Existing Agreements, (b) current cash payments from the Debtors (i)
of all fees and expenses payable to the Agents and otherwise under the
Existing Agreements, including but not limited to, the reasonable fees and
disbursements of counsel and financial consultants for the Pre-Petition Agent
and (ii) on the first business day of each month, all accrued but unpaid
letter of credit fees, and interest on the Pre-Petition Debt at a rate per
annum equal to the non-default contractual interest rate under the
Pre-Petition Credit Agreement, PROVIDED that, without prejudice to the rights
of any other party to contest such assertion, if the Restructuring is not
consummated prior to the Termination Date, the Pre-Petition Secured Lenders
reserve their rights to assert claims for the payment of additional interest
calculated at any other applicable rates of interest (including, without
limitation, default rates), or on any other basis, provided for in the
Existing Agreements.
(4) PRESERVATION AND MONITORING OF COLLATERAL. The Debtors are
hereby authorized and directed to take all steps reasonably necessary to
protect and maintain the value of the Pre-Petition Collateral, including,
without limitation, making such capital expenditures and performing such
maintenance as may be necessary for purposes of maintaining such value. The
Pre-Petition Secured Lenders shall be permitted to retain expert consultants
and financial advisors at the expense of the Debtors, which consultants and
advisors shall be given reasonable access for purposes of monitoring the
value of the Pre-Petition Collateral and the compliance by the Debtors with
the provisions of this paragraph.
10
[(5) LIMITATION ON CHARGING EXPENSES AGAINST COLLATERAL. Except to
the extent of the Carve-Out (as hereinafter defined), no expenses of
administration of these Cases or any future proceeding or that may result
therefrom, including liquidation in bankruptcy or other proceedings under the
Code, shall be charged against or recovered from the Collateral or, while the
Debtors are permitted to use Cash Collateral that is part of the Collateral
or the Pre-Petition Collateral, the Pre-Petition Collateral, pursuant to
Section 506(c) of the Code or any similar principal of law, without the prior
written consent of the Pre-Petition Agent, and no such consent shall be
implied from any other action, inaction, or acquiescence by the Pre-Petition
Agent or the Pre-Petition Secured Lenders.](2)
(j) PRIORITY OF OBLIGATIONS HEREUNDER; CARVE OUT.
(a) Pursuant to Section 507(b) of the Code, all of the Debtors'
obligations arising under this Order sha(1)ll constitute obligations of the
Debtors with priority over any and all administrative expenses or other
claims under Sections 105,326,328,[506(c)](1), 507(a) or [726](1) of the
Code, subject only to the payment of the Carve Out (as hereinafter defined).
(b) For purposes hereof, the "Carve-Out" means an amount equal to the
sum of (x) in the event of the occurrence of the Termination Date, the
allowed and unpaid
---------------------
(1) Unless otherwise determined by Arrangers in their sole discretion prior
to completion of the final hearing on the cash collateral order, the
bracketed language shall be included in the final cash collateral order.
11
professional fees and disbursements incurred by the Debtor and by any
statutory committee (each, a "COMMITTEE") appointed in the Cases in an
aggregate amount not in excess of the sum of (i) $2.5 million; plus (ii) the
allowed unpaid professional fees and disbursements incurred by the Debtors
and the Committee prior to the Termination Date, plus (y) the payment of fees
pursuant to 28 U.S.C Section 1930 and to the Clerk of the Court, PROVIDED
HOWEVER that so long as the Termination Date shall not have occurred, the
Debtors shall be permitted to pay compensation and reimbursement of expenses
allowed and payable under Sections 330 and 331 of the Code, as the same may
be due and payable, and any such compensation and expenses previously paid
prior to the Termination Date shall not be applied against the Carve-Out. No
portion of the Carve-Out shall be utilized for the payment of professional
fees and disbursements incurred in connection with any challenge to the
amount, extent, priority, validity, perfection or enforcement of the
indebtedness of the Borrowers owing to the Pre-Petition Secured Lenders.
(k) RESERVATION OF RIGHTS OF PRE-PETITION SECURED LENDERS. Under the
circumstances, the Court finds that, notwithstanding any other
provision hereof, the adequate protection provided herein is
reasonable and sufficient to protect the interests of the Pre-Petition
Secured Lenders. However, the Pre-Petition Agent and the Pre-Petition
Secured Lenders may request further or different adequate protection,
and the Debtors or any other party may contest any such request.
Moreover, nothing contained in this Order
12
(including, without limitation, the authorization of the use of Cash
Collateral) shall impair or modify the right of any Pre-Petition
Secured Lender that is a party to a swap agreement or other eligible
financial contract with a Debtor to assert rights of set-off or other
rights with respect thereto (or the right of the Debtors to contest
such assertions).
(l) PERFECTION OF ADEQUATE PROTECTION LIENS. The Agents and the
Pre-Petition Secured Lenders that have been granted security interests
and liens hereunder shall not be required to file or record financing
statements, mortgages, notices of lien or similar instruments in any
jurisdiction or take any other action in order to validate and perfect
the security interests and liens granted to them pursuant to this
Order. If the Pre-Petition Agent on behalf of the Pre-Petition Secured
Lenders shall, in its sole discretion, choose to file such financing
statements, mortgages, notices of lien or similar instruments or
otherwise confirm perfection of such security interests and liens, the
liens and security interests granted herein shall be deemed perfected
at the time and on the date of entry of this Order. Upon the request
of the Pre-Petition Agent, each of the Pre-Petition Secured Lenders
and the Pre-Petition Agent, without any further consent of any party,
is authorized to take, execute and deliver such instruments (in each
case without representation or warranty of any kind) to enable the
Pre-petition Agent to further perfect, preserve and enforce the
security interests
13
and liens granted to the Pre-Petition Agent and the
Pre-Petition Lenders by this Order.
(m) PRESERVATION OF RIGHTS GRANTED UNDER THE ORDER.
(a) Except for claims and liens granted to the DIP Agent
under a Qualifying DIP Order (each as defined in the Pre-Petition Credit
Agreement) prior to the Termination Date, no claim having a priority superior
to or PARI PASSU with that granted by this Order to the Agents and the
Lenders or to the Pre-Petition Agent and the Pre-Petition Secured Lenders,
respectively, shall be granted, and the security interests and liens granted
to the Pre-Petition Agent and the Pre-Petition Secured Lenders hereunder
shall not be (i) subject to any lien or security interest that is avoided and
preserved for the benefit of the Debtors' estates under Section 551 of the
Code or (ii) subordinated to or made PARI PASSU with any other lien or
security interest under Section 364(d) of the Code or otherwise.
(b) Other than pursuant to the written consent of the
Pre-Petition Agent and the Pre-Petition Secured Lenders, the Debtors shall
not seek an order dismissing any of the Cases. If an order dismissing any of
the Cases under Section 1112 of the Code or otherwise is at any time entered,
such order shall provide (in accordance with Sections 105 and 349 of the
Code) that (x) the liens, security interests and claims granted to the
Pre-Petition Agent and the Pre-Petition Secured Lenders pursuant to this
Order shall continue in full force and effect and shall maintain their
priorities as provided in this Order until all obligations in respect thereof
shall have been paid and satisfied in full (and
14
that such security interests, liens and claims shall, notwithstanding such
dismissal, remain binding on all parties in interest) and (y) this Court
shall retain jurisdiction, notwithstanding such dismissal, for the purposes
of enforcing the claims, liens and security interests referred to in (x) above.
(c) If any or all of the provisions of this Order are hereafter
reversed, modified, vacated or stayed, such reversal, stay, modification or
vacation shall not affect the validity and enforceability of any lien or
priority authorized or created hereby. Notwithstanding any such reversal,
stay, modification or vacation, any use of Cash Collateral prior to written
notice to the Pre-Petition Agent of the effective date of such reversal,
stay, modification or vacation shall be governed in all respects by this
Order, as applicable, and the Pre-Petition Secured Lenders shall be entitled
to all the rights, remedies, privileges and benefits granted in this Order
with respect to all uses of Cash Collateral.
(d) The obligations of the Debtors under this Order shall not
be discharged by the entry of an order confirming a plan of reorganization in
any of the Cases and, pursuant to Section 1141(d)(4) of the Code, the Debtors
have waived such discharge.
(n) LIMITATION ON USE OF COLLATERAL. Notwithstanding anything
herein to the contrary, no Cash Collateral, Collateral or the
Carve-Out (collectively, the "DESIGNATED ASSETS") may be used to
object, contest or raise any defense to, the validity, perfection,
priority, extent or enforceability of the Pre-Petition Debt or the
liens securing the Pre-Petition Debt, or to assert any
15
claims or causes of action against the Pre-Petition Secured
Lenders or the Pre-Petition Agent, PROVIDED, HOWEVER, that
Designated Assets in an amount not to exceed $100,000 in the
aggregate may be utilized to pay allowed expenses of the Official
Committee of Unsecured Creditors (the "COMMITTEE") appointed in
these cases incurred in connection with the investigation or
evaluation of the validity, perfection, priority, extent or
enforceability of the Pre-Petition Debt or the liens securing the
Pre-Petition Debt.
(o) PARTIES IN INTEREST BOUND. The admissions contained in
paragraph 3 shall be binding upon the Debtors under all circumstances, and
shall be binding upon all other parties in interest, including without
limitation; the Committee, unless (a) a party in interest (including the
Committee) has properly filed an adversary proceeding or contested matter
(subject to the limitation set forth in paragraph 11) challenging the
validity, enforceability or priority of the Pre-Petition Debt or the liens on
the Pre-Petition Collateral in respect thereof, or otherwise asserting any
claims or causes of action against the Pre-Petition Agent or the Pre-Petition
Secured Lenders on behalf of the Debtors' estates, no later than the date
that is 90 days after the date that the Committee has been appointed, and
(b) the Court rules in favor of the plaintiff in any such timely and properly
filed adversary proceeding or contested matter. If no such adversary
proceeding or contested matter is
16
commenced as of such date, the Pre-Petition Debt shall
constitute allowed clams, not subject to subordination and
otherwise unavoidable, for all purposes in these chapter 11
cases and any subsequent chapter 7 cases, the liens securing
the Pre-Petition Debt on the Pre-Petition Collateral shall be
deemed legal, valid, binding, perfected, not subject to
defense, counterclaim, offset of any kind, subordination and
otherwise unavoidable, and the Pre-Petition Agent or the
Pre-Petition Secured Lenders, the Pre-Petition Debt and the
liens on the Pre-Petition Collateral securing the Pre-Petition
Debt shall not be subject to any other or further challenge by
any party in interest seeking to exercise the rights of the
Debtors' estates, including without limitation, any successor
thereto. If any such adversary proceeding or contested matter
is timely commenced as of such date, the admissions contained
in paragraph 3 shall nonetheless remain binding and preclusive
(as provided in this paragraph) except to the extent that such
acknowledgements and agreements were expressly challenged in
such adversary proceeding or contested matter.
(p) SUCCESSORS AND ASSIGNS. The provisions of this Order shall be
binding upon the Agents, the Pre-Petition Agent, the
Pre-Petition Secured Lenders and the Debtors and their
respective successors and assigns (including any chapter 7 or
chapter 11 trustee hereinafter appointed or elected for the
estate of any of the Debtors) and inure to the benefit of the
17
Agents, the Pre-Petition Agent, the Pre-Petition Secured
Lenders and the Debtors and (except with respect to any
trustee hereinafter appointed or elected for the estate of any
of the Debtors) their respective successors and assigns.
[(q) FINAL HEARING. The Final Hearing on the Motion is scheduled
for _______, 2002 at ____ before this Court] (2)
[(r) NOTICES. The Interim Hearing was held pursuant to the
authorization of Bankruptcy Rule 4001(b)(2), whereby notice of
the Motion and the Interim Hearing was given to the United
States Trustee, the Debtors' twenty (20) largest creditors, as
listed on schedules filed pursuant to Bankruptcy Rule 1007(d)
with the Debtors' petition, the Pre-Petition Agent and the
Pre-Petition Secured Lenders. Debtors shall promptly mail
copies of this Order to the parties having been given notice
of the Interim Hearing and to any other party which has filed
a request for notices with this Court and to any Committee
after the same has been appointed, or Committee counsel, if
the same shall have been appointed. Any party in interest
objecting to the relief sought at the Final Hearing shall
serve and file written objections; which objections shall be
served upon (i) attorneys for the Debtors: Skadden, Arps,
Slate, Xxxxxxx & Xxxx, Attn: Xxxxx X. Xxxxx, 000 X. Xxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000; (ii) Attorneys for
Xxxxxx, as administrative agent
---------------------------
(2) This paragraph to be included in Interim Order only.
18
and collateral agent for the Pre-Petition Secured Lenders:
Cravath, Xxxxx & Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx,
Xxx Xxxx, XX 00000, Attn: Xxxxxxxx X. Grousset; Xxxxx Xxxx &
Xxxxxxxx, 000 Xxxxxxxxx Xxx., Xxx Xxxx, XX 00000, Attn: Xxxxxx
X. Xxxxxxxxx; and (iii) the Office of the United States
Trustee for the [INSERT DISTRICT], [INSERT ADDRESS], and shall
be filed with the Clerk of the United States Bankruptcy Court,
[INSERT DISTRICT], in each case to be actually received by
said counsel and by the Clerk no later than ___ p.m. local
time ___ (__) days before such hearing.] (3)
Dated:
------------------------------
UNITED STATES BANKRUPTCY JUDGE
---------------------------
(3) This paragraph to be included in Interim Order only.
ANNEX VI
FORM OF DIP ORDER
-----------------
[TO BE REVISED]
UNITED STATES BANKRUPTCY COURT
DISTRICT OF
---------
In re ) Case No.
) ---------
McLeodUSA Incorporated, ) Chapter 11
XxXxxx Purchasing, LLC, )
)
Debtors.
FINAL ORDER (I) AUTHORIZING DEBTORS TO OBTAIN POST-PETITION
FINANCING PURSUANT TO 11 U.S.C.ss.ss.105, 361, 362, 364(c)(1), 364(c)(2),
364(c)(3) and 364(d)(1) AND (II) GRANTING ADEQUATE PROTECTION TO
PRE-PETITION SECURED PARTIES
UPON THE MOTION (the "MOTION"), dated ___________, of
McLeodUSA
Incorporated and XxXxxx Purchasing, LLC (jointly and severally, the "BORROWER"
or the "BORROWERS"), each as Debtor and Debtor-in-Possession (jointly and
severally, the "DEBTOR" or the "DEBTORS"), pursuant to Sections 105, 361, 362,
364(c)(1), 364(c)(2), 364(d)(1) of the United States Bankruptcy Code, 11
U.S.C.ss.ss.101, ET SEQ. (the "CODE"), and Rules 2002, 4001 and 9014 of the
Federal Rules of Bankruptcy Procedure (the "BANKRUPTCY RULES") seeking, among
other things:
(1) authorization to obtain post-petition financing (the
"FINANCING"), up to the principal amount of $50 million, from the
JPMorgan Chase Bank ("XXXXXX" or the "ADMINISTRATIVE AGENT"), and
X.X. Xxxxxx Securities Inc. ("JPMSI" or the "SYNDICATION AGENT" and
together with Xxxxxx, the "AGENTS") acting as Agents for themselves
and a syndicate of financial institutions (together with the Agents,
the "DIP LENDERS") to be arranged by the Agents; and
(2) the granting of adequate protection to the lenders (the
"PRE-PETITION SECURED LENDERS") under or in connection with that
certain Credit Agreement, dated as of May 31, 2000 (as heretofore
amended, supplemented or otherwise modified, the "PRE-PETITION CREDIT
AGREEMENT") among the Borrower, the banks listed therein, the letter of
credit issuing banks named therein, and Xxxxxx, as administrative agent
for the Pre-Petition Secured Lenders (the "PRE-PETITION AGENT"), and
that certain Security Agreement, dated as of [DATE], between __________
and Xxxxxx as Collateral Agent (as heretofore amended, supplemented or
otherwise modified, the "SECURITY AGREEMENT" and, collectively with the
Pre-Petition Credit Agreement, and the Mortgages and other loan
documentation executed in connection therewith, the "EXISTING
AGREEMENTS") whose liens and security interests are being primed by the
Financing; and DUE NOTICE of the Motion and the Final Hearing having
been given by the Debtors to the twenty largest unsecured creditors of
each of the Debtors, the Pre-Petition Agent, the Pre-Petition Secured
Lenders and the United States Trustee for the District of _________;
and
THE FINAL HEARING having been held on [DATE]; and
2
UPON THE RECORD made by the Debtors at the Final Hearing, and after due
deliberation and consideration and sufficient cause appearing therefor;
IT IS FOUND, DETERMINED, ORDERED AND ADJUDGED, that:
1. JURISDICTION. This Court has core jurisdiction over these
proceedings and the parties and property affected hereby pursuant to 28
U.S.C.ss.ss.157(b) and 1334.
2. NOTICE. The notice given by the Debtors of the Motion and the
Final Hearing constitutes due and sufficient notice of the Motion and the Final
Hearing.
3. DEBTORS' STIPULATIONS. Without prejudice to the rights of any
other party, the Debtors have stipulated and agreed that:
(1) in accordance with the terms of the Existing Agreements
and as of the date hereof and as of the filing of the Debtors' Chapter 11
petitions herein (the "PETITION DATE"), Borrower _______________ was truly
and justly indebted and liable to the Pre-Petition Secured Lenders, without
defense, counterclaim or offset of any kind, in the aggregate principal
amount of approximately $[AMOUNT] in respect of loans made and in the
aggregate principal amount of approximately $[AMOUNT] in respect of letters
of credit issued, in each case, by the Pre-Petition Secured Lenders pursuant
to the Existing Agreements, plus interest thereon and fees and expenses
incurred in connection therewith as provided in the Existing Agreements
(collectively, the "PRE-PETITION DEBT");
(2) the liens and security interests granted to the
Pre-Petition Agent pursuant to the Security Agreement and pursuant to all
mortgages, deeds of trust and other security documents executed by either or
both of the Debtors in favor of the Pre-Petition Agent in connection with the
Existing Agreements, are valid, perfected, enforceable, first priority liens and
security interests in the personal and real property described in such
Agreement,
3
mortgages, deeds of trusts and security documents (the "PRE-PETITION
COLLATERAL") subject only to (a) the liens and security interests granted to
the Agents and the DIP Lenders pursuant to this Order and the DIP Credit
Agreement and (b) liens permitted under the Existing Agreements to the extent
such permitted liens are permitted thereunder to be senior to or pari passu
with the liens of the Pre-Petition Agent on the Pre-Petition Collateral; and
(3) the aggregate value of the Pre-Petition Collateral substantially
exceeds the aggregate amount of the Pre-Petition Debt.
4. FINDINGS REGARDING THE FINANCING
(a) The Debtors have a need to obtain financing in order to permit,
among other things, the orderly continuation of the operation of their
business, to maintain business relationships with vendors and suppliers, to
make capital expenditures and to satisfy other working capital needs of
themselves and certain of their subsidiaries and affiliates, and the ability
of the Debtors to obtain sufficient working capital and liquidity through the
incurrence of new indebtedness for borrowed money and other financial
accommodations is vital to the preservation and maintenance of the going
concern values of the Debtors and a successful reorganization of the Debtors.
(b) The Debtors are unable to obtain adequate unsecured credit
allowable under Section 503(b)(1) of the Code as an administrative expense,
and a credit facility in the amount and on the terms provided by the
Financing is unavailable to the Debtors without the Debtors granting to the
Agents and the DIP Lenders (subject to the Carve-Out, as defined below) the
Superpriority Claim and the DIP Liens (each as defined below).
4
(c) The terms of the Financing are fair and reasonable, and reflect
the Debtors' exercise of prudent business judgment consistent with their
fiduciary duty and are supported by reasonably equivalent value and fair
consideration.
(d) The Financing has been negotiated in good faith and at
arms-length between the Debtors and the Agents, and any credit extended,
letters of credit issued for the account of and loans made to the Debtors by
the DIP Lenders pursuant to the Debtor-in-Possession Credit Agreement
attached as Exhibit A to the Motion as such agreement has been modified as of
the date hereof (the "DIP CREDIT AGREEMENT"), and any credit extended in
respect of overdrafts referred to in the DIP Credit Agreement, shall be
deemed to have been extended by the DIP Lenders in good faith, as that term
is used in Section 364(e) of the Code.
5. AUTHORIZATION OF THE FINANCING AND THE DOCUMENTS.1'
(a) The Debtors are hereby authorized to borrow or obtain letters
of credit pursuant to the DIP Credit Agreement, which shall be used in
accordance with this Order and the DIP Credit Agreement for the purposes set
forth in the DIP Credit Agreement. In addition, the Debtors are hereby
authorized to the extent provided in the DIP Credit Agreement to incur
overdrafts and related liabilities arising from treasury, depository and cash
management services or in connection with any automated clearing house fund
transfers provided to or for the benefit of the Debtors by [BANK] or any of
its affiliates (in addition to the amount of borrowings and letters of credit
obtained pursuant to the DIP Credit Agreement).
--------------
1' The Court has entered its Interim Order Authorizing Use of Cash
Collateral and Providing Adequate Protection Under 11 U.S.C. Sections 105,
361 and 363, and contemporaneously with this order is entering its Final
Order Authorizing Use of Cash Collateral and Providing Adequate Protection
Under U.S.C. Sections 105, 361 and 363 (the "Cash Collateral Orders").
Notwithstanding any provision in either of the Cash Collateral Orders to
5
(b) In furtherance of the foregoing, each of the Debtors is
authorized and directed to do and perform all acts, to make, execute and
deliver all instruments and documents (including, without limitation, the
execution of security agreements, mortgages and financing statements), and to
pay all fees, that may be reasonably required or necessary for the Debtors'
performance of the Financing, including, without limitation:
(1) the execution, delivery and performance of the Financing
Documents (as defined in the DIP Credit Agreement) and any exhibits attached
thereto, including, without limitation, the DIP Credit Agreement and the
Security Agreement (substantially in the forms attached to the Motion),
contemplated thereby (as each such item is defined in the DIP Credit
Agreement) (collectively, and together with the letter agreement referred to
in clause (3) below, the "DOCUMENTS"),
(2) the execution and delivery of one or more amendments to the
DIP Credit Agreement for, among other things, the purpose of adding financial
institutions as DIP Lenders and reallocating the commitments for the
Financing among the DIP Lenders in each case in such form as the Debtors, the
Agents and the DIP Lenders may agree,
(3) the non-refundable payment to the Agents or the DIP
Lenders, as the case may be, of the fees referred to in the DIP Credit
Agreement (and in the separate letter agreement dated [DATE] between the
Borrowers and the Agents referred to in the DIP Credit Agreement) and such
Letter of Credit Fees, Commitment Fees and reasonable costs and expenses as
may be due from time to time including, without limitation, attorneys' fees
--------------
the contrary, the provisions of this Order shall control.
6
and disbursements as provided in the Documents, all as such terms are defined
in the Documents, and
(4) performance of all other acts required under or in
connection with the Documents.
(c) Upon execution and delivery of the Documents, the Documents
shall constitute valid and binding obligations of the Debtors, enforceable
against each Debtor party thereto in accordance with their terms.
6. SUPERPRIORITY CLAIMS.
(a) Pursuant to Section 364(c)(1) of the Code, all of the Debtors'
obligations and indebtedness arising under or in respect of the Financing and
the Documents (including without limitation in respect of overdrafts referred
to in Section _____ of the DIP Credit Agreement)(the "DIP OBLIGATIONS") shall
constitute obligations of the Debtors with priority over any and all
administrative expenses of the kind specified in Sections 503(b) and 501(b)
of the Code, and over any and all administrative expenses or other claims
under Sections 105, 326, 328, 330, 331, 506(c), 507(a), 546(c) or 726 of the
Code (the "SUPERPRIORITY CLAIMS"), subject only in the event of the
occurrence of a Default or an Event of Default (each as defined in the DIP
Credit Agreement) to the payment of the Carve Out (as hereinafter defined).
(b) For purposes hereof, the "Carve-Out" means an amount equal to
the sum of (x) in the event of the occurrence and during the continuance of a
Default or an Event of Default (each as defined in the Agreement) or an event
that would constitute a Default or an Event of Default with the giving of
notice or lapse of time or both, the allowed and unpaid professional fees and
disbursements incurred by the Debtor and by any statutory committee
7
(each, a "COMMITTEE") appointed in the Cases in an aggregate amount not in
excess of the sum of (i) $2.5 million; plus (ii) the amount certified to the
Administrative Agent by the Debtors in the last Borrowing Base (to be defined
in the Agreement) prior to a Default or an Event of Default as constituting
the then unpaid professional fees and disbursements incurred by the Debtors
and the Committee, plus (y) the payment of fees pursuant to 28 U.S.C. Section
1930 and to the Clerk of the Court, PROVIDED HOWEVER that so long as no
Default or Event of Default or an event which with the giving of notice or
lapse of time or both would constitute a Default or an Event of Default shall
have occurred and be continuing, the Debtors shall be permitted to pay
compensation and reimbursement of expenses allowed and payable under Sections
330 and 331 of the Code, as the same may be due and payable, and any such
compensation and expenses previously paid prior to the occurrence of a
Default or Event of Default shall not be applied against the Carve-Out. No
portion of the Carve-Out shall be utilized for the payment of professional
fees and disbursements incurred in connection with any challenge to the
amount, extent, priority, validity, perfection or enforcement of the
indebtedness of the Borrowers owing to the parties primed by the priming
liens or to the collateral securing such indebtedness.
7. DIP LIENS. As security for the DIP Obligations, effective upon the
date of this Order and without the necessity of the execution by the Debtors
of mortgages, security agreements or otherwise, the following security
interests and liens are hereby granted to the Agent and the DIP Lenders (all
properly identified in clauses (1), (2) and (3) below being collectively
referred to as the "COLLATERAL," and such security interests and liens being
collectively referred to as the "DIP LIENS") subject (except in the case of
amounts deposited in respect of Letters of Credit pursuant to Section _____
of the DIP Credit Agreement,
8
which shall not be subject to the Carve-Out) in the event of the occurrence
of a Default or an Event of Default, to the payment of the Carve-Out:
(1) FIRST LIEN ON CASH BALANCES AND UNENCUMBERED PROPERTY.
Pursuant to Section 364(c)(2) of the Code, the Agent and the DIP Lenders are
hereby granted a perfected first priority senior security interest in and
lien upon (A) all Cash Balances (as defined in the DIP Credit Agreement) and
other cash of the Borrowers (whether maintained with the Agents or otherwise)
and any investment of the funds contained therein (all of such property
referred to in this clause (A) being hereinafter referred to as the "CREDIT
AGREEMENT CASH COLLATERAL"), and (B) all unencumbered pre- and post-petition
property of the Debtors, whether existing on the Petition Date or thereafter
acquired (but not including the proceeds of causes of action arising solely
under the Code, including, but not limited to, avoidance actions, or
incorporated thereunder pursuant to section 544(b)(1) thereof).
(2) LIEN PRIMING PRE-PETITION LIENS. Pursuant to Section
364(d)(1) of the Code, the Agent and the DIP Lenders are hereby granted a
perfected first priority senior priming security interest in and lien upon
all pre- and post-petition property of the Debtors (including, without
limitation, accounts receivable, contracts, documents, equipment, general
intangibles, instruments, inventory, interests in leaseholds, real property
and the capital stock of the subsidiaries of the Debtors and the proceeds of
all of the foregoing), whether now existing or hereafter acquired, that is
subject to the existing liens presently securing any of the Debtors'
indebtedness, including, but not limited to Debtors' indebtedness (including
in respect of issued but undrawn letters of credit) to the Pre-Petition
Secured Lenders (but not including the proceeds of causes of action accruing
solely under the Code, including, but not limited to, avoidance actions, or
incorporated thereunder pursuant to Section 544(b)(1)
9
thereof). Such security interests and liens shall be senior in all respects
to the security interests and liens in such property of the holders of any of
the Debtors' indebtedness, including the Debtors' indebtedness to the
Pre-Petition Secured Lenders and any present and future liens of the
Pre-Petition Secured Lenders (including, without limitation, adequate
protection liens granted hereunder) but shall not be senior to the interests
of other parties arising out of liens, if any, in such property existing on
the Petition Date (i) to the extent scheduled in Schedule ___ to the DIP
Credit Agreement; and (ii) to the extent such liens secure any indebtedness
(other than indebtedness to the Pre-Petition Secured Lenders and as scheduled
in Schedule ___ in an aggregate amount less than or equal to [$1 million],
including liens that are perfected subsequent to the Petition Date as
permitted by Section 546(b) of the Code.
(3) LIEN JUNIOR TO LIENS OF OTHER SECURED CREDITORS. Pursuant
to Section 364(c)(3) of the Code, the Agent and the DIP Lenders are hereby
granted a perfected junior priority security interest in and lien upon all pre-
and post-petition property of the Debtors (which liens will be supplemental to
those liens described in clause (2) of this paragraph 7, as to which the liens
and security interests in favor of the Agents will be as described in such
clause), whether now existing or hereafter acquired, that is subject to valid
and perfected liens in existence on the Petition Date or to valid liens in
existence on the Petition Date that are perfected subsequent to the Petition
Date as permitted by Section 546(b) of the Code, junior to such valid and
perfected liens (but not including the proceeds of causes of action accruing
solely under the Code, including, but not limited to, avoidance actions, or
incorporated thereunder pursuant to Section 544(b)(1) thereof).
8. PROTECTION OF DIP LENDERS' RIGHTS.
10
(a) So long as there are any borrowings or letters of credit
outstanding, or the DIP Lenders have any Commitment (as defined in the DIP
Credit Agreement) under the DIP Credit Agreement, the Pre-Petition Secured
Lenders shall take no action to foreclose upon the liens granted to the
Pre-Petition Secured Lenders pursuant to the Existing Agreements and this Order
or otherwise exercise remedies against the Collateral.
(b) Subject only to the provisions of the DIP Credit
Agreement, the automatic stay provisions of Section 362 of the Code are vacated
and modified to the extent necessary to permit the Agents and the DIP Lenders to
exercise, upon the occurrence of an Event of Default and the giving of the five
business days' written notice to the Debtors and any Committee, all rights and
remedies against the Collateral provided for in the Documents (including,
without limitation, the right to setoff monies of the Debtors in accounts
maintained with the Agents or any DIP Lender).
9. ADEQUATE PROTECTION. The Pre-Petition Secured Lenders are entitled,
pursuant to Sections 361 and 364(d)(1) of the Code, to adequate protection of
their interest in the Pre-Petition Collateral for any diminution in value of
the Pre-Petition Secured Lenders' interests in the Pre-Petition Collateral,
including, without limitation, any such diminution resulting from the priming
of the Pre-Petition Agent's security interests and liens in the Pre-Petition
Collateral by the Agents and the DIP Lenders pursuant to the Financing
Documents and this Order and the imposition of the automatic stay pursuant to
Section 362 of the Code. As adequate protection, the Pre-Petition Agent and
the Pre-Petition Secured Lenders are hereby granted the following:
(1) ADEQUATE PROTECTION LIENS. The Pre-Petition Agent and
the Pre-Petition Secured Lenders are hereby granted (effective upon the date
of this Order and
11
without the necessity of the execution by the Debtors of mortgages, security
agreements, pledge agreements, financing statements or other agreements) a
perfected first priority senior security interest in and lien upon all the
Collateral, subject and subordinate only to (a) the security interests and liens
granted to the Agents for the benefit of the DIP Lenders in this Order and
pursuant to the Documents and any liens on the Collateral to which such liens so
granted to the Agents are junior, (b) the applicable provisions of the
Carve-Out, (c) any compensation (exclusive of professional fees and expenses)
directly payable to any trustee appointed in these chapter 11 cases, (d) valid
and perfected non-voidable liens in existence on the Petition Date and (e) valid
liens in existence on the Petition Date that are perfected subsequent to the
Petition Date as permitted by Section 546(b) of the Code, provided, however,
that in the event the Restructuring is consummated, the Pre-Petition Secured
Lenders shall not be entitled to any cash payment with respect to such liens.
(2) SECTION 507(b) CLAIM. The Pre-Petition Agent and the
Pre-Petition Secured Lenders are hereby granted, subject, in the event of the
occurrence of a Default or an Event of Default, to the payment of the Carve-Out,
a superpriority claim as provided for in Section 507(b) of the Code, immediately
junior to the claims under Section 364(c)(1) of the Code held by the Agents and
the DIP Lenders.
(3) INTEREST, FEES AND EXPENSES. The Pre-Petition Agent and
the Pre-Petition-Secured Lenders shall receive (a) cash payments in an amount
equal to all accrued and unpaid letter of credit fees and interest on the
Pre-Petition Debt at the rate provided for in the Existing Agreements, and all
other accrued and unpaid fees and disbursements (including, but not limited to,
fees owed to the Pre-Petition Agent) incurred prior to the Petition Date owing
under the Existing Agreements, (b) current cash payments (i) in an amount equal
to all
12
fees and expenses payable to the Pre-Petition Agent and otherwise under the
Existing Agreements, including but not limited to, the reasonable fees and
disbursements of counsel and financial consultants for the Pre-Petition Agent
and (ii) on the first business day of each month, all accrued but unpaid
letter of credit fees, and interest on the Pre-Petition Debt at a rate per
annum equal to the non-default contractual interest rate under the
Pre-Petition Credit Agreement, PROVIDED that, without prejudice to the rights
of any other party to contest such assertion, the Pre-Petition Secured Lenders
reserve their rights, upon the occurrence of a Default or Event of Default
under the Pre-Petition Credit Agreement (other than a Default or Event of
Default that has been waived in accordance with the terms of the Third
Amendment dated ____, 2001, to the Pre-Petition Credit Agreement), to assert
claims for the payment of additional interest calculated at any other
applicable rates of interest (including, without limitation, default rates),
or on any other basis, provided for in the Existing Agreements.
(4) PRESERVATION AND MONITORING OF COLLATERAL. The Debtors
are hereby authorized and directed to take all steps reasonably necessary to
protect and maintain the value of the Pre-Petition Collateral, including,
without limitation, making such capital expenditures and performing such
maintenance as may be necessary for purposes of maintaining such value. The
Pre-Petition Secured Lenders shall be permitted to continue to retain expert
consultants and financial advisors at the expense of the Debtors, which
consultants and advisors shall be given reasonable access not less frequently
than quarterly for purposes of monitoring the value of the Pre-Petition
Collateral and the compliance by the Debtors with the provisions of this
paragraph.
(5) LIMITATION ON CHARGING EXPENSES AGAINST COLLATERAL.
Except to the extent of the Carve-Out, no expenses of administration of the
Cases or any future
13
proceeding or that may result therefrom, including liquidation in bankruptcy
or other proceedings under the Code, shall be charged against or recovered
from the Collateral or, to the extent such expenses are incurred prior to
repayment in full of all amounts owing to the DIP Lenders the Pre-Petition
Collateral, pursuant to Section 506(c) of the Code or any similar principal
of law, without the prior written consent of the Agents or the Pre-Petition
Agent, as the case may be, and no such consent shall be implied from any
other action, inaction, or acquiescence by the Agents, the DIP Lenders, the
Pre-Petition Agent or the Pre-Petition Secured Lenders.
10. RESERVATION OF RIGHTS OF PRE-PETITION SECURED LENDERS. The Court
finds that, notwithstanding any other provision hereof, the adequate
protection provided herein is reasonable and sufficient to protect the
interests of the Pre-Petition Secured Lenders. However, the Pre-Petition
Agent and the Pre-Petition Secured Lenders may request further or different
adequate protection, and the Debtors or any other party may contest any such
request. Moreover, nothing contained in this Order shall impair or modify the
right of any Pre-Petition Secured Lender that is a party to a swap agreement
or other eligible financial contract with a Debtor to assert rights of
set-off or other rights with respect thereto (or the right of the Debtors to
contest such assertions).
11. PERFECTION OF DIP LIENS AND ADEQUATE PROTECTION LIENS. The
Agents, the DIP Lenders and the Pre-Petition Secured Lenders that have been
granted security interests and liens hereunder shall not be required to file
or record financing statements, mortgages, notices of lien or similar
instruments in any jurisdiction or take any other action in order to validate
and perfect the security interests and liens granted to them pursuant to
this Order. If the Agents on behalf of the DIP Lenders or the Pre-Petition
Secured Lenders shall, in their
14
sole discretion, choose to file such financing statements, mortgages, notices
of lien or similar instruments or otherwise confirm perfection of such
security interests and liens, the liens and security interest granted herein
shall be deemed perfected at the time and on the date of entry of this Order.
The Pre-Petition Secured Lenders shall not file such financing statements,
mortgages, notices of lien or similar instruments, or otherwise confirm
perfection of such security interests and liens, unless the Agents on behalf
of the DIP Lenders shall theretofore have done so. Upon the request of the
Agents, each of the Pre-Petition Secured Lenders and the Pre-Petition Agent,
without any further consent of any party, is authorized to take, execute and
deliver such instruments (in each case without representation or warranty of
any kind) to enable the Agents to further perfect, preserve and enforce the
security interests an liens granted to the Agents for the benefit of the DIP
Lenders by the Documents and this Order.
12. PRESERVATION OF RIGHTS GRANTED UNDER THE ORDER.
(a) No claim having a priority superior to or PARI PASSU with that
granted by this Order to the Agents and the DIP Lenders or to the
Pre-Petition Agent and the Pre-Petition Secured Lenders, respectively, shall
be granted while any portion of the Financing (or refinancing thereof) or the
commitment thereunder remains outstanding, and the security interests and
liens granted to the Agents on behalf of the DIP Lenders hereunder shall not
be (i) subject to any lien or security interest that is avoided and preserved
for the benefit of the Debtors' estates under Section 551 of the Code or (ii)
subordinated to or made PARI PASSU with any other lien or security interest
under Section 364(d) of the Code or otherwise.
15
(b) Unless all obligations and indebtedness owing to the Agents
and the DIP Lenders under the DIP Credit Agreement shall theretofore have
been paid in full (and, with respect to outstanding Letters of Credit issued
pursuant to the DIP Credit Agreement, cash collateralized in accordance with
the provisions of the DIP Credit Agreement), the Debtors shall not seek, and
it shall constitute an Event of Default if any of the Debtors seek, or if
there is entered, an order dismissing any of the Cases. If an order
dismissing any of the Cases under Section 1112 of the Code or otherwise is at
any time entered, such order shall provide (in accordance with Sections 105
and 349 of the Code) that (x) the superpriority claims, priming liens and
security interests and replacement security interests granted to the Agents
and the DIP Lenders and the Pre-Petition Secured Lenders, as the case may be,
pursuant to this Order shall continue in full force and effect and shall
maintain their priorities as provided in this Order until all obligations in
respect thereof shall have been paid and satisfied in full (and that such
superpriority claims, priming liens and replacement liens, shall,
notwithstanding such dismissal, remain binding on all parties in interest)
and (y) this Court shall retain jurisdiction, notwithstanding such dismissal,
for the purposes of enforcing the claims, liens and security interests
referred to in (x) above.
(c) If any or all of the provisions of this Order are hereafter
reversed, modified, vacated or stayed, such reversal, stay, modification or
vacation shall not affect (x) the validity of any obligation, indebtedness or
liability incurred by the Debtors to the DIP Lenders prior to written notice
to the Agents of the effective date of such reversal, stay, modification or
vacation or (y) the validity and enforceability of any lien or priority
authorized or created hereby or pursuant to the DIP Credit Agreement with
respect to any such obligation, indebtedness or liability. Notwithstanding
any such reversal, stay,
16
modification or vacation, or any indebtedness, obligation or liability
incurred by the Debtors to the DIP Lenders prior to written notice to
Pre-Petition Agent and the Agents of the effective date of such reversal,
stay, modification or vacation shall be governed in all respects by the
original provisions of this Order, as applicable, and the DIP Lenders and the
Pre-Petition Secured Lenders shall be entitled to all the rights, remedies,
privileges and benefits granted in this Order and/or pursuant to the DIP
Credit Agreement with respect to all such indebtedness, obligation or
liability.
(d) The obligations of the Debtors under this Order and the
Financing Documents shall not be discharged by the entry of an order
confirming a plan of reorganization in any of the Cases and, pursuant to
Section 1141(d)(4) of the Code, the Debtors have waived such discharge.
13. LIMITATION ON USE OF FINANCING PROCEEDS AND COLLATERAL.
Notwithstanding anything herein to the contrary, no borrowings, letters of
credit, Collateral or the Carve-Out (collectively, the "DESIGNATED ASSETS")
may be used to object, contest or raise any defense to, the validity,
perfection, priority, extent or enforceability of the Pre-Petition Debt or
the liens securing the Pre-Petition Debt, or to assert any claims or causes
of action against the Pre-Petition Secured Lenders or the Pre-Petition Agent
PROVIDED, HOWEVER, that Designated Assets in an amount not to exceed $100,000
in the aggregate may be utilized to pay allowed expenses of any Official
Committee of Unsecured Creditors appointed in these cases incurred in
connection with the investigation or evaluation of the validity, perfection,
priority, extent or enforceability of the Pre-Petition Debt or the liens
securing the Pre-Petition Debt.
14. AMENDMENTS TO THE DOCUMENTS. The Debtors, the Agents and the DIP
Lenders may amend, modify, supplement or waive any provision of the Documents
if such
17
amendment, modification, supplement or waiver is permitted under the terms of
the Documents and is not material (in the good faith judgment of the Debtors
and the Agents), without the need to apply to, or receive further approval
from, the Court, PROVIDED, HOWEVER, that the Debtors shall give notice to any
Committee and the Office of the United States Trustee of any non-material
amendments, waivers, supplements or modifications.
15. SUBROGATION OF DEBTORS. Upon (a) final satisfaction and repayment in
full of all DIP Obligations to the Agent and the DIP Lenders under the DIP
Credit Agreement and (b) termination of the commitments thereunder, each of
the Debtors shall thereafter, automatically and without further act or deed,
be subrogated to the rights of the Agents and the DIP Lenders under the DIP
Credit Agreement as against the other Debtors based upon each respective
Debtor's actual (a) usage of or benefit from the proceeds of the Financing and
(b) repayment or satisfaction thereof. Such rights of subrogation shall
include, without limitation, all of the liens, collateral, priorities,
superpriorities and other rights, remedies and claims granted to the Agents
or the DIP Lenders, as the case may be, under the Documents or otherwise.
Final determination of the respective usage of or benefit from the proceeds
of the Financing by each Debtor and its liability therefor, as well as the
amount of any claims arising by way of subrogation in favor of the other
Debtors, shall be made by this Court after notice and a hearing.
16. ORDER GOVERNS. In the event of any inconsistency between the
provisions of this Order and of the DIP Credit Agreement, the provisions of
this Order shall govern.
17. SUCCESSORS AND ASSIGNS. The provisions of this Order shall be binding
upon the Agents, the DIP Lenders, the Pre-Petition Agent, the Pre-Petition
Secured Lenders and the Debtors and their respective successors and assigns
(including any chapter 7 or chapter 11
18
trustee hereinafter appointed or elected for the estate of any of the
Debtors) and inure to the benefit of the Agents, the DIP Lenders, the
Pre-Petition Agent, the Pre-Petition Secured Lenders and the Debtors and
(except with respect to any trustee hereinafter appointed or elected for the
estate of any of the Debtors) their respective successors and assigns.
Dated:
------------------------------
UNITED STATES BANKRUPTCY JUDGE
19
ANNEX VII
NON-CORE ASSETS
---------------
ASSET DESCRIPTION
----- -----------
DTG/ATS South Dakota ILEC, CLEC and cable assets
Splitrock National data network
CapRock Services Off-shore oil service
Xxxxxx County Local cable operator
Iowa/ATS Cedar Rapids cable and telco overbuild
IBS Telecom equipment
Operator Services 411 services
Public Services Pay phone services
Xxxxxxx XXXX Telemarketing
CMR Telemarketing
Inventory Excess telecommunications equipment
Gulfstream V and other aircraft Aircraft
Effingham, Illinois building Building
Facilities Idle and excess facilities identified for
sale or consolidation and having an
estimated value of $15,280,000 in the
aggregate as of September 30, 2001
The foregoing assets are identified in the Third Amendment as Non-Core
Assets. These assets may be disposed of as a sale of stock, sale of assets,
merger or consolidation, or any combination of the foregoing.
