EXHIBIT 10.85
EXECUTION COPY
$84,573,934.83
CREDIT AGREEMENT
Dated as of July 25, 2002
Among
ICG COMMUNICATIONS, INC.
as Borrower
and
THE INITIAL LENDERS
as Initial Lenders
and
ROYAL BANK OF CANADA
as Administrative Agent and Collateral Agent
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as Documentation Agent
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
1.01. Certain Defined Terms........................................................................2
1.02. Computation of Time Periods; Other Definitional Provisions.........................19
1.03. Accounting Terms...................................................................19
ARTICLE II
2.01. The Term Advances..................................................................19
2.02. Repayment of Term Advances.........................................................19
2.03. Prepayments........................................................................19
2.04. Interest...........................................................................20
2.05. Fees...............................................................................21
2.06. Conversion of Term Advances........................................................21
2.07. Increased Costs, Etc...............................................................22
2.08. Payments and Computations..........................................................23
2.09. Taxes..............................................................................24
2.10. Sharing of Payments, Etc...........................................................26
2.11. Defaulting Lenders.................................................................27
ARTICLE III
3.01. Conditions Precedent to Effective Date.............................................28
3.02. Determinations Under Section 3.01..................................................31
3.01. Conditions Subsequent..............................................................31
ARTICLE IV
4.01. Representations and Warranties of the Borrower.....................................33
ARTICLE V
5.01. Affirmative Covenants..............................................................39
5.02. Negative Covenants.................................................................46
5.03. Reporting Requirements.............................................................52
5.04. Financial Covenants................................................................56
ARTICLE VI
6.01. Events of Default..................................................................57
ARTICLE VII
7.01. Authorization and Action...........................................................60
7.02. Agents' Reliance, Etc..............................................................60
7.03. Agents and Affiliates..............................................................60
7.04. Lender Credit Decision.............................................................61
7.05. Indemnification....................................................................61
7.06. Successor Agents...................................................................61
ARTICLE VIII
8.01. Amendments, Etc....................................................................62
8.02. Notices, Etc.......................................................................62
8.03. No Waiver; Remedies................................................................63
8.04. Costs and Expenses.................................................................63
8.05. Right of Set-off...................................................................64
8.06. Binding Effect.....................................................................65
8.07. Assignments and Participations.....................................................65
8.08. Execution in Counterparts..........................................................67
8.09. Confidentiality....................................................................67
8.10. Release of Collateral..............................................................67
8.11. Jurisdiction, Etc..................................................................67
8.12. Governing Law......................................................................68
8.13. Waiver of Jury Trial...............................................................68
8.14. Non-U.S. Subsidiaries..............................................................68
8.15. Existing Credit Agreement..........................................................68
SCHEDULES
Schedule I - Term Advances and Applicable Lending Offices
Schedule II - Subsidiary Guarantors
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(p) - Environmental Matters
Schedule 4.01(q) - Tax Matters
Schedule 4.01(s) - Existing Debt
Schedule 4.01(t) - Liens
Schedule 4.01(u) - Owned and Leased Real Property to be Mortgaged
Schedule 4.01(v) - Leased Real Property (Lessee)
Schedule 4.01(w) - Investments
Schedule 4.01(x) - Intellectual Property
Schedule 4.01(y) - Material Contracts
Schedule 4.01(z) - Identified Assets
Schedule 5.01(e) - Preservation of Corporation Existence
EXHIBITS
Exhibit A - Form of Term Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Security Agreement
Exhibit D - Form of Subsidiary Guaranty
Exhibit E - Form of Escrow Agreement
Exhibit F-1 - Form of Opinion of, Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, Counsel to the Loan Parties
Exhibit F-2 - Form of Opinion of Xxxxx & Xxxxxxx L.L.P, Colorado Counsel
to the Loan Parties
Exhibit G - Form of Opinion of Local Counsel
Exhibit H - Form of Subordination Agreement
Exhibit I - Form of Mortgage
Exhibit J - Form of Estoppel Certificate and Consent
Exhibit K - Form of Disclosure Statement
Exhibit L - Form of Confirmation Order
Exhibit M - Form of Plan Modification
CREDIT AGREEMENT dated as of July 25, 2002 (as amended,
restated, supplemented or otherwise modified from time to time, this
"Agreement"), among ICG Communications, Inc., a Delaware corporation (the
"Borrower") which is in the process of being reorganized under Chapter 11
of the United States Bankruptcy Code (11 U.S.C. ss. 101 et seq.; the
"Bankruptcy Code"), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof as the Initial
Lenders (the "Initial Lenders"), Royal Bank of Canada, as collateral agent
(together with any successor collateral agent appointed pursuant to Article
VII, the "Collateral Agent") and as administrative agent (together with any
successor administrative agent appointed pursuant to Article VII, the
"Administrative Agent") for the Lenders (as hereinafter defined)) and
Wachovia Bank, National Association, as documentation agent (the
"Documentation Agent" and, together with the Administrative Agent and the
Collateral Agent, the "Agents").
PRELIMINARY STATEMENTS:
(1) The Borrower is in the process of obtaining an order of the
Bankruptcy Court (the "Confirmation Order") confirming an amended plan of
reorganization (the "Plan Modification") under the Bankruptcy Code in the
form attached hereto as Exhibit M which amends and restates the Second
Amended Joint Plan of Reorganization filed by the Borrower with the
Bankruptcy Court, dated as of April 3, 2002, and in connection therewith
intends to substantially consummate the Plan of Reorganization (as defined
herein) prior to the Deadline Date (as hereinafter defined).
(2) Pursuant to the credit agreement dated as of August 12,
1999 among ICG Equipment, Inc. and ICG Netahead, Inc. as the borrowers
thereunder, ICG Services, Inc. as the parent, Royal Bank of Canada, as
administrative agent and the lenders and other parties party thereto (as
amended, restated, supplemented or otherwise modified, the "Existing Credit
Agreement"), there is an aggregate principal amount of term advances
outstanding equal to $84,573,934.83 (the "Existing Advances").
(3) The Borrower and the Lenders have agreed to enter into this
Agreement pursuant to which the Existing Advances, less $25,000,000 paid as
set forth herein on the Effective Date ($59,573,934.83 being the "Initial
Principal Amount"), will become "Term Advances" for all purposes hereunder.
(4) The Lenders are entering into the transactions contemplated
hereby subject to, and in reliance upon, among other things, the funding
into escrow of $25,000,000 (plus such fees and other amounts payable
hereunder) for the account of the Agents and the Lenders as set forth
herein, the entry of the Confirmation Order and substantial consummation of
the Plan of Reorganization described above.
(5) The Lenders have indicated their willingness to enter into
this Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS.
As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Administrative Agent" has the meaning specified in the recital
of parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent as the Administrative Agent shall specify in
writing to the Borrower and the Lenders.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 10% or more of the Voting Interests of such Person or to direct
or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Interests, by contract or
otherwise.
"Agents" has the meaning specified in the recital of parties to
this Agreement.
"Agreement Value" means, for each Hedge Agreement, on any date
of determination, an amount determined by the Administrative Agent
equal to: (a) in the case of a Hedge Agreement documented pursuant to
the Master Agreement (Multicurrency-Cross Border) published by the
International Swap and Derivatives Association, Inc. (the "Master
Agreement"), the amount, if any, that would be payable by any Loan
Party or any of its Subsidiaries to its counterparty to such Hedge
Agreement, as if (i) such Hedge Agreement was being terminated early
on such date of determination, (ii) such Loan Party or Subsidiary was
the sole "Affected Party", and (iii) the Administrative Agent was the
sole party determining such payment amount (with the Administrative
Agent making such determination pursuant to the provisions of the
form of Master Agreement); or (b) in the case of a Hedge Agreement
traded on an exchange, the xxxx-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge Agreement
to the Loan Party or Subsidiary of a Loan Party party to such Hedge
Agreement determined by the Administrative Agent based on the
settlement price of such Hedge Agreement on such date of
determination, or (c) in all other cases, the xxxx-to-market value of
such Hedge Agreement, which will be the unrealized loss on such Hedge
Agreement to the Loan Party or Subsidiary of a Loan Party party to
such Hedge Agreement determined by the Administrative Agent as the
amount, if any, by which (i) the present value of the future cash
flows to be paid by such Loan Party or Subsidiary exceeds (ii) the
present value of the future cash flows to be received by such Loan
Party or Subsidiary pursuant to such Hedge Agreement; capitalized
terms used and not otherwise defined in this definition shall have
the respective meanings set forth in the above described Master
Agreement.
"Applicable Lending Office" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate
Advance and such Lender's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"Applicable Margin" means, at any time, 6.00% per annum in the
case of Eurodollar Rate Advances, and 4.75% per annum in the case of
Base Rate Advances, subject to reduction as set forth in the grid below.
----------------------------------------------------------------------
| | Applicable Margin |
| Cumulative Prepayment of | ----------------- |
| Term Advances | Base+ Eurodollar Rate+ |
| ---------------------------------|-----------------------------------|
| $0 - $ 9,999,999 | 475 bps 600 bps |
| $10,000,000 - $14,999,999 | 425 bps 550 bps |
| $15,000,000 - $19,999,999 | 375 bps 500 bps |
| $20,000,000 - $24,999,999 | 325 bps 450 bps |
| $25,000,000 - $29,999,999 | 275 bps 400 bps |
| $30,000,000 | 225 bps 350 bps |
----------------------------------------------------------------------
As used in the above grid, the term "Cumulative Prepayment of Term
Advances" means the aggregate of all payments in excess of scheduled
amortization payments to the extent applied to prepay principal of
Term Advances outstanding hereunder in inverse order of maturity
(excluding for all purposes the $25,000,000 payment on the Effective
Date).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by
the Administrative Agent, in accordance with Section 8.07 and in
substantially the form of Exhibit B hereto.
"Bankruptcy Code" has the meaning specified in the recital of
parties to this Agreement.
"Bankruptcy Court" means the United States Bankruptcy Court for
the District of Delaware.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by Royal Bank
of Canada in New York, New York, from time to time, as its base
or prime rate; and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means a Term Advance that bears interest as
provided in Section 2.04(a)(i).
"Borrower" has the meaning specified in the recital of parties
to this Agreement.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period,
the sum of, without duplication, (a) all cash expenditures made,
directly or indirectly, by such Person or any of its Subsidiaries on
a Consolidated basis during such period for equipment, fixed assets,
real property, improvements or other assets, or for replacements or
substitutions therefor or additions thereto and other tangible and
intangible assets that may be capitalized under GAAP, that have been
or should be, in accordance with GAAP, reflected as additions to
property, plant or equipment on a Consolidated balance sheet of such
Person or have a useful life of more than one year plus, without
duplication, (b) the aggregate principal amount of all Debt
(including Obligations under Capitalized Leases) assumed or incurred
on a Consolidated basis in connection with any such expenditures. For
purposes of this definition, the purchase price of equipment that is
purchased with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase
price less the amount of such proceeds, as the case may be.
"Capital Stock" of any Person means any and all shares,
interests, partnership interests, participations, rights in or other
equivalents (however designated) of such Person's equity (however
designated).
"Capitalized Leases" means all leases that have been or should
be, in accordance with GAAP, recorded as capitalized leases.
"Cases" shall mean the Chapter 11 cases of certain Loan Parties
before the Bankruptcy Court.
"Cash Equivalents" means any of the following, to the extent
owned by the Borrower or any of its respective Subsidiaries free and
clear of all Liens other than Liens created under the Collateral
Documents and having a maturity of not greater than 365 days (except
with respect to clause (d) below) from the date of the acquisition
thereof: (a) readily marketable direct obligations of the Government
of the United States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and credit
of the Government of the United States, (b) insured certificates of
deposit of or time deposits with any commercial bank that is a Lender
or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c)
below, is organized under the laws of the United States or any State
thereof and has combined capital and surplus of at least $1 billion,
(c) commercial paper in an aggregate amount of no more than
$25,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United
States and rated at least "Prime-1" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent
grade) by Standard & Poor's, a division of The XxXxxx-Xxxx Companies,
Inc., (d) commercial paper in an aggregate amount of no more than
$25,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United
States and rated at least "Prime-2" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-2" (or the then equivalent
grade) by Standard & Poor's, a division of The XxXxxx-Xxxx Companies,
Inc., so long as the maturity date of such commercial paper is not
greater than 180 days from the date of the acquisition thereof, (e)
investments in repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause
(a) above entered into with any office of a bank or trust company
meeting the qualifications specified in clause (b) above, or (f)
investments in money market funds substantially all the assets of
which are comprised of securities of the types described in clauses
(a) through (e) above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CFC" means any Person that is a "controlled foreign
corporation" pursuant to Section 957 of the Internal Revenue Code.
"Change of Control" means the occurrence of any of the
following (other than as the result of consummation of the Plan of
Reorganization): (a) any Person or two or more Persons acting in
concert, other than any Permitted Holders, shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act
of 1934), directly or indirectly, of Voting Interests of the Borrower
(or other securities convertible into such Voting Interests), other
than Excluded Interests, representing the greater of (i) 35% or more
of the combined voting power of all Voting Interests of the Borrower,
or (ii) more than the aggregate Voting Interests of the Permitted
Holders; or (b) (i) any Person or two or more Persons acting in
concert, other than any Permitted Holders, shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act
of 1934), directly or indirectly, of Voting Interests of the Borrower
(or other securities convertible into such Voting Interests), other
than Excluded Interests, representing the greater of (A) 20% or more
of the combined voting power of all Voting Interests of the Borrower,
or (B) more than the aggregate Voting Interests of the Permitted
Holders, and (ii) during any period of up to 24 consecutive months,
commencing before or after the date of this Agreement, individuals
who at the beginning of such 24-month period were members of the
board of directors of the Borrower (together with any Continuing
Directors) shall cease for any reason to constitute a majority of the
board of directors of the Borrower then in office; provided that the
acquisition of beneficial ownership by Xxxxxx Xxxxxxx & Co.,
Incorporated and X.X. Xxxx Asset Management Co., L.L.C. and their
respective affiliates in the aggregate of 20% or more of the combined
voting power of all Voting Interests of the Borrower shall not
constitute a Change of Control under the foregoing provision
(b)(i)(A).
"Closing Date" has the meaning set forth in Section 3.01.
"Collateral" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of the Collateral Agent for the
benefit of the Secured Parties.
"Collateral Agent" has the meaning specified in the recital of
parties to this Agreement.
"Collateral Account" has the meaning specified in the Security
Agreement.
"Collateral Documents" means Mortgages, the Security Agreement
and any other agreement that creates or purports to create a Lien in
favor of the Collateral Agent for the benefit of the Secured Parties.
"Confidential Information" means information that any Loan
Party furnishes to any Agent or any Lender on a confidential basis,
but does not include any such information that is or becomes
generally available to the public other than as a result of a breach
by such Agent or any Lender of its obligations hereunder or that is
or becomes available to such Agent or such Lender from a source other
than the Loan Parties that is not, to the best of such Agent's or
such Lender's knowledge, acting in violation of a confidentiality
agreement directly or indirectly with a Loan Party.
"Confirmation Order" has the meaning specified in the
Preliminary Statements hereto.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Contingent Obligation" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, Capitalized Leases, dividends or other payment
Obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including,
without limitation, (a) the direct or indirect guarantee, endorsement
(other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse
by such Person of the Obligation of a primary obligor, (b) the
Obligation to make take-or-pay or similar payments, if required,
regardless of nonperformance by any other party or parties to an
agreement or (c) any Obligation of such Person, whether or not
contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to
advance or supply funds (A) for the purchase or payment of any such
primary obligation or (B) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase property,
assets, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable
pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is
required to perform thereunder), as determined by such Person in good
faith.
"Continuing Directors" means each member of the board of
directors of the Borrower who (a) was or becomes a member of the
board of directors of the Borrower on the Effective Date, or (b) is
at any time nominated for election by the Borrower's stockholders or
elected to fill a vacancy in the board of directors of the Borrower,
in either case, with the approval of a majority of the other
Continuing Directors who were members of the board of directors at
the time of such nomination or election.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Term Advances of one Type into Term Advances of the
other Type pursuant to Section 2.06 or 2.07.
"Deadline Date" has the meaning specified in Section 3.03.
"Debt" of any Person at any date of determination means,
without duplication, (a) all indebtedness of such Person for borrowed
money, (b) all Obligations of such Person for the deferred and unpaid
purchase price of property or services which is due more than 6
months after the date of placing such property in service or taking
delivery of title thereto or the completion of such services (other
than trade payables and accrued current liabilities incurred in the
ordinary course of such Person's business), (c) all Obligations of
such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such
property), (e) all Obligations of such Person as lessee under
Capitalized Leases, (f) all Obligations of such Person under
acceptance, letter of credit or similar facilities, (g) all
Obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interests in such
Person or any other Person or any warrants, rights or options to
acquire such capital stock (in each case, pursuant to the terms of
such Equity Interests or capital stock) if the failure to pay such
monetary obligations allows the holders of such Equity Interests or
capital stock to exercise remedies or additional rights against such
Person, valued, in the case of Redeemable Preferred Interests, at the
greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (h) all Obligations of such Person in
respect of Hedge Agreements, valued at the Agreement Value thereof,
(i) all Contingent Obligations of such Person and (j) all
indebtedness and other payment Obligations referred to in clauses (a)
through (i) above of another Person secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise,
to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment
of such indebtedness or other payment Obligations.
"Debt for Borrowed Money" of any Person means all items that,
in accordance with GAAP, would be classified as indebtedness on a
Consolidated balance sheet of such Person.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Defaulted Amount" means, with respect to any Lender at any
time, any amount required to be paid by such Lender to any Agent or
any other Lender hereunder or under any other Loan Document at or
prior to such time that has not been so paid as of such time,
including, without limitation, any amount required to be paid by such
Lender to (a) any other Lender pursuant to Section 2.10 to purchase
any participation in Term Advances owing to such other Lender and (b)
any Agent pursuant to Section 7.05 to reimburse such Agent for such
Lender's ratable share of any amount required to be paid by the
Lenders to such Agent as provided therein. In the event that a
portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.11(a), the remaining portion of such Defaulted Amount shall
be considered a Defaulted Amount originally required to be paid
hereunder or under any other Loan Document on the same date as the
Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at
such time, (a) owes a Defaulted Amount or (b) shall take any action
or be the subject of any action or proceeding of a type described in
Section 6.01(f).
"Disclosure Statement" means the disclosure statement with
respect to the Plan Modification, which shall be substantially in the
form attached hereto as Exhibit K, as modified solely to reflect the
terms of this Agreement and the Related Documents.
"Documentation Agent" has the meaning specified in the recital
of parties to this Agreement.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, as the case may be,
or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"EBITDA" means, with respect to any Person for any period, the
sum of the following, determined on a Consolidated basis without
duplication, in accordance with GAAP: (a) net income (or net loss) of
such Person and its Subsidiaries for such period plus (b) the sum of
the following (in each case, to the extent deducted in determining
such net income) (i) income and franchise tax expenses of such Person
and its Subsidiaries for such period, (ii) interest expense of such
Person and its Subsidiaries for such period, (iii) amortization,
depreciation and other non-cash charges for such period and (iv) any
non-recurring extraordinary losses for such period, less (c) interest
income of such Person and its Subsidiaries for such period and any
non-recurring extraordinary gains for such period.
"Effective Date" has the meaning set forth in Section 3.03.
"Eligible Assignee" means any commercial bank or
financial institution (including, without limitation, any fund
that regularly invests in loans similar to the Term Advances) as
approved by the Administrative Agent and (so long as no Event of
Default has occurred and is continuing at the time of such
assignment) by the Borrower (such approvals not to be unreasonably
withheld); provided, however, that neither any Loan Party nor any
Affiliate of a Loan Party nor any Shareholder of the Borrower nor
any holder of the Subordinated Cerberus Notes unless any such
holder is an assignee of the entire principal amount of Term
Advances outstanding hereunder shall qualify as an Eligible
Assignee under this definition.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
"Environmental Law" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ,
judgment, injunction, decree or judicial or agency interpretation,
policy or guidance relating to pollution or protection of the
environment, health, safety or natural resources, including, without
limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous
Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"Equity Interests" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such
Person, warrants, options or other rights for the purchase or other
acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible
into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or
options for the purchase or other acquisition from such Person of
such shares (or such other interests), and other ownership or profit
interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and
whether or not such shares, warrants, options, rights or other
interests are authorized or otherwise existing on any date of
determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of any Loan Party, or
under common control with any Loan Party, within the meaning of
Section 414 of the Internal Revenue Code.
"ERISA Event" means (a)(i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to
any Plan unless the 30-day notice requirement with respect to such
event has been waived by the PBGC or (ii) the requirements of Section
4043(b) of ERISA apply with respect to a contributing sponsor, as
defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum
funding waiver with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to terminate such
Plan, pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility of
any Loan Party or any ERISA Affiliate in the circumstances described
in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or
any ERISA Affiliate from a Multiple Employer Plan during a plan year
for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (f) the conditions for imposition of a lien
under Section 302(f) of ERISA shall have been met with respect to any
Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA;
or (h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds
for the termination of, or the appointment of a trustee to
administer, such Plan.
"Escrow Agreement" means the escrow agreement among the
Borrower, Xxxxxxxxx L.L.C., a Delaware limited liability company,
Xxxxxx Xxxxxxx & Co., Incorporated, a Delaware corporation and
JPMorgan Chase Bank, as escrow agent, dated as of July 25, 2002 in
the form attached as Exhibit E hereto.
"Escrowed Property" has the meaning set forth in the Escrow
Agreement.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending
Office" opposite its name on Schedule I hereto or in the Assignment
and Acceptance pursuant to which it became a Lender (or, if no such
office is specified, its Domestic Lending Office), or such other
office of such Lender as such Lender may from time to time specify to
the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances, an interest rate per annum equal to the
rate per annum obtained by dividing (a) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in U.S. Dollars at 11:00 A.M. (London time)
two Business Days before the first day of such Interest Period for a
period equal to such Interest Period (provided that, if for any
reason such rate is not available, the term "Eurodollar Rate" shall
mean, for any Interest Period for all Eurodollar Rate Advances, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in U.S. Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates) by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means a Term Advance that bears
interest as provided in Section 2.04(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for all Eurodollar Rate Advances means the reserve percentage
applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New
York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchangeable Capital Stock" means any Capital Stock which is
exchangeable or convertible into another security.
"Excluded Interests" means any Voting Interests of the Borrower
(or other securities convertible into such Voting Interests)
beneficially owned by any Person as the result of the effects of the
anti dilution provisions of any of the Warrants issued in connection
with the Subordinated Cerberus Notes.
"Existing Advances" has the meaning specified in the
Preliminary Statements.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Debt" means Debt of each Loan Party and its
Subsidiaries outstanding immediately after giving effect to the
consummation of the Transaction and the Plan of Reorganization, other
than Debt pursuant to the Loan Documents and the Subordinated
Cerberus Notes.
"Extraordinary Receipt" means any cash received by or paid to
or for the account of any Person not in the ordinary course of
business, including, without limitation, tax refunds (excluding
amounts applied to pay taxes within 18 months of receipt thereof),
pension plan reversions, proceeds of insurance (including, without
limitation, any key man life insurance but excluding proceeds of
business interruption insurance to the extent such proceeds
constitute compensation for lost earnings), condemnation awards (and
payments in lieu thereof), indemnity payments, any purchase price
adjustment received in connection with any purchase agreement and any
proceeds from the sale of receivables; provided, however, that an
Extraordinary Receipt shall not include (i) non-ordinary course IRU's
referred to in Section 2.03(b), (ii) payments made to a Loan Party by
another Loan Party (it being understood that any cash received that
otherwise falls within the definition of "Extraordinary Receipt" as
defined herein shall not cease to be an Extraordinary Receipt because
a subsequent payment is made with such cash to a Loan Party by
another Loan Party) or (iii) cash receipts received from proceeds of
insurance, condemnation awards (or payments in lieu thereof) or
indemnity payments to the extent that such proceeds, awards or
payments (A) are in respect of loss or damage to equipment, fixed
assets or real property are applied (or in respect of which
expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such
proceeds were received in accordance with the terms of the Loan
Documents, so long as such application is made within six months
after the occurrence of such damage or loss or (B) are received by
any Person in respect of any third party claim against such Person
and applied to pay (or to reimburse such Person for its prior payment
of) such claim and the costs and expenses of such Person with respect
thereto.
"FCC" means the Federal Communications Commission or any
successor commission or agency of the United States of America having
jurisdiction over the Borrower or any System.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is
a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Fee Letters" means (i) the fee letter dated July 25, 2002
between the Borrower and the Administrative Agent, as amended and
(ii) the fee letter dated July 25, 2002 between the Borrower and the
Documentation Agent, as amended.
"Fiscal Year" means a fiscal year of the Borrower and its
Consolidated Subsidiaries ending on December 31 in any calendar year.
"GAAP" has the meaning specified in Section 1.03.
"Grantors" has the meaning specified in the Security Agreement.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon
gas and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other hedging
agreements.
"Hedge Bank" means any Lender or an Affiliate of a Lender in
its capacity as a party to a Secured Hedge Agreement, it being
understood that upon the assignment by any Lender of all of its
interests under this Agreement pursuant to Section 8.07, such Lender
or any Affiliate of such Lender shall no longer be a "Hedge Bank" and
any Hedge Agreement between such Lender or its Affiliate and the
Borrower shall no longer be a "Secured Hedge Agreement".
"Identified Assets" means the assets listed on Schedule 4.01(z)
attached hereto.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Initial Principal Amount" has the meaning specified in the
Preliminary Statements.
"Insufficiency" means, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Interest Period" means, for each Eurodollar Rate Advance, the
period commencing on the Closing Date or the date of the Conversion
of any Base Rate Advance into such Eurodollar Rate Advance, and
ending on the last day of the period selected by the Borrower
pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by
the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months, as the
Borrower may, upon notice received by the Administrative Agent not
later than 11:00 A.M. (New York City time) on the third Business Day
prior to the first day of such Interest Period, select; provided,
however, that:
(a) the Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance that ends after any
principal repayment installment date unless, after giving
effect to such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances having
Interest Periods that end on or prior to such principal
repayment installment date shall be at least equal to the
aggregate amount of principal repayment installments due and
payable hereunder on or prior to such date;
(b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided, however, that, if such
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business
Day;
(c) whenever the first day of any Interest Period occurs
on a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month; and
(d) subject to clause (a) above, if the Borrower has
failed to notify the Administrative Agent with respect to the
duration of any Interest Period, the duration of such Interest
Period shall be one month.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
"Inventory" means all Inventory referred to in Section 1(b) of
the Security Agreement.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or
Debt or the assets comprising a division or business unit or a
substantial part or all of the business of such Person, any capital
contribution to such Person or any other direct or indirect
investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation and any arrangement
pursuant to which the investor incurs Debt of the types referred to
in clause (i) or (j) of the definition of "Debt" in respect of such
Person.
"IRU" means an indefeasible right of use of an identified
portion of one or more of the Loan Parties' telecommunication
equipment and/or network.
"Lenders" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 8.07 for so long as
such Initial Lender or Person, as the case may be, shall be a party
to this Agreement.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential
arrangement, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of way
or other encumbrance on title to real property.
"Loan Documents" means (a) for purposes of this Agreement and
the Term Notes and any amendment, supplement or modification hereof
or thereof, (i) this Agreement, (ii) the Term Notes, (iii) the
Subsidiary Guaranties, (iv) the Collateral Documents, (v) the Fee
Letters, and (vi) the Subordination Agreement, and (b) for purposes
of the Subsidiary Guaranties and the Collateral Documents and for all
other purposes other than for purposes of this Agreement and the Term
Notes, (i) this Agreement, (ii) the Term Notes, (iii) the Subsidiary
Guaranties, (iv) the Collateral Documents, (v) the Fee Letters, (vi)
each Secured Hedge Agreement, and (vii) the Subordination Agreement.
"Loan Parties" means the Borrower and the Subsidiary Guarantors.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole, (b) the rights and remedies of any
Agent or any Lender under any Transaction Document or (c) the ability
of any Loan Party to perform its Obligations under any Transaction
Document to which it is or is to be a party.
"Material Contract" means (i) any material lease agreement to
which the Borrower or any of its Subsidiaries is a party as lessor
(and the lessee is not a Loan Party) and (ii) each other contract to
which either the Borrower or any of its Subsidiaries is a party
involving aggregate consideration payable to or by such Person of
$2,000,000 or more in any year or otherwise material to the business,
condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries (taken
as a whole); provided that no contract rejected or to be rejected in
the Cases shall be a Material Contract.
"Mortgages" has the meaning specified in Section 5.01(u).
"Mortgage Policies" has the meaning specified in Section 5.01(u)(B).
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b)
was so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease,
transfer or other disposition of any asset other than in the ordinary
course of business, or any Extraordinary Receipt received by or paid
to or for the account of any Person or the incurrence or issuance of
any Debt or the sale or issuance of any Equity Interests (including,
without limitation, any capital contribution by any Person) (except
in each case for transactions solely between Loan Parties), the
aggregate amount of cash received from time to time (whether as
initial consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a)
brokerage commissions, underwriting or placement agent fees and
discounts, legal fees, accountant's and consultant's fees, finder's
fees and other similar fees and commissions, (b) provision for the
amount of taxes payable within one year in connection with or as a
result of such transaction, (c) the amount of any Debt secured by a
Lien on such asset that, by the terms of the agreement or instrument
governing such Debt, is required to be repaid upon such disposition,
in each case to the extent, but only to the extent, that the amounts
so deducted are, at the time of receipt of such cash, actually paid
to a Person that is not an Affiliate of such Person or any Loan Party
or any Affiliate of any Loan Party and are properly attributable to
such transaction or to the asset that is the subject thereof and (d)
such other reserves as are required by GAAP; provided, however, that
in the case of taxes that are deductible under clause (b) above but
for the fact that, at the time of receipt of such cash, such taxes
have not been actually paid or are not then payable, such Loan Party
or such Subsidiary may deduct an amount (the "Reserved Amount") equal
to the amount reserved in accordance with GAAP for such Loan Party's
or such Subsidiary's reasonable estimate of such taxes, other than
taxes for which such Loan Party or such Subsidiary is indemnified,
provided further, however, that, at the time such taxes are paid, an
amount equal to the amount, if any, by which the Reserved Amount for
such taxes exceeds the amount of such taxes actually paid shall
constitute "Net Cash Proceeds" of the type for which such taxes were
reserved for all purposes hereunder. For purposes of this definition,
proceeds of ordinary course sales of equipment in an amount not to
exceed $250,000 in the aggregate in any Fiscal Year shall not be Net
Cash Proceeds to the extent that such proceeds are invested in
replacement equipment within 90 days.
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind,
including, without limitation, any liability of such Person on any
claim, whether or not the right of any creditor to payment in respect
of such claim is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, disputed, undisputed, legal, equitable,
secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section
6.01(f). Without limiting the generality of the foregoing, the
Obligations of any Loan Party under the Loan Documents include (a)
the obligation to pay principal, interest, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of
any of the foregoing that any Lender, in its reasonable discretion,
may elect to pay or advance on behalf of such Loan Party.
"Open Year" has the meaning specified in Section 4.01(q)(iii).
"Other Taxes" has the meaning specified in Section 2.09(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Holders" means Cerberus Capital Management, L.P. and
any of its Affiliates, any investment fund or account managed by
Cerberus Capital Management L.P. or any Affiliate thereof and Xxxxxx
Xxxxxxx & Co., Incorporated, jointly and severally.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (i) Liens for taxes, assessments,
governmental charges or claims that are not yet due and payable or
are being contested in good faith by appropriate legal proceedings
promptly instituted and diligently conducted and in each case, for
which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made; (ii) statutory
and common law Liens of landlords and carriers, warehousemen,
mechanics, attorneys, suppliers, materialmen, repairmen or other
similar Liens arising in the ordinary course of business, unexercised
rights of set off, in each case with respect to amounts not yet
delinquent or that are bonded or being contested in good faith by
appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been
made; (iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or
deposits made to secure the performance of tenders, bids, leases,
licenses, statutory or regulatory obligations, bankers' acceptances,
surety, indemnity, performance and appeal bonds, trade or government
contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed
money); (v) easements (including reciprocal easement agreements),
rights-of-way, municipal, building and zoning ordinances and similar
charges, utility agreements, covenants, reservations, restrictions,
encroachments, charges, encumbrances, title defects or other
irregularities that were not incurred in connection with and do not
secure Debt and do not materially interfere with the ordinary course
of business of any Loan Party or any of its Subsidiaries; (vi)
leases, subleases, licenses and rights-of-use granted to others;
(vii) any interest or title of a lessor in property subject to any
Capitalized Lease or operating lease; (viii) Liens arising from
filing Uniform Commercial Code financing statements regarding leases
or installment sales; (ix) Liens on property of, or on shares of
capital stock or Debt, any Person existing at the time such Person
becomes, or becomes a part of, any Subsidiary of any Loan Party;
provided that such Liens do not extend to or cover any property or
assets of any Loan Party or any Subsidiary of any Loan Party of other
than the property or assets acquired; (x) Liens in favor of any Loan
Party or any Subsidiary of any Loan Party; (xi) Liens arising from
the rendering of a final judgment or order against any Loan Party or
any Subsidiary of any Loan Party that does not give rise to an Event
of Default; (xii) Liens securing reimbursement obligations with
respect to letters of credit that encumber documents and other
property relating to such letters of credit and the products and
proceeds thereof; (xiii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (xiv) Liens
arising out of conditional sale, installment sales, title retention,
consignment or similar arrangements for the sale of goods entered
into by any Loan Party or any of its Subsidiaries in the ordinary
course of business; (xv) Liens securing the Subordinated Cerberus
Notes; (xvi) Liens specified as in existence on the effective date of
the Plan of Reorganization as set forth on Schedule 4.01(t) hereto;
and (xvii) any escrow, holdback, earn-out or similar arrangement not
otherwise prohibited under this Agreement in connection with any
sale, lease, transfer or other disposition of any asset not otherwise
prohibited hereunder.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Plan Modification" has the meaning specified in the
Preliminary Statements hereto.
"Plan of Reorganization" means the Second Amended Joint Plan of
Reorganization filed by the Borrower with the Bankruptcy Court, dated
April 3, 2002, and as modified by the Plan Modification.
"Pledged Debt" has the meaning specified in the Security
Agreement.
"Pledged Equity" has the meaning specified in the Security
Agreement.
"Preferred Interests" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon
any distribution of such Person's property and assets, whether by
dividend or upon liquidation.
"Prepayment Amount" has the meaning specified in Section 5.03(a).
"Prepayment Date" has the meaning specified in Section 5.03(a).
"Prepayment Notice" has the meaning specified in Section 5.03(a).
"Properties" shall mean those properties listed on Schedule 4.01(u)
hereto.
"PUC" means any state governmental authority having utility or
telecommunications authority over any Borrower or any System.
"Redeemable" means, with respect to any Equity Interest, any
Debt or any other right or Obligation, any such Equity Interest,
Debt, right or Obligation that (a) the issuer has undertaken to
redeem at a fixed or determinable date or dates, whether by operation
of a sinking fund or otherwise, or upon the occurrence of a condition
not solely within the control of the issuer or (b) is redeemable at
the option of the holder.
"Register" has the meaning specified in Section 8.07(d).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Related Documents" means the Subordinated Cerberus Notes.
"Required Lenders" means, at any time, Lenders owed or holding
at least a majority in interest of the aggregate principal amount of
the Term Advances outstanding at such time; provided, however, that
if any Lender shall be a Defaulting Lender at such time, there shall
be excluded from the determination of Required Lenders at such time
the aggregate principal amount of the Term Advances owing to such
Lender (in its capacity as a Lender) and outstanding at such time.
"Responsible Officer" means any officer of any Loan Party or
any of its Subsidiaries.
"Restructuring Transactions" has the meaning specified in the
Plan Modification.
"Revenue" means, for any period, Consolidated revenues of the
Borrower and its Subsidiaries for such period.
"Secured Hedge Agreement " means any Hedge Agreement required
or permitted under Article V that is entered into between the
Borrower and any Hedge Bank.
"Secured Obligations" has the meaning specified in Section 2 of
the Security Agreement.
"Secured Parties" means the Agents, the Lenders and the Hedge
Banks.
"Security Agreement" has the meaning specified in Section
3.01(a)(ii).
"Single Employer Plan" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of any Loan Party or any ERISA Affiliate and no Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have
liability under Section 4069 of ERISA in the event such plan has been
or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such
Person's ability to pay such debts and liabilities as they mature
(assuming and believing that such Person is able to refinance its
long term indebtedness on acceptable terms as such indebtedness
matures) and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction,
for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall
be computed as the amount that, in the light of all the facts and
circumstances known to such Person at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Subordinated Cerberus Notes" means the $25 million secured
subordinated notes and other securities issued pursuant to the terms
thereof (including any guarantees of each thereof) issued by the
Borrower to Xxxxxxxxx L.L.C. and Xxxxxx Xxxxxxx & Co., Incorporated
evidenced by documentation in form and substance satisfactory to the
Administrative Agent.
"Subordinated Debt" means any Debt of any Loan Party that (i)
is unsecured, (ii) subordinated in all respects to the Obligations of
such Loan Party under the Loan Documents on, and that otherwise
contains, terms and conditions satisfactory to the Required Lenders,
(iii) has no principal payments scheduled or otherwise payable prior
to the final maturity of the Term Advances and (iv) requires the
consent of the Required Lenders for any cash payments of interest.
"Subordination Agreement" has the meaning specified in Section
3.01(l).
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital
stock having ordinary voting power to elect a majority of the Board
of Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership, joint
venture or limited liability company or (c) the beneficial interest
in such trust or estate is at the time directly or indirectly owned
or controlled by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guarantors" means the Subsidiaries of the Borrower
listed on Schedule II hereto and each other Subsidiary of the
Borrower that shall be required to execute and deliver a guaranty
pursuant to Section 5.01(j).
"Subsidiary Guaranty" has the meaning specified in Section
3.01(a)(iii).
"System" means each data communications, telecommunications or
information system (including, without limitation, any voice, video
transmission, data or Internet services), and any related, ancillary
or complementary services, owned by the Borrower or its Subsidiaries
and all replacements, enhancements or additions thereto.
"Tax Sharing Agreement" means the Tax Sharing Agreement between
the Borrower, ICG Services, Inc., ICG NetAhead, Inc. and ICG
Equipment, Inc. dated as of August 9, 1999.
"Taxes" has the meaning specified in Section 2.09(a).
"Term Advance" has the meaning specified in Section 2.01.
"Term Note" means a promissory note of the Borrower payable to
the order of any Lender in substantially the form of Exhibit A
hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term Advance owing to such Lender, as amended.
"Transaction" means the substantial consummation of the Plan of
Reorganization.
"Transaction Documents" means, collectively, the Loan Documents
and the Related Documents.
"Type" refers to the distinction between Term Advances bearing
interest at the Base Rate and Term Advances bearing interest at the
Eurodollar Rate.
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing
similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1)
of ERISA, that is maintained for employees of any Loan Party or in
respect of which any Loan Party could have liability.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. COMPUTATION OF TIME PERIODS; OTHER DEFINITIONAL
PROVISIONS. In this Agreement and the other Loan Documents in the
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding". References in the Loan Documents to
any agreement or contract "as amended" shall mean and be a reference to
such agreement or contract as amended, amended and restated, supplemented
or otherwise modified from time to time in accordance with its terms.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(g)("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE TERM ADVANCES
SECTION 2.01. THE TERM ADVANCES. Upon the Closing Date and
subject to the satisfaction of the conditions set forth in Section 3.03,
each Existing Advance owing to a Lender shall become a "Term Advance" for
all purposes hereunder and under the other Loan Documents. The Term Advance
owing to each Initial Lender shall be in a principal amount equal to the
dollar amount set forth opposite such Initial Lender's name on Schedule I
hereto.
SECTION 2.02. REPAYMENT OF TERM ADVANCES. On each payment date
specified below, the Borrower shall repay to the Administrative Agent for
the ratable account of the Lenders an aggregate outstanding principal
amount of the Term Advances (which amounts shall be reduced as a result of
the application of prepayments in accordance with the order of priority set
forth in Section 2.03), equal to the amount set forth below for such
payment date:
Payment Date Principal Payment
------------ -----------------
Effective Date $25,000,000
8/31/02 $0
11/30/02 $0
2/28/03 $0
5/31/03 $0
8/31/03 $1,489,000
11/30/03 $1,489,000
2/28/04 $1,489,000
5/31/04 $1,489,000
8/31/04 $2,234,000
11/30/04 $2,234,000
2/28/05 $2,234,000
5/31/05 $2,234,000
5/31/05 $44,681,934.83
provided, however, that in the event the Borrower does not prepay $7.2
million of the Term Advances from the sale of Identified Assets by the
first anniversary of the Effective Date, the Borrower shall pre-pay the
principal amount of the Term Advances by an additional $375,000 on each of
8/31/03, 11/30/03, 2/28/04 and 5/31/04.
SECTION 2.03. PREPAYMENTS. (a) Optional. The Borrower may, upon
at least three Business Days' notice to the Administrative Agent as set
forth in Section 5.03(a)(ii) stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding aggregate principal amount of the
Term Advances in whole or ratably in part, together with accrued interest
to the date of such prepayment on the aggregate principal amount prepaid;
provided, however, that (x) each partial prepayment shall be in an
aggregate principal amount of $500,000 or an integral multiple of $500,000
in excess thereof; and (y) if any prepayment of a Eurodollar Rate Advance
is made on a date other than the last day of an Interest Period for such
Term Advance, the Borrower shall also pay any amounts owing pursuant to
Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, within three Business
Days of the date of receipt of Net Cash Proceeds by the Borrower or any of
its Subsidiaries, prepay an aggregate principal amount of the Term Advances
in the percentage of the amount of such Net Cash Proceeds as hereinafter
set forth: (A) 100% of the Net Cash Proceeds from the sale of the
Identified Assets up to a maximum amount of $7.2 million, (B) 100% of the
Net Cash Proceeds from the sale of other assets of the Borrower and its
Subsidiaries (excluding sales of Inventory or services in the ordinary
course of business but including any non-ordinary course IRUs), (C) 100% of
the Net Cash Proceeds from Extraordinary Receipts, (D) 100% of the Net Cash
Proceeds from the issuance of additional Debt (other than Subordinated
Debt) permitted under the Loan Documents (other than Debt pursuant to
Section 5.02(b)), (E) 50% of the Net Cash Proceeds from the issuance of
Subordinated Debt in excess of $25,000,000 (other than the Subordinated
Cerberus Notes), and (F) 50% of the Net Cash Proceeds from the issuance of
equity. Any such prepayment (other than one-half of the Net Cash Proceeds
described in clause (B) above) shall be applied to prepay the Term Advances
in inverse order of maturity and any prepayments made with the remaining
one-half of the Net Cash Proceeds described in clause (B) above shall be
applied to ratably prepay the remaining scheduled amortization payments for
the Term Advances. For purposes hereof, non-ordinary course IRUs shall
include IRUs for a term in excess of 10 years for which 75% or more of the
aggregate dollar amount of lease payments are to be paid within the first
35% of such lease term.
(ii) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the
principal amount prepaid. If any payment of Eurodollar Rate Advances
otherwise required to be made under this Section 2.03(b) would be made on a
day other than the last day of the applicable Interest Period therefor, the
Borrower may direct the Administrative Agent to (and if so directed, the
Administrative Agent shall) deposit such payment in the Collateral Account
until the last day of the applicable Interest Period at which time the
Administrative Agent shall apply the amount of such payment to the
prepayment of such Term Advances; provided, however, that such Term
Advances shall continue to bear interest as set forth in Section 2.04 until
the last day of the applicable Interest Period therefor. Notwithstanding
the foregoing, to the extent any such prepayments are required to be made
prior to the Effective Date, such prepayments shall be made on the
Effective Date, together with interest, as more fully set forth in the Plan
of Reorganization.
SECTION 2.04. INTEREST. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Term Advance
owing to each Lender from the date of such Term Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Term
Advance is a Base Rate Advance, a rate per annum equal at all
times to the sum of (A) the Base Rate in effect from time to time
plus (B) the Applicable Margin in effect from time to time,
payable in arrears quarterly on the last day of each quarter
during such periods and on the date such Base Rate Advance shall
be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as
such Term Advance is a Eurodollar Rate Advance, a rate per annum
equal at all times during each Interest Period for such Term
Advance to the sum of (A) the Eurodollar Rate for such Interest
Period for such Term Advance plus (B) the Applicable Margin in
effect from time to time, payable in arrears on the last day of
such Interest Period and, if such Interest Period has a duration
of more than three months, on each day that occurs during such
Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of a payment or bankruptcy Default or any Event of Default, the
Borrower shall pay interest on (i) the unpaid principal amount of each Term
Advance owing to each Lender, payable in arrears monthly on the last day of
each month and on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid on such Term Advance
pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent
permitted by law, the amount of any interest, fee or other amount payable
under the Loan Documents that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable in
arrears on the date such amount shall be paid in full and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid, in the case of interest, on the Type of Term Advance
on which such interest has accrued pursuant to clause (a)(i) or (a)(ii)
above and, in all other cases, on Base Rate Advances pursuant to clause
(a)(i) above.
(c) Notice of Interest Period and Interest Rate. Promptly after
receipt of a notice of Conversion pursuant to Section 2.06 or a notice of
selection of an Interest Period pursuant to the terms of the definition of
"Interest Period", the Administrative Agent shall give notice to the
Borrower and each Lender of the applicable Interest Period and the
applicable interest rate determined by the Administrative Agent for
purposes of clause (a)(i) or (a)(ii) above.
(d) Interest Prior to Effective Date. Interest accruing
hereunder during the period commencing on the Closing Date until the
Effective Date shall be payable net of interest payable under the Existing
Credit Agreement and shall be paid by the Borrower to the Administrative
Agent on the Effective Date as more fully set forth in the Plan of
Reorganization.
SECTION 2.05. FEES (a) Facility Fee. The Borrower shall pay on
the Effective Date to the Administrative Agent for the account of the
Lenders a facility fee equal to 2.5% of the Initial Principal Amount.
(b) Agents' Fees. The Borrower shall pay to each Agent for its
own account such fees as may from time to time be agreed between the
Borrower and such Agent in the Fee Letters.
(c) Payment of Fees on the Effective Date. Fees due and payable
under this Section 2.05 shall be paid by the Borrower on the Effective
Date, but shall accrue interest as if payable on the Closing Date, as more
fully set forth in the Plan of Reorganization.
SECTION 2.06. CONVERSION OF TERM ADVANCES. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Administrative
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the date of the proposed Conversion and subject to the
provisions of Section 2.04 and Section 2.07, Convert all or any portion of
the Term Advances of one Type into Term Advances of the other Type;
provided, however, that any Conversion of Eurodollar Rate Advances into
Base Rate Advances shall be made only on the last day of an Interest Period
for such Eurodollar Rate Advances, and each Conversion of Term Advances
shall be made ratably among the Lenders in accordance with their pro rata
share of the Term Advances. Each such notice of Conversion shall, within
the restrictions specified above, specify (i) the date of such Conversion,
(ii) the Term Advances to be Converted and (iii) if such Conversion is into
Eurodollar Rate Advances, the duration of the initial Interest Period for
such Term Advances. Each notice of Conversion shall be irrevocable and
binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate
unpaid principal amount of Eurodollar Rate Advances with respect to any
Interest Period shall be reduced, by payment or prepayment or otherwise, to
less than $1,000,000, such Term Advances shall automatically Convert into
Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of
any Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section
1.01, the Administrative Agent will forthwith so notify the Borrower and
the Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a one month Eurodollar Rate Advance.
(iii) Upon the occurrence and during the continuance of
any Default, (x) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (y) the obligation of the Lenders to make, or to Convert
Term Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.07. INCREASED COSTS, ETC. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to any Lender of
agreeing to make or of making, funding or maintaining Eurodollar Rate
Advances (excluding, for purposes of this Section 2.07, any such increased
costs resulting from (x) Taxes or Other Taxes (as to which Section 2.09
shall govern) and (y) changes in the basis of taxation of overall net
income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Lender is organized or
has its Applicable Lending Office or is otherwise doing business (or any
political subdivision thereof)), then the Borrower shall from time to time,
upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for
such increased cost; provided, however, that a Lender claiming additional
amounts under this Section 2.07(a) agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions)
to designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such
increased cost that may thereafter accrue and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such Lender. A
certificate as to the amount of such increased cost, and the details of the
computation thereof, submitted to the Borrower by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall be any
increase in the amount of capital required or expected to be maintained by
any Lender or any corporation controlling such Lender as a result of or
based upon the existence of such Lender's pro rata share of the Term
Advances, then, upon demand by such Lender or such corporation (with a copy
of such demand to the Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the
existence of such Lender's pro rata share of the Term Advances hereunder. A
certificate as to such amounts, and the details of the computation thereof,
submitted to the Borrower by such Lender shall be conclusive and binding
for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, Lenders
owed at least 50% of the then aggregate unpaid principal amount thereof
notify the Administrative Agent that the Eurodollar Rate for any Interest
Period for such Term Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon (i) each such Eurodollar
Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Term Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall notify the Borrower that such Lenders have determined that the
circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for any Lender or
its Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such
Lender to the Borrower through the Administrative Agent, (i) each
Eurodollar Rate Advance of such Lender will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Term Advances into, Eurodollar Rate Advances
shall be suspended until the Administrative Agent shall notify the Borrower
that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation
would allow such Lender or its Eurodollar Lending Office to continue to
perform its obligations to make Eurodollar Rate Advances or to continue to
fund or maintain Eurodollar Rate Advances and would not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender.
SECTION 2.08. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall
make each payment hereunder and under the Term Notes, irrespective of any
right of counterclaim or set-off (except as otherwise provided in Section
2.11), not later than 11:00 A.M. (New York City time) on the day when due
in U.S. dollars to the Administrative Agent at the Administrative Agent's
Account in same day funds, with payments being received by the
Administrative Agent after such time being deemed to have been received on
the next succeeding Business Day. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, fees or any other Obligation
then payable hereunder and under the Term Notes to more than one Lender, to
such Lenders for the account of their respective Applicable Lending Offices
ratably in accordance with the amounts of such respective Obligations then
payable to such Lenders and (ii) if such payment by the Borrower is in
respect of any Obligation then payable hereunder to one Lender, to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 8.07(d), from and after the
effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Term Notes in respect of
the interest assigned thereby to the Lender assignee thereunder, and the
parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date
directly between themselves.
(b) The Borrower hereby authorizes each Lender and each of its
Affiliates, if and to the extent payment owed to such Lender is not made
when due hereunder or, in the case of a Lender, under the Term Note held by
such Lender, to charge from time to time, to the fullest extent permitted
by law, against any or all of the Borrower's accounts with such Lender or
such Affiliate any amount so due.
(c) All computations of interest and of fees shall be made by
the Administrative Agent on the basis of a year of 360 days, in each case
for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of
an interest rate, fee or commission hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Term Notes
shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to any
Lender hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each such
Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent the Borrower shall not have so made such payment in
full to the Administrative Agent, each such Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for application
to the Obligations under the Loan Documents under circumstances for which
the Loan Documents do not specify the Term Advances to which, or the manner
in which, such funds are to be applied, the Administrative Agent may, but
shall not be obligated to, elect to distribute such funds to each Lender
ratably in accordance with such Lender's proportionate share of the
principal amount of all outstanding Term Advances, in repayment or
prepayment of such of the outstanding Term Advances or other Obligations
owed to such Lender, and for application to such principal installments, as
the Administrative Agent shall direct.
(g) Notwithstanding anything contained herein to the contrary,
to the extent any payment would otherwise be required to be made under this
Agreement (including, without limitation, this Section 2.08, Section 2.07
or Section 2.09) prior to the Effective Date, any such payment shall be
made on the Effective Date, with interest, as more fully set forth in the
Plan of Reorganization.
SECTION 2.09. TAXES. (a) Except as otherwise provided in this
Section 2.09, any and all payments by the Borrower hereunder or under the
Term Notes shall be made, in accordance with Section 2.08, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, (i) in the case of each Lender and each Agent,
taxes that are imposed on its overall net income by the United States and
taxes that are imposed on its overall net income (and any franchise taxes)
by the state or foreign jurisdiction under the laws of which such Lender or
such Agent, as the case may be, is organized or is otherwise doing business
or any political subdivision thereof and, (ii) in the case of each Lender,
taxes that are imposed on its overall net income (and any franchise taxes)
by the state or foreign jurisdiction of such Lender's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Term Notes being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under any Term
Note to any Lender or any Agent, (i) the sum payable by the Borrower shall,
except as otherwise provided in this Section 2.09, be increased as may be
necessary so that after the Borrower and the Administrative Agent have made
all required deductions (including deductions applicable to additional sums
payable under this Section 2.09) such Lender or such Agent, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make all such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property, intangible, mortgage recording or
similar taxes, charges or levies that arise from any payment made hereunder
or under the Term Notes or from the execution, delivery or registration of,
performance under, or otherwise with respect to, this Agreement, or the
Term Notes or the Mortgages (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and each Agent for
and hold them harmless against the full amount of Taxes and Other Taxes,
and for the full amount of taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 2.09, imposed on or paid by such Lender
or such Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date
such Lender or such Agent (as the case may be) makes written demand
therefor. Any such demand shall show in reasonable detail the amount
payable and the calculations used to determine such amount.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall use its best efforts to furnish to the Administrative Agent,
at its address referred to in Section 8.02, the original or a certified
copy of a receipt evidencing such payment or other evidence of payment
reasonably satisfactory to the Administrative Agent. In the case of any
payment hereunder or under the Term Notes by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf
of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the
Borrower shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to
the Administrative Agent stating that such payment is exempt from Taxes.
For purposes of subsections (d) and (e) of this Section 2.09, the terms
"United States" and "United States person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender and Agent organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date on
which it becomes a Lender or Agent and from time to time thereafter as
requested in writing by the Borrower (but only so long thereafter as such
Lender or Agent remains lawfully able to do so), provide each of the
Administrative Agent and the Borrower with two original Internal Revenue
Service forms W-8ECI, W-8IMY (together with a withholding statement
satisfying the requirements of Treasury Regulation ss. 1.1441-1(e) (3)(iv)(C))
or W-8BEN (and, if eligible to do so, a certificate representing that such
Lender is not a "bank" for purposes of Section 881(c) of the Internal
Revenue Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is
not a controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Internal Revenue Code)), as
appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that such Lender or Agent is exempt from or
entitled to a reduced rate of United States withholding tax on payments
pursuant to this Agreement or the Term Notes. If the forms provided by a
Lender or Agent at the time such Lender or Agent first becomes a party to
this Agreement indicate a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender or Agent provides the appropriate
forms certifying that a lesser rate applies, whereupon withholding tax at
such lesser rate only shall be considered excluded from Taxes; provided,
however, that if a change in applicable law increases such rate, the
increase only shall not be excluded from Taxes; and provided further,
however that if, at the effective date of the Assignment and Acceptance
pursuant to which a Lender becomes a party to this Agreement, the Lender
assignor was entitled to payments under subsection (a) of this Section 2.09
in respect of United States withholding tax with respect to interest paid
at such date, then, to such extent, the term Taxes shall include (in
addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if
any, applicable with respect to the Lender assignee on such date. If any
form or document referred to in this subsection (e) requires the disclosure
of information, other than information necessary to compute the tax payable
and information required on the date hereof by Internal Revenue Service
form W-8ECI, W-8IMY or W-8BEN (or the related certificate described above)
or W-9, that the applicable Lender or Agent reasonably considers to be
confidential, such Person shall give notice thereof to the Borrower and
shall not be obligated to include in such form or document such
confidential information. Solely for purposes of complying with information
reporting and backup withholding requirements under the Internal Revenue
Code, each Lender and Agent that is a "United States person" as defined
under the Internal Revenue Code, other than a corporation, shall provide
each of the Administrative Agent and the Borrower with two original
Internal Revenue Service forms W-9 at the times and in the manner described
above with respect to the other Internal Revenue Service forms.
(f) For any period with respect to which a Lender or Agent has
failed to provide the Borrower with the appropriate form described in
subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under subsection (e)
above), such Lender or Agent shall not be entitled to increased payment or
indemnification under subsection (a) or (c) of this Section 2.09 with
respect to Taxes imposed by the United States by reason of such failure;
provided, however, that should a Lender or Agent become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Lender shall reasonably request to assist
such Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant
to this Section 2.09 agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a
change would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender, be disadvantageous to such Lender.
SECTION 2.10. SHARING OF PAYMENTS, ETC. If any Lender shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, other than as a result of
an assignment pursuant to Section 8.07) (a) on account of Obligations due
and payable to such Lender hereunder and under the Term Notes at such time
in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations due and payable to such Lender at such time to
(ii) the aggregate amount of the Obligations due and payable to all Lenders
hereunder and under the Term Notes at such time) of payments on account of
the Obligations due and payable to all Lenders hereunder and under the Term
Notes at such time obtained by all the Lenders at such time or (b) on
account of Obligations owing (but not due and payable) to such Lender
hereunder and under the Term Notes at such time in excess of its ratable
share (according to the proportion of (i) the amount of such Obligations
owing to such Lender at such time to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all Lenders hereunder and
under the Term Notes at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lenders hereunder and
under the Term Notes at such time obtained by all of the Lenders at such
time, such Lender shall forthwith purchase from the other Lenders such
interests or participating interests in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each
other Lender shall be rescinded and such other Lender shall repay to the
purchasing Lender the purchase price to the extent of such Lender's ratable
share (according to the proportion of (i) the purchase price paid to such
Lender to (ii) the aggregate purchase price paid to all Lenders) of such
recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such other Lender's
required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing an interest or participating interest
from another Lender pursuant to this Section 2.10 may, to the fullest
extent permitted by law, exercise all its rights of payment (including the
right of set-off) with respect to such interest or participating interest,
as the case may be, as fully as if such Lender were the direct creditor of
the Borrower in the amount of such interest or participating interest, as
the case may be.
SECTION 2.11. DEFAULTING LENDERS. (a) In the event that, at any
one time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Amount and (iii) the Borrower shall make any
payment hereunder or under any other Loan Document to the Administrative
Agent for the account of such Defaulting Lender, then the Administrative
Agent may, on its behalf or on behalf of such other Agents or such other
Lenders and to the fullest extent permitted by applicable law, apply at
such time the amount so paid by the Borrower to or for the account of such
Defaulting Lender to the payment of each such Defaulted Amount to the
extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any
such Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this Agreement
and the other Loan Documents payment, to such extent, of such Defaulted
Amount on such date. Any such amount so applied by the Administrative Agent
shall be retained by the Administrative Agent or distributed by the
Administrative Agent to such other Agents or such other Lenders, ratably in
accordance with the respective portions of such Defaulted Amounts payable
at such time to the Administrative Agent, such other Agents and such other
Lenders and, if the amount of such payment made by the Borrower shall at
such time be insufficient to pay all Defaulted Amounts owing at such time
to the Administrative Agent, such other Agents and such other Lenders, in
the following order of priority:
(i) first, to the Agents for any Defaulted Amounts then
owing to the Agents, ratably in accordance with such respective
Defaulted Amounts then owing to the Agents; and
(ii) second, to any other Lenders for any Defaulted
Amounts then owing to such other Lenders, ratably in accordance
with such respective Defaulted Amounts then owing to such other
Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by
the Administrative Agent pursuant to this subsection (a), shall be applied
by the Administrative Agent as specified in subsection (b) of this Section 2.11.
(b) In the event that, at any one time, (i) any Lender shall be
a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Amount and (iii) the Borrower, any Agent or any other Lender shall be
required to pay or distribute any amount hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower
or such Agent or such other Lender shall pay such amount to the
Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent
shall, to the fullest extent permitted by applicable law, hold in escrow
such amount otherwise held by it. Any funds held by the Administrative
Agent in escrow under this subsection (b) shall be deposited by the
Administrative Agent in such account as the Administrative Agent shall
designate in writing to the Borrower and the Defaulting Lender, in the name
and under the control of the Administrative Agent, but subject to the
provisions of this subsection (b). The terms applicable to such account,
including the rate of interest payable with respect to the credit balance
of such account from time to time, shall be the Administrative Agent's
standard terms applicable to escrow accounts maintained with it. Any
interest credited to such account from time to time shall be held by the
Administrative Agent in escrow under, and applied by the Administrative
Agent from time to time in accordance with the provisions of, this
subsection (b). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to
time to the extent necessary to pay any amount payable by such Defaulting
Lender hereunder and under the other Loan Documents to the Administrative
Agent or any other Lender, as and when such Term Advances or amounts are
required to be made or paid and, if the amount so held in escrow shall at
any time be insufficient to make and pay all such amounts required to be
made or paid at such time, in the following order of priority:
(i) first, to the Agents for any amounts then due and
payable by such Defaulting Lender to the Agents hereunder, ratably
in accordance with such amounts then due and payable to the
Agents; and
(ii) second, to any other Lenders for any amount then due
and payable by such Defaulting Lender to such other Lenders
hereunder, ratably in accordance with such respective amounts then
due and payable to such other Lenders.
In the event that any Lender that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender shall be
distributed by the Administrative Agent to such Lender and applied by such
Lender to the Obligations owing to such Lender at such time under this
Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(c) The rights and remedies against a Defaulting Lender under
this Section 2.11 are in addition to other rights and remedies that any
Agent or any Lender may have against such Defaulting Lender with respect to
any Defaulted Amount.
(d) Notwithstanding anything in this Section 2.11 to the
contrary, upon any payment by the Borrower hereunder or under any other
Loan Documents for the account of a Defaulting Lender, the Administrative
Agent and the Defaulting Lender shall treat such payment as having been
applied in the manner in which the Borrower intended for purposes of
calculating interest owed by the Borrower.
ARTICLE III
CONDITIONS OF CLOSING DATE AND EFFECTIVE DATE
SECTION 3.01. CONDITIONS PRECEDENT TO CLOSING DATE. Subject to
the satisfaction of the conditions set forth in Section 3.03, this
Agreement shall be deemed to be effective as of the date (the "Closing
Date") on which the following conditions precedent shall have been
satisfied:
(a) The Administrative Agent shall have received on or before
the Closing Date the following, each dated the Effective Date (unless
otherwise specified), in form and substance satisfactory to the
Lenders (unless otherwise specified) and (except for the Term Notes)
in sufficient copies for each Lender:
(i) The Term Notes payable to each Lender or its
registered assigns which requests a Term Note .
(ii) A security agreement in substantially the form of
Exhibit C hereto (together with each other security agreement
and security agreement supplement delivered pursuant to Section
5.01(j), in each case as amended, the "Security Agreement"),
duly executed by each Loan Party thereto, together with;
(A) proper financing statements to be duly filed on
or before the Effective Date under the Uniform Commercial
Code of all jurisdictions that the Administrative Agent
may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests
created under the Security Agreement, covering the
Collateral described in the Security Agreement,
(B) evidence of the insurance required by the terms
of the Security Agreement,
(C) the Intellectual Property Security Agreement
referred to in the Security Agreement, in substantially
the form of Exhibit F to the Security Agreement, duly
executed by each Grantor, and
(D) the Consents to Assignment of Letter of Credit
Rights referred to in the Security Agreement, in
substantially the form of Exhibit G to the Security
Agreement, duly executed by the issuing bank and
nominated person party thereto and acknowledged and
agreed to by the Grantor beneficiary.
(iii) A guaranty in substantially the form of Exhibit D
hereto (together with each other guaranty and guaranty
supplement delivered pursuant to Section 5.01(j), in each case
as amended, the "Subsidiary Guaranty"), duly executed by each
Subsidiary Guarantor.
(iv) Certified copies of the resolutions of the Board of
Directors of each Loan Party approving the Transaction and each
Transaction Document to which it is or is to be a party, and of
all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if
any, with respect to the Transaction and each Transaction
Document to which it is or is to be a party (except for the
Plan Modification).
(v) To the extent such Secretary of State customarily
provides such certificates, a copy of a certificate of the
Secretary of State of the jurisdiction of incorporation of each
Loan Party, dated reasonably near the Closing Date, certifying
(A) as to a true and correct copy of the charter of such Loan
Party and each amendment thereto on file in such Secretary's
office and (B) that (1) such amendments are the only amendments
to such Loan Party's charter on file in such Secretary's office
and (2) such Loan Party has paid all franchise taxes, if any,
to the date of such certificate and (C) such Loan Party is duly
incorporated and in good standing or presently subsisting under
the laws of the State of the jurisdiction of its incorporation.
(vi) To the extent such Secretary of State customarily
provides such certificates, a copy of a certificate of the
Secretary of State of each of California, Georgia, North
Carolina and Ohio for ICG Telecom Group, Inc. and Texas for ICG
ChoiceCom Management, LLC and ICG ChoiceCom, L.P., dated
reasonably near the Closing Date, stating that each Loan Party
is duly qualified and in good standing as a foreign corporation
in such State and has filed all annual reports required to be
filed to the date of such certificate.
(vii) A certificate of each Loan Party, signed on behalf
of such Loan Party by its President or a Vice President (the
statements made in which certificate shall be true on and as of
the Closing Date), certifying as to (A) the truth of the
representations and warranties contained in the Loan Documents
as though made on and as of the Closing Date (except for the
representations and warranties set forth in Section 4.01(m))and
(B) the absence of any event occurring and continuing, or
resulting from the transactions contemplated by this Agreement,
that constitutes a Default.
(viii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to
sign each Transaction Document to which it is or is to be a
party and the other documents to be delivered hereunder and
thereunder (the statements made in which certificate shall be
true on and as of the Closing Date) (A) the absence of any
amendments to the charter of such Loan Party since the date of
the Secretary of State's certificate referred to in Section
3.01(a)(v), (B) a true and correct copy of the bylaws of such
Loan Party as in effect on the date on which the resolutions
referred to in Section 3.01(a)(iv) were adopted and on the
Closing Date and (C) the due incorporation and good standing or
valid existence of such Loan Party as a corporation organized
under the laws of the jurisdiction of its incorporation, and
the absence of any proceeding for the dissolution or
liquidation of such Loan Party.
(ix) Certified copies of each of the Related Documents,
duly executed by the parties thereto and in form and substance
satisfactory to the Lenders, together with all agreements,
instruments and other documents delivered in connection
therewith as the Administrative Agent shall request.
(x) Evidence of insurance naming the Collateral Agent as
additional insured and loss payee with such responsible and
reputable insurance companies or associations, and in such
amounts and covering such risks, as is satisfactory to the
Collateral Agent.
(xi) Certified copies of all Material Contracts of each
Loan Party and its Subsidiaries as the Administrative Agent
shall request except where prohibited by applicable
confidentiality agreements.
(b) The Lenders shall be satisfied with the corporate and legal
structure and capitalization of each Loan Party and each of its
Subsidiaries the Equity Interests in which Subsidiaries is being
pledged pursuant to the Loan Documents, including the terms and
conditions of the charter, bylaws and each class of Equity Interest
in each Loan Party and each such Subsidiary and of each agreement or
instrument relating to such structure or capitalization.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of any Transaction Document or the
consummation of the transactions contemplated thereby, other than the
Cases and the Confirmation Order (including the Plan Modification and
the approval thereof by the Bankruptcy Court).
(d) All governmental and third party consents and approvals
necessary in connection with the Transaction Documents (except for
the Plan Modification) shall have been obtained (without the
imposition of any conditions that are not acceptable to the Lenders)
and shall remain in effect; all applicable waiting (except with
respect to approval of the Plan Modification and the Confirmation
Order) periods in connection with the transactions contemplated by
the Transaction Documents shall have expired without any action being
taken by any competent authority, and no law or regulation shall be
applicable in the judgment of the Lenders, in each case that
restrains, prevents or imposes materially adverse conditions upon the
Transaction or the rights of the Loan Parties or their Subsidiaries
freely to transfer or otherwise dispose of, or to create any Lien on,
any properties now owned or hereafter acquired by any of them.
(e) The Related Documents shall be in full force and effect
subject only to the conditions contained in Section 3A of the Note
and Warrant Purchase Agreement as provided to the Administrative
Agent pursuant to Section 3.01(a)(ix) hereof.
(f) The Administrative Agent shall have received copies of the
Escrow Agreement duly executed by the parties thereto in form and
substance satisfactory to the Administrative Agent and the Escrowed
Property, (including $25,000,000 in cash) shall have been deposited
into the escrow account provided for therein.
(g) The holders of the Subordinated Cerberus Notes (and any
other Subordinated Debt) shall have entered into a subordination
agreement (the "Subordination Agreement") in substantially the form
of Exhibit H hereto with respect to any Debt relating to the
Subordinated Cerberus Notes.
SECTION 3.02. DETERMINATIONS UNDER SECTION 3.01. (a) For
purposes of determining compliance with the conditions specified in Section
3.01, each Lender and each Agent shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lenders and the Agents upon delivery by each such
Lender or Agent of its signature pages into escrow as provided in Section
3.02(b).
(b) Each of the Lenders and the Agents hereby appoints the
Administrative Agent as escrow agent to hold the signature page to this
Agreement of each such Lender and Agent in trust and the Administrative
Agent hereby accepts such appointment. The Administrative Agent agrees to
hold such signature pages in escrow until the conditions set forth in
Section 3.03 have been satisfied. Upon the satisfaction of the conditions
set forth in Section 3.03, the Administrative Agent shall release such
signature pages to the Borrower and agrees to provide prompt notice thereof
to the Lenders and Agents. If the conditions set forth in Section 3.03 are
not satisfied by the Deadline Date, the Administrative Agent shall return
each signature page to the appropriate Lender or Agent.
(c) The Borrower hereby appoints the Administrative Agent as
escrow agent to hold the items delivered pursuant to Section 3.01 or, prior
to the Effective Date, Section 3.03 (other than any items that need to be
filed to establish perfection) in trust and the Administrative Agent hereby
accepts such appointment. The Administrative Agent agrees to hold such
items in escrow until the conditions set forth in Section 3.03 are
satisfied. Upon the satisfaction of the conditions set forth in Section
3.03, the items held in escrow shall be deemed automatically released. If
the conditions set forth in Section 3.03 are not satisfied by the Deadline
Date, the Administrative Agent shall return each of the items held in
escrow to the Borrower.
SECTION 3.03. CONDITIONS TO EFFECTIVE DATE. This Agreement
shall become effective (and shall be deemed effective as of the Closing
Date) on the date all the following conditions have been satisfied (the
"Effective Date") on or before 4 p.m. prevailing Eastern Time on October
31, 2002 or such later date as shall be agreed to in writing by the
Borrower, Xxxxxxxxx L.L.C., Xxxxxx Xxxxxxx & Co., Incorporated, the
Administrative Agent and the Creditors' Committee (such date being the
"Deadline Date") and shall terminate and the Existing Credit Agreement, the
other "Loan Documents" (as defined therein) and the Existing Advances shall
remain in existence if the following conditions have not been satisfied by
the Deadline Date:
(a) The Administrative Agent shall have received a certified
copy of the Confirmation Order certified on behalf of the Borrower by
its President or Vice President as being a true and complete copy, in
substantially the form of Exhibit L hereto, with a determination of
solvency to be included in such Confirmation Order.
(b) The occurrence of the Effective Date of the Plan of
Reorganization in accordance with its terms (such terms not to be
modified without the consent of the Administrative Agent).
(c) The Administrative Agent shall have received a certificate,
signed on behalf of the Borrower by its President or a Vice President
certifying that as of the Effective Date the Confirmation Order shall
not have been reversed, vacated, modified or stayed except with
respect to the Plan Modification and the Plan of Reorganization shall
not have been amended, supplemented or otherwise modified without the
prior written consent of the Administrative Agent.
(d) The conditions in the Escrow Agreement to the release of
the Escrowed Property shall have been satisfied and the Subordinated
Cerberus Notes shall have been issued and made fully effective.
(e) The Borrower shall have paid (i) the principal payment of
$25,000,000 referred to in Section 2.02 in immediately available
funds, (ii) all accrued fees of the Agents and the Lenders payable
hereunder and all reasonable accrued expenses of the Agents
(including the fees under the Fee Letters, the facility fee referred
to in Section 2.05 and the reasonable accrued fees and expenses of
counsel, accountants and financial advisors to the Administrative
Agent) in connection with this Agreement and (iii) all reasonable
accrued and unpaid fees, interest and expenses of the Agents and
Lenders (including, without limitation, the accrued facility fee and
the reasonable accrued fees and expenses of counsel, accountants and
financial advisors to the Administrative Agent) in connection with
the Existing Credit Agreement, in each case, together with interest
accrued as of the Closing Date as more fully set forth in the Plan of
Reorganization.
(f) The Borrower shall have complied at all times with the
minimum cash balance requirement set forth in the stipulation filed
with the Bankruptcy Court on July 23, 2002.
(g) The Administrative Agent shall have received (i) Account
Control Agreements, duly executed by each Pledged Account Bank
referred to in the Security Agreement and (ii) certificates
representing the Pledged Equity referred to in the Security Agreement
accompanied by undated stock powers executed in blank and instruments
evidencing the Pledged Debt indorsed in blank.
(h) The Administrative Agent shall have received a certificate
of the Borrower, signed on behalf of the Borrower by its President or
a Vice President, dated the Effective Date (the statements made in
which certificate shall be true on and as of the Effective Date),
certifying as to (i) the truth of the representations and warranties
contained in Section 4.01(m) hereof and (ii) the compliance by the
Borrower with each of the covenants contained in Article V hereof
(other than Section 5.04(a) hereof) during the period from the
Closing Date to the Effective Date.
(i) The Administrative Agent shall have received a copy of the
certificate of incorporation of the Borrower, as amended and restated
pursuant to the Plan of Reorganization, in substantially the form of
Exhibit A-1 to the Plan of Reorganization, certified as of the
Effective Date by the appropriate official of the state of such
Person's incorporation as being a true and complete copy thereof, and
a copy of the by-laws of the Borrower, as amended and restated
pursuant to the Plan of Reorganization, in substantially the form of
Exhibit B-1 to the Plan of Reorganization, together with a
certificate of the Secretary or Assistant Secretary of the Borrower,
dated as of the Effective Date, certifying as to such by-laws being a
true and complete copy thereof, with no amendments thereto.
(j) The Disclosure Statement shall have been approved by final
order of the Bankruptcy Court and the Confirmation Order (a) shall
have been entered by the Bankruptcy Court, (b) shall be in full force
and effect, (c) shall not have been reversed, stayed, modified or
amended, except with respect to the Plan Modification (unless the
order providing for such reversal, stay, modification or amendment
shall no longer be in effect) and (d) shall not have been the subject
of a timely filed appeal unless the effectiveness of the Confirmation
Order shall not have been stayed in accordance with the Federal Rules
of Bankruptcy Procedure or, in the event such order was stayed
pending appeal, such stay shall have been terminated by a subsequent
court order.
(k) The Administrative Agent shall have received a favorable
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP or its affiliate
law practices, counsel for the Loan Parties, in substantially the
form of Exhibit F-1 hereto subject to such changes as may be
necessary to account for any intervening changes in fact or law.
(l) The Administrative Agent shall have received a favorable
opinion of Xxxxx & Xxxxxxx L.L.P., Colorado counsel for the Loan
Parties in substantially the form of Exhibit F-2, subject to such
changes as may be necessary to account for any intervening changes in
fact or law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
The Borrower represents and warrants, after giving effect to the
transactions contemplated by the Loan Documents and the Plan of
Reorganization, as though such transactions and the Plan of Reorganization
were consummated on and as of the Closing Date and subject to entry of the
Confirmation Order, as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed could not be
reasonably likely to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority (including, without
limitation, all governmental licenses, permits and other approvals)
to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of
the date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of its Equity
Interests authorized, and the number outstanding, on the date hereof
and the percentage of each such class of its Equity Interests owned
(directly or indirectly) by such Loan Party and the number of shares
covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights at the date hereof. Except as set forth
on Schedule 4.01(b), all of the outstanding Equity Interests in each
Loan Party's Subsidiaries has been validly issued, are fully paid and
non-assessable and are owned by such Loan Party or one or more of
other Subsidiaries of the Borrower free and clear of all Liens,
except those created under the Loan Documents or permitted under
clauses (i) or (xv) of the definition of "Permitted Liens".
(c) The execution, delivery and performance by each Loan Party
of each Transaction Document to which it is or is to be a party, and
the consummation of the Transaction, are within such Loan Party's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Loan Party's charter
or bylaws, (ii) violate any law, rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach
of, or constitute a default or require any payment to be made under,
any contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument binding on or affecting any Loan Party, any
of its Subsidiaries or any of their properties in such a manner as
would be reasonably likely to have a Material Adverse Effect or (iv)
except for the Liens created under the Loan Documents, result in or
require the creation or imposition of any Lien upon or with respect
to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease
or other instrument, the violation or breach of which could be
reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of any
Transaction Document to which it is or is to be a party, or for the
consummation of the Transaction, (ii) the grant by any Loan Party of
the Liens granted by it pursuant to the Collateral Documents, (iii)
the perfection or maintenance of the Liens created under the
Collateral Documents (including the first priority nature thereof) or
(iv) the exercise by any Agent or any Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant
to the Collateral Documents, except for the Confirmation Order and
the authorizations, approvals, actions, notices and filings referred
to herein (including filings to perfect the Lien of the Collateral
Agent and the holders of Subordinated Cerberus Notes in the
Collateral) or listed on Schedule 4.01(d) hereto, all of which,
except for the Confirmation Order as it relates to the Plan
Modification, have been duly obtained, taken, given or made and are
in full force and effect. All applicable waiting periods, except for
the Confirmation Order as it relates to the Plan Modification, in
connection with the Transaction have expired without any action
having been taken by any competent authority restraining, preventing
or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer
or otherwise dispose of, or to create any Lien on, any properties now
owned or hereafter acquired by any of them.
(e) This Agreement has been, and each other Transaction
Document when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and
each other Transaction Document when delivered hereunder will be, the
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms.
(f) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) could be reasonably
likely to have a Material Adverse Effect or (ii) purports to affect
the legality, validity or enforceability of any Transaction Document
or the consummation of the Transaction other than the Cases and the
Confirmation Order (including the Plan Modification and the approval
thereof by the Bankruptcy Court).
(g) The Consolidated balance sheets of the Borrower and its
Subsidiaries as at December 31, 2001, and the related Consolidated
statements of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended,
accompanied by a qualified opinion of KPMG LLC, independent public
accountants, and the Consolidated unaudited balance sheets of the
Borrower and its Subsidiaries as at March 31, 2002, and the related
unaudited Consolidated statements of income and Consolidated
statement of cash flows of the Borrower and its Subsidiaries for the
three months then ended, duly certified by the Chief Financial
Officer of the Borrower, copies of which have been furnished to the
Administrative Agent, in each case fairly present, subject, in the
case of said balance sheet as at March 31, 2002, and said statements
of income and cash flows for the three months then ended, to year-end
audit adjustments and the absence of footnotes, the Consolidated
financial condition of the Borrower and its Subsidiaries as at such
dates and the Consolidated results of operations of the Borrower and
its Subsidiaries for the periods ended on such dates, all in
accordance with generally accepted accounting principles applied on a
consistent basis.
(h) The Consolidated and, to the extent required by the auditor
of the Borrower and its Subsidiaries, consolidating forecasted
balance sheets, statements of income and statements of cash flows of
the Borrower and its Subsidiaries delivered to the Lenders pursuant
to Section 5.03 were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in light of
the conditions existing at the time of delivery of such forecasts,
and represented, at the time of delivery, the Borrower's best
estimate of its future financial performance.
(i) No information, exhibit or report furnished by or on behalf
of any Loan Party to any Agent or any Lender in connection with the
negotiation of the Loan Documents or pursuant to the terms of the
Loan Documents contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
made therein not misleading.
(j) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Term Advance will be used to purchase or carry any
Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
(k) Neither any Loan Party nor any of its Subsidiaries is an
"investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms
are defined in the Investment Company Act of 1940, as amended.
Neither any Loan Party nor any of its Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended. Neither the making of any
Term Advances, nor the application of the proceeds or repayment
thereof by the Borrower, nor the consummation of the other
transactions contemplated by the Transaction Documents, will violate
any provision of any such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(l) Upon consummation of the Plan of Reorganization, neither
any Loan Party nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other agreement
or instrument or subject to any charter or other constitutive
restriction that could reasonably be expected to have a Material
Adverse Effect.
(m) As of the Effective Date, all filings and other actions
necessary or desirable to perfect and protect the security interest
in the Collateral created under the Collateral Documents have been
duly made or taken and are in full force and effect, and the
Collateral Documents create in favor of the Collateral Agent for the
benefit of the Secured Parties a valid and, together with such
filings and other actions, perfected first priority (subject to liens
and security interests permitted under the Loan Documents) security
interest in the Collateral, securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable
to perfect and protect such security interest have been duly taken.
The Loan Parties are the legal and beneficial owners of the
Collateral free and clear of any Lien, except for the liens and
security interests created or permitted under the Loan Documents.
(n) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(o) (i) No ERISA Event has occurred or is reasonably expected
to occur with respect to any Plan.
(ii) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the PBGC and furnished to the Lenders, is complete
and accurate and fairly presents the funding status of such Plan, and
since the date of such Schedule B there has been no material adverse
change in such funding status.
(iii) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability
to any Multiemployer Plan.
(iv) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated,
within the meaning of Title IV of ERISA, and no such Multiemployer
Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA.
(p) (i) Except in each case as specified on Schedule 4.01(p):
the operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance
with such Environmental Laws and Environmental Permits has been
resolved without ongoing obligations or costs, and no circumstances
exist that could be reasonably likely to (A) form the basis of an
Environmental Action against any Loan Party or any of its
Subsidiaries or any of their properties that could have a Material
Adverse Effect or (B) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under
any Environmental Law.
(ii) Except in each case as specified on Schedule 4.01(p):
none of the properties currently or formerly owned or operated by
any Loan Party or any of its Subsidiaries is listed or proposed
for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list or is adjacent to any such property
except for storage of fuel in the ordinary course of business;
there are no and to the best knowledge of any Loan Party or any
of their subsidiaries, never have been any underground or
aboveground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are
being or have been treated, stored or disposed on any property
currently owned or operated by any Loan Party or any of its
Subsidiaries or, to the best of its knowledge, on any property
formerly owned or operated by any Loan Party or any of its
Subsidiaries; there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan
Party or any of its Subsidiaries; and Hazardous Materials have
not been released, discharged or disposed of on any property
currently or formerly owned or operated by any Loan Party or any
of its Subsidiaries.
(iii) Except in each case as specified on Schedule 4.01(p):
neither any Loan Party nor any of its Subsidiaries is
undertaking, and has not completed, either individually or
together with other potentially responsible parties, any
investigation or assessment or remedial or response action
relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any
governmental or regulatory authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any
property currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries have been disposed of in a
manner not reasonably expected to result in material liability to
any Loan Party or any of its Subsidiaries.
(q) (i) Neither any Loan Party nor any of its Subsidiaries is
party to any tax sharing agreement other than the Tax Sharing
Agreement.
(ii) Except as disclosed on Schedule 4.01(q), (i) all
material tax returns, statements, reports and forms (including
estimated tax or information returns) (collectively, the "Tax
Returns") required to be filed with any taxing authority by, or
with respect to, each Loan Party and their Subsidiaries have been
timely filed in accordance with all applicable laws; (ii) each
Loan Party and their Subsidiaries has timely paid or made
adequate provision for payment of all taxes that are shown as due
and payable on Tax Returns that have been so filed or that are
otherwise required to be paid (including without limitation,
assessments, interest and penalties) and, as of the time of
filing, each Tax Return was accurate and complete and correctly
reflected, in all material respects, the facts regarding income,
business, assets, operations, activities and the status of each
Loan Party and their Subsidiaries (other than taxes which are
being contested in good faith and for which adequate reserves are
reflected on the financial statements delivered hereunder) and
(iii) each Loan Party and its Subsidiaries have made adequate
provision for all material taxes payable by such Loan Party and
its Subsidiaries for which no Tax Return has yet been filed or
which are otherwise due.
(iii) Set forth on Part I of Schedule 4.01(q) hereto is a
complete and accurate list in all material respects, as of the
date hereof, of each taxable year of each Loan Party and each of
its Subsidiaries and Affiliates for which Federal income tax
returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or collection
has not occurred by reason of extension or otherwise (an "Open Year").
(iv) The aggregate unpaid amount, as of the date hereof, of
adjustments to the Federal income tax liability of each Loan
Party and each of its Subsidiaries and Affiliates proposed by the
Internal Revenue Service with respect to Open Years that are not
set forth on Schedule 4.01(q) does not exceed $1,000,000. Set
forth on Part II of Schedule 4.01(q) hereto is a complete and
accurate description, as of the date hereof, of each such item
that separately, for all such Open Years, together with
applicable interest and penalties, exceeds $1,000,000. No issues
have been raised by the Internal Revenue Service in respect of
Open Years that, in the aggregate, could be reasonably likely to
have a Material Adverse Effect.
(v) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each
Loan Party and its Subsidiaries and Affiliates proposed by all
state, local and foreign taxing authorities (other than amounts
arising from adjustments to Federal income tax returns) does not
exceed $1,000,000. No issues have been raised by such taxing
authorities that, in the aggregate, could be reasonably likely to
have a Material Adverse Effect.
(r) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that could be
reasonably likely to have a Material Adverse Effect.
(s) Set forth on Schedule 4.01(s) hereto is a complete and
accurate list of all Existing Debt, showing as of the date hereof the
obligor and the principal amount outstanding thereunder.
(t) Set forth on Schedule 4.01(t) hereto is a complete and
accurate list of all Liens on the property or assets of any Loan
Party or any of its Subsidiaries, showing as of the date hereof the
lienholder thereof, the principal amount of the obligations secured
thereby and the property or assets (or type of property or assets) of
such Loan Party or such Subsidiary subject thereto other than
Permitted Liens described in clauses (i), (ii), (v), (vi), (vii),
(viii), (xiii) or (xv) of the definition thereof and Permitted Liens
securing Debt or Debt for Borrowed Money in an amount that is less
than $250,000 on an individual basis and $2,500,000 in the aggregate.
(u) Set forth on Schedule 4.01(u) hereto under the heading "Fee
Properties" thereon is a complete and accurate list of all real
property owned by any Loan Party or any of its Subsidiaries, showing
as of the date hereof the street address, county or other relevant
jurisdiction, state, record owner and book and estimated fair value
thereof. Each Loan Party or such Subsidiary has good, marketable and
insurable fee simple title to such real property, free and clear of
all Liens, other than Liens created or permitted by the Loan
Documents.
(v) Set forth on Schedule 4.01(v) hereto is a complete and
accurate list of all leases of real property under which any Loan
Party or any of its Subsidiaries is the lessee, showing as of the
date hereof the street address, county or other relevant
jurisdiction, state, lessor, lessee, expiration date and annual
rental cost thereof. To the best of the Borrower's knowledge, each
such lease is the legal, valid and binding obligation of the lessor
thereof, enforceable in accordance with its terms.
(w) Set forth on Schedule 4.01(w) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries on the date hereof, showing as of the date hereof the
amount, obligor or issuer and maturity, if any, thereof.
(x) Set forth on Schedule 4.01(x) hereto is a complete and
accurate list of all patents, patent applications, registered
trademarks and servicemarks, trademark and servicemark applications,
registered trade names, registered copyrights, applications for
copyright registration of each Loan Party or any of its Subsidiaries
and all material licenses of copyrights, trademarks, servicemarks and
patents to which any Loan Party or any Subsidiary thereof is a party,
showing as of the date hereof the jurisdiction in which registered,
the registration number and the date of registration.
(y) Set forth on Schedule 4.01(y) hereto is a complete and
accurate list of all Material Contracts of each Loan Party and its
Subsidiaries, showing as of the date hereof the parties, subject
matter and term thereof. Each such Material Contract has been duly
authorized, executed and delivered by each Loan Party and its
Subsidiaries party thereto, has not been amended or otherwise
modified, is in full force and effect and is binding upon and
enforceable against each Loan Party and its Subsidiaries party
thereto in accordance with its terms, and to the best of Borrower's
knowledge, there exists no default under any Material Contract by any
party thereto.
(z) Set forth on Schedule 4.01(z) hereto is a complete and
accurate list of all Identified Assets showing as of the date hereof
the street address, county or other relevant jurisdiction, state,
record owner and book and estimated fair value thereof.
(aa) The Confirmation Order has not been reversed, vacated,
modified or stayed, no application or motion shall have been filed or
served on any Loan Party seeking a stay pending appeal and except for
the Plan Modification, the Plan of Reorganization has not been
amended, supplemented or otherwise modified without the prior written
consent of the Administrative Agent.
ARTICLE
COVENANTS OF THE LOAN PARTIES
SECTION 5.01. AFFIRMATIVE COVENANTS. From the Closing Date and
thereafter, and so long as any Term Advance or any other Obligation of any
Loan Party under any Loan Document (other than under the Secured Hedge
Agreements) shall remain unpaid, each Loan Party will:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with ERISA and the
Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its
property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property; provided, however, that neither
the Loan Parties nor any of their Subsidiaries shall be required
to pay or discharge any such tax, assessment, charge, levy or
claim that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being
maintained; provided, further that prior to the Effective Date,
neither the Borrower nor any of its Subsidiaries shall be required
to pay or discharge any such tax, assessment, charge, levy or
claim except as provided under the Bankruptcy Code or the Plan of
Reorganization.
(c) Compliance with Environmental Laws. Comply, and cause
each of its Subsidiaries and all lessees and other Persons
operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew and cause each of its Subsidiaries to
obtain and renew all Environmental Permits necessary for its
operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other
action necessary to remove and clean up all Hazardous Materials
from any of its properties, in accordance with the requirements of
all Environmental Laws; provided, however, that neither the Loan
Parties nor any of their Subsidiaries shall be required to
undertake any such cleanup, removal, remedial or other action to
the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same
general areas in which such Loan Party or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Except as
otherwise provided by the Plan of Reorganization, reserve and
maintain, and cause each of its Subsidiaries (other than the
Subsidiaries listed on Schedule 5.01(e)) to preserve and maintain,
its existence, legal structure, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises
(including, without limitation, any permits, licenses, approvals,
privileges and franchises issued to such Loan Party by the FCC or
any PUC); provided, however, that the Borrower and its
Subsidiaries may consummate any merger or consolidation permitted
under Section 5.02(d) and provided further that neither any Loan
Party nor any of its Subsidiaries shall be required to preserve
any right, permit, license, approval, privilege or franchise if
the Board of Directors or to the extent authority has been
properly delegated, the management of such Loan Party or such
Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of such Loan Party
or such Subsidiary, as the case may be, and that the loss thereof
is not disadvantageous in any material respect to such Loan Party,
such Subsidiary or the Lenders.
(f) Visitation Rights. At any reasonable time and from
time to time, upon reasonable advance notice permit any of the
Agents or any of the Lenders, or any agents or representatives
thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, such
Loan Party and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of such Loan Party and any of its
Subsidiaries with any of their officers or directors and with
their independent certified public accountants.
(g) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial
transactions and the assets and business of such Loan Party and
each such Subsidiary and which shall be, for the Borrower and its
Subsidiaries on a consolidated basis, in accordance with generally
accepted accounting principles in effect from time to time.
(h) Maintenance of Properties, Etc. Maintain and
preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are used or useful in the
conduct of its business in good working order and condition,
ordinary wear and tear excepted and will from time to time make or
cause to be made all appropriate repairs, renewals and
replacements thereof except where failure to do so would not have
a Material Adverse Effect.
(i) Transactions with Affiliates. Except as otherwise
required by the Plan of Reorganization and except, prior to the
Effective Date, for transactions between any Loan Party and ICG
Services, Inc., conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates who are not Loan Parties on
terms that are fair and reasonable and no less favorable to such
Loan Party or such Subsidiary than it would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
(j) Covenant to Guarantee Obligations and Give Security.
Upon (x) the request of the Collateral Agent following the
occurrence and during the continuance of a Default, (y) the
formation or acquisition of any new direct or indirect
Subsidiaries by any Loan Party or (z) the acquisition of any
property by any Loan Party, and such property, in the reasonable
judgment of the Collateral Agent, shall not already be subject to
a perfected first priority security interest in favor of the
Collateral Agent for the benefit of the Secured Parties, then each
Loan Party shall, in each case at such Loan Party's expense:
(i) in connection with the formation or
acquisition of a Subsidiary, within 10 days after such
formation or acquisition, cause each such Subsidiary, and
cause each direct and indirect parent of such Subsidiary
(if it has not already done so), to duly execute and
deliver to the Collateral Agent a guaranty or guaranty
supplement, in form and substance satisfactory to the
Collateral Agent, guaranteeing the other Loan Parties'
obligations under the Loan Documents, provided, however,
that if such required date is prior to the Effective
Date, such guaranty or guaranty supplement shall take
effect upon the Effective Date,
(ii) within 10 days after such request,
formation or acquisition, furnish to the Collateral Agent
a description of the real and personal properties of the
Loan Parties and their respective Subsidiaries in detail
reasonably satisfactory to the Collateral Agent,
(iii) within 15 days after the later of (i) such
request, formation or acquisition, or (ii) the provision
by the Collateral Agent of the applicable form of
documents, duly execute and deliver, and cause each such
Subsidiary and each direct and indirect parent of such
Subsidiary (if it has not already done so) to duly
execute and deliver, to the Collateral Agent mortgages,
pledges, collateral assignments, security agreement
supplements and other security agreements, as specified
by and in form and substance reasonably satisfactory to
the Collateral Agent, securing payment of all the
Obligations of the applicable Loan Party, such Subsidiary
or such parent, as the case may be, under the Loan
Documents and constituting Liens on all such properties,
provided, however, that if such required date is prior to
the Effective Date, such mortgages, pledges, collateral
assignments, security agreement supplements or other
security agreements shall take effect upon the Effective
Date,
(iv) within 30 days after such request,
formation or acquisition, take, and cause such Subsidiary
or such parent to take, whatever action (including,
without limitation, the recording of mortgages, the
filing of Uniform Commercial Code financing statements,
the giving of notices and the endorsement of notices on
title documents) may be necessary or advisable in the
reasonable opinion of the Collateral Agent to vest in the
Collateral Agent (or in any representative of the
Collateral Agent designated by it) valid and subsisting
Liens on the properties purported to be subject to the
mortgages, pledges, collateral assignments, security
agreement supplements and security agreements delivered
pursuant to this Section 5.01(j), enforceable against all
third parties in accordance with their terms, provided,
however, that if such required date is prior to the
Effective Date, such actions shall be taken upon the
Effective Date,
(v) within 70 days after such request, formation
or acquisition (or if later, upon the Effective Date),
deliver to the Collateral Agent, upon the request of the
Collateral Agent in its sole discretion, a signed copy of
a favorable opinion, addressed to the Collateral Agent
and the other Secured Parties, of counsel for the Loan
Parties reasonably acceptable to the Collateral Agent as
to the matters contained in clauses (i), (iii) and (iv)
above (subject to customary limitations), as to such
guaranties, guaranty supplements, mortgages, pledges,
collateral assignments, security agreement supplements
and security agreements being legal, valid and binding
obligations of each Loan Party thereto enforceable in
accordance with their terms, as to the matters contained
in clause (iv) above, as to such recordings, filings,
notices, endorsements and other actions being sufficient
to create valid perfected Liens on such properties, and
as to such other matters as the Collateral Agent may
reasonably request,
(vi) as promptly as reasonably practicable after
such request, formation or acquisition, deliver, upon the
request of the Collateral Agent in its sole discretion,
to the Collateral Agent with respect to each parcel of
real property owned or held by the entity that is the
subject of such request, formation or acquisition title
reports, surveys and engineering, soils and other
reports, and environmental assessment reports, each in
scope, form and substance reasonably satisfactory to the
Collateral Agent, provided, however, that to the extent
that any Loan Party or any of its Subsidiaries shall have
otherwise received any of the foregoing items with
respect to such real property, such items shall, promptly
after the receipt thereof, be delivered to the Collateral
Agent,
(vii) upon the request of the Collateral Agent
following the occurrence and during the continuance of a
Default, promptly cause to be deposited any and all cash
dividends paid or payable to it or any of its
Subsidiaries from any of its Subsidiaries from time to
time into the Collateral Account, and with respect to all
other dividends paid or payable to it or any of its
Subsidiaries from time to time, promptly execute and
deliver, or cause such Subsidiary to promptly execute and
deliver, as the case may be, any and all further
instruments and take or cause such Subsidiary to take, as
the case may be, all such other action as the Collateral
Agent may deem reasonably necessary or desirable in order
to obtain and maintain from and after the time such
dividend is paid or payable a perfected, first priority
lien on and security interest in such dividends,
provided, however, that such actions shall not be
required to be taken until the Collateral Account is
required to be in place pursuant to Section 5.01(p), and
(viii) at any time and from time to time, after
the Effective Date, promptly execute and deliver any and
all further instruments and documents and take all such
other action as the Collateral Agent may deem reasonably
necessary or desirable in obtaining the full benefits of,
or in perfecting and preserving the Liens of, such
guaranties, mortgages, pledges, collateral assignments,
security agreement supplements, intellectual property
security agreement supplements and security agreements.
(k) Further Assurances. (i) After the Effective Date,
promptly upon request by any Agent, or any Lender through the
Administrative Agent, correct, and cause each of its Subsidiaries
promptly to correct, any material defect or error that may be
discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and
(ii) After the Effective Date, promptly upon request by
any Agent, or any Lender through the Administrative Agent, do,
execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register any and all such further acts, deeds,
conveyances, pledge agreements, mortgages, deeds of trust, trust
deeds, collateral assignments, financing statements and
continuations thereof, termination statements, notices of
collateral assignment, transfers, certificates, assurances and
other instruments as any Agent, or any Lender through the
Administrative Agent, may reasonably require from time to time in
order to (A) carry out more effectively the purposes of the Loan
Documents, (B) to the fullest extent permitted by applicable law,
subject any Loan Party's or any of its Subsidiaries' properties,
assets, rights or interests to the Liens now or hereafter intended
to be covered by any of the Collateral Documents, (C) perfect and
maintain the validity, effectiveness and priority of any of the
Collateral Documents and any of the Liens intended to be created
thereunder and (D) assure, convey, grant, assign for collateral,
transfer, preserve, protect and confirm more effectively unto the
Secured Parties the rights granted or now or hereafter intended to
be granted to the Secured Parties under any Loan Document or under
any other instrument executed in connection with any Loan Document
to which any Loan Party or any of its Subsidiaries is or is to be
a party, and cause each of its Subsidiaries to do so.
(l) Performance of Related Documents. After the Effective
Date, perform and observe, and cause each of its Subsidiaries to
perform and observe, all of the terms and provisions of each
Related Document to be performed or observed by it, maintain each
such Related Document in full force and effect, enforce such
Related Document in accordance with its terms, take all such
action to such end as may be from time to time requested by the
Administrative Agent and, upon request of the Administrative
Agent, make to each other party to each such Related Document such
demands and requests for information and reports or for action as
any Loan Party or any of its Subsidiaries is entitled to make
under such Related Document.
(m) Compliance with Terms of Leaseholds. Except in each
case for (i) leases rejected or to be rejected in the Cases and
leases terminated in connection with sales of assets required or
permitted hereunder, or (ii) as otherwise required by the
Bankruptcy Code or the Plan of Reorganization, make all payments
and otherwise perform all obligations in respect of all leases of
real property to which such Loan Party or any of its Subsidiaries
is a party, keep such leases in full force and effect and not
allow such leases to lapse or be terminated or any rights to renew
such leases to be forfeited or cancelled, notify the
Administrative Agent of any default by any party with respect to
such leases and cooperate with the Administrative Agent in all
respects to cure any such default, and cause each of its
Subsidiaries to do so, except where the failure to do so either
individually or in the aggregate, could not be reasonably likely
to have a Material Adverse Effect.
(n) Performance of Material Contracts. Perform and
observe all the terms and provisions of each Material Contract to
be performed or observed by it, maintain each such Material
Contract in full force and effect, enforce each such Material
Contract in accordance with its terms, take all such action to
such end as may be from time to time reasonably requested by the
Administrative Agent and, upon request of the Administrative
Agent, make to each other party to each such Material Contract
such demands and requests for information and reports or for
action as any Loan Party or any of its Subsidiaries is entitled to
make under such Material Contract, and cause each of its
Subsidiaries to do so, except, in any case, where the failure to
do so, either individually or in the aggregate, could not be
reasonably likely to have a Material Adverse Effect; provided,
however, that prior to the Effective Date, neither the Borrower
nor any of its Subsidiaries shall be required to take any such
action not permitted under the Bankruptcy Code. Notwithstanding
the foregoing, prior to the Effective Date the Borrower shall not
be in violation of this covenant to the extent that any failure to
perform or observe any term or provision of any Material Contract
results primarily from circumstances that are beyond the control
of the Borrower and its Subsidiaries; provided, however, that the
Borrower shall use commercially reasonable efforts to mitigate any
adverse effect of such termination.
(o) Sales of Identified Assets. After the Effective Date,
use best efforts to sell the Identified Assets for cash and fair
market value as soon as reasonably practicable following such date.
(p) Cash Collateral Accounts. As of the Effective Date,
maintain, and cause each of its Subsidiaries to maintain, the
Collateral Account with Wachovia Bank, National Association, or
any of its affiliates, or any other bank acceptable to the
Administrative Agent and lockbox accounts into which all proceeds
of Collateral are paid with Wachovia Bank, National Association,
or any of its affiliates, or one or more banks acceptable to the
Collateral Agent that have accepted the assignment of such
accounts to the Collateral Agent for the benefit of the Secured
Parties pursuant to the Security Agreement.
(q) Quarterly Financial Summaries. The Company shall
prepare on a quarterly basis, detailed financial summaries, copies
of which shall be furnished to the Board of Directors (or any
committee thereof) and to the Lenders as set forth in Section
5.03(r); provided that to the extent such financial summaries are
prepared more frequently than on a quarterly basis any and all
such additional financial summaries shall be delivered to the
Agent and the Lenders as required in Section 5.03(r).
(r) Lender Conference Call. At any time as the
Administrative Agent shall reasonably request, the Borrower shall
host a conference call with the Lenders to discuss the reports
delivered under Section 5.03(r) and any other related business matters.
(s) Landlord Consents. From the Effective Date and until
the date that is 90 days after the Effective Date, the Borrower
shall use commercially reasonable efforts to obtain landlord
estoppel certificates and consent agreements substantially in the
form of Exhibit J hereto and otherwise satisfactory to the
Administrative Agent for those locations where the replacement
value of equipment owned or leased by the Loan Parties is equal to
or greater than $1,000,000.
(t) Account Control Agreements. On the Effective Date,
the Borrower shall deliver the Account Control Agreements referred
to in the Security Agreement, in substantially the form of Exhibit
B to the Security Agreement, duly executed by each Pledged Account
Bank referred to in the Security Agreement, provided that if any
Pledged Account Bank referred to in the Security Agreement does
not agree to execute and deliver an Account Control Agreement in
substantially the form of Exhibit B to the Security Agreement, the
Borrower will have an additional 30 days to find a replacement
Pledged Account bank in order to satisfy this Section 5.01(t).
(u) Mortgages, etc. By the date that is 45 days after the
Closing Date (or at such other time as is otherwise hereinafter
provided), the Borrower shall deliver deeds of trust, trust deeds,
mortgages, leasehold mortgages and leasehold deeds of trust
substantially in the form of Exhibit I hereto (with such changes
as may be required to account for local law matters) and otherwise
in form and substance reasonably satisfactory to the
Administrative Agent, covering the Properties together with each
other mortgage delivered pursuant to Section 5.01(j), in each case
as amended, the "Mortgages"), duly executed by the appropriate
Loan Party, together with:
(A) evidence, using commercially reasonable
efforts that counterparts of the Mortgages have been duly
recorded within five Business Days of the Effective Date
in all filing or recording offices that the
Administrative Agent may deem necessary or desirable in
order to create a valid first and subsisting Lien on the
property described therein in favor of the Collateral
Agent for the benefit of the Secured Parties and that all
filing and recording taxes and fees have been paid,
(B) within five Business Days of the Effective
Date, fully paid American Land Title Association Lender's
Extended Coverage title insurance policies (the "Mortgage
Policies") in form and substance, with endorsements and
in amount acceptable to the Administrative Agent, issued,
coinsured and reinsured by title insurers acceptable to
the Administrative Agent, insuring the Mortgages to be
valid first and subsisting Liens on the real property
described therein, free and clear of all defects
(including, but not limited to, mechanics' and
materialmen's Liens) and encumbrances, excepting only
Permitted Liens, and providing for such other affirmative
insurance (including endorsements for mechanics' and
materialmen's Liens) and such coinsurance and direct
access reinsurance as the Administrative Agent may
reasonably deem necessary or desirable,
(C) American Land Title Association/American
Congress on Surveying and Mapping form surveys, for which
all necessary fees (where applicable) have been paid, and
dated a recent date acceptable to the Agent certified to
the Administrative Agent and the issuer of the Mortgage
Policies in a manner satisfactory to the Administrative
Agent by a land surveyor duly registered and licensed in
the States in which the real property described in such
surveys is located and acceptable to the Administrative
Agent, showing all buildings and other improvements, any
off-site improvements, the location of any easements,
parking spaces, rights of way, building set-back lines
and other dimensional regulations and the absence of
encroachments, either by such improvements or on to such
property, and other defects, other than encroachments and
other defects reasonably acceptable to the Administrative
Agent,
(D) within five Business Days of the Effective
Date, estoppel and consent agreements, using commercially
reasonable efforts, in form and substance satisfactory to
the Administrative Agent, executed by each of the lessors
of the leased real properties listed on Schedule 4.01(u)
hereto, under the heading "Leasehold Properties" thereon,
along with (x) a memorandum of lease in recordable form
with respect to such leasehold interest, executed and
acknowledged by the owner of the affected real property,
as lessor, or (y) evidence that the applicable lease with
respect to such leasehold interest or a memorandum
thereof has been recorded in all places necessary or
desirable, in the Administrative Agent's reasonable
judgment, to give constructive notice to third-party
purchasers of such leasehold interest, or (z) if such
leasehold interest was acquired or subleased from the
holder of a recorded leasehold interest, the applicable
assignment or sublease document, executed and
acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon
recordation and otherwise in form satisfactory to the
Administrative Agent.
(E) evidence of the insurance required by the
terms of the Mortgages, and
(F) within five Business Days of the Effective
Date, such other consents, agreements and confirmations
of lessors and third parties as the Administrative Agent
may deem necessary or desirable and evidence that all
other actions that the Administrative Agent may deem
necessary or desirable in order to create valid first and
subsisting Liens on the property described in the
Mortgages has been taken.
(G) within five Business Days of the Effective
Date, opinions of local counsel for the Loan Parties in
states in which the Properties are located, with respect
to the enforceability and perfection of the Mortgages and
any related fixture filings substantially in the form of
Exhibit G hereto, and otherwise in form and substance
satisfactory to the Administrative Agent.
(v) Dissolution of Certain Entities. Not later than the
date that is five Business Days after the Effective Date, the
Borrower shall have (i) dissolved or (ii) merged into a Loan
Party, with the Loan Party as the surviving entity, ICG Funding,
LLC and ICG Telecom of San Diego, L.P.; provided that to the
extent such entities are not so dissolved or merged by such date,
such entities shall execute security agreement supplements and
guaranty supplements and all such other documents as the
Administrative Agent shall reasonably request in order for such
entities to become Loan Parties hereunder.
SECTION 5.02. NEGATIVE COVENANTS. From the Closing Date and
thereafter, so long as any Term Advance or any other Obligation of any Loan
Party under any Loan Document shall remain unpaid, no Loan Party shall, at
any time:
(a) Liens, Etc. Create, incur, assume or, from and after
the Effective Date, suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or, from and after the
Effective Date, suffer to exist, any Lien on or with respect to
any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or
sign or, from and after the Effective Date, suffer to exist, or
permit any of its Subsidiaries to sign or, from and after the
Effective Date, suffer to exist, any security agreement
authorizing any secured party thereunder to file such financing
statement, or assign, or permit any of its Subsidiaries to assign,
any accounts or other right to receive income, except:
(i) liens created under the Loan Documents and
Liens securing the Subordinated Cerberus Notes;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof or
required on the Effective Date to be provided in the
future or provided for by the Plan of Reorganization and,
in each case, described on Schedule 4.01(t) hereto or
otherwise described in Section 4.01(t) hereof;
(iv) purchase money Liens upon or in property
acquired or held by the Borrower or any of its
Subsidiaries in the ordinary course of business to secure
the purchase price of such property or to secure Debt
incurred solely for the purpose of financing the
acquisition of any such property to be subject to such
Liens, or Liens existing on any such property at the time
of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the
purchase price), or extensions, renewals or replacements
of any of the foregoing for the same or a lesser amount;
provided, however, that no such Lien shall extend to or
cover any property other than the property being
acquired, and no such extension, renewal or replacement
shall extend to or cover any property not theretofore
subject to the Lien being extended, renewed or replaced;
and provided further that the aggregate principal amount
of the Debt secured by Liens permitted by this clause
(iv) shall not exceed the amount permitted under Section
5.02(b)(iii)(B) at any time outstanding;
(v) Liens arising in connection with Capitalized
Leases of the Borrower or any of its Subsidiaries
permitted under Section 5.02(b)(iii)(C); provided that no
such Lien shall extend to or cover any Collateral or
assets other than the assets subject to such Capitalized
Leases;
(vi) Liens on property of a Person existing at
the time such Person is merged into or consolidated with
the Borrower or any Subsidiary of the Borrower or becomes
a Subsidiary of the Borrower; provided that such Liens
were not created in contemplation of such merger,
consolidation or investment and do not extend to any
assets other than those of the Person merged into or
consolidated with the Borrower or such Subsidiary or
acquired by the Borrower or such Subsidiary; and
(vii) Liens in connection with Debt permitted
under Section 5.02(b)(iii)(G); provided that no such Lien
shall extend to or cover any Collateral other than cash
and Cash Equivalents in an amount equal to not more than
110% of the amount of such Debt.
(viii) Liens securing Debt permitted by Section
5.02(b)(iii)(H) to the extent such Debt was secured
immediately prior to such refinancing, refunding or
extension, without any increase in the assets subject to
Liens thereunder and in the case of the Subordinated
Cerberus Notes, having financial terms and other
covenants no less favorable to the Borrower and its
Subsidiaries; provided that no such Lien shall extend to
or cover any Collateral or assets other than the assets
subject to such refinanced, refunded or extended Debt.
(b) Debt. Create, incur, assume or, from and after the
Effective Date, suffer to exist, or permit any of its Subsidiaries
to create, incur, assume or, from and after the Effective Date,
suffer to exist, any Debt, except:
(i) in the case of the Borrower, Debt owed to a
Loan Party, which Debt if evidenced by a promissory note
shall, from and after the Effective Date, constitute
Pledged Debt and such promissory note shall, from and
after the Effective Date, be pledged as security for the
Obligations of the holder thereof under the Loan
Documents to which such holder is a party and delivered
to the Collateral Agent pursuant to the terms of the
Security Agreement,
(ii) in the case of any Subsidiary of the
Borrower that is a Loan Party, Debt owed to the Borrower
or to another Loan Party, provided that, in each case,
such Debt if evidenced by a promissory note shall, from
and after the Effective Date, constitute Pledged Debt,
and such promissory notes shall, from and after the
Effective Date, be pledged as security for the
Obligations of the holder thereof under the Loan
Documents to which such holder is a party and delivered
to the Collateral Agent pursuant to the terms of the
Security Agreement.
(iii) in the case of the Borrower and its Subsidiaries,
(A) Debt under the Loan Documents;
(B) Debt secured by Liens permitted by
Section 5.02(a)(iv) not to exceed in the aggregate
(together with any Capitalized Leases permitted
under clause (C) below) $10,000,000 at any time
outstanding, excluding, for purposes of such
limitation, Debt secured by Liens described in
Section 5.02(a)(iii);
(C) Capitalized Leases not to exceed in the
aggregate (together with any Debt permitted under
clause (B) above) $10,000,000 at any time
outstanding, excluding, for purposes of such
limitation, Debt secured by Liens described in
Section 5.02(a)(iii);
(D) Existing Debt;
(E) Debt in respect of Hedge Agreements
with Hedge Banks or banks which used to be Hedge
Banks immediately prior to an assignment of its
interests under this Agreement designed to hedge
against fluctuations in interest rates or foreign
exchange rates incurred in the ordinary course of
business and consistent with prudent business
practice;
(F) the Subordinated Cerberus Notes;
(G) Debt in respect of letters of credit
and other financial instruments in an aggregate
principal amount at any time outstanding not to
exceed $10,000,000;
(H) other unsecured Debt in an aggregate
principal amount not to exceed $5,000,000 at any
one time outstanding; and
(I) any refinancing, refunding or extending
the maturity of, any Debt described in clauses (A)
through (I) hereof; provided that the terms of any
such refinancing, refunding or extending Debt, and
of any agreement entered into and of any
instrument issued in connection therewith, are
otherwise permitted by the Loan Documents,
provided further that the principal amount of any
such Debt shall not be increased above the
principal amount thereof outstanding immediately
prior to such extension, refunding or refinancing,
and the direct and contingent obligors therefor
shall not be changed, as a result of or in
connection with such extension, refunding or
refinancing and, in the case of the Subordinated
Cerberus Notes, the financial terms and other
covenants shall be no less favorable to the
Borrower and its Subsidiaries.
(c) Change in Nature of Business. Make, or permit any of
its Subsidiaries to make, any material change in the nature of its
business as carried on at the date hereof.
(d) Mergers, Etc. Merge into or consolidate with any
Person or permit any Person to merge into it (other than with
respect to the Restructuring Transactions), or permit any of its
Subsidiaries to do any of the foregoing, except that any
Subsidiary of the Borrower may merge into or consolidate with any
other Subsidiary of the Borrower, provided that, in the case of
any such merger or consolidation, the Person formed by such merger
or consolidation shall be a wholly owned Subsidiary of the
Borrower, provided further that, in the case of any such merger or
consolidation to which a Subsidiary Guarantor is a party, the
Person formed by such merger or consolidation shall become a
Subsidiary Guarantor and provided, however, that in each case,
immediately after giving effect thereto, no event shall occur and
be continuing that constitutes a Default.
(e) Sales, Etc., of Assets. Except as provided for in the
Plan of Reorganization, sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets (including, without limitation,
the sale of receivables), or grant any option or other right to
purchase, lease or otherwise acquire any assets other than
Inventory to be sold or leased in the ordinary course of its
business, except:
(i) sales or leases of Inventory, services,
fixtures, equipment and receivables in the ordinary
course of its business;
(ii) sales of Identified Assets for cash and fair
market value and any escrow or holdback in connection
therewith in an amount not to exceed $700,000;
(iii) sales or trade-ins of surplus, worn or
obsolete equipment;
(iv) transactions solely among Loan Parties, and
(v) sales of non-ordinary course IRU's referred to
in Section 2.03(b)(i).
(vi) Sales of assets (other than assets described
in (i) through (v) above) in an aggregate amount not to
exceed $500,000 in any Fiscal Year;
provided that in the case of sales of assets pursuant to clauses
(ii), (iii), (v) and (vi) above (except with respect to proceeds
reinvested in replacement equipment within 90 days that do not
constitute Net Cash Proceeds pursuant to the last sentence of the
definition thereof), the Borrower shall, within two Business Days
of receipt by any Loan Party or any of its Subsidiaries of the Net
Cash Proceeds from such sale, prepay the Term Advances pursuant
to, and in the amount and order of priority set forth in, Section
2.03(b), as specified therein.
(f) Investments in Other Persons. Make or, from and after
the Effective Date, hold, or permit any of its Subsidiaries to
make or, from and after the Effective Date, hold, any Investment
in any Person, except:
(i) Investments by the Loan Parties in other Loans
Parties;
(ii) Investments existing on the date hereof and
described on Schedule 4.01(x) hereto;
(iii) Investments consisting of intercompany Debt
permitted under Section 5.02(b);
(iv) loans and advances to employees in the
ordinary course of business of each of the Borrower and
its Subsidiaries as presently conducted in an aggregate
amount not to exceed $500,000 on a consolidated basis at
any time outstanding;
(v) Investments by each of the Borrower and its
Subsidiaries in Hedge Agreements permitted under Section
5.02(b)(iii)(E);
(vi) Investments by each of the Borrower and its
Subsidiaries in cash or Cash Equivalents collateralizing
Debt permitted under Section 5.02(b)(iii)(G) in an amount
equal to not more than 110% of such Debt;
(vii) any escrow or holdback permitted under
Section 5.02(e)(ii);
(viii) investments in cash or Cash Equivalents
(subject to the requirements of this Agreement and the
Collateral Documents with respect to pledged accounts);
and
(ix) other Investments in an aggregate amount
invested not to exceed $10,000,000 and Investments made
solely with Equity Interests of the Borrower and it
Subsidiaries; provided that with respect to Investments
made under this clause (ix), (1) immediately before and
after giving effect thereto, no Default shall have
occurred and be continuing or would result therefrom and
(2) immediately after giving effect to the acquisition of
a company or business pursuant to this clause (ix), the
Borrower and its Subsidiaries shall be in pro forma
compliance with the covenants contained in Section 5.04,
calculated based on the financial statements most
recently delivered to the Lenders pursuant to Section
5.03 as evidenced by a certificate of the Chief Financial
Officer of the Borrower delivered to the Lenders
demonstrating such compliance.
(g) Restricted Payments. Except, from and after the
Effective Date, pursuant to the Subordinated Cerberus Notes as in
effect on such date, declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its
Equity Interests other than of a wholly owned Subsidiary now or
hereafter outstanding, return any capital to its stockholders,
partners or members (or the equivalent Persons thereof) as such,
make any distribution of assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the
equivalent Persons thereof) as such or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise
acquire for value any Equity Interests in the Borrower or to issue
or sell any Equity Interests therein, except that, so long as no
Default shall have occurred and be continuing at the time of any
action described in clause (i) or (ii) below or would result
therefrom:
(i) the Borrower may declare and pay dividends and
distributions payable only in stock of the Borrower,
other than Redeemable Capital Stock or Exchangeable
Capital Stock, and
(ii) any Subsidiary of the Borrower may (A)
declare and pay dividends to the Borrower, (B) declare
and pay dividends to any other Loan Party of which it is
a Subsidiary and (C) accept capital contributions from
its parent corporation to the extent permitted under
Section 5.02(f)(i).
(h) Amendments of Constitutive Documents. Amend, or
permit any of its Subsidiaries to amend, its certificate of
incorporation or bylaws or other constitutive documents other than
any such amendment that could not reasonably be expected to have a
Material Adverse Effect and other than the amendment and
restatement of the certificate of incorporation and the bylaws of
the Borrower as provided for in the Plan of Reorganization.
(i) Accounting Changes. Make or permit, or permit any of
its Subsidiaries to make or permit, any change in (i) accounting
policies or reporting practices, except as required or permitted
by generally accepted accounting principles (including changes
required or permitted in connection with the emergence of the
Borrower and certain of its Subsidiaries from Bankruptcy Court
protection pursuant to Chapter 11 of the Bankruptcy Code), or (ii)
Fiscal Year.
(j) Prepayments, Etc., of Debt. Except for the
consummation of the Plan of Reorganization, (1) prepay, redeem,
purchase, defease or otherwise satisfy prior to the scheduled
maturity thereof in any manner, or make any payment in violation
of any subordination terms of, any Debt, except (i) the prepayment
of the Term Advances in accordance with the terms of this
Agreement, (ii) prepayment of debt secured by assets to be sold
under any sale not prohibited hereunder from the proceeds of such
sale, (iii) prepayment of any debt payable to any Loan Party, and
(iv) regularly scheduled or required repayments or redemptions of
Existing Debt, or (2) (x) amend, modify or change in any manner
any term or condition of any Subordinated Debt, or permit any of
its Subsidiaries to do any of the foregoing other than to prepay
any Debt payable to the Borrower or (y) amend, modify or change in
any manner any term or condition of any Existing Debt if such
amendment, modification or change is reasonably likely to have an
adverse impact on (a) the business, conditions (financial or
otherwise), operations, performance, properties or prospects of
the Borrower and its Subsidiaries taken as a whole, (b) the rights
and remedies of any Agent or any Lender under any Transaction
Document or (c) the ability of any Loan Party to perform its
Obligations under any Transaction Document to which it is or is to
be a party, or permit any of its Subsidiaries to do any of the
foregoing other than to prepay any Debt payable to any Loan Party.
(k) Amendment, Etc., of Related Documents. Cancel or
terminate any Related Document or consent to or accept any
cancellation or termination thereof, amend, modify or change in
any manner any term or condition of any Related Document or give
any consent, waiver or approval thereunder, waive any default
under or any breach of any term or condition of any Related
Document, agree in any manner to any other amendment, modification
or change of any term or condition of any Related Document or take
any other action in connection with any Related Document that
would impair the value of the interest or rights of any Loan Party
thereunder or that would impair the rights or interests of any
Agent or any Lender, or permit any of its Subsidiaries to do any
of the foregoing.
(l) Negative Pledge. Enter into or, from and after the
Effective Date, suffer to exist, or permit any of its Subsidiaries
to enter into or, from and after the Effective Date, suffer to
exist, any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its property or assets except
(i) in favor of the Secured Parties or (ii) in connection with (A)
any Existing Debt, (B) any purchase money Debt permitted by
Section 5.02(b)(iii)(B) solely to the extent that the agreement or
instrument governing such Debt prohibits a Lien on the property
acquired with the proceeds of such Debt, (C) any Capitalized Lease
permitted by Section 5.02(b)(iii)(C) solely to the extent that
such Capitalized Lease prohibits a Lien on the property subject
thereto, (D) any Debt outstanding on the date any Subsidiary of
the Borrower becomes such a Subsidiary (so long as such agreement
was not entered into solely in contemplation of such Subsidiary
becoming a Subsidiary of the Borrower), (E) negative pledges
contained in asset sale agreements relating to assets required or
permitted to be sold under this Agreement, (F) the Subordinated
Cerberus Notes and (G) any governmental license, permit or other
approval.
(m) Partnerships, Etc. Become a general partner in any
general or limited partnership or joint venture, or permit any of
its Subsidiaries (other than a wholly owned special purpose
Subsidiary of the Borrower formed specifically for the purpose) to
do so, except for ICG ChoiceCom L.P. and ICG Telecom of San Diego,
L.P.
(n) Speculative Transactions. Engage, or permit any of
its Subsidiaries to engage, in any transaction involving commodity
options or futures contracts or any similar speculative
transactions, other than Hedge Agreements permitted by Section
5.02(b)(iii)(E).
(o) Formation of Subsidiaries. Organize or invest, or
permit any Subsidiary to organize or invest, in any new Subsidiary
unless it becomes a Subsidiary Guarantor.
(p) Payment Restrictions Affecting Subsidiaries. Directly
or indirectly, enter into or, from and after the Effective Date,
suffer to exist, or permit any of its Subsidiaries to enter into
or, from and after the Effective Date, suffer to exist, any
agreement or arrangement limiting the ability of any of its
Subsidiaries to declare or pay dividends or other distributions in
respect of its Equity Interests or repay or prepay any Debt owed
to, make loans or advances to, or otherwise transfer assets to or
invest in, the Borrower or any Subsidiary of the Borrower (whether
through a covenant restricting dividends, loans, asset transfers
or investments, a financial covenant or otherwise), except (i) the
Loan Documents, (ii) the Subordinated Cerberus Notes, (iii) any
agreement or instrument evidencing Existing Debt and (iv)
restrictions, solely with respect to the Subsidiaries or assets
being sold, contained in asset sale agreements relating to the
sale of Subsidiaries and assets being sold.
(q) Amendment, Etc., of Material Contracts. Cancel or
terminate any Material Contract or consent to or accept any
cancellation or termination thereof (to the extent that such
consent or acceptance is a condition of termination or
cancellation by the other party), amend or otherwise modify any
Material Contract or give any consent, waiver or approval
thereunder, waive any default under or breach of any Material
Contract, agree in any manner to any other amendment, modification
or change of any term or condition of any Material Contract or
take any other action in connection with any Material Contract
that would impair the value of the interest or rights of any Loan
Party thereunder in any material respect or that would impair the
interest or rights of any Agent or any Lender, or permit any of
its Subsidiaries to do any of the foregoing, in each case except
in the ordinary course of business in a manner that would not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.03. REPORTING REQUIREMENTS. Beginning on the
Effective Date, so long as any Term Advance or any other Obligation of any
Loan Party under any Loan Document shall remain unpaid, or any Lender shall
have any Commitment hereunder, each applicable Loan Party will furnish to
the Agents and the Lenders:
(a) Default Prepayment and Material Adverse Change
Notices. (i) As soon as possible and in any event within two days
after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect
continuing on the date of such statement, a statement of the chief
financial officer of the Borrower setting forth details of such
Default and the action that the Borrower has taken and proposes to
take with respect thereto, (ii) as soon as possible and in any
event no later than 1:00 P.M. (New York City time) at least three
Business Days before any prepayment of Term Advances is to be made
by the Borrower pursuant to Section 2.03(a) (the "Prepayment
Date"), written notice of the principal amount of such prepayment
(the "Prepayment Amount") and the applicable Prepayment Date. Each
such notice (a "Prepayment Notice") shall be by telex or
telecopier or otherwise as provided in Section 8.02 and (iii)
promptly after any event, development or occurrence reasonably
likely to constitute a Material Adverse Change, a statement of the
chief financial officer of the Borrower setting forth details of
such Material Adverse Change and the action that the Borrower has
taken and proposes to take with respect thereto.
(b) Annual Financials. As soon as available and in any
event within 92 days after the end of each Fiscal Year, a copy of
the annual audit report for such year for the Borrower and its
Subsidiaries, including therein Consolidated and, to the extent
required by the auditor of the Borrower and its Subsidiaries,
consolidating balance sheets of the Borrower and its Subsidiaries
as of the end of such Fiscal Year and Consolidated and, to the
extent required by the auditor of the Borrower and its
Subsidiaries, consolidating statements of income and a
Consolidated statement of cash flows of the Borrower and its
Subsidiaries for such Fiscal Year, in each case accompanied by an
opinion acceptable to the Required Lenders of KPMG LLC or other
independent public accountants of recognized standing acceptable
to the Required Lenders, together with (i) a certificate of the
Chief Financial Officer to the Lenders stating that in the course
of the regular audit of the business of the Borrower and its
Subsidiaries, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such
accounting firm has not indicated to such Chief Financial Officer
that it had obtained knowledge that a Default has occurred and is
continuing, or if, in the opinion of such accounting firm, a
Default has occurred and is continuing, a statement as to the
nature thereof, (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by the Chief
Financial Officer in determining, as of the end of such Fiscal
Year, compliance with the covenants contained in Section 5.04,
provided that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with
Section 5.04, a statement of reconciliation conforming such
financial statements to GAAP, (iii) a certificate of the Chief
Financial Officer of the Borrower stating that no Default has
occurred and is continuing or, if a default has occurred and is
continuing, a statement as to the nature thereof and the action
that the Borrower has taken and proposes to take with respect
thereto and (iv) copies of the management comment letter or
recommendations, if any, of KPMG LLC or other independent
accountants of recognized standing acceptable to the Required
Lenders addressed to the management of the Borrower in connection
with the accounts or books of the Borrower or any Subsidiary, or
any audit of any of them.
(c) Quarterly Financials. As soon as available and in any
event within 47 days after the end of each of the first three
quarters of each Fiscal Year, Consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as of the end
of such quarter and Consolidated and, to the extent required by
the auditor of the Borrower and its Subsidiaries, consolidating
statements of income and a Consolidated statement of cash flows of
the Borrower and its Subsidiaries for the period commencing at the
end of the previous fiscal quarter and ending with the end of such
fiscal quarter (except for the Consolidated statement of cash
flows, which shall be on a year to date basis) and Consolidated
and, to the extent required by the auditor of the Borrower and its
Subsidiaries, consolidating statements of income and a
Consolidated statement of cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous
Fiscal Year and ending with the end of such quarter, setting forth
in each case in comparative form the corresponding figures for the
corresponding date or period of the preceding Fiscal Year, all in
reasonable detail and duly certified (subject to normal year-end
audit adjustments and the absence of footnotes) by the Chief
Financial Officer of the Borrower as having been prepared in
accordance with GAAP, together with (i) a certificate of said
officer stating that no Default has occurred and is continuing or,
if a Default has occurred and is continuing, a statement as to the
nature thereof and such action that the Borrower has taken and
proposes to take with respect thereto, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used
by the Borrower in determining compliance with the covenants
contained in Section 5.04, provided that in the event of any
change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the
determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP and
(iii) to the extent the Borrower has entered into any Hedge
Agreement permitted under Section 5.02(b)(iii)(E), detailed
information as to the relevant amounts and terms of such Hedge
Agreements.
(d) Annual Budgets. As soon as available and in any event
no later than January 31 of each Fiscal Year, budgets prepared by
management of the Borrower, in form satisfactory to the
Administrative Agent, of balance sheets, income statements and
cash flow statements on a quarterly basis for such Fiscal Year and
on an annual basis for each Fiscal Year thereafter until the
Termination Date.
(e) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting any Loan Party or any of its Subsidiaries, of
the type described in Section 4.01(f).
(f) Securities Reports. Promptly after the sending or
filing thereof, copies of all proxy statements, financial
statements and reports that any Loan Party or any of its
Subsidiaries sends to its stockholders, and copies of all regular,
periodic and special reports, and all registration statements,
that any Loan Party or any of its Subsidiaries files with the
Securities and Exchange Commission or any governmental authority
that may be substituted therefor, or with any national securities
exchange.
(g) Creditor Reports. Promptly after the furnishing
thereof, copies of any statement or report furnished to any holder
of Debt securities of any Loan Party or of any of its Subsidiaries
pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the
Lenders pursuant to any other clause of this Section 5.03.
(h) Agreement Notices. Promptly upon receipt thereof,
copies of all notices, requests and other documents received by
any Loan Party or any of its Subsidiaries under or pursuant to any
Related Document or Material Contract or instrument, indenture,
loan or credit or similar agreement regarding or related to any
breach or default by any party thereto or any other event that
could reasonably be expected to materially impair the value of the
interests or the rights of any Loan Party or otherwise have a
Material Adverse Effect and copies of any amendment, modification
or waiver of any provision of any Related Document or Material
Contract or instrument, indenture, loan or credit or similar
agreement and, from time to time upon request by the
Administrative Agent, such information and reports regarding the
Related Documents, the Material Contracts and such instruments,
indentures and loan and credit and similar agreements as the
Administrative Agent may reasonably request.
(i) ERISA. (i) ERISA Events and ERISA Reports. (A)
Promptly and in any event within 10 days after any Loan Party or
any ERISA Affiliate knows or has reason to know that any ERISA
Event has occurred, a statement of the Chief Financial Officer of
the Borrower describing such ERISA Event and the action, if any,
that such Loan Party or such ERISA Affiliate has taken and
proposes to take with respect thereto and (B) on the date any
records, documents or other information must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a
copy of such records, documents and information.
(ii) Plan Terminations. Promptly and in any event within
two Business Days after receipt thereof by any Loan Party or any
ERISA Affiliate, copies of each notice from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed to
administer any Plan.
(iii) Plan Annual Reports. Promptly and in any event
within 30 days after the filing thereof with the PBGC, copies of
each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan.
(iv) Multiemployer Plan Notices. Promptly and in any
event within five Business Days after receipt thereof by any Loan
Party or any ERISA Affiliate from the sponsor of a Multiemployer
Plan, copies of each notice concerning (A) the imposition of
Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of
ERISA, of any such Multiemployer Plan or (C) the amount of
liability incurred, or that may be incurred, by such Loan Party or
any ERISA Affiliate in connection with any event described in
clause (A) or (B).
(j) Environmental Conditions. Promptly after the
assertion or occurrence thereof, notice of any Environmental
Action against or of any noncompliance by any Loan Party or any of
its Subsidiaries with any Environmental Law or Environmental
Permit that could (i) reasonably be expected to have a Material
Adverse Effect or (ii) cause any property described in the
Mortgages to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(k) Real Property. As soon as available and in any event
within 47 days after the end of each Fiscal Quarter, a report
supplementing Schedules 4.01(u) and 4.01(v) hereto, including an
identification of all owned and leased real property disposed of
by the Borrower or any of its Subsidiaries during such Fiscal
Year, a list and description (including the street address, county
or other relevant jurisdiction, state, record owner, book value
thereof and, in the case of leases of property, lessor, lessee,
expiration date and annual rental cost thereof) of all real
property acquired or leased during such Fiscal Year and a
description of such other changes in the information included in
such Schedules as may be necessary for such Schedules to be
accurate and complete.
(l) Insurance. As soon as available and in any event
within 30 days after the end of each Fiscal Year, a report
summarizing the insurance coverage (specifying type, amount and
carrier) in effect for each Loan Party and its Subsidiaries and
containing such additional information as any Agent, or any Lender
through the Administrative Agent, may reasonably specify.
(m) Revenue Agent Reports. Within 10 days after receipt,
copies of all Revenue Agent Report (Internal Revenue Service Form
886), or other written proposals of the Internal Revenue Service,
that propose, determine or otherwise set forth positive
adjustments to the federal income tax liability of the affiliated
group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which the Borrower is a member aggregating
$3,000,000 or more.
(n) Tax Certificates. Promptly, and in any event within
thirty (30) Business Days after the due date (with extensions, if
properly obtained) for filing the final federal income tax return
in respect of each taxable year, a certificate (a "Tax
Certificate") signed by the President or the Chief Financial
Officer of the Borrower, stating that there has been paid to the
Internal Revenue Service or other applicable taxing authority, the
full amount that the affiliated group that includes the Borrower
is required to pay in respect of federal income tax for such year
and that the Borrower has applied for any refunds payable to it in
respect of its taxes, that the Borrower has not paid amounts in
respect of taxes (federal, state, local or foreign) in excess of
the amounts, if any, they are required to pay under the Tax
Sharing Agreement in respect of such taxable year and have
received amounts, if any, due to it under the Tax Sharing
Agreement for such year.
(o) Reports of Identified Asset Sales. From and after the
Effective Date, from time to time as the Administrative Agent
shall request until the first anniversary of the Effective Date,
but not less than 30 days after the end of each month, reports
describing in reasonable detail the status of the sales of
Identified Assets.
(p) Capital Expenditure Certificates. For all point to
point broadband capital expenditures in years 2002, 2003, and
2004, the Chief Financial Officer of the Borrower shall provide a
certificate to the Lenders on a quarterly basis (which shall be
delivered at the same time as the financial statements referred to
in Sections 5.03(b) and (c) hereof) reporting: the amount of
actual aggregate point to point capital expenditures for the
immediately preceding quarter compared to planned capital
expenditures permitted under this Agreement for that quarter, and
the amount of point to point capital expenditure projects
permitted under this Agreement during the immediately preceding
quarter specifying for such projects the aggregate projected
quarterly cash flows, internal rate of return and payback periods.
The Borrower shall deliver with such certificate the computations
supporting the certification.
(q) Press Releases. After such time as the Borrower shall
cease to be a reporting company with the Securities Exchange
Commission, promptly after the release thereof, copies of any
press releases released by any Loan Party or any of its
Subsidiaries.
(r) Financial Summaries. As soon as available and in any
event promptly after the furnishing thereof to the board of
directors (or any committee thereof) of the Borrower, copies of
the financial summary furnished to the board of directors (or any
committee thereof) together with all attachments and appendices
furnished in connection therewith which summaries shall be
prepared and furnished no less frequently than on a quarterly
basis as required under Section 5.02(g) hereof.
(s) Other Information. Such other information respecting
the business, condition (financial or otherwise), operations,
performance, properties or prospects of any Loan Party or any of
its Subsidiaries as any Agent, or any Lender through the
Administrative Agent, may from time to time reasonably request.
SECTION 5.04. FINANCIAL COVENANTS. Beginning on the Effective
Date, so long as any Term Advance or any other Obligation of any Loan Party
under any Loan Document shall remain unpaid, or any Lender shall have any
Commitment hereunder, the Borrower will:
(a) Minimum EBITDA: At the end of each fiscal quarter set
forth below, maintain consolidated EBITDA for each consecutive
four fiscal quarterly period (except that until the fiscal quarter
ending March 31, 2003 such measurements shall be made for the
fiscal quarterly periods from April 1, 2002 and until the end of
the fiscal quarter set forth below) of not less than the amount
set forth below:
Fiscal Quarter Ending Amount
--------------------- ------
September 30, 2002 $30,901,000
December 31, 2002 $46,351,000
March 31, 2003 $63,854,000
June 30, 2003 $67,251,000
September 30, 2003 $70,649,000
December 31, 2003 $74,046,000
March 31, 2004 $79,586,000
June 30, 2004 $85,248,000
September 30, 2004 $91,269,000
December 31, 2004 $97,111,000
March 31, 2005 $109,708,000
June 30, 2005 $120,660,000
(b) Minimum Cash Balance. From and after the Effective
Date, maintain at all times a minimum cash balance of freely
available funds held on deposit in the cash collateral account
maintained by Wachovia Bank, National Association or one of its
affiliates (or such other institution that is a Lender and is
acceptable to the Administrative Agent) in an amount equal to (i)
75% of the outstanding principal amount of the Term Advances
outstanding hereunder for the period from the Effective Date until
the first anniversary of the Closing Date, unless there is a
Default or the Borrower anticipates a Default under this
Agreement, in which case the cash balance will stay at the 75%
level until there is no longer a Default or an anticipated Default
and (ii) at all times thereafter, an amount equal to 50% of the
principal amount of the Term Advances outstanding hereunder.
(c) Maximum Capital Expenditure. At the end of each
fiscal quarter set forth below, not permit consolidated Capital
Expenditures for each consecutive four fiscal quarterly periods
(except that until the fiscal quarter ending March 31, 2003 such
measurements shall be made for the fiscal quarterly periods from
April 1, 2002 and until the end of the fiscal quarter set forth
below) to exceed the corresponding amount set forth below:
Amount of Capital
Period Ending In Expenditure
---------------- -----------
September 30, 2002 $43,492,000
December 31, 2002 $63,358,000
March 31, 2003 $81,052,000
June 30, 2003 $85,477,000
September 30, 2003 $72,948,000
December 31, 2003 $78,777,000
March 31, 2004 $82,755,000
June 30, 2004 $86,729,000
September 30, 2004 $90,704,000
December 31, 2004 $86,678,000
March 31, 2005 $93,123,000
June 30, 2005 $99,564,000
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("Events of Default") shall occur and shall, from and after the Effective
Date, be continuing:
(a) (i) the Borrower shall fail to pay any principal of
any Term Advance when the same shall become due and payable or
(ii) the Borrower shall fail to pay any interest on any Term
Advance, or any Loan Party shall fail to make any other payment
under any Loan Document, in each case under this clause (ii)
within two Business Days after the same becomes due and payable;
or
(b) any representation or warranty made by any Loan Party
(or any of its officers) under or in connection with any Loan
Document shall prove to have been incorrect in any material
respect when made or confirmed; or
(c) any Loan Party shall fail to perform or observe any
term, covenant or agreement contained in Xxxxxxx 0.00(x), (x),
(x), (x) or (n), 5.02, 5.03(a)(i), or 5.04; or
(d) any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document
on its part to be performed or observed if such failure shall
remain unremedied for 30 days after the earlier of the date on
which (i) a Responsible Officer becomes aware of such failure or
(ii) written notice thereof shall have been given to the Borrower
by any Agent or any Lender; or
(e) any Loan Party or any of its Subsidiaries shall fail
to pay any principal of, premium or interest on or any other
amount payable in respect of any Debt of such Loan Party or such
Subsidiary (as the case may be) that is outstanding in a principal
amount (or, in the case of any Hedge Agreement, an Agreement
Value) of at least $2,500,000 either individually or in the
aggregate (but excluding Debt outstanding hereunder), when the
same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or
any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the
holder thereof to cause, such Debt to mature; or any such Debt
shall be declared to be due and payable or required to be prepaid
or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required to
be made, in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 60 days or any of the
actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or
any substantial part of its property) shall occur; or any Loan
Party or any of its Subsidiaries shall take any corporate action
to authorize any of the actions set forth above in this subsection
(f); or
(g) any judgments or orders (except the Confirmation
Order), either individually or in the aggregate, for the payment
of money in excess of $2,500,000 (determined net of any applicable
insurance proceeds) shall be rendered against any Loan Party or
any of its Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 25 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;
or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that could be
reasonably likely to have a Material Adverse Effect, and there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery
thereof pursuant to Section 3.01 or 5.01(j) and the terms of the
Escrow Agreement shall for any reason cease to be valid and
binding on or enforceable against any Loan Party party to it, or
any such Loan Party shall so state in writing; or
(j) any Collateral Document or financing statement after
delivery thereof pursuant to Section 3.01 or 5.01(j) and the terms
of the Escrow Agreement shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first
priority lien on and security interest in the U.S. Collateral
purported to be covered thereby, subject only to Liens permitted
hereunder or thereunder; or
(k) a Change of Control shall occur; or
(l) any Material Adverse Change shall have occurred and
shall remain unremedied for 10 days after written notice thereof
shall have been given to the Borrower by the Administrative Agent;
provided that if the Borrower provides the Administrative Agent
with evidence sufficient to the Administrative Agent that the
Material Adverse Change can be remedied within 30 day after notice
from the Administrative Agent, the Borrower shall have such 30 day
period to remedy the situation before it will be an Event of
Default hereunder; or
(m) any ERISA Event shall have occurred with respect to a
Plan and the sum (determined as of the date of occurrence of such
ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to which an
ERISA Event shall have occurred and then exist (or the liability
of the Loan Parties and the ERISA Affiliates related to such ERISA
Event) exceeds $500,000; or
(n) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan in an
amount that, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Loan Parties and the ERISA
Affiliates as Withdrawal Liability (determined as of the date of
such notification), exceeds $500,000 or requires payments
exceeding $100,000 per annum; or
(o) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions
of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization
or termination occurs by an amount exceeding $500,000;
then, and in any such event, the Administrative Agent shall at the request,
or may with the consent, of the Required Lenders, (A) by notice to the
Borrower, declare the Term Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Term Notes, all such interest and
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to
the Borrower under the Bankruptcy Code, the Term Notes, all such interest
and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. AUTHORIZATION AND ACTION. Each Lender (in its
capacities as a Lender and on behalf of itself and its Affiliates as
potential Hedge Banks) hereby appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Loan Documents as are
delegated to such Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Term Notes), no Agent
shall be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Term Notes; provided, however, that no Agent shall be
required to take any action that exposes such Agent to personal liability
or that is contrary to this Agreement or applicable law. Each Agent agrees
to give to each Lender prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.
SECTION 7.02. AGENTS' RELIANCE, ETC. Neither any Agent nor any
of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or
in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of
the foregoing, each Agent: (a) may treat the payee of any Term Note as the
holder thereof until, in the case of the Administrative Agent, the
Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Lender that is the payee of such Term Note, as
assignor, and an Eligible Assignee, as assignee, or, in the case of any
other Agent, such Agent has received notice from the Administrative Agent
that it has received and accepted such Assignment and Acceptance, in each
case as provided in Section 8.07; (b) may consult with legal counsel
(including counsel for any Loan Party), independent public accountants and
other experts selected by it and shall not be liable for any action taken
or omitted to be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for
any statements, warranties or representations (whether written or oral)
made in or in connection with the Loan Documents; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records)
of any Loan Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto;
and (f) shall incur no liability under or in respect of any Loan Document
by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram, telecopy or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 7.03. AGENTS AND AFFILIATES. With respect to the Term
Advances made by it and the Term Notes issued to it, each Agent shall have
the same rights and powers under the Loan Documents as any other Lender and
may exercise the same as though it were not an Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include each
Agent in its individual capacity. Each Agent and its respective affiliates
may accept deposits from, lend money to, act as trustee under indentures
of, accept investment banking engagements from and generally engage in any
kind of business with, any Loan Party, any of its Subsidiaries and any
Person that may do business with or own securities of any Loan Party or any
such Subsidiary, all as if such Agent was not an Agent and without any duty
to account therefor to the Lenders.
SECTION 7.04. LENDER CREDIT DECISION. Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender and based on the financial statements referred to in Section 4.01
and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance
upon any Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement.
SECTION 7.05. INDEMNIFICATION. (a) Each Lender severally agrees
to indemnify each Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against such Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by such Agent under the Loan
Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
such Agent's gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction. Without
limitation of the foregoing, each Lender agrees to reimburse each Agent
promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by
the Borrower under Section 8.04, to the extent that such Agent is not
promptly reimbursed for such costs and expenses by the Borrower.
(b) For purposes of this Section 7.05, the Lenders' respective
ratable shares of any amount shall be determined, at any time, according to
the aggregate principal amount of the Term Advances outstanding at such
time and owing to the respective Lenders. The failure of any Lender to
reimburse any Agent, as the case may be, promptly upon demand for its
ratable share of any amount required to be paid by the Lenders to such
Agent, as the case may be, as provided herein shall not relieve any other
Lender of its obligation hereunder to reimburse such Agent, as the case may
be, for its ratable share of such amount, but no Lender shall be
responsible for the failure of any other Lender to reimburse such Agent, as
the case may be, for such other Lender's ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender
hereunder, the agreement and obligations of each Lender contained in this
Section 7.05 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the other Loan Documents.
SECTION 7.06. SUCCESSOR AGENTS. Any Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Agent, subject, so long as no Default has
occurred and is continuing, to the consent of the Borrower, such consent
not to be unreasonably withheld. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then
the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, subject, so long as no Default has occurred and is continuing, to
the consent of the Borrower, such consent not to be unreasonably withheld,
which shall be a commercial bank organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of
at least $250,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent and, in the case of a successor Collateral
Agent, upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to
any mortgages, and such other instruments or notices, as may be necessary
or desirable, or as the Required Lenders may request, in order to continue
the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Loan Documents. If within 45 days after
written notice is given of the retiring Agent's resignation or removal
under this Section 7.06 no successor Agent shall have been appointed and
shall have accepted such appointment, then on such 45th day (i) the
retiring Agent's resignation or removal shall become effective, (ii) the
retiring Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (iii) the Required Lenders shall
thereafter perform all duties of the retiring Agent under the Loan
Documents until such time, if any, as the Required Lenders appoint a
successor Agent as provided above. After any retiring Agent's resignation
or removal hereunder as Agent shall have become effective, the provisions
of this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the Term Notes or any other Loan Document,
nor consent to any departure by any Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed (or, in
the case of the Collateral Documents, consented to) by the Required
Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that (a) no amendment, waiver or consent shall, unless in writing
and signed by all of the Lenders (other than any Lender that is, at such
time, a Defaulting Lender), do any of the following at any time: (i) waive
any of the conditions specified in Section 3.01, (ii) change the number of
Lenders or the percentage of the aggregate unpaid principal amount of the
Term Advances that shall be required for the Lenders or any of them to take
any action hereunder, (iii) reduce or limit the obligations of any
Subsidiary Guarantor under Section 1 of the Subsidiary Guaranty issued by
it or release such Subsidiary Guarantor or otherwise limit such Subsidiary
Guarantor's liability with respect to the Obligations owing to the Agents
and the Lenders (other than, in the case of any Subsidiary Guarantor, to
the extent permitted under the Subsidiary Guaranty), (iv) release any
material portion of the Collateral in any transaction or series of related
transactions or permit the creation, incurrence, assumption or existence of
any Lien on any material portion of the Collateral in any transaction or
series of related transactions to secure any Obligations other than
Obligations owing to the Secured Parties under the Loan Documents, (v)
amend Section 2.10 or this Section 8.01, (vi) reduce the principal of, or
interest on, the Term Notes or any fees or other amounts payable hereunder,
(vii) postpone any date scheduled for any payment of principal of, or
interest on, the Term Notes pursuant to Section 2.02 or 2.04 or any date
fixed for payment of fees or other amounts payable hereunder, or (viii)
limit the liability of any Loan Party under any of the Loan Documents and
(b) no amendment, waiver or consent shall, unless in writing and signed by
the Required Lenders and each Lender (other than any Lender that is, at
such time, a Defaulting Lender) that has a Term Advance outstanding
hereunder if such Lender is directly affected by such amendment, waiver or
consent, (i) reduce the principal of, or interest on, the Term Notes held
by such Lender or any fees or other amounts payable hereunder to such
Lender, (ii) postpone any date fixed for any payment of principal of, or
interest on, the Term Notes held by such Lender or any fees or other
amounts payable hereunder to such Lender, (iii) change the order of
application of any prepayment set forth in Section 2.03 in any manner that
materially affects such Lender; provided further that no amendment, waiver
or consent shall, unless in writing and signed by an Agent in addition to
the Lenders required above to take such action, affect the rights or duties
of such Agent under this Agreement or the other Loan Documents.
SECTION 8.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including
telecopy communication) and mailed (by certified mail), telecopied or
delivered by hand; if to the Borrower, at its address at 000 Xxxxxxxxx
Xxxxx Xxxx, Xxxxxxxxx, XX 00000, facsimile: (000) 000-0000, Attention:
Xxxxxxx X. Xxxx, Xx., with a copy to Xxxxxxx X. Xxxxxx, General Counsel; if
to any Initial Lender, at its Domestic Lending Office specified opposite
its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which
it became a Lender; if to the Administrative Agent or the Collateral Agent,
at its address at 0 Xxxxxxx Xxxxx, 0xx xxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Facsimile: (000) 000-0000; Attention: Xxxxxx Xxxxx; with a copy
to Xxxxxx Xxxxxxxxx at 0 Xxxxxxx Xxxxx, 0xx xxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Facsimile: (000) 000-0000; or, as to any party, at such other
address as shall be designated by such party in a written notice to the
other parties. All such notices and other communications shall, when mailed
(by certified mail), telecopied or delivered shall be effective when
received by the party being notified. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement
or the Term Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of an original executed
counterpart thereof.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of any
Lender or any Agent to exercise, and no delay in exercising, any right
hereunder or under any Term Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. COSTS AND EXPENSES. (a) The Borrower agrees to
pay on demand (i) all costs and expenses of the Administrative Agent, the
Documentation Agent and the Collateral Agent in connection with the
preparation, execution, delivery, administration, modification and
amendment of the Loan Documents (including, without limitation, (A) all due
diligence, collateral review, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and expenses of
counsel for such Agents with respect thereto, with respect to advising such
Agents as to their rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan
Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and
with respect to presenting claims in or otherwise participating in or
monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii)
all costs and expenses of such Agents and each Lender in connection with
the enforcement of the Loan Documents, whether in any action, suit or
litigation, any "workout" or restructuring in respect of the Obligations
under the Loan Documents, or any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally (including, without
limitation, the reasonable fees and expenses of counsel for the
Administrative Agent, the Documentation Agent and the Collateral Agent and
each Lender with respect thereto).
(b) The Borrower agrees to indemnify, defend and save and hold
harmless the Administrative Agent, Documentation Agent and the Collateral
Agent, each Lender and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against, and shall pay on demand, any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out
of or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation
of a defense in connection therewith) (i) this Agreement and the Term
Advances hereunder, the actual or proposed use of the proceeds of the Term
Advances, the other Transaction Documents or any of the transactions
contemplated thereby, or (ii) the actual or alleged presence of Hazardous
Materials on any property of any Loan Party or any of its Subsidiaries or
any Environmental Action relating in any way to any Loan Party or any of
its Subsidiaries, except to the extent such claim, damage, loss, liability
or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section
8.04(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party, whether or
not any Indemnified Party is otherwise a party thereto and whether or not
the Transaction is consummated. The Borrower also agrees not to assert any
claim against any Agent, any Lender or any of their Affiliates, or any of
their respective officers, directors, employees, agents and advisors, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to this Agreement and the Term
Advances hereunder, the actual or proposed use of the proceeds of the Term
Advances, the other Transaction Documents or any of the transactions
contemplated by the Transaction Documents.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Term
Advance, as a result of a payment or Conversion pursuant to Section 2.03,
2.06(b)(i) or 2.07(d), acceleration of the maturity of the Term Notes
pursuant to Section 6.01 or for any other reason, or by an Eligible
Assignee to a Lender other than on the last day of the Interest Period for
such Term Advance upon an assignment of rights and obligations under this
Agreement pursuant to Section 8.07 as a result of a demand by the Borrower
pursuant to Section 8.07(a), or if the Borrower fails to make any payment
or prepayment of a Term Advance for which a notice of prepayment has been
given or that is otherwise required to be made, whether pursuant to Section
2.02, 2.03 or 6.01 or otherwise, the Borrower shall, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), jointly
and severally pay to the Administrative Agent for the account of such
Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment or Conversion or such failure to pay or prepay, as the case may be,
including, without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Term Advance.
(d) If any Loan Party fails to pay when due any costs, expenses
or other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may
be paid on behalf of such Loan Party by the Administrative Agent or any
Lender, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of
any Loan Party hereunder or under any other Loan Document, the agreements
and obligations of the Borrower contained in Sections 2.07 and 2.09 and
this Section 8.04 shall survive the payment in full of principal, interest
and all other amounts payable hereunder and under any of the other Loan
Documents.
SECTION 8.05. RIGHT OF SET-OFF. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the
request or the granting of the consent specified by Section 6.01 to
authorize the Administrative Agent to declare the Term Notes due and
payable pursuant to the provisions of Section 6.01, each Agent and each
Lender and each of their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set
off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at
any time owing by such Agent, such Lender or such Affiliate to or for the
credit or the account of the Borrower against any and all of the
Obligations of the Borrower now or hereafter existing under the Loan
Documents, irrespective of whether such Agent or such Lender shall have
made any demand under this Agreement or such Term Note or Term Notes and
although such Obligations may be unmatured. Each Agent and each Lender
agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each
Agent and each Lender and their respective Affiliates under this Section
are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender and their
respective Affiliates may have.
SECTION 8.06. BINDING EFFECT. Subject to Sections 3.03 and
8.16, this Agreement shall become effective when it shall have been
executed by the Borrower and each Agent and the Administrative Agent shall
have been notified by each Initial Lender that such Initial Lender has
executed it and thereafter shall be binding upon and inure to the benefit
of the Borrower, each Agent and each Lender and their respective successors
and assigns, except that the Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior written
consent of the Lenders.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender
may assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or
a portion of the Term Advances owing to it and the Term Note or Term Notes
held by it); provided, however, that (i) each such assignment shall be of a
uniform, and not a varying, percentage of all rights and obligations under
and in respect of the Term Advances, (ii) except in the case of an
assignment of all of the Lender's rights and obligations under this
Agreement, the aggregate amount of the Term Advances being assigned to such
Eligible Assignee pursuant to such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no
event be less than $2,000,000 (or such lesser amount as shall be approved
by the Administrative Agent and, so long as no Default shall have occurred
and be continuing at the time of effectiveness of such assignment, the
Borrower) and (iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in
the Register, an Assignment and Acceptance, together with any Term Note or
Term Notes subject to such assignment and a processing and recordation fee
of $3,000.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and
Acceptance, (i) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations
of a Lender or, as the case may be, hereunder and (ii) the Lender or
assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than its rights under Sections
2.07, 2.09 and 8.04 to the extent any claim thereunder relates to an event
arising prior to such assignment) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
covering all of the remaining portion of an assigning Lender's or rights
and obligations under this Agreement, such Lender or shall cease to be a
party hereto).
(c) By executing and delivering an Assignment and Acceptance,
each Lender assignor thereunder and each assignee thereunder confirm to and
agree with each other and the other parties thereto and hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of any Loan Party
or the performance or observance by any Loan Party of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon any Agent, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes each Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to such Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this Agreement
are required to be performed by it as a Lender or, as the case may be.
(d) The Administrative Agent, acting for this purpose (but only
for this purpose) as the agent of the Borrower, shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and principal amount
of the Term Advances owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Agents and
the Lenders shall treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Agent or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, together with any Term Note or Term
Notes subject to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrower and each other Agent. In the case of
any assignment by a Lender, within five Business Days after its receipt of
a request therefor from the Eligible Assignee (acting through the Agent),
the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Term Note or Term
Notes, if any, a new Term Note or Term Notes to the order of such Eligible
Assignee in an amount equal to the Term Advances assumed by it hereunder
pursuant to such Assignment and Acceptance and, if any assigning Lender has
retained a Term Advance hereunder, a new Term Note or Term Notes to the
order of such assigning Lender in an amount equal to the Term Advance
retained by it hereunder. Any such new Term Note or Term Notes shall be in
an aggregate principal amount equal to the aggregate principal amount of
such surrendered Term Note or Term Notes (if any), shall be dated the
effective date of such Assignment and Acceptance, and shall otherwise be in
substantially the form of Exhibit A hereto, as the case may be.
(f) Each Lender may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its pro rata share of the Term
Advances owing to it and the Term Note or Term Notes (if any) held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its pro rata share of the Term Advances)
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)
such Lender shall remain the holder of any such Term Note or Term Notes for
all purposes of this Agreement, (iv) the Borrower, the Agents and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or
any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal
of, or interest on, the Term Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation,
postpone any date fixed for any payment of principal of, or interest on,
the Term Notes or any fees or other amounts payable hereunder, in each case
to the extent subject to such participation, or release all or
substantially all of the Collateral.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 8.07, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided, however, that, prior to
any such disclosure, the assignee or participant or proposed assignee or
participant shall agree in writing to preserve the confidentiality of any
Confidential Information received by it from such Lender.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without
limitation, the Term Advances owing to it and the Term Note or Term Notes
held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
SECTION 8.08. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
SECTION 8.09. CONFIDENTIALITY. Neither any Agent nor any Lender
shall disclose any Confidential Information to any Person without the
consent of the Borrower, other than (a) to such Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors
and to actual or prospective Eligible Assignees and participants, and then
only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process, (c) as requested or required by any state,
Federal or foreign authority or examiner regulating such Lender and (d) to
any rating agency when required by it, provided that, prior to any such
disclosure, such rating agency shall undertake to preserve the
confidentiality of any Confidential Information relating to the Loan
Parties received by it from such Lender.
SECTION 8.10. RELEASE OF COLLATERAL. Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Loan Party
(including, without limitation, as a result of the sale, in accordance with
the terms of the Loan Documents, of the Loan Party that owns such
Collateral) in accordance with the terms of the Loan Documents, the
Collateral Agent will, at the Borrower's expense, execute and deliver to
such Loan Party such documents as such Loan Party may reasonably request to
evidence the release of such item of Collateral from the assignment and
security interest granted under the Collateral Documents in accordance with
the terms of the Loan Documents.
SECTION 8.11. JURISDICTION, ETC. (a) From and after the
Effective Date, each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or Federal court of the United
States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in any such New
York State court or, to the fullest extent permitted by law, in such
Federal court. Each of the Loan Parties hereby agrees that service of all
process in any such proceeding in any such court may be made by registered
mail or certified mail, return receipt requested, to such Loan Party at its
address provided in Section 8.02. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right
that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents in the courts
of any jurisdiction.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it
is a party in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 8.12. GOVERNING LAW. This Agreement and the Term Notes
shall be governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 8.13. WAIVER OF JURY TRIAL. Each of the Borrower, the
Agents and the Lenders irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the
Term Advances, or the actions of any Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
SECTION 8.14. NON-U.S. SUBSIDIARIES. Notwithstanding any
provision of any Loan Document to the contrary, unless an Event of Default
shall have occurred and be continuing, (i) no more than 65% of the equity
interests in any CFC shall be pledged or similarly hypothecated to
guarantee or support any Obligation of the Borrower, (ii) no CFC shall
guarantee or support any Obligation of the Borrower and (iii) no security
or similar interest shall be granted in the assets of any CFC, which
security or similar interest guarantees or supports any Obligations of the
Borrower. The Parties agree that any pledge, guaranty or security or
similar interest made or granted in contravention of this Section 8.14
shall be void ab initio.
SECTION 8.15. EXISTING CREDIT AGREEMENT. Upon the Effective
Date, this agreement will replace the Existing Credit Agreement in its
entirety, and after the Effective Date the Existing Credit Agreement and
the other "Loan Documents" (as defined therein) shall be of no further
force and effect (except for any provision thereof that by its terms
survives termination thereof). Obligations payable under both this
Agreement and the Existing Credit Agreement shall be payable without
duplication (including interest, as specified in Section 2.04(d)).
SECTION 8.16. EFFECTIVE DATE; REPRESENTATIONS AND WARRANTIES.
(a) It shall be a condition to the effectiveness of this Agreement (other
than Section 8.04, which shall be effective as of the Closing Date) and to
each of the other Loan Documents that, on or prior to the Deadline Date,
each of the conditions contained in Section 3.03 shall have been satisfied.
In the event that such conditions are not fulfilled and the Effective Date
does not occur by such date, the property held in escrow shall be
distributed pursuant to Section 3.02 and this Agreement and the other Loan
Documents shall be of no further force and effect (other than the
provisions of Section 8.04, which shall survive any such termination).
Notwithstanding any provision of any Loan Document to the contrary (except
solely to the extent that the certification required pursuant to Section
3.03(h)(ii) constitutes a condition the Effective Date), the obligations of
the Loan Parties under the Loan Documents shall be effective only from and
after the Effective Date.
(b) Each of the representations and warranties of any Loan
Party contained in any Loan Document and made as of a date prior to the
Effective Date shall be deemed to have been made after giving effect to the
transactions contemplated by the Loan Documents and the Plan of
Reorganization, as though such transactions and the Plan of Reorganization
were consummated on and as of the Closing Date and subject to the entry by
the Bankruptcy Court of the Confirmation Order.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
ICG COMMUNICATIONS, INC.
By
-----------------------------------------
Title:
ROYAL BANK OF CANADA,
as Administrative Agent and Collateral Agent
By
-----------------------------------------
Title:
WACHOVIA BANK,
NATIONAL
ASSOCIATION,
formerly known as
"First Union
National Bank" as
Documentation Agent
By
-----------------------------------------
Title:
Initial Lenders
ENDEAVOUR LLC
By
-----------------------------------------
Title:
BARCLAYS BANK PLC
By
-----------------------------------------
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
formerly known as "First Union National Bank"
By
-----------------------------------------
Title:
ROYAL BANK OF CANADA
By
-----------------------------------------
Title:
XXXXXX XXXXXXX SENIOR FUNDING, INC.
By
-----------------------------------------
Title:
BNP PARIBAS
By
-----------------------------------------
Title:
IBM CREDIT CORPORATION
By
-----------------------------------------
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By
-----------------------------------------
Title:
ING PRIME RATE TRUST
By
-----------------------------------------
Title:
FINOVA CAPITAL CORPORATION
By
-----------------------------------------
Title:
CAPTIVA FINANCE LTD.
By
-----------------------------------------
Title:
ELT FINANCE LTD.
By
-----------------------------------------
Title:
FRANKLIN FLOATING RATE TRUST
By
-----------------------------------------
Title:
KEYPORT LIFE INSURANCE COMPANY
By: Xxxxx Xxx & Xxxxxxx Incorporated, as
Advisor for Keyport Life Insurance Company
By
-----------------------------------------
Title:
XXXXX XXX FLOATING RATE LIMITED
LIABILITY COMPANY
By
-----------------------------------------
Title:
WINGED FOOT FUNDING TRUST
By
-----------------------------------------
Title:
FOOTHILL INCOME TRUST II LP
By
-----------------------------------------
Title:
EXHIBIT A
FORM OF TERM NOTE
$_______________ Dated: ________ __, ____
FOR VALUE RECEIVED, the undersigned, ICG COMMUNICATIONS, INC.,
a Delaware corporation (the "Borrower"), HEREBY PROMISES, TO PAY to
_____________ or its registered assigns (the "Lender") for the account of
its Applicable Lending Office (as defined in the Credit Agreement referred
to below) the aggregate principal amount of the Term Advances (as defined
below) owing to the Lender by the Borrower pursuant to the Credit Agreement
dated as of July __, 2002 (as amended, amended and restated, supplemented
or otherwise modified from time to time, the "Credit Agreement"; terms
defined therein, unless otherwise defined herein, being used herein as
therein defined) among the Borrower, the Lender and certain other lenders
party thereto, Royal Bank of Canada, as Collateral Agent and as
Administrative Agent for the Lender and such other lenders and Wachovia
Bank, N.A., as Documentation Agent on the dates and in the amounts
specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal
amount of each Term Advance from the Effective Date until such principal
amount is paid in full, at such interest rates, and payable at such times,
as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Royal Bank of Canada, as Administrative Agent,
at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, in same day funds. Each
Term Advance owing to the Lender by the Borrower and the maturity thereof,
and all payments made on account of principal thereof, including without
limitation the Lender's pro rata share of the mandatory pre-payment
referred to below of the Term Advance on the Effective Date, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto, which is part of this Promissory Note; provided,
however, that the failure of the Lender to make any such recordation or
endorsement shall not affect the Obligations of the Borrower under this
Promissory Note.
This Promissory Note is one of the Term Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides that the Existing Advance under
the Existing Credit Agreement owing to the Lender shall become a Term
Advance (the "Term Advance") by the Lender to or for the benefit of the
Borrower in an amount not to exceed at any time outstanding the U.S. dollar
amount first above mentioned, the indebtedness of the Borrower resulting
from each such Term Advance being evidenced by this Promissory Note, (ii)
provides for, among other prepayments from time to time, a mandatory
prepayment of the Term Advances in the aggregate principal amount of
$25,000,000 upon, and as a condition of, the conversion of the Existing
Advances to Term Advances, and (iii) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events and also
for prepayments on account of principal hereof prior to the maturity hereof
upon the terms and conditions therein specified. The obligations of the
Borrower under this Promissory Note and the other Loan Documents, and the
obligations of the other Loan Parties under the Loan Documents, are secured
by the Collateral as provided in the Loan Documents.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
ICG COMMUNICATIONS, INC.
By
--------------------------
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
------------------------------------------------------------------------------
| | | Amount of | Unpaid | |
| Date | Amount of | Principal Paid | Principal | Notation |
| | Advance | or Prepaid | Balance | Made By |
|-----------|--------------|------------------|----------------|---------------|
| | | | | |
|-----------|--------------|------------------|----------------|---------------|
| | | | | |
|-----------|--------------|------------------|----------------|---------------|
| | | | | |
|-----------|--------------|------------------|----------------|-- ------------|
| | | | | |
|-----------|--------------|------------------|----------------|---------------|
| | | | | |
|-----------|--------------|------------------|----------------|---------------|
| | | | | |
|-----------|--------------|------------------|----------------|---------------|
| | | | | |
|-----------|--------------|------------------|----------------|---------------|
| | | | | |
------------------------------------------------------------------------------
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of July __,
2002 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"; the terms defined therein,
unless otherwise defined herein, being used herein as therein defined)
among ICG COMMUNICATIONS, INC., a Delaware corporation (the "Borrower"),
the Lenders party thereto, Royal Bank of Canada, as Collateral Agent and as
Administrative Agent for the Lenders and Wachovia Bank, N.A., as
Documentation Agent.
Each "Assignor" referred to on Schedule 1 hereto (each, an
"Assignor") and each "Assignee" referred to on Schedule 1 hereto (each, an
"Assignee") agrees severally with respect to all information relating to it
and its assignment hereunder and on Schedule 1 hereto as follows:
1. Such Assignor hereby sells and assigns, without recourse
except as to the representations and warranties made by it herein, to such
Assignee, and such Assignee hereby purchases and assumes from such
Assignor, an interest in and to such Assignor's rights and obligations
under the Credit Agreement as of the date hereof equal to the percentage
interest specified on Schedule 1 hereto of all outstanding rights and
obligations of the Term Advances under the Credit Agreement. After giving
effect to such sale and assignment, the amount of the Term Advances owing
to such Assignee will be as set forth on Schedule 1 hereto.
2. Such Assignor (i) represents and warrants that its name set
forth on Schedule 1 hereto is its legal name, that it is the legal and
beneficial owner of the interest or interests being assigned by it
hereunder and that such interest or interests are free and clear of any
adverse claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under
any Loan Document or any other instrument or document furnished pursuant
thereto; and (iv) attaches the Term Note or Term Notes (if any) held by
such Assignor and requests that the Administrative Agent exchange any such
Term Note or Term Notes for a new Term Note or Term Notes payable to the
order of such Assignee, if requested by the Assignee, in an amount equal to
the Term Advance assumed by such Assignee pursuant hereto, or new Term
Notes payable to the order of such Assignee, if requested by the Assignee,
in an amount equal to the Term Advance assumed by such Assignee pursuant
hereto and such Assignor, if any Term Notes payable to the Assignor are
attached hereto, in an amount equal to the Term Advance retained by such
Assignor under the Credit Agreement, respectively, as specified on Schedule 1
hereto.
3. Such Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements
referred to in Section 4.01 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance; (ii) agrees that
it will, independently and without reliance upon any Agent, any Assignor or
any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) represents
and warrants that its name set forth on Schedule 1 hereto is its legal
name; (iv) confirms that it is an Eligible Assignee; (v) appoints and
authorizes each Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are
delegated to such Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (vi) agrees that it will
perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement are required to be performed by it as a
Lender; and (vii) attaches any U.S. Internal Revenue Service forms required
under Section 2.09 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Administrative Agent for acceptance and
recording by the Administrative Agent. The effective date for this
Assignment and Acceptance (the "Assignment Effective Date") shall be the
date of acceptance hereof by the Administrative Agent, unless otherwise
specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative
Agent, as of the Assignment Effective Date, (i) such Assignee shall be a
party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) such Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement (other than its rights and
obligations under the Loan Documents that are specified under the terms of
such Loan Documents to survive the payment in full of the Obligations of
the Loan Parties under the Loan Documents to the extent any claim
thereunder relates to an event arising prior to the Assignment Effective
Date) and, if this Assignment and Acceptance covers all of the remaining
portion of the rights and obligations of such Assignor under the Credit
Agreement, such Assignor shall cease to be a party thereto.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Assignment Effective Date, the Administrative
Agent shall make all payments under the Credit Agreement and the Notes in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect thereto)
to such Assignee. Such Assignor and such Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the
Notes for periods prior to the Assignment Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number
of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of Schedule 1 to this Assignment and Acceptance
by telecopier shall be effective as delivery of an original executed
counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, each Assignor and each Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their
officers thereunto duly authorized as of the date specified thereon.
Effective Date (if other than date of acceptance by Administrative Agent):
(1)_______ __, ____
Assignors
---------
_____________________, as Assignor
[Type or print legal name of Assignor]
By
------------------------------------------
Title:
Dated: _________ __, ____
_____________________, as Assignor
[Type or print legal name of Assignor]
By
------------------------------------------
Title:
Dated: _________ __, ____
Assignees
---------
_____________________, as Assignee
[Type or print legal name of Assignee]
By
------------------------------------------
Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
_____________________, as Assignee
[Type or print legal name of Assignee]
________________
(1) This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Administrative Agent.
By
------------------------------------------
Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
Accepted and Approved this ____
day of ___________, ____
[NAME OF ADMINISTRATIVE AGENT],
as Administrative Agent
By
------------------------------
Title:
[Approved this ____ day
of _____________, ____
[NAME OF BORROWER]
By
------------------------------
Title:
EXHIBIT C
FORM OF SECURITY AGREEMENT
EXECUTION COPY
SECURITY AGREEMENT
Dated as of July __, 2002
From
THE PERSONS LISTED ON THE SIGNATURE PAGES HEREOF
as Grantors
to
ROYAL BANK OF CANADA
as Collateral Agent
Table of Contents
Page
Section 1. Grant of Security....................................................................................2
Section 2. Security for Obligations.............................................................................5
Section 3. Grantors Remain Liable...............................................................................6
Section 4. Delivery and Control of Security Collateral and Account Collateral...................................6
Section 5. Maintaining the Account Collateral...................................................................7
Section 6. Investing of Amounts in the Collateral Account.......................................................9
Section 7. Release of Amounts...................................................................................9
Section 8. Maintaining Electronic Chattel Paper, Transferable Records and Letter-of-Credit
Rights and Giving Notice of Commercial Tort Claims..............................................9
Section 9. Representations and Warranties.......................................................................9
Section 10. Further Assurances..................................................................................13
Section 11. As to Equipment and Inventory.......................................................................14
Section 12. Insurance...........................................................................................14
Section 13. Post-Closing Changes; Bailees; Collection on Receivables and Related Contracts......................15
Section 14. As to Intellectual Property Collateral..............................................................16
Section 15. Voting Rights; Dividends; Etc.......................................................................18
Section 16. As to Letter-of-Credit Rights.......................................................................19
Section 17. Transfers and Other Liens; Additional Shares........................................................19
Section 18. Collateral Agent Appointed Attorney-in-Fact.........................................................19
Section 19. Collateral Agent May Perform........................................................................20
Section 20. The Collateral Agent's Duties.......................................................................20
Section 21. Remedies............................................................................................20
Section 22. Indemnity and Expenses..............................................................................22
Section 23. Amendments; Waivers; Etc............................................................................22
Section 24. Addresses for Notices...............................................................................22
Section 25. Continuing Security Interest; Assignments under the Credit Agreement................................23
Section 26. Release and Termination.............................................................................23
Section 27. Execution in Counterparts...........................................................................23
Section 28. The Mortgages.......................................................................................23
Section 29. Governing Law.......................................................................................24
Schedules
Schedule I - Location, Chief Executive Office, Type Of Organization, Jurisdiction Of Organization
And Organizational Identification Number
Schedule II - Pledged Equity and Pledged Debt
Schedule III - Locations of Equipment and Inventory
Schedule IV - Changes in Name, Location, Etc.
Schedule V - Patents, Trademarks and Trade Names, Copyrights and IP Agreements
Schedule VI - Account Collateral
Schedule VII - Account Collateral not Subject to Account Control Agreement
Schedule VIII - Commercial Tort Claims
Schedule IX - Letters of Credit
Exhibits
Exhibit A - Form of Security Agreement Supplement
Exhibit B - Form of Account Control Agreement (Deposit Account/Securities Account)
Exhibit C - Form of Securities Account Control Agreement
Exhibit D - Form of Commodity Account Control Agreement
Exhibit E - Form of Intellectual Property Security Agreement
Exhibit F - Form of Intellectual Property Security Agreement Supplement
Exhibit G - Form of Consent to Assignment of Letter of Credit Rights
EXECUTION COPY
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of July __, 2002 made by the
Persons listed on the signature pages hereof and the Additional Grantors
(as defined in Section 23(c)) (such Persons so listed and the Additional
Grantors being, collectively, the "Grantors") to Royal Bank of Canada, as
administrative agent and collateral agent (the "Collateral Agent") for
Secured Parties under the Credit Agreement referred to below.
PRELIMINARY STATEMENTS.
(1) ICG Communications, Inc., a Delaware corporation (the
"Borrower"), has entered into a Credit Agreement dated as of July __, 2002
(said Agreement, as it may be hereafter amended, supplemented or otherwise
modified from time to time, being the Credit Agreement) with the Lenders
party thereto, Royal Bank of Canada, as Administrative Agent and Collateral
Agent, and Wachovia Bank, N.A., as Documentation Agent.
(2) Pursuant to the Credit Agreement, the Grantors are entering
into this Agreement in order to grant to the Collateral Agent for the
ratable benefit of the Secured Parties a security interest in the
Collateral (as hereinafter defined).
(3) Each Grantor is the owner of the shares of stock or other
Equity Interests (the "Initial Pledged Equity") set forth opposite such
Grantor's name on and as otherwise described in Part I of Schedule II
hereto and issued by the Persons named therein and of the indebtedness
evidenced by promissory notes (the "Initial Pledged Debt") set forth
opposite such Grantor's name on and as otherwise described in Part II of
Schedule II hereto and issued by the obligors named therein.
(4) The Borrower will open a collateral deposit account,
entitled "Royal Bank of Canada, as Collateral Agent - ICG Cash Collateral
Account", (the "Collateral Account"), with Wachovia Bank, N. A., or one of
its Affiliates, in the name of the Collateral Agent and under the sole
control and dominion of the Collateral Agent and subject to the terms of
this Agreement.
(5) The Borrower and/or one or more of the other Grantors has
opened or will open operating deposit accounts, (i)Account No.
101-806-8921, with Xxxxx Fargo Bank, N.A., (ii) Account Nos. 014-7060 and
022-5277, with Mellon Bank, N.A. and (iii) an account with Wachovia Bank,
N.A., or one of its Affiliates (the "Operating Accounts") in each case, in
the name of the Borrower and subject to the terms of this Agreement.
(6) The Borrower and the other Grantors have opened other
deposit accounts (the "Other Deposit Accounts") with banks, in the name of
the Borrower and the other Grantors and subject to the terms of this
Agreement, as described in Schedule VI hereto.
(7) The Borrower is the beneficiary under certain letters of
credit as described in Schedule IX.
(8) It is a condition precedent to the effectiveness of the
Credit Agreement and the entry into Secured Hedge Agreements by the Hedge
Banks from time to time that the Grantors shall have granted the security
interest and made the pledge contemplated by this Agreement.
(9) Each Grantor will derive substantial direct and indirect
benefit from the transactions contemplated by the Loan Documents.
(10) Terms defined in the Credit Agreement and not otherwise
defined in this Agreement are used in this Agreement as defined in the
Credit Agreement. Further, unless otherwise defined in this Agreement or in
the Credit Agreement, terms defined in Article 8 or 9 of the UCC (as
defined below) and/or in the Federal Book Entry Regulations (as defined
below) are used in this Agreement as such terms are defined in such Article
8 or 9 and/or the Federal Book Entry Regulations. "UCC" means the Uniform
Commercial Code as in effect, from time to time, in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection
or the priority of any security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the
State of New York, "UCC" means the Uniform Commercial Code as in effect,
from time to time, in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority. The term "Federal Book Entry Regulations" means
(a) the federal regulations contained in Subpart B ("Treasury/Reserve
Automated Debt Entry System (TRADES)") governing book-entry securities
consisting of U.S. Treasury bonds, notes and bills and Subpart D
("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R. ss. 357.2, ss.
357.10 through ss. 357.14 and ss. 357.41 through ss. 357.44 and (b) to the
extent substantially identical to the federal regulations referred to in
clause (a) above (as in effect from time to time), the federal regulations
governing other book-entry securities.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lenders to enter into the Credit Agreement and to induce the
Hedge Banks to enter into Secured Hedge Agreements from time to time, each
Grantor hereby agrees with the Collateral Agent for its benefit and the
ratable benefit of the Secured Parties as follows:
Section 1. Grant of Security.
Each Grantor hereby grants to the Collateral Agent, for the
ratable benefit of the Secured Parties, a security interest in such
Grantor's right, title and interest in and to the following, in each case,
as to each type of property described below, whether now owned or hereafter
acquired by such Grantor, wherever located, and whether now or hereafter
existing or arising (collectively, the "Collateral"):
(a) all equipment in all of its forms, including, without
limitation, all machinery, tools, motor vehicles, vessels, aircraft,
furniture and fixtures and all parts thereof and all accessions
thereto and all software related thereto, including, without
limitation, software that is embedded in and is part of the equipment
(any and all such property being the "Equipment");
(b) all inventory (including but not limited to, all
telecommunications equipment and goods and all ancillary equipment
and goods) in all of its forms including (i) all raw materials, work
in process, finished goods and materials used or consumed in the
manufacture, production, preparation or shipping thereof, (ii) goods
in which such Grantor has an interest in mass or a joint or other
interest or right of any kind (including, without limitation, goods
in which such Grantor has an interest or right as consignee) and
(iii) goods that are returned to or repossessed or stopped in transit
by such Grantor, and all accessions thereto and products thereof and
documents therefor, and all software related thereto, including,
without limitation, software that is embedded in and is part of the
inventory (any and all such property being the "Inventory");
(c) all accounts (including, without limitation,
health-care-insurance receivables), chattel paper (including, without
limitation, tangible chattel paper and electronic chattel paper),
instruments (including, without limitation, promissory notes),
deposit accounts, letter-of-credit rights, general intangibles
(including, without limitation, payment intangibles) and other
obligations of any kind, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of
services and whether or not earned by performance, and all rights now
or hereafter existing in and to all supporting obligations and in and
to all security agreements, mortgages, Liens, leases, letters of
credit and other contracts securing or otherwise relating to the
foregoing property (any and all of such accounts, chattel paper,
instruments, deposit accounts, letter-of-credit rights, general
intangibles and other obligations, to the extent not referred to in
clause (d), (e) or (f) below, being the "Receivables", and any and
all such supporting obligations, security agreements, mortgages,
Liens, leases, letters of credit and other contracts to the extent
not referred to in (d), (e) or (f) below being the "Related
Contracts");
(d) the following (the "Security Collateral"):
(i) the Initial Pledged Equity and the certificates, if
any, representing the Initial Pledged Equity, and all
dividends, distributions, return of capital, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or
all of the Initial Pledged Equity and all subscription
warrants, rights or options issued thereon or with respect
thereto;
(ii) the Initial Pledged Debt and the instruments,
evidencing the Initial Pledged Debt, and all interest, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Debt;
(iii) all additional shares of stock and other Equity
Interests from time to time acquired by such Grantor in any
manner (such shares and other Equity Interests, together with
the Initial Pledged Equity, being the "Pledged Equity"), and
the certificates, if any, representing such additional shares
or other Equity Interests, and all dividends, distributions,
return of capital, cash, instruments and other property from
time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares or
other Equity Interests and all subscription warrants, rights or
options issued thereon or with respect thereto;
(iv) all additional indebtedness from time to time owed
to such Grantor evidenced by promissory notes (such
indebtedness, together with the Initial Pledged Debt, being the
"Pledged Debt") and the instruments, evidencing such
indebtedness, and all interest, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
indebtedness; and
(v) all other investment property (including, without
limitation, all (A) securities, whether certificated or
uncertificated, (B) security entitlements, (C) securities
accounts, (D) commodity contracts and (E) commodity accounts)
in which such Grantor has now, or acquires from time to time
hereafter, any right, title or interest in any manner, and the
certificates or instruments, if any, representing or evidencing
such investment property, and all dividends, distributions,
return of capital, interest, distributions, value, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of such investment property and all
subscription warrants, rights or options issued thereon or with
respect thereto;
(e) the following (collectively, the "Account Collateral"):
(i) the Collateral Account, the Operating Accounts and
the Other Deposit Accounts and all funds and financial assets
from time to time credited thereto (including, without
limitation, all Cash Equivalents), all interest, dividends,
distributions, cash, instruments and other property from time
to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such funds and
financial assets, and all certificates and instruments, if any,
from time to time representing or evidencing the Collateral
Account, the Operating Accounts and the Other Deposit Accounts;
(ii) all promissory notes, certificates of deposit,
deposit accounts, checks and other instruments from time to
time delivered to or otherwise possessed by the Collateral
Agent for or on behalf of such Grantor, including, without
limitation, those delivered or possessed in substitution for or
in addition to any or all of the then existing Account
Collateral; and
(iii) all interest, dividends, distributions, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account
Collateral;
(f) the following (collectively, the "Intellectual Property
Collateral"):
(i) all patents, patent applications, utility models and
statutory invention registrations, all inventions claimed or
disclosed therein and all improvements thereto (the "Patents");
(ii) all trademarks, service marks, domain names, trade
dress, logos, designs, slogans, trade names, business names,
corporate names and other source identifiers, whether
registered or unregistered (provided that no security interest
shall be granted in United States intent-to-use trademark
applications to the extent that, and solely during the period
in which, the grant of a security interest therein would impair
the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together, in each
case, with the goodwill symbolized thereby ("Trademarks");
(iii) all copyrights, including, without limitation,
copyrights in Computer Software (as hereinafter defined),
internet web sites and the content thereof, whether registered
or unregistered ("Copyrights");
(iv) all computer software, programs and databases
(including, without limitation, source code, object code and
all related applications and data files), firmware and
documentation and materials relating thereto, and any
substitutions, replacements, improvements, error corrections,
updates and new versions of any of the foregoing ("Computer
Software");
(v) all confidential and proprietary information,
including, without limitation, know-how, trade secrets,
manufacturing and production processes and techniques,
inventions, research and development information, databases and
data, including, without limitation, technical data, financial,
marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists
and information (collectively, "Trade Secrets"), and all other
intellectual, and intangible property of any type, including,
without limitation, industrial designs and mask works;
(vi) all registrations and applications for registration
for any of the foregoing, including, without limitation, those
registrations and applications for registration set forth in
Schedule VI hereto (as such Schedule VI may be supplemented
from time to time by any IP Security Agreement Supplements (as
defined below)) together with all reissues, divisions,
continuations, continuations-in-part, extensions, renewals and
reexaminations thereof;
(vii) all rights in the foregoing provided by
international treaties or conventions, all rights corresponding
thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining
thereto;
(viii) all agreements, permits, consents, orders and
franchises relating to the license, development, use or
disclosure of any of the foregoing to which such Grantor, now
or hereafter, is a party or a beneficiary, including, without
limitation, the agreements set forth in Schedule V hereto ("IP
Agreements"); and
(ix) any and all claims for damages and injunctive relief
for past, present and future infringement, dilution,
misappropriation, violation, misuse or breach with respect to
any of the foregoing, with the right, but not the obligation,
to xxx for and collect, or otherwise recover, such damages;
(g) all commercial tort claims described in Schedule X hereto
(collectively, the "Commercial Tort Claims Collateral");
(h) all books and records (including, without limitation,
customer lists, credit files, printouts and other computer output
materials and records) of such Grantor pertaining to any of the
Collateral; and
(i) all proceeds of, collateral for, income, royalties and
other payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the Collateral
(including, without limitation, proceeds, collateral and supporting
obligations that constitute property of the types described in
clauses (a) through (i) of this Section 1 and this clause (j)) and,
to the extent not otherwise included, all (A) payments under
insurance (whether or not the Collateral Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the
foregoing Collateral, (B) tort claims, including, without limitation,
all commercial tort claims and (C) cash.
Not withstanding anything herein to the contrary, in no event
shall the security interest granted under Section 1 hereof attach to (i)
any of the outstanding capital stock of a CFC in excess of 65% of the
voting power of all classes of capital stock of such CFC entitled to vote
and (ii) the Grantor's rights under contracts and agreements (other than
(a) Accounts and General Intangibles for money due or to become due
thereunder and (b) any contract as to which consent for the Lien created
hereby has been obtained) which by their terms prohibit the granting of a
security interest or assignment thereof and are not, because of other
applicable law, subject to the provisions of Article 9 rendering such
prohibitions ineffective (the "Restricted Agreements"), and in each case
the foregoing shall not be "Collateral" hereunder.
Section 2. Security for Obligations. This Agreement secures, in
the case of each Grantor, the payment of all Obligations of such Grantor
now or hereafter existing under the Loan Documents, whether direct or
indirect, absolute or contingent, and including, without limitation, any
extensions, modifications, substitutions, amendments and renewals thereof,
whether for principal, reimbursement obligations, interest, premiums,
penalties, fees, indemnifications, contract causes of action, costs,
expenses or otherwise (all such Obligations being the "Secured
Obligations"). Without limiting the generality of the foregoing, this
Agreement secures the payment of all amounts that constitute part of the
Secured Obligations and would be owed by such Grantor to any Secured Party
under the Loan Documents but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or
similar proceeding involving any Grantor.
Section 3. Grantors Remain Liable. Anything herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Agent of any of the rights hereunder shall not release any of
the Grantors from any of its duties or obligations under the contracts and
agreements included in the Collateral and (c) neither the Collateral Agent
nor any Secured Party shall have any obligation or liability under the
contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall the Collateral Agent or any
Secured Party be obligated to perform any of the obligations or duties of
any of the Grantors thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.
Section 4. Delivery and Control of Security Collateral and
Account Collateral. (a) All certificates or instruments representing or
evidencing Security Collateral or Account Collateral (other than checks
deposited for collection and chattel paper) with a value greater than or
equal to $5,000, individually, shall be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent. The Collateral Agent shall have the
right, at any time in its discretion and without prior notice to the
Grantors, to transfer to or to register in the name of the Collateral Agent
or any of its nominees any or all of the Security Collateral and Account
Collateral, subject only to the revocable rights specified in Section
15(a). In addition, the Collateral Agent shall have the right at any time
to exchange certificates or instruments representing or evidencing Security
Collateral or Account Collateral for certificates or instruments of smaller
or larger denominations.
(b) With respect to any Security Collateral in which any
Grantor has any right, title or interest and that constitutes a security
and is not represented or evidenced by a certificate or an instrument, the
applicable Grantor shall cause the issuer thereof to agree in an
authenticated record with such Grantor and the Collateral Agent that such
issuer will comply with instructions with respect to such security
originated by the Collateral Agent without further consent of such Grantor,
such authenticated record to be in form and substance satisfactory to the
Collateral Agent. With respect to any Security Collateral in which any
Grantor has any right, title or interest and that is not an uncertificated
security, upon the request of the Collateral Agent, such Grantor will
notify each such issuer of Pledged Equity that such Pledged Equity is
subject to the security interest granted hereunder.
(c) With respect to any Security Collateral in which any
Grantor has any right, title or interest and that constitutes a security
entitlement with a value greater than or equal to $5,000, individually, in
which the Collateral Agent is not the entitlement holder, such Grantor
shall (within 30 days of the Effective Date for such entitlements in
existence on the Effective Date) cause the securities intermediary with
respect to such security entitlement, either (i) to identify in its records
the Collateral Agent as having such security entitlement against such
securities intermediary or (ii) to agree in an authenticated record with
such Grantor and the Collateral Agent that such securities intermediary
will comply with entitlement orders (that is, notifications communicated to
such securities intermediary directing transfer or redemption of the
financial asset to which such Grantor has a security entitlement)
originated by the Collateral Agent without further consent of such Grantor,
such authenticated record to be in substantially the form of Exhibit C or
otherwise in form and substance satisfactory to the Collateral Agent (such
agreement being a "Securities Account Control Agreement").
(d) With respect to any Security Collateral in which any
Grantor has any right, title or interest and that constitutes a commodity
contract, such Grantor shall cause the commodity intermediary with respect
to such commodity contract to agree in an authenticated record with such
Grantor and the Collateral Agent that such commodity intermediary will
apply any value distributed on account of such commodity contract as
directed by the Collateral Agent without further consent of such Grantor,
such authenticated record to be in substantially the form of Exhibit D
hereto or otherwise in form and substance satisfactory to the Collateral
Agent (such agreement being a "Commodity Account Control Agreement", and
all such authenticated records, together with all Securities Account
Control Agreements being, collectively, "Security Control Agreements").
(e) No Grantor will change or add any securities intermediary
or commodity intermediary that maintains any securities account or
commodity account in which any of the Collateral is credited or carried, or
change or add any such securities account or commodity account, in each
case without first complying with the above provisions of this Section 4 in
order to perfect the security interest granted hereunder in such
Collateral.
(f) With respect to any Security Collateral that constitutes a securities
account or a commodity account, the applicable Grantor will, in the case of
a securities account, comply with subsection (c) of this Section 4 with
respect to all security entitlements carried in such securities account
and, in the case of a commodity account, comply with subsection (d) of this
Section 4 with respect to all commodity contracts carried in such commodity
account.
(g) With respect to any Security Collateral in which any
Grantor has any right, title or interest that constitutes Pledged Debt,
upon the request of the Collateral Agent, such Grantor will notify each
issuer of such Pledged Debt that such Pledged Debt is subject to the
security interest granted hereunder.
Section 5. Maintaining the Account Collateral. Until the
termination of the security interest granted hereunder:
(a) On the Effective Date, each Grantor will maintain all
Account Collateral only with the Collateral Agent or with banks (the
"Pledged Account Banks") that have agreed, in a record authenticated
by the Grantor, the Collateral Agent and the Pledged Account Banks,
to (i) comply with instructions originated by the Collateral Agent
directing the disposition of funds in the Account Collateral without
the further consent of the Grantor and (ii) waive or subordinate in
favor of the Collateral Agent all claims of the Pledged Account Banks
(including, without limitation, claims by way of a security interest,
lien or right of setoff or right of recoupment but not including
claims for fees or returned items) to the Account Collateral, which
authenticated record shall be substantially in the form of Exhibit B
hereto, or shall otherwise be in form and substance reasonably
satisfactory to the Collateral Agent (the "Account Control
Agreement"); provided, however, this Section 5(a) shall not apply to
Other Deposit Accounts listed in Schedule VII hereto so long as the
amounts on deposit in such Other Deposit Accounts shall not, either
individually or in the aggregate exceed the sum of (i) the amount
necessary to cash collateralize Debt described in Section
5.02(b)(iii)(H) of the Credit Agreement, (ii) the amount necessary to
cash collateralize Debt securing Liens of the type described in
clause (iv) of the definition of "Permitted Liens" and (iii)
$8,500,000 for any payroll account or other retail account.
(b) (i) After the occurrence and during the continuance of any
Event of Default and at the written direction of the Collateral
Agent, each Grantor shall promptly instruct each Affiliate of such
Grantor obligated at any time to make any payment to such Grantor for
any reason (an "Obligor") to make such payment to an Other Deposit
Account or to the Collateral Account and shall pay to the Collateral
Agent for deposit in the Collateral Account, at the end of each
Business Day, all proceeds of Collateral.
(ii) After the occurrence and during the continuance of any
Event of Default and at the written direction of the Collateral
Agent, each Grantor shall promptly instruct each Person who is not an
Affiliate of such Grantor obligated at any time to make any payment
to such Grantor for any reason to make such payment to an Other
Deposit Account or to the Collateral Account and shall pay to the
Collateral Agent for deposit in the Collateral Account, at the end of
each Business Day, all proceeds of Collateral.
(c) Each Grantor agrees that it will not add any bank that
maintains a deposit account for such Grantor or open any new deposit
account with any then existing Pledged Account Bank unless (i) the
Collateral Agent shall have received at least 10 days' prior written
notice of such additional bank or such new deposit account and (ii)
the Collateral Agent shall have received, in the case of a bank or
Pledged Account Bank that is not the Collateral Agent, an Account
Control Agreement authenticated by such new bank and such Grantor, or
a supplement to an existing Account Control Agreement with such then
existing Pledged Account Bank, covering such new deposit account
(and, upon the receipt by the Collateral Agent of such Account
Control Agreement or supplement, Schedule VI hereto shall be
automatically amended to include such Other Deposit Account). Each
Grantor agrees that it will not terminate any bank as a Pledged
Account Bank or terminate any Account Collateral, except that the
Grantor may terminate an Other Deposit Account, and terminate a bank
as a Pledged Account Bank with respect to such Other Deposit Account,
if it gives the Collateral Agent at least 10 days' prior written
notice of such termination (and, upon such termination, Schedule VI
hereto shall be automatically amended to delete such Pledged Account
Bank and Other Deposit Account).
(d) Upon any termination of any Other Deposit Account by any
Grantor, or by any Pledged Account Bank with respect thereto, such
Grantor will immediately (i) transfer all funds and property held in
such terminated Other Deposit Account to another Other Deposit
Account listed in Schedule VI or to the Collateral Account and (ii)
notify all Obligors that were making payments to such Other Deposit
Account to make all future payments to another Other Deposit Account
listed in Schedule VI hereto or to the Collateral Account, in each
case so that the Collateral Agent shall have a continuously perfected
security interest in such Account Collateral, funds and property.
Each Grantor agrees to terminate any or all Account Collateral and
Account Control Agreements upon request by the Collateral Agent.
(e) The Collateral Agent shall have the sole right to direct
the disposition of funds with respect to the Collateral Account; and
it shall be a term and condition of the Collateral Account,
notwithstanding any term or condition to the contrary in any other
agreement relating to the Collateral Account, that no amount
(including, without limitation, interest on Cash Equivalents credited
thereto) will be paid or released to or for the account of, or
withdrawn by or for the account of, the Borrower or any other Person
from the Collateral Account.
(f) If an Event of Default shall have occurred and be
continuing, the Collateral Agent may, at any time and without notice
to, or consent from, the Grantor, (i) transfer, or direct the
transfer of, funds from the Account Collateral to satisfy the
Grantor's obligations under the Loan Documents and (ii) transfer, or
direct the transfer of, funds from the Other Deposit Accounts to the
Collateral Account.
Section 6. Investing of Amounts in the Collateral Account. The
Collateral Agent will, subject to the provisions of Sections 5 and 21, from
time to time (a) invest, or direct the applicable Pledged Account Bank to
invest, amounts received with respect to the Collateral Account in such
Cash Equivalents credited to (A) the Collateral Account as the Borrower may
select and the Collateral Agent may approve or (B) in the case of Cash
Equivalents consisting of Securities Collateral, a securities account in
which the Collateral Agent is the securities intermediary or a securities
account subject to a Securities Account Control Agreement, and (b) invest
interest paid on the Cash Equivalents referred to in clause (a) above, and
reinvest other proceeds of any such Cash Equivalents that may mature or be
sold, in each case in such Cash Equivalents credited in the same manner.
Interest and proceeds that are not invested or reinvested in Cash
Equivalents as provided above shall be deposited and held in the Collateral
Account. In addition, the Collateral Agent shall have the right at any time
after the occurrence and during the continuance of an Event of Default to
exchange, or direct the applicable Pledged Account Bank to exchange, such
Cash Equivalents for similar Cash Equivalents of smaller or larger
determinations, or for other Cash Equivalents, credited to the Collateral
Account, as the case may be.
Section 7. Release of Amounts. Subject to Section 5(e) and so
long as no Event of Default shall have occurred and be continuing, the
Collateral Agent will pay and release, or direct the applicable Pledged
Account Bank to pay and release, to the Borrower or at its order or, at the
request of the Borrower, to the Administrative Agent to be applied to the
Obligations of the Borrower under the Loan Documents, such amount, if any,
as is then on deposit in the Collateral Account, as the case may be, in
each case to the extent permitted to be released under the terms of the
Credit Agreement.
Section 8. Maintaining Electronic Chattel Paper, Transferable
Records and Letter-of-Credit Rights and Giving Notice of Commercial Tort
Claims. Until the termination of the security interest granted hereunder:
(a) Each Grantor will maintain (i) all electronic chattel paper
so that the Collateral Agent has control of the electronic chattel
paper in the manner specified in Section 9-105 of the UCC and (ii)
all transferable records so that the Collateral Agent has control of
the transferable records in the manner specified in Section 16 of the
Uniform Electronic Transactions Act, as in effect in the jurisdiction
governing such transferable record ("UETA" );
(b) Each Grantor will maintain all letter-of-credit rights
assigned to the Collateral Agent, including, without limitation, all
letter-of-credit rights associated with the letters of credit
described in Schedule IX, so that the Collateral Agent has control of
the letter-of-credit rights in the manner specified in Section 9-107
of the UCC; and
(c) Each Grantor will promptly give notice to the Collateral
Agent of any commercial tort claim for which it intends to pursue a
remedy that may arise in the future and will immediately execute or
otherwise authenticate a supplement to this Agreement, and otherwise
take all necessary action, to subject such commercial tort claim to
the first priority security interest created under this Agreement.
Section 9. Representations and Warranties. Each of the Grantors
represents and warrants as follows as of the Effective Date:
(a) Such Grantor's exact legal name, as defined in Section
9-503(a) of the UCC, is correctly set forth in Schedule I hereto.
Such Grantor has only the trade names, domain names and marks listed
on Schedule V hereto. Such Grantor is located (within the meaning of
Section 9-307 of the UCC) and has its chief executive office in the
state or jurisdiction set forth in Schedule I hereto. The information
set forth in Schedule I hereto with respect to such Grantor is true
and accurate in all respects. Such Grantor has not previously changed
its name, location, chief executive office, type of organization,
jurisdiction of organization or organizational identification number
during the last five years from those set forth in Schedule I hereto
except as disclosed in Schedule IV hereto.
(b) All of the Equipment and Inventory of such Grantor are
located at the places specified therefor in Schedule III hereto. All
Security Collateral consisting of certificated securities and
instruments have been delivered to the Collateral Agent.
(c) Such Grantor is the legal and beneficial owner of the
Collateral of such Grantor free and clear of any Lien, claim, option
or right of others, except for the security interest created by this
Agreement and other Liens permitted by the Credit Agreement.
(d) Except for possessory interests of landlord and
warehousemen, such Grantor has exclusive possession and control of
the Equipment and Inventory other than Equipment and Inventory stored
at any leased premises or warehouse for which the Borrower, in
accordance with the terms of Section 5.01(s) of the Credit Agreement,
will use commercially reasonable efforts to obtain a landlord's or
warehouseman's agreement, in form and substance satisfactory to the
Collateral Agent as so indicated by an asterisk on Schedule III
hereto, as such Schedule III may be amended from time to time
pursuant to Section 11(a). In the case of Equipment and Inventory
located on leased premises or in warehouses, no lessor or
warehouseman of any premises or warehouse upon or in which such
Equipment or Inventory is located has (i) issued any warehouse
receipt or other receipt in the nature of a warehouse receipt in
respect of any Equipment or Inventory, (ii) issued any document for
any of such Grantor's Equipment or Inventory or (iii) received
notification of any secured party's interest (other than the security
interest granted hereunder) in such Grantor's Equipment or Inventory.
(e) The Pledged Equity of any Loan Party pledged by such
Grantor hereunder has been duly authorized and validly issued and is
fully paid and non-assessable. With respect to any Pledged Equity
that is an uncertificated security, the Grantor in respect thereof
has caused the issuer thereof either (i) to register the Collateral
Agent as the registered owner of such security or (ii) to agree in an
authenticated record with such Grantor and the Collateral Agent that
such issuer will comply with instructions with respect to such
security originated by the Collateral Agent without further consent
of such Grantor. If such Grantor is an issuer of Pledged Equity, such
Grantor confirms that it has received notice of such security
interest. To the best of the Grantor's knowledge, the Pledged Debt
pledged by such Grantor hereunder has been duly authorized,
authenticated or issued and delivered, is the legal, valid and
binding obligation of the issuers thereof, is evidenced by one or
more promissory notes (which notes have been delivered to the
Collateral Agent) and is not in default.
(f) The Initial Pledged Equity issued by Subsidiaries of the
Borrower constitutes the percentage of the issued and outstanding
equity interests of the issuers thereof indicated on Schedule II. The
Initial Pledged Debt is outstanding in the principal amount indicated
on Schedule II.
(g) All of the investment property owned by such Grantor is
listed on Schedule II hereto.
(h) Such Grantor has no deposit accounts, other than the
Account Collateral listed on Schedule VI hereto, as such Schedule VI
may be amended from time to time pursuant to Section 5(d), and
Account Control Agreements are in effect for each deposit account
that constitutes Account Collateral (other than Account Collateral
consisting of deposit accounts maintained with the Collateral Agent),
except to the extent such Account Control Agreements are not required
by Section 5(a).
(i) Such Grantor is not a beneficiary or assignee under any
letter of credit, other than the letters of credit described in
Schedule IX hereto, as such Schedule IX may be amended from time to
time, and legal, binding and enforceable Consents to Assignment of
Letter of Credit Rights, in the form of the Consent to Assignment of
Letter of Credit Rights attached hereto as Exhibit H, are in effect
for each letter of credit that constitutes Collateral. Such Grantor
has instructed all issuers and nominated persons under letters of
credit in which the Grantor is the beneficiary or assignee to make
all payments to either an Other Deposit Account or the Cash
Concentration Account.
(j) All filings and other actions (including, without
limitation, (A) actions necessary to obtain control of Collateral as
provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and
Section 16 of UETA and (B) actions necessary to perfect the
Collateral Agent's security interest with respect to Collateral
evidenced by a certificate of ownership) necessary to perfect the
security interest in the Collateral of such Grantor created under
this Agreement have been duly made or taken and are in full force and
effect (other than with respect to motor vehicles, Accounts not
subject to control agreements and FCC licenses), and this Agreement
creates in favor of the Collateral Agent for the benefit of the
Secured Parties a valid and, together with such filings and other
actions, perfected first priority (subject to the Liens permitted by
the Loan Documents) security interest in the Collateral of such
Grantor, securing the payment of the Secured Obligations.
(k) Except as have been obtained as of the Effective Date, no
consent of any other Person and no authorization, approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either
(i) for the grant by such Grantor of the security interest granted by
it hereby, for the pledge by such Grantor of the Security Collateral
pursuant hereto or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) for the perfection or maintenance of
the security interest created hereby (including the priority of such
security interest), except for the filing of financing and
continuation statements under the UCC, the recordation of the
Intellectual Property Security Agreements referred to in Section
14(f) with the U.S. Patent and Trademark Office and the U.S.
Copyright Office and the actions described in Section 4 with respect
to Security Collateral and Section 5 with respect to the Account
Collateral, or (iii) for the exercise by the Collateral Agent of its
voting or other rights provided for in this Agreement or the remedies
in respect of the Collateral pursuant to this Agreement, except as
may be required in connection with the disposition of any portion of
the Security Collateral by laws affecting the offering and sale of
securities generally.
(l) The Inventory has been produced by such Grantor in material
compliance with all requirements of the Fair Labor Standards Act.
(m) As to itself and its Intellectual Property Collateral:
(i) The operation of such Grantor's business as currently
conducted or as contemplated to be conducted and the use of the
Intellectual Property Collateral in connection therewith do
not, to the Grantor's knowledge, conflict with, infringe,
misappropriate, dilute, misuse or otherwise violate the
intellectual property rights of any third party, except as
could not reasonably be expected to have a Material Adverse
Effect.
(ii) To the Grantor's knowledge, such Grantor is the
exclusive owner of all right, title and interest in and to the
Intellectual Property Collateral owned by Grantor, and, to the
Grantor's knowledge, such Grantor is entitled to use all
Intellectual Property Collateral as used in the conduct of its
business, subject only to the terms of the IP Agreements.
(iii) The Intellectual Property Collateral set forth on
Schedule V hereto includes all of the patents, patent
applications, trademark registrations and applications, domain
names, copyright registrations and applications and material IP
Agreements owned by such Grantor.
(iv) The material Intellectual Property Collateral is
subsisting and has not been adjudged invalid or unenforceable
in whole or part, and to the best of such Grantor's knowledge,
is valid and enforceable. Such Grantor is not aware of any uses
of any material item of Intellectual Property Collateral that
could be reasonably expected to lead to such item becoming
invalid or unenforceable.
(v) Such Grantor has made or performed all filings,
recordings and other acts and has paid all required fees and
taxes to maintain and protect its interest in each and every
item of Intellectual Property Collateral set forth on Schedule
V hereto in full force and effect including, without
limitation, recordations of any of its interests in the Patents
and Trademarks set forth on Schedule V hereto with the U.S.
Patent and Trademark Office and in corresponding national and
international patent offices where any such Intellectual
Property Collateral is registered or a registration is pending,
and recordation of any of its interests in the Copyrights with
the U.S. Copyright Office and in corresponding national and
international copyright offices to the extent applicable. Such
Grantor has used proper statutory notice in connection with its
use of each patent, trademark and copyright in the Intellectual
Property Collateral to the extent required to maintain or
preserve all of such Grantor's rights therein.
(vi) No claim, action, suit, investigation, litigation or
proceeding has been asserted in writing or is pending or
threatened against such Grantor (i) based upon or challenging
or seeking to deny or restrict the Grantor's rights in or use
of any of the Intellectual Property Collateral, (ii) alleging
that the Grantor's rights in or use of the Intellectual
Property Collateral or that any services provided by, processes
used by, or products manufactured or sold by, such Grantor
infringe, misappropriate, dilute, misuse or otherwise violate
any patent, trademark, copyright or any other proprietary right
of any third party, or (iii) alleging that the Intellectual
Property Collateral is being licensed or sublicensed in
violation or contravention of the terms of any license or other
agreement except as could not reasonably be expected to have a
Material Adverse Effect. To the Grantor's knowledge, no Person
is engaging in any activity that infringes, misappropriates,
dilutes, misuses or otherwise violates the Intellectual
Property Collateral or the Grantor's rights therein except as
could not reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule V hereto, such Grantor
has not granted any license, release, covenant not to xxx,
non-assertion assurance, or other right to any Person with
respect to any material part of the Intellectual Property
Collateral. The consummation of the transactions contemplated
by the Transaction Documents will not result in the termination
or impairment of any of the Intellectual Property Collateral
except as will not have a Material Adverse Effect.
(vii) With respect to each IP Agreement: (A) such IP
Agreement has been duly authorized, executed and delivered by
Grantor, and is valid and binding and in full force and effect
and, to the extent it contains an integration clause that is
enforceable, represents the entire agreement between the
respective parties thereto with respect to the subject matter
thereof; (B) IP Agreements that are included in the Collateral
will not cease to be valid and binding and in full force and
effect as a result of the rights and interest granted herein,
nor will the grant of such rights and interest constitute a
breach or default under such IP Agreement or otherwise give any
party thereto a right to terminate such IP Agreement except as
will not have a Material Adverse Effect; (C) such Grantor has
not received any notice of termination or cancellation under
any material IP Agreement; (D) neither Grantor nor, to any
Grantor's knowledge, any other party to any material IP
Agreement is in breach or default thereof in any material
respect, and such Grantor has not received any notice of a
breach or default under any material IP Agreement, which breach
or default has not been cured; and (E) such Grantor has not
granted to any other third party any rights, adverse or
otherwise, under such IP Agreement other than Liens securing
the holders of the Subordinated Cerberus Notes.
(viii) To the best of such Grantor's knowledge, (A) none
of the Trade Secrets of such Grantor has been used, divulged,
disclosed or appropriated to the detriment of such Grantor for
the benefit of any other Person other than such Grantor; (B) no
employee, independent contractor or agent of such Grantor has
misappropriated any trade secrets of any other Person in the
course of the performance of his or her duties as an employee,
independent contractor or agent of such Grantor; and (C) no
employee, independent contractor or agent of such Grantor is in
default or breach of any term of any employment agreement,
non-disclosure agreement, assignment of inventions agreement or
similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of such
Grantor's Intellectual Property Collateral in any material
respect.
(ix) No Grantor or Intellectual Property Collateral is
subject to any outstanding consent, settlement, decree, order,
injunction, judgment or ruling restricting the use of any
material Intellectual Property Collateral except as may be
contained in an IP Agreement or that would impair the validity
or enforceability of such Intellectual Property Collateral.
(n) The Grantor has no commercial tort claims for which it
expects to pursue a remedy (as defined in Section 9-102(13) of the
UCC) other than those listed in Schedule VIII hereto.
Section 10. Further Assurances. (a) Each Grantor agrees that
from time to time, at the expense of such Grantor, such Grantor will
promptly execute and deliver, or otherwise authenticate, all further
instruments and documents, and take all further action, that may be
necessary or desirable, or that the Collateral Agent may reasonably request
under U.S. law (including, without limitation, to the extent required under
the Loan Documents, procuring third party consents), in order to perfect
and protect any pledge or security interest granted or purported to be
granted hereby or to enable the Collateral Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, such Grantor will: (i) xxxx
conspicuously each document included in the Inventory, each chattel paper
included in the Receivables, each Related Contract, each Assigned Agreement
and, at the request of the Collateral Agent, each of its records pertaining
to the Collateral with a legend, in form and substance satisfactory to the
Collateral Agent, indicating that such document, chattel paper, Related
Contract, Assigned Agreement or Collateral is subject to the security
interest granted hereby; (ii) if any Collateral shall be evidenced by a
promissory note or other instrument or chattel paper, deliver and pledge to
the Collateral Agent hereunder such note or instrument or chattel paper
duly indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Collateral Agent;
and (iii) execute, or authenticate and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices,
as may be necessary or desirable, or as the Collateral Agent may request,
in order to perfect and preserve the pledge and security interest granted
or purported to be granted by such Grantor hereunder; (iv) deliver and
pledge to the Collateral Agent for benefit of the Secured Parties
certificates representing Security Collateral that constitutes certificated
securities, accompanied by undated stock or bond powers executed in blank;
(v) take all action necessary to the extent required under the Loan
Documents to ensure that the Collateral Agent has control of Collateral
consisting of deposit accounts, electronic chattel paper, investment
property, letter-of-credit rights and transferable records as provided in
Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and in Section 16 of
UETA; (vi) cause the Collateral Agent to be the beneficiary under all
letters of credit that constitute Collateral, with the exclusive right to
make all draws under such letters of credit, and with all rights of a
transferee under Section 5-114(e) of the UCC; and (vii) deliver to the
Collateral Agent evidence that all other action that the Collateral Agent
may deem reasonably necessary or desirable in order to perfect and protect
the security interest created by such Grantor under this Agreement has been
taken.
(b) Each Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, including,
without limitation, one or more financing statements indicating that such
financing statements cover all assets or all personal property (or words of
similar effect) of such Grantor, in each case without the signature of such
Grantor, and regardless of whether any particular asset described in such
financing statements falls within the scope of the UCC or the granting
clause of this Agreement. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by
law. Each Grantor ratifies its authorization for the Collateral Agent to
have filed such financing statements, continuation statements or amendments
filed prior to the date hereof.
(c) Each Grantor will furnish to the Collateral Agent from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.
Section 11. As to Equipment and Inventory. (a) Each Grantor
shall cause its Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear
excepted, and in accordance with any manufacturer's manual, and shall
forthwith, or in the case of any loss or damage to any of such Equipment as
quickly as practicable after the occurrence thereof, make or cause to be
made all repairs, replacements and other improvements in connection
therewith that are necessary or desirable to such end. Each Grantor shall
promptly furnish to the Collateral Agent a statement respecting any loss or
damage to any material portion of the Equipment or Inventory of such
Grantor.
(b) In producing the Inventory, each Grantor shall comply in
all material respects with all requirements of the Fair Labor Standards Act.
Section 12. Insurance. (a) Each Grantor shall, at its own
expense, maintain insurance with respect to its Equipment and Inventory in
such amounts, against such risks, in such form and with such insurers, as
is required under the Credit Agreement. Each policy for property insurance
shall provide for all losses to be paid on behalf of the Collateral Agent
and such Grantor as their interests may appear, and each policy for
property damage insurance shall provide for all losses (except for losses
of less than $5,000,000 per occurrence) to be paid directly to the
Collateral Agent. Each such policy shall in addition (i) name such Grantor
and the Collateral Agent as insured parties thereunder (without any
representation or warranty by or obligation upon the Collateral Agent) as
their interests may appear, (ii) contain the agreement by the insurer that
any loss thereunder shall be payable to the Collateral Agent
notwithstanding any action, inaction or breach of representation or
warranty by such Grantor, (iii) provide that there shall be no recourse
against the Collateral Agent for payment of premiums or other amounts with
respect thereto and (iv) provide that at least 10 days' prior written
notice of cancellation or of lapse shall be given to the Collateral Agent
by the insurer. Each Grantor shall, if so requested by the Collateral
Agent, deliver to the Collateral Agent original or duplicate policies of
such insurance and, as often as the Collateral Agent may reasonably
request, a report of a reputable insurance broker with respect to such
insurance. Further, each Grantor shall, at the request of the Collateral
Agent, duly exercise and deliver instruments of assignment of such
insurance policies to comply with the requirements of Section 10 and cause
the insurers to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance maintained by
any Grantor pursuant to this Section 12 may be paid directly to the Person
who shall have incurred liability covered by such insurance. In case of any
loss involving damage to Equipment or Inventory when subsection (c) of this
Section 12 is not applicable, the applicable Grantor shall make or cause to
be made the necessary repairs to or replacements of such Equipment or
Inventory as deemed desirable in the reasonable opinion of the Grantor, and
any proceeds of insurance maintained by such Grantor pursuant to this
Section 12 shall be paid to such Grantor as reimbursement for the costs of
such repairs or replacements.
(c) Upon the occurrence and during the continuance of any Event
of Default or the actual or constructive total loss (in excess of
$5,000,000 per occurrence) of any Equipment or Inventory, all insurance
payments in respect of such Equipment or Inventory shall be paid to and
applied by the Collateral Agent as specified in Section 21(b).
Section 13. Post-Closing Changes; Bailees; Collection on
Receivables and Related Contracts. (a) No Grantor will change its name,
type of organization, jurisdiction of organization, organizational
identification number or location from those set forth in Section 9(a) of
this Agreement without first giving at least 30 days' prior written notice
to the Collateral Agent and taking all action reasonably required by the
Collateral Agent for the purpose of perfecting or protecting the security
interest granted by this Agreement. No Grantor will become bound by a
security agreement authenticated by another Person (determined as provided
in Section 9-203(d) of the UCC) without giving the Collateral Agent 30
days' prior written notice thereof and taking all action required by the
Collateral Agent to ensure that the perfection and first priority nature of
the Collateral Agent's security interest in the Collateral will be
maintained. Each Grantor will hold and preserve its records relating to the
Collateral including, without limitation, the Related Contracts, and will
permit representatives of the Collateral Agent at any time upon reasonable
notice and during normal business hours to inspect and make abstracts from
such records and other documents. If the Grantor does not have an
organizational identification number and later obtains one, it will
forthwith notify the Collateral Agent of such organizational identification
number.
(b) If any Collateral with a replacement value in excess of
$1,000,000 of any Grantor is at any time in the possession or control of a
warehouseman, bailee or agent, and if the Collateral Agent so requests,
such Grantor will (i) notify such warehouseman, bailee or agent of the
security interest created hereunder, (ii) instruct such warehouseman,
bailee or agent to hold all such Collateral solely for the Collateral
Agent's account subject only to the Collateral Agent's instructions (which
shall permit such Collateral to be removed by such Grantor in the ordinary
course of business until the Collateral Agent notifies such warehouseman,
bailee or agent that an Event of Default has occurred and is continuing),
(iii) use commercially reasonable efforts to cause such warehouseman,
bailee or agent to authenticate a record acknowledging that it holds
possession of such Collateral for the Collateral Agent's benefit and shall
act solely on the instructions of the Collateral Agent without the further
consent of the Grantor or any other Person, and (iv) make such
authenticated record available to the Collateral Agent.
(c) Except as otherwise provided in this subsection (c), each
Grantor shall continue to collect, at its own expense, all amounts due or
to become due such Grantor under the Receivables and Related Contracts in
the manner such Grantor currently collects such amounts. In connection with
such collections made in respect of Related Contracts with, or Receivables
owing from, a Person being an affiliate of such Grantor, such Grantor may
take (and, at the Collateral Agent's direction, shall take) such action as
such Grantor or the Collateral Agent may reasonably deem necessary or
advisable to enforce or expedite collection of the Receivables or amounts
due or to become due under the Receivables and Related Contracts; provided,
however, that the Collateral Agent shall have the right at any time that an
Event of Default has occurred and is continuing, upon written notice to
such Grantor of its intention to do so, to notify the Obligors in respect
of any Receivables and under any Assigned Agreements and Related Contracts
of the pledge of such Receivables and Related Contracts to the Collateral
Agent and to direct such Obligors to make payment of all amounts due or to
become due to such Grantor thereunder directly to the Collateral Agent or
its designee and, upon such notification and at the expense of such
Grantor, to enforce collection of any such Receivables and Related
Contracts directly against the relevant Obligor, and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the
same extent as such Grantor might have done, and to otherwise exercise all
rights with respect to such Receivables and Related Contracts, including,
without limitation, those set forth set forth in Section 9-607 of the UCC.
In connection with such collections made in respect of Receivables and
Related Contracts owing from a Person not an affiliate of such Grantor,
such Grantor may take (and, at the Collateral Agent's direction, shall
take), after the occurrence and during the continuance of any Event of
Default, such action as such Grantor or the Collateral Agent may reasonably
deem necessary or advisable to enforce or expedite collection of the
Receivables and Related Contracts; provided, however, that the Collateral
Agent shall have the right at any time after the occurrence and during the
continuance of any Event of Default, upon written notice to such Grantor of
its intention to do so, to notify the Obligors in respect of any
Receivables and under any Related Contracts of the assignment of such
Receivables and Related Contracts to the Collateral Agent and to direct
such Obligors to make payment of all amounts due or to become due to such
Grantor thereunder directly to the Collateral Agent or its designee and,
upon such notification and at the expense of such Grantor, to enforce
collection of any such Receivables or sums due or to become due under any
Related Contracts directly against the relevant Obligor, and to adjust,
settle or compromise the amount or payment thereof, in the same manner and
to the same extent as such Grantor might have done. After receipt by such
Grantor of the notice from the Collateral Agent referred to in the proviso
to the preceding sentences for so long as an Event of Default is
continuing, (i) all amounts and proceeds (including instruments) received
by such Grantor in respect of the Receivables and Related Contracts shall
be received in trust for the benefit of the Collateral Agent hereunder,
shall be segregated from other funds of such Grantor and shall be forthwith
paid over to the Collateral Agent in the same form as so received (with any
necessary indorsement) and (ii) such Grantor shall not adjust, settle or
compromise the amount or payment of any Receivable or any amount due or to
become due or any payment in respect of any Related Contracts, release
wholly or partly any Obligor thereof, or allow any credit or discount
thereon.
(d) No Grantor will permit or consent to the subordination of
its right to payment under any of the Receivables or the Related Contracts
to any other indebtedness or obligations of the Obligor thereof.
Section 14. As to Intellectual Property Collateral. (a) With
respect to each item of its Intellectual Property Collateral, each Grantor
agrees to take, to the extent it believes the same to be appropriate in the
exercise of its commercially reasonable judgment, and to the extent such
steps are applicable to the particular type of Intellectual Property, at
its expense, all necessary steps, including, without limitation, in the
U.S. Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authority, to (i) maintain the validity and enforceability of
such Intellectual Property Collateral and maintain such Intellectual
Property Collateral in full force and effect, and (ii) pursue the
registration and maintenance of each patent, trademark, or copyright
registration or application, now or hereafter included in such Intellectual
Property Collateral of such Grantor, including, without limitation, the
payment of required fees and taxes, the filing of responses to office
actions issued by the U.S. Patent and Trademark Office, the U.S. Copyright
Office or other governmental authorities, the filing of applications for
renewal or extension, the filing of affidavits under Sections 8 and 15 of
the U.S. Trademark Act, the filing of divisional, continuation,
continuation-in-part, reissue and renewal applications or extensions, as
applicable, the payment of maintenance fees and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings. No Grantor shall, without the written consent
of the Collateral Agent, abandon any Intellectual Property Collateral, or
abandon any right to file an application for patent, trademark, or
copyright, unless such Grantor shall have previously determined that such
use or the pursuit or maintenance of such Intellectual Property Collateral
is no longer desirable in the conduct of such Grantor's business and that
the loss thereof would not be reasonably likely to have a Material Adverse
Effect, in which case, such Grantor will give prompt notice of any such
abandonment to the Collateral Agent.
(b) Each Grantor agrees promptly to notify the Collateral Agent
if such Grantor becomes aware (i) that any item of the Intellectual
Property Collateral that is material may have become abandoned, placed in
the public domain, invalid or unenforceable, or of any adverse
determination or development regarding such Grantor's ownership of any of
the Intellectual Property Collateral or to keep and maintain and enforce
the same, or (ii) of any adverse determination other than in an office
action or the institution of any proceeding (including, without limitation,
the institution of any proceeding in the U.S. Patent and Trademark Office
or any court) regarding any material item of the Intellectual Property
Collateral.
(c) In the event that any Grantor becomes aware that any item
of the Intellectual Property Collateral that is material to Grantor's
business is being materially infringed or misappropriated by a third party,
such Grantor shall promptly notify the Collateral Agent and shall take such
commercially reasonable and appropriate actions, at its expense, to protect
or enforce such Intellectual Property Collateral, including, without
limitation, suing for infringement or misappropriation and for an
injunction against such infringement or misappropriation.
(d) Each Grantor shall use proper statutory notice in
connection with its use of each item of its Intellectual Property
Collateral to the extent necessary to maintain and preserve any of its
rights therein. No Grantor shall do or permit any act or knowingly omit to
do any act whereby any of its Intellectual Property Collateral may lapse or
become invalid or unenforceable or placed in the public domain except to
the extent that it is commercially reasonable to do so.
(e) Each Grantor shall take all steps which it deems to be
appropriate in the exercise of its commercially reasonable judgment to
preserve and protect each item of its Intellectual Property Collateral,
including, without limitation, maintaining the quality of any and all
products or services provided in connection with any of the Trademarks
owned by Grantor, consistent with the quality of the products and services
as of the date hereof, and taking all steps reasonably necessary to ensure
that all licensed users of any of the Trademarks owned by Grantor use such
consistent standards of quality.
(f) Each Grantor agrees to execute or otherwise authenticate an
agreement, in substantially the form set forth in Exhibit E hereto or
otherwise in form and substance reasonably satisfactory to the Collateral
Agent (an "Intellectual Property Security Agreement"), for recording the
security interest granted hereunder to the Collateral Agent in such
Intellectual Property Collateral with the U.S. Patent and Trademark Office,
the U.S. Copyright Office and any other governmental authorities in the
United States necessary to perfect the security interest hereunder in such
Intellectual Property Collateral.
(g) Each Grantor agrees that should it obtain an ownership
interest in any item of the type set forth in Section 1(g) that is not on
the date hereof a part of the Intellectual Property Collateral
("After-Acquired Intellectual Property") (i) the provisions of this
Agreement shall automatically apply thereto, and (ii) any such
After-Acquired Intellectual Property and, in the case of trademarks, the
goodwill symbolized thereby, shall automatically become part of the
Intellectual Property Collateral subject to the terms and conditions of
this Agreement with respect thereto. Each Grantor shall give prompt written
notice to the Collateral Agent identifying the After-Acquired Intellectual
Property that is the subject of a registration or application for
registration in any jurisdiction, and such Grantor shall execute and
deliver to the Collateral Agent with such written notice, or otherwise
authenticate, an agreement substantially in the form of Exhibit F hereto or
otherwise in form and substance reasonably satisfactory to the Collateral
Agent (an "IP Security Agreement Supplement") covering such After-Acquired
Intellectual Property, which IP Security Agreement Supplement shall be
recorded with the U.S. Patent and Trademark Office, the U.S. Copyright
Office necessary to perfect the security interest hereunder in such
After-Acquired Intellectual Property.
Section 15. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to its Security
Collateral or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the other Loan Documents; provided,
however, that such Grantor shall not exercise or refrain from
exercising any such right if, in the Collateral Agent's reasonable
judgment, such action would have a material adverse effect on the
value of the Security Collateral or any part thereof.
(ii) Each Grantor shall be entitled to receive and retain any
and all dividends, interest and other distributions paid in respect
of its Security Collateral; provided, however, that any and all
dividends, interest and other distributions paid or payable other
than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in
exchange for, such Security Collateral, shall be, and shall be
forthwith delivered to the Collateral Agent to hold as, Security
Collateral and shall, if received by such Grantor, be received in
trust for the benefit of the Collateral Agent, be segregated from the
other property or funds of such Grantor and be forthwith delivered to
the Collateral Agent as Security Collateral in the same form as so
received (with any necessary indorsement).
(iii) The Collateral Agent shall execute and deliver (or cause
to be executed and delivered) to each Grantor all such proxies and
other instruments as such Grantor may reasonably request for the
purpose of enabling such Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i)
above and to receive the dividends or interest payments that it is
authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of a Default
or an Event of Default:
(i) All rights of each Grantor (x) upon notice from the
Collateral Agent to such effect to exercise or refrain from
exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 15(a)(i) shall,
upon notice to such Grantor by the Collateral Agent, cease and (y) to
receive the dividends, interest and other distributions that it would
otherwise be authorized to receive and retain pursuant to Section
15(a)(ii) shall automatically cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise or refrain from exercising
such voting and other consensual rights and to receive and hold as
Security Collateral such dividends, interest and other distributions.
(ii) All dividends, interest and other distributions that are
received by each Grantor contrary to the provisions of paragraph (i)
of this Section 15(b) shall be received in trust for the benefit of
the Collateral Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent as
Security Collateral in the same form as so received (with any
necessary indorsement).
(iii) The Collateral Agent shall be authorized to send to each
Securities Intermediary or Commodity Intermediary as defined in and
under any Security Control Agreement a Notice of Exclusive Control as
defined in and under such Security Control Agreement.
Section 16. As to Letter-of-Credit Rights. (a) Each Grantor, by
granting a security interest in its Receivables consisting of
letter-of-credit rights in an amount exceeding $1,000,000 to the Collateral
Agent, intends to (and hereby does) collaterally assign to the Collateral
Agent its rights (including its contingent rights) to the proceeds of all
Related Contracts consisting of letters of credit of which it is or
hereafter becomes a beneficiary or assignee. Each Grantor will promptly use
commercially reasonable efforts to cause the issuer of each letter of
credit and each nominated person (if any) with respect thereto to consent
to such assignment of the proceeds thereof in substantially the form of the
Consent to Assignment of Letter of Credit Rights attached hereto as Exhibit
G or otherwise in form and substance satisfactory to the Collateral Agent
and deliver written evidence of such consent to the Collateral Agent.
(b) Upon the occurrence of an Event of Default, each Grantor
will, promptly upon request by the Collateral Agent, (i) notify (and such
Grantor hereby authorizes the Collateral Agent to notify) the issuer and
each nominated person with respect to each of the Related Contracts
consisting of letters of credit that the proceeds thereof have been
assigned to the Collateral Agent hereunder and any payments due or to
become due in respect thereof are to be made directly to the Collateral
Agent or its designee and (ii) arrange for the Collateral Agent to become
the transferee beneficiary of letter of credit.
Section 17. Transfers and Other Liens; Additional Shares. (a)
Each Grantor agrees that it shall not (i) other than as permitted under the
Credit Agreement, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, or (ii) create or suffer to exist any Lien upon or with respect
to any of the Collateral.
(b) Each Grantor agrees that it shall (i) cause each issuer of
the Pledged Equity not to issue any Equity Interests or other securities in
addition to or in substitution for the Pledged Equity issued by such
issuer, except to such Grantor, and (ii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all additional
Equity Interests or other securities of each issuer of the Pledged Equity.
Section 18. Collateral Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor or otherwise, from time to time in
the Collateral Agent's discretion after the occurrence and during the
continuance of an Event of Default, to take any action and to execute any
instrument that the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Collateral Agent pursuant to Section 10,
(b) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(c) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) or (b) above, and
(d) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
compliance with the terms and conditions of any Assigned Agreement or
the rights of the Collateral Agent with respect to any of the
Collateral.
Section 19. Collateral Agent May Perform. If any Grantor fails
to perform any agreement contained herein, the Collateral Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Collateral Agent incurred in connection therewith shall be payable by such
Grantor under Section 22(b).
Section 20. The Collateral Agent's Duties. (a) The powers
conferred on the Collateral Agent hereunder are solely to protect the
Secured Parties' interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Collateral Agent shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not any Secured Party has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.
(b) Anything contained herein to the contrary notwithstanding,
the Collateral Agent may from time to time, when the Collateral Agent deems
it to be necessary, appoint one or more subagents (each a "Subagent") for
the Collateral Agent hereunder with respect to all or any part of the
Collateral. In the event that the Collateral Agent so appoints any Subagent
with respect to any Collateral, (i) the assignment and pledge of such
Collateral and the security interest granted in such Collateral by each
Grantor hereunder shall be deemed for purposes of this Security Agreement
to have been made to such Subagent, in addition to the Collateral Agent,
for the ratable benefit of the Secured Parties, as security for the Secured
Obligations of such Grantor, (ii) such Subagent shall automatically be
vested, in addition to the Collateral Agent, with all rights, powers,
privileges, interests and remedies of the Collateral Agent hereunder with
respect to such Collateral, and (iii) the term "Collateral Agent," when
used herein in relation to any rights, powers, privileges, interests and
remedies of the Collateral Agent with respect to such Collateral, shall
include such Subagent; provided, however, that no such Subagent shall be
authorized to take any action with respect to any such Collateral unless
and except to the extent expressly authorized in writing by the Collateral
Agent.
Section 21. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party upon default under the UCC (whether or not the UCC
applies to the affected Collateral) and also may (i) require any of
the Grantors to, and each Grantor hereby agrees that it will at its
expense and upon request of the Collateral Agent forthwith, assemble
all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place to be designated
by the Collateral Agent that is reasonably convenient to both parties
and (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms
as are commercially reasonable; (iii) occupy any premises owned or
leased by any of the Grantors where the Collateral or any part
thereof is assembled or located for a reasonable period in order to
effectuate its rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv)
exercise any and all rights and remedies of any of the Grantors under
or in connection with the Collateral or otherwise in respect of the
Collateral, including, without limitation, (A) any and all rights of
such Grantor to demand or otherwise require payment of any amount
under, or performance of any provision of, the Receivables, the
Related Contracts and the other Collateral, (B) withdraw, or cause or
direct the withdrawal of, all funds with respect to the Account
Collateral and (C) exercise all other rights and remedies with
respect to the Receivables, the Related Contracts and the other
Collateral, including, without limitation, those set forth in Section
9-607 of the UCC. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to such
Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place
to which it was so adjourned.
(b) All cash proceeds received by the Collateral Agent in
respect of any sale of, collection from, or other realization upon
all or any part of the Collateral may, in the discretion of the
Collateral Agent, be held by the Collateral Agent as collateral for,
and/or then or at any time thereafter applied (after payment of any
amounts payable to the Collateral Agent pursuant to Section 22) in
whole or in part by the Collateral Agent for the ratable benefit of
the Secured Parties against, all or any part of the Secured
Obligations in such order as the Collateral Agent shall elect. Any
surplus of such cash or cash proceeds held by the Collateral Agent
and remaining after payment in full of all the Secured Obligations
shall be paid over to the applicable Grantor or to whomsoever may be
lawfully entitled to receive such surplus.
(c) All payments received by each Grantor under or in
connection with any Assigned Agreement or otherwise in respect of the
Collateral shall be received in trust for the benefit of the
Collateral Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent in
the same form as so received (with any necessary indorsement).
(d) The Collateral Agent may, without notice to any Grantor
except as required by law and at any time or from time to time,
charge, set-off and otherwise apply all or any part of the Secured
Obligations against any funds held with respect to the Account
Collateral or any other deposit account.
(e) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Grantor, the goodwill
symbolized by any Trademarks subject to such sale or other
disposition shall be included therein, and such Grantor shall supply
to the Collateral Agent or its designee such Grantor's know-how and
expertise, and records and documents relating to tangible embodiments
of any Intellectual Property Collateral subject to such sale or other
disposition, and to the manufacture, distribution, advertising and
sale of products and services of such Grantor covered by such
Intellectual Property Collateral.
Section 22. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify the Collateral Agent from and against any and all claims, losses
and liabilities growing out of or resulting from this Agreement (including,
without limitation, enforcement of this Agreement), except claims, losses
or liabilities resulting from the Collateral Agent's gross negligence or
willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) Each Grantor will upon demand pay to the Collateral Agent
the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that the
Collateral Agent may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Collateral
Agent or the Secured Parties hereunder or (iv) the failure by such Grantor
to perform or observe any of the provisions hereof.
Section 23. Amendments; Waivers; Etc. (a) No amendment or
waiver of any provision of this Agreement, and no consent to any departure
by any Grantor herefrom, shall in any event be effective unless the same
shall be in writing and signed by the Collateral Agent, and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
(b) No failure on the part of the Collateral Agent to exercise,
and no delay in exercising any right, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
(c) Upon the execution and delivery, or authentication, by any
Person of a security agreement supplement in substantially the form of
Exhibit A hereto (each a "Security Agreement Supplement"), (i) such Person
shall be referred to as an "Additional Grantor" and shall be and become a
Grantor, and each reference in this Agreement to "Grantor" shall also mean
and be a reference to such Additional Grantor, and each reference in this
Agreement and the other Loan Documents to "Collateral" shall also mean and
be a reference to the Collateral of such Additional Grantor, and (ii) the
supplemental schedules I-IX attached to each Security Agreement Supplement
shall be incorporated into and become a part of and supplement Schedules
I-IX, respectively, hereto, and the Collateral Agent may attach such
Schedules as supplements to such Schedules, and each reference to such
Schedules shall mean and be a reference to such Schedules, as supplemented
pursuant hereto.
Section 24. Addresses for Notices. All notices and other
communications provided for hereunder shall be either (i) in writing
(including telecopy communication) and, mailed (by certified mail),
telecopied, or otherwise delivered by hand or (ii) by electronic mail (if
electronic mail addresses are designated as provided below) confirmed
immediately in writing (including telecopy communication) to the Borrowers
or to the Collateral Agent, as the case may be, in each case addressed to
such Person at its address specified in the Credit Agreement or, as to any
other Grantor at its address set forth below the name of such Grantor on
the signature pages hereto, or to the Security Agreement Supplement to
which it is a party, as the case may be, or as to any party, either party,
at such other address as shall be designated by such party in a written
notice to each other party complying as to delivery with the terms of this
Section. All such notices and other communications shall, when mailed (by
certified mail), telecopied, sent by electronic mail or delivered shall be
effective when received by the party being notified. Delivery by telecopier
of an executed counterpart of any amendment or waiver of any provision of
this Agreement, any Security Agreement Supplement hereto, or of any
Schedule hereto to be executed and delivered hereunder shall be effective
as delivery of an original executed counterpart hereto.
Section 25. Continuing Security Interest; Assignments under the
Credit Agreement. This Agreement shall create a continuing security
interest in the Collateral and shall (a) remain in full force and effect
until the payment in full in cash of the Secured Obligations, (b) be
binding upon each Grantor, its successors and assigns and (c) inure,
together with the rights and remedies of the Collateral Agent hereunder, to
the benefit of the Collateral Agent, the Secured Parties and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of the Term
Advances owing to it and the Term Note or Term Notes (if any) held by it to
any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Lender herein or
otherwise, in each case as provided in Section 8.07 of the Credit
Agreement.
Section 26. Release and Termination. (a) Upon any sale, lease,
transfer or other disposition of any item of Collateral in accordance with
the terms of the Loan Documents (other than sales of Inventory in the
ordinary course of business), the Collateral Agent will, at the applicable
Grantor's expense, execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence the release of such item
of Collateral from the assignment and security interest granted hereby;
provided, however, that the applicable Grantor shall have delivered to the
Collateral Agent reasonable prior notice of the proposed release, together
with a form of release for execution by the Collateral Agent and a
certification by such Grantor to the effect that the transaction is in
compliance with the Loan Documents and as to such other matters as the
Collateral Agent may reasonably request and (iii) the proceeds of any such
sale, lease, transfer or other disposition required to be applied in
accordance with Section 2.03 of the Credit Agreement shall be paid to, or
in accordance with the instructions of, the Collateral Agent at the
closing.
(b) Upon the payment in full in cash of the Term Advances
(including any interest payable in respect thereof) and all other
Obligations arising under the Loan Documents that are then due and payable
(other than Obligations with respect to the Secured Hedge Agreements not
yet due and payable), the pledge and security interest granted hereby shall
terminate and be released and all rights to the Collateral shall revert to
the applicable Grantor. Upon any such termination, the Collateral Agent
will, at the applicable Grantor's expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence
such termination and release, and the reassignment of all the Collateral
Agent's right, title and interest to such Grantor.
Section 27. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this Agreement by telecopier shall be effective as
delivery of an original executed counterpart of this Agreement.
Section 28. The Mortgages. In the event that any of the
Collateral hereunder is also subject to a valid and enforceable Lien under
the terms of any Mortgage and the terms of such Mortgage are inconsistent
with the terms of this Agreement, then with respect to such Collateral, the
terms of such Mortgage shall be controlling in the case of fixtures and
leases, letting and licenses of, and contracts and agreements relating to
the lease of real property, and the terms of this Agreement shall be
controlling in the case of all other Collateral.
Section 29. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, except
to the extent that the validity or perfection of the security interest
hereunder, or remedies hereunder, in respect of any particular Collateral
are governed by the laws of a jurisdiction other than the State of New
York.
IN WITNESS WHEREOF, each Grantor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as
of the date first above written.
ICG COMMUNICATIONS, INC.
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG CANADIAN ACQUISITION, INC.
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG CHOICECOM, L.P.
By: ICG ChoiceCom Management, LLC,
its General Partner
ICG Telecom Group, Inc., its Managing Member
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG CHOICECOM MANAGEMENT, LLC
By: ICG Telecom Group, Inc., its Managing Member
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG CONSOLIDATED, INC.
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG EQUIPMENT, INC.
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG HOLDINGS, INC.
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG MOUNTAIN VIEW, INC.
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG SERVICES, INC.
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG TELECOM GROUP, INC.
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
ICG TELECOM GROUP OF VIRGINIA, INC.
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
NIKONET, LLC
By: ICG Telecom Group, Inc., its Managing Member
By ______________________________________
Title:
Address: 000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Exhibit A to the
Security Agreement
FORM OF SECURITY AGREEMENT SUPPLEMENT
[Date of Security Agreement Supplement]
Royal Bank of Canada,
as the Collateral Agent for the
Secured Parties referred to in the
Credit Agreement referred to below
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx
ICG Communications, Inc.
Ladies and Gentlemen:
Reference is made to (i) the Credit Agreement dated as of July
__, 2002 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among ICG
Communications, Inc., a Delaware corporation, as the Borrower, the Lenders
party thereto, Royal Bank of Canada, as collateral agent (together with any
successor collateral agent appointed pursuant to Article VII of the Credit
Agreement, the "Collateral Agent") and as administrative agent for the
Lenders, and (ii) the Security Agreement dated July __, 2002 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Security Agreement") made by the Grantors from time to time party
thereto in favor of the Collateral Agent for the Secured Parties. Terms
defined in the Credit Agreement or the Security Agreement and not otherwise
defined herein are used herein as defined in the Credit Agreement or the
Security Agreement.
SECTION 1. Grant of Security. The undersigned hereby grants to
the Collateral Agent, for the ratable benefit of the Secured Parties, a
security interest in, all of its right, title and interest in and to all of
the Collateral (as defined in the Security Agreement) of the undersigned,
whether now owned or hereafter acquired by the undersigned, wherever
located and whether now or hereafter existing or arising, including,
without limitation, the property and assets of the undersigned set forth on
the attached supplemental schedules to the Schedules to the Security
Agreement.
SECTION 2. Security for Obligations. The grant of a security
interest in, the Collateral by the undersigned under this Security
Agreement Supplement and the Security Agreement secures the payment of all
Obligations of the undersigned now or hereafter existing under or in
respect of the Loan Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, contract causes of action,
costs, expenses or otherwise. Without limiting the generality of the
foregoing, this Security Agreement Supplement and the Security Agreement
secures the payment of all amounts that constitute part of the Secured
Obligations and that would be owed by the undersigned to any Secured Party
under the Loan Documents but for the fact that such Secured Obligations are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Loan Party.
SECTION 3. Supplements to Security Agreement Schedules. The
undersigned has attached hereto supplemental Schedules I through IX to
Schedules I through IX, respectively, to the Security Agreement, and the
undersigned hereby certifies, as of the date first above written, that such
supplemental schedules have been prepared by the undersigned in
substantially the form of the equivalent Schedules to the Security
Agreement and are complete and correct.
SECTION 4. Representations and Warranties. The undersigned
hereby makes each representation and warranty set forth in Section 9 of the
Security Agreement (as supplemented by the attached supplemental schedules)
to the same extent as each other Grantor.
SECTION 5. Obligations Under the Security Agreement. The
undersigned hereby agrees, as of the date first above written, to be bound
as a Grantor by all of the terms and provisions of the Security Agreement
to the same extent as each of the other Grantors. The undersigned further
agrees, as of the date first above written, that each reference in the
Security Agreement to an "Additional Grantor" or a "Grantor" shall also
mean and be a reference to the undersigned.
SECTION 6. (1) Governing Law. This Security Agreement Supplement
shall be governed by, and construed in accordance with, the laws of the
State of New York.
Very truly yours,
[NAME OF ADDITIONAL GRANTOR]
By __________________________
Title:
Address for Notices:
______________________________
______________________________
______________________________
__________________
(1) If the Additional Grantor is not concurrently executing a
Guaranty, add provisions relating to submission to jurisdiction
and jury trial waiver.
Exhibit B to the
Security Agreement
FORM OF ACCOUNT CONTROL AGREEMENT
(Deposit Account/Securities Account)
ACCOUNT CONTROL AGREEMENT (this "Agreement") dated as of
________, ____, among____________, a ___________ (the "Grantor"), Royal
Bank of Canada, as Collateral Agent (the "Secured Party"), and _________, a
_________ ("____________"), as securities intermediary and depository bank
(the "Account Holder").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security
interest (the "Security Interest") in the following accounts maintained by
the Account Holder for the Grantor (each, an "Account" and collectively,
the "Accounts"):
[Insert account numbers and other identifying information.]
(2) Terms defined in Article 8 or 9 of the Uniform Commercial
Code in effect in the State of New York ("N.Y. Uniform Commercial Code")
are used in this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, the parties hereto hereby agree as
follows:
SECTION 1. The Accounts. The Grantor and Account Holder
represent and warrant to, and agrees with, the Secured Party that:
(a) The Account Holder maintains each Account for the
Grantor, and all property (including, without limitation, all
funds and financial assets) held by the Account Holder in the
Accounts for the account of the Grantor are, and will continue to
be, credited to an Account in accordance with instructions given
by the Grantor (unless otherwise provided herein).
(b) To the extent that funds are credited to any Account,
such Account is a deposit account; and to the extent that
financial assets are credited to any Account, such Account is a
securities account. The Account Holder is (i) the bank with which
each Account that is a deposit account is maintained and (ii) the
securities intermediary with respect to financial assets held in
any Account that is a securities account. The Grantor is (x) the
Account Holder's customer with respect to the Accounts and (y) the
entitlement holder with respect to financial assets credited from
time to time to any Account.
(c) Notwithstanding any other agreement to the contrary,
the Account Holder's jurisdiction with respect to each Account for
purposes of the N.Y. Uniform Commercial Code is, and will continue
to be for so long as the Security Interest shall be in effect, the
State of New York.
(d) Attached as Exhibit A hereto are statements of the
respective Accounts as of the date hereof showing the property
credited to each Account.
(e) The Grantor and Account Holder do not know of any
claim to or interest in any Account or any property (including,
without limitation, funds and financial assets) credited to any
Account, except for claims and interests of the parties referred
to in this Agreement and the holders of the Subordinated Cerberus
Notes, which claim is subordinated to the claim of the Secured Party.
SECTION 2. Control by Secured Party. The Account Holder will
comply with (i) all instructions directing disposition of the funds in any
and all of the Accounts, (ii) all notifications and entitlement orders that
the Account Holder receives directing it to transfer or redeem any
financial asset in any and all of the Accounts, and (iii) all other
directions concerning any and all of the Accounts, including, without
limitation, directions to distribute to the Secured Party proceeds of any
such transfer or redemption or interest or dividends on property in any and
all of the Accounts (any such instruction, notification or direction
referred to in clause (i), (ii) or (iii) above being an "Account
Direction"), in each case of clauses (i), (ii) and (iii) above originated
by the Secured Party without further consent by the Grantor or any other
Person.
SECTION 3. Grantor's Rights in Accounts. (a) Upon the delivery
of a Notice of Exclusive Control (as defined below) by the Secured Party,
the Account Holder will comply with Account Directions and other directions
concerning each Account originated by, and only by, the Secured Party.
(b) Until the Account Holder receives a notice from the Secured
Party that the Secured Party will exercise exclusive control over any
Account (a "Notice of Exclusive Control" with respect to such Account), the
Account Holder will permit the Grantor full access to the Accounts and
amounts and investments credited thereto and may distribute to the Grantor
all interest and regular cash dividends on property (including, without
limitation, funds and financial assets) in such Account.
(c) If the Account Holder receives from the Secured Party a
Notice of Exclusive Control with respect to any Account, until such notice
has been withdrawn, the Account Holder will cease distributing to the
Grantor all interest and dividends on property (including, without
limitation, funds and financial assets) in such Account.
SECTION 4. Priority of Secured Party's Security Interest. (a)
The Account Holder (i) subordinates to the Security Interest and in favor
of the Secured Party any security interest, lien, or right of recoupment or
setoff that the Account Holder may have, now or in the future, against any
Account or property (including, without limitation, any funds and financial
assets) credited to any Account, and (ii) agrees that it will not exercise
any right in respect of any such security interest or lien or any such
right of recoupment or setoff until the Security Interest is terminated,
except that the Account Holder (A) will retain its prior security interest
and lien on property credited to any Account, (B) may exercise any right in
respect of such security interest or lien, and (C) may exercise any right
of recoupment or setoff against any Account, in the case of clauses (A),
(B) and (C) above, to secure or to satisfy, and only to secure or to
satisfy, payment (x) for such property, (y) for its customary fees and
expenses for the routine maintenance and operation of such Account, and (z)
if such Account is a deposit account, for the face amount of any items that
have been credited to such Account but are subsequently returned unpaid
because of uncollected or insufficient funds.
(b) The Account Holder will not enter into any other agreement
with any Person relating to Account Directions or other directions with
respect to any Account other than the holders of the Subordinated Cerberus
Notes; provided that any rights of control under any such agreement will
not take effect until the termination of the Security Agreement.
SECTION 5. Statements, Confirmations, and Notices of Adverse
Claims. (a) The Account Holder will send copies of all statements and
confirmations for each Account simultaneously to the Secured Party and the
Grantor.
(b) When the Account Holder knows of any claim or interest in
any Account or any property (including, without limitation, funds and
financial assets) credited to any Account other than the claims and
interests of the parties referred to in this Agreement, the Account Holder
will promptly notify the Secured Party and the Grantor of such claim or
interest.
SECTION 6. The Account Holder's Responsibility. (a) Except for
permitting a withdrawal, delivery, or payment in violation of Section 3,
the Account Holder will not be liable to the Secured Party for complying
with Account Directions or other directions concerning any Account from the
Grantor that are received by the Account Holder before the Account Holder
receives and has a reasonable opportunity to act on a Notice of Exclusive
Control.
(b) The Account Holder will not be liable to the Grantor or the
Secured Party for complying with a Notice of Exclusive Control or with an
Account Direction or other direction concerning any Account originated by
the Secured Party, even if the Grantor notifies the Account Holder that the
Secured Party is not legally entitled to issue the Notice of Exclusive
Control or Account Direction or such other direction unless the Account
Holder takes the action after it is served with an injunction, restraining
order, or other legal process enjoining it from doing so, issued by a court
of competent jurisdiction, and had a reasonable opportunity to act on the
injunction, restraining order or other legal process.
(c) This Agreement does not create any obligation of the
Account Holder except for those expressly set forth in this Agreement and,
in the case of any Account that is a securities account, in Part 5 of
Article 8 of the N.Y. Uniform Commercial Code and, in the case of any
Account that is a deposit account, in Article 4 of the N.Y. Uniform
Commercial Code. In particular, the Account Holder need not investigate
whether the Secured Party is entitled under the Secured Party's agreements
with the Grantor to give an Account Direction or other direction concerning
any Account or a Notice of Exclusive Control. The Account Holder may rely
on notices and communications it believes given by the appropriate party.
SECTION 7. Indemnity. The Grantor will indemnify the Account
Holder, its officers, directors, employees and agents against claims,
liabilities and expenses arising out of this Agreement (including, without
limitation, reasonable attorney's fees and disbursements), except to the
extent the claims, liabilities or expenses are caused by the Account
Holder's gross negligence or willful misconduct as found by a court of
competent jurisdiction in a final, non-appealable judgment.
SECTION 8. Termination; Survival. (a) The Secured Party may
terminate this Agreement by notice to the Account Holder and the Grantor.
If the Secured Party notifies the Account Holder that the Security Interest
has terminated, this Agreement will immediately terminate.
(b) The Account Holder may terminate this Agreement on 60 days'
prior notice to the Secured Party and the Grantor, provided that before
such termination the Account Holder and the Grantor shall make arrangements
to transfer the property (including, without limitation, all funds and
financial assets) credited to each Account to another Account Holder that
shall have executed, together with the Grantor, a control agreement in
favor of the Secured Party in respect of such property in substantially the
form of this Agreement or otherwise in form and substance satisfactory to
the Secured Party.
(c) Sections 6 and 7 will survive termination of this Agreement.
SECTION 9. Governing Law. This Agreement and each Account will
be governed by the law of the State of New York. The Account Holder and the
Grantor may not change the law governing any Account without the Secured
Party's express prior written agreement.
SECTION 10. Entire Agreement. This Agreement is the entire
agreement, and supersedes any prior agreements, and contemporaneous oral
agreements, of the parties concerning its subject matter.
SECTION 11. Amendments. No amendment of, or waiver of a right
under, this Agreement will be binding unless it is in writing and signed by
the party to be charged.
SECTION 12. Financial Assets. The Account Holder agrees with
the Secured Party and the Grantor that, to the fullest extent permitted by
applicable law, all property (other than funds) credited from time to time
to any Account will be treated as financial assets under Article 8 of the
N.Y. Uniform Commercial Code.
SECTION 13. Notices. A notice or other communication to a party
under this Agreement will be in writing (except that Account Directions may
be given orally), will be sent to the party's address set forth under its
name below or to such other address as the party may notify the other
parties and will be effective on receipt.
SECTION 14. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Grantor, the Secured
Party and the Account Holder, and thereafter shall be binding upon and
inure to the benefit of the Grantor, the Secured Party and the Account
Holder and their respective successors and assigns.
SECTION 15. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
[NAME OF GRANTOR]
By ___________________________
Name:
Title:
Address:
______________________________
______________________________
ROYAL BANK OF CANADA, as
Collateral Agent
By ___________________________
Name:
Title:
Address:
______________________________
______________________________
[NAME OF ACCOUNT HOLDER]
By ___________________________
Name:
Title:
Address:
______________________________
______________________________
EXHIBIT A
---------
[Statements of the various Accounts showing the
property credited to each Account]
IN WITNESS WHEREOF, the undersigned has duly executed this
Consent and Agreement as of the date set opposite its name below.
Dated: _______________, __ [NAME OF OBLIGOR]
By: ______________________
Title:
Exhibit C to the
Security Agreement
FORM OF SECURITIES ACCOUNT CONTROL AGREEMENT
CONTROL AGREEMENT dated as of ________, ____, among
____________, a ___________ (the "Grantor"), Royal Bank of Canada, as
Collateral Agent (the "Secured Party"), [___________, a ___________, as
Control Agent (the "Control Agent")] and _________, a _________
("____________"), as securities intermediary (the "Securities Intermediary").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security
interest (the "Security Interest") in account no. _______________
maintained by the Securities Intermediary for the Grantor (the "Account").
(2) Terms defined in Article 8 or 9 of the Uniform Commercial
Code in effect in the State of New York ("N.Y. Uniform Commercial Code")
are used in this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, the parties hereto hereby agree as
follows:
SECTION 1. The Account. The Grantor and Securities Intermediary
represent and warrant to, and agree with, the Grantor and the Secured Party
that:
(a) The Securities Intermediary maintains the Account for
the Grantor, and all property held by the Securities Intermediary
for the account of the Grantor is, and will continue to be,
credited to the Account.
(b) The Account is a securities account. The Securities
Intermediary is the securities intermediary with respect to the
property credited from time to time to the Account. The Grantor is
the entitlement holder with respect to the property credited from
time to time to the Account.
(c) The State of New York is, and will continue to be,
the Securities Intermediary's jurisdiction of organization for
purposes of Section 8-110(e) of the UCC so long as the Security
Interest shall remain in effect.
(d) Exhibit A attached hereto is a statement of the property
credited to the Account on the date hereof.
(e) The Grantor and Securities Intermediary do not know
of any claim to or interest in the Account or any property
credited to the Account, except for claims and interests of the
parties referred to in this Agreement and the holders of the
Subordinated Cerberus Notes, which claims are subordinated to the
claim of the Secured Party.
SECTION 2. Control by [Secured Party][Control Agent]. [(a)] The
Securities Intermediary will comply with all notifications it receives
directing it to transfer or redeem any property in the Account (each an
"Entitlement Order") or other directions concerning the Account (including,
without limitation, directions to distribute to the Secured Party proceeds
of any such transfer or redemption or interest or dividends on property in
the Account) originated by the [Secured Party] [Control Agent] without
further consent by the Grantor or any other person.
[(b) The Control Agent hereby acknowledges that is shall
maintain and exercise control of the Account on behalf of the Secured Party.]
SECTION 3. Grantor's Rights in Account. (a) Except as otherwise
provided herein, the Securities Intermediary will comply with Entitlement
Orders and other directions concerning the Account originated by the Grantor.
(b) Until the Securities Intermediary receives a notice from
the [Secured Party] [Control Agent] that the [Secured Party] [Control
Agent] will exercise exclusive control over the Account (a "Notice of
Exclusive Control"), the Securities Intermediary may distribute to the
Grantor all interest and regular cash dividends on property in the Account.
(c) If the Securities Intermediary receives from the [Secured
Party] [Control Agent] a Notice of Exclusive Control, until such notice
shall have been withdrawn, the Securities Intermediary will cease
distributing to the Grantor all interest and dividends on property in the
Account and will cease complying with Entitlement Orders from the Grantors
with respect thereto.
SECTION 4. Priority of Secured Party's Security Interest. (a)
The Securities Intermediary subordinates in favor of the Secured Party any
security interest, lien, or right of setoff it may have, now or in the
future, against the Account or property in the Account, except that the
Securities Intermediary will retain its prior lien on property in the
Account to secure payment for property purchased for the Account and normal
commissions and fees for the Account.
(b) The Securities Intermediary will not agree with any Person
not party to this Agreement that the Securities Intermediary will comply
with Entitlement Orders originated by such Person other than the holders of
the Subordinated Cerberus Notes; provided that any rights of control under
any such agreement will not take effect until the termination of the
Security Agreement.
SECTION 5. Statements, Confirmations, and Notices of Adverse
Claims. (a) The Securities Intermediary will send copies of all statements
and confirmations for the Account simultaneously to the Grantor[, the
Control Agent] and the Secured Party.
(b) When the Securities Intermediary knows of any claim or
interest in the Account or any property credited to the Account other than
the claims and interests of the parties referred to in this Agreement, the
Securities Intermediary will promptly notify [the Control Agent,] the
Secured Party and the Grantor of such claim or interest.
SECTION 6. The Securities Intermediary's Responsibility. (a)
Except for permitting a withdrawal, delivery, or payment in violation of
Section 3, the Securities Intermediary will not be liable to [the Control
Agent or] the Secured Party for complying with Entitlement Orders or other
directions concerning the Account from the Grantor that are received by the
Securities Intermediary before the Securities Intermediary receives and has
a reasonable opportunity to act on a Notice of Exclusive Control.
(b) The Securities Intermediary will not be liable to the
Grantor or the Secured Party for complying with a Notice of Exclusive
Control or with an Entitlement Order or other direction concerning the
Account originated by the [Secured Party] [Control Agent], even if the
Grantor notifies the Securities Intermediary that the [Secured Party]
[Control Agent] is not legally entitled to issue the Notice of Exclusive
Control or Entitlement Order or such other direction unless the Securities
Intermediary takes the action after it is served with an injunction,
restraining order, or other legal process enjoining it from doing so,
issued by a court of competent jurisdiction, and had a reasonable
opportunity to act on the injunction, restraining order or other legal
process.
(c) This Agreement does not create any obligation of the
Securities Intermediary except for those expressly set forth in this
Agreement and in Part 5 of Article 8 of the N.Y. Uniform Commercial Code.
In particular, the Securities Intermediary need not investigate whether the
[Secured Party] [Control Agent] is entitled under the [Secured Party's]
[Control Agent's] agreements with the Grantor [or Secured Party] to give an
Entitlement Order or other direction concerning the Account or a Notice of
Exclusive Control. The Securities Intermediary may rely on notices and
communications it believes given by the appropriate party.
SECTION 7. Indemnity. The Grantor will indemnify the Securities
Intermediary, its officers, directors, employees and agents against claims,
liabilities and expenses arising out of this Agreement (including, without
limitation, reasonable attorney's fees and disbursements), except to the
extent the claims, liabilities or expenses are caused by the Securities
Intermediary's gross negligence or willful misconduct as found by a court
of competent jurisdiction in a final, non-appealable judgment.
SECTION 8. Termination; Survival. (a) The Secured Party may
terminate this Agreement by notice to [the Control Agent,] the Securities
Intermediary and the Grantor. If the Secured Party notifies the Securities
Intermediary that the Security Interest has terminated, this Agreement will
immediately terminate.
(b) The Securities Intermediary may terminate this Agreement on
60 days' prior notice to [the Control Agent,] the Secured Party and the
Grantor, provided that before such termination the Securities Intermediary
and the Grantor shall make arrangements to transfer the property in the
Account to another securities intermediary that shall have executed,
together with [the Control Agent and] the Grantor, a control agreement in
favor of [the Control Agent and] the Secured Party in respect of such
property in substantially the form of this Agreement or otherwise in form
and substance satisfactory to the Secured Party.
[(c) The Control Agent may terminate this agreement on 60 days'
prior notice to the Securities Intermediary, the Secured Party and the
Grantor, provided that before such termination, the Securities
Intermediary, the Secured Party and the Grantor shall make arrangements for
another Person to assume the rights and obligations of the Control Agent
hereunder, and such Person shall have executed, together with the
Securities Intermediary, the Secured Party and the Grantor, a control
agreement in favor of such Person and the Secured Party in substantially
the form of this Agreement or otherwise in form and substance satisfactory
to the Secured Party.]
[(c)] [(d)] Sections 6 and 7 will survive termination of this
Agreement.
SECTION 9. Governing Law. This Agreement and the Account will
be governed by the law of the State of New York. [The] [None of the]
Securities Intermediary [, the Control Agent, nor] [and] the Grantor may
[not] change the law governing the Account without the Secured Party's
express prior written agreement.
SECTION 10. Entire Agreement. This Agreement is the entire
agreement, and supersedes any prior agreements, and contemporaneous oral
agreements, of the parties concerning its subject matter.
SECTION 11. Amendments. No amendment of, or waiver of a right
under, this Agreement will be binding unless it is in writing and signed by
the party to be charged.
SECTION 12. Financial Assets. The Securities Intermediary
agrees with [the Control Agent,] the Secured Party and the Grantor that, to
the fullest extent permitted by applicable law, all property credited from
time to time to the Account will be treated as financial assets under
Article 8 of the N.Y. Uniform Commercial Code.
SECTION 13. Notices. A notice or other communication to a party
under this Agreement will be in writing (except that Entitlement Orders may
be given orally), will be sent to the party's address set forth under its
name below or to such other address as the party may notify the other
parties and will be effective on receipt.
SECTION 14. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Grantor, the Secured
Party[, the Control Agent] and the Securities Intermediary, and thereafter
shall be binding upon and inure to the benefit of the Grantor, the Secured
Party[, the Control Agent] and the Securities Intermediary and their
respective successors and assigns.
SECTION 15. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
[NAME OF GRANTOR]
By ___________________________
Name:
Title:
Address:
______________________________
______________________________
ROYAL BANK OF CANADA, as
Collateral Agent
By ___________________________
Name:
Title:
Address:
______________________________
______________________________
[[NAME OF CONTROL AGENT], as
Control Agent
By ___________________________
Name:
Title:
Address:
______________________________
______________________________]
[NAME OF SECURITIES
INTERMEDIARY]
By ___________________________
Name:
Title:
Address:
______________________________
______________________________
Exhibit D to the
Security Agreement
FORM OF COMMODITY ACCOUNT CONTROL AGREEMENT
CONTROL AGREEMENT dated as of ________, ____, among
____________, a ___________ (the "Grantor"), Royal Bank of Canada, as
Collateral Agent (the "Secured Party"), and _________, a _________
("____________"), as commodity intermediary (the "Commodity Intermediary").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security
interest (the "Security Interest") in account no. _______________
maintained by the Commodity Intermediary for the Grantor (the "Account").
(2) Terms defined in Article 8 or 9 of the Uniform Commercial
Code in effect in the State of New York ("N.Y. Uniform Commercial Code")
are used in this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, the parties hereto hereby agree as
follows:
SECTION 1. The Account. The Grantor and the Commodity
Intermediary represent and warrant to, and agree with, the Grantor and the
Secured Party that:
(a) The Commodity Intermediary maintains the Account for
the Grantor, and all commodity contracts held by the Commodity
Intermediary for the account of the Grantor is, and will continue
to be, carried in the Account.
(b) The Account is a commodity account. The Commodity
Intermediary is the commodity intermediary with respect to the
commodity contracts carried from time to time in the Account. The
Grantor is the commodity customer with respect to the commodity
contracts carried from time to time in the Account.
(c) The State of New York is, and will continue to be,
the Commodity Intermediary's jurisdiction of organization for
purposes of Section 9-305(b) of the UCC so long as the Security
Interest shall remain in effect.
(d) Exhibit A attached hereto is a statement of the
commodity contracts carried in the Account on the date hereof.
(e) The Grantor and Commodity Intermediary do not know of
any claim to or interest in the Account or any commodity contract
carried in the Account, except for claims and interests of the
parties referred to in this Agreement and the holders of the
Subordinated Cerberus Notes, which claims are subordinate to the
claim of the Secured Party.
SECTION 2. Control by Secured Party. The Commodity Intermediary
will comply with all notifications it receives directing it to apply any
value distributed on account of any commodity contract or contracts carried
in the Account (each an "Entitlement Order") or other directions concerning
the Account originated by the Secured Party without further consent by the
Grantor or any other person.
SECTION 3. Grantor's Rights in Account. (a) Except as otherwise
provided herein, the Commodity Intermediary will comply with Entitlement
Orders and other directions concerning the Account originated by the Grantor.
(b) Until the Commodity Intermediary receives a notice from the
Secured Party that the Secured Party will exercise exclusive control over
the Account (a "Notice of Exclusive Control"), the Commodity Intermediary
may act on directions originated by the Grantor concerning the Account
except directions consisting of any Entitlement Order.
(c) If the Commodity Intermediary receives from the Secured
Party a Notice of Exclusive Control, until such notice shall have been
withdrawn, the Commodity Intermediary will cease acting on any directions
referred to in subsection (b) above and will cease complying with
Entitlement Orders from the Grantors with respect thereto.
SECTION 4. Priority of Secured Party's Security Interest. (a)
The Commodity Intermediary subordinates in favor of the Secured Party any
security interest, lien, or right of setoff it may have, now or in the
future, against the Account or commodity contracts carried in the Account,
except that the Commodity Intermediary will retain its prior lien on
commodity contracts in the Account to secure payment for commodity
contracts purchased for the Account and normal commissions and fees for the
Account.
(b) The Commodity Intermediary will not agree with any third
party that the Commodity Intermediary will comply with Entitlement Orders
originated by the third party other than the holders of the Subordinated
Cerberus Notes; provided that any rights of control under any such
agreement will not take effect until the termination of the Security
Agreement.
SECTION 5. Statements, Confirmations, and Notices of Adverse
Claims. (a) The Commodity Intermediary will send copies of all statements
and confirmations for the Account simultaneously to the Grantor and the
Secured Party.
(b) When the Commodity Intermediary knows of any claim or
interest in the Account or any commodity contracts carried in the Account
other than the claims and interests of the parties referred to in this
Agreement, the Commodity Intermediary will promptly notify the Secured
Party and the Grantor of such claim or interest.
SECTION 6. The Commodity Intermediary's Responsibility. (a) The
Commodity Intermediary will not be liable to the Secured Party for
complying with Entitlement Orders or other directions concerning the
Account from the Grantor that are received by the Commodity Intermediary
before the Commodity Intermediary receives and has a reasonable opportunity
to act on a Notice of Exclusive Control.
(b) The Commodity Intermediary will not be liable to the
Grantor for complying with a Notice of Exclusive Control or with an
Entitlement Order or other direction concerning the Account originated by
the Secured Party, even if the Grantor notifies the Commodity Intermediary
that the Secured Party is not legally entitled to issue the Notice of
Exclusive Control or Entitlement Order or such other direction unless the
Commodity Intermediary takes the action after it is served with an
injunction, restraining order, or other legal process enjoining it from
doing so, issued by a court of competent jurisdiction, and had a reasonable
opportunity to act on the injunction, restraining order or other legal
process.
(c) This Agreement does not create any obligation of the
Commodity Intermediary except for those expressly set forth in this
Agreement. In particular, the Commodity Intermediary need not investigate
whether the Secured Party is entitled under the Secured Party's agreements
with the Grantor to give an Entitlement Order or other direction concerning
the Account or a Notice of Exclusive Control. The Commodity Intermediary
may rely on notices and communications it believes given by the appropriate
party.
SECTION 7. Indemnity. The Grantor will indemnify the Commodity
Intermediary, its officers, directors, employees and agents against claims,
liabilities and expenses arising out of this Agreement (including, without
limitation, reasonable attorney's fees and disbursements), except to the
extent the claims, liabilities or expenses are caused by the Commodity
Intermediary's gross negligence or willful misconduct as found by a court
of competent jurisdiction in a final non-appealable judgment.
SECTION 8. Termination; Survival. (a) The Secured Party may
terminate this Agreement by notice to the Commodity Intermediary and the
Grantor. If the Secured Party notifies the Commodity Intermediary that the
Security Interest has terminated, this Agreement will immediately terminate.
(b) The Commodity Intermediary may terminate this Agreement on
60 days' prior notice to the Secured Party and the Grantor, provided that
before such termination the Commodity Intermediary and the Grantor shall
make arrangements to transfer the commodity contracts carried in the
Account to another commodity intermediary that shall have executed,
together with the Grantor, a control agreement in favor of the Secured
Party in respect of such commodity contracts in substantially the form of
this Agreement or otherwise in form and substance satisfactory to the
Secured Party.
(c) Sections 6 and 7 will survive termination of this Agreement.
SECTION 9. Governing Law. This Agreement and the Account will
be governed by the law of the State of New York. The Commodity Intermediary
and the Grantor may not change the law governing the Account without the
Secured Party's express prior written agreement.
SECTION 10. Entire Agreement. This Agreement is the entire
agreement, and supersedes any prior agreements, and contemporaneous oral
agreements, of the parties concerning its subject matter.
SECTION 11. Amendments. No amendment of, or waiver of a right
under, this Agreement will be binding unless it is in writing and signed by
the party to be charged.
SECTION 12. Commodity Contracts. The Commodity Intermediary
agrees with the Secured Party and the Grantor that, to the fullest extent
permitted by applicable law, all property carried from time to time in the
Account will be treated as commodity contracts under Article 8 of the N.Y.
Uniform Commercial Code.
SECTION 13. Notices. A notice or other communication to a party
under this Agreement will be in writing (except that Entitlement Orders may
be given orally), will be sent to the party's address set forth under its
name below or to such other address as the party may notify the other
parties and will be effective on receipt.
SECTION 14. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Grantor, the Secured
Party and the Commodity Intermediary, and thereafter shall be binding upon
and inure to the benefit of the Grantor, the Secured Party and the
Commodity Intermediary and their respective successors and assigns.
SECTION 15. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
[NAME OF GRANTOR]
By ___________________________
Name:
Title:
Address:
______________________________
______________________________
ROYAL BANK OF CANADA, as
Collateral Agent
By ___________________________
Name:
Title:
Address:
______________________________
______________________________
Address:
[NAME OF COMMODITY
INTERMEDIARY]
By ___________________________
Name:
Title:
Address:
______________________________
______________________________
Exhibit E to the
Security Agreement
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "IP Security Agreement") dated _____________, ____, is made by the
Persons listed on the signature pages hereof (collectively, the "Grantors")
in favor of Royal Bank of Canada, as collateral agent (the "Collateral
Agent") for the Secured Parties (as defined in the Credit Agreement
referred to below).
WHEREAS, ICG Communications, Inc., a Delaware corporation, has
entered into a Credit Agreement dated as of July __, 2002 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"), with Royal Bank of Canada, as Administrative Agent
and as Collateral Agent, and the Lenders party thereto. Terms defined in
the Credit Agreement and not otherwise defined herein are used herein as
defined in the Credit Agreement.
WHEREAS, as a condition precedent to the making of Advances by
the Lenders under the Credit Agreement and the entry into Secured Hedge
Agreements by the Hedge Banks from time to time, each Grantor has executed
and delivered that certain Security Agreement dated July __, 2002 made by
the Grantors to the Collateral Agent (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Security Agreement").
WHEREAS, under the terms of the Security Agreement, the
Grantors have granted to the Collateral Agent, for the ratable benefit of
the Secured Parties, a security interest in, among other property, certain
intellectual property of the Grantors, and have agreed as a condition
thereof to execute this IP Security Agreement for recording with the U.S.
Patent and Trademark Office, the United States Copyright Office and other
governmental authorities.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Grantor
agrees as follows:
SECTION 1. Grant of Security. Each Grantor hereby grants to the
Collateral Agent for the ratable benefit of the Secured Parties a security
interest in all of such Grantor's right, title and interest in and to the
following (the "Collateral"):
(i) the patents and patent applications set forth in
Schedule A hereto (the "Patents");
(ii) the trademark and service xxxx registrations and
applications set forth in Schedule B hereto (provided that no
security interest shall be granted in United States intent-to-use
trademark applications to the extent that, and solely during the
period in which, the grant of a security interest therein would
impair the validity or enforceability of such intent-to-use
trademark applications under applicable federal law), together
with the goodwill symbolized thereby (the "Trademarks");
(iii) all copyrights, whether registered or unregistered,
now owned or hereafter acquired by such Grantor, including,
without limitation, the copyright registrations and applications
and exclusive copyright licenses set forth in Schedule C hereto
(the "Copyrights");
(iv) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of
any of the foregoing, all rights in the foregoing provided by
international treaties or conventions, all rights corresponding
thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining
thereto;
(v) any and all claims for damages and injunctive relief
for past, present and future infringement, dilution,
misappropriation, violation, misuse or breach with respect to any
of the foregoing, with the right, but not the obligation, to xxx
for and collect, or otherwise recover, such damages; and
(vi) any and all proceeds of, collateral for, income,
royalties and other payments now or hereafter due and payable with
respect to, and supporting obligations relating to, any and all of
the Collateral of or arising from any of the foregoing.
SECTION 2. Security for Obligations. The grant of a security
interest in, the Collateral by each Grantor under this IP Security
Agreement secures the payment of all Obligations of such Grantor now or
hereafter existing under or in respect of the Loan Documents, whether
direct or indirect, absolute or contingent, and whether for principal,
reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise.
Without limiting the generality of the foregoing, this IP Security
Agreement secures, as to each Grantor, the payment of all amounts that
constitute part of the Secured Obligations and that would be owed by such
Grantor to any Secured Party under the Loan Documents but for the fact that
such Secured Obligations are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving a
Loan Party.
SECTION 3. Recordation. Each Grantor authorizes and requests
that the Register of Copyrights, the Commissioner for Patents and the
Commissioner for Trademarks and any other applicable government officer
record this IP Security Agreement.
SECTION 4. Execution in Counterparts. This IP Security
Agreement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 5. Grants, Rights and Remedies. This IP Security
Agreement has been entered into in conjunction with the provisions of the
Security Agreement. Each Grantor does hereby acknowledge and confirm that
the grant of the security interest hereunder to, and the rights and
remedies of, the Collateral Agent with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions of
which are incorporated herein by reference as if fully set forth herein.
SECTION 6. Governing Law. This IP Security Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, each Grantor has caused this IP Security
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
ICG COMMUNICATIONS, INC.
By ___________________________
Name:
Title:
Address for Notices:
______________________________
______________________________
[NAME OF GRANTOR]
By ___________________________
Name:
Title:
Address for Notices:
______________________________
______________________________
[NAME OF GRANTOR]
By ___________________________
Name:
Title:
Address for Notices:
______________________________
______________________________
[ETC.]
Exhibit F to the
Security Agreement
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this
"IP Security Agreement Supplement") dated _____________, ____, is made by
the Person listed on the signature page hereof (the "Grantor") in favor of
Royal Bank of Canada, as collateral agent (the "Collateral Agent") for the
Secured Parties (as defined in the Credit Agreement referred to below).
WHEREAS, ICG Communications, Inc., a Delaware corporation, has
entered into a Credit Agreement dated as of July __, 2002 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"), with Royal Bank of Canada, as Administrative Agent
and as Collateral Agent, and the Lender Parties party thereto. Terms
defined in the Credit Agreement and not otherwise defined herein are used
herein as defined in the Credit Agreement.
WHEREAS, pursuant to the Credit Agreement, the Grantor and
certain other Persons have executed and delivered that certain Security
Agreement dated July __, 2002 made by the Grantor and such other Persons to
the Collateral Agent (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Security Agreement") and that
certain Intellectual Property Security Agreement dated July __, 2002 (as
amended, amended and restated, supplemented or otherwise modified from time
to time, the "IP Security Agreement").
WHEREAS, under the terms of the Security Agreement, the Grantor
has granted to the Collateral Agent, for the ratable benefit of the Secured
Parties, a security interest in the Additional Collateral (as defined in
Section 1 below) of the Grantor and has agreed as a condition thereof to
execute this IP Security Agreement Supplement for recording with the U.S.
Patent and Trademark Office, the United States Copyright Office and other
governmental authorities.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Grantor
agrees as follows:
SECTION 1. Grant of Security. Each Grantor hereby grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, a
security interest in all of such Grantor's right, title and interest in and
to the following (the "Collateral"):
(i) the patents and patent applications set forth in
Schedule A hereto (the "Patents");
(ii) the trademark and service xxxx registrations and
applications set forth in Schedule B hereto (provided that no
security interest shall be granted in United States intent-to-use
trademark applications to the extent that, and solely during the
period in which, the grant of a security interest therein would
impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together with the
goodwill symbolized thereby (the "Trademarks");
(iii) the copyright registrations and applications and
exclusive copyright licenses set forth in Schedule C hereto (the
"Copyrights");
(iv) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the foregoing, all rights in the foregoing provided by
international treaties or conventions, all rights corresponding
thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto;
(v) all any and all claims for damages and injunctive
relief for past, present and future infringement, dilution,
misappropriation, violation, misuse or breach with respect to any of
the foregoing, with the right, but not the obligation, to xxx for and
collect, or otherwise recover, such damages; and
(vi) any and all proceeds of, collateral for, income,
royalties and other payments now or hereafter due and payable with
respect to, and supporting obligations relating to, any and all of
the foregoing or arising from any of the foregoing.
SECTION 2. Supplement to Security Agreement. Schedule VI to the
Security Agreement is, effective as of the date hereof, hereby supplemented
to add to such Schedule the Additional Collateral.
SECTION 3. Security for Obligations. The grant of a security
interest in the Additional Collateral by the Grantor under this IP Security
Agreement Supplement secures the payment of all Obligations of the Grantor
now or hereafter existing under or in respect of the Loan Documents,
whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise.
SECTION 4. Recordation. The Grantor authorizes and requests
that the Register of Copyrights, the Commissioner for Patents and the
Commissioner for Trademarks and any other applicable government officer to
record this IP Security Agreement Supplement.
SECTION 5. Grants, Rights and Remedies. This IP Security
Agreement Supplement has been entered into in conjunction with the
provisions of the Security Agreement. The Grantor does hereby acknowledge
and confirm that the grant of the security interest hereunder to, and the
rights and remedies of, the Collateral Agent with respect to the Additional
Collateral are more fully set forth in the Security Agreement, the terms
and provisions of which are incorporated herein by reference as if fully
set forth herein.
SECTION 6. Governing Law. This IP Security Agreement Supplement
shall be governed by, and construed in accordance with, the laws of the
State of New York.
IN WITNESS WHEREOF, the Grantor has caused this IP Security
Agreement Supplement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
[NAME OF GRANTOR]
By ___________________________
Name:
Title:
Address for Notices:
______________________________
______________________________
______________________________
Exhibit G to the
Security Agreement
FORM OF CONSENT TO ASSIGNMENT OF LETTER OF CREDIT RIGHTS
To: Royal Bank of Canada, as Collateral Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx
[INSERT NAME OF BENEFICIARY], as Beneficiary
[____________________]
[____________________]
[____________________]
We refer to the [INSERT ALL IDENTIFYING INFORMATION WITH
RESPECT TO RELEVANT LETTER OF CREDIT] (as it may be amended, supplemented
or otherwise modified from time to time, the "Letter of Credit")[, a true
copy of which is attached hereto]. The Letter of Credit has been
established in favor of [INSERT NAME OF BENEFICIARY], as beneficiary (the
"Beneficiary"), and we are the [issuing bank (the "Issuing
Bank")][nominated person (the "Nominated Person")] required to give value
thereunder pursuant to one [or more] drawing[s] upon the satisfaction of
the conditions stated in the Letter of Credit. The liability of the
[Issuing Bank][Nominated Person] for action or omissions under the Letter
of Credit is governed by the laws of [INSERT RELEVANT JURISDICTION], as
chosen by agreement in the Letter of Credit. [To the best knowledge of the
undersigned,] the signatories to this consent letter are the only persons
obligated to give value under the Letter of Credit.
We hereby confirm that there is no term in the Letter of Credit
or other restriction which prohibits, restricts or requires any person's
consent to the Beneficiary's assignment of or creation of a security
interest in the rights to payment or performance under the Letter of
Credit. We hereby consent to and acknowledge the assignment by the
Beneficiary of all proceeds of and rights to payment and performance under
the Letter of Credit in favor of [________], as collateral agent (the
"Collateral Agent") pursuant to the Security Agreement dated as of
[________], 200_ executed by the Beneficiary [and other parties thereto],
as Grantor, in favor of the Collateral Agent, as such agreement may be
amended, amended and restated, supplemented or otherwise modified from time
to time (the "Security Agreement").
We hereby agree to pay, irrespective of, and without deduction
for, any counterclaim, defense, recoupment or set-off, all proceeds of the
Letter of Credit that would otherwise be paid to the Beneficiary directly
to the Collateral Agent to the following account:
[____________________]
[____________________]
[____________________]
[____________________]
We hereby confirm and agree that the Letter of Credit is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects and that the Collateral Agent shall have no
liability or obligation under or with respect to the Letter of Credit or
any document related thereto as a result of this consent letter, the
Security Agreement or otherwise.
This consent letter may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same consent letter.
Delivery of an executed counterpart of a signature page to this consent
letter by telecopier shall be effective as delivery of an original executed
counterpart of this consent letter.
This consent letter shall be governed by, and construed in
accordance with, the laws of the State of New York.
[NAME OF ISSUING BANK]
By: ______________________
Name:
Title:
[NAME OF NOMINATED PERSON]
By: ______________________
Name:
Title:
The above is acknowledged and agreed to:
[NAME OF GRANTOR/BENEFICIARY]
By _____________________________
Name: __________________________
Title:__________________________
Address for Notices:
________________________________
________________________________
________________________________
EXHIBIT D
FORM OF SUBSIDIARY GUARANTY
S&S DRAFT
7/19/02
SUBSIDIARY GUARANTY
Dated as of July __, 2002
From
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
THE ADDITIONAL SUBSIDIARY GUARANTORS REFERRED TO HEREIN
as Additional Subsidiary Guarantors
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
T A B L E O F C O N T E N T S
Section Page
Section 1. Subsidiary Guaranty; Limitation of Liability......................................1
Section 2. Subsidiary Guaranty Absolute......................................................2
Section 3. Waivers and Acknowledgments.......................................................3
Section 4. Subrogation.......................................................................4
Section 5. Payments Free and Clear of Taxes, Etc.............................................5
Section 6. Representations and Warranties....................................................7
Section 7. Covenants.........................................................................7
Section 8. Amendments, Subsidiary Guaranty Supplements, Etc..................................8
Section 9. Notices, Etc......................................................................8
Section 10. No Waiver; Remedies..............................................................9
Section 11. Right of Set-off.................................................................9
Section 12. Indemnification..................................................................9
Section 13. Subordination....................................................................10
Section 14. Continuing Subsidiary Guaranty; Assignments under the Credit Agreement...........11
Section 15. Execution in Counterparts........................................................11
Section 16. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc...........................11
Exhibit A - Subsidiary Guaranty Supplement
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY dated as of July __, 2002 made by the Persons
listed on the signature pages hereof under the caption "Subsidiary
Guarantors" and the Additional Subsidiary Guarantors (as defined in Section
8(b)) (such Persons so listed and the Additional Subsidiary Guarantors
being, collectively, the "Subsidiary Guarantors" and, individually, each a
"Subsidiary Guarantor") in favor of the Secured Parties (as defined in the
Credit Agreement referred to below).
PRELIMINARY STATEMENT. ICG Communications, Inc., a Delaware
corporation ("ICG Communications") (the "Borrower"), is party to a Credit
Agreement dated as of July __, 2002 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"; the capitalized terms defined therein and not otherwise defined
herein being used herein as therein defined) with certain Initial Lenders
party thereto, Royal Bank of Canada, as Collateral Agent and as
Administrative Agent for such Lenders, and Wachovia Bank, N.A., as
Documentation Agent. Each Subsidiary Guarantor will derive substantial
direct and indirect benefits from the transactions contemplated by the
Credit Agreement. It is a condition precedent to the entry by the Initial
Lenders into the Credit Agreement and the entry by the Hedge Banks into
Secured Hedge Agreements from time to time that each Subsidiary Guarantor
shall have executed and delivered this Subsidiary Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Credit Agreement and the Hedge Banks
to enter into Secured Hedge Agreements from time to time, each Subsidiary
Guarantor, jointly and severally with each other Subsidiary Guarantor,
hereby agrees as follows:
Section 1. Subsidiary Guaranty; Limitation of Liability. (a) Each
Subsidiary Guarantor hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or
on any date of a required prepayment or by acceleration, demand or
otherwise, of all Obligations of any of the Loan Parties now or hereafter
existing under or in respect of the Loan Documents (including, without
limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing Obligations), whether direct or
indirect, absolute or contingent, and whether for principal, interest,
premiums, fees, indemnities, contract causes of action, costs, expenses or
otherwise (such Obligations being the "Guaranteed Obligations"), and agrees
to pay any and all expenses (including, without limitation, fees and
expenses of counsel) incurred by the Administrative Agent or any other
Secured Party in enforcing any rights under this Subsidiary Guaranty or any
other Loan Document. Without limiting the generality of the foregoing, each
Subsidiary Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any
other Loan Party to any Secured Party under or in respect of the Loan
Documents but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding
involving such other Loan Party.
(b) Each Subsidiary Guarantor, and by its acceptance of this
Subsidiary Guaranty, the Administrative Agent and each other Secured Party,
hereby confirms that it is the intention of all such Persons that this
Subsidiary Guaranty and the Obligations of each Subsidiary Guarantor
hereunder not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign,
federal or state law to the extent applicable to this Subsidiary Guaranty
and the Obligations of each Subsidiary Guarantor hereunder. To effectuate
the foregoing intention, the Administrative Agent, the other Secured
Parties and the Subsidiary Guarantors hereby irrevocably agree that the
Obligations of each Subsidiary Guarantor under this Guaranty at any time
shall be limited to the maximum amount as will result in the Obligations of
such Subsidiary Guarantor under this Subsidiary Guaranty not constituting a
fraudulent transfer or conveyance. For purposes hereof, "Bankruptcy Law"
means any proceeding of the type referred to in Section 6.01(f) of the
Credit Agreement or Title 11, U.S. Code, or any similar foreign, federal or
state law for the relief of debtors.
(c) Each Subsidiary Guarantor hereby unconditionally and
irrevocably agrees that in the event any payment shall be required to be
made to any Secured Party under this Subsidiary Guaranty or the Parent
Guaranty, such Subsidiary Guarantor will contribute, to the maximum extent
permitted by law, such amounts to each other Subsidiary Guarantor and the
Parent so as to maximize the aggregate amount paid to the Secured Parties
under or in respect of the Loan Documents.
Section 2. Subsidiary Guaranty Absolute. Each Subsidiary Guarantor
guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Secured Party with respect
thereto. The Obligations of each Subsidiary Guarantor under or in respect
of this Subsidiary Guaranty are independent of the Guaranteed Obligations
or any other Obligations of any other Loan Party under or in respect of the
Loan Documents, and a separate action or actions may be brought and
prosecuted against each Subsidiary Guarantor to enforce this Subsidiary
Guaranty, irrespective of whether any action is brought against the
Borrower or any other Loan Party or whether the Borrower or any other Loan
Party is joined in any such action or actions. The liability of each
Subsidiary Guarantor under this Subsidiary Guaranty shall be irrevocable,
absolute and unconditional irrespective of, and each Subsidiary Guarantor
hereby irrevocably waives any defenses it may now have or hereafter acquire
in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Guaranteed
Obligations or any other Obligations of any other Loan Party under
or in respect of the Loan Documents, or any other amendment or
waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to
any Loan Party or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of
any Collateral or any other collateral, or any taking, release or
amendment or waiver of, or consent to departure from, any other
guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other
collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any
Collateral or any other collateral for all or any of the
Guaranteed Obligations or any other Obligations of any Loan Party
under the Loan Documents or any other assets of any Loan Party or
any of its Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of any Loan Party or any of its
Subsidiaries;
(f) any failure of any Secured Party to disclose to any
Loan Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or
prospects of any other Loan Party now or hereafter known to such
Secured Party (each Subsidiary Guarantor waiving any duty on the
part of the Secured Parties to disclose such information);
(g) the failure of any other Person to execute or deliver
this Subsidiary Guaranty, any Subsidiary Guaranty Supplement (as
hereinafter defined) or any other guaranty or agreement or the
release or reduction of liability of any Subsidiary Guarantor or
other Subsidiary Guarantor or surety with respect to the
Guaranteed Obligations; or
(h) any other circumstance (including, without
limitation, any statute of limitations) or any existence of or
reliance on any representation by any Secured Party that might
otherwise constitute a defense available to, or a discharge of,
any Loan Party or any other Subsidiary Guarantor or surety.
This Subsidiary Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Guaranteed
Obligations is rescinded or must otherwise be returned by any Secured Party
or any other Person upon the insolvency, bankruptcy or reorganization of
the Borrower or any other Loan Party or otherwise, all as though such
payment had not been made.
Section 3. Waivers and Acknowledgments. (a) Each Subsidiary
Guarantor hereby unconditionally and irrevocably waives promptness,
diligence, notice of acceptance, presentment, demand for performance,
notice of nonperformance, default, acceleration, protest or dishonor and
any other notice with respect to any of the Guaranteed Obligations and this
Subsidiary Guaranty and any requirement that any Secured Party protect,
secure, perfect or insure any Lien or any property subject thereto or
exhaust any right or take any action against any Loan Party or any other
Person or any Collateral.
(b) Each Subsidiary Guarantor hereby unconditionally and
irrevocably waives any right to revoke this Subsidiary Guaranty and
acknowledges that this Subsidiary Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the
future.
(c) Each Subsidiary Guarantor hereby unconditionally and
irrevocably waives (i) any defense arising by reason of any claim or
defense based upon an election of remedies by any Secured Party that in any
manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification
rights of such Subsidiary Guarantor or other rights of such Subsidiary
Guarantor to proceed against any of the other Loan Parties, any other
guarantor, any other Person or any Collateral and (ii) any defense based on
any right of set-off or counterclaim against or in respect of the
Obligations of such Subsidiary Guarantor hereunder.
(d) Each Subsidiary Guarantor acknowledges that the Collateral
Agent may, without notice to or demand upon such Subsidiary Guarantor and
without affecting the liability of such Subsidiary Guarantor under this
Subsidiary Guaranty, foreclose under any mortgage by nonjudicial sale, and
each Subsidiary Guarantor hereby waives any defense to the recovery by the
Collateral Agent and the other Secured Parties against such Subsidiary
Guarantor of any deficiency after such nonjudicial sale and any defense or
benefits that may be afforded by applicable law.
(e) Each Subsidiary Guarantor hereby unconditionally and
irrevocably waives any duty on the part of any Secured Party to disclose to
such Subsidiary Guarantor any matter, fact or thing relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Loan Party or any of its Subsidiaries
now or hereafter known by such Secured Party.
(f) Each Subsidiary Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in
Section 2 and this Section 3 are knowingly made in contemplation of such
benefits.
Section 4. Subrogation. Each Subsidiary Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights that it
may now have or hereafter acquire against the Borrower, any other Loan
Party or any other insider guarantor that arise from the existence,
payment, performance or enforcement of such Subsidiary Guarantor's
Obligations under or in respect of this Subsidiary Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right
to participate in any claim or remedy of any Secured Party against the
Borrower, any other Loan Party or any other insider guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the
right to take or receive from the Borrower, any other Loan Party or any
other insider guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security on account of
such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Subsidiary Guaranty
shall have been paid in full in cash and all Secured Hedge Agreements shall
have expired or been terminated or this Subsidiary Guaranty shall otherwise
have terminated pursuant to Section 14. If any amount shall be paid to any
Subsidiary Guarantor in violation of the immediately preceding sentence at
any time prior to the latest of (a) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Subsidiary
Guaranty, (b) the payment in full in cash of the Obligations under the
Credit Agreement, and (c) the latest date of expiration or termination of
all Secured Hedge Agreements, unless this Subsidiary Guaranty shall have
otherwise terminated pursuant to Section 14, such amount shall be received
and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such Subsidiary Guarantor and
shall forthwith be paid or delivered to the Administrative Agent in the
same form as so received (with any necessary endorsement or assignment) to
be credited and applied to the Guaranteed Obligations and all other amounts
payable under this Subsidiary Guaranty, whether matured or unmatured, in
accordance with the terms of the Loan Documents, or to be held as
Collateral for any Guaranteed Obligations or other amounts payable under
this Subsidiary Guaranty thereafter arising. If (i) any Subsidiary
Guarantor shall make payment to any Secured Party of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all
other amounts payable under this Subsidiary Guaranty shall have been paid
in full in cash, (iii) the Obligations payable under the Credit Agreement
shall have been paid in full in cash and (iv) all Secured Hedge Agreements
shall have expired or been terminated, or this Subsidiary Guaranty shall
have otherwise terminated pursuant to Section 14, the Secured Parties will,
at such Subsidiary Guarantor's request and expense, execute and deliver to
such Subsidiary Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to such Subsidiary Guarantor of an interest in the Guaranteed
Obligations resulting from such payment made by such Subsidiary Guarantor
pursuant to this Subsidiary Guaranty.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Except as
otherwise provided in this Section 5, any and all payments made by any
Subsidiary Guarantor under or in respect of this Subsidiary Guaranty or any
other Loan Document shall be made, in accordance with Section 2.08 of the
Credit Agreement, free and clear of and without deduction for any and all
present or future Taxes. If any Subsidiary Guarantor shall be required by
law to deduct any Taxes from or in respect of any sum payable under or in
respect of this Subsidiary Guaranty or any other Loan Document to any
Secured Party, (i) the sum payable by such Subsidiary Guarantor shall,
except as otherwise provided in this Section 5, be increased as may be
necessary so that after such Subsidiary Guarantor and the Administrative
Agent have made all required deductions (including deductions applicable to
additional sums payable under this Section 5), such Secured Party receives
an amount equal to the sum it would have received had no such deductions
been made, (ii) such Subsidiary Guarantor shall make all such deductions
and (iii) such Subsidiary Guarantor shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, each Subsidiary Guarantor agrees to pay any
present or future Other Taxes that arise from any payment made by or on
behalf of such Subsidiary Guarantor under or in respect of this Subsidiary
Guaranty or any other Loan Document or from the execution, delivery or
registration of, performance under, or otherwise with respect to, this
Subsidiary Guaranty and the other Loan Documents.
(c) Each Subsidiary Guarantor will indemnify each Secured Party
for and hold it harmless against the full amount of Taxes and Other Taxes,
and for the full amount of taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 5, imposed on or paid by such Secured
Party and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Secured
Party makes written demand therefor. Any such demand shall show in
reasonable detail the amount payable and the calculations used to determine
such amount.
(d) Within 30 days after the date of any payment of Taxes by or on
behalf of any Subsidiary Guarantor, such Subsidiary Guarantor shall use its
best efforts to furnish to the Administrative Agent, at its address
referred to in Section 9, the original or a certified copy of a receipt
evidencing such payment or other evidence of payment reasonably
satisfactory to the Administrative Agent. In the case of any payment
hereunder by or on behalf of any Subsidiary Guarantor through an account or
branch outside the United States or by or on behalf of such Subsidiary
Guarantor by a payor that is not a United States person, if such Subsidiary
Guarantor determines that no Taxes are payable in respect thereof, such
Subsidiary Guarantor shall furnish, or shall cause such payor to furnish,
to the Administrative Agent, at such address, an opinion of counsel
acceptable to the Administrative Agent stating that such payment is exempt
from Taxes. For purposes of subsections (d) and (e) of this Section 5, the
terms "United States" and "United States person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Upon the reasonable request in writing of any Subsidiary
Guarantor, each Secured Party organized under the laws of a jurisdiction
outside the United States shall (but only so long thereafter as such
Secured Party remains lawfully able to do so) provide each of the
Administrative Agent and such Subsidiary Guarantor with two original
Internal Revenue Service forms W-8ECI, W-8IMY (together with a withholding
statement satisfying the requirements of Treasury Regulation
ss.1.1441-1(e)(3)(iv)(C)) or W-8BEN (and, if eligible to do so, a
certificate representing that such Secured Party is not a "bank" for
purposes of Section 881(c) of the Internal Revenue Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Internal Revenue Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Internal Revenue Code)), as appropriate, or any successor
or other form prescribed by the Internal Revenue Service, certifying that
such Secured Party is exempt from or entitled to a reduced rate of United
States withholding tax on payments under the Loan Documents. If the forms
provided by a Secured Party at the time such Secured Party first becomes a
party to the Credit Agreement or the applicable Secured Hedge Agreement
indicate a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless
and until such Secured Party provides the appropriate form certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes; provided, however, that if a
change in applicable law increases such rate, the increase only shall not
be excluded from Taxes; and provided further, however, that if, in the case
of a Secured Party becoming a party to the Credit Agreement, at the date of
the Assignment and Acceptance pursuant to which a Secured Party becomes a
party to the Credit Agreement, the Secured Party assignor was entitled to
payments under subsection (a) of this Section 5 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that
may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to
the Secured Party assignee on such date. If any form or document referred
to in this subsection (e) and requested by any Subsidiary Guarantor
pursuant to this subsection (e) requires the disclosure of information,
other than information necessary to compute the tax payable and information
required by Internal Revenue Service form W-8ECI, W-8IMY or W-8BEN (or the
related certificate described above) or W-9, that the applicable Secured
Party reasonably considers to be confidential, such Person shall give
notice thereof to the applicable Subsidiary Guarantor and shall not be
obligated to include in such form or document such confidential
information. Solely for purposes of complying with the information
reporting and backup withholding requirements under the Internal Revenue
Code, each Secured Party that is a "United States person" as defined under
the Internal Revenue Code, other than a corporation, will provide each of
the Administrative Agent and the applicable Subsidiary Guarantor with two
original Internal Revenue Service forms W-9 at the times and in the manner
described above with respect to the other Internal Revenue Service forms.
(f) For any period with respect to which a Secured Party has
failed to provide any Subsidiary Guarantor following such Subsidiary
Guarantor's request therefor pursuant to subsection (e) above with the
appropriate form described in subsection (e) above (other than if such
failure is due to a change in law occurring after the date on which a form
originally was required to be provided or if such form otherwise is not
required under subsection (e) above), such Secured Party shall not be
entitled to increased payment or indemnification under subsection (a) or
(c) of this Section 5 with respect to Taxes imposed by the United States by
reason of such failure; provided, however, that should a Secured Party
become subject to Taxes because of its failure to deliver a form required
hereunder, such Subsidiary Guarantor shall take such steps as such Secured
Party shall reasonably request to assist such Secured Party to recover such
Taxes.
(g) Any Secured Party claiming any additional amounts payable
pursuant to this Section 5 agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change
the jurisdiction of its Eurodollar Lending Office if the making of such a
change would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Secured Party, be otherwise disadvantageous to
such Secured Party.
Section 6. Representations and Warranties. Each Subsidiary
Guarantor hereby makes each representation and warranty made in the Loan
Documents by the Borrower with respect to such Subsidiary Guarantor and
each Subsidiary Guarantor hereby further represents and warrants as
follows:
(a) There are no conditions precedent to the effectiveness of this
Subsidiary Guaranty that have not been satisfied or waived.
(b) Such Subsidiary Guarantor has, independently and without
reliance upon any Secured Party and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Subsidiary Guaranty and each other Loan Document to which
it is or is to be a party, and such Subsidiary Guarantor has established
adequate means of obtaining from each other Loan Party on a continuing
basis information pertaining to, and is now and on a continuing basis will
be completely familiar with, the business, condition (financial or
otherwise), operations, performance, properties and prospects of such other
Loan Party.
Section 7. Covenants. Each Subsidiary Guarantor covenants and
agrees that, so long as any part of the Guaranteed Obligations shall remain
unpaid or any Secured Hedge Agreement shall be in effect, unless this
Subsidiary Guaranty shall have terminated pursuant to Section 14, such
Subsidiary Guarantor will perform and observe, and cause each of its
Subsidiaries to perform and observe, all of the terms, covenants and
agreements set forth in the Loan Documents on its or their part to be
performed or observed or that the Borrower has agreed to cause such
Subsidiary Guarantor or such Subsidiaries to perform or observe.
Section 8. Amendments, Subsidiary Guaranty Supplements, Etc. (a)
No amendment or waiver of any provision of this Subsidiary Guaranty and no
consent to any departure by any Subsidiary Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by the
Administrative Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all of the Lender
Parties (other than any Lender Party that is, at such time, a Defaulting
Lender), (a) reduce or limit the obligations of any Subsidiary Guarantor
hereunder, release any Subsidiary Guarantor hereunder or otherwise limit
any Subsidiary Guarantor's liability with respect to the Obligations owing
to the Secured Parties under or in respect of the Loan Documents, (b)
postpone any date fixed for payment hereunder or (c) change the number of
Secured Parties or the percentage of the aggregate unpaid principal amount
of the Advances that, in each case, shall be required for the Secured
Parties or any of them to take any action hereunder.
(b) Upon the execution and delivery by any Person of a subsidiary
guaranty supplement in substantially the form of Exhibit A hereto (each, a
"Subsidiary Guaranty Supplement"), (i) such Person shall be referred to as
an "Additional Subsidiary Guarantor" and shall become and be a Subsidiary
Guarantor hereunder, and each reference in this Subsidiary Guaranty to a
"Subsidiary Guarantor" shall also mean and be a reference to such
Additional Subsidiary Guarantor, and each reference in any other Loan
Document to a "Subsidiary Guarantor" shall also mean and be a reference to
such Additional Subsidiary Guarantor, and (ii) each reference herein to
"this Subsidiary Guaranty", "hereunder", "hereof" or words of like import
referring to this Subsidiary Guaranty, and each reference in any other Loan
Document to the "Subsidiary Guaranty", "thereunder", "thereof" or words of
like import referring to this Subsidiary Guaranty, shall mean and be a
reference to this Subsidiary Guaranty as supplemented by such Subsidiary
Guaranty Supplement.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopy
communication) and mailed (by certified mail), telecopied, or delivered by
hand; if to any Subsidiary Guarantor, addressed to it in care of the
Borrower at the Borrower's addresses specified in Section 8.02 of the
Credit Agreement; if to any Agent or any Lender Party, at its address
specified in Section 8.02 of the Credit Agreement, if to any Hedge Bank, at
its address specified in the Secured Hedge Agreement to which it is a
party, or, as to any party, at such other address as shall be designated by
such party in a written notice to each other party. All such notices and
other communications shall, when mailed (by certified mail), telecopied or
delivered shall be effective when received by the party being notified.
Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Subsidiary Guaranty or of any Subsidiary
Guaranty Supplement to be executed and delivered hereunder shall be
effective as delivery of an original executed counterpart thereof.
Section 10. No Waiver; Remedies. No failure on the part of any
Secured Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 of the Credit
Agreement to authorize the Administrative Agent to declare the Term Notes
due and payable pursuant to the provisions of said Section 6.01, each Agent
and each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Agent, such Lender or such Affiliate
to or for the credit or the account of any Subsidiary Guarantor against any
and all of the Obligations of such Subsidiary Guarantor now or hereafter
existing under the Loan Documents, irrespective of whether such Agent or
such Lender Party shall have made any demand under this Subsidiary Guaranty
or any other Loan Document and although such Obligations may be unmatured.
Each Agent and each Lender agrees promptly to notify such Subsidiary
Guarantor after any such set-off and application; provided, however, that
the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Agent and each Lender Party and
their respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of
set-off) that such Agent, such Lender and their respective Affiliates may
have.
Section 12. Indemnification. (a) Without limitation on any other
Obligations of any Subsidiary Guarantor or remedies of the Secured Parties
under this Subsidiary Guaranty, each Subsidiary Guarantor shall, to the
fullest extent permitted by law, indemnify, defend and save and hold
harmless each Secured Party and each of their Affiliates and their
respective officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against, and shall pay on demand, any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred
by or asserted or awarded against any Indemnified Party in connection with
or as a result of any failure of any Guaranteed Obligations to be the
legal, valid and binding obligations of any Loan Party enforceable against
such Loan Party in accordance with their terms provided, however, that no
Subsidiary Guarantor shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Indemnified Party's gross
negligence or willful misconduct as found in a final, non-appealable
judgment by a court of competent jurisdiction.
(b) Each Subsidiary Guarantor hereby also agrees that none of the
Indemnified Parties shall have any liability (whether direct or indirect,
in contract, tort or otherwise) to any of the Subsidiary Guarantors or any
of their respective Affiliates or any of their respective officers,
directors, employees, agents and advisors, and each Subsidiary Guarantor
hereby agrees not to assert any claim against any Indemnified Party on any
theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Facilities, the actual
or proposed use of the proceeds of the Term Advances, the Transaction
Documents or any of the transactions contemplated by the Transaction
Documents.
(c) Without prejudice to the survival of any of the other
agreements of any Subsidiary Guarantor under this Subsidiary Guaranty or
any of the other Loan Documents, the agreements and obligations of each
Subsidiary Guarantor contained in Section 1(a) (with respect to enforcement
expenses), the last sentence of Section 2, Section 5 and this Section 12
shall survive the payment in full of the Guaranteed Obligations and all of
the other amounts payable under this Subsidiary Guaranty.
Section 13. Subordination. Each Subsidiary Guarantor hereby
subordinates any and all debts, liabilities and other Obligations owed to
such Subsidiary Guarantor by each other Loan Party (the "Subordinated
Obligations") to the Guaranteed Obligations to the extent and in the manner
hereinafter set forth in this Section 13:
(a) Prohibited Payments, Etc. Except during the
continuance of an Event of Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating
to any other Loan Party) and until the Administrative Agent shall
have given written notice thereof to the Borrower, each Subsidiary
Guarantor may receive regularly scheduled payments from any other
Loan Party on account of the Subordinated Obligations. After the
occurrence and during the continuance of any Event of Default
(including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party),
however, upon written notice thereof from the Administrative
Agent, no Subsidiary Guarantor shall demand, accept or take any
action to collect any payment on account of the Subordinated
Obligations.
(b) Prior Payment of Guaranteed Obligations. In any
proceeding under any Bankruptcy Law relating to any other Loan
Party, each Subsidiary Guarantor agrees that the Secured Parties
shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses
accruing after the commencement of a proceeding under any
Bankruptcy Law, whether or not constituting an allowed claim in
such proceeding ("Post Petition Interest")) before such Subsidiary
Guarantor receives payment of any Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the
continuance of any Event of Default (including the commencement
and continuation of any proceeding under any Bankruptcy Law
relating to any other Loan Party), each Subsidiary Guarantor
shall, if the Administrative Agent so requests, collect, enforce
and receive payments on account of the Subordinated Obligations as
trustee for the Secured Parties and deliver such payments to the
Administrative Agent on account of the Guaranteed Obligations
(including all Post Petition Interest), together with any
necessary endorsements or other instruments of transfer, but
without reducing or affecting in any manner the liability of such
Subsidiary Guarantor under the other provisions of this Subsidiary
Guaranty.
(d) Administrative Agent Authorization. After the
occurrence and during the continuance of any Event of Default
(including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), the
Administrative Agent is authorized and empowered (but without any
obligation to so do), in its discretion, (i) in the name of each
Subsidiary Guarantor, to collect and enforce, and to submit claims
in respect of, Subordinated Obligations and to apply any amounts
received thereon to the Guaranteed Obligations (including any and
all Post Petition Interest), and (ii) to require each Subsidiary
Guarantor (A) to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and (B) to pay any amounts
received on such obligations to the Administrative Agent for
application to the Guaranteed Obligations (including any and all
Post Petition Interest).
Section 14. Continuing Subsidiary Guaranty; Assignments under the
Credit Agreement. This Subsidiary Guaranty is a continuing guaranty and
shall (a) remain in full force and effect until the later of (i) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Subsidiary Guaranty, and (ii) the payment in full in
cash of the Obligations payable under the Credit Agreement, in each case
other than Obligations with respect to the Secured Hedge Agreements not yet
due and payable on such later date, (b) be binding upon the Subsidiary
Guarantor, its successors and assigns and (c) inure to the benefit of and
be enforceable by the Secured Parties and their successors, transferees and
assigns. Without limiting the generality of clause (c) of the immediately
preceding sentence, any Secured Party may assign or otherwise transfer all
or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of the Advances owing to
it and the Term Note or Term Notes held by it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Secured Party herein or otherwise, in each
case as and to the extent provided in Section 8.07 of the Credit Agreement.
No Subsidiary Guarantor shall have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Secured
Parties.
Section 15. Execution in Counterparts. This Subsidiary Guaranty
and each amendment, waiver and consent with respect hereto may be executed
in any number of counterparts and by different parties thereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Subsidiary Guaranty by telecopier shall be effective as delivery of an
original executed counterpart of this Subsidiary Guaranty.
Section 16. Governing Law; Jurisdiction; Waiver of Jury Trial,
Etc.. (a) This Subsidiary Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) Each Subsidiary Guarantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United
States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Subsidiary Guaranty or any of the other Loan Documents to which it is or is
to be a party, or for recognition or enforcement of any judgment, and each
Subsidiary Guarantor hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by
law, in such federal court. Each Subsidiary Guarantor agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Subsidiary Guaranty or any other
Loan Document shall affect any right that any party may otherwise have to
bring any action or proceeding relating to this Subsidiary Guaranty or any
other Loan Document in the courts of any jurisdiction.
(c) Each Subsidiary Guarantor irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Subsidiary
Guaranty or any of the other Loan Documents to which it is or is to be a
party in any New York State or federal court. Each Subsidiary Guarantor
hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court. (d) EACH SUBSIDIARY GUARANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF
ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this
Subsidiary Guaranty to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
ICG CANADIAN ACQUISITION, INC.
By
-----------------------------------
Title:
ICG CHOICECOM, L.P.
By: ICG ChoiceCom Management, LLC, its
General Partner
ICG Telecom Group, Inc., its Managing
Member
By
------------------------------------
Title:
ICG CHOICECOM MANAGEMENT, LLC
By: ICG Telecom Group, Inc., its
Managing Member
By
-----------------------------------
Title:
ICG CONSOLIDATED, INC.
By
-----------------------------------
Title:
ICG EQUIPMENT, INC.
By
-----------------------------------
Title:
ICG HOLDINGS, INC.
By
-----------------------------------
Title:
ICG MOUNTAIN VIEW, INC.
By
-----------------------------------
Title:
ICG SERVICES, INC.
By
-----------------------------------
Title:
ICG TELECOM GROUP, INC.
By
-----------------------------------
Title:
ICG TELECOM GROUP OF VIRGINIA, INC.
By
-----------------------------------
Title:
NIKONET, LLC
By: ICG Telecom Group, Inc., its
Managing Member
By
-----------------------------------
Title:
Exhibit A
To The
Subsidiary Guaranty
FORM OF SUBSIDIARY GUARANTY SUPPLEMENT
--------- --, ----
Royal Bank of Canada, as Collateral and as Administrative Agent
Xxx Xxxxxxx Xxxxx, Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Credit Agreement dated as of July __, 2002 among
ICG Communications, Inc. ("ICG Communications"), a Delaware
corporation ("Borrower"), certain Lenders party thereto,
Royal Bank of Canada, as Collateral Agent and as Administrative
Agent for such Lenders, and Wachovia Bank, N.A., as Documentation Agent.
Ladies and Gentlemen:
Reference is made to the above-captioned Credit Agreement and to
the Subsidiary Guaranty referred to therein (such Subsidiary Guaranty, as
in effect on the date hereof and as it may hereafter be amended,
supplemented or otherwise modified from time to time, together with this
Subsidiary Guaranty Supplement, being the "Subsidiary Guaranty"). The
capitalized terms defined in the Subsidiary Guaranty or in the Credit
Agreement and not otherwise defined herein are used herein as therein
defined.
Section 1. Subsidiary Guaranty; Limitation of Liability. (a) The
undersigned hereby absolutely, unconditionally and irrevocably guarantees
the punctual payment when due, whether at scheduled maturity or on any date
of a required prepayment or by acceleration, demand or otherwise, of all
Obligations of each other Loan Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any
extensions, modifications, substitutions, amendments or renewals of any or
all of the foregoing Obligations), whether direct or indirect, absolute or
contingent, and whether for principal, interest, premium, fees,
indemnities, contract causes of action, costs, expenses or otherwise (such
Obligations being the "Guaranteed Obligations"), and agrees to pay any and
all expenses (including, without limitation, fees and expenses of counsel)
incurred by the Administrative Agent or any other Secured Party in
enforcing any rights under this Subsidiary Guaranty Supplement, the
Subsidiary Guaranty or any other Loan Document. Without limiting the
generality of the foregoing, the undersigned's liability shall extend to
all amounts that constitute part of the Guaranteed Obligations and would be
owed by any other Loan Party to any Secured Party under or in respect of
the Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such other Loan Party.
(b) The undersigned, and by its acceptance of this Subsidiary
Guaranty Supplement, the Administrative Agent and each other Secured Party,
hereby confirms that it is the intention of all such Persons that this
Subsidiary Guaranty Supplement, the Subsidiary Guaranty and the Obligations
of the undersigned hereunder and thereunder not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar foreign, federal or state law to the extent applicable to this
Subsidiary Guaranty Supplement, the Subsidiary Guaranty and the Obligations
of the undersigned hereunder and thereunder. To effectuate the foregoing
intention, the Administrative Agent, the other Secured Parties and the
undersigned hereby irrevocably agree that the Obligations of the
undersigned under this Subsidiary Guaranty Supplement and the Subsidiary
Guaranty at any time shall be limited to the maximum amount as will result
in the Obligations of the undersigned under this Subsidiary Guaranty
Supplement and the Subsidiary Guaranty not constituting a fraudulent
transfer or conveyance.
(c) The undersigned hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to any Secured
Party under this Subsidiary Guaranty Supplement and the Subsidiary
Guaranty, the undersigned will contribute, to the maximum extent permitted
by applicable law, such amounts to each other Subsidiary Guarantor and each
other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.
Section 2. Obligations Under the Subsidiary Guaranty. The
undersigned hereby agrees, as of the date first above written, to be bound
as a Subsidiary Guarantor by all of the terms and conditions of the
Subsidiary Guaranty to the same extent as each of the other Subsidiary
Guarantors thereunder. The undersigned further agrees, as of the date first
above written, that each reference in the Subsidiary Guaranty to an
"Additional Subsidiary Guarantor" or a "Subsidiary Guarantor" shall also
mean and be a reference to the undersigned, and each reference in any other
Loan Document to a "Subsidiary Guarantor" or a "Loan Party" shall also mean
and be a reference to the undersigned.
Section 3. Representations and Warranties. The undersigned hereby
makes each representation and warranty set forth in Section 6 of the
Subsidiary Guaranty to the same extent as each other Subsidiary Guarantor.
Section 4. Delivery by Telecopier. Delivery of an executed
counterpart of a signature page to this Subsidiary Guaranty Supplement by
telecopier shall be effective as delivery of an original executed
counterpart of this Subsidiary Guaranty Supplement.
Section 5. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a) This Subsidiary Guaranty Supplement shall be governed by, and construed
in accordance with, the laws of the State of New York.
(b) The undersigned hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of
any New York State court or any federal court of the United States of
America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Subsidiary
Guaranty Supplement, the Subsidiary Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or
enforcement of any judgment, and the undersigned hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or,
to the extent permitted by law, in such federal court. The undersigned
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Subsidiary
Guaranty Supplement or the Subsidiary Guaranty or any other Loan Document
shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Subsidiary Guaranty Supplement, the
Subsidiary Guaranty or any of the other Loan Documents to which it is or is
to be a party in the courts of any other jurisdiction.
(c) The undersigned irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Subsidiary Guaranty
Supplement, the Subsidiary Guaranty or any of the other Loan Documents to
which it is or is to be a party in any New York State or federal court. The
undersigned hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court.
(d) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[NAME OF ADDITIONAL SUBSIDIARY
GUARANTOR]
By
-------------------------------
Title:
EXHIBIT E
FORM OF ESCROW AGREEMENT
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of July 25, 2002 (the "Agreement"),
between ICG Communications, Inc., a Delaware corporation (the "Company"),
Xxxxxxxxx L.L.C., a Delaware limited liability company ("Xxxxxxxxx"),
Xxxxxx Xxxxxxx & Co., Incorporated, a Delaware corporation ("Xxxxxx
Xxxxxxx", and together with Xxxxxxxxx, the "Purchasers") and JPMorgan Chase
Bank (the "Escrow Agent").
WHEREAS, this Agreement is being entered into in connection with
(i) the Second Amended Joint Plan of Reorganization of ICG Communications,
Inc. and its Affiliated Debtors and Debtors in Possession, as modified (the
"Plan"; capitalized terms used but not defined herein have the respective
meanings specified in the Plan), (ii) the Credit Agreement, dated the date
hereof (the "Credit Agreement"), among the Company and the banks, financial
institutions and other institutional lenders listed on the signature pages
thereof as the Initial Lenders (the "Initial Lenders"), Royal Bank of
Canada as collateral agent (the "Collateral Agent") and as administrative
agent (the "Administrative Agent"), and Wachovia Bank, National Association
as documentation agent (the "Documentation Agent"), and (iii) the Note and
Warrant Purchase Agreement, dated the date hereof (the "Note and Warrant
Purchase Agreement"), between the Company, Xxxxxxxxx and Xxxxxx Xxxxxxx;
and
WHEREAS, pursuant to the terms of the Note and Warrant Purchase
Agreement, the Company is selling $25,000,000 aggregate principal amount of
its 14% Senior Subordinated Notes Due July, 2006 (the "Notes") and the
Purchasers are receiving Warrants (the "Warrants"), Nominal Warrants (the
"Nominal Warrants") and the Notes. Concurrently with the closing of such
sale, (i) the Purchasers will deposit with the Escrow Agent, as hereinafter
provided, $25,000,000 in cash and (ii) the Company will deposit with the
Escrow Agent, as hereinafter provided, the Notes, the Warrants and the
Nominal Warrants. Pursuant to the Credit Agreement and in accordance with
the Plan, $25,000,000 (the "Required Amount") of the Escrowed Funds (as
hereinafter defined) will be used to fund certain of the obligations
outstanding to the Initial Lenders on the date that the Plan becomes
effective (the "Effective Date"); and
WHEREAS, the Escrow Agent will hold the Escrowed Property (as
hereinafter defined) in escrow and release such Escrowed Property pursuant
to the terms hereof on or prior to October 31, 2002 or such later date as
(i) the Company, (ii) the Purchasers, (iii) the agent for the Lenders under
the Pre-Petition Credit Agreement and (iv) the Creditors' Committee shall
agree to in writing (the "Deadline Date" and such written agreement, the
"Deadline Extension").
Accordingly, the Company, the Purchasers and the Escrow Agent
agree as follows:
1. Delivery and Acceptance of Escrowed Property. (a) Concurrently
with the execution and delivery hereof, the Purchasers shall deposit
$25,000,000 with the Escrow Agent (the "Escrowed Funds") and the Company
shall deposit the Notes, Warrants and Nominal Warrants with the Escrow
Agent (the "Escrowed Notes and Warrants").
(b) The Escrow Agent shall accept the Escrowed Funds and the
Escrowed Notes and Warrants and shall hold such funds and the proceeds
thereof and such Notes, Warrants and Nominal Warrants in separate
identifiable accounts for disbursement in accordance with the provisions
hereof (the "Escrow Accounts"). The Escrowed Funds, the proceeds of such
Escrowed Funds and the Escrowed Notes and Warrants shall constitute the
"Escrowed Property." The Escrow Agent further agrees to invest any portion
of the Escrowed Property that is comprised of cash in an account at
JPMorgan Chase Bank yielding LIBOR minus 50 basis points (the "Trust
Account"). Such investments in the Trust Account must, when added to the
balance of the Escrowed Property without the reinvestment thereof or sale
prior to maturity, provide cash to the Escrow Agent in an amount at least
equal to the Required Amount on the Effective Date. Temporarily uninvested
funds shall not earn or accrue interest.
(c) The obligation of the Escrow Agent to make the payments and
transfers required by this Escrow Agreement shall be limited to the
Escrowed Property and any other moneys on deposit in the Escrow Account
pursuant to this Escrow Agreement. The Escrow Agent shall not be liable for
any loss resulting from any investment made pursuant to this Agreement in
compliance with the provisions hereof.
2. Disbursement of Escrowed Property. (a) Prior to the hearing
(the "Confirmation Hearing") before the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court") at which the Company will
seek entry of an order confirming the Plan (as defined in the Note and
Warrant Purchase Agreement) (the "Confirmation Order"), such order to be
substantially in the form attached hereto as Exhibit A, the Company shall
make available to Purchasers the documents to be delivered pursuant to
Section 3A of the Note and Warrant Purchase Agreement and the Purchasers
shall have a reasonable opportunity to review such documents. At least
three hours prior to the time the Confirmation Hearing is scheduled to
commence, the Company shall deliver to the Purchasers the deliveries
referenced in Section 3A of the Note and Warrant Purchase Agreement,
including a release notice to the Escrow Agent in the form attached hereto
as Exhibit B (the "Joint Escrow Release Notice") executed by the Company.
Provided that the documents referred to in Section 3A of the Note and
Warrant Purchase Agreement have been made available to the Purchasers as
set forth in the first sentence of this Section 2(a), the Purchasers shall
then promptly deliver to the Company a Joint Escrow Release Notice executed
by the Purchasers. Upon entry of the Confirmation Order and subsequent
receipt by the Escrow Agent of a copy of the Confirmation Order and the
Joint Escrow Release Notice executed by the Purchasers and the Company, the
Escrow Agent will deliver (i) the Escrowed Funds to the Collateral Agent,
(ii) the Notes, Warrants and Nominal Warrants to the Purchasers and (iii)
the proceeds from the Escrowed Funds to the Company. If the Purchasers fail
to deliver the Joint Escrow Release Notice as provided herein, then upon
the execution of an order by the Bankruptcy Court (an "Escrow Release
Order") directing the Escrow Agent to so release the Escrowed Property, the
Escrow Agent will deliver (i) the Escrowed Funds to the Collateral Agent,
(ii) the Notes, Warrants and Nominal Warrants to the Purchasers and (iii)
the proceeds from the Escrowed Funds to the Company. Nothing herein shall
obligate the Escrow Agent to solicit any of the documents referenced in
this Section 2(a).
(b) Notwithstanding the foregoing, in the event that, on or before
the Deadline Date, the Confirmation Order shall not have been entered by
the Bankruptcy Court, nor shall the Joint Escrow Release Notice have been
executed by the Purchasers and the Company, nor shall an Escrow Release
Order have been entered, the Escrow Agent will return as promptly as
practicable, but in no event later than two Business Days, (i) 90% of all
of the Escrowed Funds and the proceeds of such Escrowed Funds to Xxxxxxxxx,
(ii) 10% of all of the Escrowed Funds and the proceeds of such Escrowed
Funds to Xxxxxx Xxxxxxx and (iii) the Notes, Warrants and Nominal Warrants
to the Company; provided, however, that in the event there shall be pending
as of the Deadline Date any dispute regarding the Escrowed Property,
including, without limitation, a dispute regarding the satisfaction of any
of the conditions to release of the Escrowed Property set forth in the
foregoing Section 2(a), the Escrowed Property shall not be released by the
Escrow Agent unless and until directed to do so by order of the Bankruptcy
Court.
(c) The Company shall promptly deliver any Deadline Extension to
the Escrow Agent.
3. Termination. Upon the release of all Escrowed Property in
accordance with Section 2 hereof, this Agreement shall terminate.
4. Indemnity. The Company agrees to indemnify the Escrow Agent,
and its officers, directors, employees and agents, for, and to hold it and
each of them harmless against, any loss, liability or expense arising out
of or in connection with this Agreement and carrying out its duties
hereunder, including the cost and expenses of defending itself against any
claim of liability; provided, however, that the Company will not be liable
for indemnification or otherwise for any loss, liability or expense to the
extent arising out of the gross negligence, willful misconduct or bad faith
of the Escrow Agent.
5. Modifications, Waivers and Amendments. The Escrow Agent shall
not be bound by any modification, amendment, termination (except as
provided in Section 3), cancellation, rescission or supersession of this
Agreement unless the same shall be in writing and signed by the parties
hereto, and, if its rights, duties, immunities or indemnities as Escrow
Agent are affected thereby, unless it shall have given its prior written
consent thereto. This Agreement may not be modified, amended or terminated
(except as provided in Section 3) without the written consent of the
Initial Lenders.
6. Settlement of Disputes Regarding Ownership. Any dispute which
may arise under this Agreement with respect to the delivery and/or
ownership or right of possession of the Escrowed Property shall be settled
either by mutual agreement of the parties (evidenced in writing and signed
by the parties hereto) or by a final order, decree or judgment of the
United States Bankruptcy Court for the District of Delaware.
7. Concerning the Escrow Agent. (a) The fee of the Escrow Agent
hereunder is as set forth on Schedule I attached hereto, which fee shall be
nonrefundable and paid in advance by the Company. The Company also agrees
to pay on demand the costs and expenses of the Escrow Agent, including the
reasonable fees and expenses of counsel selected by the Escrow Agent, other
than the costs and expenses reimbursed pursuant to Section 4, incurred in
connection with its duties hereunder.
(b) The Escrow Agent shall exercise the same degree of care toward
the Escrowed Property as it exercises toward its own similar property and
shall not be held to any higher standard of care under this Agreement, nor
be deemed to owe any fiduciary duty to the Company.
(c) The Escrow Agent may act upon any instrument or other writing
believed by it in good faith to be genuine and to have been signed or
presented by the proper person, and shall not be liable to any party hereto
in connection with the performance of its duties hereunder, except for its
own negligence, willful misconduct or bad faith. The duties of the Escrow
Agent shall be determined only with reference to this Agreement and
applicable laws and the Escrow Agent is not charged with any knowledge of,
or any duties or responsibilities in connection with, any other document or
agreement. If in doubt as to its duties and responsibilities hereunder, the
Escrow Agent may consult with counsel and shall be protected in any action
taken or omitted in good faith in reliance on the advice or opinion of such
counsel.
(d) The Escrow Agent may execute any of its powers or
responsibilities hereunder and exercise any rights hereunder either directly
or by or through its agents or attorneys.
(e) Nothing in this Agreement shall be deemed to impose upon the
Escrow Agent any duty to qualify to do business or to act as agent or
otherwise in any jurisdiction other than the State of New York.
(f) The Escrow Agent shall not be responsible for and shall not be
under a duty to examine into or pass upon the validity, binding effect,
execution or sufficiency of this Agreement, any agreement amendatory or
supplemental hereto or of any certificates delivered to it hereunder.
(g) The Escrow Agent makes no representation as to the validity,
value, genuineness or collectability of any security or other document or
instrument held by or delivered to it.
(h) The Escrow Agent shall not be called upon to advise any party as
to selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder.
(i) The Escrow Agent shall have the right at any time to resign
hereunder by giving written notice of its resignation to the Company at the
address set forth herein or at such other address as the Company shall
provide, at least 30 days prior to the date specified for such resignation to
take effect. Upon the effective date of such resignation, all cash and other
payments and all other property then held by the Escrow Agent hereunder shall
be delivered by it to a successor escrow agent. If no successor escrow agent
is appointed, the Escrow Agent may apply to a court of competent jurisdiction
for such appointment.
(j) If the Escrow Agent should at any time be confronted with
inconsistent claims or demands to the Escrowed Property, the Escrow Agent
shall have the right, but not the duty, to interplead the parties in the
United States Bankruptcy Court for the District of Delaware and request that
such court determine the respective rights of the parties with respect to the
Escrowed Property. In the event the Escrow Agent no longer holds any Escrowed
Property, it shall be released from any obligation or liability as a
consequence of any such claims or demands.
(k) In the event fund transfer instructions are given (other than in
writing at the time of the execution of the Agreement), whether in writing, by
telecopier or otherwise the Escrow Agent is authorized to seek confirmation of
such instructions by telephone call-back to the person or persons designated
on the call-back schedule attached hereto, and the Escrow Agent may rely upon
the confirmations of anyone purporting to be the person or persons so
designated. The persons and telephone numbers for call-backs may be changed
only in writing actually received and acknowledged by the Escrow Agent. If the
Escrow Agent is unable to contact any of the authorized representatives
identified in the Call-Back Schedule, the Escrow Agent is hereby authorized to
seek confirmation of such instructions by telephone call-back to any one or
more of a party's executive officers, ("Executive Officers"), which shall
include the titles of Chief Executive Officer and Executive Vice President,
General Counsel and Secretary, as the Escrow Agent may select. Such "Executive
Officer" shall deliver to the Escrow Agent a fully executed Incumbency
Certificate, and the Escrow Agent may rely upon the confirmation of anyone
purporting to be any such officer. The Escrow Agent and the beneficiary's bank
in any funds transfer may rely solely upon any account numbers or similar
identifying numbers provided by the Purchaser or the Seller to identify (i)
the beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank.
The Escrow Agent may apply any of escrowed funds for any payment order it
executes using any such identifying number, even when its use may result in a
person other than the beneficiary being paid, or the transfer of funds to a
bank other than the beneficiary's bank or an intermediary bank designated. The
parties to this Agreement acknowledge that such security procedure is
commercially reasonable.
(l) Upon execution of this agreement, each party shall provide the
Escrow Agent with a fully executed W-8 or W-9 Internal Revenue Service form,
which shall include their Tax Identification Number (TIN) as assigned by the
Internal Revenue Service. All interest or other income earned under the Escrow
Agreement shall be allocated and paid as provided herein and reported by the
recipient to the Internal Revenue Service as having been so allocated and
paid.
(m) Any corporation into which the Escrow Agent in its individual
capacity may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Escrow Agent in its individual capacity shall be a party, or any
corporation to which substantially all the corporate trust business of the
Escrow Agent in its individual capacity may be transferred, shall be the
Escrow Agent under this Escrow Agreement without further act.
(n) Anything in this agreement to the contrary notwithstanding, in no
event shall the Escrow Agent be liable for special, indirect or consequential
damage of any kind whatsoever (including but not limited to lost profits),
even if the Escrow Agent has been advised for the likelihood for such loss or
damage and regardless of the form of action. The parties hereto acknowledge
that the foregoing indemnities shall survive the resignation or removal of the
Escrow Agent or the termination of this agreement.
8. Notices. All notices required to be given hereunder shall be in
writing and shall be deemed given when received at the following addresses
until such time as the parties hereto designate a different or additional
address or addresses:
To the Company:
ICG Communications, Inc.
000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
To the Purchasers:
Xxxxxxxxx L.L.C.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
Xxxxxx Xxxxxxx & Co., Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
In each case with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
To the Escrow Agent:
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxx
Facsimile: (000) 000-0000/8156
9. Miscellaneous. (a) This Agreement sets forth exclusively the
duties of the Escrow Agent with respect to any and all matters pertinent
hereto and no implied duties or obligations shall be read into this Agreement
against the Escrow Agent.
(b) This Agreement may be executed in any number of counterparts,
each of which shall be an original and all of which when taken together shall
constitute one agreement.
(c) This Agreement shall be governed by the laws of the State of New
York but without giving effect to applicable principles of conflicts of law to
the extent that the application of the laws of another jurisdiction would be
required thereby.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day first written above.
ICG COMMUNICATIONS, INC.
By:
--------------------------------------------
Name:
Title:
XXXXXXXXX L.L.C.
By:
--------------------------------------------
Name:
Title:
XXXXXX XXXXXXX & CO., INCORPORATED
By:
--------------------------------------------
Name:
Title:
JPMORGAN CHASE BANK
as Escrow Agent
By:
--------------------------------------------
Name:
Title:
Exhibit A to Escrow Agreement
Form of Confirmation Order
(to be attached)
Exhibit B to Escrow Agreement
Form of Joint Escrow Release Notice
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx
[ ], 2002
Ladies and Gentlemen:
The undersigned refer to the Escrow Agreement dated as of July [ ],
2002 (the "Agreement", the terms defined therein being used herein as therein
defined), by and among the Company and the Purchasers, and hereby give you
joint notice that the Bankruptcy Court has entered the Confirmation Order
which is attached hereto as Exhibit I and that the Escrowed Property is to be
immediately released pursuant to the terms of the Agreement.
Very truly yours,
ICG COMMUNICATIONS, INC.
By:_________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
XXXXXXXXX L.L.C.
By:_________________________________
Name:
Title:
XXXXXX XXXXXXX & CO., INCORPORATED
By:_________________________________
Name:
Title:
CC: Xxxxxxx X. Xxxx, Esq., Skadden, Arps, Slate, Xxxxxxx & Xxxx
Xxxxxx Xxxxxxxx, Esq., Xxxxxxx Xxxx & Xxxxx LLP
Xxxxx X'Xxxxxxxx, Esq., Shearman & Sterling
Xxxxxxx Xxxxx, Esq., Wachtell, Lipton, Xxxxx & Xxxx
Xxxxxx Xxxxxxxxx, Esq., Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
EXHIBIT F-1
FORM OF OPINION OF, SKADDEN, ARPS, SLATE, XXXXXXX
& XXXX LLP, COUNSEL TO THE LOAN PARTIES
[Effective Date], 2002
The Addressees set forth on
Schedule I hereto
Re: ICG Communications, Inc. Credit Agreement
-----------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to ICG Communications, Inc., a
Delaware corporation (the "Borrower"), the subsidiaries of the Borrower set
forth on Schedule II attached hereto (each a "Delaware Subsidiary", and
collectively, the "Delaware Subsidiaries", and the Borrower and the
Delaware Subsidiaries are collectively, the "Subject Opinion Companies",
and the subsidiaries of the Borrower set forth on Schedule III attached
hereto (each an "Other Subsidiary", and collectively, the "Other
Subsidiaries", and each of the Other Subsidiaries and the Delaware
Subsidiaries are referred to collectively herein as the "Borrower
Subsidiaries"), in connection with the preparation, execution and delivery
of the Credit Agreement, dated as of July __, 2002 (the "Credit
Agreement"), among the Borrower, the parties identified on Schedule I
hereto under the caption "Lenders" as lenders (collectively, the
"Lenders"), Royal Bank of Canada, as administrative agent for the Lenders
(in such capacity, the "Administrative Agent") and as collateral agent for
the Secured Parties (as defined in the Credit Agreement) (in such capacity,
the "Collateral Agent") and certain other agreements, instruments and
documents related to the Credit Agreement. The Borrower and the Borrower
Subsidiaries are referred to herein individually as an "Opinion Company"
and collectively, as the "Opinion Companies". This opinion is being
delivered pursuant to Section 3.03(k) of the Credit Agreement. Capitalized
terms used herein and not otherwise defined herein shall have the same
meanings herein as set forth in the Credit Agreement.
In our examination we have assumed the genuineness of all
signatures including endorsements, the legal capacity of natural persons,
the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as
facsimile, electronic, certified or photostatic copies, and the
authenticity of the originals of such copies. As to any facts material to
this opinion which we did not independently establish or verify, we have
relied upon statements and representations of the Opinion Companies and
their respective officers and other representatives and of public
officials, including the facts and conclusions set forth therein.
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 2
In rendering the opinions set forth herein, we have examined and
relied on originals or copies of the following:
(a) the Credit Agreement;
(b) the Term Notes delivered by the Borrower on the date hereof
(the "Notes");
(c) the Subsidiary Guaranty delivered by the Borrower Subsidiaries
on the date hereof (the "Subsidiary Guaranty");
(d) the Security Agreement delivered by the Opinion Parties on the
date hereof (the "Security Agreement");
(e) the Subordination Agreement;
(f) a letter agreement dated July 25, 2002, among the Collateral
Agent and the Opinion Companies relating to the pre-filing of certain
Uniform Commercial Code financing statements (the "UCC Letter Agreement");
(g) the certificate of Xxxxxx Xxxxxx, Assistant General Counsel of
the Borrower, dated the date hereof, a copy of which is attached as Exhibit
A hereto and the certificate of Xxxxxx Xxxxxx, Assistant Secretary of
certain of the Opinion Companies, dated the date hereof, a copy of which is
attached as Exhibit B hereto;
(h) certificates, each dated as of a recent date, from the
Secretary of State of the State of Delaware as to the filing of each
Opinion Party's Certificate of Incorporation, Certificate of Formation or
Certificate of Limited Partnership, as the case may be, and to the good
standing of each such Opinion Party in such state on such date (the
"Delaware Secretary of State Certificates");
(i) copies of the By-laws, operating agreement or limited
partnership agreement (as applicable) of each of the Subject Opinion
Companies;
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 3
(j) a copy of certain resolutions of the board of directors of the
Borrower adopted on July 18, 2002;
(k) copies of certain resolutions of the directors or other
governing body of each of the Subject Opinion Companies (other than the
Borrower) adopted on or about June 30, 2002;
(l) unfiled copies of financing statements, identifying each of
"ICG Communications, Inc.", "ICG Consolidated, Inc.", "ICG ChoiceCom
Management, LLC" and "ICG ChoiceCom, L.P.", respectively, as debtor, and
"Royal Bank of Canada, as Collateral Agent", as secured party, which we
understand will be filed within ten (10) days of the transfer of the
security interest in the office of the Secretary of State of the State of
Delaware (such filing office, the "Filing Office" and such financing
statements, collectively, the "Financing Statements");
(m) the certificates evidencing the Initial Pledged Equity (as
defined in the Security Agreement) constituting "Certificated Securities"
as defined in Article 8 of the UCC and described on Schedule IV hereto and
delivered on or prior to the date hereof (the "Opinion Pledged
Certificates"); and
(n) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction other
than (i) the Applicable Laws of the State of New York, (ii) the Applicable
Laws of the United States of America, (iii) the UCC (as defined below) and
(iv) for purposes of opinion paragraphs 1 and 9, the General Corporation
Law of the State of Delaware ("DGCL"), the Delaware Limited Liability
Company Act (the "DLLCA") and the Delaware Revised Uniform Limited
Partnership Act ("DRLPA"; and together with the DGCL and the DLLCA, the
"Delaware Organizational Laws"), as applicable. We have relied with your
consent as to matters of the laws of the State of New York and as to the
Delaware UCC (defined below), the DLLCA and the DRLPA on the opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP dated the date hereof and
addressed to us.
The Addressees set forth on
Schedule I hereto
[Effective Date], 20022
Page 4
As used herein:
(i) "Applicable Laws" shall mean those laws, rules and regulations
which, in our experience, are normally applicable to transactions of the
type contemplated by the Transaction Agreements (as defined below) without
our having made any special investigation as to the applicability of any
specific law, rule or regulation, and which are not the subject of a
specific opinion herein referring expressly to a particular law or laws.
(ii) "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or registration with,
any governmental authority pursuant to the Applicable Laws of the State of
New York or the Applicable Laws of the United States of America.
(iii) "New York UCC" means the Uniform Commercial Code as in
effect on the date hereof in the State of New York (without regard to laws
referenced in Section 9-201 thereof). "Delaware UCC" means the Uniform
Commercial Code as in effect on the date hereof in the State of Delaware
(without regard to laws referenced in Section 9-201 thereof).
(iv) "Transaction Agreements" means the Credit Agreement, the
Notes, the Subsidiary Guaranty, the Security Agreement, the Subordination
Agreement and the UCC Letter Agreement.
(v) "UCC" means (a) the New York UCC and (b) the Delaware UCC, as
applicable.
(vi) "UCC Collateral" means the Collateral (as such term is
defined in the Security Agreement) to the extent such collateral is of a
type subject to Article 9 of the UCC.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that :
1. Each Subject Opinion Company is validly existing and in good
standing under the relevant Delaware Organizational Laws. Each of the
Subject Opinion Companies has the corporate, limited liability company or
limited partnership power and authority, as the case may be, to execute,
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 5
deliver and perform all of its obligations under each of the Transaction
Agreements to which it is a party under the relevant Delaware
Organizational Laws. The execution and delivery by each Subject Opinion
Company of each of the Transaction Agreements to which it is a party, the
consummation by each such Subject Opinion Company of the transactions
contemplated thereby and the filing of the respective Financing Statement
naming such Subject Opinion Company as debtor have been duly authorized by
all requisite corporate action on the part of each such Subject Opinion
Company under the Delaware Organizational Laws. Each of the Transaction
Agreements has been duly executed and delivered by each of the Subject
Opinion Companies party thereto under the relevant Delaware Organizational
Laws.
2. Each of the Transaction Agreements (other than the UCC Letter
Agreement, on which we express no opinion) constitutes the valid and
binding obligation of each Opinion Company which is a party thereto,
enforceable against such Opinion Company in accordance with its terms under
the Applicable Laws of the State of New York.
3. (a) Neither the execution, delivery or performance by any
Subject Opinion Company of the Transaction Agreements to which such Subject
Opinion Company is a party nor the compliance by such Subject Opinion
Company with the terms and provisions thereof will conflict with the
Certificate of Incorporation, Certificate of Formation, Certificate of
Limited Partnership, By-laws, limited liability company agreement,
operating agreement or partnership agreement, as applicable, of such
Subject Opinion Company.
(b) Neither the execution, delivery or performance by each Opinion
Company of the Transaction Agreements to which such Opinion Company is a
party nor the compliance by such Opinion Company with the terms and
provisions thereof will contravene any provision of any Applicable Law of
the State of New York or any Applicable Law of the United States of
America.
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 6
4. No Governmental Approval, which has not been obtained or taken
and is not in full force and effect, is required to authorize, or
isrequired in connection with, the execution or delivery of any of the
Transaction Agreements by any Opinion Company which is a party thereto or
the enforceability of any of the Transaction Agreements against any Opinion
Company which is a party thereto.
5. Under the New York UCC, the provisions of the Security
Agreement are effective to create a valid security interest in each Opinion
Company's rights in the UCC Collateral in favor of the Collateral Agent for
the ratable benefit of the Secured Parties to secure the Obligations (as
defined in the Security Agreement).
6. Pursuant to the provisions of the Security Agreement, each
Subject Opinion Company has authorized the filing of its respective
Financing Statement identifying the UCC Collateral for purposes of Section
9-509 of the Delaware UCC.
7. Each Financing Statement includes not only all of the types of
information required by Section 9-502(a) of the Delaware UCC but also the
types of information without which the Filing Office may refuse to accept
such Financing Statement pursuant to Section 9-516 of the Delaware UCC.
8. Under the Delaware UCC, the security interest of the Collateral
Agent for the ratable benefit of the Secured Parties will be perfected in
each Subject Opinion Company's rights in all UCC Collateral upon the later
of the attachment of the security interest and the filing of the Financing
Statements in the Filing Office; provided, however, we express no opinion
with respect to (i) money, (ii) deposit accounts, (iii) letter of credit
rights, (iv) goods covered by a certificate of title statute, (v)
as-extracted collateral and timber to be cut, (vi) any property subject to
a statute, regulation or treaty of the United States whose requirements for
a security interest's obtaining priority over the rights of a lien creditor
with respect to the property preempt Section 9-310(a) of the Delaware UCC
or (vii) any goods subject to a negotiable document of title.
9. You have asked whether each of the Subject Opinion Companies is
a "registered organization" as such term is defined in Section 9-
102(a)(70) of the Delaware UCC. Pursuant to the DGCL, 8 Del. C. Sections
101(a) and 103(c)(6), 6 Del. C. Section 11-201(a) and 6 Del. C. 17-201(a),
the Secretary of State of Delaware is required to maintain a public record
showing that each of the Subject Opinion Companies has been organized under
the laws of the State of Delaware. Based on our review of the Delaware
Secretary of State Certificates, we are of the opinion that under the
Delaware UCC and the Delaware Organizational Laws, each of the Subject
Opinion Companies is a "registered organization."
10. Under the New York UCC, the provisions of the Security
Agreement are effective to create a valid security interest in the rights
of each Opinion Company identified on Schedule IV as the owner of any
Opinion Pledged Certificates in such Opinion Pledged Certificates in favor
of the Collateral Agent for the ratable benefit of the Secured Parties to
secure the Obligations (as defined in the Security Agreement).
11. Under the New York UCC, the security interest of the
Collateral Agent for the ratable benefit of the Secured Parties in the
Opinion Pledged Certificates will be perfected upon the later of the
attachment of the security interest or the Collateral Agent for the ratable
benefit of the Secured Parties obtaining possession in the State of New
York of the Opinion Pledged Certificates.
Our opinions in paragraphs 5 through 9 with respect to the
security interest of the Collateral Agent in the UCC Collateral are subject
to the following qualifications:
(a) We have assumed that each Opinion Company owns, or with
respect to after-acquired property will own, the UCC Collateral, and we
express no opinion as to the nature or extent of such Opinion Company's
rights in any of the UCC Collateral and we note that with respect to any
after-acquired property, the security interest will not attach until such
Opinion Company acquires ownership thereof.
(b) Our opinion with respect to proceeds is subject to the
limitations set forth in Section 9-315 of the UCC and, in addition, we call
to your attention that in the case of certain types of proceeds, other
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 7
parties such as holders in due course, protected purchasers of securities,
persons who obtain control over securities entitlements and buyers in the
ordinary course of business may acquire a superior interest or may take
their interest free of the security interest of a secured party.
(c) We express no opinion with respect to commercial tort claims.
(d) We express no opinion with respect to any goods which are
accessions to, or commingled or processed with, other goods to the extent
that the security interest is limited by Section 9-335 or 9-336 of the UCC.
(e) We note that paragraph 9 hereof contains our opinion with
respect to each Subject Opinion Company's status as a "registered
organization." Except to the extent that this determination is an element
of your choice of law analysis, we express no opinion with respect to the
choice of law governing perfection, the effect of perfection and
non-perfection or priority of the security interest.
(f) For purposes of our opinion paragraph 9, we have assumed that
each Subject Opinion Company is and will remain "organized solely" (within
the meaning of Section 9-102(a)(70) of the Delaware UCC) under the laws of
the State of Delaware.
(g) We advise you that with respect to that portion of the UCC
Collateral in which the Collateral Agent has been granted a security
interest by more than one agreement, a court may limit the Collateral
Agent's right to choose among the remedies otherwise given to it by such
agreements with respect to such UCC Collateral.
(h) We call to your attention that the right of the Collateral
Agent to become a partner or member may be limited by applicable law and
the terms of the partnership agreement or limited liability company
agreement pursuant to which the partnership or limited liability company
was formed, as amended from time to time, and that the only remedy may be
the right to receive distributions to which the relevant Opinion Company is
otherwise entitled pursuant to the partnership agreement or limited
liability company agreement.
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 8
(i) We express no opinion with respect to any security interest of
the Collateral Agent for the benefit of any person other than the Lenders.
(j) We call to your attention that in the case of licenses or
permits issued by governmental authorities, the Opinion Companies may not
have sufficient rights therein for the security interest of the Collateral
Agent to attach and even if any Opinion Company has sufficient rights for
the security interest to attach, exercise of remedies may be limited by the
terms of the license or permit or require the consent of the governmental
authority issuing such license or permit.
(k) We express no opinion regarding any security interest in any
copyrights, patents, trademarks, service marks or other intellectual
property, the proceeds thereof or money due with respect to the lease,
license or use thereof except to the extent Article 9 of the UCC may be
applicable to the foregoing and, without limiting the generality of the
foregoing, we express no opinion as to the effect of any federal laws
relating to copyrights, patents, trademarks, service marks or other
intellectual property on the opinions expressed herein.
Our opinions in paragraphs 10 and 11 with respect to the security
interest of the Collateral Agent in the Opinion Pledged Certificates are
subject to the following qualifications:
(a) We have assumed that each Opinion Company owns, or with
respect to after-acquired property will own, the Opinion Pledged
Certificates, and we express no opinion as to the nature or extent of such
Opinion Company's rights in any of the Opinion Pledged Certificates.
(b) Our opinion with respect to proceeds is subject to the
limitations set forth in Section 9-315 of the New York UCC and, in
addition, we call to your attention that in the case of certain types of
proceeds, other parties such as holders in due course, protected purchasers
of securities, persons who obtain control over securities entitlements and
buyers in the ordinary course of business may acquire a superior interest
or may take their interest free of the security interest of a secured party.
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 9
(c) We express no opinion with respect to the choice of law
governing perfection, the effect of perfection and non-perfection or
priority of the security interest.
(d) We call to your attention that the right of the Collateral
Agent to become a partner or member may be limited by applicable law and
the terms of the partnership agreement or limited liability company
agreement pursuant to which the partnership or limited liability company
was formed, as amended from time to time, and that the only remedy may be
the right to receive distributions to which the relevant Opinion Company is
otherwise entitled pursuant to the partnership agreement or limited
liability company agreement.
(e) We express no opinion with respect to any security interest of
the Collateral Agent for the benefit of any person other than the Lenders.
12. No Opinion Company is an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
13. Neither the execution, delivery or performance by each Opinion
Company of the Transaction Agreements to which such Opinion Company is a
party nor the compliance by such Opinion Company with the terms and
provisions thereof will violate any provision of the Public Utility Holding
Company Act of 1935, as amended.
14. The United States Bankruptcy Court for the District of
Delaware (the "Court") in the matter of ICG Communications, Inc., et al,
Case No. 00-4238 (PJW), after a hearing held on ________, 2002, issued an
order confirming the plan of reorganization of the Borrower and the other
debtors (the "Confirmation Order"), which was entered on the official
docket of the Court on _____________, 2002. Based on our review of the
official docket maintained by the clerk of the Court as of _____ a.m. on
___________, 2002, the Confirmation Order has not been reversed, modified
or amended, either in whole or in part, and no notice of appeal or motion
to reverse, modify or amend has been filed with the Court.
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 10
Our opinions are subject to the following further assumptions and
qualifications:
(a) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity (regardless
of whether enforcement is sought in equity or at law);
(b) we have assumed that each of the Transaction Agreements
constitutes the valid and binding obligation of each party to such
Transaction Agreement (other than the Opinion Companies party thereto)
enforceable against such other party in accordance with its terms;
(c) we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of any party to
any Transaction Agreement (other than the Opinion Companies party thereto
to the extent expressly set forth herein) with any state, federal or other
laws or regulations applicable to them or (ii) the legal or regulatory
status or the nature of the business of any such party;
(d) we express no opinion as to the enforceability of any rights
to contribution or indemnification provided for in the Transaction
Agreements which are violative of the public policy underlying any law,
rule or regulation (including any federal or state securities law, rule or
regulation);
(e) we express no opinion as to the applicability or effect of any
fraudulent transfer or similar law on the Transaction Agreements or any
transaction contemplated thereby;
(f) we express no opinion as to the applicability or effect of any
preference or similar law on the Transaction Agreements or any transaction
contemplated thereby;
(g) we express no opinion on the enforceability of any provision
in any Transaction Agreement purporting to prohibit, restrict or condition
the assignment of rights under such Transaction Agreement to the extent
such restriction on assignability is governed by the UCC;
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 11
(h) in the case of the Subsidiary Guaranty certain of the remedial
provisions, including waivers, with respect to the Subsidiary Guaranty are
or may be unenforceable in whole or in part, but the inclusion of such
provisions does not affect the validity of the Subsidiary Guaranty, taken
as a whole;
(i) our opinion with respect to the enforceability of the choice
of New York law and choice of New York forum provisions of the Transaction
Agreements is rendered in reliance upon the Act of July 19, 1984, ch. 421,
1984 XxXxxxxx'x Sess. Laws of N.Y. 1406 (codified at N.Y. Gen. Oblig.
Lawss.ss.5- 1401, 5-1402 (XxXxxxxx 1989) and N.Y. CPLR 327(b) (XxXxxxxx
1990)) and is subject to the qualification that such enforceability may be
limited by public policy considerations of any jurisdiction, other than the
courts of the State of New York, in which enforcement of such provisions,
or of a judgment upon an agreement containing such provisions, is sought;
(j) we express no opinion with respect to any provision of the
Transaction Agreements to the extent it authorizes or permits any purchaser
of a participation interest to set-off or apply any deposit, property or
indebtedness with respect to any participation interest;
(k) we express no opinion regarding any matter subject to the
Federal Communications Act of 1934, as amended, the rules and regulations
of the Federal Communications Commission, state utility or
telecommunications regulatory statutes, and the rules and regulations of
any state public utilities commissions, or any other federal, state or
local laws and regulations related to the provision of communications
services or operations of telecommunications systems, and we express no
opinion on the effect of such laws, rules or regulations on the opinions
herein contained, including, without limitation, the effect of any such
laws, rules or regulations on the Collateral Agent's or any Lenders'
ability to exercise any remedies set forth in any of the Transaction
Agreements;
(l) certain of the remedial provisions with respect to the
security contained in the Security Agreement may be unenforceable in whole
or in part, but the inclusion of such provisions does not affect the
validity of the Security Agreement, taken as a whole, and the Security
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 12
Agreement, each taken as a whole, together with applicable law (subject to
the qualification contained in clause (k), above), contains adequate
provisions for the practical realization of the benefits of the security;
and
(m) except as set forth in opinion paragraphs 5 through 11 hereof,
we express no opinion with respect to the validity, perfection or priority
of any security interest.
In rendering the foregoing opinions, we have assumed, with your
consent, that:
(a) each Other Subsidiary is validly existing and in good standing
under the laws of its jurisdiction of organization;
(b) each Other Subsidiary has the power and authority to execute,
deliver and perform all of its obligations under each of the Transaction
Agreements to which it is a party and the execution and delivery of each of
the Transaction Agreements to which each such Other Subsidiary is a party
and the consummation by each such Other Subsidiary of the transactions
contemplated thereby and the filing of the Financing Statements naming each
such Other Subsidiary as debtor have been duly authorized by all requisite
action on the part of each such Other Subsidiary. Each of the Transaction
Agreements to which each such Other Subsidiary is a party has been duly
authorized, executed and delivered by each such Other Subsidiary;
(c) the execution, delivery and performance of any Opinion
Company's obligations under the Transaction Agreements to which such
Opinion Company is a party does not and will not conflict with, contravene,
violate or constitute a default under (i) the Certificate of Incorporation,
Certificate of Formation, Certificate of Limited Partnership, By-laws,
limited liability company agreement, operating agreement, partnership
agreement or other organizational documents of any Other Subsidiary, (ii)
any lease, indenture, instrument or other agreement to which such Opinion
Company or its property is subject, (iii) any rule, law or regulation to
which such Opinion Company is subject (other than Applicable Laws of the
State of New York and the Applicable Laws of the United States of America
as to which we express our opinion in paragraph 3 herein) or (iv) any
judicial or administrative order or decree of any governmental authority;
and
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 13
(d) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body (other
than Governmental Approvals as to which we express our opinion in opinion
paragraph 4 herein) is required to authorize or is required in connection
with the execution, delivery or performance by any Opinion Company of any
Transaction Agreement to which such Opinion Company is a party or the
transactions contemplated thereby.
We understand that you are separately receiving opinions with
respect to certain of the foregoing assumptions from Xxxxxx Xxxxxx,
Assistant General Counsel to the Borrower, and we are advised that such
opinions contain qualifications. Our opinions herein stated are based on
the assumptions specified above and we express no opinion as to the effect
on the opinions herein stated of the qualifications contained in such other
opinions.
The Addressees set forth on
Schedule I hereto
[Effective Date], 2002
Page 14
This opinion is being furnished only to you in connection with the
Transaction Agreements and is solely for your benefit and is not to be
used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by any other person or entity for any purpose without our prior
written consent, except that any person or entity who becomes a Lender
party to the Credit Agreement pursuant to Section 8.07(a) thereof may rely
on this opinion as if addressed to such person or entity and delivered to
such person or entity on the date hereof.
Very truly yours,
Exhibit A to Opinion of
Special Counsel to ICG Communications, Inc.
-------------------------------------------
Officer's Certificate
I, Xxxxxx Xxxxxx, am the duly elected, qualified and acting
Assistant General Counsel of ICG Communications, Inc. a Delaware
corporation (the "Borrower"). I understand that pursuant to Section
3.01(a)(xvii) of the Credit Agreement (the "Agreement") dated as of July __
2002, among the Borrower, the Lenders party thereto and Royal Bank of
Canada, as administrative agent for the Lenders and as collateral agent,
each of Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois) ("SASM&F Illinois")
and Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP ("SASM&F LLP, and together
with SASM&F Illinois, "SASM&F") is rendering an opinion (together, the
"Opinion") to each of the Addressees listed on Schedule I to the opinion of
SASM&F Illinois. Capitalized terms used herein but not otherwise defined
herein shall have the meanings assigned to such terms as set forth in the
Opinion. I further understand that SASM&F is relying on this officer's
certificate and the statements made herein in rendering such Opinion.
With regard to the foregoing, on behalf of the Borrower, I hereby
certify that:
1. I am familiar with the business of the Borrower, each of the
other Opinion Parties and each of the Borrower's other subsidiaries, and
due inquiry has been made of all persons deemed necessary or appropriate to
verify or confirm the statements contained herein.
2. SASM&F may rely on the respective representations and
warranties that the Borrower and the other Opinion Parties have made in
each of the Transaction Agreements and each of the certificates delivered
pursuant thereto. I have made a careful review of each of such
representations and warranties and hereby confirm, to the best of my
knowledge and belief, that such representations and warranties are true,
correct and complete on and as of the date of this certificate.
3. Less than twenty-five percent (25%) of the assets of the
Borrower and its subsidiaries on a consolidated basis and on an
unconsolidated basis consist of Margin Stock.
4. The Borrower and each of the other Opinion Parties is primarily
engaged directly, or indirectly through Majority-Owned Subsidiaries, in the
telecommunications business; and the Borrower and each other Opinion Party
(i) is not and does not hold itself out as being engaged primarily, nor
does it propose to engage primarily, in the business of investing,
reinvesting or trading in Securities, (ii) has not and is not engaged in,
and does not propose to engage in, the business of issuing Face-Amount
Certificates of the Installment Type and has no such certificate
outstanding and (iii) does not own or propose to acquire Investment
Securities having a Value exceeding forty percent (40%) of the Value of the
total assets of the Borrower or any other Opinion Company (exclusive of
Government Securities and cash items) on an unconsolidated basis.
5. Neither the Borrower nor any other Opinion Company owns or
operates facilities used for the generation, transmission, or distribution
of electric energy for sale ("Electric Utility Facilities").
6. Neither the Borrower nor any other Opinion Company owns or
operates facilities used for the distribution of natural or manufactured
gas for heat, light, or power ("Gas Utility Facilities").
7. Neither the Borrower nor any of its subsidiaries, directly or
indirectly, or through one or more intermediary Companies, owns, controls,
or holds with power to vote (a) ten percent (10%) or more of the
outstanding Voting Securities of any Company that owns or operates any
Electric Utility Facilities or Gas Utility Facilities, or (b) any other
interest, directly or indirectly, or through one or more intermediary
entities, in (i) any Company that owns or operates any Electric Utility
Facilities or Gas Utility Facilities, or (ii) any of the foregoing types of
entities that have received notice of the sort described in paragraph 8
below.
8. Neither the Borrower nor any of its subsidiaries has received
notice that the Securities and Exchange Commission has determined, or may
determine, that the Borrower or any of its subsidiaries exercises a
controlling influence over the management or direction of the policies of a
gas utility company or an electric utility company as to make it subject to
the obligations, duties and liabilities imposed on holding companies by the
Public Utility Holding Company Act of 1935, as amended ("PUHCA").
9. To the best of my knowledge, no Company that has registered
with the Securities and Exchange Commission as a public utility holding
company under PUHCA owns, directly or indirectly, through one or more
intermediary entities, ten percent (10%) or more of the outstanding Voting
Securities (as defined below) of the Borrower or any of its Subsidiaries.
10. As used in paragraph 3 of this certificate, the following term
shall have the following meaning:
"Margin Stock" means: (i) any equity security registered or having
unlisted trading privileges on a national securities exchange; (ii) any OTC
security designated as qualified for trading in the National Market System
under a designation plan approved by the Securities and Exchange
Commission; (iii) any debt security convertible into a margin stock or
carrying a warrant or right to subscribe to or purchase a margin stock;
(iv) any warrant or right to subscribe to or purchase a margin stock; or
(v) any security issued by an investment company registered under Section 8
of the Investment Company Act of 1940.
11. As used in paragraphs 4 and 11 of this certificate, the
following terms shall have the following meanings:
"Exempt Fund" means a company that is excluded from treatment as
an investment company solely by section 3(c)(1) or 3(c)(7) of the
Investment Company Act of 1940 (applicable to certain privately offered
investment funds).
"Face-Amount Certificate of the Installment Type" means any
certificate, investment contract, or other Security that represents an
obligation on the part of its issuer to pay a stated or determinable sum or
sums at a fixed or determinable date or dates more than 24 months after the
date of issuance, in consideration of the payment of periodic installments
of a stated or determinable amount.
"Government Securities" means all Securities issued or guaranteed
as to principal or interest by the United States, or by a person controlled
or supervised by and acting as an instrumentality of the government of the
United States pursuant to authority granted by the Congress of the United
States; or any certificate of deposit for any of the foregoing.
"Investment Securities" includes all Securities except (A)
Government Securities, (B) Securities issued by companies the only
shareholders in which are employees and former employees of a company and
its subsidiaries, members of the families of such persons and the company
and its subsidiaries and (C) Securities issued by Majority-Owned
Subsidiaries of the Borrower or any of the other Opinion Companies which
are not engaged and do not propose to be engaged in activities within the
scope of clause (i), (ii) or (iii) of paragraph 4 of this Certificate or
which are exempted or excepted from treatment as an investment company by
statute, rule or governmental order (other than Exempt Funds).
"Majority-Owned Subsidiary" of a person means a company fifty
percent (50%) or more of the outstanding Voting Securities of which are
owned by such person, or by a company which, within the meaning of this
paragraph, is a Majority-Owned Subsidiary of such person.
"Security" means any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put, call,
straddle, option, or privilege on any security (including a certificate of
deposit) or on any group or index of securities (including any interest
therein or based on the value thereof), or any put, call, straddle, option,
or privilege entered into on a national securities exchange relating to
foreign currency, or, in general, any interest or instrument commonly known
as a "security," or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, guarantee of, or warrant
or right to subscribe to or purchase, any of the foregoing.
"Value" means (i) with respect to Securities owned at the end of
the last preceding fiscal quarter for which market quotations are readily
available, the market value at the end of such quarter; (ii) with respect
to other Securities and assets owned at the end of the last preceding
fiscal quarter, fair value at the end of such quarter, as determined in
good faith by or under the direction of the board of directors; and (iii)
with respect to securities and other assets acquired after the end of the
last preceding fiscal quarter, the cost thereof.
"Voting Security" means any security presently entitling the owner
or holder thereof to vote for the election of directors of a company (or
its equivalent, e.g., general partner or manager of a limited liability
company).
12. As used in paragraphs 7, 9 and 12 of this certificate, the
following terms shall have the following meanings:
"Company" means a corporation, limited liability company,
partnership, association, joint-stock company, joint venture, trust, or any
receiver, trustee, or other liquidating agent of any of the foregoing in
its capacity as such.
"Security" or "Securities" means any note, draft, stock, treasury
stock, bond, debenture, limited liability company interest, certificate of
interest or participation in any profit-sharing agreement or in any oil,
gas, other mineral royalty or lease, any collateral-trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security,
receiver's or trustee's certificate, or, in general, any instrument
commonly known as a "security"; or any certificate of interest or
participation in, temporary or interim certificate for, receipt for,
guaranty of, assumption of liability on, or warrant or right to subscribe
to or purchase, any of the foregoing.
"Voting Security" or "Voting Securities" means any Security
presently entitling the owner or holder thereof to vote in the direction or
management of the affairs of a Company, or any Security issued under or
pursuant to any trust, agreement, or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such Security are
presently entitled to vote in the direction or management of the affairs of
a Company; and a specified per centum of the outstanding Voting Securities
of a Company means such amount of the outstanding Voting Securities of such
Company as entitles the holder or holders thereof to cast said specified
per centum of the aggregate votes which the holders of all the outstanding
Voting Securities of such Company are entitled to cast in the direction or
management of the affairs of such Company.
[Signature Page Follows]
IN WITNESS WHEREOF, I have executed this certificate this ______
day of _________, 2002.
ICG COMMUNICATIONS, INC.
By: __________________________________
Exhibit B to Opinion of
Special Counsel to ICG Communications, Inc.
-------------------------------------------
Officer's Certificate
I, Xxxxxx Xxxxxx, am the duly elected, qualified and acting
Assistant General Counsel and/or Assistant Secretary of ICG Communications,
Inc., a Delaware corporation (the "Borrower"), and those subsidiaries of
the Borrower identified as a signatory hereto (collectively, the
"Subsidiaries"). I understand that pursuant to Section 3.01(a)(xvii) of the
Credit Agreement (the "Agreement") dated as of July ___, 2002, among the
Borrower, the Lenders party thereto and Royal Bank of Canada, as
administrative agent for the Lenders and as collateral agent, each of
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois) ("SASM&F Illinois") and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP ("SASM&F LLP, and together with
SASM&F Illinois, "SASM&F") is rendering an opinion (together, the
"Opinion") to each of the Addressees listed on Schedule I to the opinion of
SASM&F Illinois. Capitalized terms used herein but not otherwise defined
herein shall have the meanings assigned to such terms as set forth in the
Opinion. I also understand that SASM&F is rendering opinions as to the
perfection of Liens on the capital stock and other equity interests of the
Subsidiaries pledged to the Collateral Agent under the Security Agreement
that are subject to restrictive legends. In connection with such opinions,
SASM&F has requested confirmation that such Subsidiaries are satisfied with
evidence presented to them that the pledge of the capital sock and other
equity interests of the Subsidiaries to the Collateral Agent will not
violate the Securities Act of 1933, as amended, or any rule or regulation
promulgated thereunder. I further understand that SASM&F is relying on this
officer's certificate and the statements made herein in rendering such
Opinion.
With regard to the foregoing, on behalf of each of the
Subsidiaries, I hereby certify that each of the Subsidiaries has been
presented with evidence satisfactory to it that the pledge of the capital
stock, limited liability company membership interests and/or partnership
interests, as applicable, of the Subsidiaries to the Collateral Agent
pursuant to the Security Agreement is not in violation of the Securities
Act of 1933, as amended, or any rule or regulation promulgated thereunder.
I hereby further certify, on behalf of ICG Telecom Group, Inc.
("TGI"), that TGI, in its capacity as general partner of ICG Telecom of San
Diego, L.P. ("LP"), has been presented with evidence satisfactory to it
that neither the pledge by CCM of its general partnership interests in the
LP nor the pledge by the LP's limited partners of their respective limited
partnership interests in the LP to the Collateral Agent pursuant to the
Security Agreement are in violation of the Securities Act of 1933, as
amended, or any rule or regulation promulgated thereunder.
IN WITNESS WHEREOF, I have executed this certificate this ______
day of ______, 2002.
ICG SERVICES, INC.
ICG CANADIAN ACQUISITION, INC.
ICG HOLDINGS, INC.
ICG TELECOM GROUP, INC.
ICG EQUIPMENT, INC.
ICG MOUNTAIN VIEW, INC.
ICG CONSOLIDATED, INC.
ICG TELECOM GROUP OF VIRGINIA, INC.
ICG FUNDING LLC
By: ICG Communications, Inc., its
Managing Member
NIKONET, LLC
By: ICG Telecom Group, Inc., its
Managing Member
ICG CHOICECOM MANAGEMENT, LLC
By: ICG Telecom Group, Inc., its
Managing Member
ICG CHOICECOM, L.P.
By: ICG ChoiceCom Management, LLC
By: ICG Telecom Group, Inc., its
Managing Member
By: ___________________________________
EXHIBIT F-2
FORM OF OPINION OF XXXXX & XXXXXXX L.L.P., COLORADO COUNSEL
TO THE LOAN PARTIES
[Effective Date], 2002
Royal Bank of Canada, as Collateral Agent and
Administrative Agent
Wachovia Bank, National Association, as Documentation
Agent
for the Initial Lenders (as defined below)
0 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Re: ICG Communications, Inc.
Ladies and Gentlemen:
This firm has acted as local counsel to ICG Communications, Inc.,
a Delaware corporation as reorganized under Chapter 11 of the United States
Bankruptcy Code (the "Company"), ICG Telecom Group, Inc. a Colorado
corporation ("Telecom"), ICG Equipment, Inc., a Colorado corporation
("Equipment"), ICG Mountain View, Inc., a Colorado corporation ("Mountain
View"), and ICG Holdings, Inc., a Colorado corporation ("Holdings," and,
together with Telecom, Equipment and Mountain View, the "Colorado
Subsidiaries") in connection with the Credit Agreement dated as of July
[__], 2002 (the "Credit Agreement") between the Company, the banks,
financial institutions and other institutional lenders listed on the
signature pages thereto as the Initial Lenders, Royal Bank of Canada, as
collateral agent and as administrative agent for the Lenders, and Wachovia
Bank, National Association, as documentation agent. This opinion letter is
furnished to you pursuant to the requirements set forth in Section 3.03(l)
of the Credit Agreement in connection with the closing thereunder on the
date hereof. Capitalized terms used herein which are defined in the Credit
Agreement and not otherwise defined in this opinion letter have the
meanings set forth in the Credit Agreement. As used in this opinion letter
the term "Colorado UCC" means Revised Article 9 of the Uniform Commercial
Code as in effect in the State of Colorado on the date hereof.
For purposes of this opinion letter, we have examined photocopies
of the following documents (the "Documents"):
1. Executed copy of the Credit Agreement.
2. Executed copy of the Security Agreement, dated as of
[Effective Date], 2002 (the "Security Agreement") entered
into by the Company, the Colorado Subsidiaries and other
affiliates of the Company for the benefit of the Collateral
Agent.
3. Executed copy of the Subsidiary Guaranty, dated as of
[Effective Date], 2002 (the "Guaranty") entered into by the
Colorado Subsidiaries and the other Guarantors party thereto
in favor of the Secured Parties.
4. Copies of completed UCC-1 financing statements (a) naming
Telecom as debtor and the Collateral Agent as secured party,
(b) naming Equipment as debtor and the Collateral Agent as
secured party, (c) naming Mountain View as debtor and the
Collateral Agent as secured party, and (d) naming Holdings
as debtor and the Collateral Agent as secured party, which
UCC-1 financing statements have been prepared in connection
with the Security Agreement for filing in the UCC records of
the Colorado Secretary of State (the "Colorado Filing
Office"). Copies of such financing statements (the "Colorado
Financing Statements") are attached hereto as Exhibit A.
5. The Articles of Incorporation of Telecom, as certified by
the Colorado Secretary of State on [_______ __], 2002, and
as certified by the Secretary of Telecom on the date hereof
as being complete, accurate and in effect.
6. A certificate of good standing of Telecom issued by the
Secretary of State of the State of Colorado dated [_______ __],
2002.
7. The Articles of Incorporation of Equipment, as certified by
the Colorado Secretary of State on [_______ __], 2002, and
as certified by the Secretary of Equipment on the date
hereof as being complete, accurate and in effect.
8. A certificate of good standing of Equipment issued by the
Secretary of State of the State of Colorado dated [_______ __],
2002.
9. The Articles of Incorporation of Mountain View, as certified
by the Colorado Secretary of State on [_______ __], 2002,
and as certified by the Secretary of Mountain View on the
date hereof as being complete, accurate and in effect.
10. A certificate of good standing of Mountain View issued by
the Secretary of State of the State of Colorado dated
[_______ __], 2002.
11. The Articles of Incorporation of Holdings, as certified by
the Colorado Secretary of State on [_______ __], 2002, and
as certified by the Secretary of Holdings on the date hereof
as being complete, accurate and in effect.
12. A certificate of good standing of Holdings issued by the
Secretary of State of the State of Colorado dated [_______ __],
2002.
13. Certificates of certain officers of the Colorado
Subsidiaries, dated [Effective Date], 2002, as to certain
facts relating to the Colorado Subsidiaries.
14. A certificate of the Secretary of each Colorado Subsidiary,
dated [Effective Date], 2002, as to the incumbency and
signatures of certain officers of such Colorado Subsidiary.
The Credit Agreement, the Security Agreement and the Guaranty are
sometimes hereinafter referred to collectively as the "Loan Documents."
In our examination of the Loan Documents and other Documents, we
have assumed the genuineness of all signatures, the legal capacity of all
natural persons, the accuracy and completeness of all Documents, the
authenticity of all originals of the Documents and the conformity to
authentic originals of all of the Documents submitted to us as copies
(including telecopies). As to matters of fact relevant to the opinions
expressed herein, we have relied on the representations and statements of
fact made in the Documents, we have not independently established the facts
so relied on, and we have not made any investigation or inquiry other than
our examination of the Documents. This opinion letter is given, and all
statements herein are made, in the context of the foregoing.
We have made the following further assumptions: (i) that the
execution, delivery and performance of the Security Agreement have been
validly authorized, and the Security Agreement has been duly and validly
executed and delivered, by each Colorado Subsidiary; (ii) that the Security
Agreement creates in favor of the Collateral Agent a valid security
interest in the respective right, title and interest of each Colorado
Subsidiary in and to "Collateral" specified in Section 1 of the Security
Agreement ("Colorado UCC Collateral"); (iii) that pending the completion
(which, we are advised, is expected to occur within ten days) of the filing
of the Colorado Financing Statements (including payment of all applicable
fees and charges), operative facts (and applicable law) will remain
unchanged from those in existence on the date hereof; (iv) that each
Colorado Subsidiary is and will continue to be "organized solely" in
Colorado, within the meaning of Section 9-102(73) of the Colorado UCC; and
(v) that (consistent with the officers' certificates referred to in
paragraph 13 above) (A) neither Equipment nor Mountain View is a
"transmitting utility" as such term is defined in Section 9-102(83) of the
Colorado UCC, and (B) each of Telecom and Holdings is a "transmitting
utility" as such term is defined in Section 9-102(83) of the Colorado UCC.
Insofar as it relates to Colorado UCC Collateral constituting "proceeds,"
as defined in the Colorado UCC, our opinion below is subject to the
limitations set forth in Section 9-315 of the Colorado UCC.
This opinion letter is based as to matters of law solely on
applicable provisions of the Colorado UCC and the Colorado Business
Corporation Act, as in effect on the date hereof (the "CBCA"), and we
express no opinion as to any other laws, statutes, rules or regulations.
Based upon, subject to and limited by the foregoing, we are of the
opinion that to the extent that the security interest granted to the
Collateral Agent under the Security Agreement in the respective right,
title and interest of each Colorado Subsidiary in and to Colorado UCC
Collateral (excepting, however, any "fixtures," "as-extracted collateral"
or "timber to be cut," each as defined in the Colorado UCC) is subject to
perfection currently by the filing of financing statements in Colorado,
such security interest will be perfected upon the later of (i) the filing
of the Colorado Financing Statements in the Colorado Filing Office and (ii)
the attachment of such security interest.
* * * * *
You have asked whether the Colorado Subsidiaries are "registered
organizations" as that term is defined in Section 9-102(73) of the Colorado
UCC. Although the Colorado Legislature, in enacting Revised Article 9,
presumably intended that Colorado corporations would qualify as "registered
organizations," there is a possibility that Colorado corporations may not
qualify, because the CBCA does not clearly mandate that Colorado "maintain
a public record showing" Colorado corporations "to have been organized," as
contemplated by Section 9-102(73). If Colorado corporations nevertheless
are treated as "registered organizations" under Section 9-102(73) of the
Colorado UCC, then pursuant to Section 9-307(e) of the Colorado UCC each
Colorado Subsidiary, as a corporation organized solely under the law of
Colorado, is located in Colorado. If Colorado corporations are not treated
as "registered organizations" under Section 9-102(73) of the Colorado UCC,
then pursuant to Section 9-307(b)(3) of the Colorado UCC each Colorado
Subsidiary, as an organization that (i) has more than one place of
business, and (ii) has its chief executive office in Englewood, Colorado,
is located in Colorado.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion letter. This opinion
letter has been prepared solely for your use in connection with the closing
under the Credit Agreement on the date hereof, and should not be quoted in
whole or in part or otherwise be referred to, and should not be filed with
or furnished to any governmental agency or other person or entity, without
the prior written consent of this firm.
Very truly yours,
XXXXX & XXXXXXX L.L.P.
EXHIBIT G
[FORM OF OPINION OF LOCAL COUNSEL
WITH RESPECT TO REAL ESTATE MATTERS]
__________ ___, 2002
To the Lender Parties party from time to time to the Credit Agreement
referred to below and to Royal Bank of Canada, as Administrative Agent
Re: ICG Communications, Inc.
Ladies and Gentlemen:
We have acted as special Colorado (the "State") counsel to ICG
Communications, Inc., a Delaware corporation ("Company"), in connection
with the execution and delivery of the Deed of Trust referenced below
pursuant to that certain Credit Agreement, dated as of July 24, 2002 (the
"Credit Agreement"), by and among Company, the Lender Parties (as defined
therein) and Royal Bank of Canada, as administrative agent (in such
capacity, "Administrative Agent") for the Lender Parties. This opinion is
rendered at the request of Company pursuant to Section 5.01(4)(a) of the
Credit Agreement. Capitalized terms used herein and not otherwise defined
shall have the respective meanings ascribed to such terms in the Deed of
Trust, or if not defined therein, in the Credit Agreement.
In our capacity as such counsel, we have examined originals, or
copies identified to our satisfaction as being true copies, of such
records, documents or other instruments as in our judgment are necessary or
appropriate to enable us to render the opinions expressed below, including
such corporate records and documents of Company and such certificates of
public officials and officers of Company as we have deemed necessary or
appropriate for purposes of this opinion. These records, documents and
instruments also included execution copies or counterparts of the following
documents (collectively, the "Subject Documents"):
1. The Credit Agreement; and
2. The Deed of Trust, Security Agreement, Assignment of Rents and
Leases and Fixture Filing [(Leasehold Estate)] (Colorado), dated as of
[___________ ___], 2002, from Company, as grantor, to Administrative Agent,
as trustee, encumbering the "Mortgaged Property" described therein (the
"Deed of Trust").
Assumptions
-----------
In rendering this opinion we have assumed, without having made any
independent investigation of the facts, except with respect to matters of
State and federal law on which we have opined below, the following:
(i) the genuineness of all signatures, the authenticity of
all documents submitted to us as originals and the conformity with
originals of all documents submitted to us as copies;
(ii) to the extent that the obligations of Company may be
dependent upon such matters, other than with respect to Company,
that each party to the agreements and contracts referred to herein
is duly formed, validly existing and in good standing under the
laws of its jurisdiction of formation; that each such other party
has the requisite corporate or other organizational power and
authority to perform its obligations under such agreements and
contracts, as applicable; and that such agreements and contracts
have been duly authorized, executed and delivered by, and each of
them constitutes the legally valid and binding obligations of,
such other parties, as applicable, enforceable against such other
parties in accordance with their respective terms;
(iii) that Company is duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of
incorporation;
(iv) that Company has the requisite corporate power and
authority to enter into and perform its obligations under the
Subject Documents to which it is a party;
(v) the due authorization, execution and delivery by
Company of the Subject Documents to which Company is a party;
(vi) that a part or all of the loan proceeds to be advanced
pursuant to the Credit Agreement will have been advanced on or
before the date hereof;
(vii) that all material factual matters, including without
limitation, representations and warranties, contained in the
Subject Documents, are true and correct as set forth therein;
(viii) that Company, at the time of recordation of the Deed
of Trust, held an interest of record in the real property portions
of the Mortgaged Property owned by Company; and
(ix) that the Subject Documents will be governed by and
construed in accordance with the internal laws of the State,
without regard to conflicts of laws principles, notwithstanding
the provisions of the Subject Documents to the contrary.
[**INSERT ANY NECESSARY STATE-SPECIFIC ASSUMPTIONS**]
Opinions
--------
On the basis of such examination, our reliance upon the
assumptions contained herein and our consideration of those questions of
law we considered relevant, and subject to the limitations and
qualifications in this opinion, we are of the opinion that:
1. The Deed of Trust constitutes the legal, valid and
binding obligation of Company, enforceable against Company in
accordance with its terms.
2. The execution and delivery of the Subject Documents, the
performance by Company of its obligations thereunder and the
compliance with the terms and conditions thereof by Company are
not in contravention of or in conflict with any law, rule or
regulation of the State applicable to Company.
3. The execution and delivery by Company of the Subject
Documents to which it is a party and the performance of Company's
obligations thereunder do not require any governmental consents,
approvals, authorizations, permits, registrations, declarations or
filings or other action or any notices to, consents of, orders of
or filings with any governmental authority or regulatory body of
the State (including those having jurisdiction over the
enforcement of the environmental laws of the State), except for
the recordation of the Deed of Trust in the recording office
described herein.
4. The Deed of Trust (including the acknowledgement,
attestation, seal and witness requirements) is in appropriate form
for recordation in the State.
5. The Deed of Trust is in proper form sufficient to create
a valid mortgage lien in favor of Administrative Agent on, and to
vest Administrative Agent with power of sale in, such of the
Mortgaged Property described therein that constitutes real
property (including fixtures, to the extent the same constitute
real property). The recordation of the Deed of Trust in the office
of the Recorder of [_________________] County, Colorado is the
only recordation, filing or registration necessary to perfect the
lien on the Mortgaged Property created by the Deed of Trust. Upon
recordation of the Deed of Trust in the office of the Recorder of
[___________________] County, Colorado, Administrative Agent will
have a valid and perfected mortgage lien on the Mortgaged Property
described therein. No other recordation, filing, re-recordation or
re-filing is necessary in order to perfect or to maintain the
priority of the mortgage lien created by the Deed of Trust.
6. The real property description attached to the Deed of
Trust is in form legally sufficient for the purpose of subjecting
that portion of the Mortgaged Property that constitutes real
property to the lien evidenced by the Deed of Trust.
7. The Deed of Trust is in proper form sufficient to
constitute a valid and effective fixture filing with respect to
the Premises under Article 9 of the Uniform Commercial Code as in
effect in the State, naming Company as debtor and Administrative
Agent as secured party.
8. Administrative Agent is not required to qualify to
transact business in the State nor will Agent incur any tax
imposed by the State (including, without limitation, any tax
imposed by the State on interest or on revenue paid in respect of
the Credit Agreement), solely as the result of the ownership or
recordation of the Deed of Trust.
9. No taxes or other charges, including, without
limitation, intangible, documentary, stamp, mortgage, transfer or
recording taxes or similar charges are payable to the State or to
any governmental authority or regulatory body located therein on
account of the execution or delivery of the Deed of Trust, or the
creation of the lien and security interest thereunder, or the
filing, recordation or registration of the Deed of Trust, except
for nominal filing or recording fees.
Qualifications
--------------
The foregoing opinions are subject to the following qualifications,
limitations and exceptions:
1. Qualifying paragraph 1 above, the enforceability of the
Deed of Trust and the lien created thereby may be limited or
affected by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally (including,
without limitation, fraudulent conveyance laws) and by general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity
or at law. The aforesaid opinion as to enforceability of the Deed
of Trust is also subject to the qualification that certain
provisions contained therein may not be enforceable, but (subject
to the limitations set forth in the foregoing sentence) such
unenforceability will not render the Deed of Trust invalid as a
whole or substantially interfere with realization of the principal
benefits and/or security provided thereby.
2. In rendering the opinions expressed in this opinion
letter, we have made no examination of and express no opinion with
respect to: (i) title to or, except as to adequacy of form,
descriptions of the Mortgaged Property described in the Deed of
Trust; (ii) the nature or extent of Company's rights in, or title
to, the Mortgaged Property; (iii) the existence or non-existence
of liens, security interests, charges or encumbrances thereon or
therein actually of record; or (iv) the priority of any liens on
any part of the Mortgaged Property. We have not independently
certified the existence, condition, location or ownership of any
of the Mortgaged Property.
This opinion is given as of the date hereof, and we disclaim any
obligation to update this opinion letter for events occurring after the
date of this opinion letter. The foregoing opinion applies only with
respect to the laws of the State and the federal laws of the United States
of America and we express no opinion with respect to the laws of any other
jurisdiction.
This opinion is rendered only to Administrative Agent and the
Lender Parties and their respective successors and assigns (including any
participant in any Lender Party's interest) and is solely for their benefit
in connection with the transactions contemplated by the Subject Documents
and may not be relied upon by Administrative Agent, or the Lender Parties
or their respective successors and assigns for any other purpose without
our prior written consent.
Very truly yours,
EXHIBIT H
FORM OF SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT (this "Agreement"), dated as of July __,
2002, by and among ICG Communications, Inc. (the "Borrower"), Xxxxxxxxx
L.L.C., a Delaware limited liability company, and Xxxxxx Xxxxxxx & Co.,
Incorporated, a Delaware corporation, as the holders (the "Subordinated
Creditors") of the Subordinated Cerberus Notes (as defined below),
Xxxxxxxxx L.L.C., as agent for the Subordinated Creditors (the "Junior
Agent") and the Administrative Agent and the Collateral Agent (each as
defined in the Credit Agreement referred to below) on behalf of the Lenders
(as defined in the Credit Agreement referred to below).
PRELIMINARY STATEMENTS:
(1) ICG Communications, Inc., a Delaware corporation, as Borrower,
and certain of its subsidiaries, as Subsidiary Guarantors, have entered
into a Credit Agreement dated as of July __, 2002 (said Credit Agreement,
as it may hereafter be amended, amended and restated, supplemented or
otherwise modified from time to time, being the "Credit Agreement"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined) with Royal Bank of Canada, as Administrative Agent and
Collateral Agent, Wachovia Bank, National Association, as Documentation
Agent and the Lenders named therein.
(2) The Company is indebted to the Subordinated Creditors in the
initial principal amount of $25,000,000, evidenced by certain Senior
Subordinated Notes dated July __, 2002 (collectively, the "Subordinated
Cerberus Notes"). All Debt and other Obligations of the Company to the
Subordinated Creditors under or in respect of the Subordinated Cerberus
Notes (whether created directly or acquired by assignment or otherwise),
and interest and premiums, if any, thereon and other amounts payable in
respect thereof or in connection therewith, are hereinafter referred to as
the "Subordinated Debt".
(3) It is a condition precedent to the entry by the Lenders into
the Credit Agreement with the Borrower, that the Subordinated Creditors
shall have executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Credit Agreement with the Borrower,
the Subordinated Creditors, the Junior Agent, the Borrower, the Junior
Agent, the Administrative Agent and the Collateral Agent each hereby agrees
as follows:
SECTION 1. Agreement to Subordinate. (a) The Subordinated
Creditors agree that the Subordinated Debt is and shall be subordinate, in
right of payment to the prior payment in full in cash or cash equivalents
of all Obligations of the Loan Parties under, and in respect of, the Loan
Documents, all such Obligations, and any refunding or refinancing thereof,
being referred to herein as the "Senior Indebtedness"; provided that, to
the extent there is any refunding or refinancing of the Obligations of the
Loan Parties under the Loan Documents after the date hereof, the
then-outstanding principal amount of, and all other cash and non-cash
Obligations under or in respect of, the Subordinated Cerberus Notes
(including without limitation, all accrued and unpaid interest, fees and
expenses) and any refunding or refinancing thereof shall become pari passu
with the Obligations under the Loan Documents and shall constitute "Senior
Indebtedness" for all purposes under this Agreement.
(b) For the purposes of this Agreement, the Senior Indebtedness
shall not be deemed to have been paid in full until the Lenders shall have
received payment of the Senior Indebtedness in full in cash or cash
equivalents. For the avoidance of doubt, "cash equivalents" as used herein
shall mean any of the following having a maturity of not greater than 30
days (a) readily marketable direct obligations of the Government of the
United States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government
of the United States, and (b) insured certificates of deposit of or time
deposits with any commercial bank that (i) is a Lender or a member of the
Federal Reserve System, (ii) issues (or the parent of which issues)
commercial paper rated at least "Prime-1" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., (iii) is
organized under the laws of the United States or any State thereof and (iv)
has combined capital and surplus of at least $1 billion.
SECTION 2. Events of Subordination. (a) Upon any payment or
distribution of assets of any Loan Party of any kind or character, whether
in cash, property or securities, in connection with any dissolution or
winding up or total or partial liquidation or reorganization of any Loan
Party, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings or other marshalling of assets for the
benefit of creditors, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full before the holders of the
Subordinated Debt shall be entitled (i) to receive any payment by (or on
behalf of) such Loan Party on account of its Subordinated Debt, or (ii) to
acquire any of the Subordinated Debt or any distribution by such Loan Party
with respect to the Subordinated Debt, in each case of any cash, property
or securities of such Loan Party (except that the holders of Subordinated
Debt may receive and retain junior securities from a previously established
defeasance trust). Any such payment or distribution by (or on behalf of)
such Loan Party on account of its Subordinated Debt in connection with any
such dissolution, winding up, liquidation or reorganization to which the
holders of the Subordinated Debt would be entitled, but for these
subordination provisions, shall be made by such Loan Party or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person making such payment or distribution or by the holders of the
Subordinated Debt if received by them or it, directly to the holders of
Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
representatives as their respective interests appear, to the extent
necessary to pay all such Senior Indebtedness in full after giving effect
to any concurrent payment, distribution or provision therefor to or for the
holders of such Senior Indebtedness.
(b) During the continuance of any Event of Default, upon receipt
by the Borrower (with a copy to the agent for the holders of the
Subordinated Debt) of written notice from the Agent for the holders of such
Senior Indebtedness (or the holders of at least a majority in principal
amount of such Senior Indebtedness then outstanding), no payment of the
Subordinated Debt hereunder may be made by or on behalf of any Loan Party
for a period (a "Payment Blockage Period") commencing on the date of
receipt of such notice and ending 179 days thereafter (unless, in each
case, such Payment Blockage Period shall be terminated by (i) written
notice to any Loan Party from such representatives for such holders or (ii)
payment in full of such Senior Indebtedness or (iii) such event of default
being cured or waived). Not more than one Payment Blockage Period may be
commenced with respect to the Subordinated Debt during any period of 360
consecutive days. Notwithstanding anything in this Agreement to the
contrary, there must be 180 consecutive days in any 360-day period in which
no Payment Blockage Period is in effect. No event of default that existed
or was continuing (it being acknowledged that any subsequent action that
would give rise to an event of default pursuant to any provision under
which an event of default previously existed or was continuing shall
constitute a new event of default for this purpose) on the date of the
commencement of any Payment Blockage Period with respect to the Senior
Indebtedness initiating such Payment Blockage Period shall be, or shall be
made, the basis for the commencement of a second Payment Blockage Period by
the representative for, or the holders of, such Senior Indebtedness,
whether or not within a period of 360 consecutive days, unless such event
of default shall have been cured or waived for a period of not less than 90
consecutive days.
(c) Notwithstanding any provision to the contrary in the
documentation setting forth the terms of the Subordinated Debt, except for
scheduled interest payments that are not subject to a payment blockage
pursuant to Section 2(b) hereof, no payment (including mandatory
prepayments) in respect of the Subordinated Debt may be made by any Loan
Party to the holders of the Subordinated Debt unless and until the holders
of the Senior Indebtedness shall have been paid in full, and any such
payment received by any holder of the Subordinated Debt shall be received
and held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness (pro rata to such holders on the
basis of such respective amount of Senior Indebtedness held by such
holders) or their respective representatives, as their respective interests
appear, for application to the payment of Senior Indebtedness remaining
unpaid until all such Senior Indebtedness has been paid in full, after
giving effect to any concurrent payment, distribution or provision therefor
to or for the holders of such Senior Indebtedness.
SECTION 3. In Furtherance of Subordination. The Subordinated
Creditors agree as follows:
(a) To the extent any payment of Senior Indebtedness by (or on
behalf of) any Loan Party, including as proceeds of security or
enforcement of any right of setoff, is set aside or required to be paid
to any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then the Senior Indebtedness or
part thereof originally intended to be satisfied by such payment shall
be deemed to be reinstated and outstanding as if such payment had not
occurred.
(b) For purposes of Section 2(a) and this Section 3, the words
"cash, property or securities" shall not be deemed to include (so long
as the effect of this clause is not to cause the Subordinated Debt to
be treated in any case or proceeding or similar event described in
Section 2(a) and this Section 3 as part of the same class of claims as
the Senior Indebtedness or any class of claims pari passu with, or
senior to, the Senior Indebtedness for any payment or distribution)
securities of any Loan Party or any other corporation provided for by a
plan of reorganization or readjustment that are subordinated, at least
to the extent that the Subordinated Debt is subordinated, to the
payment of all Senior Indebtedness then outstanding; provided that (1)
if a new corporation results from such reorganization or readjustment,
such corporation assumes the Senior Indebtedness and (2) the rights of
the holders of the Senior Indebtedness are not, without the consent of
such holders, altered by such reorganization or readjustment.
(c) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution
of assets of any Loan Party of any kind or character, whether in cash,
property or securities, shall be received by any holder of Subordinated
Debt at a time when such payment or distribution is prohibited by
Section 2(a) hereof and before all Senior Indebtedness is paid in full,
such payment or distribution shall be received and held in trust for
the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness (pro rata to such holders on the basis of such
respective amount of Senior Indebtedness held by such holders) or their
respective representatives, as their respective interests appear, for
application to the payment of Senior Indebtedness remaining unpaid
until all such Senior Indebtedness has been paid in full, after giving
effect to any concurrent payment, distribution or provision therefor to
or for the holders of such Senior Indebtedness.
(d) The holders of Senior Indebtedness (or any portion of them)
may, with respect to the Senior Indebtedness and any and all collateral
therefor and guaranties thereof, at any time and from time to time,
without the consent of or notice to the holders of the Subordinated
Debt, without incurring responsibility to the holders of the
Subordinated Debt and without impairing or releasing the subordination
provisions or the obligations hereunder of the holders of the
Subordinated Debt to the holders of Senior Indebtedness, but subject to
the following proviso, agree to amend, waive, supplement or otherwise
modify the terms or conditions of any of the Senior Indebtedness, or
grant extensions of the time of payment or performance of, and make
compromises in respect of, any or all of the Senior Indebtedness
(including, without limitation, releases of collateral held by the
Collateral Agent on behalf of the holders of Senior Indebtedness and
the holders of Subordinated Debt or guaranties of, and settlements
with, the Loan Parties or any other Persons, including any guarantor,
surety or provider of collateral security for the Senior Indebtedness)
and the agreements, instruments and other documents related thereto,
including (without limitation) any one or more of the following: (a)
change the manner, place or terms of payment or extend the time of
payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding or secured; (b) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for the
collection of Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Loan Parties and any other Person;
provided, however, that the holders of the Senior Indebtedness shall
not without the prior written consent of a majority (in aggregate
dollar amount) of the holders of Subordinated Cerberus Notes (i)
increase the principal amount of the Senior Indebtedness outstanding at
any time, or (ii) extend the final maturity date of any Senior
Indebtedness.
(e) (i) The security interests in and liens on the assets of
the Loan Parties granted to the Collateral Agent on behalf of the
Lenders are senior to any security interest and lien on such assets
granted by the Loan Parties to the agent for the holders of the
Subordinated Cerberus Notes and that any such security interest or lien
on such assets granted or claimed to be granted by the Loan Parties to
the holders of the Subordinated Cerberus Notes is subordinate to the
security interests and liens granted to the Collateral Agent on behalf
of the Lenders, regardless of the time or order of attachment or
perfection of any of such liens or security interests, the time or
order of filing of financing statements, the acquisition of purchase
money or other liens or security interests, the time of giving or
failure to give notice of the acquisition or expected acquisition of
purchase money or other liens or security interests, or any other
circumstances whatsoever, notwithstanding any provision of applicable
law relating to perfection or priority to the contrary; provided,
however, notwithstanding the foregoing or any other provision of this
Agreement, in the event that the Collateral Agent does not hold a
valid, perfected and enforceable lien on any assets of any Loan Party,
then the lien subordination herein shall not be effective on any date
with respect to any such assets on which the Junior Agent holds on
behalf of the holders of the Subordinated Cerberus Notes a valid,
perfected and enforceable lien. For purposes of the foregoing
allocation of priorities, any claim of a right of setoff shall be
treated in all respects as a security interest, and no claimed right of
setoff shall be asserted by any creditor to defeat or diminish the
rights or priorities of any other creditor provided for herein.
(ii) The Junior Agent and the Subordinated Creditors hereby
agree, upon the request of the Collateral Agent at any time and from
time to time, to execute such other documents or instruments as may be
reasonably requested by the Collateral Agent further to evidence as a
matter of public record or otherwise the senior priority of the liens
securing the Senior Indebtedness as contemplated by this Agreement.
(iii) The Junior Agent and the holders of the Subordinated
Cerberus Notes hereby acknowledge and agree that the Collateral Agent
will take possession or control of all collateral for which possession
or control is, in the reasonable judgment of the Collateral Agent, the
preferred method of perfection under the relevant provisions of the
Uniform Commercial Code. With respect to any assets of the Loan Parties
in which a security interest may be perfected under the Uniform
Commercial Code or other relevant law by possession or control and in
respect of which the Collateral Agent has taken possession or control
(collectively, "Specified Collateral"), each of the Collateral Agent on
behalf of the Lenders, on the one hand, and the Junior Agent, on behalf
of the holders of the Subordinated Cerberus Notes (collectively, the
"Junior Lenders"), on the other hand (the Collateral Agent and the
Junior Agent, each, an "Agent"), hereby appoints the other Agent as
agent for the purposes of perfecting the other Agent's liens on any of
all Specified Collateral in the possession or control of such Agent;
provided, that, the Agent in possession of any Specified Collateral
shall not have any duty or liability to protect or preserve any rights
of the non-possessing Agent and the Lenders or the Junior Lenders, as
the case may be, pertaining to any such Specified Collateral and,
except for gross negligence or willful misconduct as determined
pursuant to a final non-appealable order of a court of competent
jurisdiction, and the non-possessing Agent and the Lenders or the
Junior Lenders, as the case may be, hereby waives, and releases the
other Agent from, all claims and liabilities arising pursuant to the
possessing Agent's role as bailee with respect to such Specified
Collateral, so long as the possessing Agent shall use the same degree
of care with respect thereto as the possessing Agent uses for similar
property pledged to the possessing Agent as collateral for obligations
of others owing to the possessing Agent. After all Senior Indebtedness
is paid in full, possession, control or the other rights with respect
to any such Specified Collateral remaining shall be immediately
transferred to the Junior Agent. Each of the Lenders and the Junior
Lenders and each Agent (each, a "Secured Party") acknowledges and
agrees that no other Secured Party makes any representation or warranty
whatsoever as to the nature, extent, description, validity or priority
of any Specified Collateral or the security interests in or liens upon
any Specified Collateral.
SECTION 4. No Commencement of Any Proceeding. No holder of any
Subordinated Debt nor any agent therefor shall commence, prosecute or
participate in any action, suit or proceeding seeking to challenge the
validity, enforceability, amount or priority of any Senior Indebtedness or
any liens securing any Senior Indebtedness, unless agreed to in writing by
the Collateral Agent or otherwise required by applicable law or judicial
order.
SECTION 5. Rights of Holders of Subordinated Debt. (a) Upon the
payment in full of all Senior Indebtedness, the holders of the Subordinated
Debt shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Loan Parties made on such Senior Indebtedness until the
principal of, premium, if any, and interest on the Subordinated Debt shall
be paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the holders of the Subordinated Debt would
be entitled except for these subordination provisions, and no payment
pursuant to these subordination provisions to the holders of Senior
Indebtedness by holders of the Subordinated Debt shall, as between the Loan
Parties, their creditors other than holders of Senior Indebtedness, and the
holders of the Subordinated Debt, be deemed to be a payment by the Loan
Parties to or on account of the Senior Indebtedness. It is understood that
these subordination provisions are intended solely for the purpose of
defining the relative rights of the holders of the Subordinated Debt, on
the one hand, and the holders of the Senior Indebtedness, on the other
hand.
(b) If any payment or distribution to which the holders of the
Subordinated Debt would otherwise have been entitled but for the provisions
of this Agreement shall have been applied, pursuant to the provisions of
this Agreement to the payment of all amounts payable under Senior
Indebtedness, then, and in such case, the holders of the Subordinated Debt
shall be entitled to receive from the holders of such Senior Indebtedness
any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount required to make payment in full, of
such Senior Indebtedness.
(c) Nothing contained in these subordination provisions is
intended to or shall impair, as among the Loan Parties and the holders of
the Subordinated Debt, the obligation of the Loan Parties, which is
absolute and unconditional, to pay to the holders of the Subordinated Debt
as and when the same shall become due and payable in accordance with the
terms thereof, or is intended to or shall affect the relative rights of the
holders of the Subordinated Debt and creditors of the Loan Parties other
than the holders of the Senior Indebtedness, nor shall anything herein
prevent the holders of the Subordinated Debt from exercising all remedies
otherwise permitted by applicable law upon default, subject in each case to
the rights, if any, of the holders of the Senior Indebtedness set forth
herein.
(d) The holders of the Subordinated Debt will not exercise any
claim, remedy or right that they may now have or hereafter acquire against
any Loan Party that arises under, out of or in connection with the
Subordinated Debt, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, including, without
limitation, the right to take or receive from any Loan Party, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and
until all of the Senior Indebtedness shall have been paid in full (or, in
the case of letters of credit, collateralized in full and in cash);
provided, however, that notwithstanding the foregoing, (i) the holders of
the Subordinated Debt may (A) ask or make demand in respect of payments
permitted to be received by Section 2(b) of this Agreement, (B) exercise
any and all of their rights and remedies in respect of conversion to equity
of any Subordinated Debt, and (C) sell, assign or otherwise transfer any
and all of the Subordinated Debt and their rights relating thereto, subject
to the provisions of this Agreement (including, without limitation, the
transfer restrictions set forth in Section 7 hereof), and (ii) if an event
of default with respect to the Subordinated Debt shall have occurred and be
continuing, the holders of the Subordinated Debt may (v) accelerate any or
all of the Subordinated Debt, (w) file and prosecute a lawsuit to collect,
or otherwise enforce, subject to the provisions of this Agreement, any and
all of the rights in respect of, the Subordinated Debt, (x) commence, or
join with any other creditor in commencing, any proceeding referred to in
Section 2(a) of this Agreement against the Borrower or any Loan Party, (y)
exercise the rights of such holders in any proceeding referred to in
Section 2(a) of this Agreement, subject to the terms of this Agreement, and
(z) realize upon and exercise any and all remedies in respect of any assets
securing the Subordinated Cerberus Notes following, in the case of any
assets of the Loan Parties upon which the Collateral Agent has a valid,
perfected and enforceable lien, (A) written notice to the agent for the
holders of the Senior Indebtedness, and (B) the expiration of 180 days,
unless prior to the end of such 180-day period, the Collateral Agent shall
have commenced and be pursuing enforcement of its liens on such assets in a
commercially reasonable manner (it being recognized that the Collateral
Agent shall have no duties or obligations to the holders of the
Subordinated Cerberus Notes in so doing.
(e) Upon any payment or distribution of assets or securities
referred to in this Agreement, the holders of the Subordinated Debt shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding up, liquidation or
reorganization proceedings are pending, or upon a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person making such payment or distribution, delivered to the
holders of the Subordinated Debt for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other Indebtedness of the Loan Parties, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to these subordination
provisions.
(f) The failure to make a payment on account of principal of,
premium, if any, or interest on the Subordinated Debt by reason of any
provision of these subordination provisions will not be construed as
preventing the occurrence of an event of default under such Subordinated
Debt.
(g) Nothing contained herein shall prevent the Loan Parties,
except under the conditions described in Sections 2 and 3, from making
payments of interest on the Subordinated Debt, on the terms set forth in
the instruments or agreements evidencing the Subordinated Debt as of the
date of this Agreement, to the holders entitled thereto unless, at least
two Business Days prior to the date upon which such payment becomes due and
payable, the relevant representative shall have received the written notice
provided for in Section 2(b). The Borrower shall give prompt written notice
to the relevant representative of any dissolution, winding up, liquidation
or reorganization of any Loan Party.
SECTION 6. Subordination Legend; Further Assurances. The Borrower
will xxxx its books of account in such a manner as shall be effective to
give proper notice of the effect of this Agreement, and the Subordinated
Creditors shall place the following legend on the Subordinated Cerberus
Notes:
"The indebtedness evidenced by this Note is subordinated to the
prior payment in full of the Senior Indebtedness (as defined in
the Subordination Agreement hereinafter referred to) pursuant to,
and to the extent provided in, the Subordination Agreement dated
as of July __, 2002 (as amended, modified or restated from time to
time in the manner provided therein, collectively, the
"Subordination Agreement"), made by and among ICG Communication,
Inc., as the Borrower, Xxxxxxxxx L.L.C. and Xxxxxx Xxxxxxx & Co.,
Incorporated, as the holders (the "Subordinated Creditors") of the
Subordinated Cerberus Notes (as defined therein), Cerberus Capital
Management, L.P., as agent for the Subordinated Creditors, and the
Administrative Agent and the Collateral Agent (each as defined in
the Credit Agreement referred to therein) on behalf of the Lenders
(as defined in such Credit Agreement)."
The Subordinated Creditors and the Borrower will, at their own expense and
at any time and from time to time, promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or desirable, or that the Collateral Agent may reasonably
request, in order to protect any right or interest granted or purported to
be granted hereby or to enable the Collateral Agent or any Lender to
exercise and enforce its rights and remedies hereunder.
SECTION 7. Agreements in Respect of Subordinated Debt. (a) The
Subordinated Creditors will not sell, assign, pledge, encumber or otherwise
dispose of the Subordinated Debt unless such sale, assignment, pledge,
encumbrance or disposition is to a party that agrees to be bound by this
Agreement, and any sale, assignment, pledge, encumbrance or other
disposition to a party that does not agree to be bound by this Agreement
shall be void. Each party to this Agreement agrees that the Subordinated
Debt shall remain expressly subject to this Agreement notwithstanding such
assignment, pledge, encumbrance or disposition.
(b) The Subordinated Creditors will not permit the terms of any of
the Subordinated Debt to be changed in such a manner as to have an adverse
effect upon the rights or interests of the Collateral Agent or any Lender
hereunder.
(c) The Subordinated Creditors shall promptly notify the Collateral
Agent of the occurrence of any default under the Subordinated Debt.
SECTION 8. Agreement by the Borrower. The Borrower agrees that it
will not make any payment of the Subordinated Debt, or take any other
action, in contravention of the provisions of this Agreement.
SECTION 9. Purchase Option. (a) Any holder of a Subordinated
Cerberus Note that is controlled or managed by Cerberus Capital Management,
L.P. or any affiliate thereof, or any other holder of a Subordinated
Cerberus Note that is designated to the Collateral Agent in writing by
Cerberus Capital Management, L.P. or any affiliate thereof as having rights
under this Section 9 (the "Electing Junior Lender") shall have the option
at any time upon not less than 10 Business Days' prior written notice to
the Collateral Agent to purchase all but not less than all of the Senior
Indebtedness from the Collateral Agent and the Lenders. Any such notice
from the Electing Junior Lender to the Collateral Agent shall be
irrevocable. If more than one holder of the Subordinated Cerberus Notes
shall have delivered a notice indicating its intention to purchase all of
the Senior Indebtedness, the Collateral Agent and the Lenders shall have no
obligations with respect to such notices other than with respect to the
first such notice received by the Collateral Agent.
(b) On the date specified by the Electing Junior Lender in such
notice (which shall not be less than 10 days, nor more than 30 days, after
the receipt by the Collateral Agent of the notice from the Electing Junior
Lender of its election to exercise such option), the Collateral Agent and
the Lenders shall, subject to any required approval of any court or other
regulatory or governmental authority then in effect, if any, sell to the
Electing Junior Lender, and the Electing Junior Lender shall purchase from
the Collateral Agent and the Lenders, the Senior Indebtedness, together
with their interests in all assets of the Loan Parties securing the Senior
Indebtedness (collectively, "Senior Collateral").
(c) Upon the date of such purchase and sale, the Electing Junior
Lender shall pay to the Collateral Agent and the Lenders in cash as the
purchase price therefor the full amount (at par value) of all Senior
Indebtedness then outstanding and unpaid (including principal, interest,
early termination and other fees and expenses, including reasonable
out-of-pocket attorneys' fees and legal expenses).
(d) Such purchase price shall be remitted by wire transfer in
Federal funds to the bank account of the Agent for the benefit of the
Lenders, as the Agent may designate in writing to the Junior Agent and the
Electing Junior Lender for such purposes. Interest shall be calculated to,
but excluding, the Business Day on which such purchase and sale shall occur
if the amounts so paid by the Electing Junior Lender to the bank accounts
designated by the Lenders are received in such bank accounts prior to 11:00
a.m. New York time, and interest shall be calculated to and including such
Business Day if the amounts so paid by the Electing Junior Lender to such
bank accounts are received in such bank accounts later than 11:00 a.m. New
York time.
(e) Such purchase shall be expressly made without representation
or warranty of any kind by any of the Collateral Agent or the Lenders as to
the Senior Indebtedness, the Collateral or otherwise, and without recourse
to any of the Collateral Agent and the Lenders, except that each Lender
shall represent and warrant: (i) the amount of the Senior Indebtedness
being purchased from it (but without representation or warranty as to the
collectability, validity or enforceability of such Senior Indebtedness);
(ii) that such Lender owns such Senior Indebtedness free and clear of any
liens or encumbrances created by it; and (iii) that such Lender has the
right to assign such Senior Indebtedness and the assignment is duly
authorized by it. Upon the purchase by the Electing Junior Lender of the
Senior Indebtedness, the Electing Junior Lender agrees to indemnify and
hold harmless the Collateral Agent and the Lenders from and against all
loss, cost, damage or expense (including attorneys' fees and legal
expenses) suffered or incurred by the Collateral Agent or the Lenders
arising from or in any way related to the acts or omissions of such Junior
Lender after the purchase.
SECTION 10. Continuation of Senior Indebtedness; No Fiduciary
Duty. Without the necessity of any reservation of rights against or any
notice to or assent by holders of the Subordinated Debt, subject to the
provisions of Section 3(d) and Section 3(e) hereof, any demand for payment
of any of the Senior Indebtedness may be rescinded, in whole or in part,
and any of the Senior Indebtedness may be continued or extended, and the
Collateral Agent and the Lenders may exercise or refrain from exercising
any rights and remedies against the Loan Parties and the assets securing
the Senior Indebtedness, all without impairing, abridging, releasing or
affecting the subordination provisions or any of the other agreements or
obligations of holders of the Subordinated Debt or the Loan Parties.
Subject to the provisions of Section 3(e) hereof, neither the Collateral
Agent nor any of the Lenders shall have any fiduciary duty to holders of
the Subordinated Debt or any other implied obligation to act or refrain
from acting with respect to the Loan Parties or the collateral therefor, or
with respect to any of the Senior Indebtedness in any manner that is
contrary to what the Collateral Agent or the Lenders may determine from
time to time is in its or their own interests.
SECTION 11. Obligations Hereunder Not Affected. All rights and
interests of the Collateral Agent and the Lenders hereunder, and all
agreements and obligations of the Subordinated Creditors and the Borrower
under this Agreement, shall remain in full force and effect irrespective
of:
(i) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document or any other agreement or instrument
relating thereto;
(ii) subject to the proviso to Section 1(a) hereof and the
proviso to Section 3(d) hereof, any change in the time, manner or place
of payment of, or in any other term of, all or any of the Senior
Indebtedness, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement or the other Loan Documents;
(iii) any taking, exchange, release or non-perfection of any
other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Senior
Indebtedness;
(iv) any manner of application of collateral, or proceeds
thereof, to all or any of the Senior Indebtedness, or any manner of
sale or other disposition of any collateral for all or any of the
Senior Indebtedness or any other assets of the Borrower or its
Subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any other Loan Party; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower, any other Loan
Party or a subordinated creditor.
This Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by the Collateral Agent or any
Lender upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, all as though such payment had not been made.
SECTION 12. Waiver. The Subordinated Creditors and the Borrower
hereby waive promptness, diligence, notice of acceptance and any other
notice with respect to any of the Senior Indebtedness and this Agreement
and any requirement that the Collateral Agent or any Lender protect,
secure, perfect or insure any security interest or lien or any property
subject thereto or exhaust any right or take any action against the
Borrower, any other Loan Party or any other person or entity or any
collateral.
SECTION 13. Representations and Warranties. (a) The Borrower
hereby represents and warrants that the Subordinated Debt now outstanding,
a true and complete copy of the instruments evidencing which have been
furnished to the Collateral Agent, has been duly authorized, issued and
delivered by the Borrower and constitutes the legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance
with its terms, and that there exists no default in respect of the
Subordinated Debt on the Effective Date.
(b) The Subordinated Creditors hereby represent and warrant that
as of the date hereof, the Subordinated Creditors are the legal and
beneficial owners of the Subordinated Debt owing to such parties and now
outstanding, free and clear of any lien, security interest, option or other
charge or encumbrance on the Effective Date.
(c) The Subordinated Creditors hereby represent and warrant that
the Subordinated Creditors have, independently and without reliance upon
the Collateral Agent or any Lender and based on such documents and
information as they have deemed appropriate, made their own credit analyses
and decisions to enter into this Agreement.
SECTION 14. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to the departure by the
Subordinated Creditors or the Borrower herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Collateral
Agent and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 15. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including
telecopier, telegraphic, telex or cable communication) and mailed,
telecopied, telegraphed, telexed, cabled or delivered to it, if to the
Borrower, at the address specified in the Security Agreement; if to any of
the Subordinated Creditors, at the address and to the attention of the
person listed on the counterpart hereto; if to the Junior Agent, at 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxx X. Xxxxxxx;
and if to the Administrative Agent, the Collateral Agent or any Lender, at
its address specified in the Credit Agreement, or as to each party, at such
other address as shall be designated by such party in a written notice to
each other party. All such notices and other communications shall, when
mailed, telegraphed, telecopied or telexed, be effective three days after
being deposited in the mails or, if sent by overnight courier, on the next
Business Day following the day of delivery to the overnight courier, or, if
on a Business Day, when delivered to the telegraph company, transmitted by
telecopier or confirmed by telex answerback, respectively, and if on other
than a Business Day, on the next succeeding Business Day following such
delivery to the telegraph company, transmittal by telecopier or telex
answerback confirmation.
SECTION 16. No Waiver; Remedies. No failure on the
part of the Collateral Agent or any Lender to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 17. Continuing Agreement; Assignments Under the Credit
Agreement. This Agreement is a continuing agreement and shall (i) remain in
full force and effect until the later of the payment in full of the Senior
Indebtedness and the Termination Date, (ii) be binding upon the
Subordinated Creditors, the Borrower and their respective successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Collateral Agent, the Lenders and their respective successors, transferees
and assigns. Without limiting the generality of the foregoing clause (iii),
any Lender may assign or otherwise transfer all or any portion of its
rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it
and the Note or Notes held by it, if any) to any other Person, and such
Person shall thereupon become vested with all the rights in respect thereof
granted to such Lender herein or otherwise, in each case as provided in
Section 8.07 of the Credit Agreement.
SECTION 18. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, United
States.
IN WITNESS WHEREOF, the Subordinated Creditors and the
Borrower have caused this Agreement to be duly executed and delivered by
its officer thereunto duly authorized as of the date first above written.
ICG COMMUNICATIONS, INC.
By
---------------------------------
Title:
By
---------------------------------
Title:
HOLDERS OF SUBORDINATED
CERBERUS NOTES:
Notice Address: XXXXXXXXX L.L.C.
By
---------------------------------
Title:
Notice Address: XXXXXX XXXXXXX & CO., INCORPORATED
By
---------------------------------
Title:
ACCEPTED AND AGREED:
ROYAL BANK OF CANADA, as
Administrative Agent and as Collateral Agent
By
-----------------------------------
Title:
By
----------------------------------
Title:
EXHIBIT I
FORM OF MORTGAGE
DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING [(LEASEHOLD ESTATE)] (COLORADO)
by and from
[ ], "Grantor"
----------------------------------
to
Public Trustee of [_________] County, Colorado, "Trustee"
for the benefit of
ROYAL BANK OF CANADA, in its capacity as collateral agent, "Beneficiary"
Dated as of [________], 2002
Location:
Municipality:
County:
State: Colorado
THE SECURED PARTY (BENEFICIARY) DESIRES THIS FIXTURE FILING
TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE
DESCRIBED HEREIN.
PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
File # 7664/73
DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (LEASEHOLD ESTATE) (COLORADO)
THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND
LEASES AND FIXTURE FILING [(LEASEHOLD ESTATE)] (Colorado) (this "Deed of
Trust") is dated as of [________], 2002 by and from [ ], a [ ] Corporation
("Grantor"), whose address is 000 Xxxxxxxxx Xxxxx Xxxx, Xxxxxxxxx, XX 00000
to the Public Trustee of [_________] County, Colorado ("Trustee"), for the
benefit of ROYAL BANK OF CANADA, as Collateral Agent (in such capacity,
"Agent") for the lenders party to the Credit Agreement (defined below)
(such lenders, together with their respective successors and assigns,
collectively, the "Lenders"), having an address at 0 Xxxxxxx Xxxxx, Xxx
Xxxx, XX 00000 (Agent, together with its successors and assigns,
"Beneficiary").
ARTICLE 1
DEFINITIONS
-----------
Section 1.1 Definitions. All capitalized terms used herein
without definition shall have the respective meanings ascribed to them in
that certain Credit Agreement dated as of July 24, 2002 among Grantor, the
Initial Lenders, Agent and Wachovia Bank, National Association, as
documentation agent (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"). As used herein, the following terms
shall have the following meanings:
(a) "Event of Default": (1) The occurrence of an Event of
Default under and as defined in the Credit Agreement, or (2) the default by
Grantor in the observance or performance of any covenant, condition or
agreement expressly set forth in this Deed of Trust and the continuance of
such default unremedied for a period of: (x) in the case of a default that
is susceptible to cure by the payment of money, 2 Business Days after same
becomes due and payable, or (y) in the case of all other such defaults, 30
days after the earlier of the date on which (i) a Responsible Officer
becomes aware of such failure or (ii) receipt of written notice thereof
from Beneficiary, the Documentation Agent or any Lender.
(b) "Indebtedness": (1) All indebtedness created by the Loan
Documents of Grantor to Beneficiary and the Lenders, including, without
limitation, the sum of all (a) principal, interest and other amounts owing
under or evidenced or secured by the Loan Documents, and (b) principal,
interest and other amounts which may hereafter be lent by Beneficiary or
any of the Lenders under or in connection with the Credit Agreement or any
of the other Loan Documents, whether evidenced by a promissory note or
other instrument which, by its terms, is secured hereby, and (2) all other
indebtedness, obligations and liabilities now or hereafter existing of any
kind of Grantor to Beneficiary or any of the Lenders under documents which
recite that they are intended to be secured by this Deed of Trust. The
final maturity date of the Indebtedness is May 31, 2005.
(c) "Mortgaged Property": All of Grantor's right, title and
interest in and to (1) the fee [leasehold] interest in the real property
described in Exhibit A [created by the Subject Lease (defined below),
together with all rights and interests of Grantor in and to the Subject
Lease] and any greater estate therein [in such real property] as hereafter
may be acquired by Grantor (the "Land"), (2) all improvements now owned or
hereafter acquired by Grantor, now or at any time situated, placed or
constructed upon the Land (the "Improvements"; the Land and Improvements
are collectively referred to as the "Premises"), (3) all materials,
supplies, equipment, apparatus and other items of personal property now
owned or hereafter acquired by Grantor and now or hereafter attached to,
installed in or used in connection with any of the Improvements or the
Land, and water, gas, electrical, telephone, storm and sanitary sewer
facilities and all other utilities whether or not situated in easements
(the "Fixtures"), (4) all goods, accounts, general intangibles,
instruments, documents, chattel paper and all other personal property of
any kind or character, including such items of personal property as defined
in the UCC (defined below), now owned or hereafter acquired by Grantor and
now or hereafter affixed to, placed upon, used in connection with, arising
from or otherwise related to the Premises (the "Personalty"), (5) all
reserves, escrows or impounds required under the Credit Agreement and all
deposit accounts maintained by Grantor with respect to the Mortgaged
Property (the "Deposit Accounts"), (6) all leases, licenses, concessions,
occupancy agreements or other agreements (written or oral, now or at any
time in effect) which grant to any Person, [other than Grantor], a
possessory interest in, or the right to use, all or any part of the
Mortgaged Property, together with all related security and other deposits
(the "Leases"), (7) all of the rents, revenues, royalties, income,
proceeds, profits, security and other types of deposits, and other benefits
paid or payable by parties to the Leases for using, leasing, licensing
possessing, operating from, residing in, selling or otherwise enjoying the
Mortgaged Property (the "Rents"), (8) all other agreements, such as
construction contracts, architects' agreements, engineers' contracts,
utility contracts, maintenance agreements, management agreements, service
contracts, listing agreements, guaranties, warranties, permits, licenses,
certificates and entitlements in any way relating to the construction, use,
occupancy, operation, maintenance, enjoyment or ownership of the Mortgaged
Property (the "Property Agreements"), (9) all rights, privileges,
tenements, hereditaments, rights-of-way, easements, appendages and
appurtenances appertaining to the foregoing, (10) all property tax refunds
payable with respect to the Mortgaged Property (the "Tax Refunds"), (11)
all accessions, replacements and substitutions for any of the foregoing and
all proceeds thereof (the "Proceeds"), (12) all insurance policies,
unearned premiums therefor and proceeds from such policies covering any of
the above property now or hereafter acquired by Grantor (the "Insurance"),
and (13) all awards, damages, remunerations, reimbursements, settlements or
compensation heretofore made or hereafter to be made by any governmental
authority pertaining to any condemnation or other taking (or any purchase
in lieu thereof) of all or any portion of the Land, Improvements, Fixtures
or Personalty (the "Condemnation Awards"). As used in this Deed of Trust,
the term "Mortgaged Property" shall mean all or, where the context permits
or requires, any portion of the above or any interest therein.
Notwithstanding anything herein to the contrary, in no event shall
Mortgaged Property include Grantor's rights under contracts and agreements
(other than (a) Accounts and General Intangibles (as defined in Security
Agreement) for money due or to become due thereunder and (b) any contract
as to which consent for the Lien created hereby has been obtained) which by
their terms prohibit the granting of a security interest or assignment
thereof and are not, because of other applicable law, subject to the
provisions of the UCC rendering such prohibitions ineffective.
(d) "Obligations": All of the agreements, covenants,
conditions, warranties, representations and other obligations of Grantor
(including, without limitation, the obligation to repay the Indebtedness)
under the Credit Agreement and the other Loan Documents.
(e) "Security Agreement": That certain Security Agreement by
and from Grantor and the other grantors referred to therein to Agent dated
as of [___________], 2002, as the same may hereafter be amended,
supplemented or otherwise modified from time to time.
(f) ["Subject Lease": Shall have the meaning set forth in
Exhibit B attached hereto.]
(g) "UCC": The Uniform Commercial Code of Colorado or, if the
creation, perfection and enforcement of any security interest herein
granted is governed by the laws of a state other than Colorado, then, as to
the matter in question, the Uniform Commercial Code in effect in that state.
ARTICLE 2
GRANT
-----
Section 2.1 Grant. To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations,
Grantor GRANTS, BARGAINS, ASSIGNS, SELLS, CONVEYS and CONFIRMS, to Trustee
the Mortgaged Property, subject, however, only to the Permitted Liens, TO
HAVE AND TO HOLD the Mortgaged Property, IN TRUST, WITH POWER OF SALE, and
Grantor does hereby bind itself, its successors and assigns to WARRANT AND
FOREVER DEFEND the title to the Mortgaged Property unto Trustee.
ARTICLE 3
WARRANTIES, REPRESENTATIONS AND COVENANTS
-----------------------------------------
Grantor warrants, represents and covenants to Beneficiary as
follows:
Section 3.1 Title to Mortgaged Property and Lien of this
Instrument. Grantor owns the Mortgaged Property free and clear of any
liens, claims or interests, except the Permitted Liens. This Deed of Trust
creates valid, enforceable first priority liens and security interests
against the Mortgaged Property.
Section 3.2 First Lien Status. Grantor shall preserve and
protect the first lien and security interest status of this Deed of Trust
and the other Loan Documents. If any lien or security interest other than a
Permitted Lien is asserted against the Mortgaged Property, Grantor shall
promptly upon obtaining knowledge of such lien or security interest, and at
its expense, (a) give Beneficiary a detailed written notice of such lien or
security interest (including origin, amount and other terms), and (b) pay
the underlying claim in full or take such other action so as to cause it to
be released or contest the same in compliance with the requirements of the
Credit Agreement (including the requirement of providing a bond or other
security satisfactory to Beneficiary).
Section 3.3 Payment and Performance. Grantor shall pay the
Indebtedness when due under the Loan Documents and shall perform the
Obligations in full when they are required to be performed.
Section 3.4 Replacement of Fixtures and Personalty. Grantor
shall not, without the prior written consent of Beneficiary, permit any of
the Fixtures or Personalty owned or leased by Grantor to be removed at any
time from the Land or Improvements, unless the removed item is removed
temporarily for maintenance and repair or, if removed permanently, is
permitted to be removed by the Credit Agreement.
Section 3.5 Inspection. Grantor shall permit Beneficiary and
the Lenders and their respective agents, representatives and employees,
upon reasonable prior notice to Grantor, [and in compliance with the
Subject Lease,] to inspect the Mortgaged Property and all books and records
of Grantor located thereon, and to conduct such environmental and
engineering studies as Beneficiary or the Lenders may reasonably require,
provided that such inspections and studies shall not materially interfere
with the use and operation of the Mortgaged Property.
Section 3.6 Other Covenants. To the extent permitted by
applicable law, all of the covenants in the Credit Agreement are
incorporated herein by reference and, together with covenants in this
Article 3, shall be covenants running with the Land.
Section 3.7 Insurance; Condemnation Awards and Insurance Proceeds
(a) Insurance. Grantor shall maintain or cause to be
maintained, with responsible and reputable insurers, insurance with respect
to the Mortgaged Property against loss or damage of the kinds customarily
carried or maintained under similar circumstances by corporations engaged
in similar businesses and owning similar properties in the same general
areas as the Mortgaged Property. Each such policy of insurance shall name
Beneficiary as the loss payee (or, in the case of liability insurance, an
additional insured) thereunder for the ratable benefit of the Lenders, and
shall provide for at least 30 days' prior written notice of any material
modification or cancellation of such policy. In addition to the foregoing,
if any portion of the Mortgaged Property is located in an area identified
by the Federal Emergency Management Agency as an area having special flood
hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968 (and any amendment or successor act
thereto), then Grantor shall maintain, or cause to be maintained, with a
responsible and reputable insurer, flood insurance, to the extent
available, in an amount sufficient to comply with all applicable rules and
regulations promulgated pursuant to such Act.
(b) Condemnation Awards. [Subject to the terms of the Subject
Lease,] Grantor assigns all Condemnation Awards to Beneficiary and
authorizes Beneficiary to collect and receive such Condemnation Awards [(to
the extent Grantor is entitled thereto under the Subject Lease)] and to
give proper receipts and acquittances therefor, subject to the terms of the
Credit Agreement.
(c) Insurance Proceeds. [Subject to the terms of the Subject
Lease,] Grantor assigns to Beneficiary all proceeds of any insurance
policies insuring against loss or damage to the Mortgaged Property. Grantor
authorizes Beneficiary to collect and receive such proceeds [(to the extent
Grantor is entitled thereto under the Subject Lease)] and authorizes and
directs the issuer of each of such insurance policies to make payment for
all such losses (to the extent Grantor is entitled thereto under the
Subject Lease) directly to Beneficiary, instead of to Grantor and
Beneficiary jointly.
[ARTICLE 4
LEASEHOLD DEED OF TRUST PROVISIONS
----------------------------------
Section 4.1 Representations; Warranties; Covenants. Grantor
hereby represents, warrants and covenants that:
(a) (1) Except as set forth in Exhibit B hereof, the Subject
Lease is unmodified and in full force and effect, (2) all rent and other
charges therein have been paid to the extent they are payable to the date
hereof, (3) Grantor enjoys the quiet and peaceful possession of the
Premises, (4) to the best of its knowledge, Grantor is not in default under
any of the terms thereof and there are no circumstances which, with the
passage of time or the giving of notice or both, would constitute an event
of default thereunder, (5) to the best of Grantor's knowledge, the lessor
thereunder is not in default under any of the terms or provisions thereof
on the part of the lessor to be observed or performed;
(b) Grantor shall promptly pay, when due and payable, the rent and other
charges payable pursuant to the Subject Lease, and will timely perform and
observe all of the other terms, covenants and conditions required to be
performed and observed by Grantor as lessee under the Subject Lease;
(c) Grantor shall notify Beneficiary in writing of any default
by Grantor in the performance or observance of any terms, covenants or
conditions on the part of Grantor to be performed or observed under the
Subject Lease within three (3) days after Grantor obtains knowledge of such
default;
(d) Grantor shall, immediately upon receipt thereof, deliver a
copy of each notice given to Grantor by the lessor pursuant to the Subject
Lease and promptly notify Beneficiary in writing of any default by the
lessor in the performance or observance of any of the terms, covenants or
conditions on the part of the lessor to be performed or observed
thereunder;
(e) Unless required under the terms of the Subject Lease,
Grantor shall not, without the prior written consent of Beneficiary (which
may be granted or withheld in Beneficiary's sole and absolute discretion)
terminate, modify or surrender the Subject Lease, and any such attempted
termination, modification or surrender without Beneficiary's written
consent shall be void; and
(f) Grantor shall, within twenty (20) days after written
request from Beneficiary, use its best efforts to obtain from the lessor
and deliver to Beneficiary a certificate setting forth the name of the
tenant under the Subject Lease and stating that the Subject Lease is in
full force and effect, is unmodified or, if the Subject Lease has been
modified, the date of each modification (together with copies of each such
modification), that no notice of termination thereof has been served on
Grantor, stating that no default or event which with notice or lapse of
time (or both) would become a default is existing under the Subject Lease
(or if any such default or event is existing, specifying the nature of such
default or event), stating the date to which rent has been paid, and
containing such other statements and representations as may be requested by
Beneficiary.
Section 4.2 No Merger. So long as any of the Indebtedness or
the Obligations remain unpaid or unperformed, the fee title to and the
leasehold estate in the Premises subject to the Subject Lease shall not
merge but shall always be kept separate and distinct notwithstanding the
union of such estates in the lessor or Grantor, or in a third party, by
purchase or otherwise. If Grantor acquires the fee title or any other
estate, title or interest in the Premises, or any part thereof, the lien of
this Deed of Trust shall attach to, cover and be a lien upon such acquired
estate, title or interest and the same shall thereupon be and become a part
of the Mortgaged Property with the same force and effect as if specifically
encumbered herein. Grantor agrees to execute all instruments and documents
that Beneficiary or Trustee may reasonably require to ratify, confirm and
further evidence the lien of this Deed of Trust on the acquired estate,
title or interest. Furthermore, Grantor hereby appoints Beneficiary as its
true and lawful attorney-in-fact to execute and deliver, following an Event
of Default, all such instruments and documents in the name and on behalf of
Grantor. This power, being coupled with an interest, shall be irrevocable
as long as any portion of the Indebtedness remains unpaid.
Section 4.3 Beneficiary as Lessee. If the Subject Lease shall
be terminated prior to the natural expiration of its term due to default by
Grantor or any tenant thereunder, and if, pursuant to the provisions of the
Subject Lease, Beneficiary or its designee shall acquire from the lessor a
new lease of the Premises, Grantor shall have no right, title or interest
in or to such new lease or the leasehold estate created thereby, or renewal
privileges therein contained.
Section 4.4 No Assignment. Notwithstanding anything to the
contrary contained herein, this Deed of Trust shall not constitute an
assignment of the Subject Lease within the meaning of any provision thereof
prohibiting its assignment and Beneficiary shall have no liability or
obligation thereunder by reason of its acceptance of this Deed of Trust.
Beneficiary shall be liable for the obligations of the tenant arising out
of the Subject Lease for only that period of time for which Beneficiary is
in possession of the Premises or has acquired, by foreclosure or otherwise,
and is holding all of Grantor's right, title and interest therein.]
ARTICLE 5
DEFAULT AND FORECLOSURE
Section 5.1 Remedies. Upon the occurrence and continuance of an
Event of Default, Beneficiary may, at Beneficiary's election and by or
through Trustee or otherwise, exercise any or all of the following rights,
remedies and recourses:
(a) Acceleration. Subject to any provisions of the Loan
Documents providing for the automatic acceleration of the Indebtedness upon
the occurrence of certain Events of Default, declare the Indebtedness to be
immediately due and payable, without further notice, presentment, protest,
notice of intent to accelerate, notice of acceleration, demand or action of
any nature whatsoever (each of which hereby is expressly waived by
Grantor), whereupon the same shall become immediately due and payable.
(b) Entry on Mortgaged Property. Subject to [the terms of the
Subject Lease and] applicable law, enter the Mortgaged Property and take
exclusive possession thereof and of all books, records and accounts
relating thereto or located thereon. If Grantor remains in possession of
the Mortgaged Property after an Event of Default and without Beneficiary's
prior written consent, subject to the terms of the Subject Lease and
applicable law, Beneficiary may invoke any legal remedies to dispossess
Grantor.
(c) Operation of Mortgaged Property. Hold, lease, develop,
manage, operate or otherwise use the Mortgaged Property upon such terms and
conditions as Beneficiary may deem reasonable under the circumstances
(making such repairs, alterations, additions and improvements and taking
other actions, from time to time, as Beneficiary deems necessary or
desirable), all in a manner consistent with the terms of the Subject Lease,
and apply all Rents and other amounts collected by Trustee in connection
therewith in accordance with the provisions of Section 5.7.
(d) Foreclosure and Sale. Institute proceedings for the
complete foreclosure of this Deed of Trust, either by judicial action or by
power of sale, in which case the Mortgaged Property may be sold for cash or
credit in one or more parcels as Trustee may deem best or as Beneficiary
may direct [subject to terms of the Subject Lease]. Foreclosure through
Trustee will be initiated by Beneficiary's filing of its notice of election
and demand for sale with Trustee. If the Beneficiary invokes the power of
sale, the Public Trustee shall give notice of sale and shall sell the
Mortgaged Property according to the laws of the State of Colorado. With
respect to any notices required or permitted under the UCC, Grantor agrees
that ten (10) days' prior written notice shall be deemed commercially
reasonable. At any such sale by virtue of any judicial proceedings, power
of sale, or any other legal right, remedy or recourse, the title to and
right of possession of any such property shall pass to the purchaser
thereof, and to the fullest extent permitted by law, Grantor shall be
completely and irrevocably divested of all of its right, title, interest,
claim, equity, equity of redemption, and demand whatsoever, either at law
or in equity, in and to the property sold and such sale shall be a
perpetual bar both at law and in equity against Grantor, and against all
other Persons claiming or to claim the property sold or any part thereof,
by, through or under Grantor. To the extent permitted by applicable law,
Beneficiary, Beneficiary's designee or any of the Lenders may be a
purchaser at such sale and if Beneficiary is the highest bidder,
Beneficiary may credit the portion of the purchase price that would be
distributed to Beneficiary against the Indebtedness in lieu of paying cash.
In the event this Deed of Trust is foreclosed by judicial action,
appraisement of the Mortgaged Property is waived. Beneficiary shall be
entitled to collect all costs and expenses incurred in pursuing the
remedies provided herein, including, without limitation, reasonable
attorneys' fees and costs of appraisals and title evidence. Except as
otherwise provided by applicable law or in Section 5.7 below, the Public
Trustee shall apply the proceeds of sale in the following order: (a) to all
costs and expenses of the sale, including, without limitation, the Public
Trustee's fees, attorneys' fees and costs of appraisals and title evidence;
(b) to all sums secured by this Deed of Trust (in such priority and
proportions as Beneficiary in its discretion shall deem proper); and (c)
the excess, if any, to the person or persons legally entitled thereto.
Nothing in this Section 5.1(d) shall be deemed to contradict or add to the
requirements and procedures now or hereafter specified by Colorado law, and
any such inconsistency shall be resolved in favor of Colorado law
applicable at the time of foreclosure.
(e) Receiver. Make application to a court of competent
jurisdiction for, and obtain from such court as a matter of strict right
and, to the extent permitted by applicable law, without notice to Grantor
or regard to the adequacy of the Mortgaged Property for the repayment of
the Indebtedness, the appointment of a receiver of the Mortgaged Property,
and Grantor irrevocably consents to such appointment. Any such receiver
shall have all the usual powers and duties of receivers in similar cases,
including the full power to rent, maintain and otherwise operate the
Mortgaged Property upon such terms as may be approved by the court, [and in
a manner consistent with the terms of the Subject Lease,] and shall apply
such Rents in accordance with the provisions of Section 5.7.
(f) Other. [Subject to the terms of the Subject Lease,]
exercise all other rights, remedies and recourses granted under the Loan
Documents or otherwise available at law or in equity.
Section 5.2 Separate Sales. To the extent not prohibited under
the Subject Lease, the Mortgaged Property may be sold in one or more
parcels and in such manner and order as Trustee in its sole discretion may
elect; the right of sale arising out of any Event of Default shall not be
exhausted by any one or more sales.
Section 5.3 Remedies Cumulative, Concurrent and Nonexclusive.
Beneficiary, the Lenders and Trustee shall have all rights, remedies and
recourses granted in the Loan Documents and available at law or equity
(including the UCC), which rights (a) shall be cumulated and concurrent,
(b) may be pursued separately, successively or concurrently against Grantor
or others obligated under the Loan Documents, or against the Mortgaged
Property, or against any one or more of them, at the sole discretion of
Beneficiary, the Lenders or Trustee, as the case may be, (c) may be
exercised as often as occasion therefor shall arise, and the exercise or
failure to exercise any of them shall not be construed as a waiver or
release thereof or of any other right, remedy or recourse, and (d) are
intended to be, and shall be, nonexclusive. No action by Beneficiary,
Trustee or the Lenders in the enforcement of any rights, remedies or
recourses under the Loan Documents or otherwise at law or equity shall be
deemed to cure any Event of Default.
Section 5.4 Release of and Resort to Collateral. To the extent
permitted by applicable law, Beneficiary may release, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Mortgaged Property, any part of the
Mortgaged Property without, as to the remainder, in any way impairing,
affecting, subordinating or releasing the lien or security interest created
in or evidenced by the Loan Documents or their status as a first and prior
lien and security interest in and to the Mortgaged Property. For payment of
the Indebtedness, Beneficiary may resort to any other security in such
order and manner as Beneficiary may elect.
Section 5.5 Waiver of Redemption, Notice and Marshalling of
Assets. To the fullest extent permitted by law, Grantor hereby irrevocably
and unconditionally waives and releases (a) all benefit that might accrue
to Grantor by virtue of any present or future statute of limitations or law
or judicial decision exempting the Mortgaged Property from attachment, levy
or sale on execution or providing for any stay of execution, exemption from
civil process, redemption or extension of time for payment, (b) all notices
of any Event of Default or of any election by Trustee or Beneficiary to
exercise or the actual exercise of any right, remedy or recourse provided
for under the Loan Documents, and (c) any right to a marshalling of assets
or a sale in inverse order of alienation.
Section 5.6 Discontinuance of Proceedings. If Beneficiary, the
Lenders or Trustee shall have proceeded to invoke any right, remedy or
recourse permitted under the Loan Documents and shall thereafter elect to
discontinue or abandon it for any reason, Beneficiary, the Lenders or
Trustee, as the case may be, shall have the unqualified right to do so and,
in such an event, Grantor, Beneficiary, the Lenders and Trustee shall be
restored to their former positions with respect to the Indebtedness, the
Obligations, the Loan Documents, the Mortgaged Property and otherwise, and
the rights, remedies, recourses and powers of Beneficiary, the Lenders and
Trustee shall continue as if the right, remedy or recourse had never been
invoked, but no such discontinuance or abandonment shall waive any Event of
Default which may then exist or the right of Beneficiary, the Lenders or
Trustee thereafter to exercise any right, remedy or recourse under the Loan
Documents for such Event of Default.
Section 5.7 Application of Proceeds. The proceeds of any sale
of, and the Rents and other amounts generated by the holding, leasing,
management, operation or other use of the Mortgaged Property pursuant to
the provision of this Deed of Trust, shall, subject to the Credit
Agreement, be applied by Beneficiary or Trustee (or the receiver, if one is
appointed) in the following order unless otherwise required by applicable law:
(a) to the payment of the costs and expenses of taking
possession of the Mortgaged Property and of holding, using, leasing,
repairing, improving and selling the same, including, without limitation
(1) trustee's and receiver's fees and expenses, including the repayment of
the amounts evidenced by any receiver's certificates, (2) court costs, (3)
attorneys' and accountants' fees and expenses, (4) costs of advertisement[,
and (5) the payment of all rent and other charges under the Subject Lease];
(b) to the payment of the Indebtedness and performance of the
Obligations in such manner and order of preference as Beneficiary in its
sole discretion may determine; and
(c) the balance, if any, to the Persons legally entitled thereto.
Section 5.8 Occupancy After Foreclosure. Any sale of the
Mortgaged Property or any part thereof in accordance with Section 5.1(d)
will divest all right, title and interest of Grantor in and to the property
sold. Subject to applicable law [and the Subject Lease,] any purchaser at a
foreclosure sale will receive immediate possession of the property
purchased. If Grantor retains possession of such property or any part
thereof subsequent to such sale, subject to applicable law, Grantor will be
considered a tenant at sufferance of the purchaser, and will, if Grantor
remains in possession after demand to remove, be subject to eviction and
removal, forcible or otherwise, with or without process of law.
Section 5.9 Additional Advances and Disbursements; Costs of
Enforcement.
(a) Upon the occurrence and continuance of an Event of Default,
Beneficiary and each of the Lenders shall have the right, but not the
obligation, to cure such Event of Default in the name and on behalf of
Grantor. All sums advanced and expenses incurred at any time by Beneficiary
or any Lender under this Section 5.9, or otherwise under this Deed of Trust
or any of the other Loan Documents or applicable law, shall bear interest
from the date that such sum is advanced or expense incurred, to and
including the date of reimbursement, computed at the highest rate at which
interest is then computed on any portion of the Indebtedness, and all such
sums, together with interest thereon, shall be secured by this Deed of Trust.
(b) Grantor shall pay all expenses (including reasonable
attorneys' fees and expenses) of or incidental to the perfection and
enforcement of this Deed of Trust and the other Loan Documents, or the
enforcement, compromise or settlement of the Indebtedness or any claim
under this Deed of Trust and the other Loan Documents, and for the curing
thereof, or for defending or asserting the rights and claims of Beneficiary
in respect thereof, by litigation or otherwise. Any costs incurred by
Beneficiary or its attorney as a part of the cost of foreclosure in
conjunction with Grantor's default hereunder shall be deemed allowable by
Trustee in a foreclosure action. Such allowable costs shall include, but
not be limited to, appraisal fees, attorneys' fees and all costs incurred
by Beneficiary or its attorney in conjunction with securing, preserving and
maintaining the Mortgaged Property and any improvements contained thereon,
such as, by way of example and not by way of limitation, costs incurred in
conjunction with the appointment and/or institution of a receivership
(whether or not a receiver be appointed).
Section 5.10 No Mortgagee in Possession. Neither the
enforcement of any of the remedies under this Article 5, the assignment of
the Rents and Leases under Article 6, the security interests under Article
7, nor any other remedies afforded to Beneficiary, any Lender under the
Loan Documents, at law or in equity shall cause Beneficiary or Trustee to
be deemed or construed to be a mortgagee in possession of the Mortgaged
Property, to obligate Beneficiary, any Lender or Trustee to lease the
Mortgaged Property or attempt to do so, or to take any action, incur any
expense, or perform or discharge any obligation, duty or liability
whatsoever under any of the Leases or otherwise.
ARTICLE 6
ASSIGNMENT OF RENTS AND LEASES
------------------------------
Section 6.1 Assignment. In furtherance of and in addition to
the assignment made by Grantor in Section 2.1 of this Deed of Trust,
Grantor hereby absolutely and unconditionally assigns, sells, transfers and
conveys to Trustee (for the benefit of Beneficiary) and to Beneficiary all
of its right, title and interest in and to all Leases, whether now existing
or hereafter entered into, and all of its right, title and interest in and
to all Rents. This assignment is an absolute assignment and not an
assignment for additional security only. So long as no Event of Default
shall have occurred and be continuing, Grantor shall have a revocable
license from Trustee and Beneficiary to exercise all rights extended to the
landlord under the Leases, including the right to receive and collect all
Rents and to hold the Rents in trust for use in the payment and performance
of the Obligations and to otherwise use the same. The foregoing license is
granted subject to the conditional limitation that no Event of Default
shall have occurred and be continuing. Upon the occurrence and during the
continuance of an Event of Default, whether or not legal proceedings have
commenced, and without regard to waste, adequacy of security for the
Obligations or solvency of Grantor, the license herein granted shall
automatically expire and terminate, without notice to Grantor by Trustee or
Beneficiary (any such notice being hereby expressly waived by Grantor to
the extent permitted by applicable law).
Section 6.2 Perfection Upon Recordation. Grantor acknowledges
that Beneficiary and Trustee have taken all actions necessary to obtain,
and that upon recordation of this Deed of Trust Beneficiary and Trustee
shall have, to the extent permitted under applicable law, a valid and fully
perfected, first priority, present assignment of the Rents arising out of
the Leases and all security for such Leases. Grantor acknowledges and
agrees that upon recordation of this Deed of Trust Trustee's and
Beneficiary's interest in the Rents shall, to the extent permitted by
applicable law, be deemed to be fully perfected, "xxxxxx" and enforced as
to Grantor, and to the extent permitted under applicable law, all third
parties, including, without limitation, any subsequently appointed trustee
in any case under Title 11 of the United States Code (the "Bankruptcy
Code"), without the necessity of commencing a foreclosure action with
respect to this Deed of Trust, making formal demand for the Rents,
obtaining the appointment of a receiver or taking any other affirmative
action.
Section 6.3 Bankruptcy Provisions. Without limitation of the
absolute nature of the assignment of the Rents hereunder, Grantor, Trustee
and Beneficiary agree that (a) this Deed of Trust shall constitute a
"security agreement" for purposes of Section 552(b) of the Bankruptcy Code,
(b) the security interest created by this Deed of Trust extends to property
of Grantor acquired before the commencement of a case in bankruptcy and to
all amounts paid as Rents and (c) such security interest shall extend to
all Rents acquired by the estate after the commencement of any case in
bankruptcy.
ARTICLE 7
SECURITY AGREEMENT
------------------
Section 7.1 Security Interest. This Deed of Trust constitutes a
"security agreement" on personal property within the meaning of the UCC and
other applicable law and with respect to the Personalty, Fixtures, Leases,
Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds,
Insurance and Condemnation Awards. To this end, Grantor grants to
Beneficiary a first and prior security interest in the Personalty,
Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Tax
Refunds, Proceeds, Insurance, Condemnation Awards and all other Mortgaged
Property which is personal property to secure the payment of the
Indebtedness and performance of the Obligations, and agrees that
Beneficiary shall have all the rights and remedies of a secured party under
the UCC with respect to such property. Any notice of sale, disposition or
other intended action by Beneficiary with respect to the Personalty,
Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Tax
Refunds, Proceeds, Insurance and Condemnation Awards sent to Grantor at
least ten (10) days prior to any action under the UCC shall constitute
reasonable notice to Grantor. In the event of any inconsistency between the
terms of this Deed of Trust and the terms of the Security Agreement with
respect to the collateral covered both therein and herein, the Security
Agreement shall control and govern to the extent of any such inconsistency.
Section 7.2 Financing Statements. Grantor shall prepare and
deliver to Mortgagee such financing statements, and shall execute and
deliver to Beneficiary, such documents, instruments and further assurances,
in each case in form and substance satisfactory to Beneficiary, as
Beneficiary may, from time to time, reasonably consider necessary to
create, perfect and preserve Beneficiary's security interest hereunder.
Grantor hereby irrevocably authorizes Beneficiary to cause financing
statements and any such other documents, instruments and assurances to be
recorded and filed, at such times and places as may be required or
permitted by law to so create, perfect and preserve such security interest.
Grantor's jurisdiction of organization is the State of Delaware. After the
date of this Deed of Trust, Grantor shall not change its name, type of
organization, organizational identification number (if any), jurisdiction
of organization or location (within the meaning of the UCC) without giving
at least 20 days' prior written notice to Beneficiary.
Section 7.3 Fixture Filing. This Deed of Trust shall also
constitute a "fixture filing" for the purposes of the UCC against all of
the Mortgaged Property which is or is to become fixtures. The information
provided in this Section 7.3 is provided so that this Deed of Trust shall
comply with the requirements of the UCC for a mortgage instrument to be
filed as a financing statement. Grantor is the "Debtor" and its name and
mailing address are set forth in the preamble of this Deed of Trust
immediately preceding Article 1. Beneficiary is the "Secured Party" and its
name and mailing address from which information concerning the security
interest granted herein may be obtained are also set forth in the preamble
of this Deed of Trust immediately preceding Article 1. A statement
describing the portion of the Mortgaged Property comprising the fixtures
hereby secured is set forth in Section 1.1(c) of this Deed of Trust. The
record owner of the Mortgaged Property is Grantor. The employer
identification number of Debtor (Grantor) is [__________]. The
organizational identification number of Debtor (Grantor) is [___________].
ARTICLE 8
CONCERNING THE TRUSTEE
----------------------
Section 8.1 Certain Rights. With the approval of Beneficiary,
Trustee shall have the right to select, employ and consult with counsel.
Trustee shall have the right to rely on any instrument, document or
signature authorizing or supporting any action taken or proposed to be
taken by it hereunder, believed by it in good faith to be genuine. Trustee
shall be entitled to reimbursement for actual, reasonable expenses incurred
by it in the performance of its duties and to reasonable compensation for
Trustee's services hereunder as shall be rendered. Grantor shall, from time
to time, pay the compensation due to Trustee hereunder and reimburse
Trustee for, and indemnify, defend and save Trustee harmless against, all
liability and reasonable expenses which may be incurred by it in the
performance of its duties, including those arising from joint, concurrent,
or comparative negligence of Trustee; however, Grantor shall not be liable
under such indemnification to the extent such liability or expenses result
solely from Trustee's gross negligence or willful misconduct. Grantor's
obligations under this Section 8.1 shall not be reduced or impaired by
principles of comparative or contributory negligence.
Section 8.2 Retention of Money. All moneys received by Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated in any
manner from any other moneys (except to the extent required by law), and
Trustee shall be under no liability for interest on any moneys received by
Trustee hereunder.
Section 8.3 Successor Trustees. If Trustee or any successor
Trustee shall die, resign or become disqualified from acting in the
execution of this trust, or Beneficiary shall desire to appoint a
substitute Trustee, Beneficiary shall have full power to appoint one or
more substitute Trustees and, if preferred, several substitute Trustees in
succession who shall succeed to all the estates, rights, powers and duties
of Trustee. Such appointment may be executed by any authorized agent of
Beneficiary and as so executed, such appointment shall be conclusively
presumed to be executed with authority, valid and sufficient, without
further proof of any action.
Section 8.4 Perfection of Appointment. Should any deed,
conveyance or instrument of any nature be required from Grantor by any
successor Trustee to more fully and certainly vest in and confirm to such
successor Trustee such estates, rights, powers and duties, then, upon
request by such Trustee, all such deeds, conveyances and instruments shall
be made, executed, acknowledged and delivered and shall be caused to be
recorded and/or filed by Grantor.
Section 8.5 Trustee Liability. In no event or circumstance
shall Trustee or any substitute Trustee hereunder be personally liable
under or as a result of this Deed of Trust, either as a result of any
action by Trustee (or any substitute Trustee) in the exercise of the powers
hereby granted or otherwise.
ARTICLE 9
MISCELLANEOUS
-------------
Section 9.1 Notices. Any notice required or permitted to be
given under this Deed of Trust shall be given in accordance with Section
8.02 of the Credit Agreement.
Section 9.2 Covenants Running with the Land. All Obligations
contained in this Deed of Trust are intended by Grantor, Beneficiary and
Trustee to be, and shall be construed as, covenants running with the
Mortgaged Property. As used herein, "Grantor" shall refer to the party
named in the first paragraph of this Deed of Trust and to any subsequent
owner of all or any portion of the Mortgaged Property. All Persons who may
have or acquire an interest in the Mortgaged Property shall be deemed to
have notice of, and be bound by, the terms of the Credit Agreement and the
other Loan Documents; however, no such party shall be entitled to any
rights thereunder without the prior written consent of Beneficiary.
Section 9.3 Attorney-in-Fact. Grantor hereby irrevocably
appoints Beneficiary and its successors and assigns, as its
attorney-in-fact, which agency is coupled with an interest and with full
power of substitution, (a) to execute and/or record any notices of
completion, cessation of labor or any other notices that Beneficiary deems
appropriate to protect Beneficiary's interest, if Grantor shall fail to do
so within ten (10) days after written request by Beneficiary, (b) upon the
issuance of a deed pursuant to the foreclosure of this Deed of Trust or the
delivery of a deed in lieu of foreclosure, to execute all instruments of
assignment, conveyance or further assurance with respect to the Leases,
Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds,
Insurance and Condemnation Awards in favor of the grantee of any such deed
and as may be necessary or desirable for such purpose, (c) to prepare and
file or record financing statements and continuation statements, and to
prepare, execute and file or record applications for registration and like
papers necessary to create, perfect or preserve Beneficiary's security
interests and rights in or to any of the Mortgaged Property, and (d) upon
the occurrence and continuation of an Event of Default, to perform any
obligation of Grantor hereunder, however: (1) Beneficiary shall not under
any circumstances be obligated to perform any obligation of Grantor; (2)
any sums advanced by Beneficiary in such performance shall be added to and
included in the Indebtedness and shall bear interest at the highest rate at
which interest is then computed on any portion of the Indebtedness; (3)
Beneficiary as such attorney-in-fact shall only be accountable for such
funds as are actually received by Beneficiary; and (4) Beneficiary shall
not be liable to Grantor or any other person or entity for any failure to
take any action which it is empowered to take under this Section 9.3.
Section 9.4 Successors and Assigns. This Deed of Trust shall be
binding upon and inure to the benefit of Beneficiary, the Lenders, Trustee
and Grantor and their respective successors and assigns. Grantor shall not,
without the prior written consent of Beneficiary, assign any rights, duties
or obligations hereunder.
Section 9.5 No Waiver. Any failure by Beneficiary, the Lenders
or Trustee to insist upon strict performance of any of the terms,
provisions or conditions of the Loan Documents shall not be deemed to be a
waiver of same, and Beneficiary, the Lenders or Trustee shall have the
right at any time to insist upon strict performance of all of such terms,
provisions and conditions.
Section 9.6 Credit Agreement. If any conflict or inconsistency
exists between this Deed of Trust and the Credit Agreement, the Credit
Agreement shall govern.
Section 9.7 Release or Reconveyance. Upon payment in full of
the Indebtedness and performance in full of the Obligations or upon a sale
or other disposition of the Mortgaged Property permitted by the Credit
Agreement, Beneficiary, at Grantor's request and expense, shall release the
liens and security interests created by this Deed of Trust or reconvey the
Mortgaged Property to Grantor.
Section 9.8 Waiver of Stay, Moratorium and Similar Rights.
Grantor agrees, to the full extent that it may lawfully do so, that it will
not at any time insist upon or plead or in any way take advantage of any
stay, marshalling of assets, extension, redemption or moratorium law now or
hereafter in force and effect so as to prevent or hinder the enforcement of
the provisions of this Deed of Trust or the Indebtedness or Obligations
secured hereby, or any agreement between Grantor and Beneficiary, the
Lenders or any rights or remedies of Beneficiary or Trustee.
Section 9.9 Applicable Law. This Deed of Trust was negotiated
in the State of New York, and the proceeds of the Term Advance have been
disbursed from the State of New York, which state the parties hereto agree
has a substantial relationship to the parties and the underlying
transaction embodied hereby. The parties hereto agree that the provisions
of this Deed of Trust regarding the creation, perfection and enforcement of
the liens and security interests herein granted shall be governed by and
construed under the laws of the state in which the Mortgaged Property is
located; and all other provisions of this Deed of Trust shall be governed
by the laws of the State of New York (including, without limitation,
Section 5-1401 of the General Obligations Law of the State of New York).
Section 9.10 Headings. The Article, Section and Subsection
titles hereof are inserted for convenience of reference only and shall in
no way alter, modify or define, or be used in construing, the text of such
Articles, Sections or Subsections.
Section 9.11 Entire Agreement. This Deed of Trust and the other
Loan Documents embody the entire agreement and understanding between
Grantor and Beneficiary and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof
and thereof. Accordingly, the Loan Documents may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
Section 9.12 Severability. If all or any portion of any
provision of this Deed of Trust shall be held to be invalid, illegal or
unenforceable in any respect or in any jurisdiction, then such invalidity,
illegality or unenforceability shall be limited and construed in such
jurisdiction as if such invalid, illegal or unenforceable provision or
portion thereof were not contained herein or therein.
Section 9.13 Beneficiary as Agents; Successor Agents.
(a) Agent has been appointed to act as Agent hereunder by the
Lenders. Agent shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including, without limitation, the release
or substitution of the Mortgaged Property) in accordance with the terms of
the Credit Agreement, any related agency agreement among Agent and the
Lenders (collectively, as amended, supplemented or otherwise modified or
replaced from time to time, the "Agency Documents") and this Deed of Trust.
Grantor and all other persons shall be entitled to rely on releases,
waivers, consents, approvals, notifications and other acts of Agent,
without inquiry into the existence of required consents or approvals of the
Lenders therefor.
(b) Beneficiary shall at all times be the same Person that is
Agent under the Agency Documents. Written notice of resignation by Agent
pursuant to the Agency Documents shall also constitute notice of
resignation as Agent under this Deed of Trust. Removal of Agent pursuant to
any provision of the Agency Documents shall also constitute removal as
Agent under this Deed of Trust. Appointment of a successor Agent pursuant
to the Agency Documents shall also constitute appointment of a successor
Agent under this Deed of Trust. Upon the acceptance of any appointment as
Agent by a successor Agent under the Agency Documents, that successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Agent as the Beneficiary
under this Deed of Trust, and the retiring or removed Agent shall promptly
(i) assign and transfer to such successor Agent all of its right, title and
interest in and to this Deed of Trust and the Mortgaged Property, and (ii)
execute and deliver to such successor Agent such assignments and amendments
and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Agent of the liens and
security interests created hereunder, whereupon such retiring or removed
Agent shall be discharged from its duties and obligations under this Deed
of Trust. After any retiring or removed Agent's resignation or removal
hereunder as Agent, the provisions of this Deed of Trust and the Agency
Documents shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Deed of Trust while it was the Agent hereunder.
ARTICLE 10
LOCAL LAW PROVISIONS
--------------------
Section 10.1. Inconsistencies. In the event of any
inconsistencies between the terms and conditions of this Article 10 and the
other provisions of this Deed of Trust, the terms and conditions of this
Article 10 shall control and be binding.
Section 10.2. Evidence of Indebtedness. For purposes of this
Deed of Trust, the evidence of the Indebtedness secured hereby shall be a
fully executed original of the Credit Agreement, such that, for example,
the Credit Agreement may be presented to the Trustee as evidence of the
Indebtedness when seeking to foreclose on this Deed of Trust or securing
any partial or complete release of this Deed of Trust, and the Trustee
shall accept a signed original of the Credit Agreement as the original
evidence of indebtedness or "promissory note" for such purposes.
[The remainder of this page has been intentionally left blank]
IN WITNESS WHEREOF, Grantor has on the date set forth in the
acknowledgement hereto, effective as of the date first above written,
caused this instrument to be duly EXECUTED AND DELIVERED by authority duly
given.
GRANTOR:
[___________], a [__________] corporation
By: __________________________________
Name:
Title:
STATE OF __________ )
) ss.:
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this _____
day of _______, 2002, by ________________, as ________ President of [ ], a
[ ] corporation.
WITNESS MY HAND AND OFFICIAL SEAL.
-----------------------------
Notary Public
My Commission Expires:
----------------------------
[Seal]
EXHIBIT A
LEGAL DESCRIPTION
Legal Description of premises located at [_______________________]:
[See Attached Page(s) For Legal Description]
EXHIBIT B
SUBJECT LEASE
The term "Subject Lease" shall mean the agreement of lease described in
this Exhibit B. If more than one agreement of lease is described, the
"Subject Lease" shall mean (a) each lease individually and (b) all such
leases collectively.
EXHIBIT J
FORM OF ESTOPPEL CERTIFICATE AND CONSENT
ESTOPPEL CERTIFICATE AND CONSENT
_________, 2002
To: Royal Bank of Canada, as Administrative Agent
Re: Lease Agreement dated ______________between [Name of
Landlord] ("Landlord") and [Name of Tenant] ("Tenant")
(together with all amendments, modifications and
supplements thereto, the "Lease Agreement")
Ladies and Gentlemen:
Reference is made to the Lease Agreement pursuant to
which, among other things, Tenant is leasing space at the real property
described on Exhibit A annexed hereto (referred to herein as the
"Premises").
Landlord acknowledges that the Tenant has entered into a
Credit Agreement, dated as of July 24, 2002 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement") with certain lenders (the "Lenders") and Royal Bank of Canada,
as administrative agent (together with its successors, in such capacity,
the "Administrative Agent"). Pursuant to certain agreements to be entered
into in connection with the Credit Agreement (as they may be amended,
restated, supplemented or otherwise modified from time to time, together
with the Credit Agreement, the "Loan Documents"), the Tenant's obligations
to the Administrative Agent and the Lenders under the Credit Agreement are
to be secured by, among other things, [a deed of trust or similar
instrument encumbering the leasehold estate created under the Lease
Agreement (the "Deed of Trust") and] a security interest in Tenant's
equipment and trade fixtures now or hereafter located in, on or about the
Premises (the "Equipment and Trade Fixtures"). The Administrative Agent and
the Lenders have requested that you agree to the terms of this letter as a
condition to the Lenders' extension of credit to the Tenant under the
Credit Agreement.
By their signatures below, Administrative Agent and
Landlord, notwithstanding anything to the contrary in the Lease Agreement,
agree as follows:
1. Landlord certifies that (a) Landlord is the landlord
under the Lease Agreement, (b) the Lease Agreement is in full force and
effect and has not been amended, modified, or supplemented except as set
forth on Exhibit B annexed hereto, (c) Landlord has no knowledge of any
defense, offset, claim or counterclaim by or in favor of Landlord against
Tenant under the Lease Agreement or against the obligations of Landlord
under the Lease Agreement, and (d) no notice of default has been given
under or in connection with the Lease Agreement which has not been cured,
and Landlord has no knowledge of the occurrence of any other default under
or in connection with the Lease Agreement.
2. Landlord hereby acknowledges that it shall not
unreasonably withhold its consent to the assignment or transfer of the
Lease Agreement to any nominee of Administrative Agent and the Lenders
pursuant to Administrative Agent's exercise of rights under the Loan
Documents; provided, however, that (a) Landlord is notified of such
assignment or transfer within 5 days thereof, (b) upon any such transfer,
Administrative Agent or its nominee assumes all of Tenant's obligations
under the Lease Agreement (Tenant shall remain liable for all such
obligations) and (c) Administrative Agent or its nominee shall be required
to cure any defaults within the applicable time periods set forth in the
Lease Agreement provided, and to the extent that, such defaults are capable
of cure by Administrative Agent. Landlord further acknowledges that any
change of control of Tenant through exercise of Administrative Agent's
rights under the Loan Documents, including without limitation by
foreclosure on the equity interests of Tenant, shall be permitted without
any requirement that Landlord consent thereto. Subject to the foregoing
provisions of this paragraph, the exercise of remedies by Administrative
Agent under the Loan Documents[, including a foreclosure of the Deed of
Trust,] shall not constitute a default under the Lease Agreement and shall
be permitted without Landlord's consent.
3. Administrative Agent and Tenant may amend, modify,
supplement, renew or substitute the Loan Documents without the consent of
Landlord.
4. Landlord shall send to Administrative Agent a
concurrent copy of any notice of default under the Lease Agreement sent to
Tenant. Landlord shall not terminate the Lease Agreement if Administrative
Agent cures the default within 30 days after receiving such notice from
Landlord or within any longer cure period set forth in the Lease Agreement.
Landlord shall also send to Administrative Agent notice promptly upon
termination of the Lease Agreement. [For any default that cannot be cured
without possession of the Premises, Landlord shall allow such additional
time as Administrative Agent shall reasonably require to prosecute and
complete a foreclosure or equivalent proceeding and obtain such possession.
If Administrative Agent completes a foreclosure on Tenant's interest under
the Lease Agreement, then Landlord shall waive any noncurable defaults.]
5. No surrender or termination (except a surrender upon
the expiration of the term of the Lease Agreement or upon a termination by
Landlord pursuant and subject to the provisions of the Lease Agreement) or
amendment of the Lease Agreement that would have a material adverse effect
on the rights of the Lenders or the Administrative Agent or on the value of
the leasehold estate that constitutes collateral for the Deed of Trust
shall be valid or effective without the prior written consent of
Administrative Agent.
6. If the Lease Agreement is terminated prior to its
expiration date by reason of Tenant's default or rejection of the Lease
Agreement by Tenant in a bankruptcy or insolvency proceeding or for any
other reason, Landlord will enter into a new lease of the Premises (a "New
Lease") with the nominee of Administrative Agent for the remainder of the
term of the Lease Agreement, at the rent and additional rent and upon all
of the covenants, agreements, terms, provisions and limitations contained
in the Lease Agreement, if Administrative Agent requests such a New Lease
within 40 days after the date of termination of the Lease Agreement and if
all sums then due to Landlord under the Lease Agreement are paid to
Landlord.
7. Landlord acknowledges that the Equipment and Trade
Fixtures are and will remain personal property and not fixtures even though
the Equipment and Trade Fixtures may be affixed to or placed in, on or
about the Premises, and that any rights Landlord may have in or to the
Equipment and Trade Fixtures are hereby waived in favor of the rights of
Administrative Agent and the Lenders therein.
8. During the term of the Lease Agreement, Landlord
grants to Administrative Agent a license to enter upon and into the
Premises upon reasonable prior written notice to Landlord at reasonable
times during regular business hours to take possession of, sell or
otherwise enforce its security interest in the Equipment and Trade
Fixtures. Administrative Agent will comply with any security or escort
requirements or other reasonable requirements imposed by Landlord in
accordance with the Lease Agreement. Administrative Agent shall promptly
repair, at Administrative Agent's expense, or reimburse Landlord for any
physical damage to the Premises caused by the conduct of such sale and any
removal of Equipment and Trade Fixtures by or through Administrative Agent
(normal wear and tear excluded).
9. Within the 40-day period after receipt by
Administrative Agent of a notice that the Lease Agreement has been
terminated, Administrative Agent shall have the right, but not the
obligation, to cause the Equipment and Trade Fixtures to be removed from
the Premises provided Administrative Agent pays Landlord all rent and other
charges that would have accrued under the Lease Agreement and would have
been payable by Tenant for the period beginning on the date on which the
Lease Agreement terminated and ending on the last day of such 40-day
period.
10. Notwithstanding anything to the contrary set forth in
this letter or the Lease Agreement, no Lender Party (defined below) shall
have any obligation or liability under this letter, the Lease Agreement or
any New Lease beyond such Lender Party's then interest, if any, in the
Premises, and Landlord shall look exclusively to such interest of such
Lender Party, if any, in the Premises for the payment and discharge of any
obligation or liability imposed upon such Lender Party; provided, however
that to the extent a Lender Party becomes the tenant under the Lease
Agreement or any New Lease, such Lender Party will have obligations and
liabilities thereunder without reference to the foregoing. The term "Lender
Party" means Administrative Agent, the Lenders and their respective
affiliates, nominees or designees.
11. If the Lease Agreement contains a renewal option and
Tenant does not timely exercise it, then Landlord shall promptly notify
Administrative Agent. Administrative Agent shall then have 30 days to
exercise the option on Tenant's behalf.
All notices hereunder to Landlord or to Administrative
Agent shall be in writing and sent to Landlord or to Administrative Agent
at its address set forth on the signature page hereof by telefacsimile, by
United States mail, or by overnight delivery service.
The agreements contained herein shall supplement the
terms of the Lease Agreement and shall continue in effect until Landlord
shall have received Administrative Agent's written certification that all
amounts advanced under the Credit Agreement have been paid in full.
This letter and the rights and obligations of the parties
hereunder shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the state in which the Lease
Agreement is effective, without regard to conflicts of laws principles.
This letter may be executed in any number of several
counterparts. The agreements contained herein may not be modified except by
an agreement in writing signed by Landlord, Administrative Agent and
Tenant, or their respective successors in interest. The agreements
contained herein shall inure to the benefit of and shall be binding upon
Administrative Agent and its successors and assigns and Landlord and its
successors and assigns (including any transferees of the property in which
the Premises is located).
Sincerely yours,
[NAME OF LANDLORD]
By: ___________________________
Name:
Title:
Landlord's Address For Notices:
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Fax: (___) __________________________
AGREED AND ACCEPTED
AS OF ________________:
[TENANT]
By: ________________________________
Name:
Title:
ROYAL BANK OF CANADA,
as Administrative Agent
By: ________________________________
Name:
Title:
Administrative Agent's Address For Notices:
0 Xxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxx
EXHIBIT K
FORM OF DISCLOSURE STATEMENT
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- - - - - - - - - - - - - - - x
: Chapter 11
In re :
: Case No. 00-4238 (PJW)
ICG COMMUNICATIONS, INC. :
et al., : Jointly Administered
-- -- :
Debtors. :
:
- - - - - - - - - - - - - - - x
SUPPLEMENT TO DISCLOSURE STATEMENT WITH RESPECT TO SECOND
AMENDED JOINT PLAN OF REORGANIZATION OF ICG COMMUNICATIONS, INC.,
ET AL., REGARDING MODIFICATION
Dated: August __, 2002
DISCLAIMER
THE INFORMATION CONTAINED IN THIS SUPPLEMENT TO
DISCLOSURE STATEMENT (THE "SUPPLEMENT") IS INCLUDED HEREIN FOR PURPOSES OF
SOLICITING ACCEPTANCES OF THE SECOND AMENDED JOINT PLAN OF REORGANIZATION
AS MODIFIED (THE "MODIFIED PLAN") OF ICG COMMUNICATIONS, INC. AND ITS
AFFILIATED DEBTORS AND DEBTORS IN POSSESSION, AND MAY NOT BE RELIED UPON
FOR ANY PURPOSE OTHER THAN FOR SUCH CLAIM HOLDERS TO DETERMINE HOW TO VOTE
ON THE MODIFIED PLAN. NO PERSON MAY GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS, OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED
IN THIS SUPPLEMENT OR THE DISCLOSURE STATEMENT, REGARDING THE MODIFIED PLAN
OR THE SOLICITATION OF ACCEPTANCES OF THE MODIFIED PLAN.
ALL CREDITORS ARE ADVISED AND ENCOURAGED TO READ THIS
SUPPLEMENT, THE DISCLOSURE STATEMENT AND THE MODIFIED PLAN IN THEIR
ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE MODIFIED PLAN. SUMMARIES AND
STATEMENTS MADE IN THIS SUPPLEMENT ARE QUALIFIED IN THEIR ENTIRETY BY
REFERENCE TO THE MODIFIED PLAN AND THE EXHIBITS AND SCHEDULES ANNEXED TO
THE MODIFIED PLAN, THE DISCLOSURE STATEMENT AND THIS SUPPLEMENT. THE
STATEMENTS CONTAINED IN THIS SUPPLEMENT ARE MADE ONLY AS OF THE DATE
HEREOF, AND THERE CAN BE NO ASSURANCE THAT THE STATEMENTS CONTAINED HEREIN
WILL BE CORRECT AT ANY TIME AFTER THE DATE HEREOF.
THIS SUPPLEMENT HAS BEEN PREPARED IN ACCORDANCE WITH
SECTION 1125 OF THE UNITED STATES BANKRUPTCY CODE AND RULE 3016 OF THE
FEDERAL RULES OF BANKRUPTCY PROCEDURE AND NOT NECESSARILY IN ACCORDANCE
WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER NON-BANKRUPTCY LAW. THIS
SUPPLEMENT HAS BEEN NEITHER APPROVED NOR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC"), NOR HAS THE SEC PASSED UPON THE ACCURACY
OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN. PERSONS OR ENTITIES TRADING
IN OR OTHERWISE PURCHASING, SELLING OR TRANSFERRING SECURITIES OR CLAIMS OF
ICG COMMUNICATIONS, INC. OR ANY OF THE AFFILIATED DEBTORS AND
DEBTORS-IN-POSSESSION IN THESE CASES SHOULD EVALUATE THIS SUPPLEMENT, THE
DISCLOSURE STATEMENT AND THE MODIFIED PLAN IN LIGHT OF THE PURPOSE FOR
WHICH THEY WERE PREPARED.
AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER
ACTIONS OR THREATENED ACTIONS, THIS SUPPLEMENT SHALL NOT CONSTITUTE OR BE
CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, STIPULATION OR WAIVER,
BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. THIS SUPPLEMENT
SHALL NOT BE ADMISSIBLE IN ANY NON- BANKRUPTCY PROCEEDING NOR SHALL IT BE
CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURITIES OR OTHER LEGAL
EFFECTS OF THE MODIFIED PLAN AS TO HOLDERS OF CLAIMS AGAINST, OR EQUITY
INTERESTS IN, ICG COMMUNICATIONS, INC. OR ANY OF THE AFFILIATED DEBTORS AND
DEBTORS-IN-POSSESSION IN THESE CASES.
PRELIMINARY STATEMENT
On April 3, 2002 the Bankruptcy Court approved the
Debtors' Disclosure Statement (the "Original Disclosure Statement") with
Respect to Second Amended Joint Plan of Reorganization of ICG
Communications, Inc., et al. (the "Original Plan"). The Original Disclosure
Statement, among other things, summarized the terms and conditions of the
Original Plan.
The Original Disclosure Statement and Original Plan were
mailed to appropriate creditors and other parties in interest pursuant to
an order entered by the Bankruptcy Court on April 3, 2002 (the "Original
Solicitation Order"), which set forth the procedures for the solicitation
of votes to accept the Original Plan. May 10, 2002 was set as the deadline
to vote on the Original Plan (the "Original Voting Deadline"). The Original
Plan was accepted by all classes of claims entitled to vote. On May 21,
2002 the Bankruptcy Court entered the Findings of Fact, Conclusions of Law
and Order Confirming Second Amended Joint Plan of Reorganization of ICG
Communications, Inc. and its Affiliated Debtors and Debtors in Possession
(the "Original Confirmation Order").
The Original Plan contained certain conditions precedent
to its consummation, including the completion of final documentation
regarding, and the funding of, $65 million of new financing (the "Original
Exit Financing") on the Effective Date. The Original Exit Financing was
predominantly to be funded by funds and accounts managed by Cerberus
Capital Management, L.P. ("CCM"). After the Original Confirmation Order was
entered by the Bankruptcy Court, but before the Effective Date occurred,
CCM requested the inclusion of certain covenants in the Original Exit
Financing. CCM asserted that these additional covenants were both customary
as contemplated by the Original Plan and CCM's commitment letters and
necessary as a result of the Debtors' recent operating results and CCM's
belief that a Material Adverse Change and a Financial Markets Disruption
had occurred (within the meaning of those terms as set forth in CCM's
commitment letters for the Original Exit Financing attached as Exhibits to
the Original Plan). The Debtors believed that the requested covenants were
neither customary nor consistent with the commitment letters for the
Original Exit Financing, and because their inclusion would result in a
significant change to the economics described in the Original Disclosure
Statement, would have been in contravention of the Original Plan. The
Debtors also believe that no Material Adverse Change or Financial Markets
Disruption had occurred. Accordingly, although the Original Plan was
confirmed by the Bankruptcy Court, the Original Exit Financing transactions
did not close and the Effective Date for the Original Plan did not occur.
After consulting with the Official Committee of Unsecured
Creditors (the "Creditors Committee") and the Debtors' prepetition senior
secured lenders (the "Prepetition Secured Lenders"), the Debtors engaged in
negotiations with CCM in an effort to settle their disputes regarding the
Original Exit Financing and to attempt to secure CCM's agreement to provide
some exit financing, rather than proceeding to litigate with CCM and
attempting to emerge from chapter 11 with no new financing at all. As a
result of those negotiations, the Debtors entered into an agreement with
CCM that is supported by both the Creditors' Committee and the Prepetition
Secured Lenders, which agreement is embodied in a proposed modification to
the Original Plan (the "Modification," and the Original Plan as modified by
the Modification, the "Modified Plan").
The Reorganized Debtors, under the Modified Plan, will
receive $25 million of new financing (the "New Exit Financing"), as opposed
to the $65 million called for by the Original Exit Financing. As discussed
below, the New Exit Financing has been closed into escrow, and as a result
the funds provided thereby will be released, and the Effective Date of the
Modified Plan can occur immediately, upon confirmation of the Modified Plan
by the Bankruptcy Court, and upon the delivery of a certificate by the
Debtors that they are in compliance with certain covenants, representations
and warranties and satisfaction of certain other technical delivery
requirements. Upon closing of the New Exit Financing into escrow, the
commitments to provide the Original Exit Financing expired by their terms.
Under the Modified Plan, the classification and treatment
of all Claims remains unchanged. Specifically, with respect to Classes of
Claims entitled to vote:
Holders of Allowed Claims in Classes S-4
(General Unsecured Claims against the Services
Debtors) and H-4 (General Unsecured Claims
against the Holding Debtors) will continue to
receive 100% of the New Common Stock of
Reorganized ICG issued and outstanding on the
Effective Date (subject to Dilution), allocated
between such Classes as set forth in the
Original Disclosure Statement, and holders of
Allowed Claims in Class H-4 will continue to
receive the New Holdings Creditor Warrants;
Holders of Allowed Claims in Class S-5 (Secured
Lender Claims) will continue to receive $25
million in Cash and the New Secured Notes, as
described in the Original Disclosure Statement;
and
Holders of Allowed Claims in Classes S-4 and H-4
(Convenience Claims against the Services Debtors
and the Holdings Debtors, respectively) will
continue to receive Cash equal to 50% of their
respective Allowed Claims, as described in the
Original Disclosure Statement.
However, the Debtors believe that the changes reflected
in the Modified Plan compared to the Original Plan require a resolicitation
of votes from the holders of Claims entitled to vote, and thus are
soliciting such votes pursuant to this Supplement. The Modification is
attached hereto as Appendix A.
Importantly, and as discussed in more detail below, as a
result of (1) the passage of time since the date the Original Disclosure
Statement was drafted, (2) general changes in the prevailing marketplace
for telecommunications company securities, and (3) the revised financial
projections for the Reorganized Debtors necessitated, in part, by the fact
that the New Exit Financing provides for $40 million less new funds to be
obtained by the Reorganized Debtors than would have been obtained under the
Original Exit Financing, the valuation by the Debtors' investment banker of
the Reorganized Debtors' enterprise (and the securities to be issued under
the Modified Plan) has decreased compared to the valuation set forth in the
Original Disclosure Statement. Accordingly, the estimated value of the
recoveries to creditors proposed under the Modified Plan has decreased
compared to what was set forth in the Original Disclosure Statement.
A summary of the differences between the Modified Plan
and the Original Plan is set forth in this Supplement. This summary
includes the revised valuation of the Reorganized Debtors (the "New
Valuation"), as well as the revised financial projections for the
Reorganized Debtors (the "New Projections"), which are attached to this
Supplement as Appendix B. This Supplement should be read in conjunction
with the Original Plan, the Original Disclosure Statement, and the
Modification. The Original Plan and Original Disclosure Statement were
previously distributed to parties receiving this Supplement, and thus are
not being redistributed herewith.
By order of the Bankruptcy Court, the hearing to consider
confirmation of the Modified Plan will commence on September ___, 2002 at
__ a.m.; the deadline for parties to object to the Modified Plan is
September __, 2002; and the Voting Deadline with respect to the Modified
Plan, for holders of Claims in Classes X-0, X-0, X-0, H-3 and H-4, is
September __, 2002.
All capitalized terms not defined in this Supplement have
the meanings ascribed to such terms in the Modified Plan.
EVENTS LEADING TO MODIFICATION
The Original Plan was formulated on the basis of
extensive negotiations conducted after the commencement of these cases
among the Debtors and their primary constituencies. As set forth in
Exhibits G and H to the Original Plan, the Debtors received commitment
letters from CCM and certain other parties (the "Term Sheets") for the
Original Exit Financing. The Original Exit Financing was to be comprised of
two components: (i) a $25 million senior subordinated secured term loan
(the "New Senior Subordinated Term Loan"), the proceeds of which were to be
used to repay $25 million of Secured Lender Claims and (ii) the issuance by
Reorganized ICG of $40 million of unsecured convertible notes (the "New
Convertible Notes"), the proceeds of which were to be utilized by
Reorganized ICG for general working capital and corporate purposes.
After the Original Confirmation Order was entered by the
Bankruptcy Court, but before the Effective Date occurred, CCM requested the
inclusion of certain covenants in the Original Exit Financing. CCM asserted
that these additional covenants were both customary and contemplated by the
Original Plan and CCM's commitment letters and necessary as a result of the
Debtors' recent operating results and CCM's belief that a Material Adverse
Change and a Financial Markets Disruption had occurred. The Debtors
believed that the requested covenants were neither customary nor consistent
with the commitment letters for the Original Exit Financing and were in
contravention of the Original Plan, and that no Material Adverse Change or
Financial Markets Disruption had occurred. Thus, the Original Exit
Financing transactions did not close and the Effective Date of the Original
Plan did not occur.
As a result, the Debtors were faced with two alternative
potential courses of action: (i) propose a new plan without any exit
financing, attempt to obtain support for such a plan from the Creditors'
Committee and the Prepetition Secured Lenders, and pursue potential causes
of action against CCM, or (ii) seek to settle the disputes with CCM by
renegotiating the Original Exit Financing to provide some amount of exit
financing for Reorganized ICG, modify the Original Plan accordingly, and
attempt to obtain support for such a modified plan from the Creditors'
Committee and the Prepetition Secured Lenders.
After discussing the available options with each of the
Creditors' Committee and the Prepetition Secured Lenders, the Debtors
pursued settlement discussions with CCM. A settlement was reached that is
supported by both the Creditors' Committee and the Prepetition Secured
Lenders. That settlement is embodied in the Modified Plan. The Debtors
believe that given the alternatives available to them, proceeding to
attempt to confirm the Modified Plan is in the best interests of the
Debtors, their estates, and their creditors.
Importantly, pursuant to the settlement with CCM, as of
July 25, 2002 (the "Escrow Closing Date"), all principal documents
necessary to consummate the Modified Plan were fully executed, and the $25
million in proceeds from the New Exit Financing was funded into an escrow,
governed by the terms of the escrow agreement (the "Escrow Agreement")
attached as Exhibit I to the Modification. Accordingly, if the Bankruptcy
Court confirms the Modified Plan, upon certification by Reorganized ICG
that it is in compliance with certain covenants, representations and
warranties and the satisfaction of certain other technical delivery
requirements, the New Exit Financing will be consummated and the escrowed
proceeds will be released for distribution on account of Secured Lender
Claims in accordance with the terms of the Modified Plan, and the Effective
Date for the Modified Plan can immediately occur.1
On July 26, 2002, the Modification was filed with the
Bankruptcy Court. On August __, 2002, the Debtors sought and obtained an
order from the Bankruptcy Court (a) approving this Supplement pursuant to
section 1125 of the Bankruptcy Code and (b) authorizing the Debtors to
distribute this Supplement to creditors and solicit votes on the Modified
Plan.
THE DEBTORS, THE PREPETITION SECURED LENDERS AND THE
CREDITORS' COMMITTEE BELIEVE THAT THE MODIFIED PLAN IS IN THE BEST
INTERESTS OF ALL HOLDERS OF CLAIMS AGAINST THE DEBTORS AND THUS STRONGLY
RECOMMEND THAT YOU VOTE TO ACCEPT THE MODIFIED PLAN.
SUMMARY OF THE MODIFICATION
New Convertible Notes
---------------------
Under the Original Plan, Reorganized ICG was to issue $40
million of New Convertible Notes, the proceeds of which were to be utilized
by Reorganized ICG for general working capital and corporate purposes.
Under the Modified Plan, the New Convertible Notes will
not be issued and all references to the New Convertible Notes are deleted.
--------
1 Under the terms of the Escrow Agreement, the Modified Plan must be
confirmed by October 31, 2002 or such later date acceptable to the
Debtors, the Prepetition Secured Lenders, the Creditors'
Committee, Xxxxxxxxx L.L.C. and Xxxxxx Xxxxxxx & Co., Incorporated
or the funds will be returned to the lenders and they will have no
further obligations to fund the New Exit Financing.
Projections and Valuation of the Company and the New Securities
---------------------------------------------------------------
Based, in part, on information provided to the Debtors'
investment banker, Dresdner Kleinwort Xxxxxxxxxxx ("DrKW") by the Company,
the Original Disclosure Statement contained a valuation of the enterprise
of the Company on a going concern basis by DrKW. That valuation established
the value of the Company on a going concern basis at between $350 and $500
million. That valuation resulted in a total equity value between
approximately $142 million and $292 million (with a midpoint of $217
million), which was derived by subtracting from the Company's enterprise
value the projected funded debt (prior to the New Convertible Notes) on the
pro forma balance sheet for the Company. See Overview in the Original
Disclosure Statement.
DrKW's valuation in the Original Disclosure Statement was
premised, in part, upon the projections attached to the Original Disclosure
Statement as Appendix D (the "Original Projections"). Based upon (i)
information obtained after the Original Disclosure Statement was completed
and approved by the Bankruptcy Court and (ii) the fact that under the
Modified Plan as opposed to the Original Plan the Reorganized Debtors will
not obtain the proceeds of the New Convertible Notes (which, as described
above will no longer be issued at all), the Debtors have prepared the New
Projections. The New Projections are attached hereto as Appendix B.
Compared to the Original Projections, the New Projections take into account
the following developments:
o A significant period of time has passed since the
formulation of the Original Projections. The New
Projections incorporate new information that has come to
the Company's attention and that is relevant to the
outlook for the Company's businesses, and also update the
Company's forecasts to account for actual results since
the Original Projections were prepared.
o As described in the Original Disclosure Statement, the
telecommunications industry generally has been marked by
a period of extreme uncertainty and disruption. These
conditions have adversely affected the financial markets'
view of the prospects for the telecommunications industry
generally. Although these conditions were reflected in
the Original Projections, the New Projections take into
account developments that have occurred subsequent to the
creation of the Original Projections.
o As a result of not obtaining the $40 million from the
issuance of the New Convertible Notes as contemplated by
the Original Plan, the Reorganized Debtors' ongoing
business plan will be adjusted to provide for
significantly less capital expenditures. Reducing capital
expenditures will enable the Reorganized Debtors to
continue operating their businesses within the economic
confines of their existing cash balances, which are
approximately $95 million as of the date hereof. As a
result of lowered capital spending, the Debtors believe
that revenue and earnings projections will be lower than
as set forth in the Original Projections, which is
reflected in the New Projections.
Although the New Projections differ from the Original
Projections, the Debtors believe that they will be able to satisfy the
feasibility standards required by section 1129(a)(11) of the Bankruptcy
Code to confirm the Modified Plan. See Section XI.A of the Original
Disclosure Statement.
After the Original Confirmation Order was entered, the
persons at DrKW that worked on the engagement for the Debtors left DrKW and
formed a new firm, Xxxxxx Xxxxxxxx Xxxxx & Co., LLC ("MBL"). MBL has
succeeded DrKW as the Debtors' investment banker. MBL has reviewed the New
Projections and concluded that the revisions have a material impact on the
Original Valuation. Accordingly, based upon the New Projections and
prevailing market conditions, MBL 's New Valuation ascribes a valuation
range for the Company on a going concern basis at between $250 and $325
million, with a mid-point of $287.5 million. The New Valuation ascribes a
total equity value of between approximately $39.8 million and $114.8
million (with a midpoint of $77.3 million), which is derived by subtracting
from the Company's enterprise value the projected funded debt on the pro
forma balance sheet for the Company. See the New Projections at Appendix B.
Based upon the New Valuation, the valuations of the
various securities and other instruments to be issued under the Modified
Plan are set forth below as each such security or instrument is discussed.
The valuation of the Company and the valuation of any
security or instrument to be issued under the Modified Plan are based upon
numerous assumptions, including among other things, an assumption that the
operating results projected for Reorganized ICG in the New Projections will
be achieved in all material respects. The Debtors and MBL believe that
these valuation assumptions are reasonable. However, the valuation
assumptions are not a prediction or reflection of post-Confirmation trading
prices of the New Common Shares or any other security or instrument. As a
result of a variety of factors, including those discussed in Section VI of
the Original Disclosure Statement and elsewhere in this Supplement, the
trading prices of securities or instruments issued under a plan of
reorganization are subject to many unforeseeable circumstances and
therefore cannot be predicted.
Please see Section VI of the Original Disclosure
Statement for a discussion of certain risk factors with respect to the
Original Plan and the New Securities, which risk factors the Debtors
believe remain pertinent to the Modified Plan and the securities and
instruments to be issued thereunder. Moreover, holders of Claims
considering the Modified Plan should consider that the telecommunications
industry remains, and many telecommunications companies remain, highly
troubled. For example, WorldCom, Inc., one of the largest
telecommunications companies in the world, has recently filed for relief
under chapter 11 of the Bankruptcy Code. The Debtors have contracts with,
and derive some of their revenue from, WorldCom and its affiliates. The
Debtors also have contracts with, and derive some of their revenue from
other large telecommunications companies that have reported various
operating and/or financial troubles, such as Qwest Communications. The
chapter 11 filing by WorldCom, and chapter 11 filings by any of these other
companies (if such filings were to occur), could have adverse effects on
the Debtors' or Reorganized Debtors' ability to collect moneys owed to them
by such companies and/or on the Debtors' existing contacts with such
companies.
New Senior Subordinated Term Loan and Issuance of New Nominal Warrants
----------------------------------------------------------------------
Under the Original Plan, Reorganized ICG was to obtain
the New Senior Subordinated Term Loan, the proceeds of which were to be
used to repay $25 million of Secured Lender Claims. Under the Modified
Plan, the New Senior Subordinated Term Loan will be implemented. As
discussed above, the principal documentation for the New Senior
Subordinated Term Loan has already been executed and delivered, and the $25
million in proceeds therefrom has been placed in an escrow and the escrowed
funds will be available for distribution to the Prepetition Secured Lenders
under the Modified Plan if the Modified Plan is confirmed by October 31,
2002 and certain other conditions described above are satisfied. If the
Modified Plan is not confirmed and such other conditions are not satisfied
by October 31, 2002 the $25 million will be returned to the lenders and the
lenders will be relieved of all obligations to provide the New Exit
Financing.
Under the Original Plan, the lenders of the New Senior
Subordinated Term Loan were to receive a closing fee in the form of
warrants to purchase 200,000 additional New Common Shares (the "Fee
Warrants"). The strike price for the Fee Warrants was $20 per share, which
was set based upon a total equity value for Reorganized ICG of $160 million
(as with the strike price for the New Holdings Creditor Warrants). Under
the Modified Plan, the Fee Warrants will be issued, but as a result of the
New Valuation, the strike price for the Fee Warrants (and the New Holdings
Creditor Warrants) will be $9.12 per share, which is based upon a total
equity value for Reorganized ICG of $77.3 million. Based upon the New
Valuation, MBL has ascribed an aggregate value of $1.0 million to the Fee
Warrants. The Fee Warrants shall not be exempt from registration under
applicable securities laws pursuant to section 1145 of the Bankruptcy Code.
The Fee Warrants shall have a term expiring on the fifth (5th) anniversary
of the Effective Date.
Finally, under the Modified Plan, the lenders of the New
Senior Subordinated Term Loan shall also receive warrants to purchase
additional New Common Shares equal to five percent (5%) of the total issued
and outstanding New Common Shares (on a fully diluted basis, before the
Management Option Plan), with a strike price of $.01 (the "New Nominal
Warrants"). Based upon the New Valuation, MBL has ascribed an aggregate
value of $4.3 million to the New Nominal Warrants. The New Nominal Warrants
shall not be exempt from registration under applicable securities laws
pursuant to section 1145 of the Bankruptcy Code. The New Nominal Warrants
shall have a term expiring on the fifth (5th) anniversary of the Effective
Date.
New Holdings Creditor Warrants
------------------------------
Under the Original Plan, holders of Allowed Claims in
Class H-4 were to receive their Pro Rata share of the New Holdings Creditor
Warrants, which were to be 5 year warrants to purchase 800,000 additional
New Common Shares (approximately ten percent (10%) of the aggregate amount
of New Common Shares to be issued and outstanding on the Effective Date),
at a strike price of $20.00 per share. That strike price was based upon an
implied total equity value of Reorganized ICG of $160 million (prior to
conversion of the New Convertible Notes).
Under the Modified Plan, the New Holdings Creditor
Warrants will continue to be issued, but (as with the Fee Warrants), shall
have a strike price of $9.12 per share, which is based upon a total equity
value for Reorganized ICG of $77.3 million. Based upon the New Valuation,
MBL has ascribed a value of $3.6 million to the New Holdings Creditor
Warrants. The New Holdings Creditor Warrants shall be exempt from
registration under the applicable securities laws pursuant to section 1145
of the Bankruptcy Code.
Modification to Management Option Plan
--------------------------------------
Under the Original Plan, management and designated
employees were to receive stock options pursuant to the Management Option
Plan. The Management Option Plan provided for options to purchase ten
percent (10%) of the aggregate New Common Shares outstanding on a fully
diluted basis. Options to purchase seven percent (7%) of the aggregate New
Common Shares outstanding on a fully diluted basis were to be granted
effective on the Effective Date to individuals determined by the CEO (the
"Initial Stock Options"). The exercise price of the Initial Stock Options
was to be based upon an implied reorganization equity value of $160
million.
Under the Modified Plan, the Management Option Plan will
provide for options to purchase seven and one- half percent (7.5%) of the
aggregate New Common Shares outstanding on a fully diluted basis. The
Initial Stock Options shall be options to purchase seven percent (7%) of
the New Common Shares on a fully diluted basis, with an exercise price
based upon an implied total equity value of Reorganized ICG of $77.3
million.
Reorganized ICG's Board of Directors
------------------------------------
Under the Original Plan, the Board of Directors of
Reorganized ICG (the "New Board") was to be comprised of nine (9) members:
5 selected by CCM; 2 selected by Xxxx; 1 selected by the Creditors'
Committee; and the Chief Executive Officer, Xx. Xxxxxxx Xxxxxx.
Under the Modified Plan, the New Board will be comprised
of five (5) members: 2 selected by CCM; 2 selected by Xxxx; and Xx. Xxxxxxx
Xxxxxx. The New Board will have staggered terms, with Xx. Xxxxxx'x initial
term being for one (1) year; one director selected by Xxxx and one selected
by CCM having an initial term of two (2) years; and one director selected
by Xxxx and one selected by CCM having an initial term of three (3) years.
Certain provisions under the Original Plan with respect
to requiring super-majority voting by the New Board with respect to certain
issues have been modified, generally to reduce the number of actions that
require super-majority voting. All such provisions are contained in the
Exhibits to the Modification.
Modifications to Lucent Settlement and Cisco Settlement
-------------------------------------------------------
Under the Original Plan, the Debtors were to effectuate
settlements of complex issues and disputes with each of Lucent and Cisco.
Those settlements both provided for, among other things, payment by the
Reorganized Debtors to each of Lucent and Cisco of an amount of Cash and an
amount of unsecured promissory notes, each as described in the Original
Disclosure Statement.
Under the Modified Plan, the Lucent Settlement and the
Cisco Settlement will each remain in place. However, the Debtors have
commenced discussions with each of Lucent and Cisco to modify the terms of
those settlements, in each case in an effort to reduce the amount of Cash
required to be paid by the Debtors on the Effective Date and, in exchange,
to increase the amount and improve (for Lucent and Cisco) the terms of the
unsecured promissory notes to be delivered by the Reorganized Debtors.
While there can be no assurance that any such modifications will be agreed
to by Lucent or Cisco, the Debtors reserve their right to agree to
modifications to either settlement that the Debtors, in their business
judgement, believe to be beneficial to the Debtors.
Closing in Escrow; Other Changes to the Original Plan and Certain
Exhibits Thereto
-----------------------------------------------------------------
As set forth above, all principal documents necessary to
consummate the Modified Plan have been fully executed and delivered and the
New Exit Financing has been funded, into escrow. As a result of effectively
pre-closing the transactions that will become effective on the Effective
Date of the Modified Plan (if it is confirmed by the Bankruptcy Court), if
the Effective Date of the Modified Plan occurs, the transaction documents
shall, in most respects, operate as if they became effective on the Escrow
Closing Date. The Purchasers of the New Exit Financing will be entitled to
a payment on the Effective Date in an amount equal to the interest that
would have accrued on the New Exit Financing during the period commencing
on the Escrow Closing Date and ending on the Effective Date. So long as the
Debtors properly certify on the Effective Date that they are in compliance
with certain covenants, representations and warranties, if any event were
to occur before the Effective Date that would constitute a default or an
event of default under such documents and such event continues after the
Effective Date, the Effective Date would nonetheless occur, and the
Reorganized Debtors would be in default under such documents with the
consequences set forth therein. This structure was negotiated for by the
Debtors to ensure that the Debtors emerge from Chapter 11 if the Modified
Plan is confirmed, with the only conditions that must be satisfied by the
Debtors being the confirmation of the Modified Plan, the delivery by the
Debtors of the certificate of compliance with certain covenants,
representations and warranties and the satisfaction of certain other
technical delivery requirements.
In connection with the various changes to the Original
Plan outlined above, certain terms (e.g., representations, warranties and
covenants) contained in the terms and conditions for the various securities
and instruments to be issued under the Original Plan have been modified as
agreed to by the Debtors, the Creditors' Committee, the Prepetition Secured
Lenders and CCM. Each of these changes is not described in this Supplement.
The principal final documents for each of these securities and instruments
are attached to the Modification (which is attached hereto as Appendix A)
as Exhibits thereto, in replacement of the respective Exhibits attached to
the Original Plan (which in most cases were comprised of term sheets).
Because these Exhibits are voluminous, they are not attached to the copy of
the Modification attached hereto, however, any party may obtain a copy of
any Exhibit to the Modification by contacting:
ICG Communications, Inc.
c/o Logan and Company, Inc.
000 Xxxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Estimated Percentage Recoveries to Holders of Claims in Classes X-0,
X-0, X-0; H-3 and H-4
--------------------------------------------------------------------
Holders of Allowed Claims in Class S-5 (Secured Lender
Claims) will continue to receive their Pro Rata share of $25 million in
Cash and the New Secured Notes. See Original Disclosure Statement. New
Secured Notes will continue to be valued, for purposes of estimating
percentage recoveries to holders of Claims in Class S-5, at par. Class S-5
Claims are Impaired and entitled to vote on the Modified Plan. Estimated
Percentage Recovery: 100%.
Holders of Allowed Claims in Classes S-3 and H-3
(Convenience Claims against the Services Debtors and Holdings Debtors,
respectively) will continue to receive Cash equal to 50% of their of the
amount of their respective Allowed Claims. Class S-3 and H-3 Claims are
Impaired and entitled to vote on the Modified Plan. Estimated Percentage
Recovery: 50%.
Holders of Claims in Classes S-4 and H-4 (General
Unsecured Claims against the Services Debtors and Holdings Debtors,
respectively): As discussed above, the Original Valuation set forth in the
Original Disclosure Statement has been replaced by the New Valuation set
forth above. The aggregate shares of New Common Stock to be distributed to
holders of Claims in Classes S-4 and H-4 are valued under the New Valuation
at $73 million. As a result, while the classification of Claims and the
proposed distributions to holders of Allowed Claims in classes S-4 and H-4
under the Modified Plan is the same as in the Original Plan, the estimated
percentage recoveries to the holders of such Allowed Claims has changed
compared to the estimated percentage recoveries set forth in the Original
Disclosure Statement. The revised estimated percentage recoveries for
Classes S-4 and H-4 are set forth below. These estimated percentage
recoveries are premised on the Debtors' estimates of the amount of Claims
in each such Class that will ultimately be Allowed. Those estimates have
not changed from the estimates set forth in the Original Disclosure
Statement. To the extent that actual Allowed Class H-4 or S-4 Claims differ
from those estimates, the estimated percentage recoveries to holders of
Allowed Class H-4 and S-4 Claims will differ accordingly:
Class S-4 (General Unsecured Claims against the Services
Debtors) are Impaired and entitled to vote on the Modified
Plan. Estimated Percentage Recovery: 2.69%.2
Class H-4 (General Unsecured Claims against the Holdings
Debtors) are Impaired and entitled to vote on the Modified
Plan. Estimated Percentage Recovery: 3.36%.3
ADDITIONAL DISCLOSURE AND SOLICITATION
The purpose of this Supplement is to provide additional
information to enable Claim holders to make a reasonably informed decision
with respect to the Modified Plan, prior to exercising their right to vote
to accept or reject the Modified Plan.
The Bankruptcy Court has approved this Supplement as
containing information of a kind and in sufficient and adequate detail to
enable such Claim holders to make an informed judgment with respect to
acceptance or rejection of the Modified Plan. THE BANKRUPTCY COURT'S
APPROVAL OF THIS SUPPLEMENT DOES NOT CONSTITUTE EITHER A GUARANTY OF THE
ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN OR AN
ENDORSEMENT OF THE MODIFIED PLAN BY THE BANKRUPTCY COURT.
ALL HOLDERS OF CLAIMS AGAINST THE DEBTORS ARE ENCOURAGED
TO READ THIS SUPPLEMENT, THE ORIGINAL DISCLOSURE STATEMENT AND ITS
APPENDICES CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING TO VOTE EITHER
TO ACCEPT OR TO REJECT THE MODIFIED PLAN. This Supplement contains
important information about the Modified Plan, considerations pertinent to
acceptance or rejection of the Modified Plan, and developments concerning
the Chapter 11 Cases.
THIS SUPPLEMENT AND THE ORIGINAL DISCLOSURE STATEMENT ARE
THE ONLY DOCUMENTS TO BE USED IN CONNECTION WITH THE SOLICITATION OF VOTES
ON THE MODIFIED PLAN. No person has been authorized to distribute any
information concerning the Debtors other than the information contained
herein.
Except as otherwise specifically and expressly stated
herein, this Supplement does not reflect any events that may occur
subsequent to the date hereof and that may have a material impact on the
information contained in this Supplement. The delivery of this Supplement
shall not under any circumstance imply that the information herein is
correct or complete as of any time subsequent to the date hereof.
MODIFIED PLAN VOTING INSTRUCTIONS AND PROCEDURES
Solicitation Package
Your prior votes with respect to the Original Plan are
not valid with respect to the Modified Plan, and you must submit the new
Ballots included with this Supplement to vote for or against the Modified
Plan. Prior to the mailing of this Supplement, as part of the solicitation
of acceptances of the Original Plan, the Debtors have sent to you copies of
the Original Plan and the Original Disclosure Statement. As a result of the
changes described above, the Debtors are now sending this Supplement along
with the Modification for your approval. Accordingly, included with this
Supplement is the notice (the "Confirmation Hearing Notice") of, among
other things, the time for submitting Ballots to accept or reject the
Modified Plan, the date, time and place of the hearing to consider
confirmation of the Modified Plan, and related matters, and the time for
filing objections to confirmation of the Modified Plan and one or more
Ballots (and return envelopes) to be used by you in voting to accept or to
reject the Modified Plan.
--------
2 As set forth in the Original Disclosure Statement, Holders of
Allowed Claims in Class S-4 will receive a Pro Rata share of
the Class S-4 Stock Pool, which is estimated to be comprised
of approximately 40.5% of the total New Common Shares issues
and outstanding on the Effective Date (subject to Dilution).
3 As set forth in the Original Disclosure Statement, Holders of
Allowed Claims in Class H-4 will receive a Pro Rata share of
the Class H-4 Stock Pool, which is estimated to be comprised
of approximately 59.5% of the total New Common Shares issues
and outstanding on the Effective Date (subject to Dilution).
Voting Procedures, Ballots and Voting Deadline
After carefully reviewing the Original Plan, the
Modification, the Original Disclosure Statement, this Supplement and the
detailed instructions accompanying your Ballots, please indicate your
acceptance or rejection of the Modified Plan, by voting in favor of or
against the Modified Plan, on the Ballots. You must complete and sign your
original Ballots (copies will not be accepted) and return it in the
envelope provided.
Each Ballot has been coded to reflect the Class of Claims
it represents. Accordingly, in voting to accept or reject the Modified
Plan, you must use only the coded Ballot or Ballots sent to you with this
Supplement.
IN ORDER FOR YOUR VOTE TO BE COUNTED, YOUR BALLOTS MUST
BE PROPERLY COMPLETED AS SET FORTH ABOVE AND IN ACCORDANCE WITH THE VOTING
INSTRUCTIONS ON THE BALLOTS AND RECEIVED NO LATER THAN SEPTEMBER __, 2002,
AT 4:00 P.M. (EASTERN TIME) (THE "VOTING DEADLINE") TO XXXXX AND COMPANY,
INC. (THE "VOTING AGENT"). DO NOT RETURN DEBT INSTRUMENTS WITH YOUR BALLOT.
If you have any questions about (1) the procedure for
voting your Claims or with respect to the packet of materials that you have
received or (2) the amount of your Claim, or if you wish to obtain, at your
own expense, unless otherwise specifically required by Federal Rule of
Bankruptcy Procedure 3017(d), an additional copy of the Original Plan, the
Modification, the Original Disclosure Statement, this Supplement or any
appendices or exhibits to any of such documents, please contact:
ICG Communications, Inc.
c/o Logan and Company, Inc.
000 Xxxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
FOR FURTHER INFORMATION AND INSTRUCTION ON VOTING TO
ACCEPT OR REJECT THE PLAN, SEE SECTION XI OF THE ORIGINAL DISCLOSURE
STATEMENT.
Confirmation Hearing and Deadline for Objections to Confirmation
Pursuant to section 1128 of the Bankruptcy Code and
Federal Rule of Bankruptcy Procedure 3017(c), the Bankruptcy Court has
scheduled a Confirmation Hearing for September __, 2001, at ___a.m. to
consider confirming the Modified Plan. The Confirmation Hearing may be
adjourned from time to time by the Bankruptcy Court without further notice
except for the announcement of the adjournment date made at the
Confirmation Hearing or at any subsequent adjourned Confirmation Hearing.
Objections to Confirmation of the Modified Plan must be filed with the
Bankruptcy Court not later than September __, 2002.
Dated: August __, 2002
Englewood, Colorado
ICG COMMUNICATIONS, INC.
(for itself and on behalf of the Debtors)
By:______________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
SKADDEN, ARPS, SLATE, XXXXXXX & XXXX (ILLINOIS)
Xxxxxxx X. Xxxx
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000
-and-
----------------------------------------
SKADDEN, ARPS, SLATE, XXXXXXX & XXXX LLP
Xxxxx X. Xxxxxxx
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000
Attorneys for Debtors and Debtors-in-Possession
APPENDIX A
(Please see Exhibit A to the Motion)
APPENDIX B
EXHIBIT L
FORM OF CONFIRMATION ORDER
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
In re: :
: Chapter 11
ICG COMMUNICATIONS, INC., : Case No. 00-4238 (PJW)
et al., :
-- --- : Jointly Administered
Debtors. :
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER
CONFIRMING SECOND AMENDED JOINT PLAN OF REORGANIZATION
OF ICG COMMUNICATIONS, INC. AND ITS AFFILIATED DEBTORS
AND DEBTORS IN POSSESSION, AS MODIFIED
TABLE OF CONTENTS
Page
INTRODUCTION........................................................................................1
I. FINDINGS OF FACT...........................................................................4
A. JURISDICTION AND VENUE...................................................4
B. COMPLIANCE WITH THE REQUIREMENTS OF SECTION
1129 OF THE BANKRUPTCY CODE..............................................4
1. Section 1129(a)(1) -- Compliance of the Plan
with Applicable Provisions of the Bankruptcy
Code....................................................4
a. Sections 1122 and 1123(a)(1)-(4)--
Classification and Treatment of Claims
and Interests..................................5
b. Section 1123(a)(5)-- Adequate Means
for Implementation of the Plan.................6
c. Section 1123(a)(6) -- Prohibition
Against the Issuance of Nonvoting
Equity Securities and Adequate
Provisions for Voting Power of Classes
of Securities..................................7
d. Section 1123(a)(7) - Selection of
Directors and Officers in a Manner
Consistent with the Interests of
Creditors and Equity Security Holders
and Public Policy..............................8
e. Section 1123(b)(1)-(2)-- Impairment of
Claims and Interests and Assumption,
Assumption and Assignment or
Rejection of Executory Contracts and
Unexpired Leases...............................9
f. Section 1123(b)(3)-- Retention,
Enforcement and Settlement of Claims
Held by the Debtors............................9
g. Section 1123(b)(5)-- Modification of the
Rights of Holders of Claims...................10
h. Section 1123(b)(6)-- Other Provisions
Not Inconsistent with Applicable
Provisions of the Bankruptcy Code.............10
i. Section 1123(d)-- Cure of Defaults............11
2. Section 1129(a)(2) -- Compliance with
Applicable Provisions of the Bankruptcy Code...........11
3. Section 1129(a)(3)-- Proposal of the Plan in
Good Faith.............................................11
4. Section 1129(a)(4)-- Bankruptcy Court
Approval of Certain Payments as Reasonable.............12
5. Section 1129(a)(5) -- Disclosure of Identity of
Proposed Management, Compensation of
Insiders and Consistency of Management
Proposals with the Interests of Creditors and
Public Policy..........................................13
6. Section 1129(a)(6)-- Approval of Rate Changes..........13
7. Section 1129(a)(7)-- Best Interests of Holders
of Claims and Interests................................13
8. Section 1129(a)(8)-- Acceptance of the Plan by
Each Impaired Class....................................14
9. Section 1129(a)(9)-- Treatment of Claims
Entitled to Priority Pursuant to Section 507(a)
of the Bankruptcy Code.................................14
10. Section 1129(a)(10)-- Acceptance By at Least
One Impaired Class.....................................15
11. Section 1129(a)(11)-- Feasibility of the Plan..........15
12. Section 1129(a)(12)-- Payment of Bankruptcy
Fees...................................................15
13. Section 1129(a)(13)-- Retiree Benefits.................16
14. Section 1129(b)-- Confirmation of the Plan
Over the Nonacceptance of Impaired Classes.............16
15. Bankruptcy Rule 3016(a)................................16
16. Section 1129(d)-- Purpose of Plan......................17
C. SETTLEMENTS AND RELEASES................................................17
1. Settlement of Intercompany Claims Between the
Holdings Debtors and the Services Debtors..............17
2. Settlements with Cisco and Lucent......................17
3. Fairness of Releases...................................18
D. SATISFACTION OF CONDITIONS TO CONFIRMATION..............................18
E. SUBSTANTIVE CONSOLIDATION...............................................18
II. CONCLUSIONS OF LAW........................................................................19
A. JURISDICTION AND VENUE..................................................19
B. EXEMPTIONS FROM SECURITIES LAWS.........................................19
C. EXEMPTIONS FROM TAXATION................................................21
D. COMPLIANCE WITH SECTION 1129 OF THE
BANKRUPTCY CODE.........................................................22
E. APPROVAL OF THE SETTLEMENTS AND RELEASES
PROVIDED UNDER THE PLAN AND CERTAIN OTHER
MATTERS.................................................................22
F. AGREEMENTS AND OTHER DOCUMENTS..........................................23
G. ASSUMPTIONS, ASSUMPTIONS AND ASSIGNMENTS AND
REJECTIONS OF EXECUTORY CONTRACTS AND
UNEXPIRED LEASES........................................................24
H. SUBSTANTIVE CONSOLIDATION...............................................25
III. ORDER.....................................................................................25
A. CONFIRMATION OF THE PLAN................................................25
B. EFFECTS OF CONFIRMATION.................................................25
1. Immediate Effectiveness; Successors and
Assigns................................................25
2. Continued Corporate Existence; Vesting of
Assets.................................................26
3. Cancellation and Surrender of Instruments,
Securities and Other Documentation.....................27
4. Release of Liens.......................................27
C. CLAIMS BAR DATES........................................................28
1. Bar Dates for Administrative Claims....................28
a. General Bar Date Provisions...................28
b. Bar Dates for Certain Administrative
Claims........................................29
i. Professional Compensation............29
ii. Ordinary Course Liabilities..........29
iii. Priority Tax Claims..................30
2. Bar Date for Rejection Damages Claims and
Related Procedures.....................................30
D. MATTERS RELATING TO IMPLEMENTATION OF THE
PLAN....................................................................31
1. Restructuring Transactions.............................31
2. Directors and Officers; Employment-Related
Agreements and Compensation Programs...................36
a. Directors and Officers of Reorganized
Debtors.......................................36
b. Approval of New Employment,
Retirement, Indemnification, and Other
Related Agreements and Incentive
Compensation Programs.........................36
3. Approval of Agreements Related to the New
Common Stock...........................................37
4. Approval of Exit Financing.............................37
5. Approval of New Loan Documents.........................38
6. Approval of Executory Contract and Unexpired
Lease Provisions and Related Procedures................40
7. Distribution Record Date...............................45
E. SUBSTANTIVE CONSOLIDATION OF THE HOLDINGS
DEBTORS AND SERVICES DEBTORS............................................46
F. ACTIONS IN FURTHERANCE OF THE PLAN......................................47
G. RELEASES AND INDEMNIFICATION............................................50
H. DISCHARGE, TERMINATION, INJUNCTION AND
SUBORDINATION RIGHTS....................................................50
1. Discharge of Claims and Satisfaction and
Termination of Interests...............................50
2. Injunctions............................................51
3. Releases and Satisfaction of Subordination
Rights.................................................53
4. Exculpation............................................54
I. RESOLUTION OF OTHER OBJECTIONS OR DISPUTES..............................55
J. PAYMENT OF STATUTORY FEES...............................................57
K. SUBSTANTIAL CONSUMMATION................................................58
L. RETENTION OF JURISDICTION...............................................58
M. NOTICE OF ENTRY OF CONFIRMATION ORDER...................................58
TABLE OF EXHIBITS
Exhibit Exhibit Name
------- ------------
A Plan
B Modification
C Rejection Bar Date Notice
D Cure Amount Notice
E Confirmation Notice
F Initial Board of Directors of Reorganized ICG
INTRODUCTION
------------
The above-captioned debtors and debtors in possession
(collectively, the"Debtors") having proposed the Second Amended Joint Plan
of Reorganization of ICG Communications, Inc. and its Affiliated Debtors
and Debtors in Possession, dated April 3, 2002 (the "Original Plan"); the
Bankruptcy Court having entered its Order (I) Approving Procedures and
Materials Employed to Provide Notice of the Disclosure Statement Hearing,
(II) Approving Disclosure Statement, (III) Determining Treatment of Certain
Claims for Notice and Voting Purposes, (IV) Scheduling Hearing on
Confirmation of the Plan, (V) Establishing Record Date and Procedures for
Filing Objections to the Plan and Temporary Allowance of Claims and (VI)
Approving Solicitation Procedures for Confirmation, dated April 3, 2002
(the "Original Solicitation Order") [Docket No. 1349]; a hearing pursuant
to section 1129 of the Bankruptcy Code to consider confirmation of the
Original Plan having been held on May 20, 2002 (the "First Confirmation
Hearing"); the Bankruptcy Court having entered its Findings of Fact,
Conclusions of Law, and Order Confirming Second Amended Joint Plan of
Reorganization of ICG Communications, Inc. and its Affiliated Debtors and
Debtors in Possession, dated May 21, 2002 (the "Original Confirmation
Order") [Docket No. __]; the substantial consummation of the Original Plan,
within the meaning of section 1127 of the Bankruptcy Code having not
occurred; the Debtors having proposed the Modification to Second Amended
Joint Plan of Reorganization of ICG Communications, Inc. et al., dated July
__, 2002 (the "Modification" and the Original Plan as modified by the
Modification, the "Modified Plan")1 [Docket No. __]; the Bankruptcy Court
--------
1 Unless otherwise specified, capitalized terms and phrases used
herein have the meanings assigned to them in the Modified Plan.
The rules of interpretation set forth in Section I.C of the
Modified Plan shall apply to these Findings of Fact, Conclusions
of Law and Order (this "Second Confirmation Order"). In addition,
in accordance with Section I.A of the Modified Plan, any term used
in the Modified Plan or this Second Confirmation Order that is not
defined in the Modified Plan or this Second Confirmation Order,
but that is used in the Bankruptcy Code or the Bankruptcy Rules,
shall have the meaning given to that term in the Bankruptcy Code
or the Bankruptcy Rules, as applicable. In accordance with Section
III.A of this Second Confirmation Order, if there is any direct
conflict between the terms of the Modified Plan, the terms of the
Original Confirmation Order and the terms of this Second
Confirmation Order the terms of this Second Confirmation Order
shall control. A copy of the Original Plan (without the exhibits
thereto) is attached hereto as Exhibit A and incorporated herein
by reference. A copy of the Modification (without the exhibits
thereto) is attached hereto as Exhibit B and incorporated herein
by reference.
having entered the Order (I) Approving Supplemental Disclosure With Respect
to the Second Amended Joint Plan of Reorganization of ICG Communications,
Inc., et al., as Modified and (II) Approving Solicitation Procedures for
Confirmation with Respect to the Plan as Modified, dated August __, 2002
(the "Supplemental Solicitation Order") [Docket No. __]; the Debtors having
filed the Declaration of Xxxxx & Company, Inc. Certifying the Voting On and
Tabulation of Ballots Accepting and Rejecting the Debtors' Second Amended
Joint Plan of Reorganization, as Modified (the "Voting Declaration")
[Docket No. ___] on September __, 2002; the Bankruptcy Court having
established, in the Supplemental Solicitation Order, September __, 2002 at
_:00 p.m. as the date and time of the hearing pursuant to section 1129 of
the Bankruptcy Code to consider Confirmation of the Modified Plan (the
"Second Confirmation Hearing"); declarations of service having been
executed by Xxxxxxxx X. Xxxxx and Filed with the Bankruptcy Court (the
"Declarations of Service") [Docket Nos. _______], with respect to the
mailing of a notice of the Second Confirmation Hearing and the other
solicitation materials in respect of the Modified Plan in accordance with
the Supplemental Solicitation Order; declarations of publication having
been Filed with the Bankruptcy Court (collectively, the "Declarations of
Publication") [Docket Nos. ___] with respect to the publication of the
notice of the Second Confirmation Hearing in the national editions of The
Wall Street Journal, and the daily edition of the Denver Post in accordance
with the Supplemental Solicitation Order; objections to Confirmation of the
Modified Plan (collectively, the "Objections") having been Filed by (i) [
]; the Debtors having filed a Memorandum of Law in Support of Confirmation
of the Second Amended Joint Plan of Reorganization of ICG Communications,
Inc., as Modified (the "Second Memorandum of Law") on September __, 2002
[Docket No. __]; the Debtors having filed the Declaration of Xxxxxxx X.
Xxxxxx in Support of Second Amended Joint Plan of Reorganization of ICG
Communications, Inc., as Modified (the "Xxxxxx Declaration"), the
Declaration of Xxxxxx X. Xxxxxxx in Support of Second Amended Joint Plan of
Reorganization of ICG Communications, Inc., as Modified (the "Xxxxxxx
Declaration") and the Declaration of Xxxxxxx X. Xxxxxxxx in Support of
Second Amended Plan of Reorganization of ICG Communications, Inc., as
Modified (the "Buckfire Declaration") (the Xxxxxx Declaration together with
the Xxxxxxx Declaration and the Buckfire Declaration, the "Supporting
Declarations") on September __, 2002 as exhibits to the Second Memorandum
of Law; the Bankruptcy Court having reviewed the Plan, the Modification,
the Disclosure Statement, the Supplement, the Disclosure Statement Order,
the Supplemental Solicitation Order, the Voting Declaration, the
Declarations of Service, the Declarations of Publication, the Objections,
the Second Memorandum of Law, the Supporting Declarations and the other
papers before the Bankruptcy Court in connection with the Confirmation of
the Modified Plan; the Bankruptcy Court having heard the statements of
counsel in support of Confirmation at the Second Confirmation Hearing, as
reflected in the record at the Second Confirmation Hearing; the Bankruptcy
Court having considered all testimony presented and evidence admitted at
the Second Confirmation Hearing; the Bankruptcy Court having taken judicial
notice of the papers and pleadings on file in these chapter 11 cases; and
the Bankruptcy Court finding that (i) notice of the Second Confirmation
Hearing and the opportunity of any party in interest to object to
Confirmation were adequate and appropriate, in accordance with Bankruptcy
Rule 2002(b) and the Supplemental Solicitation Order, as to all parties to
be affected by the Modified Plan and the transactions contemplated thereby
and (ii) the legal and factual bases set forth at the Second Confirmation
Hearing and as set forth in this Second Confirmation Order establish just
cause for the relief granted herein; the Bankruptcy Court hereby makes the
following Findings of Fact, Conclusions of Law and Order.2
--------
2 This Second Confirmation Order constitutes the Bankruptcy Court's
findings of fact and conclusions of law under Fed. R. Civ. P. 52,
as made applicable herein by Bankruptcy Rules 7052 and 9014. Any
finding of fact shall constitute a finding of fact even if it is
stated as a conclusion of law, and any conclusion of law shall
constitute a conclusion of law even if it is stated as a finding
of fact.
I. FINDINGS OF FACT.
A. JURISDICTION AND VENUE.
On November 14, 2000, the Debtors commenced their
respective Reorganization Cases by filing voluntary petitions for relief
under chapter 11 of the Bankruptcy Code. The Debtors were and are qualified
to be debtors under section 109(a) of the Bankruptcy Code. ICG
Communications, Inc., the direct or indirect parent of each of the
Affiliate Debtors, is domiciled in Delaware. Accordingly, pursuant to 28
U.S.C.ss.1408, venue in the United States Bankruptcy Court for the District
of Delaware for these chapter 11 cases was proper as of the Petition Date
and continues to be proper.
B. COMPLIANCE WITH THE REQUIREMENTS OF SECTION
1129 OF THE BANKRUPTCY CODE.
1. Section 1129(a)(1) -- Compliance of the Plan with
Applicable Provisions of the Bankruptcy Code.
The Modified Plan complies with all applicable provisions
of the Bankruptcy Code, as required by section 1129(a)(1) of the Bankruptcy
Code, including sections 1122 and 1123 of the Bankruptcy Code.
a. Sections 1122 and 1123(a)(1)-(4) --
Classification and Treatment of
Claims and Interests.
Pursuant to sections 1122(a) and 1123(a)(1) of the
Bankruptcy Code, Article II of the Modified Plan designates Classes of
Claims and Interests, other than Administrative Claims and Priority Tax
Claims.3 As required by section 1122(a), each Class of Claims and Interests
--------
3 Pursuant to section 1123(a)(1) of the Bankruptcy Code, classes of
Administrative Claims and Priority Tax Claims are not required to
be classified.
contains only Claims or Interests that are substantially similar to the
other Claims or Interests within that Class. The Modified Plan designates
eleven Classes of Claims and Interests, designated as Classes H-1 through
H-5 and S-1 through S-6. Such classification is proper under section
1122(a) of the Bankruptcy Code because such Claims and Interests have
differing rights among each other and against the Debtors' assets or
differing interests in the Debtors or their reorganization. Additionally,
in accordance with section 1122(b) of the Bankruptcy Code, the Modified
Plan provides for two Classes of Unsecured Claims of $5,000 or less, one
each against the Holdings Debtors and the Services Debtors. This
classification is reasonable and necessary for administrative convenience.
Pursuant to sections 1123(a)(2) and 1123(a)(3) of the Bankruptcy Code,
Article II of the Modified Plan specifies all Classes of Claims and
Interests that are not impaired under the Modified Plan. Article III
specifies the treatment of all Classes of Claims and Interests that are
impaired under the Modified Plan. Pursuant to section 1123(a)(4) of the
Bankruptcy Code, the Modified Plan also provides the same treatment for
each Claim or Interest within a particular Class, unless the holder of a
Claim or Interest agrees to less favorable treatment of its Claim or
Interest.
b. Section 1123(a)(5) -- Adequate Means for
Implementation of the Modified Plan.
Article V and various other provisions of the Modified
Plan provide adequate means for the Modified Plan's implementation. Those
provisions relate to, among other things: (a) the continued corporate
existence of the Debtors (subject to the Restructuring Transactions) and
the vesting of the Debtors' assets in the Reorganized Debtors; (b) the
cancellation of Old Securities and Agreements; (c) the corporate
constituent documents that will govern the Reorganized Debtors; (d) the
selection of the initial directors and officers for the Reorganized
Debtors; (e) all appropriate and necessary documentation governing entry
into the New Senior Subordinated Term Loan, the New Nominal Warrants, the
Fee Warrants and effectuation of the Escrow Agreement; (f) the preservation
of Litigation Claims by the Debtors and the Reorganized Debtors; (g) the
entry into the Registration Rights Agreement; (h) the settlement with
Lucent Technologies, Inc. ("Lucent"), and the settlement with Cisco
Systems, Inc. and Cisco Capital ("Cisco"); (i) the continuation of certain
employee, retiree and workers' compensation benefits and the implementation
of the Management Option Plan; (j) the release of liens; (k) the
distribution of cash pursuant to the Modified Plan; (l) the execution,
delivery and implementation of all documents, and the granting of security
interests in and liens upon substantially all of the assets of the
Reorganized Debtors, as are necessary and appropriate in connection with
the consummation of the credit facility by and among the Reorganized
Debtors and the holders of the New Secured Notes (the "New Credit
Facility"), including without limitation (i) a credit agreement with the
holders of the Secured Lender Claims (the "New Credit Agreement"), (ii) a
security agreement with the collateral agent for the holders of the Secured
Lender Claims (the "New Security Agreement"), (iii) UCC financing
statements, (iv) the guarantees executed by those Subsidiaries as required
by Section [5.01(j)] of the New Credit Agreement (the "New Guarantees"),
(v) a subordination agreement with the agent for the holders of the Secured
Lender Claims, Cerberus Capital Management, L.P. ("CCM") and any other
financial institutions that are parties to the New Senior Subordinated Term
Loan (the "Subordination Agreement") and (vi) such other documents as are
necessary and appropriate in connection with the New Credit Facility
(collectively, including the New Credit Agreement, the New Security
Agreement, such UCC financing statements, the New Guarantees and the
Subordination Agreement, the "New Loan Documents"); (m) the issuance and
distribution of the New Common Shares, New Secured Notes, New Nominal
Warrants, Fee Warrants and New Holdings Creditor Warrants; and (n) the
adoption, execution, delivery and implementation of all contracts,
instruments, releases and other agreements or documents related to the
foregoing. Moreover, as evidenced by the New Projections, the Debtors will
have sufficient cash to make all payments required to be made on the
Effective Date pursuant to the terms of the Modified Plan.
c. Section 1123(a)(6) -- Prohibition Against
the Issuance of Nonvoting Equity Securities
and Adequate Provisions for Voting Power
of Classes of Securities.
Section 5.3 of the Modified Plan provides that the
certificates of incorporation and the by-laws or similar constituent
documents of Reorganized ICG and each of the other Reorganized Debtors,
among other things, will prohibit the issuance of nonvoting equity
securities to the extent required by section 1123(a) of the Bankruptcy
Code. Such prohibitory provisions have been incorporated into Exhibit A-1
to the Modified Plan. In light of the foregoing, the Modified Plan
satisfies the requirement of section 1123(a)(6) of the Bankruptcy Code that
a plan of reorganization provide for an appropriate distribution of voting
power among the classes of securities possessing voting power.
d. Section 1123(a)(7) - Selection of Directors
and Officers in a Manner Consistent with
the Interests of Creditors and Equity
Security Holders and Public Policy.
The Modified Plan complies with section 1123(a)(7) by
properly and adequately disclosing or otherwise identifying the procedures
for determining the identity and affiliations of all individuals or
entities proposed to serve on or after the Effective Date as officers and
directors of Reorganized ICG. Moreover, the Modified Plan ensures that the
selection of the proposed compensation and indemnification arrangements for
such persons are consistent with the interests of creditors and public
policy.
The existing senior officers of ICG will serve initially
in their same capacities after the Effective Date for Reorganized ICG. The
initial board of directors of Reorganized ICG will consist of five (5)
directors. The Chief Executive Officer shall be a director. CCM and X.X.
Xxxx Asset Management Co., L.L.C. ("Xxxx"), respectively, have designated
the persons set forth on Exhibit F hereto as members of the initial board
of directors.
In light of the foregoing, the manner of selection of the
initial directors and officers of the Reorganized Debtors and the manner of
selection of successor directors and officers of the Reorganized Debtors,
as set forth in the certificates of incorporation and by-laws or similar
constituent documents of the applicable Reorganized Debtor and applicable
state law, are consistent with the interests of the holders of Claims and
Interests and public policy.
e. Section 1123(b)(1)-(2) -- Impairment of
Claims and Interests and Assumption,
Assumption and Assignment or Rejection
of Executory Contracts and Unexpired Leases.
In accordance with section 1123(b)(1) of the Bankruptcy
Code, Article II of the Modified Plan impairs or leaves unimpaired, as the
case may be, each Class of Claims and Interests. In accordance with section
1123(b)(2) of the Bankruptcy Code, Article VII of the Modified Plan
provides that each of the Debtors will be deemed to have assumed every
executory contract and unexpired lease to which it is a party, including
those listed on Schedule 7.1 of the Modified Plan, unless such contract or
lease (i) was previously assumed or rejected by such Debtor, (ii)
previously expired or terminated pursuant to its own terms, or (iii) is
listed on Schedule 7.3 of the Modified Plan.
f. Section 1123(b)(3) -- Retention,
Enforcement and Settlement of Claims
Held by the Debtors.
Section 5.10 of the Modified Plan provides that, except
as provided in the Modified Plan or in any contract, instrument, release or
other agreement entered into or delivered in connection with the Modified
Plan, in accordance with section 1123(b) of the Bankruptcy Code, the
Reorganized Debtors will retain and may enforce, xxx on, settle, or
compromise (or decline to do any of the foregoing) all Litigation Claims,
that the Debtors or the Estates may hold against any Person or entity. The
Reorganized Debtors or their successors may pursue such retained claims,
demands, rights or causes of action, as appropriate, in accordance with the
best interests of the Reorganized Debtors or their successors holding such
claims, demands, rights or causes of action.
g. Section 1123(b)(5)-- Modification of the
Rights of Holders of Claims.
Article III of the Modified Plan modifies, or leaves
unaffected, as the case may be, the rights of holders of each Class of
Claims.
h. Section 1123(b)(6) -- Other Provisions Not
Inconsistent with Applicable Provisions of
the Bankruptcy Code.
The Modified Plan includes additional appropriate
provisions that are not inconsistent with applicable provisions of the
Bankruptcy Code, including: (i) the provisions of Article VIII of the
Modified Plan governing distributions on account of Allowed Claims; (ii)
the provisions of Article IX of the Modified Plan establishing procedures
for resolving Disputed Claims and making distributions on account of such
Disputed Claims once resolved; (iii) the provisions of Article VI of the
Modified Plan providing for the substantive consolidation of the Estates
that comprise the Holdings Debtors, and the Estates that comprise the
Services Debtors, respectively for the purpose of implementing the Modified
Plan; (iv) the provisions of Section 12.9 of the Modified Plan regarding
the discharge of Claims and termination of Interests; (v) the provisions of
Article XI of the Modified Plan regarding retention of jurisdiction by the
Court over certain matters after the Effective Date; and (vi) the
provisions of Article V regarding the means for implementation of the
Modified Plan.
i. Section 1123(d)-- Cure of Defaults.
Section 7.2 of the Modified Plan provides for Cure with
respect to each Executory Contract and Unexpired Lease to be assumed
pursuant to Section 7.1 of the Modified Plan in accordance with section
365(b)(1) of the Bankruptcy Code.
2. Section 1129(a)(2) -- Compliance with Applicable
Provisions of the Bankruptcy Code.
The Debtors have complied with all applicable provisions
of the Bankruptcy Code, as required by section 1129(a)(2) of the Bankruptcy
Code, including section 1125 of the Bankruptcy Code and Bankruptcy Rules
3017 and 3018. The Disclosure Statement, the Supplement and the procedures
by which the Ballots for acceptance or rejection of the Modified Plan were
solicited and tabulated were fair, properly conducted and in accordance
with sections 1125 and 1126 of the Bankruptcy Code, Bankruptcy Rules 3017
and 3018 and the Supplemental Solicitation Order. Consistent with Section
12.11 of the Modified Plan, the Debtors, the Reorganized Debtors, the
Creditors' Committee, the Claims Resolution Committee, the Indenture
Trustees, the Prepetition Secured Lenders and CCM and their respective
directors, officers, employees, agents, members and professionals, as
applicable, have acted in "good faith," within the meaning of section
1125(e) of the Bankruptcy Code.
3. Section 1129(a)(3) -- Proposal of the Modified
Plan in Good Faith.
The Debtors proposed the Modified Plan in good faith and
not by any means forbidden by law. In determining that the Modified Plan
has been proposed in good faith, the Bankruptcy Court has examined the
totality of the circumstances surrounding the formulation of the Modified
Plan. Based on the uncontroverted evidence presented at the Second
Confirmation Hearing, the Bankruptcy Court finds and concludes that the
Modified Plan has been proposed with the legitimate and honest purpose of
reorganizing the business affairs of each of the Debtors and
maximizing the returns available to creditors of the Debtors. Consistent
with the overriding purpose of chapter 11 of the Bankruptcy Code, the
Modified Plan is designed to allow the Debtors to reorganize by providing
them with a capital structure that will allow them to satisfy their
obligations with sufficient liquidity and capital resources and to fund
necessary capital expenditures and otherwise conduct their businesses.
Moreover, the Modified Plan itself and the arms' length negotiations among
the Debtors, the Creditors' Committee, the Holdings SubCommittee, the
Prepetition Secured Lenders, CCM and the Debtors' other constituencies
leading to the Modified Plan's formulation, as well as the overwhelming
support of creditors for the Modified Plan, provide independent evidence of
the Debtors' good faith in proposing the Modified Plan.
4. Section 1129(a)(4) -- Bankruptcy Court Approval of
Certain Payments as Reasonable.
Section 12.1 of the Modified Plan makes all payments on
account of Professionals' Fee Claims for services rendered prior to the
Effective Date subject specifically to the requirements of sections 327,
328, 330, 331, 503(b) and 1103 of the Bankruptcy Code, as applicable, by
requiring Professionals to file final fee applications with the Court. The
Bankruptcy Court will review the reasonableness of such applications under
sections 328 and 330 of the Bankruptcy Code and any applicable case law.
Article XI of the Modified Plan provides that the Bankruptcy Court will
retain jurisdiction after the Effective Date to hear and determine all
applications for allowance of compensation or reimbursement of expenses
authorized pursuant to the Bankruptcy Code or the Modified Plan. All fees
and expenses of Professionals authorized to be paid periodically pursuant
to the prior orders of the Bankruptcy Court shall remain subject to final
review for reasonableness by the Bankruptcy Court.
5. Section 1129(a)(5) -- Disclosure of Identity
of Proposed Management, Compensation of Insiders
and Consistency of Management Proposals with
the Interests of Creditors and Public Policy.
Section 5.7 of the Modified Plan provides for the manner
of selection of the initial board of directors and officers of Reorganized
ICG, as well as the manner for selecting the boards of directors for the
other Reorganized Debtors (which are subsidiaries of Reorganized ICG).
Because initial board of directors will be comprised primarily of directors
selected by CCM and Xxxx, the appointment or continuance of the proposed
directors and officers is consistent with the interests of holders of
Claims and Interests and public policy.
6. Section 1129(a)(6)-- Approval of Rate Changes.
The Debtors' current businesses do not involve the
establishment of rates over which any regulatory commission has
jurisdiction or will have jurisdiction after Confirmation.
7. Section 1129(a)(7) -- Best Interests of Holders of
Claims and Interests.
With respect to each impaired Class of Claims or
Interests for each Debtor, each holder of a Claim or Interest in such
impaired Class has accepted the Modified Plan or, as demonstrated by the
liquidation analysis included as Appendix C to the Disclosure Statement and
the Xxxxxxx Declaration and the Buckfire Declaration, will receive or
retain under the Modified Plan on account of such Claim or Interest
property of a value, as of the Effective Date, that is not less than the
amount such holder would receive or retain if the Debtors were liquidated
on the Effective Date under chapter 7 of the Bankruptcy Code.
8. Section 1129(a)(8) -- Acceptance of the Modified
Plan by Each Impaired Class.
Pursuant to sections 1124 and 1126 of the Bankruptcy
Code: (a) as indicated in Article II of the Modified Plan, Classes X-0,
X-0, X-0 and S-2 are Classes of unimpaired Claims or Interests and (b) as
indicated in the Voting Declaration, all impaired Classes of Claims
(Classes X-0, X-0, X-0, X-0 and S-5) have accepted the Modified Plan.
Because the holders of Interests in Classes H-5 and S-6 will not receive or
retain any property on account of such Interests, Classes H-5 and S-6 are
deemed not to have accepted the Modified Plan pursuant to section 1126(g)
of the Bankruptcy Code. Notwithstanding the lack of compliance with section
1129(a)(8) of the Bankruptcy Code with respect to Classes H-5 and S-6, the
Modified Plan is confirmable because, as described in Section I.B.14 below,
the Modified Plan satisfies the "cramdown" requirements of section 1129(b)
of the Bankruptcy Code with respect to such Classes.
9. Section 1129(a)(9) -- Treatment of Claims Entitled
to Priority Pursuant to Section 507(a) of the
Bankruptcy Code.
The Modified Plan provides for treatment of Allowed
Administrative Claims, Priority Tax Claims and Priority Claims in the
manner required by section 1129(a)(9) of the Bankruptcy Code.
10. Section 1129(a)(10) -- Acceptance By at Least One
Impaired Class.
As indicated in the Voting Declaration and as reflected
in the record of the Confirmation Hearing, at least one Class of Claims or
Interests that is impaired under the Modified Plan has accepted the
Modified Plan, determined without including any acceptance of the Modified
Plan by any insider (i.e., each of Classes H- 3, X-0, X-0, X-0 and S-5).
11. Section 1129(a)(11)-- Feasibility of the
Modified Plan.
Although the Debtors' anticipated cash balances on the
Effective Date, as set forth in the New Projections, have decreased, and
although it is impossible to predict with certainty the precise future
profitability of the Debtors' businesses or the industries and markets in
which the Debtors operate, Confirmation is not likely to be followed by the
liquidation of, or the need for further financial reorganization of the
Debtors, the Reorganized Debtors or any successor to the Reorganized
Debtors under the Modified Plan, as demonstrated by the Xxxxxxx Declaration
and the description of the Debtors' financial projections contained in the
Supplement. As set forth in the Xxxxxx Declaration and the Xxxxxxx
Declaration, upon the Effective Date, the Reorganized Debtors will have
sufficient cash flow and capital resources to pay their liabilities as they
become due and to satisfy their capital needs for the conduct of their
businesses, and their assets will exceed their liabilities.
12. Section 1129(a)(12)-- Payment of Bankruptcy Fees.
Section 12.3 of the Modified Plan provides that, on or
before the Effective Date, Administrative Claims for fees payable pursuant
to 28 U.S.C.ss.1930 will be paid in cash. After the Effective date, the
Reorganized Debtors shall pay all required fees pursuant to 28
U.S.C.ss.1930 or any other statutory requirement and comply with all
statutory reporting requirements.
13. Section 1129(a)(13)-- Retiree Benefits.
Section 5.6(a) of the Modified Plan provides that all
employee compensation and benefit plans of the Debtors, including programs
subject to sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered
into before or after the Petition Date and not since terminated are deemed
to be, and will be treated as though they are, executory contracts that are
assumed under Section 7.1 of the Modified Plan.
14. Section 1129(b) -- Confirmation of the Modified Plan
Over the Nonacceptance of Impaired Classes.
Pursuant to section 1129(b)(1) of the Bankruptcy Code,
the Modified Plan may be confirmed notwithstanding that Interests in
Classes H-5 and S-6 are impaired and are deemed not to have accepted the
Modified Plan pursuant to section 1126(g) of the Bankruptcy Code. Other
than the requirement in section 1129(a)(8) of the Bankruptcy Code that
Classes H-5 and S-6 accept the Modified Plan, all of the requirements of
section 1129(a) of the Bankruptcy Code have been met. The Modified Plan
does not discriminate unfairly and is fair and equitable with respect to
Classes H-5 and S-6. No holders of Interests junior to the Interests in
Classes H-5 and S-6 will receive or retain any property under the Modified
Plan and, as evidenced by the valuations and estimates contained in the
Disclosure Statement and in the Buckfire Declaration, no Class of Claims or
Interests senior to Classes H-5 and S-6 is receiving more than full payment
on account of the Claims and Interests in such Classes.
15. Bankruptcy Rule 3016(a).
The Modified Plan is dated and identifies the entities
submitting the Modified Plan.
16. Section 1129(d)-- Purpose of Modified Plan.
The primary purpose of the Modified Plan is not avoidance
of taxes or avoidance of the requirements of Section 5 of the Securities
Act, and there has been no objection Filed by any governmental unit
asserting such avoidance.
C. SETTLEMENTS AND RELEASES
1. Settlement of Intercompany Claims Between the
Holdings Debtors and the Services Debtors.
As demonstrated by the Xxxxxx Declaration, the allocation
of recoveries to holders of General Unsecured Claims against the Holdings
Debtors and the Services Debtors, respectively, in settlement and
compromise of potential disputes with respect to intercompany claims issues
among the Holdings Debtors and Services Debtors is fair, reasonable and
appropriate in light of the underlying facts and circumstances. The
substantial analysis and good faith negotiations of interested parties,
including the Debtors, Creditors' Committee and the Holdings' SubCommittee,
as well as the overwhelming support for the Modified Plan by holders of
Claims in Classes H-4 and S-4, supports this conclusion.
2. Settlements with Cisco and Lucent.
As demonstrated by the Xxxxxx Declaration, the benefits
to be received by the Debtors, the Reorganized Debtors and their respective
creditors as a result of (i) the settlement with Cisco contained in Section
5.14 and Schedule 5.14 to the Modified Plan and (ii) the settlement with
Lucent contained in Section 5.13 and Schedule 5.13 and other related
documents are fair, reasonable and appropriate in light of the relevant
facts and circumstances underlying each such settlement.
3. Fairness of Releases.
The releases set forth in Section 5.12 of the Modified
Plan are appropriate. The Debtors are releasing certain parties from claims
owned by the Debtors. No creditor or other third party is being deemed to
release any non- derivative claim it may have against a third party, unless
it affirmatively and voluntarily chose to do so by making an election on
its ballot to vote on the Modified Plan. Parties not voting on the Modified
Plan or that did not affirmatively elect to grant releases on their
Modified Plan ballots are not deemed to have granted any releases of
individual claims they may possess against non-Debtors (if any).
D. SATISFACTION OF CONDITIONS TO CONFIRMATION.
Each of the conditions precedent to the entry of this Second
Confirmation Order, as set forth in Section 10.1 of the Modified Plan, has
been satisfied.
E. SUBSTANTIVE CONSOLIDATION
The substantive consolidation of the Estates that
comprise the Holdings Debtors and the Estates that comprise the Services
Debtors, respectively, for the purpose of implementing the Modified Plan,
as described in Article VI of the Modified Plan, will promote a more
equitable distribution of the Debtors' assets and is appropriate under
section 105 of the Bankruptcy Code. Among the factors supporting the
substantive consolidation of the Debtors' Estates, as demonstrated by the
Xxxxxx Declaration and the Xxxxxxx Declaration, are the following: (1)
accurately segregating the assets and liabilities of each respective
Debtor, if possible, would be immensely difficult and costly (2) the
Debtors individual entity books and records were kept based upon accounting
principles that do not reflect, in material ways, fair market value of
assets or liabilities; (3) there are thousands of individual transfers or
transactions within the Holdings Debtors and within the Services Debtors
that would have to be separately analyzed to properly view each separate
entities' assets and liabilities on a fair market basis; (4) there is no
evidence that any creditors will be prejudiced by the aggregation of the
assets and liabilities of the Estates that comprise the Holdings Debtors
and the Services Debtors, respectively, and (5) no creditor or other party
has objected to this limited substantive consolidation, after ample notice
and opportunity to do so.
II. CONCLUSIONS OF LAW.
A. JURISDICTION AND VENUE.
The Bankruptcy Court has jurisdiction over this matter
pursuant to 28 U.S.C. xx.xx. 157 and 1334. This is a core proceeding
pursuant to 28 U.S.C. ss. 157(b)(2). The Debtors were and are qualified to
be debtors under section 109 of the Bankruptcy Code. Venue of the
Reorganization Cases in the United States Bankruptcy Court for the District
of Delaware was proper as of the Petition Date, pursuant to 28 U.S.C. ss.
1408, and continues to be proper.
B. EXEMPTIONS FROM SECURITIES LAWS.
Pursuant to section 1125(d) of the Bankruptcy Code, the
Debtors' transmittal of Modified Plan solicitation packages, their
solicitation of acceptances of the Modified Plan and their issuance and
distribution of the New Common Stock, the New Holdings Creditor Warrants,
the New Secured Notes and the Management Options are not and will not be
governed by or subject to any otherwise applicable law, rule or regulation
governing the solicitation or acceptance of a plan of reorganization or the
offer, issuance, sale or purchase of securities. Accordingly, the Debtors,
the Reorganized Debtors and their respective directors, officers,
employees, agents and professionals (acting in such capacity) are entitled
to the protection of section 1125(e) of the Bankruptcy Code.
Pursuant to section 1145(a)(1) of the Bankruptcy Code,
the offering, issuance and distribution of the New Common Stock, the New
Holdings Creditor Warrants and the Management Options and any other
securities issuable pursuant to the Modified Plan (except as otherwise set
forth in the Disclosure Statement) shall be exempt from section 5 of the
Securities Act and any state or local law requiring registration prior to
the offering, issuance, distribution or sale of securities.
Pursuant to and to the fullest extent permitted by
section 1145 of the Bankruptcy Code, the resale of any New Common Stock,
New Holdings Creditor Warrants, Management Options and any other securities
issuable pursuant to the Modified Plan (except as otherwise described in
the Disclosure Statement) shall be exempt from section 5 of the Securities
Act and any state or local law requiring registration prior to the
offering, issuance, distribution or sale of securities.
The New Secured Notes are issued under the New Credit
Agreement and thus are not securities for the purposes of Bankruptcy Code
section 1145. Notwithstanding the foregoing, to the extent the New Secured
Notes are deemed to be securities, the offering, issuance and distribution
of the New Secured Notes, and the resale thereof, shall be exempt from
section 5 of the Securities Act and any state or local law requiring
registration prior to the offering, issuance, distribution or sale of
securities.
C. EXEMPTIONS FROM TAXATION.
Pursuant to section 1146(c) of the Bankruptcy Code, the
issuance, transfer, or exchange of a security, or the making or delivery of
an instrument of transfer under a plan confirmed under section 1129 of this
title, may not be taxed under any law imposing a stamp tax or similar tax.
D. COMPLIANCE WITH SECTION 1129 OF THE
BANKRUPTCY CODE.
As set forth in Section I above, the Modified Plan
complies in all respects with the applicable requirements of section 1129
of the Bankruptcy Code.
E. APPROVAL OF THE SETTLEMENTS AND RELEASES
PROVIDED UNDER THE MODIFIED PLAN AND CERTAIN
OTHER MATTERS.
Pursuant to section 1123(b)(3) of the Bankruptcy Code and
Bankruptcy Rule 9019(a), the settlements, compromises, releases, waivers,
discharges and injunctions set forth in the Modified Plan, the settlement
of intercompany claims among the Holdings Debtors and the Services Debtors,
the settlement with Cisco, the settlement with Lucent and the settlement
with CCM are approved as integral parts of the Modified Plan and are fair,
equitable, reasonable and in the best interests of the Debtors, the
Reorganized Debtors and their respective Estates and the holders of Claims
and Interests.
In approving the settlements, compromises, releases,
waivers, discharges and injunctions of and from such potential claims, as
described above, the Bankruptcy Court has considered: (a) the balance of
the likelihood of success of claims asserted by the Debtors or other
claimants against the likelihood of success of the defenses or
counterclaims possessed by the Debtors, other claimants or other potential
defendants; (b) the complexity, cost and delay of litigation that would
result in the absence of these settlements, compromises, releases, waivers,
discharges and injunctions; (c) the lack of objections by any creditor or
party in interest to the settlements, compromises, releases, waivers,
discharges and injunctions and the acceptance of the Modified Plan by an
overwhelming majority of the holders of Claims, as set forth in the Voting
Declaration; and (d) that the Modified Plan, which gives effect to the
settlements, compromises, releases, waivers, discharges and injunctions, is
the product of extensive arms' length negotiations among the Debtors, the
Creditors' Committee, the Holdings SubCommittee, the Prepetition Secured
Lenders and other parties in interest.
All settlements, compromises, releases, waivers,
discharges and injunctions of claims and causes of action set forth in the
Modified Plan, which are approved herein as an integral part of the
Modified Plan and as fair, equitable, reasonable and in the best interests
of the Debtors, the Reorganized Debtors and their respective Estates and
the holders of Claims and Interests, are effective and binding in
accordance with their terms.
F. AGREEMENTS AND OTHER DOCUMENTS.
The Debtors have disclosed all material facts regarding:
(1) the Restructuring Transactions authorized by Section 5.4 of the
Modified Plan; (2) the adoption of new or amended and restated certificates
of incorporation and by-laws or similar constituent documents for the
Reorganized Debtors; (3) the initial selection of directors and officers of
the Reorganized Debtors; (4) the Escrow Agreement and the New Senior
Subordinated Term Loan; (5) the distribution of cash pursuant to the
Modified Plan; (6) the issuance and distribution of the New Common Stock,
the New Holdings Creditor Warrants, the Management Options, the New Nominal
Warrants, the Fee Warrants and the New Secured Notes pursuant to the
Modified Plan; (7) the adoption, execution, delivery and implementation of
all contracts, leases, instruments, releases and other agreements or
documents related to any of the foregoing, including the Management Option
Plan, the Registration Rights Agreement, the settlement with Cisco and the
settlement with Lucent; (8) the adoption, execution and implementation of
employment, retirement and indemnification agreements, incentive
compensation programs, retirement income plans, welfare benefit plans and
other employee plans and related agreements, including the Management
Option Plan; and (9) the other matters provided for under the Modified Plan
involving the corporate structure of any Debtor or Reorganized Debtor or
corporate action to be taken by or required of any Debtor or Reorganized
Debtor.
G. ASSUMPTIONS, ASSUMPTIONS AND ASSIGNMENTS AND
REJECTIONS OF EXECUTORY CONTRACTS AND
UNEXPIRED LEASES.
Each pre- or post-Confirmation assumption, assumption and
assignment or rejection of an Executory Contract or Unexpired Lease
pursuant to Sections 7.1 and 7.3 of the Modified Plan, including any pre-
or post-Confirmation assumption, assumption and assignment or rejection
effectuated as a result of any amendment to Schedule 7.3 to the Modified
Plan, as contemplated by Section 7.3 of the Modified Plan, shall be legal,
valid and binding upon the applicable Debtor or Reorganized Debtor and all
nondebtor parties to such Executory Contract or Unexpired Lease, all to the
same extent as if such assumption, assumption and assignment or rejection
had been effectuated pursuant to an appropriate authorizing order of the
Bankruptcy Court entered before the Confirmation Date under section 365 of
the Bankruptcy Code.
H. SUBSTANTIVE CONSOLIDATION
In light of the factors identified in Section I.E above,
the substantive consolidation of the Estates that comprise the Holdings
Debtors and the Estates that comprise the Services Debtors, respectively,
is in the bests interests of the Debtors' creditors and is appropriate
under section 105 of the Bankruptcy Code.
III. ORDER
ACCORDINGLY, THE COURT HEREBY ORDERS THAT:
A. CONFIRMATION OF THE MODIFIED PLAN.
The Modified Plan and each of its provisions are
confirmed pursuant to section 1129 of the Bankruptcy Code; provided,
however, that if there is any direct conflict between the terms of the
Modified Plan and the terms of this Second Confirmation Order, the terms of
this Second Confirmation Order shall control. All of the Objections and
other responses to, and statements and comments regarding, the Modified
Plan, other than those withdrawn with prejudice in their entirety prior to,
or on the record at, the Second Confirmation Hearing are overruled.
B. EFFECTS OF CONFIRMATION.
1. Immediate Effectiveness; Successors and Assigns.
The stay contemplated by Bankruptcy Rule 3020(e) shall
not apply to this Second Confirmation Order. Subject to the provisions of
Section 12.6 of the Modified Plan, and notwithstanding any otherwise
applicable law, immediately upon the entry of this Second Confirmation
Order, the terms of the Modified Plan and this Second Confirmation Order
are deemed binding upon the Debtors, the Reorganized Debtors, any and all
holders of Claims or Interests (irrespective of whether such Claims or
Interests are impaired under the Modified Plan or whether the holders of
such Claims or Interests accepted, rejected or are deemed to have accepted
or rejected the Modified Plan), any and all nondebtor parties to Executory
Contracts and Unexpired Leases with any of the Debtors and any and all
entities that are parties to or are subject to the settlements,
compromises, releases, discharges and injunctions described in Section I.C
above and the respective heirs, executors, administrators, successors or
assigns, if any, of any of the foregoing. The Effective Date shall be
deemed to have occurred immediately upon the distribution of funds in the
Escrow Agreement.
2. Continued Corporate Existence; Vesting of Assets.
Except as otherwise provided in the Modified Plan (and
subject to the provisions regarding Restructuring Transactions in Section
5.4 of the Modified Plan), each Debtor shall, as a Reorganized Debtor,
continue to exist after the Effective Date as a separate corporate entity,
with all the powers of a corporation (or such other corporate form) under
applicable law and without prejudice to any right to alter or terminate
such existence (whether by merger, dissolution or otherwise) under
applicable state law. Except as otherwise provided in the Modified Plan, as
of the Effective Date, all property of the respective Estates of the
Debtors, and any property acquired by a Debtor or Reorganized Debtor under
the Modified Plan, shall vest in the applicable Reorganized Debtor, free
and clear of all Claims, liens, charges, other encumbrances and Interests.
On and after the Effective Date, each Reorganized Debtor is authorized to
(a) operate its businesses; (b) use, acquire and dispose of property; and
(c) compromise or settle any Claims or Interests, in each case without
supervision or approval by the Bankruptcy Court and free of any
restrictions of the Bankruptcy Code or the Bankruptcy Rules, other than
those restrictions expressly imposed by the Modified Plan or this Second
Confirmation Order. Without limiting the foregoing, each Reorganized Debtor
is authorized to pay the charges that it incurs on or after the Effective
Date for professionals' fees, disbursements, expenses or related support
services (including fees relating to the preparation of Professional fee
applications) without application to the Bankruptcy Court.
3. Cancellation and Surrender of Instruments,
Securities and Other Documentation.
Except as provided in any contract, instrument or other
agreement or document created, entered into or delivered in connection with
the Modified Plan, on the Effective Date and concurrently with the
applicable distributions made pursuant to Article III of the Modified Plan,
the Old Securities are canceled and of no further force and effect, without
any further action on the part of any Debtor or Reorganized Debtor. The
holders of or parties to such canceled instruments, securities and other
documentation shall have no rights arising from or relating to such
instruments, securities and other documentation or the cancellation
thereof, except the rights provided pursuant to the Modified Plan;
provided, however, that no distribution under the Modified Plan shall be
made to or on behalf of any holder of an Allowed Claim evidenced by such
canceled instruments or securities unless and until such instruments or
securities are received by the applicable Indenture Trustee pursuant to,
and to the extent required by, Section 8.8 of the Modified Plan.
4. Release of Liens.
Except as otherwise provided in the Modified Plan or in
any contract, instrument, release or other agreement or document entered
into or delivered in connection with the Modified Plan, on the Effective
Date and concurrently with the applicable distributions made pursuant to
Article III of the Modified Plan, all mortgages, deeds of trust, liens or
other security interests against the property of any Estate are fully
released and discharged, and all right, title and interest of any holder of
such mortgages, deeds of trust, liens or other security interests,
including any rights to any collateral thereunder, shall revert to the
applicable Reorganized Debtor and its successors and assigns.
C. CLAIMS BAR DATES.
1. Bar Dates for Administrative Claims.
a. General Bar Date Provisions.
Except as otherwise provided in Sections 3.1 and 12.1 of
the Modified Plan and herein, unless previously filed, all requests for
payment of Administrative Claims must be filed with the Bankruptcy Court
and served on counsel for the Debtors and counsel for the Creditors'
Committee, pursuant to the procedures specified in the Confirmation Notice
(as such term is defined below), no later than 45 days after the Effective
Date. Holders of Administrative Claims that are required to File and serve
a request for payment of such Administrative Claims and that do not File
and serve a request by the applicable bar date shall be forever barred from
asserting such Administrative Claims against the Debtors, the Reorganized
Debtors or their respective property and such Administrative Claims shall
be deemed discharged as of the Effective Date. The Debtors have forty-five
(45) business days after receipt to object to the amount requested. The
Bankruptcy Court shall retain jurisdiction to determine the Allowed amount
of such Administrative Claim. Notwithstanding the foregoing, no request for
payment of an Administrative Claim need be filed with respect to an
Administrative Claim which is paid or payable by a Debtor in the ordinary
course of business.
b. Bar Dates for Certain Administrative Claims.
i. Professional Compensation.
All final requests for compensation or reimbursement of
Professional Fee Claims for services rendered to the Debtors or any
creditors' committee prior to the Effective Date and Substantial
Contribution Claims must be filed and served on the Reorganized Debtors and
their counsel no later than forty-five (45) days after the Effective Date.
Objections to applications of such Professionals or other entities for
compensation or reimbursement of expenses must be filed and served on the
Reorganized Debtors and their counsel and the requesting Professional or
other entity no later than 30 days after the date on which the applicable
application was served. To the extent necessary, entry of this Second
Confirmation Order shall amend and supersede any previously entered order
of the Bankruptcy Court regarding the payment of Professional Fee Claims.
ii. Ordinary Course Liabilities.
Holders of Administrative Claims based on liabilities
incurred by a Debtor in the ordinary course of its business, including
Administrative Trade Claims and Administrative Claims of governmental units
for Taxes (including Tax audit Claims arising after the Petition Date)
shall not be required to File or serve any request for payment of such
Administrative Claims. Such Administrative Claims shall be satisfied
pursuant to Section 3.1 of the Modified Plan.
iii. Priority Tax Claims
Each of the Debtors shall have the right to file an
objection to any Priority Tax Claim and other claims asserted by taxing
authorities and the Debtors' rights to object to and settle or otherwise
compromise Priority Tax Claims are preserved, provided that any such
objection must be filed no later than 90 days following the Effective Date,
unless such time period is extended by the Court. Following resolution of
any objections, Priority Tax Claims and other claims asserted by taxing
authorities shall be treated as provided under the Modified Plan and, with
respect to objections and other matters addressed herein, the provisions of
this Second Confirmation Order.
2. Bar Date for Rejection Damages Claims and Related
Procedures.
The Debtors or the Reorganized Debtors shall provide
written notice to each nondebtor party to an Executory Contract or
Unexpired Lease being rejected pursuant to the Modified Plan of (i) the
applicable Executory Contract or Unexpired Lease being rejected, (ii) the
bar date set forth in this Section III.C and (iii) the procedures for such
party to File and serve a proof of Claim for any Claims that may arise from
such rejection (the "Rejection Bar Date Notice"). The Rejection Bar Date
Notice shall be in substantially the form attached hereto as Exhibit C and
incorporated herein by reference and shall be served on each nondebtor
party or parties to an Executory Contract or Unexpired Lease within 30 days
after the Effective Date.
Notwithstanding anything in the Bar Date Order to the
contrary, if the rejection of an Executory Contract or Unexpired Lease
pursuant to Section 7.3 of the Modified Plan gives rise to a Claim by the
other party or parties to the Executory Contract or Unexpired Lease, such
Claim shall be forever barred and shall not be enforceable against the
Debtors, the Reorganized Debtors, their respective successors or their
respective properties unless a proof of Claim is Filed and served on the
Reorganized Debtors, pursuant to the procedures specified in this Second
Confirmation Order and the Rejection Bar Date Notice, no later than 30 days
after the date of service of the applicable Rejection Bar Date Notice.
D. MATTERS RELATING TO IMPLEMENTATION OF THE
MODIFIED PLAN.
1. Restructuring Transactions.
On or after the Confirmation Date, pursuant to
appropriate provisions of applicable state business corporation laws and
sections 1123(a) and 1142(b) of the Bankruptcy Code, the Debtors and the
Reorganized Debtors are authorized to enter into such Restructuring
Transactions and take such actions as may be necessary or appropriate to
effect a corporate restructuring of their respective businesses or simplify
the overall corporate structure of the Reorganized Debtors and make all
filings and recordings in connection therewith, all as contemplated by,
among others, Section 5.4 of the Modified Plan, and in accordance with
applicable terms of the Modified Plan, the Exhibits thereto and this Second
Confirmation Order. Such restructuring may include one or more mergers,
consolidations, restructurings, dispositions, liquidations or dissolutions,
as may be determined by the Debtors or the Reorganized Debtors to be
necessary or appropriate. The actions to effect these transactions may
include: (i) the execution and delivery of appropriate agreements or other
documents of merger, consolidation, restructuring, disposition, liquidation
or dissolution containing terms that are consistent with the terms of the
Modified Plan and that satisfy the applicable requirements of applicable
state law and such other terms to which the applicable entities may agree;
(ii) the execution and delivery of appropriate instruments of transfer,
assignment, assumption or delegation of any asset, property, right,
liability, duty or obligation on terms consistent with the terms of the
Modified Plan and having such other terms to which the applicable entities
may agree; (iii) the filing of appropriate certificates or articles of
merger, consolidation or dissolution pursuant to applicable state law; and
(iv) all other actions that the applicable entities determine to be
necessary or appropriate, including making filings or recordings that may
be required by applicable state law in connection with such transactions.
The Restructuring Transactions may include one or more
mergers, consolidations, restructurings, dispositions, liquidations or
dissolutions as may be determined by the Debtors or Reorganized Debtors to
be necessary or appropriate to result in substantially all of the
respective assets, properties, rights, liabilities, duties and obligations
of certain of the Reorganized Debtors vesting in one or more surviving,
resulting or acquiring corporations. In each case in which the surviving,
resulting or acquiring corporation in any such transaction is a successor
to a Reorganized Debtor, such surviving, resulting or acquiring corporation
shall perform the obligations of the applicable Reorganized Debtor pursuant
to the Modified Plan to pay or otherwise satisfy the Allowed Claims against
such Reorganized Debtor, except as provided in any contract, instrument or
other agreement or document effecting a disposition to such surviving,
resulting or acquiring corporation, which may provide that another
Reorganized Debtor will perform such obligations.
Each of the following shall occur and be effective as of
the date specified in the documents effectuating the applicable
Restructuring Transactions or the Effective Date, if no such other date is
specified in such other documents, and are authorized and approved in all
respects and for all purposes without any requirement of further action by
the stockholders or board of directors of any of the Debtors: the
Restructuring Transactions; the adoption of new or amended and restated
certificates of incorporation and by-laws or similar constituent documents
for the Reorganized Debtors; the initial selection of directors and
officers for the Reorganized Debtors; effectuation of the Escrow Agreement
and the release of the proceeds of the New Senior Subordinated Term Loan;
the distribution of cash pursuant to the Modified Plan; the issuance and
distribution of the New Common Stock, the New Holdings Creditor Warrants,
the Management Options, the New Nominal Warrants, the Fee Warrants and the
New Secured Notes pursuant to the Modified Plan; the adoption, execution,
delivery and implementation of all contracts, leases, instruments, releases
and other agreements or documents related to any of the foregoing,
including the Registration Rights Agreement and the Management Option Plan
the Escrow Agreement and the New Senior Subordinated Term Loan; the
adoption, execution and implementation of employment, retirement and
indemnification agreements, incentive compensation programs, retirement
income plans, welfare benefit plans and other employee plans and related
agreements, including the Management Option Plan; and the other matters
provided for under the Modified Plan involving the corporate structure of
any Debtor or Reorganized Debtor or corporate action to be taken by or
required of any Debtor or Reorganized Debtor.
Pursuant to section 1142(b) of the Bankruptcy Code,
section 303 of the Delaware General Corporation Law and any comparable
provision of the business corporation laws of any other state
(collectively, the "Reorganization Effectuation Statutes"), without further
action by the Bankruptcy Court or the stockholders or board of directors of
any of the Debtors or the Reorganized Debtors, the Debtors and the
Reorganized Debtors are authorized to: (i) cause to be filed with the
Secretary of State of the State of Delaware or other applicable state or
local official (A) any and all certificates, agreements or plans of merger,
consolidation, dissolution, liquidation or amendment necessary or
appropriate to effectuate the provisions of the Modified Plan and (B)
certificates of incorporation, by-laws or similar constituent documents or
certificates or articles of amendment thereto, as applicable (collectively,
the "Governance Documents"); and (ii) take or cause to be taken all such
other actions, including the making of appropriate filings or recordings as
may be required under appropriate provisions of applicable state business
corporation laws or any other applicable law, or as any of the Chairman of
the Board, Chief Executive Officer, President, Executive Vice President,
Chief Financial Officer, Treasurer, Chief Operating Officer, Senior Vice
President, any Vice President or any Secretary (collectively, the
"Responsible Officers") of the appropriate Debtor or Reorganized Debtor may
determine are necessary or appropriate in connection with the provisions of
the Modified Plan and the Governance Documents. Each federal, state and
local governmental agency or department is authorized and directed to
accept the filing of any Governance Document or other document related to
the implementation of the Modified Plan. Without limiting the generality or
effect of the foregoing, this Second Confirmation Order is declared and
determined to be in recordable form and shall be accepted by any filing or
recording officer or authority of any applicable governmental authority or
department without any further orders, certificates or other supporting
documents. After the Effective Date or the effective time of any applicable
Restructuring Transaction, each of the Reorganized Debtors is authorized to
amend or restate its certificate of incorporation or by-laws or similar
constituent documents as permitted by applicable state law, subject to the
terms and conditions of such constituent documents.
The Responsible Officers of each Debtor or Reorganized
Debtor are authorized to execute, deliver, file or record such contracts,
instruments, releases, and other agreements or documents, including any
Governance Documents or other documents related to the implementation of
the Modified Plan, and take such actions as may be necessary or appropriate
to effectuate and implement the provisions of the Modified Plan. The
Secretary or any Assistant Secretary of each Debtor or Reorganized Debtor
is authorized to certify or attest to any of the foregoing actions. The
execution of any such document or the taking of any such action is deemed
conclusive evidence of the authority of such person to so act.
2. Directors and Officers; Employment-Related
Agreements and Compensation Programs.
a. Directors and Officers of Reorganized
Debtors.
The appointment of the initial directors and officers of
each of the Reorganized Debtors, as set forth in Section I.B above, Exhibit
F hereto and Section 5.7 of the Modified Plan (including the process for
filling the vacant directorship), as of and immediately following the
Effective Date is approved.
Each such director and officer shall serve from and after
the Effective Date until his or her successor is duly elected or appointed
and qualified or until such director's or officer's earlier death,
resignation or removal in accordance with the terms of the certificates of
incorporation and by-laws or similar constituent documents of the
applicable Reorganized Debtor and applicable state law.
b. Approval of New Employment, Retirement,
Indemnification, and Other Related
Agreements and Incentive Compensation
Programs.
Pursuant to section 1142(b) of the Bankruptcy Code and
the Reorganization Effectuation Statutes, without further action by the
Bankruptcy Court or the stockholders or board of directors of any of the
Reorganized Debtors, and without limiting the power or authority of the
Reorganized Debtors following the Effective Date to take any and all such
actions as may be permitted or required by applicable nonbankruptcy law,
the Reorganized Debtors are authorized, as of the Effective Date, to: (i)
maintain, amend or revise existing employment, retirement, welfare,
incentive, severance, indemnification and other agreements with their
active directors, officers and employees, subject to the terms and
conditions of any such agreement; (ii) enter into new employment,
retirement, welfare, incentive, severance, indemnification and other
agreements for active and retired employees; and (iii) make the initial
grants under the Management Option Plan. Pursuant to the employment
contract for Xx. Xxxxxx, which was approved by this Court on June 21, 2001,
Xx. Xxxxxx shall be paid a Reorganization Bonus of $700,000 not later than
ten (10) days after the Effective Date.
3. Approval of Agreements Related to the New Common
Stock.
Pursuant to section 1142(b) of the Bankruptcy Code and
the Reorganization Effectuation Statutes and without further action by the
Bankruptcy Court or the stockholders or board of directors of any of the
Reorganized Debtors, Reorganized ICG is authorized to execute and deliver
the Registration Rights Agreement, which agreement shall be duly
authorized, valid and binding and enforceable in accordance with their
terms and the New Common Stock issued pursuant to such agreements, upon
issuance, shall be duly authorized validly issued and fully paid and
nonassessable.
4. Approval of Exit Financing.
Pursuant to section 1142(b) of the Bankruptcy Code and
the Reorganization Effectuation Statutes and without further action by the
Bankruptcy Court or the stockholders or board of directors of any of the
Reorganized Debtors, on the Effective Date, the Reorganized Debtors are
authorized to execute and deliver those documents necessary or appropriate
to obtain the New Senior Subordinated Term Loan and to take all such other
actions and execute, deliver, record and file all such other agreements,
instruments, financing statements, releases, applications, registration
statements, reports and other documents, and any changes, additions and
modifications thereto, as any of their Responsible Officers may determine
are necessary or appropriate in connection with the consummation of the
transactions contemplated by the issuance of the New Senior Subordinated
Term Loan, including such documents and actions required by CCM and any
other financial institutions that are parties to the New Senior
Subordinated Term Loan, and also including the making of such filings, or
the recording of any security interests, as may be required by the New
Senior Subordinated Term Loan. Any actions taken or authorized to be taken
by the Debtors or taken by the lenders under the New Senior Subordinated
Term Loan to file and/or record financing statements or security interests
required by the New Senior Subordinated Term Loan prior to the Effective
Date are hereby approved and such filings, financing statements or security
interests shall become immediately effective on the Effective Date. All
cash necessary for the Reorganized Debtors to make payments pursuant to the
Modified Plan shall be obtained from the Reorganized Debtors' cash balances
and operations or the New Senior Subordinated Term Loan. Cash payments to
be made pursuant to the Modified Plan shall be made by Reorganized ICG;
provided, however, that the Debtors and the Reorganized Debtors shall be
entitled to transfer funds between and among themselves as they determine
to be necessary or appropriate to enable the Reorganized Debtors to satisfy
its obligations under the Modified Plan. Any Intercompany Claims resulting
from such transfers shall be accounted for and settled in accordance with
the Debtors' historical intercompany account settlement practices.
5. Approval of New Loan Documents.
Pursuant to section 1142(b) of the Bankruptcy Code and
without further action by the Bankruptcy Court or the stockholders or board
of directors of any of the Reorganized Debtors, on the Effective Date, the
Reorganized Debtors are authorized and directed to execute and deliver
those documents necessary or appropriate in connection with the issuance of
the New Secured Notes, including without limitation, the New Credit
Agreement, the New Security Agreement, UCC financing statements, the New
Guarantees, the Subordination Agreement and such other of the New Loan
Documents as are necessary and appropriate in connection with the
consummation of the New Credit Facility. The Reorganized Debtors are
further authorized and directed to grant security interests in and liens
upon substantially all of their assets, in accordance with the terms of the
New Security Agreement. Any actions taken or authorized to be taken by the
Debtors or taken by the lenders under the New Credit Facility to file
and/or record financing statements or security interests required by the
New Credit Facility prior to the Effective Date are hereby approved and
such filings, financing statements or security interests shall become
immediately effective on the Effective Date. The New Loan Documents, and
the Reorganized Debtors' obligations thereunder and in connection with the
New Credit Facility are valid, legal and binding obligations of the
Reorganized Debtors, enforceable in accordance with their terms.
The New Credit Facility, the terms thereof and the
transactions contemplated thereby are the result of extensive arms' length,
good faith negotiations among the parties thereto. The issuance of the New
Secured Notes, the execution of each of the New Loan Documents, including
without limitation, the New Guarantees, the granting of the security
interests in and liens upon substantially all of the Reorganized Debtors'
assets, the consummation of the transactions contemplated by the New Credit
Facility in furtherance of the Modified Plan and the treatment of the
Secured Lender Claims pursuant to the Modified Plan constitute a fair
exchange of reasonable equivalent value, and none of the foregoing,
individually or together, constitutes a fraudulent transfer or fraudulent
conveyance under any applicable state or federal law.
Pursuant to section 1142(b) of the Bankruptcy Code and
without further action by the Bankruptcy Court or the stockholders or board
of directors of any of the Reorganized Debtors, on the Effective Date and
at such other times as invoices shall be rendered to the Reorganized
Debtors, the Reorganized Debtors are authorized and directed to pay (i) all
legal and other fees payable under the Pre- Petition Credit Agreement, (ii)
all legal and other fees payable pursuant to the Final Order Granting
Adequate Protection and Authorizing Use of Cash Collateral Pursuant to
Bankruptcy Code Sections 361, 362(d) and 363, dated December 19, 2000, and
(iii) all fees payable in connection with the negotiation and preparation
of the New Loan Documents and any related documentation, in each case
including all legal and other fees of Shearman & Sterling, Young Xxxxxxx
Stargatt & Xxxxxx, LLP, Deloitte & Touche and Impala Partners, LLC, that
are then accrued and unpaid.
6. Approval of Executory Contract and Unexpired Lease
Provisions and Related Procedures.
Except as otherwise modified herein, the Executory
Contract and Unexpired Lease provisions of Article VII of the Modified Plan
are specifically approved. Except as otherwise provided in the Modified
Plan or in any contract, instrument, release or other agreement or document
entered into in connection with the Modified Plan, on the Effective Date,
pursuant to section 365 of the Bankruptcy Code, the applicable Debtor or
Debtors shall assume each executory contact and unexpired lease to which a
Debtor is a party, including those listed on Schedule 7.1 of the Modified
Plan, unless such contract or lease (i) was previously assumed or rejected
by such Debtor, (ii) previously expired or terminated pursuant to its own
terms, or (iii) is listed on Schedule 7.3 of the Modified Plan as being an
executory contract or unexpired lease to be rejected. To the extent that an
executory contract or unexpired lease is not listed on Schedule 7.3, such
executory contract or unexpired lease is assumed. Each contract and lease
shall be assumed or rejected only to the extent that any such contract or
lease constitutes an executory contract or unexpired lease. Listing a
contract or lease on Schedule 7.3 to the Modified Plan shall not constitute
an admission by a Debtor or Reorganized Debtor that such contract or lease
is an executory contract or unexpired lease or that a Debtor or Reorganized
Debtor has any liability thereunder.
As of the effective time of the applicable Restructuring
Transaction, any Executory Contract or Unexpired Lease to be held by any
Debtor or another surviving, resulting or acquiring corporation in the
applicable Restructuring Transaction, shall be deemed assigned to the
applicable entity, pursuant to section 365 of the Bankruptcy Code.
This Second Confirmation Order shall constitute an order
approving the treatment of executory contracts and unexpired leases
described in Article VII of the Modified Plan, pursuant to section 365 of
the Bankruptcy Code, as of the Effective Date. The Debtors or the
Reorganized Debtors shall provide notice to each party whose executory
contract or unexpired lease is being assumed or assumed and assigned
pursuant to the Modified Plan of (i) the contract or lease being assumed or
assumed and assigned; (ii) the name of the proposed assignee, if any; (iii)
the Cure, if any, that the applicable Debtor or Reorganized Debtor believes
it (or its assignee) would be obligated to pay in connection with such
assumption; and (iv) the procedures for such party to object to the
assumption or assumption and assignment of the applicable contract or lease
or the amount of the proposed Cure (the "Cure Amount Notice"). The Cure
Amount Notice shall be in substantially the form attached hereto as Exhibit
D and incorporated herein by reference and shall be served on each
nondebtor party or parties to an Executory Contract or Unexpired Lease
within 30 days after the Effective Date.
To the extent that such Claims constitute monetary
defaults, the Cure associated with each executory contract and unexpired
lease to be assumed or assumed and assigned pursuant to the Modified Plan
shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code,
at the option of the Debtor or Reorganized Debtor assuming such contract or
lease or the assignee of such Debtor or Reorganized Debtor, if any by Cure.
If there is a dispute regarding (i) the amount of any Cure, (ii) the
ability of the applicable Reorganized Debtor or any assignee to provide
"adequate assurance of future performance" (within the meaning of section
365 of the Bankruptcy Code) under the contract or lease to be assumed or
(iii) any other matter pertaining to assumption of such contract or lease,
such party must File and serve on the Debtors or the Reorganized Debtors,
as applicable, a written objection setting forth the basis for such dispute
no later than 20 days after the date of service of the Cure Amount Notice.
The Cure shall be made following the entry of a Final Order resolving the
dispute and approving the assumption or assumption and assignment, as the
case may be. If there is a dispute as to the amount of Cure or any
requirement for adequate assurance of future performance that cannot be
resolved consensually among the parties, the Debtors shall have the right
to reject the contract or lease for a period of five (5) days after entry
of a Final Order establishing a Cure amount in excess of that provided by
the Debtors or any requirement for adequate assurance of future performance
that is not acceptable to the Debtors.
If the nondebtor party to an Executory Contract or
Unexpired Lease does not timely and properly object to the proposed Cure
Amount Claim identified in a Cure Amount Notice, the proposed amount shall
become the final Allowed Cure Amount Claim without further action by the
Bankruptcy Court, the Debtors or the Reorganized Debtors, and the Proposed
Cure Amount Claim shall be paid or satisfied in accordance with the
Modified Plan and this Second Confirmation Order. Until a Cure Amount Claim
becomes Allowed in accordance with the procedures set forth in this Section
III.D.5 and the Cure Amount Notice, such Claim shall be treated as a
Disputed Claim for purposes of making distributions under the Modified
Plan.
Reorganized ICG shall provide standard and customary
indemnification for all officers and directors (as of the Petition Date and
thereafter) for all actions or events occurring after the Petition Date.
Except as provided below, Indemnification Obligations to present and former
officers and directors for actions or events occurring prior to the
Petition Date is limited to director and officer liability insurance
coverage. Reorganized ICG shall indemnify present and former officers and
directors for all legal fees and expenses and shall advance all such fees
and expenses, as well as any insurance deductibles (if applicable), related
to any claims or lawsuits for any actions or events occurring prior to the
Petition Date.
The obligations of each Debtor or Reorganized Debtor to
indemnify members of the Special Committee, including for actions or events
occurring prior to the Petition Date, are deemed and treated as executory
contracts that are assumed by Reorganized ICG pursuant to the Modified Plan
and section 365 of the Bankruptcy Code as of the Effective Date.
Accordingly, such indemnification obligations shall survive and be
unaffected by entry of this Second Confirmation Order, irrespective of
whether such indemnification is owed for an act or event occurring before
or after the Petition Date. Reorganized ICG shall reimburse the Special
Committee and its members for all legal fees and expenses incurred by them
in connection with the Chapter 11 Cases and the Modified Plan.
The obligations of each Debtor or Reorganized Debtor to
indemnify any present or former professionals or advisors of the Debtors
arising out of acts that occurred prior to the Petition Date, including
without limitation, accountants, auditors, financial consultants,
underwriters, or attorneys, are deemed and treated as Executory Contracts
that are rejected by the applicable Debtor pursuant to the Modified Plan
and section 365 of the Bankruptcy Code, as of the Effective Date, and any
Claims arising from such indemnification obligations (including any
rejection damage claims) shall be subject to the bar date provisions of
Section III.C above.
7. Distribution Record Date.
The Distribution Record Date shall be September 1, 2002.
The Distribution provisions of the Modified Plan shall be, and hereby are,
approved. The Debtors and the Disbursing Agent, as the case may be, shall
make all Distributions required under the Modified Plan.
As of the close of business on the Distribution Record
Date, the respective transfer registers for the Old Notes, as maintained by
the Debtors or the Indenture Trustees, shall be closed. The applicable
Disbursing Agent shall have no obligation to recognize the transfer or sale
of any Old Note Claim that occurs after the close of business on the
Distribution Record Date and shall be entitled for all purposes herein to
recognize and make distributions only to those holders of Old Note Claims
that are holders of such Claims as of the close of business on the
Distribution Record Date.
E. SUBSTANTIVE CONSOLIDATION OF THE HOLDINGS
DEBTORS AND SERVICES DEBTORS.
The substantive consolidation of the Estates that
comprise the Holdings Debtors and the Estates that comprise the Services
Debtors for the purpose of implementing the Modified Plan, including for
purposes of voting, Confirmation and distributions to be made under the
Modified Plan, is approved. Accordingly, for purposes of implementing the
Modified Plan, on the Effective Date (a) all assets and liabilities of each
of the Holdings Debtors shall be deemed merged or treated as though they
were merged into and with the assets and liabilities of ICG; (b) all assets
and liabilities of each of the Services Debtors shall be deemed merged or
treated as though they were merged into and with the assets and liabilities
of ICG Services, Inc.; (c) no distributions shall be made under the
Modified Plan on account of Intercompany Claims among the Debtors; (d) no
distributions shall be made under the Modified Plan on account of
Subsidiary Interests; and (e) all guarantees of the Debtors of the
obligations of any other Debtor shall be deemed eliminated so that any
claim against any Debtor and any guarantee thereof executed by any other
Debtor and any joint or several liability of any of the Debtors shall be
deemed to be one obligation of the consolidated Debtors. The substantive
consolidation of the Debtors (other than for the purpose of implementing
the Modified Plan) shall not affect (i) the legal and corporate structures
of Reorganized ICG, subject to the right of the Debtors or Reorganized ICG
to effect Restructuring Transactions as provided in Article V of the
Modified Plan; (ii) Intercompany Claims; (iii) Subsidiary Interests, and
(iv) pre and post Commencement Date guarantees that are required to be
maintained (x) in connection with executory contracts or unexpired leases
that have been or will be assumed, or (y) pursuant to the Modified Plan.
F. ACTIONS IN FURTHERANCE OF THE MODIFIED PLAN.
The approvals and authorizations specifically set forth
in this Second Confirmation Order are nonexclusive and are not intended to
limit the authority of any Debtor or Reorganized Debtor or any officer
thereof to take any and all actions necessary or appropriate to implement,
effectuate and consummate any and all documents or transactions
contemplated by the Modified Plan or this Second Confirmation Order. In
addition to the authority to execute and deliver, adopt or amend, as the
case may be, the contracts, leases, instruments, releases and other
agreements specifically granted in this Second Confirmation Order, the
Debtors and the Reorganized Debtors are authorized and empowered, without
action of their respective stockholders or boards of directors, to take any
and all such actions as any of their Responsible Officers may determine are
necessary or appropriate to implement, effectuate and consummate any and
all documents or transactions contemplated by the Modified Plan or this
Second Confirmation Order. Pursuant to section 1142 of the Bankruptcy Code
and the Reorganization Effectuation Statutes, no action of the stockholders
or boards of directors of the Debtors or the Reorganized Debtors shall be
required for the Debtors or Reorganized Debtors to: (1) enter into,
execute and deliver, adopt or amend, as the case may be, any of the
contracts, leases, instruments, releases and other agreements or documents
and plans to be entered into, executed and delivered, adopted or amended in
connection with the Modified Plan and, following the Effective Date, each
of such contracts, leases, instruments, releases and other agreements shall
be a legal, valid and binding obligation of the applicable Reorganized
Debtor, enforceable against such Reorganized Debtor in accordance with its
terms subject only to bankruptcy, insolvency and other similar laws
affecting creditors' rights generally, and subject also to general
equitable principles; (2) issue shares of New Common Stock pursuant to the
Modified Plan, including upon exercise of the New Holdings Creditors
Warrants, Management Options, New Nominal Warrants or Fee Warrants and,
upon issuance, all such shares of New Common Stock shall be duly
authorized, validly issued and fully paid and nonassessable shares of New
Common Stock of Reorganized ICG; or (3) authorize the Reorganized Debtors
to engage in any of the activities set forth in this paragraph or otherwise
contemplated by the Modified Plan. Each of the Responsible Officers of each
Debtor and Reorganized Debtor is authorized to execute, deliver, file or
record such contracts, instruments, financing statements, releases,
mortgages, deeds, assignments, leases, applications, registration
statements, reports or other agreements or documents and take such other
actions as such officer may determine are necessary or appropriate to
effectuate or further evidence the terms and conditions of the Modified
Plan, this Second Confirmation Order and any and all documents or
transactions contemplated by the Modified Plan or this Second Confirmation
Order, all without further application to or order of the Bankruptcy Court
and whether or not such actions or documents are specifically referred to
in the Modified Plan, the Disclosure Statement, the Supplement, this Second
Confirmation Order or the exhibits to any of the foregoing, and the
signature of a Responsible Officer on a document executed in accordance
with this Section III.F shall be conclusive evidence of the Responsible
Officer's determination that such document and any related actions are
necessary and appropriate to effectuate or further evidence the terms and
conditions of the Modified Plan, this Second Confirmation Order or other
documents or transactions contemplated by the Modified Plan or this Second
Confirmation Order. The Secretary or any Assistant Secretary of each Debtor
or Reorganized Debtor is authorized to verify or attest to any of the
foregoing actions. Pursuant to section 1142 of the Bankruptcy Code and the
Reorganization Effectuation Statutes, to the extent that, under applicable
nonbankruptcy law, any of the foregoing actions otherwise would require the
consent or approval of the stockholders or the boards of directors of any
of the Debtors or Reorganized Debtors, this Second Confirmation Order shall
constitute such consent or approval, and such actions are deemed to have
been taken by unanimous action of the stockholders and directors of the
appropriate Debtor or Reorganized Debtor.
G. RELEASES AND INDEMNIFICATION.
The release and indemnification provisions contained in
the Modified Plan are approved in all respects. As further provided in
Section III.H below, the commencement or prosecution by any entity, whether
directly, derivatively or otherwise, of any claims, obligations, suits,
judgments, damages, demands, debts, rights, causes of action or liabilities
released pursuant to Section 5.12 of the Modified Plan are permanently
enjoined.
H. DISCHARGE, TERMINATION, INJUNCTION AND
SUBORDINATION RIGHTS.
1. Discharge of Claims and Satisfaction and
Termination of Interests.
Except as provided in the Modified Plan or in this Second
Confirmation Order, all consideration distributed under the Modified Plan
shall be in exchange for and in complete satisfaction, settlement,
discharge and release of all Claims of any nature whatsoever against the
Debtors or any of their assets or properties, and, regardless of whether
any property shall have been distributed or retained pursuant to the
Modified Plan on account of such Claims, upon the Effective Date, the
Debtors, and each of them, shall (i) be discharged and released under
section 1141(d)(1)(A) of the Bankruptcy Code from any and all Claims,
including, but not limited to, demands and liabilities that arose before
the Confirmation Date, and all debts of the kind specified in section
502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (A) a proof
of Claim based upon such debt is filed or deemed filed under section 501 of
the Bankruptcy Code, (B) a Claim based upon such debt is Allowed under
section 502 of the Bankruptcy Code or (C) the holder of a Claim based on
such debt accepted the Modified Plan; and (ii) terminate all ICG Interests.
In accordance with the foregoing, except as provided in
the Modified Plan or in this Second Confirmation Order, this Second
Confirmation Order constitutes a judicial determination, as of the
Effective Date, of a discharge of all Claims and other debts and
liabilities against the Debtors and termination of all ICG Interests and
other rights of equity security holders in the Debtors, pursuant to
sections 524 and 1141 of the Bankruptcy Code, and such discharge shall void
any judgment obtained against a Debtor at any time, to the extent that such
judgment relates to a discharged Claim or terminated Interest.
2. Injunctions.
Except as provided in the Modified Plan or this Second
Confirmation Order, as of the Effective Date, all entities that have held,
currently hold or may hold a Claim or other debt or liability that is
discharged or an Interest or other right of an equity security holder that
is terminated pursuant to the terms of the Modified Plan are permanently
enjoined from taking any of the following actions against the Debtors,
Reorganized Debtors or their property on account of any such discharged
Claims, debts or liabilities or terminated Interests or rights: (i)
commencing or continuing in any manner or in any place any action or other
proceeding; (ii) enforcing, attaching, collecting or recovering in any
manner any judgment, award, decree or order; (iii) creating, perfecting or
enforcing any lien or encumbrance; (iv) asserting a setoff, right of
subrogation or recoupment of any kind against any debt, liability or
obligation due to the Debtors; and (v) commencing or continuing any action,
in any manner, in any place that does not comply with or is inconsistent
with the provisions of the Modified Plan.
As of the Effective Date, all entities that have held,
currently hold or may hold a Claim, demand, debt, right, cause of action or
liability that is released pursuant to the Modified Plan are permanently
enjoined from taking any of the following actions against any released
entity or its property on account of such released Claims, obligations,
suits, judgments, damages, demands, debts, rights, causes of action or
liabilities: (i) commencing or continuing in any manner any action or other
proceeding; (ii) enforcing, attaching, collecting or recovering in any
manner any judgment, award, decree or order; (iii) creating, perfecting or
enforcing any lien or encumbrance; (iv) asserting a setoff, right of
subrogation or recoupment of any kind against any debt, liability or
obligation due to any released entity and (v) commencing or continuing any
action, in any manner, in any place that does not comply with or is
inconsistent with the provisions of the Modified Plan.
By accepting distribution pursuant to the Modified Plan,
each holder of an Allowed Claim or an Allowed Interest receiving
distributions pursuant to the Modified Plan shall be deemed to have
specifically consented to the injunctions set forth above.
3. Releases and Satisfaction of Subordination Rights.
All Claims of the holders of the Secured Lender Claims
and the Old Note Claims against the Debtors and all rights and claims
between or among such holders relating in any manner whatsoever to any
claimed subordination rights or rights to assert Claims that are owned by
any of the Debtors or their Estates against any other Debtor or third
party, shall be deemed satisfied by the distributions under, described in,
contemplated by, and/or implemented in Section 3.3 of the Modified Plan.
Distributions under, described in, contemplated by, and/or implemented by
the Modified Plan to the various Classes of Claims under the Modified Plan
shall not be subject to levy, garnishment, attachment or like legal process
by any Claim holder, including but not limited to, holders of Secured
Lender Claims and Old Note Claims by reason of any claimed subordination
rights or otherwise, so that each Claim holder shall have and receive the
benefit of the distributions in the manner set forth in the Modified Plan.
4. Exculpation
None of the Debtors, the Reorganized Debtors, the
Creditors' Committee, the Claims Resolution Committee, the Indenture
Trustees, or the Prepetition Secured Lenders, nor any of their respective
present or former members, officers, directors, employees, advisors, or
attorneys shall have or incur any liability to any holder of a Claim or an
Interest, or any other party in interest, or any of their respective
agents, employees, representatives, financial advisors, attorneys, or
affiliates, or any of their successors or assigns, for any act or omission
in connection with, relating to, or arising out of, the Chapter 11 Case,
formulating, negotiating or implementing the Modified Plan, the
solicitation of acceptances of the Modified Plan, the pursuit of
confirmation of the Modified Plan, the confirmation of the Modified Plan,
the consummation of the Modified Plan, or the administration of the
Modified Plan or the property to be distributed under the Modified Plan,
except for their gross negligence or willful misconduct, and in all
respects shall be entitled to reasonably rely upon the advice of counsel
with respect to their duties and responsibilities under the Modified Plan.
Section 12.11(b) of the Modified Plan is hereby stricken.
Reorganized ICG shall indemnify each Person exculpated
pursuant to Section 12.11 of the Modified Plan against, hold each such
Person harmless from, and reimburse each such Person for, any and all
losses, costs, expenses (including attorneys' fees and expenses),
liabilities and damages sustained by such Person arising from any liability
described in Section 12.11 of the Modified Plan.
Such exculpation and limitation on liability shall not,
however, limit, abridge, or otherwise affect the rights, if any, of the
Reorganized Debtors to enforce, xxx on, settle, or compromise the
Litigation Claims retained pursuant to Sections 5.8 and 5.9 of the Modified
Plan.
I. RESOLUTION OF CERTAIN OBJECTIONS
Notwithstanding anything in the Modified Plan or this
Second Confirmation Order to the contrary, to the extent that there is any
inconsistency between the terms of the Modified Plan or this Second
Confirmation Order and that certain Confidential Settlement Agreement and
Mutual Release (the "Settlement Agreement") between and among the Debtors
and Southwestern Xxxx Telephone, L.P., d/b/a Southwestern Xxxx Telephone
Company, Ameritech (composed of Illinois Xxxx Telephone Company d/b/a
Ameritech Illinois, Xxxxxxx Xxxx Telephone Company Incorporated d/b/a
Ameritech Indiana, Michigan Xxxx Telephone Company d/b/a Ameritech
Michigan, The Ohio Xxxx Telephone Company d/b/a Ameritech Ohio, Wisconsin
Xxxx, Inc., d/b/a Ameritech Wisconsin) and Pacific Xxxx Telephone Company
approved by this Court on May 1, 2002 and entered of record May 2, 2002
[Docket No. 1437], the terms of the Settlement Agreement shall govern.
Notwithstanding anything in the Modified Plan or this
Second Confirmation Order to the contrary, the Debtors or the Reorganized
Debtors will pay any undisputed Priority Tax Claims of the Missouri
Department of Revenue and the Tennessee Department of Revenue on or about
the Effective Date. The Debtors or the Reorganized Debtors have resolved
the objection of Bexar County by agreeing to pay a portion of Bexar
County's Other Secured Claim on or about the Effective Date and by paying
the remainder of such claim on a quarterly schedule at an agreed upon
interest rate.
Notwithstanding anything in the Modified Plan or this
Second Confirmation Order to the contrary, (i) sections 12.9 and 12.10 of
the Modified Plan, as well as any other similar or applicable language or
provisions herein, do not in any way affect, alter or preclude Genuity's
setoff or recoupment rights, however arising or asserted now or in the
future in the Colorado Action (as defined in Genuity's objection) and (ii)
sections 12.9 and 12.10 of the Modified Plan, as well as any other similar
or applicable language or provisions in this Second Confirmation Order, do
not prohibit Genuity from continuing to prosecute its counterclaims and its
affirmative defenses against the Debtors in the Colorado Action, provided
that Genuity's right to collect on any judgment rendered in Colorado Action
is governed by the Modified Plan provisions regarding distributions to
holders of Allowed prepetition Claims.
Notwithstanding anything in the Modified Plan or this
Second Confirmation Order to the contrary, the Debtors or the Reorganized
Debtors shall pay fifty percent (50%) of the amount set forth in the proof
of claim filed by the Texas Comptroller on or about the Effective Date in
complete and full satisfaction of such claim.
Notwithstanding anything in the Modified Plan or this
Second Confirmation Order to the contrary, to the extent that the Claim of
the County of San Diego is found to be an Allowed Claim, the Debtors or the
Reorganized Debtors shall pay such claim on a quarterly basis over a
three-year period at an agreed upon interest rate. County of San Diego
shall retain any liens provided for by applicable state law (if any). The
Debtors and County of San Diego have agreed to certain remedies in the
event of default.
Notwithstanding anything in the Modified Plan or this
Second Confirmation Order to the contrary, to the extent that the Internal
Revenue Service is found to have an Allowed Priority Tax Claim under
applicable law, the interest rate applicable to such Claim shall be 7%. The
Internal Revenue Service shall retain any setoff rights to which it is
entitled under the Bankruptcy Code.
J. PAYMENT OF STATUTORY FEES.
On or before the Effective Date, the Debtors shall pay
all fees payable pursuant to 28 U.S.C. ss. 1930 and shall continue to pay
such fees as they come due after the Effective Date until a final decree is
entered closing the Reorganization Cases in accordance with section 350(a)
of the Bankruptcy Code and Bankruptcy Rule 3022.
K. SUBSTANTIAL CONSUMMATION.
The substantial consummation of the Modified Plan, within
the meaning of section 1127 of the Bankruptcy Code, is deemed to occur on
the Effective Date.
L. RETENTION OF JURISDICTION.
Notwithstanding the entry of this Second Confirmation
Order and the occurrence of the Effective Date, the Bankruptcy Court shall
retain such jurisdiction over the Reorganization Cases after the Effective
Date as is legally permissible, including jurisdiction over the matters set
forth in Article XI of the Modified Plan, which provisions are incorporated
herein by reference.
M. NOTICE OF ENTRY OF SECOND CONFIRMATION ORDER.
Pursuant to Bankruptcy Rules 2002(f)(7) and 3020(c), the
Debtors or the Reorganized Debtors are directed to serve a notice of the
entry of this Confirmation Order and the establishment of bar dates for
certain Administrative Claims hereunder, substantially in the form of
Exhibit E attached hereto and incorporated herein by reference (the
"Confirmation Notice"), on all parties that received notice of the
Confirmation Hearing, no later than 15 days after the Effective Date;
provided, however, that the Debtors or the Reorganized Debtors shall be
obligated to serve the Confirmation Notice only on the record holders of
Claims or Interests as of the Confirmation Date.
1. The Debtors are directed to publish the Confirmation
Notice once in the national edition of The Wall Street Journal and in the
daily edition of The Denver Post no later than 30 days after the Effective
Date.
2. The Court hereby retains exclusive jurisdiction over
any dispute regarding the release of funds from the escrow created under
the Escrow Agreement.
Dated: September __, 2002
------------------------------------
UNITED STATES BANKRUPTCY JUDGE
EXHIBIT A
SECOND AMENDED JOINT PLAN OF REORGANIZATION OF ICG
COMMUNICATIONS, INC.
EXHIBIT B
MODIFICATION TO SECOND AMENDED JOINT
PLAN OF REORGANIZATION OF ICG COMMUNICATIONS, INC.
EXHIBIT C
REJECTION BAR DATE NOTICE
EXHIBIT D
CURE AMOUNT NOTICE
EXHIBIT E
CONFIRMATION NOTICE
EXHIBIT F
INITIAL BOARD OF DIRECTORS OF ICG
EXHIBIT M
FORM OF PLAN MODIFICATION
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- - - - - - - - - - - - - - - - - - - - - -x
: Chapter 11
In re :
: Case No. 00-4238 (PJW)
ICG COMMUNICATIONS, INC. :
et al., : Jointly Administered
-- -- :
:
Debtors. :
:
- - - - - - - - - - - - - - - - - - - - - --x
MODIFICATION TO SECOND AMENDED JOINT PLAN OF REORGANIZATION OF
ICG COMMUNICATIONS, INC., ET AL.
Dated as of July 26, 2002
The Second Amended Joint Plan of Reorganization of ICG
Communications, Inc., et. al. dated as of April 3, 2002, is hereby modified
by this Modification dated as of July 26, 2002 (this "Plan Modification")
by ICG Communications, Inc. ("ICG") and certain of its affiliates
(collectively, the "Affiliate Debtors"), debtors and debtors-in-possession
in the above-captioned cases (collectively, the "Debtors," or the
"Company"), pursuant to 11 U.S.C.ss.1127(a), as follows:
1. Section 1.4 is amended and restated in its entirety as follows:
"Ballots" means each of the ballot forms distributed with the
Supplement to holders of Impaired Claims entitled to vote as
specified in Section 4.1 of this Plan, in connection with the
solicitation of acceptances of the Plan.
2. Section 1.31 is amended and restated in its entirety as follows:
"Dilution" means dilution subsequent to the Effective Date (a)
from exercise of the New Holdings Creditor Warrants, (b) to the
extent necessary to give effect to the exercise of the Management
Options, (c) from the exercise of the Fee Warrants (d) from the
exercise of the New Nominal Warrants, or (e) otherwise as a result
of the issuance of common shares, implementation of other
management incentive programs or other action taken by the board
of directors of Reorganized ICG.
3. Section 1.40 is amended and restated in its entirety as follows:
"Exit Financing" means the financing obtained by Reorganized ICG
on the Effective Date pursuant to the New Senior Subordinated Term
Loan.
4. A new Section 1.41(a) is added as follows:
"Fee Warrants" means the warrants to purchase 200,000 New Common
Shares with the terms and conditions set forth in Plan Exhibits
H-2 and H-3, to be issued on the Effective Date by Reorganized ICG
to the lenders under the New Senior Subordinated Term Loan in
connection with the Exit Financing.
5. Section 1.54 is amended and restated in its entirety as follows:
"Management Option Plan" means the option plan to be adopted by
Reorganized ICG pursuant to Section 5.6 of this Plan, in
substantially the form of Plan Exhibit C-1.
6. Section 1.58 ("New Convertible Notes") is deleted in its
entirety and replaced with "Intentionally Omitted" and all
references to the New Convertible Notes are deemed removed from
the Plan.
7. Section 1.59 is amended and restated in its entirety as follows:
"New Holdings Creditor Warrants" means the warrants to purchase
800,000 New Common Shares with terms and conditions set forth on
Plan Exhibit D-1, to be issued on the Effective Date by
Reorganized ICG pursuant to Section 5.5 of this Plan for
distribution to holders of Allowed Claims in Class H-4, if Class
H-4 accepts the Plan pursuant to Section 3.3(b) of this Plan.
8. A new Section 1.59(a) is added as follows:
"New Nominal Warrants" means the warrants to purchase five percent
(5%) of the New Common Shares with terms and conditions set forth
on Plan Exhibit H-4, to be issued on the Effective Date by
Reorganized ICG to the lenders under the New Senior Subordinated
Term Loan in connection with the Exit Financing.
9. Section 1.60 is amended and restated in its entirety as follows:
"New Secured Notes" means the secured promissory notes to be
issued on the Effective Date by Reorganized ICG pursuant to
Section 5.5 of this Plan for distribution to holders of Allowed
Claims in Class S-5, with the terms and conditions set forth on
Plan Exhibit E-1.
10. Section 1.61 is amended and restated in its entirety as follows:
"New Securities" means, collectively, the Management Options, the
New Common Shares, New Holdings Creditor Warrants, and New Secured
Notes.
11. Section 1.62 is amended and restated in its entirety as follows:
"New Senior Subordinated Term Loan" means the new senior
subordinated term loan made on the Effective Date to Reorganized
ICG in the principal amount of $25 million, to be arranged by
Cerberus Capital Management L.P., as contemplated by Section 5.15
of this Plan, with the terms and conditions set forth in Plan
Exhibit H-1.
12. Section 1.81 is amended and restated in its entirety as follows:
"Plan" means this Chapter 11 reorganization plan and all exhibits
annexed hereto or referenced herein, as modified by the Plan
Modification, as the same may be amended, modified or supplemented
from time to time.
13. A new Section 1.81(a) is added as follows:
"Plan Modification" means the Modification to the Plan, dated as of
July 26, 2002.
14. Section 1.82 is amended and restated in its entirety as follows:
"Plan Exhibit" means any exhibit or schedule attached to the Plan or
the Plan Modification.
15. Section 1.91 is amended and restated in its entirety as follows:
"Registration Rights Agreement" means the agreement to be entered
into between Reorganized ICG and certain holders of General
Unsecured Claims with respect to rights of registration as to the
New Common Shares, in substantially the form set forth in Plan
Exhibit F-1.
16. A new Section 1.108(a) is added as follows:
"Supplement" means that certain Supplement to Disclosure Statement
With Respect to Second Amended Joint Plan of Reorganization of ICG
Communications, Inc., et al., Regarding Modification, dated as of
August __, 2002, as approved by the Bankruptcy Court pursuant to
section 1125 of the Bankruptcy Code and Fed. R. Bankr. P. 3018.
17. Section 5.3 is amended and restated in its entirety as follows:
Certificates of Incorporation and By-laws
The certificate or articles of incorporation and by-laws of each
Debtor shall be amended as necessary to satisfy the conditions of
the Plan and the Bankruptcy Code and shall include, among other
things, pursuant to section 1123(a)(6) of the Bankruptcy Code, a
provision prohibiting the issuance of non-voting equity securities,
but only to the extent required by section 1123(a)(6) of the
Bankruptcy Code. The amended Certificate of Incorporation and
By-laws of Reorganized ICG shall be in substantially the form
attached to the Plan as Plan Exhibits A-1 and B-1, respectively.
18. Section 5.5 is amended and restated in its entirety as follows:
Issuance of New Securities
On the Effective Date, Reorganized ICG shall issue for distribution
in accordance with the terms of the Plan: (a) $59,573,934.83 in
principal amount of New Secured Notes to holders of Allowed Claims
in Class S-5; (b) eight (8) million shares of New Common Shares to
the holders of Allowed Claims in Classes H-4 and S-4; and (c) the
New Holdings Creditor Warrants to holders of Allowed Claims in Class
H-4 if Class H-4 accepts the Plan. The issuance of all of the New
Securities, and the distribution thereof shall be exempt from
registration under applicable securities laws pursuant to section
1145 of the Bankruptcy Code. Without limiting the effect of section
1145 of the Bankruptcy Code, on the Effective Date, Reorganized ICG
will enter into a Registration Rights Agreement with each Allowed
Class H-4 or S-4 Claim holder (a) who by virtue of holding New
Common Shares and/or its relationship with Reorganized ICG could
reasonably be deemed to be an "underwriter" or "affiliate" (as such
terms are used within the meaning of applicable securities laws) of
Reorganized ICG, and (b) who requests in writing that Reorganized
ICG execute such agreement. The Registration Rights Agreements may
contain certain demand and piggyback registration rights for the
benefit of the signatories thereto. The Registration Rights
Agreement shall be in substantially the form set forth in Plan
Exhibit F-1. After the Effective Date, Reorganized ICG shall use
reasonable efforts to have the New Common Shares listed for trading
on a national securities exchange.
19. Section 5.7 is amended and restated in its entirety as follows:
(a) Appointment. The existing senior officers of ICG shall
serve initially in the same capacities after the Effective Date for
Reorganized ICG. The initial board of directors of Reorganized ICG
shall consist of five (5) directors. Cerberus Capital Management,
L.P. ("CCM") shall be entitled to appoint two (2) directors; X.X.
Xxxx Asset Management Co., L.L.C. ("Xxxx") shall be entitled to
appoint two (2) directors, and the Chief Executive Officer shall be
a director. All of the selected directors shall be reasonably
acceptable to the Chief Executive Officer and the Creditors'
Committee. The Chief Executive Officer shall be Chairman of the
board of directors. The Persons designating the board members shall
file with the Bankruptcy Court and give to ICG written notice of the
identities of such members no later than three (3) Business Days
before the date of the Confirmation Hearing.
(b) Terms. Reorganized ICG board members shall have staggered
terms, with the Chief Executive Officer's initial term being for one
(1) year; one director selected by Xxxx and one selected by CCM each
having an initial term of two (2) years; and one director selected
by Xxxx and one selected by CCM each having an initial term of three
(3) years.
(c) Vacancies. Until the first annual meeting of shareholders
of Reorganized ICG after the Effective Date, any vacancy in the
directorship shall be filled by a person designated by such director
(or the entity that originally designated such director) as a
replacement to serve out the remainder of the applicable term.
20. Section 5.15 is amended and restated in its entirety as follows:
Exit Financing
On the Effective Date, Reorganized ICG shall enter into all
necessary and appropriate documentation to obtain the Exit
Financing. Specifically, on the Effective Date, Reorganized ICG
shall enter into the $25 million New Senior Subordinated Term Loan,
and in connection therewith shall issue the Fee Warrants. The
proceeds of the Senior Subordinated Term Loan shall be utilized to
repay $25 million of the Secured Lender Claims. In connection
therewith, Reorganized ICG shall also issue to the lenders under the
New Senior Subordinated Term Loan the New Nominal Warrants. The
issuance of the New Senior Subordinated Term Loan and the notes
distributed on account thereof, as well as the New Nominal Warrants
and the Fee Warrants, shall not be exempt from registration under
applicable securities laws pursuant to section 1145 of the
Bankruptcy Code, and, accordingly, such securities will either have
to be registered under the Securities Act or be issued and
distributed pursuant to an exemption from registration other than
under section 1145 of the Bankruptcy Code.
21. Section 10.1 is amended and restated in its entirety as follows:
Conditions to Confirmation
The following are conditions precedent to the occurrence of the
Confirmation Date: (a) the entry of an order finding that the
Disclosure Statement and the Supplement together contain adequate
information pursuant to section 1125 of the Bankruptcy Code and (b)
the proposed Confirmation Order shall be in form and substance
reasonably acceptable to the Debtors and majority of the members of
the Creditors' Committee that vote in favor of the Plan.
22. Section 10.2 is amended and restated in its entirety as follows:
Conditions to Effective Date
The following are conditions precedent to the occurrence of the
Effective Date, each of which must be satisfied or waived in
accordance with Section 10.3 of this Plan:
(a) The Confirmation Order shall have been entered and
there shall not be in effect any stay of its effectiveness; the
Confirmation Order shall be in form and substance reasonably
satisfactory to the Debtors and the majority of the members of
the Creditors' Committee that vote in favor of the Plan; and
the Confirmation Order shall:
(i) provide that the Debtors and Reorganized
Debtors are authorized and directed to take all actions
necessary or appropriate to enter into, implement and
consummate the contracts, instruments, releases, leases,
indentures and other agreements or documents created in
connection with the Plan or the Restructuring
Transactions;
(ii) authorize the issuance of New Securities;
(iii) provide that the New Securities issued
under the Plan in exchange for Claims against the Debtors
are exempt from registration under the Securities Act of
1933 pursuant to section 1145 of the Bankruptcy Code,
except to the extent that holders of the New Securities
are "issuers" or "underwriters," as those terms are
defined in section 1145 of the Bankruptcy Code; and
(iv) find that upon consummation of the
transactions contemplated by the Plan, the Reorganized
Debtors will be able to pay their obligations as they
become due in the ordinary course of business and that
the Reorganized Debtors' assets exceed their liabilities.
(b) The Debtors shall have delivered to Royal Bank of
Canada as agent for the lenders under the Pre-Petition Credit
Agreement and to the agent under the New Senior Subordinated
Term Loan an officer's certificate certifying as to the truth
of certain representations and warranties contained in, and the
Debtors' compliance with certain covenants in, the New Secured
Notes and the Senior Subordinated Term Loan, from July 25, 2002
through the Effective Date.
23. Plan Exhibit A ("Form of Articles of Incorporation of
Reorganized ICG") is deleted in its entirety and replace with
Plan Exhibit A-1 attached hereto.
24. Plan Exhibit B ("Form of By-laws of Reorganized ICG") is
deleted in its entirety and replace with Plan Exhibit B-1
attached hereto.
25. Plan Exhibit C ("Form of Management Option Plan") is deleted in
its entirety and replaced with Plan Exhibit C-1 attached
hereto, which is the "ICG Communications, Inc. Year 2002 Stock
Option Plan."
26. Plan Exhibit D ("Termsheet for New Holdings Creditor Warrants")
is deleted in its entirety and replaced with Plan Exhibit D-1
attached hereto, which is the "Warrant Agreement".
27. Plan Exhibit E ("Term Sheet for New Secured Notes") is deleted
in its entirety and replaced with Plan Exhibit E-1 attached
hereto, which is the "Credit Agreement for New Secured Notes."
28. Plan Exhibit F ("Form of Registration Rights Agreement") is
deleted in its entirety and replaced with Plan Exhibit F-1
attached hereto, which is the "Registration Rights Agreement."
29. Plan Exhibit G ("Commitment Letter and Termsheet for New
Convertible Notes") is deleted in its entirety and replaced
with "Intentionally Omitted" and all references to such exhibit
are deemed removed from the Plan.
30. Plan Exhibit H ("Commitment Letter and Termsheet for New Senior
Subordinated Term Loan") is deleted in its entirety and
replaced with Plan Exhibit H-1 attached hereto, which is the
"Note and Warrant Purchase Agreement."
31. A new Plan Exhibit H-2 ("Xxxxxxxxx Fee Warrant") is added
(attached hereto as Plan Exhibit H-2).
32. A new Plan Exhibit H-3 ("Xxxxxx Xxxxxxx Fee Warrant") is added
(attached hereto as Plan Exhibit H-3).
33. A new Plan Exhibit H-4 ("New Nominal Warrants") is added
(attached hereto as Plan Exhibit H-4).
34. A new Plan Exhibit I ("Escrow Agreement") is added (attached
hereto as Plan Exhibit I).
35. A new Plan Exhibit J ("Xxxx Side Letter") is added (attached
hereto as Plan Exhibit J).
36. A new Plan Exhibit K ("Subsidiary Guarantee") is added
(attached hereto as Plan Exhibit K).
Dated: Wilmington, Delaware
July 26, 2002
Xxxxxxx X. Xxxx
Xxxx X. Xxxxxx
SKADDEN, ARPS, SLATE,
XXXXXXX & XXXX (ILLINOIS)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
- and -
-----------------------------------
Xxxxx X. Xxxxxxx
SKADDEN, ARPS, SLATE,
XXXXXXX & XXXX LLP
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attorneys for Debtors-in-Possession
PLAN EXHIBIT A-1
FORM OF ARTICLES OF INCORPORATION OF REORGANIZED ICG
----------------------------------------------------
PLAN EXHIBIT B-1
FORM OF BY-LAWS OF REORGANIZED ICG
----------------------------------
PLAN EXHIBIT C-1
ICG COMMUNICATIONS, INC. YEAR 2002
----------------------------------
STOCK OPTION PLAN
-----------------
PLAN EXHIBIT D-1
WARRANT AGREEMENT
-----------------
PLAN EXHIBIT E-1
CREDIT AGREEMENT FOR NEW SECURED NOTES
--------------------------------------
PLAN EXHIBIT F-1
REGISTRATION RIGHTS AGREEMENT
-----------------------------
PLAN EXHIBIT H-1
NOTE AND WARRANT
PURCHASE AGREEMENT
PLAN EXHIBIT H-2
XXXXXXXXX FEE WARRANT
---------------------
PLAN EXHIBIT H-3
XXXXXX XXXXXXX FEE WARRANT
--------------------------
PLAN EXHIBIT H-4
NEW NOMINAL WARRANTS
--------------------
PLAN EXHIBIT I
ESCROW AGREEMENT
----------------
PLAN EXHIBIT J
XXXX SIDE LETTER
----------------
PLAN EXHIBIT K
SUBSIDIARY GUARANTEE
--------------------
