Exhibit 4.6
GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT (this "Guarantee"), dated as
of September 24, 1997, is executed and delivered by ICG
Communications, Inc., a corporation organized under the laws of
the State of Delaware ("ICG"), and ICG Funding, LLC, a limited
liability company organized under the laws of the State of
Delaware "Funding") for the benefit of the Holders (as
hereinafter defined) from time to time of the Preferred
Securities (as hereinafter defined) of Funding.
WHEREAS, Funding intends to issue and sell exchangeable
limited liability company preferred securities ("Preferred
Securities"), and, it is required for the closing of such
issuance that ICG issue this Guarantee for the benefit of the
Holders of the Preferred Securities, as provided herein; and
WHEREAS, Funding will purchase the ICG Preferred Stock
(as hereinafter defined) with an amount equal to 85% of the
proceeds from the issuance and sale of the Preferred Securities
and its other common limited liability company interests (the
"Common Securities"); and
WHEREAS, ICG, for its own reasons, desires hereby to
unconditionally and irrevocably guarantee, to the extent set
forth herein, the payment in full to the Holders of the Guarantee
Payments (as hereinafter defined) and the performance of the
other obligations set forth herein.
NOW, THEREFORE, in consideration of the purchase by
each Holder of the Preferred Securities, which purchase ICG
hereby agrees shall benefit ICG, ICG executes and delivers this
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS
As used in this Guarantee, the terms set forth below shall,
unless the context otherwise requires, have the following
meanings. Capitalized terms used herein but not otherwise
defined herein shall have the meanings ascribed to such terms in
the Amended and Restated Limited Liability Company Agreement of
Funding, dated as of September 23, 1997 (the "LLC Agreement").
1.1 "Exchange Agent" shall mean ICG and its successors (or
such substitute entity as may be designated from time to time by
the Manager (as hereinafter defined), acting as agent of the
Holders in effecting the exchange of the Preferred Securities
into ICG Common Stock in such manner as may be set forth in the
LLC Agreement and the Declaration with respect to such series of
Preferred Securities.
1.2 "Declaration" shall mean the written action adopted by
the Manager pursuant to the LLC Agreement relating to the
Preferred Securities.
1.3 "Dividends" shall mean, with respect to the Preferred
Securities, the cumulative distributions from Funding with
respect to the Preferred Securities, accruing and payable in the
manner set forth in the Declaration with respect to such series
of Preferred Securities.
1.4 "Guarantee Payments" shall mean, the following
payments, without duplication, to the extent not paid by Funding:
(i) any accrued and unpaid distributions that are required to be
paid on the Preferred Securities, to the extent Funding has funds
available therefor, (ii) the Redemption Price (as herein
defined), with respect to any Preferred Securities called for
redemption by Funding, to the extent Funding has funds available
therefor and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of Funding, the lesser of (a) the
aggregate of the liquidation preference and all accrued and
unpaid dividends on the Preferred Securities to the date of
payment to the extent Funding has funds available therefor and
(b) the amount of assets of Funding remaining available for
distribution to holders of Preferred Securities upon the
liquidation of Funding.
1.5 "Holder" shall mean the registered holder from time to
time of Preferred Securities.
1.6 "ICG Common Stock" shall mean the common stock of ICG,
par value $.01 per share.
1.7 "ICG Preferred Stock" shall mean the preferred stock
mandatorily redeemable 2009 of ICG, par value $.01 per share.
1.8 "Manager" means ICG, in its capacity as the manager of
Funding, or any permitted successor manager of Funding admitted
as such pursuant to the applicable provisions of the LLC
Agreement.
1.9 "Redemption Price" shall mean, (i) with respect to a
mandatory redemption by Funding, 100% of the liquidation
preference of the Preferred Securities plus accumulated and
unpaid dividends (whether or not earned or declared), to the date
fixed for redemption thereof, (ii) with respect to a provisional
redemption by Funding on or prior to November 15, 2000, 103% of
the liquidation preference of the Preferred Securities plus
accumulated and unpaid dividends (whether or not earned or
declared) to the date fixed for redemption thereof, and (iii)
with respect to an optional redemption by Funding on or after
November 18, 2000, (a) 102% of the liquidation preference, if
redeemed from November 18, 2000 to November 14, 2001, (b) 101% of
the liquidation preferred, if redeemed from November 15, 2001 to
November 14, 2002, or (c) 100% of the liquidation preference, if
redeemed on or after November 15, 2002, of the Preferred
Securities plus accumulated and unpaid dividends (whether or not
earned or declared) to the date fixed for redemption.
ARTICLE II
GUARANTEE
2.1 GENERAL. ICG irrevocably and unconditionally agrees to
pay in full to the Holders of the Preferred Securities the
Guarantee Payments with respect to the Preferred Securities, as
and when due (except to the extent previously paid by Funding),
regardless of any defense, right of set-off or counterclaim which
Funding may have or assert. ICG's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required
amounts by ICG to the Holders of the Preferred Securities or by
causing Funding to pay such amounts to such Holders.
2.2 WAIVER OF CERTAIN RIGHTS. ICG hereby waives, to the
fullest extent permitted by applicable law, notice of acceptance
of this Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
2.3 OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of ICG under this Guarantee shall in no way
be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by Funding of
any express or implied agreement, covenant, term of
condition relating to the Preferred Securities to be
performed or observed by Funding;
(b) the extension of time for the payment by Funding
of all or any portion of the Dividends, Redemption Price,
liquidation distribution or any other sums payable under the
terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising
out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence
on the part of the Holders of Preferred Securities to
enforce, assert or exercise any right, privilege, power or
remedy conferred on such Holders pursuant to the terms of
the Preferred Securities, or any action on the part of
Funding granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, winding-up, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar
proceedings affecting, Funding or any of the assets of
Funding;
(e) any invalidity of, or defect or deficiency in, any
of the Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) to the fullest extent permitted by applicable law,
any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a
guarantor.
There shall be no obligation of any Holders of Preferred
Securities to give notice to, or obtain any consent of, ICG with
respect to the happening of any of the foregoing.
2.4 PROCEEDING DIRECTLY AGAINST ICG. This Guarantee is a
guarantee of payment and not of collection. A Holder of
Preferred Securities may enforce this Guarantee with respect to
the Preferred Securities directly against ICG, and ICG waives any
right or remedy to require that any action be brought against
Funding or any other person or entity before proceeding against
ICG. Subject to Section 2.5 hereof, all waivers herein contained
shall be without prejudice to the right of a Holder, at its
option, to proceed against Funding,whether by separate action or
by joinder. ICG agrees that this Guarantee shall not be
discharged except by payment of the Guarantee Payments in full
(to the extent not previously paid by Funding) and by complete
performance of all obligations under this Guarantee.
2.5 SUBROGATION. ICG shall be subrogated to all (if any)
rights of the Holders of Preferred Securities against ICG in
respect of any amounts paid to such Holders by ICG under this
Guarantee and shall have the right to waive payment by Funding of
any amount of Dividends in respect of which payment has been made
to the Holders by it pursuant to Section 2.1 hereof; provided,
however, that ICG shall not (except to the extent required by
mandatory provisions of law) exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of a payment under this
Guarantee, if, at the time of any such payment, any amounts are
due and unpaid under this Guarantee. If any amount shall be paid
to ICG in violation of the preceding sentence, ICG agrees to hold
such amount in trust for the Holders and to pay over such amount
promptly to the Holders.
2.6 INDEPENDENT OBLIGATIONS. ICG acknowledges that its
obligations hereunder are independent of the obligations of
Funding with respect to the Preferred Securities and that ICG
shall be liable as principal and sole debtor under this Guarantee
to make Guarantee Payments in full pursuant to the terms of this
Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 2.3 hereof.
2.7 TERMINATION. This Guarantee shall terminate and be of
no further force and effect as to the Preferred Securities of any
series upon (a) full payment of the Redemption Price of all
outstanding Preferred Securities, or (b) the exchange (in the
manner provided in the LLC Agreement and the Declaration) of all
of the Preferred Securities for ICG Common Stock. In
addition,this Guarantee will terminate completely upon the
distribution to the holders of the Preferred Securities of all of
the assets of Funding, including the ICG Preferred Stock, any
interest on and principal of the Treasury Strips that are held in
the Escrow Account and any ICG Common Stock that Funding received
from ICG as a dividend (or otherwise) and has not distributed on
the Preferred Securities or sold in the open market.
Notwithstanding the foregoing, this Guarantee shall continue to
be effective or, to the fullest extent permitted by applicable
law, shall be reinstated, as the case may be, with respect to the
Preferred Securities if at any time any Holder of such Preferred
Securities must restore payment of any sums recovered on account
of, or must redeliver any securities received on account of, such
Preferred Securities or under this Guarantee for any reason
whatsoever.
2.8 SUBJECT TO INDENTURES. The obligations of ICG under
this Guarantee shall not be enforceable except to the extent
permitted under the provisions of the indenture pursuant to which
the 13 1/2% Senior Discount Notes due 2005 were issued, the
indenture pursuant to which the 12 1/2% Senior Discount Notes due
2006 were issued and the indenture pursuant to which the 11 5/8%
Senior Discount Notes due 2007 were issued.
ARTICLE III
CERTAIN COVENANTS OF ICG
3.1 COVENANTS. So long as the Preferred Securities remain
outstanding, ICG shall: (a) not cause or permit any Common
Securities to be transferred (other than in connection with a
merger or consolidation); (b) maintain direct or indirect
ownership of all outstanding Common Securities and any other
limited liability company interests in Funding other than the
Preferred Securities (except as may be permitted in the LLC
Agreement); (c) not voluntarily liquidate, dissolve or wind-up
itself (other than in connection with a merger or consolidation)
or cause Funding (other than in connection with or after an
exchange of all outstanding Preferred Securities) to liquidate,
dissolve or wind-up; (e) to remain the Manager and to timely
perform all of its duties as Manager (including the duty to cause
Funding to declare and pay dividends on all outstanding Preferred
Securities to the extent set forth in the LLC Agreement and the
Declaration) and (f) subject to the terms of the Preferred
Securities, use reasonable efforts to cause Funding to remain a
Delaware limited liability company and otherwise continue to be
treated as a partnership for United States federal income tax
purposes.
ARTICLE IV
STATUS
4.1 STATUS. This Guarantee constitutes an unsecured
obligation of ICG ranking subordinate and junior in right of
payment to all other liabilities of ICG and senior to ICG Common
Stock.
ARTICLE V
EXCHANGE OF PREFERRED SECURITIES
5.1 ISSUANCE OF ICG COMMON STOCK. ICG shall reserve and
keep available out of its authorized and unissued ICG Common
Stock (solely for issuance upon the exchange of the Preferred
Securities), free of any preemptive or other similar rights, the
number of full shares of ICG Common Stock deliverable to the
Holders upon the exchange of all outstanding Preferred Securities
not theretofore converted by the Holders.
5.2 VALIDITY OF ICG COMMON STOCK. All shares of ICG Common
Stock delivered by ICG upon such exchange will be duly
authorized, validly issued and fully paid and nonassessable.
ARTICLE VI
MISCELLANEOUS
6.1 THIRD PARTY BENEFICIARIES. All of ICG's obligations
under this Guarantee shall be directly enforceable by the Holders
from time to time of the Preferred Securities. Each Holder of
Preferred Securities is an intended third-party beneficiary of
this Guarantee.
6.2 SUCCESSORS AND ASSIGNS. All provisions contained in
this Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of ICG and shall inure to the
benefit of the Holders. Except in connection with any permitted
merger or consolidation of ICG with or into another entity or any
permitted sale, transfer or lease of ICG's assets to another
entity, ICG may not assign its rights or delegate its obligations
under this Guarantee without the prior approval of the holders of
at least a majority in liquidation preference of the Preferred
Securities then outstanding.
6.3 AMENDMENTS. Except with respect to any changes which
do not have a material adverse effect on the rights of any
Holders of Preferred Securities (in which case no vote will be
required, provided that the board of directors of ICG makes a
determination, evidenced by resolution, that such change will not
have a material adverse effect on the holders of Preferred
Securities), this Guarantee may be amended with respect to the
Preferred Securities only with the prior approval (obtained in
the manner set forth in the LLC Agreement and the applicable
Declaration) of the Holders of not less than a majority of the
aggregate liquidation preference of the outstanding Preferred
Securities.
6.4 NOTICE. Any notice, request of other communication
required or permitted to be given hereunder shall be given in
writing by delivering the same against receipt therefor by
registered mail, hand delivery, facsimile transmission (confirmed
by registered mail)or telex, addressed to ICG, as follows (and if
so given, shall be deemed given when mailed; upon receipt of
facsimile confirmation, if sent by facsimile transmission; or
upon receipt of an answer-back, if sent by telex):
ICG Communications, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telecopy (000) 000-0000
ICG Funding, LLC
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telecopy (000) 000-0000
6.5 GENDERS. The masculine and neuter genders used here
shall include the masculine, feminine and neuter genders.
6.6 GUARANTEE NOT SEPARATELY TRANSFERABLE. This Guarantee
is solely from the benefit of the Holders and is not separately
transferable from the Preferred Securities.
6.7 GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
6.8 SEVERABILITY. In case any provision of this Guarantee
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not
in any way be affected or impaired.
6.9 HEADINGS. The Article and section headings herein are
for convenience only and shall not affect the construction
hereof.
IN WITNESS WHEREOF, ICG has caused this Agreement to be duly
executed as of the day and year first above written.
ICG Communications, Inc.
By: /s/ J. Xxxxxx Xxxxx
--------------------------------
Name: J. Xxxxxx Xxxxx
Title: President and
Chief Executive Officer
ATTEST:
/s/ Xxxxxx Xxxxx
-----------------------------
Asst. Secretary
ICG Funding, LLC
By: ICG Communications, Inc., its
manager
By: /s/ J. Xxxxxx Xxxxx
--------------------------------
Name: J. Xxxxxx Xxxxx
Title: President and
Chief Executive Officer
ATTEST:
/s/ Xxxxxx Xxxxx
-----------------------------
Asst. Secretary
