SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ICG Communications, Inc.
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
449246107
(CUSIP Number)
Thomas O. Hicks
c/o Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
(214) 740-7300
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
Copies to:
Eric S. Shube
Vinson & Elkins, L.L.P.
1325 Avenue of the Americas
New York, New York 10019
(917) 206-8005
April 10, 2000
(Date of Event which Requires Filing of this Statement)
PAGE 2
<PAGE>
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. [ ]
(Continued on following pages)
PAGE 3
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Mr. Thomas O. Hicks
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
N/A
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 11,280,954
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 11,280,954
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
11,280,954
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 18.84%
- --------------------------------------------------------------------------------
14 Type of Reporting Person IN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 4
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM4 ICG Qualified Fund, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 5,132,396
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 5,132,396
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
5,132,396
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 9.56%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 5
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Equity Fund IV (1999), L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 5,132,396
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 5,132,396
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
5,132,396
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 9.56%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 6
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM4 ICG Private Fund, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 36,314
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 36,314
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
36,314
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.08%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 7
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Private Equity Fund IV (1999), L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 36,314
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 36,314
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
36,314
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.08%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 8
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM4/GP (1999) Partners, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 5,168,710
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 5,168,710
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
5,168,710
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 9.62%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 9
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM 4-EQ (1999)ICG Coinvestors, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 75,502
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 75,502
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
75,502
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.15%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 10
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM 4-EQ (1999)ICG Coinvestors, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 75,502
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 75,502
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
75,502
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.15%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 11
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM 4-SBS ICG Coinvestors, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 123,055
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 123,055
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
123,055
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.25%
- --------------------------------------------------------------------------------
14 Type of Reporting Person 00
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 12
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM 4-SBS (1999) Coinvestors, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 123,055
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 123,055
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
123,055
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.25%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 13
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Hicks, Muse GP (1999) Partners IV, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 5,367,267
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 5,367,267
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
5,367,267
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 9.95%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 14
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Hicks, Muse (1999) Fund IV, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 5,367,267
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 5,367,267
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
5,367,267
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 9.95%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 15
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM PG-IV ICG, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 273,210
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 273,210
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
273,210
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.56%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 16
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Hicks, Muse PG-IV (1999), C.V.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Netherlands
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 273,210
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 273,210
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
273,210
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.56%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 17
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM Equity Fund IV/GP Partners (1999), C.V.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Netherlands
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 273,210
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 273,210
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
273,210
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.56%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 18
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM GP Partners IV Cayman, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Cayman Islands
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 273,210
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power 273,210
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
273,210
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.56%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 19
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM Fund IV Cayman LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Cayman Islands
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 273,210
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 273,210
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
273,210
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.56%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 20
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 762430 10 6
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Bridge ICG, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 5,640,477
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 5,640,477
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
5,640,477
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 10.40%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 21
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Bridge Partners, L.P.
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 5,640,477
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 5,640,477
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
5,640,477
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 10.40%
- --------------------------------------------------------------------------------
14 Type of Reporting Person PN
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 22
<PAGE>
- --------------------------------------------------------------------------------
CUSIP No. 449246107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Bridge Partners, LLC
- --------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC use only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Texas
- --------------------------------------------------------------------------------
7 Sole Voting Power 0
Number of -----------------------------------------------------------------
Shares 8 Shared Voting Power* 5,640,477
Beneficially
Owned by -----------------------------------------------------------------
Each 9 Sole Dispositive Power 0
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power* 5,640,477
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person**
5,640,477
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 10.40%
- --------------------------------------------------------------------------------
14 Type of Reporting Person OO
- --------------------------------------------------------------------------------
* The Reporting Person expressly disclaims (a) the existence of any
group and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming (1) conversion of all 8% Series A Convertible Preferred
Stock beneficially owned by such reporting person, but without giving effect to
the conversion into Common Stock of (a) any 8% Series A Convertible Preferred
Stock held by other holders or (b) any capital stock held by other holders and
(2) exercise of all five-year Common Stock warrants beneficially owned by such
reporting person, but without giving effect to the exercise of any warrants held
by other holders.
PAGE 23
<PAGE>
Item 1. Security and Issuer.
The class of equity securities to which this Schedule 13D (this
"Statement") relates is the Common Stock, par value $0.01 per share (the "Common
Stock"), of ICG Communications, Inc., a Delaware corporation (the "Issuer").
The address of the Issuer's principal executive offices is 161 Inverness Drive
West, Englewood, Colorado 80112.
Item 2. Identity and Background.
(a) Name of Person(s) Filing this Statement (the "Reporting Persons"):
Mr. Thomas O. Hicks
HM4 ICG Qualified Fund, LLC, a Delaware limited liability company ("Qualified
LLC")
HMTF Equity Fund IV (1999), L.P., a Texas limited partnership ("Equity L.P.")
HM4 ICG Private Fund, LLC, a Delaware limited liability company ("Private LLC")
HMTF Private Equity Fund IV (1999), L.P., a Texas limited partnership ("Private
L.P.")
HM4/GP (1999) Partners, L.P., a Texas limited partnership ("HM4/GP Partners")
HM 4-EQ ICG Coinvestors, LLC, a Delaware limited liability company ("4-EQ LLC")
HM 4-EQ (1999) Coinvestors, L.P., a Texas limited partnership ("4-EQ L.P.")
HM 4-SBS ICG Coinvestors, LLC, a Delaware limited liability company ("4-SBS
LLC")
HM 4-SBS (1999) Coinvestors, L.P., a Texas limited partnership ("4-SBS L.P.")
Hicks, Muse GP (1999) Partners IV, L.P., a Texas limited partnership ("Hicks GP
Partners")
Hicks, Muse (1999) Fund IV, LLC, a Texas limited liability company ("Fund IV
LLC")
HM PG-IV ICG, LLC, a Delaware limited liability company ("PG-IV LLC")
Hicks, Muse PG-IV (1999), C.V., a limited partnership organized under the laws
of the Netherlands ("PG-IV C.V.")
HM Equity Fund IV/GP Partners (1999), C.V., a limited partnership organized
under the laws of the Netherlands ("HM Equity C.V.")
HM GP Partners IV Cayman, L.P., a Cayman Islands exempted limited partnership
("GP Cayman L.P.")
HM Fund IV Cayman LLC, an exempted Cayman Islands limited liability company
("Fund IV Cayman LLC")
HMTF Bridge ICG, LLC, a Delaware limited liability company ("Bridge LLC")
HMTF Bridge Partners, L.P., a Delaware limited partnership ("Bridge Partners
L.P.")
PAGE 24
<PAGE>
HMTF Bridge Partners, LLC, a Texas limited liability company ("Bridge Partners
LLC")
(b) - (c)
Mr. Thomas O. Hicks
Mr. Thomas O. Hicks is chief executive officer of Hicks, Muse, Tate & Furst
Incorporated ("Hicks, Muse"), a private investment firm primarily engaged in
leveraged acquisitions, recapitalizations and other investment activities. Mr.
Hicks is also the sole member and sole manager of Fund IV LLC, which is the sole
general partner of Hicks GP Partners, which is the sole general partner of
HM4/GP Partners, which is the sole general partner of each of Equity L.P. and
Private L.P. Equity L.P. is the sole member of Qualified LLC, and Private L.P.
is the sole member of Private LLC. Hicks GP Partners is also the sole general
partner of each of 4-SBS L.P. and 4-EQ L.P. 4-SBS L.P. is the sole member of
4-SBS LLC, and 4-EQ L.P. is the sole member of 4-EQ LLC. Mr. Hicks is also the
sole member of Fund IV Cayman LLC, which is the sole general partner of GP
Cayman L.P., which is the sole general partner of HM Equity C.V., which is the
sole general partner of PG-IV C.V. PG-IV C.V. is the sole member of PG-IV LLC.
Mr. Hicks is also the sole member of Bridge Partners LLC, which is the sole
general partner of Bridge Partners L.P., which is the sole member of Bridge LLC.
The business address of Mr. Hicks is 200 Crescent Court, Suite 1600, Dallas,
Texas 75201-6950.
Qualified LLC
Qualified LLC is a Delaware limited liability company formed to invest in
the 8% Series A Convertible Preferred Stock of the Issuer (the "Preferred
Stock") and the five year warrants (the "Warrants"). The business address of
Qualified LLC, which also serves as its principal office, is 200 Crescent Court,
Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
information with respect to Equity L.P., the sole member of Qualified LLC, is
set forth below.
Equity L.P.
Equity L.P. is a Texas limited partnership, the principal business of which
is to invest directly or indirectly in various companies. The business address
of Equity L.P., which also serves as its principal office, is 200 Crescent
Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to
Schedule 13D of the Exchange Act, information with respect to HM4/GP Partners,
the sole general partner of Equity L.P., is set forth below.
PAGE 25
<PAGE>
Private LLC
Private LLC is a Delaware limited liability company formed to invest in the
Preferred Stock and Warrants. The business address of Private LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to Private L.P., the sole member of Private LLC, is set
forth below.
Private L.P.
Private L.P. is a Texas limited partnership, the principal business of
which is to invest directly or indirectly in various companies. The business
address of Private L.P., which also serves as its principal office, is 200
Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C
to Schedule 13D of the Exchange Act, information with respect to HM4/GP
Partners, the sole general partner of Private L.P., is set forth below.
HM4/GP Partners
HM4/GP Partners is a Texas limited partnership, the principal business of
which is serving as the sole general partner of various limited partnerships
whose principal business is to serve as partners in various investment
partnerships. The principal business address of HM4/GP Partners, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to Hicks GP Partners, the sole general partner of
HM4/GP Partners, is set forth below.
4-EQ LLC
4-EQ LLC is a Delaware limited liability company formed to invest in the
Preferred Stock and Warrants. The business address of 4-EQ LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to 4-EQ L.P., the sole member of 4-EQ LLC, is set forth
below.
4-EQ L.P.
4-EQ L.P. is a Texas limited partnership, the principal business of which
is to invest directly or indirectly in various companies. The business address
of 4-EQ L.P., which also serves as its principal office, is 200 Crescent Court,
Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D
of the Exchange Act, information with respect to Hicks GP Partners, the sole
general partner of 4-EQ L.P., is set forth below.
PAGE 26
<PAGE>
4-SBS LLC
4-SBS LLC is a Delaware limited liability company formed to invest in the
Preferred Stock and Warrants. The business address of 4-SBS LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to 4-SBS L.P., the sole member of 4-SBS LLC, is set
forth below.
4-SBS L.P.
4-SBS L.P. is a Texas limited partnership, the principal business of which
is to invest directly or indirectly in various companies. The business address
of 4-SBS L.P., which also serves as its principal office, is 200 Crescent Court,
Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D
of the Exchange Act, information with respect to Hicks GP Partners, the sole
general partner of 4-SBS L.P., is set forth below.
Hicks GP Partners
Hicks GP Partners is a Texas limited partnership, the principal business of
which is serving as the sole general partner of various limited partnerships
whose principal business is to serve as partners in various investment
partnerships. The principal business address of Hicks GP Partners, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to Fund IV LLC, the sole general partner of Hicks GP
Partners, is set forth below.
Fund IV LLC
Fund IV LLC is a Texas limited liability company, the principal business of
which is serving as the sole general partner in various limited partnerships
whose principal business is to serve as partners in various investment
partnerships. The business address of Fund IV LLC, which also serves as its
principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950.
Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with
respect to Mr. Thomas O. Hicks, the sole member of Fund IV LLC, is set forth
above.
PG-IV LLC
PG-IV LLC is a Delaware limited liability company formed to invest in the
Preferred Stock and Warrants. The business address of PG-IV LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to PG-IV C.V., the sole member of PG-IV LLC, is set
forth below.
PG-IV C.V.
PAGE 27
<PAGE>
PG-IV C.V.
PG-IV C.V. is a limited partnership organized under the laws of the
Netherlands, the principal business of which is to invest directly or indirectly
in various companies. The business address of PG-IV C.V., which also serves as
its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to HM Equity C.V., the sole general partner of PG-IV
C.V., is set forth below.
HM Equity C.V.
HM Equity C.V. is a limited partnership organized under the laws of the
Netherlands, the principal business of which is serving as the sole general
partner of various limited partnerships whose principal business is to serve as
partners in various investment partnerships. The principal business address of
HM Equity C.V., which also serves as its principal office, is 200 Crescent
Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to
Schedule 13D of the Exchange Act, information with respect to GP Cayman L.P.,
the sole general partner of HM Equity C.V., is set forth below.
GP Cayman L.P.
GP Cayman L.P. is a Cayman Islands exempted limited partnership, the
principal business of which is serving as the sole general partner of various
limited partnerships whose principal business is to serve as partners in various
investment partnerships. The business address of GP Cayman L.P., which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to Fund IV Cayman LLC, the sole general partner of GP
Cayman L.P., is set forth below.
Fund IV Cayman LLC
Fund IV Cayman LLC is an exempted Cayman Islands limited liability company,
the principal business of which is serving as the sole general partner in
various limited partnerships whose principal business is to serve as partners in
various investment partnerships. The business address of Fund IV Cayman LLC,
which also serves as its principal office, is 200 Crescent Court, Suite 1600,
Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, information with respect to Mr. Thomas O. Hicks, the sole member
of Fund IV Cayman LLC, is set forth above.
Bridge LLC
Bridge LLC is a Delaware limited liability company formed to invest in the
Preferred Stock and Warrants. The business address of Bridge LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to
PAGE 28
<PAGE>
Instruction C to Schedule 13D of the Exchange Act, information with respect to
Bridge Partners L.P., the sole member of Bridge LLC, is set forth below.
Bridge Partners L.P.
Bridge Partners L.P. is a Delaware limited partnership, the principal
business of which to invest directly or indirectly in various companies. The
business address of Bridge Partners L.P., which also serves as its principal
office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant
to Instruction C to Schedule 13D of the Exchange Act, information with respect
to Bridge Partners LLC, the general partner of Bridge Partners L.P., is set
forth below.
Bridge Partners LLC
Bridge Partners LLC is Texas limited liability company, the principal
business of which is serving as the sole general partner of various limited
partnerships whose principal business is to serve as partners in various
investment partnerships. The principal business address of Bridge Partners LLC,
which also serves as its principal office, is 200 Crescent Court, Suite 1600,
Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, information with respect to Mr. Thomas O. Hicks, the sole member
of Bridge Partners LLC, is set forth above.
(d) None of the entities or persons identified in this Item 2 has,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) None of the entities or persons identified in this Item 2 has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violations with respect to such laws.
(f) Mr. Hicks is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
As more fully described in Item 6 below, on April 10, 2000, Bridge LLC,
Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC each purchased
from the Issuer the number of shares of Preferred Stock and the number of
Warrants set forth opposite their respective names below at the purchase price
set forth opposite their respective names below.
PAGE 29
<PAGE>
___________________________________________________________________________
Name of entity Number of shares Number of Purchase
of Preferred Stock Warrants Price
purchased purchased
___________________________________________________________________________
Qualified LLC 10,464 1,395,253 $104,644,000
Private LLC 74 9,885 $741,000
4-EQ LLC 154 20,502 $1,538,000
4-SBS LLC 251 33,412 $2,506,000
PG-IV LLC 557 74,281 $5,571,000
Bridge LLC 11,500 1,533,334 $115,000,000
____________________________________________________________________________
Qualified LLC obtained funds for the purchase price of its shares of
Preferred Stock and its Warrants from capital contributions provided by Equity
L.P.; Equity L.P. obtained such funds from capital contributions provided by its
limited partners and HM4/GP Partners; HM4/GP Partners obtained such funds from
capital contributions provided by its limited partners and Hicks GP Partners;
and Hicks GP Partners obtained such funds from capital contributions provided by
its limited partners and Fund IV LLC. Fund IV LLC obtained such funds from
capital contributions provided by Mr. Thomas O. Hicks, who obtained such funds
from personal funds.
Private LLC obtained funds for the purchase price of its shares of
Preferred Stock and its Warrants from capital contributions provided by Private
L.P.; Private L.P. obtained such funds from capital contributions provided by
its limited partners and HM4/GP Partners; HM4/GP Partners obtained such funds
from capital contributions provided by its limited partners and Hicks GP
Partners; and Hicks GP Partners obtained such funds from capital contributions
provided by its limited partners and Fund IV LLC. Fund IV LLC obtained such
funds from capital contributions provided by Mr. Thomas O. Hicks, who obtained
such funds from personal funds.
4-EQ LLC obtained funds for the purchase price of its shares of Preferred
Stock and its Warrants from capital contributions provided by 4-EQ L.P.; 4-EQ
L.P. obtained such funds from capital contributions provided by its limited
partners and Hicks GP Partners, and Hicks GP Partners obtained such funds from
capital contributions provided by its limited partners and Fund IV LLC. Fund IV
LLC obtained such funds from capital contributions provided by Mr. Thomas O.
Hicks, who obtained such funds from personal funds.
4-SBS LLC obtained funds for the purchase price of its shares of Preferred
Stock and its Warrants from capital contributions provided by 4-SBS L.P.;
4-SBS L.P. obtained such funds from capital contributions provided by its
limited partners and Hicks GP Partners, and Hicks GP
PAGE 30
<PAGE>
Partners obtained such funds from capital contributions provided by its limited
partners and Fund IV LLC. Fund IV LLC obtained such funds from capital
contributions provided by Mr. Thomas O. Hicks, who obtained such funds from
personal funds.
PG-IV LLC obtained funds for the purchase price of its shares of Preferred
Stock and its Warrants from capital contributions provided by PG-IV C.V.; PG-IV
C.V. obtained such funds from capital contributions provided by its limited
partners and HM Equity C.V.; HM Equity C.V. obtained such funds from capital
contributions provided by its limited partners and G.P. Cayman L.P.; and G.P.
Cayman L.P. obtained such funds from capital contributions provided by its
limited partners and Fund IV Cayman LLC. Fund IV Cayman LLC obtained such funds
from capital contributions provided by Mr. Thomas O. Hicks, who obtained such
funds from personal funds.
Bridge LLC obtained funds for the purchase price of its shares of Preferred
Stock and its Warrants from capital contributions provided by Bridge Partners
L.P.; Bridge Partners L.P. obtained $3,489,230.00 of such funds from capital
contributions provided by its general partner, Bridge Partners LLC, and its
limited partners, and it obtained the remainder of the funds, $114,735,029.39
(including fees), from borrowings under a credit agreement dated December 28,
1999, among HMTF Partners, L.P. and HM/Europe Coinvestors, C.V., as Initial
Borrowers, and any Future Borrowers from time to time parties thereto, the
Lenders from time to time parties thereto, the Issuing Bank, The Chase Manhattan
Bank, as Administrative Agent, and Bank of America, N.A., as Syndication Agent
("Credit Agreement"). Such funds include amounts allocated to fees and
expenses. Bridge Partners L.P. intends to repay the Credit Agreement either
with funds drawn under a new credit facility or with funds contributed by
affiliates of Hicks, Muse. The terms of the line of credit facility are set
forth in the Credit Agreement, a copy of which is filed as Exhibit 10.4 hereto,
and is incorporated by reference. Bridge Partners LLC obtained the funds it
contributed to Bridge Partners L.P. from capital contributions provided by Mr.
Thomas O. Hicks, who obtained such funds from personal funds.
Item 4. Purpose of the Transaction.
The Reporting Persons consummated the transactions described herein in
order to acquire an interest in the Issuer for investment purposes. The
Reporting Persons intend to review continuously their position in the Issuer.
Depending upon future evaluations of the business prospects of the Issuer and
upon other developments, including, but not limited to, general economic and
business conditions and stock market conditions, the Reporting Persons may
retain or from time to time increase their holdings or dispose of all or a
portion of their holdings, subject to any applicable legal and contractual
restrictions on their ability to do so.
In addition, the matters set forth in Item 6 below are incorporated in this
Item 4 by reference as if fully set forth herein.
PAGE 31
<PAGE>
Except as set forth in this Item 4 (including the matters described in Item
6 below which are incorporated in this Item 4 by reference), the Reporting
Persons have no present plans or proposals that relate to or that would result
in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule
13D under the Exchange Act.
Item 5. Interest in Securities of the Issuer.
(a) (1) Qualified LLC is the record and beneficial owner of 10,464
shares of Preferred Stock and 1,395,253 Warrants. Assuming conversion of all
such shares of Preferred Stock and exercise of all such Warrants, Qualified LLC
is the beneficial owner of 5,132,396 shares of Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at
March 27, 2000, there being 48,582,035 shares of Common Stock outstanding,
represents approximately 9.56% of the outstanding shares of Common Stock.
(2) Assuming conversion of all 10,464 shares of Preferred Stock and
exercise of all 1,395,253 Warrants owned of record by Qualified LLC, Equity
L.P., in its capacity as sole member of Qualified LLC, may, pursuant to Rule
13d-3 of the Exchange Act, be deemed to be the beneficial owner of 5,132,396
shares of Common Stock, which, based on calculations made in accordance with
Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035
shares of Common Stock outstanding, represents approximately 9.56% of the
outstanding shares of Common Stock.
(3) Private LLC is the record and beneficial owner of 74 shares of
Preferred Stock and 9,885 Warrants. Assuming conversion of all such shares of
Preferred Stock and assuming exercise of all such Warrants, Private LLC is the
beneficial owner of 36,314 shares of Common Stock, which, based on calculations
made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27,
2000, there being 48,582,035 shares of Common Stock outstanding, represents
approximately 0.08% of the outstanding shares of Common Stock.
(4) Assuming conversion of all 74 shares of Preferred Stock and
exercise of all 9,885 Warrants owned of record by Private LLC, Private L.P., in
its capacity as sole member of Private LLC, may, pursuant to Rule 13d-3 of the
Exchange Act, be deemed to be the beneficial owner of 36,314 shares of Common
Stock, which, based on calculations made in accordance with Rule 13d-3 of the
Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common
Stock outstanding, represents approximately 0.08% of the outstanding shares of
Common Stock.
(5) Assuming conversion of all 10,538 shares of Preferred Stock and
exercise of all 1,405,138 Warrants owned of record by Qualified LLC and Private
LLC, HM4/GP Partners, in its capacity as the sole general partner of each of
Equity L.P. and Private L.P., may, pursuant to Rule 13d-3 of the Exchange Act,
be deemed to be the beneficial owner of 5,168,710 shares of Common Stock, which,
based on calculations made in accordance with Rule 13d-3 of
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the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of
Common Stock outstanding, represents approximately 9.62% of the outstanding
shares of Common Stock.
(6) 4-EQ LLC is the record and beneficial owner of 154 shares of
Preferred Stock and 20,502 Warrants. Assuming conversion of all such shares of
Preferred Stock and assuming exercise of all such Warrants, 4-EQ LLC is the
beneficial owner of 75,502 shares of Common Stock, which, based on calculations
made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27,
2000, there being 48,582,035 shares of Common Stock outstanding, represents
approximately 0.15% of the outstanding shares of Common Stock.
(7) Assuming conversion of all 154 shares of Preferred Stock and
exercise of all 20,502 Warrants owned of record by 4-EQ LLC, 4-EQ L.P., in its
capacity as sole member of 4-EQ LLC, may, pursuant to Rule 13d-3 of the Exchange
Act, be deemed to be the beneficial owner of 75,502 shares of Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock
outstanding, represents approximately 0.15% of the outstanding shares of Common
Stock.
(8) 4-SBS LLC is the record and beneficial owner of 251 shares of
Preferred Stock and 33,412 Warrants. Assuming conversion of all such shares of
Preferred Stock and exercise of all such Warrants, 4-SBS LLC is the beneficial
owner of 122,055 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there
being 48,582,035 shares of Common Stock outstanding, represents approximately
0.25% of the outstanding shares of Common Stock.
(9) Assuming conversion of all 251 shares of Preferred Stock and
exercise of all 33,412 Warrants owned of record by 4-SBS LLC, 4-SBS L.P., in its
capacity as sole member of 4-SBS LLC, may, pursuant to Rule 13d-3 of the
Exchange Act, be deemed to be the beneficial owner of 123,055 shares of Common
Stock, which, based on calculations made in accordance with Rule 13d-3 of the
Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common
Stock outstanding, represents approximately 0.25% of the outstanding shares of
Common Stock.
(10) Assuming conversion of all 10,943 shares of Preferred Stock and
exercise of all 1,459,052 Warrants owned of record by Qualified LLC, Private
LLC, 4-EQ LLC and 4-SBS LLC, Hicks GP Partners, in its capacity as sole general
partner of each of HM4/GP Partners, 4-EQ L.P. and 4-SBS L.P., may, pursuant to
Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of
5,367,267 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there
being 48,582,035 shares of Common Stock outstanding, represents approximately
9.95% of the outstanding shares of Common Stock.
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(11) Assuming conversion of all 10,943 shares of Preferred Stock and
exercise of all 1,459,052 Warrants owned of record by Qualified LLC, Private
LLC, 4-EQ LLC and 4-SBS LLC, Fund IV LLC, in its capacity as the sole general
partner of Hicks GP Partners, may, pursuant to Rule 13d-3 of the Exchange Act,
be deemed to be the beneficial owner of 5,367,267 shares of Common Stock, which,
based on calculations made in accordance with Rule 13d-3 of the Exchange Act
and, as at March 27, 2000, there being 48,582,035 shares of Common Stock
outstanding, represents approximately 9.95% of the outstanding shares of Common
Stock.
(12) PG-IV LLC is the record and beneficial owner of 557 shares of
Preferred Stock and 74,281 Warrants. Assuming conversion of all such shares of
Preferred Stock and exercise of all such Warrants, PG-IV LLC is the beneficial
owner of 273,210 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there
being 48,582,035 shares of Common Stock outstanding, represents approximately
0.56% of the outstanding shares of Common Stock.
(13) Assuming conversion of all 557 shares of Preferred Stock and
exercise of all 74,281 Warrants owned of record by PG-IV LLC, PG-IV C.V., in its
capacity as sole member of PG-IV LLC, may, pursuant to Rule 13d-3 of the
Exchange Act, be deemed to be the beneficial owner of 273,210 shares of Common
Stock, which, based on calculations made in accordance with Rule 13d-3 of the
Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common
Stock outstanding, represents approximately 0.56% of the outstanding shares of
Common Stock.
(14) Assuming conversion of all 557 shares of Preferred Stock and
exercise of all 74,281 Warrants owned of record by PG-IV LLC, HM Equity C.V., in
its capacity as sole general partner of PG-IV C.V., may, pursuant to Rule 13d-3
of the Exchange Act, be deemed to be the beneficial owner of 273,210 shares of
Common Stock, which, based on calculations made in accordance with Rule 13d-3 of
the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of
Common Stock outstanding, represents approximately 0.56% of the outstanding
shares of Common Stock.
(15) Assuming conversion of all 557 shares of Preferred Stock and
exercise of all 74,281 Warrants owned of record by PG-IV LLC, GP Cayman L.P., in
its capacity as sole general partner of HM Equity C.V., may, pursuant to Rule
13d-3 of the Exchange Act, be deemed to be the beneficial owner of 273,210
shares of Common Stock, which, based on calculations made in accordance with
Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035
shares of Common Stock outstanding, represents approximately 0.56% of the
outstanding shares of Common Stock.
(16) Assuming conversion of all 557 shares of Preferred Stock and
exercise of all 74,281 Warrants owned of record by PG-IV LLC, Fund IV Cayman
LLC, in its capacity as the sole general partner of GP Cayman L.P. may, pursuant
to Rule 13d-3 of the Exchange Act, be
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<PAGE>
deemed to be the beneficial owner of 273,210 shares of Common Stock, which,
based on calculations made in accordance with Rule 13d-3 of the Exchange Act
and, as at March 27, 2000, there being 48,582,035 shares of Common Stock
outstanding, represents approximately 0.56% of the outstanding shares of Common
Stock.
(17) Bridge LLC is the record and beneficial owner of 11,500 shares of
Preferred Stock and 1,533,334 Warrants. Assuming conversion of all such shares
and exercise of all such Warrants, Bridge LLC is the beneficial owner of
5,640,477 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there
being 48,582,035 shares of Common Stock outstanding, represents approximately
10.40% of the outstanding shares of Common Stock.
(18) Assuming conversion of all 11,500 shares of Preferred Stock and
exercise of all 1,533,334 Warrants owned of record by Bridge LLC, Bridge
Partners L.P., in its capacity as sole member of Bridge LLC, may, pursuant to
Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of
5,640,477 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there
being 48,582,035 shares of Common Stock outstanding, represents approximately
10.40% of the outstanding shares of Common Stock.
(19) Assuming conversion of all 11,500 shares of Preferred Stock and
exercise of all 1,533,334 Warrants owned of record by Bridge LLC, Bridge
Partners LLC, in its capacity as general partner of Bridge Partners L.P., may,
pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner
of 5,640,477 shares of Common Stock, which, based on calculations made in
accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there
being 48,582,035 shares of Common Stock outstanding, represents approximately
10.40% of the outstanding shares of Common Stock.
(20) Assuming conversion of all 23,000 shares of Preferred Stock and
exercise of all 3,066,667 Warrants owned of record by Qualified LLC, Private
LLC, 4-EQ LLC, 4-SBS LLC, PG-IV LLC and Bridge LLC, Mr. Thomas O. Hicks, in his
capacity as sole member of Fund IV LLC, Fund IV Cayman LLC and Bridge Partners
LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the
beneficial owner of 11,280,954 shares of Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at
March 27, 2000, there being 48,582,035 shares of Common Stock outstanding,
represents approximately 18.84% of the outstanding shares of Common Stock.
The Reporting Persons expressly disclaim (a) the existence of any group and
(b) beneficial ownership with respect to any shares other than the shares owned
of record by such Reporting Person.
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(b) The information set forth in Items 7 through 11 of the cover pages
hereto is incorporated herein by reference.
(c) Except as set forth herein, none of the persons named in response
to paragraph (a) has effected any transactions in shares of Common Stock during
the past 60 days.
(d) The right to receive dividends on, and proceeds from the sale of,
the shares of Common Stock which may be beneficially owned by the persons
described in (a) and (b) above is governed by the limited liability company
agreements and limited partnership agreements of each such entity, and such
dividends or proceeds may be distributed with respect to numerous member
interests and general and limited partnership interests.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The matters set forth in Item 2 are incorporated in this Item 6 by
reference as if fully set forth herein.
Securities Purchase Agreement
Pursuant to the Preferred Stock and Warrant Purchase Agreement (as amended
by the Amendment Agreement referred to below, the "Securities Purchase
Agreement"), dated as of February 27, 2000 between the Issuer, Liberty Media
Corporation, Gleacher/ICG Investors, LLC and Bridge LLC, the Issuer agreed,
inter alia, to sell to Bridge LLC, and Bridge LLC agreed to purchase from the
Issuer, 230,000 shares of Preferred Stock and 3,066,667 Warrants for a purchase
price of $230,000,000. Prior to the issuance of the shares of Preferred Stock
and Warrants at the Closing (as defined below), pursuant to an Assignment of
Rights Under Preferred Stock and Warrant Purchase Agreement dated February 16,
2000 (the "Assignment Agreement"), Bridge LLC assigned 50% of its rights,
titles, interests and obligations in, to and under the Securities Purchase
Agreement to Qualified LLC, Private LLC, 4-EQ LLC, 4-SBS LLC and PG-IV LLC (the
"Assignees").
The number of shares of Preferred Stock to be sold to Bridge LLC and the
Assignees was reduced to 23,000 and the Liquidation Preference of each share was
increased from $1,000 to $10,000 (with no change to the aggregate purchase
price) by way of an Amendment dated April 10, 2000 ("Amendment Agreement"). The
number of shares to be sold to the other purchasers under the Securities
Purchase Agreement was also correspondingly reduced. Pursuant to the Amendment
Agreement, the parties also agreed to redesignate the Preferred Stock such that
Liberty Media Corporation would be issued Series A-1 Preferred Stock, Bridge LLC
and the Assignees would be issued Series A-2 Preferred Stock and Gleacher/ICG
Investors, LLC would be issued Series A-3 Preferred Stock. Unless the context
otherwise requires,
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<PAGE>
references herein to the "Preferred Stock" shall mean, collectively, the Series
A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3 Preferred Stock.
On April 10, 2000 at the closing held pursuant to the Securities Purchase
Agreement (the "Closing"), the Issuer sold to each of the persons listed below
(the "HMTF Holders") the number of shares of Preferred Stock and the number of
Warrants set forth opposite such person's name below in exchange for the
purchase price set forth opposite such person's name below.
___________________________________________________________________________
Name of entity Number of shares Number of Purchase
of Preferred Stock Warrants Price
purchased purchased
___________________________________________________________________________
Qualified LLC 10,464 1,395,253 $104,644,000
Private LLC 74 9,885 $741,000
4-EQ LLC 154 20,502 $1,538,000
4-SBS LLC 251 33,412 $2,506,000
PG-IV LLC 557 74,281 $5,571,000
Bridge LLC 11,500 1,533,334 $115,000,000
____________________________________________________________________________
The foregoing description of the Securities Purchase Agreement is not, and
does not purport to be, complete and is qualified in its entirety by reference
to the Stock Purchase Agreement, a copy of which is filed herewith as Exhibit
10.1 and is incorporated herein by reference and the Amendment, Consent and
Waiver, a copy of which is filed herewith as Exhibit 10.2 and is incorporated
herein by reference.
Registration Rights Agreement
At Closing, the Issuer and the holders of Preferred Stock entered into a
Registration Rights Agreement (the "Registration Rights Agreement"), pursuant to
which the Issuer has agreed to effect three "demand" registrations at the
request of the holders of a majority of the Registrable Securities held by the
HMTF Holders and any direct or indirect transferee of any Registrable Securities
held by the HMTF Holders, provided that each such demand registration must be in
respect of Registrable Securities (as defined below) with a fair market value of
at least $50,000,000 and provided that certain other restrictions are met. The
HMTF Holders may make one additional demand for registration upon exercise of
all or a portion of the Warrants held by them. The Registration Rights
Agreement also grants demand registration rights to holders of Registrable
Securities affiliated with Liberty Media Corporation. In addition, the
purchasers have certain piggyback registration rights in connection with
registrations of the Issuer's securities under the Securities Act of 1933 (the
"Securities Act") as well as rights to request a shelf registration of portions
of the Registrable Securities.
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"Registrable Securities" means (a) the shares of Common Stock issued or
issuable upon conversion of the Preferred Stock or upon exercise of the
Warrants, plus any additional shares of Common Stock or Warrants issued in
connection with any stock split, stock dividend or similar event with respect to
the Common Stock and (b) any securities that the Issuer or any successor entity
into which such Common Stock or such Preferred Stock may be converted or
changed.
The foregoing description of the Registration Rights Agreement is not, and
does not purport to be, complete and is qualified in its entirety by reference
to the Registration Rights Agreement, a copy of which is filed herewith as
Exhibit 10.3 and is incorporated herein by reference.
Certificate of Designation
As contemplated by the Securities Purchase Agreement, the Board of
Directors of the Issuer approved and adopted the Certificate of Designation of
the Powers, Preferences and Relative, Participating, Optional and Other Special
Rights of 8% Series A-1 Convertible Preferred Stock, 8% Series A-2 Convertible
Preferred Stock and 8% Series A-3 Convertible Preferred Stock, and
Qualifications, Limitations and Restrictions Thereof (the "Certificate of
Designation") to create three series of Preferred Stock. Except in relation to
director appointment rights, the powers, preferences and relative,
participating, optional and other special rights of each series of Preferred
Stock are identical.
Under the Certificate of Designation, the shares of Preferred Stock will,
with respect to dividend rights and rights on liquidation, winding-up and
dissolution, rank (i) senior to all shares of Common Stock and to each other
class of capital stock or preferred stock of the Issuer (other than Preferred
Stock Mandatorily Redeemable 2009 of the Issuer), the terms of which do not
expressly provide that it ranks senior to or on a parity with the shares of the
Preferred Stock as to dividend rights and rights on liquidation, winding-up and
dissolution of the Issuer; (ii) on a parity with the Preferred Stock Mandatorily
Redeemable 2009 of the Issuer and with each other class of capital stock or
series of preferred stock of the Issuer issued by Issuer, the terms of which
expressly provide that such class or series will rank on a parity with the
shares of the Preferred Stock as to dividend rights and rights on liquidation,
winding-up and dissolution, if the Issuer, in issuing the shares, complies with
applicable provisions in the Certificate of Designation; and (iii) junior to
each class of capital stock or series of preferred stock of the Issuer issued by
the Issuer, the terms of which expressly provide that such class or series will
rank senior to the shares of Preferred Stock as to dividend rights and rights
upon liquidation, winding-up and dissolution, if the Issuer, in issuing the
shares, complies with applicable provisions in the Certificate of Designation.
The holders of the shares of Preferred Stock will be entitled to receive
with respect to each share of Preferred Stock, out of funds legally available
for the payment of dividends,
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dividends at a rate per annum of 8% of the then-effective Liquidation Preference
(as defined below). Such dividends shall be cumulative from the date of
issuance of the Preferred Stock and shall be payable quarterly in arrears. On
each Dividend Payment Date, commencing on the June 30, 2000 Dividend Payment
Date, to and including the June 30, 2005 Dividend Payment Date, accrued
dividends on a share of Preferred Stock for the preceding Dividend Period shall
be added cumulatively to and thereafter remain a part of the Liquidation
Preference of such share. Thereafter, accrued dividends shall be payable
quarterly on each Dividend Payment Date, commencing on September 30, 2005, to
the holders of record of Preferred Stock as of the close of business on the
applicable Dividend Record Date. Accrued Dividends that are not paid in full in
cash on any Dividend Payment Date (whether or not declared and whether or not
there are sufficient funds legally available for the payment thereof) shall be
added cumulatively to the Liquidation Preference on the applicable Dividend
Payment Date and thereafter remain a part thereof.
The holders of shares of Preferred Stock will have the right, generally, at
any time, to convert any or all their shares of Preferred Stock into a number of
fully paid and nonassessable shares of Common Stock equal to the then effective
Liquidation Preference thereof plus accrued and unpaid dividends to the date of
conversion divided by the Conversion Price in effect at the time of conversion.
The initial Conversion Price is $28.00 per share.
The shares of Preferred Stock may be redeemed at any time commencing on or
after June 30, 2000, in whole or from time to time in part, at the election of
the Issuer, at a redemption price payable in cash equal to 100% of the then
effective Liquidation Preference (after giving effect to the Special Dividend
(as defined in the Certificate of Designation) if applicable) plus accrued and
unpaid dividends from the last Dividend Payment Date to the date fixed for
redemption. Shares of Preferred Stock (if not earlier redeemed or converted)
shall be mandatorily redeemed by the Issuer on June 30, 2015, at a redemption
price per share in cash equal to the then effective Liquidation Preference
(after giving effect to the Special Dividend, if applicable), plus accrued and
unpaid dividends thereon from the last Dividend Payment Date to the date of
mandatory redemption.
If a "Change of Control" (as defined in the Certificate of Designation)
occurs prior to June 30, 2005, an amount equal to the Special Dividend is to be
added to the Liquidation Preference of each share of Preferred Stock. The
Special Dividend, for each share of Preferred Stock, is the difference between
(i) $14,859.47 (as that number may be adjusted for stock splits, stock dividends
or similar events) and (ii) the amount of the actual Liquidation Preference of
such share immediately prior to the Change of Control.
Upon occurrence of a Change of Control, the Issuer has the right, but not
the obligation, to offer to repurchase all the shares of Preferred Stock at a
purchase price per share in cash equal to 101% of the Liquidation Preference of
each share of Preferred Stock repurchased (after giving effect to the Special
Dividend, if applicable), plus an amount equal to 101% of all dividends
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accrued and unpaid thereon to the date fixed for the repurchase. If the
Issuer does not offer to repurchase all the shares of Preferred Stock in
accordance with the Certificate of Designation, the dividend rate on the
Preferred Stock will increase to 16%. If the dividend rate is so increased, the
Issuer will have the right (but not the obligation) (i) at any time prior to
June 30, 2005 to offer to repurchase all the shares of Preferred Stock at a
purchase price per share in cash equal to 101% of the Liquidation Preference of
each share of Preferred Stock repurchased (after giving effect to the Special
Dividend, if applicable), plus an amount equal to 101% of all dividends accrued
and unpaid thereon to the date fixed for the repurchase and (ii) at any time
after June 30, 2005, to offer to repurchase all the shares of Preferred Stock at
a purchase price per share in cash equal to 100% of the Liquidation Preference
of each share of Preferred Stock repurchased (after giving effect to the Special
Dividend, if applicable), plus an amount equal to 100% of all dividends accrued
and unpaid thereon to the date fixed for the repurchase. If the Issuer makes
such an offer, the dividend rate on the Preferred Stock will be thereafter
reduced to 8%.
The holders of the shares of Preferred Stock will be entitled to vote on
all matters that the holders of the Issuer's Common Stock are entitled to vote
upon. In exercising these voting rights, each share of Preferred Stock shall be
entitled to vote on an as-converted basis with the holders of the Issuer's
Common Stock. The approval of the holders of between 51% and 75% the
then-outstanding shares of Preferred Stock, voting as one class, will be
required for the Issuer to take certain actions. In addition, for so long as
members of the HMTF Group own any combination of the shares of Common Stock (on
an as converted basis) that, taken together, equal at least 4,107,143 shares of
Common Stock (as adjusted for any stock dividends, splits and combinations and
similar events affecting the Common Stock from time to time), the holders of
Series A-2 Preferred Stock, voting as a class, may elect one director, or if
greater, such number (rounded up to the nearest whole number) equal to 10% of
the then authorized number of members of members of the Issuer's board of
directors, to serve on the board of directors of the Issuer. Pursuant to this
right, the holders of the Series A-2 Preferred Stock have elected Thomas O.
Hicks to the board of directors of the Issuer. The Securities Purchase
Agreement contains a parallel provision for the election of a director that is
inoperative for so long as the above described provision is in effect. Pursuant
to the Certificate of Designation, holders of the Series A-1 Preferred Stock
have the right to elect up to two directors under certain circumstances.
"Liquidation Preference" means an amount equal to $10,000 per share of
Preferred Stock plus accrued and unpaid dividends, subject to change in
accordance with the provisions of the Certificate of Designation.
The foregoing description is not, and does not purport to be, complete and
is qualified in its entirety by reference to the Certificate of Designation, a
copy of which is filed as Exhibit 10.4 and is incorporated herein by reference.
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Common Stock Warrant Certificate
As contemplated by the Securities Purchase Agreement, at the Closing the
Issuer issued the Warrants. The Warrants entitle the HMTF Holders or their
permitted assigns to purchase from the Issuer fully paid and nonassessable
shares of Common Stock at an exercise price of $34.00 per share, as adjusted
from time to time pursuant to the terms of the Warrant Certificate. The
Warrants are void after April 10, 2005. Warrants were also issued to the other
purchasers.
The foregoing description of the Warrants is not, and does not purport to
be, complete and is qualified in its entirety by reference to the form of Common
Stock Warrant, a copy of which is filed herewith as Exhibit 10.5 and is
incorporated herein by reference.
Item 7. Material to be Filed as Exhibits.
Exhibit 10.1: Securities Purchase Agreement, dated as of February 27, 2000,
between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors LLC and
Bridge LLC relating to the purchase and sale of 8% Cumulative Convertible
Preferred Stock and Warrants of ICG Communications, Inc.
Exhibit 10.2 Amendment dated as of April 10, 2000, between the Issuer,
Liberty Media Corporation, Gleacher/ICG Investors, LLC and Bridge LLC,
Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC.
Exhibit 10.3: Registration Rights Agreement, dated as of April 7, 2000,
between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors, LLC and
Bridge LLC, Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC.
Exhibit 10.4: Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of the 8% Series A-1
Convertible Preferred Stock, 8% Series A-2 Convertible Preferred Stock and 8%
Series A-3 Convertible Preferred Stock and Qualifications, Limitations and
Restrictions Thereof.
Exhibit 10.5: Form of Common Stock Warrant dated as of April 10, 2000.
Exhibit 10.6: Credit Agreement, dated December 28, 1999, by and among HMTF
Bridge Partners, L.P., and HM/Europe Coinvestors, C.V. as Initial Borrowers, the
Lenders named therein, the Issuing Bank, The Chase Manhattan Bank, as
Administrative Agent, and Bank of America, N.A., as Syndication Agent.
Exhibit 99.1: Joint Filing Agreement among the parties regarding filing of
Schedule 13D.
S-1
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 /s/ David W. Knickel*
Name: Thomas O. Hicks
* By: David W. Knickel
Attorney-in-Fact
S-2
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM4 ICG QUALIFIED FUND, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-3
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HMTF EQUITY FUND IV (1999), L.P.
By: HM4/GP (1999) Partners, L.P., its General
Partner
By: Hicks, Muse GP (1999) Partners IV, L.P., its
General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-4
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM4 ICG PRIVATE FUND, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-5
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HMTF PRIVATE EQUITY FUND IV (1999), L.P.
By: HM4/GP (1999) Partners, L.P., its General
Partner
By: Hicks, Muse GP (1999) Partners IV, L.P., its
General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-6
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM4/GP (1999) PARTNERS, L.P.
By: Hicks, Muse GP (1999) Partners IV, L.P., its
General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-7
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM 4-EQ ICG COINVESTORS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-8
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM 4-EQ (1999) COINVESTORS, L.P.
By: Hicks, Muse GP (1999) Partners IV, L.P.,
its General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its
General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-9
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM 4-SBS ICG COINVESTORS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-10
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM 4-SBS (1999) COINVESTORS, L.P.
By: Hicks, Muse GP (1999) Partners IV, L.P.,
its General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its
General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-11
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HICKS, MUSE GP (1999) PARTNERS IV, L.P.
By: Hicks, Muse (1999) Fund IV, LLC, its
General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-12
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HICKS, MUSE (1999) FUND IV, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-13
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM PG-IV ICG, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-14
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HICKS, MUSE PG-IV (1999), C.V.
By: HM Equity Fund IV/GP Partners (1999),
C.V., its General Partner
By: HM GP Partners IV Cayman, L.P., its
General Partner
By: HM Fund IV Cayman LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-15
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM EQUITY FUND IV/GP PARTNERS (1999),C.V.
By: HM GP Partners IV Cayman, L.P., its
General Partner
By: HM Fund IV Cayman LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-16
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM GP PARTNERS IV CAYMAN, L.P.
By: HM Fund IV Cayman LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-17
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HM FUND IV CAYMAN LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-18
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HMTF BRIDGE ICG, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
S-19
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HMTF BRIDGE PARTNERS, L.P.
By: HMTF Bridge Partners, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
April 20, 2000 HMTF BRIDGE PARTNERS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
<PAGE>
EXHIBIT INDEX
Exhibit 10.1: Securities Purchase Agreement, dated as of February 27, 2000,
between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors LLC and
Bridge LLC relating to the purchase and sale of 8% Cumulative Convertible
Preferred Stock and Warrants of ICG Communications, Inc.*
Exhibit 10.2 Amendment dated as of April 10, 2000, between the Issuer,
Liberty Media Corporation, Gleacher/ICG Investors, LLC and Bridge LLC,
Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC.*
Exhibit 10.3: Registration Rights Agreement, dated as of April 7, 2000,
between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors, LLC and
Bridge LLC, Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC.*
Exhibit 10.4: Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of the 8% Series A-1
Convertible Preferred Stock, 8% Series A-2 Convertible Preferred Stock and 8%
Series A-3 Convertible Preferred Stock and Qualifications, Limitations and
Restrictions Thereof.*
Exhibit 10.5: Form of Common Stock Warrant dated as of April 10, 2000.*
Exhibit 10.6: Credit Agreement, dated December 28, 1999, by and among HMTF
Bridge Partners, L.P., and HM/Europe Coinvestors, C.V. as Initial Borrowers, the
Lenders named therein, the Issuing Bank, The Chase Manhattan Bank, as
Administrative Agent, and Bank of America, N.A., as Syndication Agent.*
Exhibit 99.1: Joint Filing Agreement among the parties regarding filing of
Schedule 13D.*
__________________
* Filed herewith
PAGE 1
<PAGE>
JOINT FILING STATEMENT
Each of the undersigned agrees that (i) the statement on Schedule 13D
relating to the Common Stock, par value $.001 per share, of ICG Communications,
Inc. has been adopted and filed on behalf of each of them, (ii) all future
amendments to such statement on Schedule 13D will, unless written notice to the
contrary is delivered as described below, be jointly filed on behalf of each of
them, and (iii) the provisions of Rule 13d-1(k)(1) under the Securities Exchange
Act of 1934 apply to each of them. This agreement may be terminated with
respect to the obligations to jointly file future amendments to such statement
on Schedule 13D as to any of the undersigned upon such person giving written
notice thereof to each of the other persons signatory hereto, at the principal
office thereof.
April 20, 2000 /s/ David W. Knickel *
Name: Thomas O. Hicks
* By David W. Knickel
Attorney-in-Fact
HM4 ICG QUALIFIED FUND, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMTF EQUITY FUND IV (1999), L.P.
By: HM4/GP (1999) Partners, L.P., its General
Partner
By: Hicks, Muse GP (1999) Partners IV, L.P., its
General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
PAGE 2
<PAGE>
HM4 ICG PRIVATE FUND, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMTF PRIVATE EQUITY FUND IV (1999), L.P.
By: HM4/GP (1999) Partners, L.P., its General
Partner
By: Hicks, Muse GP (1999) Partners IV, L.P.,
its General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HM4/GP (1999) PARTNERS, L.P.
By: Hicks, Muse GP (1999) Partners IV, L.P., its
General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HM 4-EQ ICG COINVESTORS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
PAGE 3
<PAGE>
HM 4-EQ (1999) COINVESTORS, L.P.
By: Hicks, Muse GP (1999) Partners IV, L.P., its
General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HM 4-SBS ICG COINVESTORS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HM 4-SBS (1999) COINVESTORS, L.P.
By: Hicks, Muse GP (1999) Partners IV,
L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its
General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HICKS, MUSE GP (1999) PARTNERS IV, L.P.
By: Hicks, Muse (1999) Fund IV, LLC, its
General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
PAGE 4
<PAGE>
Title: Vice President
HICKS, MUSE (1999) FUND IV, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HM PG-IV ICG, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HICKS, MUSE PG-IV (1999), C.V.
By: HM Equity Fund IV/GP Partners (1999),
C.V., its General Partner
By: HM GP Partners IV Cayman, L.P., its
General Partner
By: HM Fund IV Cayman LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HM EQUITY FUND IV/GP PARTNERS (1999), C.V.
By: HM GP Partners IV Cayman, L.P., its General
Partner
By: HM Fund IV Cayman LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
PAGE 5
<PAGE>
Title: Vice President
HM GP PARTNERS IV CAYMAN, L.P.
By: HM Fund IV Cayman LLC, its General Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HM FUND IV CAYMAN LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMTF BRIDGE ICG, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMTF BRIDGE PARTNERS, L.P.
By: HMTF Bridge Partners, LLC, its General
Partner
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
HMTF BRIDGE PARTNERS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
EXHIBIT 10.1
================================================================================
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
BY AND BETWEEN
ICG COMMUNICATIONS, INC.
AND
THE PURCHASERS LISTED ON SCHEDULE I HERETO
Dated as of
February 27, 2000
================================================================================
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
ARTICLE II SALE AND PURCHASE 6
2.1 Agreement to Sell and to Purchase; Purchase Price. 6
2.2 Closing. 6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 7
3.1 Organization and Standing. 7
3.2 Capital Stock. 8
3.3 Authorization; Enforceability. 9
3.4 No Violation; Consents. 9
3.5 Commission Filings; Financial Statements. 10
3.6 Private Offering. 10
3.7 Provided Information. 11
3.8 Material Adverse Change. 11
3.9 Litigation. 11
3.10 Permits and Licenses. 11
3.11 Intellectual Property, etc. 12
3.12 Board Approval. 12
3.13 British Telecommunications. 12
3.14 Share Exchange Agreement. 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS 13
4.1 Organization; Authorization; Enforceability. 13
4.2 Private Placement. 13
4.3 No Violation; Consents. 14
4.4 No Litigation. 15
4.5 No Group Status. 15
ARTICLE V COVENANTS OF THE COMPANY 15
5.1 Operation of Business. 15
5.2 HMTF and Liberty Directors. 16
5.3 Access to Books and Records. 18
5.4 Agreement to Take Necessary and Desirable Actions. 18
5.5 Compliance with Conditions; Commercially Reasonable Efforts. 18
5.6 HSR Act Notification. 19
5.7 Consents and Approvals. 19
5.8 Reservation of Shares. 19
5.9 Use of Proceeds. 20
5.10 Filing of Certificate of Designation. 20
5.11 Listing of Shares. 20
5.12 Periodic Information. 20
5.13 Legends. 20
5.14 Payment; Paying Agent; Certain Information. 21
5.15 Rights Plan. 21
5.16 Proportional Purchase Right. 21
5.17 Modification of Share Exchange Agreement. 22
ARTICLE VI COVENANTS OF THE PURCHASERS 22
6.1 Agreement to Take Necessary and Desirable Actions. 22
6.2 Compliance with Conditions; Commercially Reasonable Efforts. 22
<PAGE>
6.3 HSR Act Notification. 22
6.4 Consents and Approvals. 23
6.5 Restrictions on Transfer. 23
6.6 Standstill. 23
ARTICLE VII CONDITIONS PRECEDENT TO CLOSING 24
7.1 Conditions to the Company's Obligations. 24
7.2 Conditions to Each Purchaser's Obligations. 25
ARTICLE VIII MISCELLANEOUS 26
8.1 Survival; Indemnification. 26
8.2 Notices. 28
8.3 Governing Law. 31
8.4 Termination. 31
8.5 Entire Agreement. 32
8.6 Modifications and Amendments. 32
8.7 Waivers and Extensions. 32
8.8 Titles and Headings. 32
8.9 Exhibits and Schedules. 32
8.10 Expenses. 32
8.11 Press Releases and Public Announcements. 32
8.12 Assignment; No Third Party Beneficiaries. 33
8.13 Severability. 33
8.14 Counterparts. 33
8.15 Further Assurances. 33
8.16 Remedies Cumulative. 33
8.17 Several Liability of the Purchasers. 34
8.18 No Duty to Other Purchasers. 34
8.19 Specific Performance. 34
8.20 No Purchaser Affiliate Liability. 34
Exhibits
Exhibit A - Form of Warrant
Exhibit B - Certificate of Designation
Exhibit C - Form of Registration Rights Agreement
Exhibit D - Form of Legal Opinion
Exhibit E - Form of Management Rights Agreement
Schedules
Schedule 3.1(b) - Equity Interests
Schedule 3.2 - Company Capital Stock
Schedule 5.1(iv) - Dividends or Distributions on Capital Stock
</TABLE>
<PAGE>
This PREFERRED STOCK AND
WARRANT PURCHASE AGREEMENT is dated as of
February 27, 2000 (this"Agreement"), by and
between ICG the "Purchasers").
WHEREAS, the Company proposes, subject to the terms and conditions set
forth herein, to issue and sell to the Purchasers 750,000 shares of its 8%
Series A Convertible Preferred Stock, initial liquidation preference $1,000 per
share, par value $0.01 per share (the "Series A Preferred Stock");
WHEREAS, the Company proposes, subject to the terms and conditions set
forth herein, to issue and sell to the Purchasers warrants (each a "Warrant" and
together, the "Warrants") to purchase 10,000,000 shares of the Company's Common
Stock, par value $0.01 per share (the "Warrant Shares"), in substantially the
form of Exhibit A attached hereto;
WHEREAS, subject to the terms and conditions set forth herein, each
Purchaser desires to purchase such Series A Preferred Stock and Warrants from
the Company;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE I
DEFINITIONS
(a) As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing; provided that neither
AT&T Corp. ("AT&T") nor any Subsidiary of AT&T which is not included in AT&T's
Liberty Media Group (as defined in AT&T's Certificate of Incorporation) will be
deemed to be an Affiliate of Liberty.
"Applicable Law" means (a) any United States Federal, state, local or
foreign law, statute, rule, regulation, order, writ, injunction, judgment,
decree or permit of any Governmental Authority and (b) any rule or listing
requirement of any applicable national stock exchange or listing requirement of
any national stock exchange or Commission recognized trading market on which
securities issued by the Company or any of the Subsidiaries are listed or
quoted.
PAGE 2
<PAGE>
"Business Day" means any day other than a Saturday, a Sunday, the day
after Thanksgiving or a day when banks in The City of New York are authorized by
Applicable Law to be closed.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock and (ii) with respect to any
other Person, any and all partnership or other equity interests of such Person.
"Certificate of Designation" means the Certificate of Designation of
the Powers, Preferences and Relative, Participating, Optional and Other Special
Rights and Qualifications, Limitations and Restrictions thereof relating to the
Series A Preferred Stock, in the form attached hereto as Exhibit B.
"Commission" means the United States Securities and Exchange
Commission.
"Commission Filings" means all reports, registration statements and
other filings filed by the Company with the Commission (and all notes and
schedules thereto and documents incorporated by reference therein).
"Common Stock" means the common stock, par value $0.01 per share, of
the Company.
"Contract" means any contract, lease, loan agreement, mortgage,
security agreement, trust indenture, note, bond, or other agreement (whether
written or oral) or instrument.
"Conversion Shares" means the shares of Common Stock issuable upon the
conversion of the Series A Preferred Stock in accordance with the terms of the
Certificate of Designation.
"Equity Documents" means this Agreement, the Registration Rights
Agreement, the Certificate of Designation, the Management Rights Agreements, the
Share Exchange Agreement and the Warrants.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"filed," when used with respect to a Commission Filing, means filed
with the Commission and publicly available.
"GAAP" means United States generally accepted accounting principles,
consistently applied.
"Gleacher Group" means Gleacher/ICG Investors LLC and its Affiliates.
"Gleacher Holders" means members of the Gleacher Group that are
holders of all or a portion of the Gleacher Shares.
PAGE 3
<PAGE>
"Gleacher Shares" means (i) the shares of Series A Preferred Stock
issued to Gleacher on the Closing Date under this Agreement held by members of
the Gleacher Group plus (ii) the shares of Common Stock issued to and held by
members of the Gleacher Group upon conversion of the shares referred to in
clause (i) above.
"Governmental Authority" means (i) any foreign, Federal, state or
local court or governmental or regulatory agency or authority, (ii) any
arbitration board, tribunal or mediator and (iii) any national stock exchange or
Commission recognized trading market on which securities issued by the Company
or any of the Subsidiaries are listed or quoted.
"HMTF" means Hicks, Muse, Tate & Furst Incorporated, a Texas
corporation.
"HMTF Funds" means the funds affiliated with the HMTF Purchaser
identified by the HMTF Purchaser on or prior to the Closing Date.
"HMTF Group" means HMTF and its Affiliates and their respective
officers, directors, partners, members, stockholders and employees (and members
of their respective families and trusts for the primary benefit of such family
members), and HMTF Purchaser and its Affiliates.
"HMTF Holders" means members of the HMTF Group that are holders of all
or a portion of the HMTF Shares.
"HMTF Purchaser" means HM4 ICG Qualified Fund, LLC; HM4 ICG Private
Fund, LLC; HM PG-IV ICG, LLC; HM 4-SBS ICG Coinvestors, LLC; HM 4-EQ ICG
Coinvestors, LLC and HMTF Bridge ICG, LLC.
"HMTF Shares" means the HMTF Issued Series A Preferred Shares held by
members of the HMTF Group plus the shares of Common Stock issued to and held by
members of the HMTF Group upon conversion of the HMTF Issued Series A Preferred
Shares or upon exercise of the Warrants held by members of the HMTF Group.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and applicable rules and regulations.
"Liberty" means Liberty Media Corporation, a Delaware corporation,
provided that if substantially all of the assets of Liberty Media Corporation
are at any time hereafter contributed to Liberty Media Group LLC, a Delaware
limited liability company, then from and after such contribution, Liberty shall
mean Liberty Media Group LLC.
"Liberty Group" means Liberty and its Affiliates.
"Liberty Holders" means members of the Liberty Group that are holders
of all or a portion of the Liberty Shares.
"Liberty Shares" means the Liberty Issued Series A Preferred Shares
held by members of the Liberty Group plus the shares of Common Stock issued to
and held by members
PAGE 4
<PAGE>
of the Liberty Group upon conversion of the Liberty Issued Series A Preferred
Shares or upon exercise of the Warrants held by members of the Liberty Group.
"Lien" means any mortgage, pledge, lien, security interest, claim,
restriction, charge or encumbrance of any kind.
"Management Rights Agreements" means the Management Rights Agreements
to be dated as of the Closing Date, to be executed by the Company and delivered
to the HMTF Funds, a form of which is attached as Exhibit E.
"Material Adverse Effect" means a material adverse effect on the
condition (financial or otherwise), business, assets or results of operations of
the Company and its Subsidiaries, taken as a whole.
"Permitted Transferee" means, with respect to any Purchaser, or any
Permitted Transferee of any Purchaser, (i) any Purchaser Affiliate of such
Purchaser that is not a holder of Common Stock on the date hereof or an
Affiliate of such holder; (ii) any Person that is a member of the Liberty Group;
and (iii) any Person that is a member of the HMTF Group and any Person
investing, directly or indirectly, in or in parallel with any member of the HMTF
Group; provided, however, that each Permitted Transferee must agree in writing
pursuant to a Permitted Transferee Agreement, in accordance with the provisions
of Section 6.5, to be bound by the terms, and subject to the conditions, of this
Agreement to the same extent, and in the same manner, as the transferring
Purchaser prior to the transfer of any Securities to such Permitted Transferee;
and provided, further, that the transfer of Securities from such Purchaser to
such Permitted Transferee is in compliance with all applicable securities laws.
"Person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.
"Purchaser Affiliate" means (a) any direct or indirect holder of any
equity interests or securities in any Purchaser (whether limited or general
partners, members, stockholders or otherwise), (b) any Affiliate of any
Purchaser or (c) any director, officer, employee, representative or agent of (i)
such Purchaser, (ii) any Affiliate of such Purchaser or (iii) any holder of
equity interests or securities referred to in clause (a) above.
"Registration Rights Agreement" means the Registration Rights
Agreement, to be dated as of the Closing Date, to be entered into by and among
the Company and the Purchasers, in the form attached hereto as Exhibit C.
"Securities" means the Shares and the Warrants.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Series A Preferred Stock" has the meaning set forth in the first
recital to this Agreement. The Series A Preferred Stock has the designation,
powers, preferences and rights, and qualifications, limitations and restrictions
thereof set forth in the Certificate of Designation.
PAGE 5
<PAGE>
"Share Exchange Agreement" means the Share Exchange Agreement between
Quadrangle Investments, Inc. and a Subsidiary of the Company to be dated as of
February 28, 2000.
"Shares" means the shares of Series A Preferred Stock to be issued and
sold by the Company to the Purchasers pursuant to Section 2.1 hereof.
"Subsidiary" means, with respect to any Person (i) a corporation a
majority of whose capital stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such Person,
by a subsidiary of such Person, or by such Person and one or more subsidiaries
of such Person, (ii) a partnership in which such Person or a subsidiary of such
Person is, at the date of determination, a general partner of such partnership
and has the power to direct the policies and management of such partnership or
(iii) any other Person (other than a corporation) in which such Person, a
subsidiary of such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (A) at
least a majority ownership interest or (B) the power to elect or direct the
election of the directors or other governing body of such Person.
"Transactions" means the transactions contemplated by this Agreement and
the other Equity Documents.
(b) As used in this Agreement, the following terms shall have the
meanings given thereto in the Sections set forth opposite such terms:
<TABLE>
<CAPTION>
<S> <C>
Term Section
Agreement. . . . . . . . . . . . . . . . Preamble
Closing. . . . . . . . . . . . . . . . . 2.2
Closing Date . . . . . . . . . . . . . . 2.2
Company. . . . . . . . . . . . . . . . . Preamble
Conversion Agent . . . . . . . . . . . . 5.14(b)(ii)
DGCL . . . . . . . . . . . . . . . . . . 3.2(b)
HMTF Director. . . . . . . . . . . . . . 5.2(a)
HMTF Issued Series A Preferred Shares. . 5.2(a)
Indemnified Party. . . . . . . . . . . . 8.1(c)
Indemnified Person . . . . . . . . . . . 8.1(b)
Indemnifying Party . . . . . . . . . . . 8.1(c)
Information. . . . . . . . . . . . . . . 3.7
Issuance . . . . . . . . . . . . . . . . 2.1
Liberty Director . . . . . . . . . . . . 5.2(b)
Liberty Issued Series A Preferred Shares 5.2(b)(i)
Losses . . . . . . . . . . . . . . . . . 8.1(b)
Notices. . . . . . . . . . . . . . . . . 8.2
Paying Agent . . . . . . . . . . . . . . 5.14(b)(i)
Permitted Transferee Agreement . . . . . 6.5
Projections. . . . . . . . . . . . . . . 3.7
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Term . . . . . . . . . . . . . . . . Section
Purchaser; Purchasers. . . . . . . . . . Preamble
Purchase Price . . . . . . . . . . . . . 2.1
Registrar. . . . . . . . . . . . . . . . 5.14(b)(iii)
Securities Transfer. . . . . . . . . . . 6.5
Supplying Purchasers . . . . . . . . . . 8.18
Warrants . . . . . . . . . . . . . . . . Recitals
Warrant Shares . . . . . . . . . . . . . Recitals
</TABLE>
ARTICLE II
SALE AND PURCHASE
2.1 Agreement to Sell and to Purchase; Purchase Price.
On the Closing Date, and upon the terms and subject to the conditions set
forth in this Agreement, the Company shall issue and sell to each Purchaser, and
each Purchaser, severally and not jointly, shall purchase and accept from the
Company such number of Shares and Warrants as is set forth opposite such
Purchaser's name on Schedule 1 hereto (the "Issuance"), for a purchase price of
one thousand dollars ($1,000) per Share (the "Purchase Price"), payable by wire
transfer of immediately available funds to a bank account or bank accounts
designated by the Company described in Section 2.2(a)(i).
2.2 Closing.
The closing of the Issuance to each Purchaser (the "Closing") shall take
place on a date to be specified by the Company and such Purchaser, which shall
be no later than the later of (A) the 2nd Business Day after the date as of
which all of the conditions set forth in Article VII hereof shall have been
satisfied as to the purchase by such Purchaser (or, to the extent permitted,
waived by the party or parties entitled to the benefit thereof) and (B) 15
Business Days after the date hereof or at such other time and date as the
parties hereto shall agree in writing (such date and time, the "Closing Date"),
at the offices of O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza, New
York, New York 10112 or at such other place as the parties hereto shall agree in
writing.
At the Closing:
(a) Each Purchaser shall deliver:
(i) against delivery of a certificate or certificates representing the
Shares and the Warrants being purchased by such Purchaser pursuant to Section
2.1, an amount equal to the aggregate Purchase Price of such Securities via wire
transfer of immediately available funds to such bank account as the Company
shall designate not later than two Business Days prior to the Closing Date;
(ii) a copy of the Registration Rights Agreement executed by such
Purchaser.
(b) The Company shall deliver to each Purchaser:
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(i) against payment of the Purchase Price therefor, a certificate or
certificates representing the Shares and Warrants being purchased by such
Purchaser pursuant to Section 2.1, which shall be in definitive form and
registered in the name of such Purchaser or its nominee or designee and in a
single certificate or in such other denominations as such Purchaser shall
request not later than two Business Days prior to the Closing Date;
(ii) an opinion of (A) H. Don Teague, General Counsel of the Company
and (B) O'Sullivan Graev & Karabell, LLP, special counsel to the Company, in
each case dated the Closing Date, covering the matters set forth on Exhibit D,
in form and substance reasonably acceptable to the Purchasers;
(iii) an officer's certificate of the Company as contemplated by
Section 7.2(f);
(iv) a certificate of the secretary of the Company covering such
matters as are customarily covered by such certificates, in form and substance
reasonably acceptable to the Purchasers;
(v) a long-form good standing certificate of the Company issued by the
Secretary of State of the State of Delaware; and
(vi) a copy of the Registration Rights Agreement executed by the
Company.
(c) The Company shall deliver to each Purchaser (or its designee) a
transaction fee equal to 3% of the Purchase Price of the Shares purchased by
such Purchaser, in immediately available funds by wire transfer to an account
designated by Purchasers at least two Business Days prior to the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Purchaser on the date
hereof and on and as of the Closing Date as follows:
3.1 Organization and Standing.
(a) Each of the Company and its material Subsidiaries (the "ICG
Subsidiaries") is duly organized, validly existing and in good standing under
the laws of its state of organization and has all corporate, limited liability
company and partnership power and authority to own its properties and assets and
to carry on its business as it is now being conducted. Each of the Company and
the ICG Subsidiaries is duly qualified to transact business as a foreign entity
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or the nature of its business makes such
qualification necessary, except for any such failures to so qualify or be in
good standing that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
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(b) All of the outstanding shares of Capital Stock of each ICG
Subsidiary have been validly issued and are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all Liens.
The Company does not own any equity interest in any corporation, partnership,
limited liability company, joint venture, or other entity except as provided on
Schedule 3.1(b) hereof.
(c) The Company has delivered to each Purchaser true and complete
copies of the Company's Certificate of Incorporation, as amended to date, and
By-laws, as in effect on the date hereof.
3.2 Capital Stock.
(a) As of the date of this Agreement, the authorized Capital Stock of
the Company consists solely of (i) 100,000,000 shares of Common Stock, par value
$0.01 per share, of which 48,208,955 shares were issued and outstanding as of
the close of business on February 24, 2000 and (ii) 1,000,000 shares of
preferred stock, par value $0.01 per share, of which 12,650.25 shares are issued
and outstanding. Each share of Capital Stock of the Company that will be issued
and outstanding immediately following the Closing, including without limitation
the Shares, will be duly authorized and validly issued and fully paid and
nonassessable, and the issuance thereof will not have been subject to any
preemptive rights or made in violation of any Applicable Law.
(b) Except as set forth on Schedule 3.2, as of the date of this
Agreement, there are (i) no outstanding options, warrants, agreements,
conversion rights, exchange rights, preemptive rights or other rights (whether
contingent or not) to subscribe for, purchase or acquire any issued or unissued
shares of Capital Stock of the Company or any ICG Subsidiary, (ii) no authorized
or outstanding stock appreciation, phantom stock, profit participation, or
similar rights with respect to the Company or any Subsidiary, (iii) no rights,
contracts, commitments or arrangements (contingent or otherwise) obligating the
Company or any ICG Subsidiary to either (A) redeem, purchase or otherwise
acquire, or offer to purchase, redeem, or otherwise acquire, any outstanding
shares of, or any outstanding warrants or rights of any kind to acquire any
shares of, or any outstanding securities that are convertible into or
exchangeable for any shares of, Capital Stock of the Company, or (B) pay any
dividend or make any distribution in respect of any shares of, or any
outstanding securities that are convertible or exchangeable for any shares of,
Capital Stock of the Company, (iv) no agreements or arrangements under which the
Company or any ICG Subsidiary is obligated to register the sale of any of its
securities under the Securities Act (except as provided hereunder) and (v) no
restrictions upon, or Contracts or understandings of the Company or any
Subsidiary, or, to the knowledge of the Company, Contracts or understandings of
any other Person, with respect to, the voting or transfer of any shares of
Capital Stock of the Company or any Subsidiary. Except as set forth on Schedule
3.2, there are no securities or instruments containing antidilution or similar
provisions that will be triggered by the consummation of the Transactions.
Except as set forth on Schedule 3.2, no party has any right of first refusal,
right of first offer, right of co-sale or other similar right regarding the
Company's securities. Except as set forth on Schedule 3.2, there are no
provisions of the Certificate of Incorporation, as amended, or the By-laws of
the Company, no agreements to which the Company is a party and no agreements by
which the Company or any ICG Subsidiary are bound, that would (a) require the
vote of the holders of more than a majority of the shares of
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the Company's issued and outstanding Common Stock, voting together as a single
class, to take or prevent any corporate action, other than those matters
requiring a class vote under General Corporation Law of the State of Delaware
(the "DGCL"), or (b) entitle any party to nominate or elect any director of the
Company or require any of the Company's stockholders to vote for any such
nominee or other person as a director of the Company.
(c) The Conversion Shares and Warrant Shares have been duly authorized
and adequately reserved in contemplation of the conversion of the Series A
Preferred Stock and the exercise of the Warrants, respectively, and, when issued
and delivered in accordance with the terms of the Certificate of Designation or
the Warrants, as the case may be, will have been validly issued and will be
fully paid and nonassessable, and the issuance thereof will not have been
subject to any preemptive rights or made in violation of any Applicable Law.
(d) The holders of the Series A Preferred Stock will, upon issuance
thereof, have the rights set forth in the Certificate of Designation (subject to
the limitations and qualifications set forth therein and under the DGCL).
3.3 Authorization; Enforceability.
The Company has the power and authority to execute, deliver and perform its
obligations under each of the Equity Documents to which it is a party, and has
taken all action necessary to authorize the execution, delivery and performance
by it of each of such Equity Documents and to consummate the Transactions. No
other corporate or stockholder proceeding on the part of the Company or any ICG
Subsidiary is necessary for such authorization, execution, delivery and
consummation. The Company has duly executed and delivered this Agreement and, at
the Closing, the Company will have duly executed and delivered each of the other
Equity Documents to which it is a party to be executed and delivered at or prior
to Closing. This Agreement constitutes, and each of the other Equity Documents
to which it is a party, when executed and delivered by the Company, will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (a) applicable bankruptcy, insolvency, reorganization, or
other laws of general application affecting enforcement of creditors' rights or
(b) general principles of equity that restrict the availability of equitable
remedies.
3.4 No Violation; Consents.
(a) The execution, delivery and performance by the Company of each of
the Equity Documents and the consummation by the Company of the Transactions do
not and will not contravene any Applicable Law, except for any such
contravention that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The execution, delivery and
performance by the Company of each of the Equity Documents and the consummation
of the Issuance (i) will not (A) violate, result in a breach of or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under any Contract to
which the Company is a party or by which the Company is bound or to which any of
its assets is subject, or (B) result in the creation or imposition of any Lien
upon any of the assets of the Company, except for any such violations, breaches,
defaults or Liens that would not, individually or in the aggregate, reasonably
be
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expected to have a Material Adverse Effect and (ii) will not conflict with or
violate any provision of the certificate of incorporation or bylaws of the
Company currently in effect or in effect as of the Closing.
(b) Except for (i) the filings by the Company, if any, required by the
HSR Act, (ii) applicable filings, if any, required by applicable federal and
state securities laws, (iii) applicable filings, if any, required by the Federal
Communication Commission and state public utility commissions and (iv) filing of
the Certificate of Designation with the Secretary of State of the State of
Delaware, which, in each case referred to in clauses (i) - (iv), shall be made
(or are not required to be made) on or prior to the Closing Date, no consent,
authorization or order of, or filing or registration with, any Governmental
Authority or other Person is required to be obtained or made by the Company or
the ICG Subsidiaries for the execution and delivery of the Equity Documents or
the consummation by the Company of the Transactions except where the failure to
obtain such consents, authorizations or orders, or make such filings or
registrations, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or a material adverse effect on the
ability of the Company to consummate the Transactions.
3.5 Commission Filings; Financial Statements.
(a) The Company has filed all reports, registration statements and
other filings, together with any amendments or supplements required to be made
with respect thereto, that it has been required to file with the Commission
under the Securities Act and the Exchange Act. As of the respective dates of
their filing with the Commission, the Commission Filings complied in all
material respects with the applicable provisions of the Securities Act and the
Exchange Act and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
(b) Each of the historical consolidated financial statements of the
Company (including any related notes or schedules) included in the Commission
Filings was prepared in accordance with GAAP (except as may be disclosed
therein), and complied in all material respects with the rules and regulations
of the Commission. Such financial statements fairly present the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of operations, cash flows and changes
in stockholders' equity for the periods then ended (subject, in the case of the
unaudited interim financial statements, to normal, recurring year-end audit
adjustments). Except as reflected in the Commission Filings filed prior to the
date hereof, the Company does not have any liabilities or obligations of any
nature (whether accrued, absolute, contingent, unasserted or otherwise) that
individually or in the aggregate would be expected to have a Material Adverse
Effect.
3.6 Private Offering.
Based, in part, on the Purchasers' representations in Section 4.2, the
offer and sale of the Securities is exempt from the registration and prospectus
delivery requirements of the Securities Act. Neither the Company, nor anyone
acting on behalf of it, has offered or sold or will offer or sell any
securities, or has taken or will take any other action (including, without
limitation, any offering of any securities of the Company under circumstances
that would require, under the
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Securities Act, the integration of such offering with the offering and sale of
the Securities), that would subject the Issuance to the registration provisions
of the Securities Act.
3.7 Provided Information.
To the knowledge of the Company, all written information (excluding
information of a general economic nature and financial projections) concerning
the Company and the Transactions (the "Information") that has been prepared by
or on behalf of the Company or any of the Company's authorized representatives
and that has been provided to the Purchasers or any of their authorized
representatives in connection with the Issuance, when taken as a whole, was, at
the time made available, correct in all material respects and did not, at the
time made available, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such statements
are made. All financial projections concerning the Company and the Transactions
(the "Projections") that have been prepared by or on behalf of the Company or
any of the Company's authorized representatives and that have been delivered to
the Purchasers or any of their authorized representatives in connection with the
Transactions have been reasonably prepared on a basis reflecting the best
currently available estimates and judgments of the Company's management as to
the future financial performance of the Company and the individual business
segments thereof.
3.8 Material Adverse Change.
Except as disclosed in the Commission Filings filed prior to the date
hereof, since September 30, 1999, there has not been any event, occurrence or
development of a state of circumstances or facts that has had, or could have
reasonably been expected to have, (i) a Material Adverse Effect or (ii) a
material adverse effect on the ability of the Company to perform its obligations
under this Agreement or the other Equity Documents.
3.9 Litigation.
Except as disclosed in Commission Filings filed prior to the date hereof,
there are not any (a) outstanding judgments against or affecting the Company or
any of the ICG Subsidiaries, (b) proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of the ICG
Subsidiaries or (c) investigations by any Governmental Authority that are, to
the knowledge of the Company, pending or threatened against or affecting the
Company or any of the ICG Subsidiaries that (i) in any manner challenge or seek
to prevent, enjoin, alter or materially delay the Transactions or (ii) if
resolved adversely to the Company or any ICG Subsidiary, would have,
individually or in the aggregate, a Material Adverse Effect.
3.10 Permits and Licenses.
The Company and the ICG Subsidiaries have obtained all governmental
permits, licenses, franchises and authorizations required for the Company and
its Subsidiaries to conduct their respective businesses as currently conducted,
except for those of which the failure to obtain would not have a Material
Adverse Effect.
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3.11 Intellectual Property, etc.
The Company and the ICG Subsidiaries have all right, title and interest in,
or a valid and binding license to use, all Company Intellectual Property (as
defined below). The Company and the ICG Subsidiaries (i) have not defaulted in
any material respect under any license to use any Company Intellectual Property,
(ii) are not the subject of any proceeding or litigation for infringement of any
third party intellectual property, (iii) have no knowledge of circumstances that
would be reasonably expected to give rise to any such proceeding or litigation
and (iv) have no knowledge of circumstances that are causing or would be
reasonably expected to cause the loss or impairment of any Company Intellectual
Property, other than a default, proceeding, litigation, loss or impairment that
is not having or would not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. "ICG Communications, Inc." is a
registered trademark of the Company in the United States and such registration
has been duly maintained by the Company.
For purposes of this Agreement, "Company Intellectual Property" means
patents and patent rights, trademarks and trademark rights, tradenames and
tradename rights, service marks and service mark rights, copyrights and
copyright rights, trade secret and trade secret rights, and other intellectual
property rights, and all pending applications for and registrations of any of
the foregoing that are used in the conduct of the business of the Company and
the ICG Subsidiaries as presently conducted.
3.12 Board Approval.
Prior to the execution of this Agreement, the Board of Directors of the
Company has approved the Transactions, including without limitation the
acquisition of the Shares, the Warrants, the Conversion Shares and the Warrant
Shares by the Purchasers and their respective "affiliates" and "associates" (as
those terms are defined in Section 203 of the DGCL) for all purposes, including
without limitation Section 203 of the DGCL, and no Purchaser or affiliate or
associate (as so defined) of a Purchaser shall as a result of the execution of
this Agreement or consummation of the transactions contemplated by this
Agreement, be subject to any of the restrictions of Section 203 of the DGCL or
any similar provisions of Applicable Law.
3.13 British Telecommunications.
As of the date hereof, the Company and its Subsidiaries do not, directly or
indirectly, beneficially own (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) any shares of any class of capital stock of British
Telecommunications plc, a company organized under the laws of England and Wales
("BT"), or any of its Subsidiaries, or any direct or indirect rights or options
to acquire (through purchase, exchange, conversion or otherwise) any shares of
any class of capital stock of BT or any of its Subsidiaries.
3.14 Share Exchange Agreement.
The representations and warranties of the Subsidiary of the Company that
will be a party to the Share Exchange Agreement to be set forth in the Share
Exchange Agreement will be true and correct when made.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally as to itself only, and not jointly, hereby
represents and warrants to the Company as of the date hereof and as of the
Closing Date as follows:
4.1 Organization; Authorization; Enforceability.
Such Purchaser is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has all corporate or
limited liability company power and authority to own its properties and assets
and to carry on its business as it is now being conducted and as currently
proposed to be conducted. Such Purchaser has the power to execute, deliver and
perform its obligations under each of the Equity Documents to which it is a
party and has taken all action necessary to authorize the execution, delivery
and performance by it of such Equity Documents and to consummate the
Transactions. No other proceedings on the part of such Purchaser are necessary
for such authorization, execution, delivery and consummation. Such Purchaser has
duly executed and delivered this Agreement and, at the Closing, such Purchaser
will have duly executed and delivered each of the other Equity Documents to be
executed and delivered by it at or prior to Closing. This Agreement constitutes,
and each of the other Equity Documents to which such Purchaser is a party, when
executed and delivered by such Purchaser, will constitute, a legal, valid and
binding obligation of such Purchaser enforceable against such Purchaser in
accordance with its terms, except as such enforceability may be limited by (a)
applicable bankruptcy, insolvency, reorganization, or other laws of general
application affecting enforcement of creditors' rights or (b) general principles
of equity that restrict the availability of equitable remedies.
4.2 Private Placement.
(a) Such Purchaser understands that (i) the offering and sale of the
Securities, the Conversion Shares and the Warrant Shares in the Issuance by the
Company is intended to be exempt from registration under the Securities Act
pursuant to Section 4(2) thereof and (ii) there is no existing public or other
market for the Securities.
(b) Such Purchaser (either alone or together with its advisors) has
sufficient knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risks of its investment in the
Securities, the Conversion Shares and the Warrant Shares, and is capable of
bearing the economic risks of such investment.
(c) Such Purchaser is acquiring the Securities, the Conversion Shares
and the Warrant Shares to be acquired hereunder for its own account (or for
accounts over which it exercises investment authority or as otherwise provided
herein), for investment and not with a view to the public resale or distribution
thereof in violation of any securities law.
(d) Such Purchaser understands that the Securities, the Conversion
Shares and the Warrant Shares will be issued in a transaction exempt from the
registration or qualification requirements of the Securities Act and applicable
state securities laws, and that such securities must be held indefinitely unless
a subsequent disposition thereof is registered or qualified under
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the Securities Act and such state securities laws or is exempt from such
registration or qualification.
(e) Such Purchaser (A) has been furnished with or has had full access
to all of the information that it considers necessary or appropriate to make an
informed investment decision with respect to the Securities, the Conversion
Shares and the Warrant Shares and that it has requested from the Company, (B)
has had an opportunity to discuss with management of the Company the intended
business and financial affairs of the Company and to obtain information (to the
extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished to
it or to which it had access and (C) can bear the economic risk of (x) an
investment in the Securities, the Conversion Shares and the Warrant Shares
indefinitely and (y) a total loss in respect of such investment, and (D) has
such knowledge and experience in business and financial matters so as to enable
it to understand and evaluate the risks of and form an investment decision with
respect to its investment in the Securities, the Conversion Shares and the
Warrant Shares and to protect its own interest in connection with such
investment.
(f) The foregoing representations with respect to the Conversion Shares
and the Warrant Shares are made only if and to the extent the offering of the
Shares and the Warrants constitutes an offering of the Conversion Shares and the
Warrant Shares.
4.3 No Violation; Consents.
(a) Subject to making the filings and obtaining the consents and
approvals referred to in Section 4.3(b), the execution, delivery and performance
by such Purchaser of each of the Equity Documents to which it is a party and the
consummation of the Transactions, do not and will not contravene any Applicable
Law, except for such contraventions as would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to timely perform its obligations under this
Agreement. The execution, delivery and performance by such Purchaser of each of
the Equity Documents to which it is a party and the consummation of the
Transactions (i) will not (A) violate, result in a breach of or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under any Contract to which
such Purchaser is party or by which such Purchaser is bound or to which any of
its assets is subject, or (B) result in the creation or imposition of any Lien
upon any of the assets of such Purchaser, except for any such violations,
breaches, defaults or Liens that would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of such
Purchaser to timely perform its obligations under this Agreement, and (ii) will
not conflict with or violate any provision of the certificate of incorporation
or bylaws or other governing documents of such Purchaser.
(b) Except for (i) the filings by the Purchaser, if any, required by
the HSR Act, and (ii) applicable filings, if any, with the Commission pursuant
to the Exchange Act, which, in each case, shall be made (or are not required to
be made) on or prior to the Closing Date, no consent, authorization or order of,
or filing or registration with, any Governmental Authority or other Person is
required to be obtained or made by such Purchaser for the execution, delivery
and performance of any of the Equity Documents to which it is a party or the
consummation of the
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Transactions, except where the failure to obtain such consents, authorizations
or orders, or make such filings or registrations, would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to timely perform its obligations under this
Agreement.
4.4 No Litigation.
There are not any (a) outstanding judgments against or affecting the
Purchaser or any of its Subsidiaries, (b) proceedings pending or, to the
knowledge of the Purchaser, threatened against or affecting the Purchaser or any
of its Subsidiaries or (c) investigations by any Governmental Authority that
are, to the knowledge of the Purchaser, pending or threatened against or
affecting the Purchaser or any of its Subsidiaries that, in any case,
individually or in the aggregate, would reasonably be expected to have a
material adverse effect on the ability of such Purchaser to timely perform its
obligations under this Agreement.
4.5 No Group Status.
Neither the Liberty Group, on the one hand, nor the HMTF Group, on the
other hand, is acting as a "group" (within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) together with, in the case of the Liberty Group, the HMTF
Group, and in the case of the HTMF Group, the Liberty Group, in each case, with
respect to acquiring, holding, voting or disposing of the Securities.
ARTICLE V
COVENANTS OF THE COMPANY
5.1 Operation of Business.
(a) From the date hereof until the Closing Date, the Company shall, and
shall cause each of the ICG Subsidiaries to:
(i) operate its business in all material respects in the ordinary
course and in compliance with Applicable Laws;
(ii) not adopt any amendment to its charter or bylaws or comparable
organizational documents;
(iii) not split, combine or reclassify any shares of the Company's
Capital Stock;
(iv) except as set forth on Schedule 5.1(iv), not declare or pay any
dividend or distribution (whether in cash, stock or property) in respect of its
Capital Stock or increase the number of shares subject to the Company's stock
incentive and option plan;
(v) not take any action, or knowingly omit to take any action, that
would, or that would reasonably be expected to, result in (A) any of the
representations and warranties of the Company set forth in Article III becoming
untrue or (B) any of the
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conditions to the obligations of the Purchasers set forth in Section 7.2 not
being satisfied or (C) the triggering of any of the anti-dilution adjustments
contained in the Certificate of Designation (had such Certificate been in
effect); or
(vi) enter into any agreement or commitment to do any of the foregoing.
(b) Without the consent of Liberty, neither the Company nor any of its
Subsidiaries will voluntarily acquire or agree to acquire (through purchase,
exchange, conversion or otherwise) beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of any shares of any class of
capital stock of BT or its Subsidiaries or any direct or indirect rights or
options to so acquire any shares of any class of capital stock of BT or any of
its Subsidiaries.
5.2 HMTF and Liberty Directors.
(a) For so long as members of the HMTF Group own any combination of
shares of Common Stock and Series A Preferred Stock representing an amount of
Common Stock (on an as-converted basis) that, taken together, equals at least
the amount of Common Stock that would then have been issuable upon conversion of
50% or more of the shares of Series A Preferred Stock issued to members of the
HMTF Group on the Closing Date under this Agreement (the "HMTF Issued Series A
Preferred Shares"), the holders of a majority of the then outstanding HMTF
Shares shall have the right to designate one member of the Company's Board of
Directors or, if greater, such number of members of the Company's Board of
Directors (rounded up to the next whole number) equal to 10% of the then
authorized number of members of the Company's Board of Directors (each such
director an "HMTF Director"); provided, however, that the right to designate an
HMTF Director under this Section 5.2 shall be suspended at any time that the
HMTF Holders have the right to elect a person to the Board of Directors under
the terms of the Series A Preferred Stock set forth in the Certificate of
Designation. In the event the holders of a majority of the then outstanding
HMTF Shares are entitled under this Section 5.2 to designate an HMTF Director
for election to the Company's Board of Directors and elect to have the Board of
Directors appoint an HMTF Director, they shall so notify the Company in writing
and the Company shall (a) increase the size of the Board of Directors by one and
fill the vacancy created thereby by electing an HMTF Director and (b) in
connection with the meeting of stockholders of the Company next following such
election, nominate an HMTF Director for election as a director by the
stockholders and use its commercially reasonable efforts to cause the HMTF
Director to be so elected. If the holders of a majority of the then outstanding
HMTF Shares are entitled under this Section 5.2 to designate an HMTF Director
for election to the Company's Board of Directors and a vacancy shall exist in
the office of an HMTF Director, the holders of a majority of the then
outstanding HMTF Shares shall be entitled to designate a successor and the Board
of Directors shall elect such successor and, in connection with the meeting of
stockholders of the Company next following such election, nominate such
successor for election as director by the stockholders and use its commercially
reasonable efforts to cause the successor to be elected.
(b) (i) For so long as members of the Liberty Group in the aggregate
own any combination of shares of Common Stock and Series A Preferred Stock
representing an amount of Common Stock (on an as-converted basis) that, taken
together, equals at least the amount of Common Stock that would then have been
issuable upon conversion of 15% of the shares of
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Series A Preferred Stock issued to members of the Liberty Group on the Closing
Date under this Agreement (the "Liberty Issued Series A Preferred Shares"), the
members of the Liberty Group voting together as a single class, by a plurality
of the votes cast or by the written consent of a majority in interest of such
members, shall have a right to designate one member of the Company's Board of
Directors or, if greater, such number of members of the Company's Board of
Directors (rounded up to the next whole number) equal to 10% of the then
authorized number of members of the Company's Board of Directors (each such
director a "Liberty Director"); provided, however, that the right to designate a
Liberty Director under this Section 5.2 shall be suspended at any time that the
Liberty Holders have the right to elect a person to the Board of Directors under
the terms of the Series A Preferred Stock set forth in the Certificate of
Designation. In the event the members of the Liberty Group are entitled under
this Section 5.2 to designate the Liberty Director for election to the Company's
Board of Directors and elect to have the Board of Directors appoint a Liberty
Director, they shall so notify the Company in writing and the Company shall (a)
increase the size of the Board of Directors by one and fill the vacancy created
thereby by electing a Liberty Director and (b) in connection with the meeting of
stockholders of the Company next following such election, nominate a Liberty
Director for election as director by the stockholders and use its commercially
reasonable efforts to cause the Liberty Director to be so elected. If the
members of the Liberty Group are entitled under this Section 5.2 to designate a
Liberty Director for election to the Company's Board of Directors and a vacancy
shall exist in the office of a Liberty Director, the members of the Liberty
Group voting together as a single class, by a plurality of the votes cast or by
the written consent of a majority in interest of such members, shall be entitled
to designate a successor and the Board of Directors shall elect such successor
and, in connection with the meeting of stockholders of the Company next
following such election, nominate such successor for election as director by the
stockholders and use its commercially reasonable efforts to cause the successor
to be elected.
(ii) For so long as members of the Liberty Group in the aggregate own
any combination of shares of Common Stock and Series A Preferred Stock
representing an amount of Common Stock (on an as-converted basis) that, taken
together, equals at least the amount of Common Stock that would then have been
issuable upon conversion of 50% of the Liberty Issued Series A Preferred Shares,
the members of the Liberty Group voting together as a single class, by a
plurality of the votes cast or by the written consent of a majority in interest
of such members, shall have a right, in addition to the rights set forth in
clause (i) above, to designate one additional member of the Company's Board of
Directors or, if greater, such number of additional members of the Company's
Board of Directors (rounded up to the next whole number) equal to 10% of the
then authorized number of members of the Company's Board of Directors (each such
director an "Additional Liberty Director"); provided, however, that the right to
designate an Additional Liberty Director under this Section 5.2 shall be
suspended at any time that the Liberty Holders have the right to elect a person
to the Board of Directors under the terms of the Series A Preferred Stock set
forth in the Certificate of Designation. In the event the members of the
Liberty Group are entitled under this Section 5.2 to designate an Additional
Liberty Director for election to the Company's Board of Directors and elect to
have the Board of Directors appoint an Additional Liberty Director, they shall
so notify the Company in writing and the Company shall (a) increase the size of
the Board of Directors by one and fill the vacancy created thereby by electing
an Additional Liberty Director and (b) in connection with the meeting of
stockholders of the Company next following such election, nominate an Additional
Liberty Director for election as director by the stockholders and use its
commercially reasonable
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efforts to cause an Additional Liberty Director to be so elected. If the
members of the Liberty Group are entitled under this Section 5.2 to designate an
Additional Liberty Director for election to the Company's Board of Directors and
a vacancy shall exist in the office of an Additional Liberty Director, the
members of the Liberty Group voting together as a single class, by a plurality
of the votes cast or by the written consent of a majority in interest of such
members, shall be entitled to designate a successor and the Board of Directors
shall elect such successor and, in connection with the meeting of stockholders
of the Company next following such election, nominate such successor for
election as director by the stockholders and use its commercially reasonable
efforts to cause the successor to be elected.
5.3 Access to Books and Records.
(a) The Company shall afford to each of the Purchasers and the
Purchasers' accountants, counsel and representatives full access upon reasonable
notice during normal business hours throughout the period prior to the Closing
Date (or the earlier termination of this Agreement pursuant to Section 8.4) to
all its properties, books, Contracts, commitments and records (including, but
not limited to, tax returns) and, during such period, shall, upon request,
furnish promptly to each of the Purchasers (i) a copy of each report, schedule
and other document filed or received by any of them pursuant to the requirements
of Federal or state securities laws and (ii) all other information concerning
its business, properties and personnel as the Purchasers may reasonably request,
provided that no investigation or receipt of information pursuant to this
Section 5.3 shall affect any representation or warranty of the Company or the
conditions to the obligations of the Purchasers.
(b) The Company shall supplement the Information and the Projections
from time to time until the Closing Date if there is a material change in the
Information and the Projections previously provided, but no such supplement
shall be given effect for purposes of determining whether the Company has
breached any representations or warranties for purposes of Section 7.2 and
Section 8.1.
5.4 Agreement to Take Necessary and Desirable Actions.
The Company shall (a) subject to the satisfaction of the conditions set
forth in Section 7.1, execute and deliver the Equity Documents and such other
documents, certificates, agreements and other writings, and (b) take such other
actions, in each case, as may be reasonably necessary, desirable or requested
by the Purchasers in order to consummate or implement the Issuance in accordance
with the terms of this Agreement.
5.5 Compliance with Conditions; Commercially Reasonable Efforts.
The Company shall use all commercially reasonable efforts to cause all of
the obligations imposed upon it in this Agreement to be duly complied with, and
to cause the conditions precedent to the obligations of the Purchasers in
Sections 7.2(a) and (b) to be satisfied. Upon the terms and subject to the
conditions of this Agreement, the Company will use all commercially reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable consistent with Applicable Law
to consummate and make
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effective in the most expeditious manner practicable the Issuance in accordance
with the terms of this Agreement.
5.6 HSR Act Notification.
To the extent required by the HSR Act, the Company shall, to the extent it
has not already done so, (a) use all commercially reasonable efforts to file or
cause to be filed, as promptly as practicable after the execution and delivery
of this Agreement, with the United States Federal Trade Commission and the
Antitrust Division of the United States Department of Justice, all reports and
other documents required to be filed by it under the HSR Act concerning the
Transactions and (b) use all commercially reasonable efforts to promptly comply
with or cause to be complied with any requests by the United States Federal
Trade Commission or the Antitrust Division of the United States Department of
Justice for additional information concerning such Transactions, in each case so
that the waiting period applicable to this Agreement and the Transactions under
the HSR Act shall expire as soon as practicable after the execution and delivery
of this Agreement. The Company agrees to request, and to cooperate with the
Purchasers in requesting, early termination of any applicable waiting period
under the HSR Act.
5.7 Consents and Approvals.
The Company (a) shall use all commercially reasonable efforts to obtain all
necessary consents, waivers, authorizations and approvals of all Governmental
Authorities and of all other Persons required in connection with the execution,
delivery and performance by the Company of the Equity Documents or the
consummation of the Issuance and (b) shall diligently assist and cooperate with
the Purchasers in preparing and filing all documents required to be submitted by
the Purchasers to any Governmental Authority in connection with the Issuance
(which assistance and cooperation shall include, without limitation, timely
furnishing, upon written requests, to the Purchasers all information concerning
the Company and the Subsidiaries that counsel to the Purchasers reasonably
determines is required to be included in such documents or would be helpful in
obtaining any such required consent, waiver, authorization or approval).
5.8 Reservation of Shares.
The Company shall:
(a) cause to be authorized and reserve and keep available at all times
during which any of the Shares and Warrants remain outstanding, free from
preemptive rights, out of its treasury stock or authorized but unissued shares
of Capital Stock, or both, solely for the purpose of effecting the conversion or
exercise of the Shares or Warrants pursuant to the terms of the Certificate of
Designation or the Warrants, sufficient shares of Common Stock to provide for
the issuance of the maximum number of shares issuable upon conversion and
exercise of outstanding Shares and Warrants;
(b) issue and cause the transfer agent to deliver such shares of Common
Stock as required upon conversion or exercise of the Shares and Warrants; and
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(c) if any shares of Common Stock reserved for the purpose of issuance
upon conversion of the Shares and exercise of the Warrants require registration
with or approval of any Governmental Authority under any Applicable Law before
such shares may be validly issued or delivered, secure such registration or
approval, as the case may be, and maintain such registration or approval in
effect so long as so required.
5.9 Use of Proceeds.
The Company shall use the proceeds from the Issuance for building out its
network, payment of expenses incurred in connection with the Transactions and
for general corporate purposes.
5.10 Filing of Certificate of Designation.
Prior to the Issuance, the Company shall file the Certificate of
Designation with the Secretary of State of the State of Delaware pursuant to
Section 151(g) of the DGCL.
5.11 Listing of Shares.
The Company shall use all commercially reasonable efforts to cause the
Conversion Shares and the Warrant Shares to be listed or otherwise eligible for
trading on the NASDAQ National Market System or other national securities
exchange.
5.12 Periodic Information.
For so long as the Securities are outstanding the Company shall file all
reports required to be filed by the Company under Section 13 or 15(d) of the
Exchange Act and shall provide the holders of the Securities and prospective
purchasers of such shares with the information specified in Rule 144A(d) under
the Securities Act.
5.13 Legends.
So long as applicable, each certificate representing any portion of the
Securities, shall contain, be stamped or otherwise imprinted with a legend in
the following form (in addition to any legend required under applicable state
securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES. SUCH SHARES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS."
After the above requirement for a legend is no longer applicable with respect to
all or any of the Securities because the applicable Securities are freely
transferable under the Securities Act, the
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Company shall remove such legend upon request from a holder of the applicable
Securities, if outside counsel for such holder reasonably determines that the
transfer of such Securities is no longer restricted by the Securities Act and
outside counsel for the Company reasonably concurs in such determination.
5.14 Payment; Paying Agent; Certain Information.
The Company shall:
(a) make any required payments on the Securities;
(b) maintain (i) an office or agency where the Securities may be
presented for payment (the "Paying Agent"), (ii) an office or agency where the
Securities may be presented for conversion (the "Conversion Agent"), and (iii) a
Registrar, which shall be an office or an agency where the Securities may be
presented for transfer; and
(c) provide certain information to the Purchasers, including such
information and notices as may be necessary for the Purchasers to exercise their
rights under this Agreement and in connection with conversion or exercise of the
Securities.
5.15 Rights Plan.
The Company shall not adopt a "poison pill" shareholder rights plan unless
(a) the Company distributes to holders of the shares of Series A Preferred
Stock, and to the holders of the Warrant Shares upon exercise of the Warrants,
such number of rights as such holders would have received had they converted
their Shares immediately prior to the record date for such distribution and (b)
the terms of such rights plan exempt the ownership and acquisition of securities
of the Company (i) by the Liberty Group, or any member thereof, and (ii) by the
HMTF Group, or any member thereof, in each case subject to compliance with
Section 6.6.
5.16 Proportional Purchase Right.
The Liberty Holders, the HMTF Holders and the Gleacher Holders shall each
have the right, for a period beginning on the Closing Date and ending on the
second anniversary of the Closing Date, to purchase from the Company their pro
rata portion (based on the percentage of the outstanding shares of Common Stock
then held by the Liberty Holders, the HMTF Holders or the Gleacher Holders, as
the case may be, on an as-converted basis) of any securities issued by the
Company so that such Holders, after giving effect to such issuance and
corresponding purchase by such Holders, shall be able to maintain their
proportional ownership interest in the Company. The purchase price for such
purchases shall be equal to the price per share received by the Company in the
issuance giving rise to the purchase right. This proportional purchase right
shall not apply to shares issued pursuant to the Share Exchange Agreement, any
rights or obligations referenced on Schedule 3.2, any shares of capital stock
issued by the Company in lieu of any fees payable in connection with the
Transaction to the Company's financial advisors, or any shares issued pursuant
to any stock option plan or employee benefit plan existing as of the date hereof
or approved by the Board of Directors of the Company. In the event the shares
are issued in connection with an acquisition or other transaction not involving
a financing, the Company will permit the Liberty Holders, the HMTF Holders and
the Gleacher Holders to
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purchase the appropriate number of shares in a separate transaction, with the
purchase price per share equal to the valuation per share of the Common Stock
established by the Board of Directors of the Company in the transaction giving
rise to the purchase right.
5.17 Modification of Share Exchange Agreement.
The Company shall not, and shall cause its Subsidiaries not to, amend,
modify or terminate the Share Exchange Agreement without the prior written
consent of the Liberty Holders and the HMTF Holders.
ARTICLE VI
COVENANTS OF THE PURCHASERS
Each Purchaser, severally as to itself only and not jointly with any other
Purchaser, hereby covenants as follows:
6.1 Agreement to Take Necessary and Desirable Actions.
Each Purchaser shall (a) subject to the satisfaction of the conditions set
forth in Section 7.2, execute and deliver each of the Equity Documents to which
it is a party and such other documents, certificates, agreements and other
writings and (b) take such other actions, in each case, as may be reasonably
necessary, desirable or requested by the Company in order to consummate or
implement the Transactions in accordance with the terms of this Agreement.
6.2 Compliance with Conditions; Commercially Reasonable Efforts.
Each Purchaser shall use all commercially reasonable efforts to cause all
of the obligations imposed upon it in this Agreement to be duly complied with,
and to cause the conditions precedent to the obligations of the Company in
Sections 7.1(a) and (b) (as they relate to such Purchaser) to be satisfied. Upon
the terms and subject to the conditions of this Agreement, each Purchaser will
use all commercially reasonable efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable consistent with Applicable Law to consummate and make effective in the
most expeditious manner practicable the Transactions in accordance with the
terms of this Agreement. Nothing herein shall be construed to require a
Purchaser or any of its Affiliates to divest or otherwise rearrange the
composition of any assets or agree to any conditions or requirements which are,
or are reasonably likely to be, materially adverse or burdensome to such
Purchaser or its Affiliates, as applicable. Nothing set forth in this Section
6.2 shall impose any obligations with respect to any filing or approval under
the HSR Act, which requirements are the subject of Section 6.3.
6.3 HSR Act Notification.
To the extent required by the HSR Act, each Purchaser shall, if it has not
already done so, (a) use all commercially reasonable efforts to file or cause to
be filed, as promptly as practicable after the execution and delivery of this
Agreement, with the United States Federal Trade Commission and the Antitrust
Division of the United States Department of Justice, all reports and other
documents required to be filed by it under the HSR Act concerning the
transactions
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contemplated hereby and (b) use all commercially reasonable efforts to promptly
comply with or cause to be complied with any requests by the United States
Federal Trade Commission or the Antitrust Division of the United States
Department of Justice for additional information concerning such transactions in
each case so that the waiting period applicable to this Agreement and the
transactions contemplated hereby under the HSR Act shall expire as soon as
practicable after the execution and delivery of this Agreement. Each Purchaser
agrees to request, and to cooperate with the Company in requesting, early
termination of any applicable waiting period under the HSR Act.
6.4 Consents and Approvals.
Each Purchaser (a) shall use all commercially reasonable efforts to obtain
all necessary consents, waivers, authorizations and approvals of all
Governmental Authorities other than as expressly set forth in Section 6.3
regarding the HSR Act, and of all other Persons required in connection with the
execution, delivery and performance by such Purchaser of this Agreement or the
consummation of the Transactions and (b) shall diligently assist and cooperate
with the Company in preparing and filing all documents required to be submitted
by the Company to any Governmental Authority in connection with such
Transactions (which assistance and cooperation shall include, without
limitation, timely furnishing to the Company all information concerning such
Purchaser that counsel to the Company reasonably determines is required to be
included in such documents or would be helpful in obtaining any such required
consent, waiver, authorization or approval). Nothing herein shall be construed
to require a Purchaser or any of its Affiliates to divest or otherwise rearrange
the composition of any assets or agree to any conditions or requirements which
are, or are reasonably likely to be, materially adverse or burdensome to such
Purchaser or its Affiliates, as applicable.
6.5 Restrictions on Transfer.
No Purchaser shall sell, assign, transfer, pledge, hypothecate, deposit in
a voting trust or otherwise dispose of any portion of the Securities (any such
disposition, a "Securities Transfer"), other than (a) to a Permitted Transferee
of such Purchaser that has agreed in writing (each, a "Permitted Transferee
Agreement") to be bound by the terms and provisions of this Section 6.5 to the
same extent that the transferring Purchaser would be bound if it beneficially
owned the Securities transferred to such Permitted Transferee or (b)(i) in any
transaction in compliance with Rule 144 under the Securities Act or any
successor rule or regulation, (ii) in a transaction exempt from the registration
requirements of the Securities Act or (iii) pursuant to a registration
statement. Each Purchaser shall promptly notify the Company of any Securities
Transfer to a Permitted Transferee of such Purchaser, which notification shall
include a Permitted Transferee Agreement executed by each Permitted Transferee
of such Purchaser to whom any Securities have been transferred.
6.6 Standstill.
(a) Prior to the fifth anniversary of the Closing Date, no Liberty
Holder shall purchase any shares of Common Stock (or securities convertible into
or exchangeable for shares of Common Stock), other than from the Company, if
after giving effect thereto and to the shares of Common Stock that the Liberty
Holders would have the right to acquire on or prior to the fifth
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anniversary of the Closing Date upon conversion or exercise of securities
acquired by such Holders on the Closing Date, the Liberty Holders, taken as a
whole, would beneficially own more than 37% of the outstanding shares of Common
Stock (assuming that all shares of Common Stock that would be issuable upon the
conversion, on the fifth anniversary of the Closing Date, of all shares of
Series A Preferred Stock issued on the Closing Date are outstanding, but
otherwise calculated in accordance with Rule 13d-3(d)(1)(i) promulgated under
the Exchange Act). In no event will any Liberty Holder be deemed to be in
violation of the foregoing provision at any time that the aggregate voting power
of the outstanding voting securities of the Company owned by the Liberty
Holders, taken as a whole, does not exceed 25.1% of the aggregate voting power
of all outstanding voting securities of the Company.
(b) Prior to the fifth anniversary of the Closing Date, no HMTF Holder
shall purchase any shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock), other than from the Company, if after
giving effect thereto and to the shares of Common Stock that the HMTF Holders
would have the right to acquire on or prior to the fifth anniversary of the
Closing Date upon conversion or exercise of securities acquired by such Holders
on the Closing Date, the HMTF Holders, taken as a whole, would beneficially own
more than 17.5% of the outstanding shares of Common Stock (assuming that all
shares of Common Stock that would be issuable upon the conversion, on the fifth
anniversary of the Closing Date, of all shares of Series A Preferred Stock
issued on the Closing Date are outstanding, but otherwise calculated in
accordance with Rule 13d-3(d)(1)(i) promulgated under the Exchange Act).
(c) Prior to the fifth anniversary of the Closing Date, no Gleacher
Holder shall purchase any shares of Common Stock (or securities convertible into
or exchangeable for shares of Common Stock), other than from the Company, if
after giving effect thereto and to the shares of Common Stock that the Gleacher
Holders would have the right to acquire on or prior to the fifth anniversary of
the Closing Date upon conversion or exercise of securities acquired by such
Holders on the Closing Date, the Gleacher Holders, taken as a whole, would
beneficially own more than 3% of the outstanding shares of Common Stock
(assuming that all shares of Common Stock that would be issuable upon the
conversion, on the fifth anniversary of the Closing Date, of all shares of
Series A Preferred Stock issued on the Closing Date are outstanding, but
otherwise calculated in accordance with Rule 13d-3(d)(1)(i) promulgated under
the Exchange Act).
ARTICLE VII
CONDITIONS PRECEDENT TO CLOSING
7.1 Conditions to the Company's Obligations.
The obligations of the Company with respect to a Purchaser hereunder
required to be performed on the Closing Date shall be subject to the
satisfaction or waiver, at or prior to the Closing, of the following conditions:
(a) The representations and warranties of such Purchaser contained in
this Agreement shall have been true and correct when made and, in addition,
shall be repeated and
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true and correct in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date.
(b) Such Purchaser shall have performed in all material respects all
obligations and agreements, and complied in all material respects with all
covenants contained in this Agreement to be performed and complied with by such
Purchaser at or prior to the Closing Date.
(c) Any applicable waiting period under the HSR Act with respect to the
purchase by such Purchaser shall have expired or been terminated.
(d) The Company shall have obtained all necessary consents, waivers,
authorizations and approvals of all Governmental Authorities and of all other
Persons required in connection with the execution, delivery and performance of
the Equity Documents or the consummation of the Issuance, such waivers to be
satisfactory in form and substance to the Company.
(e) Such Purchaser shall have entered into the Registration Rights
Agreement.
(f) The Shares to be purchased at the Closing shall be issued for an
aggregate amount of no less than $600,000,000.00.
7.2 Conditions to Each Purchaser's Obligations.
The obligations of a Purchaser hereunder required to be performed on the
Closing Date shall be subject to the satisfaction or waiver, at or prior to the
Closing, of the following conditions:
(a) The representations and warranties of the Company contained in this
Agreement (i) shall have been true and correct when made and (ii) shall be (A)
in the case of representations and warranties that are qualified as to
materiality or Material Adverse Effect, true and correct and (B) in all other
cases, true and correct in all material respects, in the case of clauses (A) and
(B), as of the Closing Date with the same force and effect as though made on and
as of the Closing Date.
(b) The Company shall have performed in all material respects all of
its obligations and agreements and complied in all material respects with all
covenants contained in this Agreement to be performed and complied with at or
prior to the Closing Date.
(c) The Company shall have entered into the Registration Rights
Agreement.
(d) The Company shall have filed the Certificate of Designation with
the Secretary of State of the State of Delaware.
(e) Any applicable waiting period under the HSR Act with respect to the
purchase by such Purchaser shall have expired or been terminated and no
litigation arising therefrom shall have been commenced and remain outstanding.
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(f) The Company shall have delivered to such Purchaser a certificate
executed on its behalf by a duly authorized representative, dated the Closing
Date, to the effect that each of the conditions specified in paragraph (a)
through (e) of this Section 7.2 has been satisfied.
(g) No provision of any Applicable Law, injunction, order or decree of
any Governmental Entity shall be in effect which has the effect of making the
Transactions illegal or shall otherwise restrain or prohibit the consummation of
the Transactions.
(h) Such Purchaser shall have received an opinion of (i) H. Don Teague,
General Counsel of the Company and (ii) O'Sullivan Graev & Karabell, LLP,
special counsel to the Company, in each case dated the Closing Date, and
addressed to such Purchaser, covering the matters set forth in Exhibit D, in
form and substance reasonably acceptable to the Purchaser.
(i) Such Purchaser shall have received certificates representing the
Securities purchased by such Purchaser concurrently with the Company's receipt
of the Purchase Price for such Securities.
(j) There shall not have occurred (i) any event, circumstance,
condition, fact, effect or other matter which has had or could reasonably be
expected to have a material adverse effect (x) on the business, assets,
financial condition, prospects, or results of operations of the Company and its
Subsidiaries taken as a whole or (y) on the ability of the Company and its
Subsidiaries to perform on a timely basis any material obligation under this
Agreement or the other Equity Documents or to consummate the Issuance
contemplated hereby; or (ii) any material disruption of or material adverse
change in financial, banking or capital market conditions.
(k) The Share Exchange Agreement shall be in full force and effect and
there shall not have been any amendment or waiver of any of its material terms
or conditions.
(l) The Company shall have delivered duly executed copies of the
Management Rights Agreements to the HMTF Funds.
(m) The Company shall have made all filings with, given all notices to,
and received all approvals from, all Governmental Authorities (including,
without limitation, the Federal Communications Commission and state public
utility commissions) required in connection with the consummation of the
Transactions, unless the failure to make such filings, give such notices or
receive such approvals would not, individually or in the aggregate, have a
Material Adverse Effect or a material adverse effect on the ability of the
Company to consummate the Transactions.
ARTICLE VIII
MISCELLANEOUS
8.1 Survival; Indemnification.
(a) All representations, warranties, covenants and agreements contained
in this Agreement shall survive the Closing for 18 months (except (i) covenants
and agreements that are required to be performed after the Closing Date
(including without limitation the covenants and
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agreements contained in Sections 5.1(b), 5.2, 5.8, 5.9, 5.11, 5.12, 5.13, 5.14,
5.15, 5.16, 5.17, 6.5 and 6.6) and (ii) Sections 3.12 and 3.13 and the last
sentence of Section 3.2(a), which shall survive indefinitely). Notwithstanding
the foregoing, with respect to claims asserted pursuant to this Section 8.1
before the expiration of the applicable representation, warranty, covenant or
agreement, such claims shall survive until the date they are finally adjudicated
or otherwise resolved.
(b) The Company agrees to indemnify and hold harmless each Purchaser
and each Purchaser Affiliate (each an "Indemnified Person"), from and against
(and to reimburse each indemnified person as the same are incurred) any and all
losses (including, but not limited to, impairment of the value of the Shares and
Warrants as of the date such loss first becomes known, but excluding
consequential damages), claims, damages, liabilities, costs and expenses
(collectively, "Losses") to which any Indemnified Person may become subject or
which any Indemnified Person may incur based upon, arising out of, or in
connection with (i) a breach of any representation, warranty or covenant of this
Agreement by the Company or (ii) any claim, litigation, investigation or
proceeding brought by or on behalf of any Person other than the Company relating
to the Issuance, and to reimburse each Indemnified Person upon demand for any
reasonable legal or other reasonable out of pocket expenses incurred in
connection with investigating or defending any of the foregoing, provided the
maximum amount indemnifiable to each Purchaser (and its successors or assigns)
under clause (i) shall not exceed the purchase price of the Securities purchased
by such Purchaser.
(c) If a Person entitled to indemnity hereunder (an "Indemnified
Party") asserts that the Company (the "Indemnifying Party") has become obligated
to the Indemnified Party pursuant to Section 8.1(b), or if any suit, action,
investigation, claim or proceeding is begun, made or instituted as a result of
which the Indemnifying Party may become obligated to the Indemnified Party
hereunder, the Indemnified Party shall notify the Indemnifying Party promptly
and shall cooperate with the Indemnifying Party, at the Indemnifying Party's
expense, to the extent reasonably necessary for the resolution of such claim or
in the defense of such suit, action or proceedings, including making available
any information, documents and things in the possession of the Indemnified
Party. Notwithstanding the foregoing notice requirement, the right to
indemnification hereunder shall not be affected by any failure to give, or delay
in giving, notice unless, and only to the extent that, the rights and remedies
of the Indemnifying Party shall have been materially prejudiced as a result of
such failure or delay.
(d) In fulfilling its obligations under this Section 8.1, after the
Indemnifying Party has provided each Indemnified Party with a written notice of
its acceptance of liability under this Section 8.1, as between such Indemnified
Party and the Indemnifying Party, the Indemnifying Party shall have the right to
investigate, defend, settle or otherwise handle, with the aforesaid cooperation,
any claim, suit, action or proceeding brought by a third party in such manner as
the Indemnifying Party may in its sole discretion reasonably deem appropriate;
provided, that (i) counsel retained by the Indemnifying Party is reasonably
satisfactory to the Indemnified Party and (ii) the Indemnifying Party will not
consent to any settlement or entry of judgment imposing any obligations on any
other party hereto other than financial obligations for which such party will be
indemnified hereunder, unless such party has consented in writing to such
settlement or judgment (which consent may be given or withheld in its sole
discretion) and (iii) the Indemnifying Party will not consent to any settlement
or entry of judgment unless, in connection
PAGE 28
<PAGE>
therewith, the Indemnifying Party obtains a full and unconditional release of
the Indemnified Party from all liability with respect to such suit, action,
investigation claim or proceeding. Notwithstanding the Indemnifying Party's
election to assume the defense or investigation of such claim, action or
proceeding, the Indemnified Party shall have the right to employ separate
counsel and to participate in the defense or investigation of such claim, action
or proceeding, which participation shall be at the expense of the Indemnifying
Party, if (i) on the advice of counsel to the Indemnified Party use of counsel
of the Indemnifying Party's choice could reasonably be expected to give rise to
a material conflict of interest, (ii) the Indemnifying Party shall not have
employed counsel reasonably satisfactory to the Indemnified Party to represent
the Indemnified Party within a reasonable time after notice of the assertion of
any such claim or institution of any such action or proceeding, (iii) if the
Indemnifying Party shall authorize the Indemnified Party to employ separate
counsel at the Indemnifying Party's expense or (iv) such action shall seek
relief other than monetary damages against the Indemnified Party.
(e) The Company and the Purchasers agree that any payment of Losses
made hereunder will be treated by the parties on their tax returns as an
adjustment to the Purchase Price. If, notwithstanding such treatment by the
parties, a final determination (which shall include the form 870-AD or successor
form) with respect to the Indemnified Party or any of its Affiliates causes any
such payment not to be treated as an adjustment to Purchase Price, then the
Indemnifying Party shall indemnify the Indemnified Party for any taxes payable
by the Indemnified Party or any subsidiary by reason of the receipt of such
payment (including any payments under this Section 8.1(e)), determined at an
assumed marginal tax rate equal to the highest marginal tax rate then in effect
for corporate taxpayers in the relevant jurisdiction.
8.2 Notices.
All notices, demands, requests, consents, approvals or other communications
(collectively, "Notices") required or permitted to be given hereunder or which
are given with respect to this Agreement shall be in writing and shall be
personally served, delivered by reputable air courier service with charges
prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile. Notice otherwise sent as provided herein shall be deemed
given on the next business day following delivery of such notice to a reputable
air courier service.
PAGE 29
<PAGE>
To the Company:
ICG Communications, Inc.
161 Inverness Drive West
P.O. Box 6742
Englewood, Colorado 80155-6742
Attn: H. Don Teague, Executive Vice President,
General Counsel and Secretary
Telephone: (303) 414-5444
Fax: (303) 414-8839
with a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
New York, New York 10112
Attn: Audrey A. Rohan
Telephone: (212) 408-2419
Fax: (212) 728-5950
To the Purchasers:
(as to matters relating to the HMTF Purchasers)
To the appropriate member of the HMTF Group
c/o Hicks, Muse, Tate & Furst Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Michael J. Levitt
Telephone: (212) 424-1400
Fax: (212) 424-1450
PAGE 30
<PAGE>
with a copy to:
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attn: Lawrence D. Stuart
Telephone: (214) 740-7300
Fax: (214) 720-7888
with a copy to:
Vinson & Elkins L.L.P.
1325 Avenue of the Americas (17th Floor)
New York, New York 10019
Attn: Eric S. Shube
Telephone: (917) 206-8005
Fax: (917) 206-8100
(as to matters relating to Liberty)
To:
Liberty Media Corporation
9197 South Peoria Street
Englewood, Colorado 80112
Attn: Gary S. Howard
Telephone: (720) 875-5400
Fax: (720) 875-5268
with copies to:
Liberty Media Corporation
9197 South Peoria Street
Englewood, Colorado 80112
Attn: Legal Department
Telephone: (720) 875-5400
Fax: (720) 875-5382
and:
Baker Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attn: Elizabeth M. Markowski
Telephone: (212) 705-5000
Fax: (212) 705-5125
PAGE 31
<PAGE>
(as to matters relating to the Gleacher Purchaser)
To:
Gleacher & Co.
660 Madison Avenue, 17th Floor
New York, New York 10019
Attn: Micheal E. Garstin
Telephone: (212) 418-4200
Fax: (212) 418-4599
8.3 Governing Law.
This Agreement shall be governed by, interpreted under, and construed in
accordance with the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.4 Termination.
(a) This Agreement may be terminated as between the Company and any
Purchaser (i) at any time prior to the Closing Date by mutual written agreement
of the Company and such Purchaser, (ii) if the Closing shall not have occurred
on or prior to May 31, 2000 either the Company or such Purchaser, at any time
after May 31, 2000, provided that the right to terminate this Agreement under
this Section 8.4(a)(ii) shall not be available to any party whose failure to
fulfill any obligation under this Agreement was the cause of or resulted in the
failure of the Closing to occur on or before such date, (iii) if any
Governmental Authority shall have issued a nonappealable final order, decree or
ruling or taken any other action having the effect of permanently restraining,
enjoining or otherwise prohibiting the Transactions, by either the Company or
such Purchaser, (iv) if either the Company or such Purchaser shall have breached
any of its material obligations under this Agreement, by the non-breaching
party, or (v) if an event described in Section 7.2(j) shall have occurred, by
such Purchaser. Any party desiring to terminate this Agreement pursuant to
clauses 8.4(a)(ii), (iii), (iv) or (v) shall promptly give notice of such
termination to the other party.
(b) If this Agreement is terminated as between the Company and a
Purchaser, as permitted by Section 8.4(a), such termination shall be without
liability of any party (or any stockholder, director, officer, partner,
employee, agent, consultant or representative of such party) to any other party
to this Agreement; provided that if such termination shall result from the
willful (a) failure of any party to fulfill a condition to the performance of
the obligations of the other party, (b) failure to perform a covenant of this
Agreement or (c) breach by any party hereto of any representation or warranty
contained herein, such failing or breaching party shall be fully liable for any
and all losses (excluding consequential damages) incurred or suffered by the
other party as a result of such failure or breach. The provisions of Sections
8.1(b)-(d), 8.2, 8.3, this Section 8.4, Sections 8.5, 8.8, 8.10, 8.11, 8.12,
8.13, 8.14, 8.16, 8.17, 8.18 and 8.20 shall survive any termination hereof
pursuant to Section 8.4(a).
PAGE 32
<PAGE>
8.5 Entire Agreement.
As between the Company and each Purchaser, this Agreement and the other
Equity Documents (including all agreements entered into pursuant hereto and
thereto and all certificates and instruments delivered pursuant hereto and
thereto) constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the
parties, whether oral or written, with respect to the subject matter hereof.
8.6 Modifications and Amendments.
No amendment, modification or termination of this Agreement as between the
Company and a Purchaser shall be binding unless executed in writing by the
Company and such Purchaser intending to be bound thereby.
8.7 Waivers and Extensions.
Any party to this Agreement may waive any condition, right, breach or
default that such party has the right to waive, provided that such waiver will
not be effective against the waiving party unless it is in writing, is signed by
such party, and specifically refers to this Agreement. Waivers may be made in
advance or after the right waived has arisen or the breach or default waived has
occurred. Any waiver may be conditional. No waiver of any breach of any
agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
8.8 Titles and Headings.
Titles and headings of sections of this Agreement are for convenience only
and shall not affect the construction of any provision of this Agreement.
8.9 Exhibits and Schedules.
Each of the exhibits and schedules referred to herein and attached hereto
is an integral part of this Agreement and is incorporated herein by reference.
8.10 Expenses.
All costs and expenses incurred in connection with this Agreement shall be
paid by the party incurring such cost or expense; provided, however, that the
Company shall pay the filing fees in respect of any filings pursuant to the HSR
Act.
8.11 Press Releases and Public Announcements.
All public announcements or disclosures relating to the Issuance or this
Agreement shall be made only if mutually agreed upon by the Company and the
Purchasers, except to the extent such disclosure is, in the opinion of counsel,
required by law or by regulation of any applicable
PAGE 33
<PAGE>
national stock exchange or Commission recognized trading market; provided that
(a) any such required disclosure shall only be made, to the extent consistent
with law and regulation of any applicable national stock exchange or Commission
recognized trading market, after consultation with each Purchaser and the
Company and (b) no such announcement or disclosure (except as required by law or
by regulation of any applicable national stock exchange or Commission recognized
trading market) shall identify any Purchaser without such Purchaser's prior
consent.
8.12 Assignment; No Third Party Beneficiaries.
This Agreement and the rights, duties and obligations hereunder may not be
assigned or delegated by the Company without the prior written consent of the
Purchasers, and may not assigned or delegated by any Purchaser without the
Company's prior written consent except that each Purchaser may assign any or all
of its rights and obligations under this Agreement to any one or more of its
Affiliates. Any assignment or delegation of rights, duties or obligations
hereunder made by the Company without the prior written consent of the
Purchasers, shall be void and of no effect. This Agreement and the provisions
hereof shall be binding upon and shall inure to the benefit of each of the
parties and their respective successors and permitted assigns. This Agreement is
not intended to confer any rights or benefits on any Persons other than the
parties hereto, except as expressly set forth in Section 5.2, Section 8.1, this
Section 8.12 or Section 8.20.
8.13 Severability.
This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity
or enforceability of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.
8.14 Counterparts.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.
8.15 Further Assurances.
As between the Company and a Purchaser, each party hereto, upon the request
of any other party hereto, shall do all such further acts and execute,
acknowledge and deliver all such further instruments and documents as may be
necessary or desirable to carry out the transactions contemplated by this
Agreement, including, in the case of the Company, such acts, instruments and
documents as may be necessary or desirable to convey and transfer to each
Purchaser the Shares and Warrants to be purchased by it hereunder.
8.16 Remedies Cumulative.
The remedies provided herein shall be cumulative and shall not preclude the
assertion by any party hereto of any other rights or the seeking of any remedies
against the other party hereto.
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<PAGE>
8.17 Several Liability of the Purchasers.
Nothing in this Agreement (including, without limitation, Article VI) shall
be construed to impose on any Purchaser any liability for any action or failure
to act of any other Purchaser, including any breach of this Agreement by any
such other Purchaser.
8.18 No Duty to Other Purchasers.
Each Purchaser confirms with each other Purchaser that such Purchaser has
conducted its own due diligence in connection with its investment in the
Securities and the other Purchasers may therefore have information different
from, or additional to, the information possessed by such Purchaser. In
addition, although certain of such other Purchasers (the "Supplying Purchasers")
may have shared information received by them (including information contained in
third party reports prepared for such other Purchasers) with such Purchaser, no
representation or warranty is being made with respect to such information by any
Supplying Purchaser or any such third party. Nothing in this Section 8.18 is
meant to limit any duty, obligation or liability the Company may have to any
Purchaser under this Agreement or otherwise.
8.19 Specific Performance.
The parties hereto agree that the remedy at law for any breach of this
Agreement may be inadequate, and that as between the Company and a Purchaser any
party by whom this Agreement is enforceable shall be entitled to specific
performance in addition to any other appropriate relief or remedy. Such party
may, in its sole discretion, apply to a court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement as between the Company and a
Purchaser, or prevent any violation hereof, and, to the extent permitted by
applicable as between the Company and a Purchaser law, each party waives any
objection to the imposition of such relief.
8.20 No Purchaser Affiliate Liability.
No Purchaser Affiliate shall have any liability or obligation of any nature
whatsoever in connection with or under this Agreement or the transactions
contemplated hereby, and the Company hereby waives and releases all claims of
any such liability and obligation, it being understood that no such Person or
entity (other than Purchaser) shall be liable for or in respect of Purchaser's
obligations under this Agreement or with respect to the transactions
contemplated hereby.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ICG COMMUNICATIONS, INC.
By:/s/ Don Teague
Name: Don Teague
Title: Executive Vice President
HMTF BRIDGE ICG, LLC
By: /s/ David Knickel
Name: David Knickel
Title: Vice President
LIBERTY MEDIA CORPORATION
By: /s/ Charles Y. Tanabe
Name: Charles Y. Tanabe
Title: Senior Vice President
<PAGE>
GLEACHER/ICG INVESTORS, LLC
By: /s/ Jeffrey Tepper
Name: Jeffrey Tepper
Title: Managing Director
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SCHEDULE I
Purchaser. . . . . . . . . Number of Shares Number of Warrants Purchase Price
HMTF Bridge ICG, LLC . . . 230,000 3,066,667 $ 230,000,000
Liberty Media Corporation. 500,000 6,666,667 $ 500,000,000
Gleacher/ICG Investors LLC 20,000 266,666 $ 20,000,000
</TABLE>
<PAGE>
EXHIBIT A
FORM OF WARRANT
<PAGE>
EXHIBIT B
CERTIFICATE OF DESIGNATION
<PAGE>
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
<PAGE>
EXHIBIT D
FORM OF LEGAL OPINION
<PAGE>
EXHIBIT E
FORM OF MANAGEMENT RIGHTS AGREEMENT
<PAGE>
PAGE 1 EXHIBIT 10.2
<PAGE>
AMENDMENT, dated as of April 10, 2000 (the "Agreement"), between ICG
Communications, Inc., a Delaware corporation (the "Company"), and the Purchasers
whose signatures appear below (the "Purchasers").
WHEREAS, reference is made to the Preferred Stock and Warrant Purchase
Agreement dated as of February 27, 2000 (the "Purchase Agreement"), by and
between the Company and the Purchasers. Capitalized terms used herein but not
otherwise defined shall be given the meaning ascribed to them in the Purchase
Agreement;
WHEREAS, pursuant to an Assignment of Rights Under Preferred Stock and
Warrant Purchase Agreement dated as of March 8, 2000, HM4 ICG Qualified Fund,
LLC, HM4 ICG Private Fund, LLC, HM PG-IV ICG, LLC, HM 4-SBS ICG Coinvestors,
LLC, and HM 4-EQ ICG Coinvestors became parties to the Purchase Agreement;
WHEREAS, in accordance with Section 8.6 of the Purchase Agreement, the
parties hereto desire to amend the Purchase Agreement as more fully set forth
below in order to reflect (1) the redesignation of the Series A Preferred Stock
into Series A-1 Preferred Stock (as defined below), Series A-2 Preferred Stock
(as defined below) and Series A-3 Preferred Stock (as defined below), (2) the
increase of the initial Liquidation Preference per share of Series A Preferred
Stock from $1,000 to $10,000 per share and the concomitant reduction in the
number of shares of Series A Preferred Stock being issued by the Company and
purchased by the Purchasers and (3) related conforming changes;
NOW, THEREFORE, in consideration of the foregoing, and of the covenants and
agreements contained herein, the parties hereby agree as follows:
1. Amendment of Recitals. The recitals of the Purchase Agreement shall
be amended by deleting the first "Whereas" clause in its entirety and
substituting, in lieu thereof, the following:
"WHEREAS, the Company proposes, subject to the terms and conditions set forth
herein, to issue and sell to the Purchasers 50,000 shares of its 8% Series A-1
Convertible Preferred Stock due 2015, initial liquidation preference $10,000 per
share, par value $0.01 per share (the "Series A-1 Preferred Stock"), 23,000
shares of its 8% Series A-2 Convertible Preferred Stock due 2015, initial
liquidation preference $10,000 per share, par value $0.01 per share (the "Series
A-2 Preferred Stock") and 2,000 shares of its 8% Series A-3 Convertible
Preferred Stock due 2015, initial liquidation preference $10,000 per share, par
value $0.01 per share (the "Series A-3 Preferred Stock" and together with the
Series A-1 Preferred Stock and the Series A-2 Preferred Stock, the "Series A
Preferred Stock");"
PAGE 2
<PAGE>
2. Amendment of Definitions. Section (a) of Article I is hereby
amended by inserting or amending, as the case may be, the following definitions:
""Amending Agreement" means the Amendment dated as of April 10, 2000 by and
among the Company and the other parties listed on the signature pages thereof."
""Equity Documents" means this Agreement, the Registration Rights
Agreement, the Certificate of Designation, the Management Rights Agreements, the
Share Exchange Agreement, the Warrants and the Amending Agreement."
""HMTF Issued Series A Preferred Shares" shall mean the shares of Series
A-2 Preferred Stock issued to members of the HMTF Group on the Closing Date
under this Agreement."
""Liberty Issued Series A Preferred Shares" shall mean the shares of Series
A-1 Preferred Stock issued to members of the Liberty Group on the Closing Date
under this Agreement."
""Registration Rights Agreement" means the Registration Rights Agreement
dated as of April 7, 2000, by and among the Company and the Purchasers, in the
form attached hereto as Exhibit C."
""Series A-1 Preferred Stock" has the meaning set forth in the first
recital to this Agreement."
""Series A-2 Preferred Stock" has the meaning set forth in the first
recital to this Agreement."
""Series A-3 Preferred Stock" has the meaning set forth in the first
recital to this Agreement."
3. Amendment of Section 2.1. The Purchase Agreement is hereby amended
by deleting "one thousand dollars ($1,000) per share" in the fifth line of
Section 2.1 and substituting, in lieu thereof, "ten thousand dollars ($10,000)
per share."
4. Amendment of Section 5.2.
(a) The Purchase Agreement is hereby amended by deleting Section 5.2(a)
in its entirety and substituting, in lieu thereof, the following:
" For so long as the members of the HMTF Group in the aggregate own any
combination of shares of Common Stock and Series A-2 Preferred Stock
representing an amount of Common Stock (on an as-converted basis) that, taken
together, equals at least 4,107,143 shares of Common Stock (as adjusted for any
stock dividends, splits and combinations and similar events affecting the Common
Stock from time to time), the holders of a majority of the then outstanding HMTF
Shares shall have the right to designate one
PAGE 3
<PAGE>
person for election to the Company's Board of Directors or, if greater, such
number of persons (rounded up to the next whole number) equal to 10% of the then
authorized number of members of the Company's Board of Directors (each such
person an "HMTF Director"); provided, however, that the right to designate an
HMTF Director under this Section 5.2 shall be suspended at any time that the
holders of the Series A-2 Preferred Stock have the right to elect a person to
the Board of Directors under the terms of the Series A-2 Preferred Stock set
forth in the Certificate of Designation. In the event the holders of a majority
of the then outstanding HMTF Shares are entitled under this Section 5.2 to
designate an HMTF Director for election to the Company's Board of Directors and
so designate an HMTF Director, they shall so notify the Company in writing and
the Company shall use its best efforts (a) to cause the size of the Board of
Directors to be increased by one and the vacancy created thereby to be filled by
electing an HMTF Director and (b) in connection with the meeting of stockholders
of the Company next following such election, to cause an HMTF Director to be
nominated for election as a director by the stockholders and to cause the HMTF
Director to be so elected. If the holders of a majority of the then outstanding
HMTF Shares are entitled under this Section 5.2 to designate an HMTF Director
for election to the Company's Board of Directors and a vacancy shall exist in
the office of an HMTF Director, the holders of a majority of the then
outstanding HMTF Shares shall be entitled to designate a successor and the Board
of Directors shall use its best efforts to (x) elect such successor and (y) in
connection with the meeting of stockholders of the Company next following such
election, cause such successor to be nominated for election as director by the
stockholders and to be elected."
(b) The Purchase Agreement is hereby amended by deleting Section
5.2(b)(i) in its entirety and substituting, in lieu thereof, the following:
" For so long as the members of the Liberty Group in the aggregate own any
combination of shares of Common Stock and Series A-1 Preferred Stock
representing an amount of Common Stock (on an as-converted basis) that, taken
together, equals at least 2,687,571 shares of Common Stock (as adjusted for any
stock dividends, splits and combinations and similar events affecting the Common
Stock from time to time), the members of the Liberty Group, voting together as a
single class by a plurality of the votes cast or by the written consent of a
majority in interest of such members, shall have a right to designate one person
for election to the Company's Board of Directors or, if greater, such number of
persons (rounded up to the next whole number) equal to 10% of the then
authorized number of members of the Company's Board
PAGE 4
<PAGE>
of Directors (each such person a "Liberty Director"); provided, however, that
the right to designate a Liberty Director under this Section 5.2 shall be
suspended at any time that the holders of the Series A-1 Preferred Stock have
the right to elect a person to the Board of Directors under the terms of the
Series A-1 Preferred Stock set forth in the Certificate of Designation. In the
event the members of the Liberty Group are entitled under this Section 5.2 to
designate the Liberty Director for election to the Company's Board of Directors
and elect to so designate a Liberty Director, they shall so notify the Company
in writing and the Company shall use its best efforts (a) to cause the size of
the Board of Directors to be increased by one and the vacancy created thereby to
be filled by electing a Liberty Director and (b) in connection with the meeting
of stockholders of the Company next following such election, to cause a Liberty
Director to be nominated for election as director by the stockholders and to
cause the Liberty Director to be so elected. If the members of the Liberty Group
are entitled under this Section 5.2 to designate a Liberty Director for election
to the Company's Board of Directors and a vacancy shall exist in the office of a
Liberty Director, the members of the Liberty Group, voting together as a single
class by a plurality of the votes cast or by the written consent of a majority
in interest of such members, shall be entitled to designate a successor and the
Board of Directors shall use its best efforts to (x) elect such successor and
(y) in connection with the meeting of stockholders of the Company next following
such election, cause such successor to be nominated for election as director by
the stockholders and to be elected."
(c) The Purchase Agreement is hereby amended by deleting Section
5.2(b)(ii) in its entirety and substituting, in lieu thereof, the following:
" For so long as the members of the Liberty Group own any combination of shares
of Common Stock and Series A-1 Preferred Shares representing an amount of Common
Stock (on an as-converted basis) that, taken together, equals 8,928,571 shares
of Common Stock (as adjusted for any stock dividends, splits and combinations
and similar events affecting the Common Stock from time to time), the members of
the Liberty Group, voting together as a single class by a plurality of the votes
cast or by the written consent of a majority in interest of such members, shall
have a right, in addition to the rights set forth in clause (i) above, to
designate one additional person for election to the Company's Board of Directors
or, if greater, such number of additional persons (rounded up to the next whole
number) equal to 10% of the then authorized number of members of the Company's
Board of Directors (each such person an "Additional Liberty Director");
provided, however, that the right to designate an Additional
PAGE 5
<PAGE>
Liberty Director under this Section 5.2 shall be suspended at any time that the
holders of the Series A-1 Preferred Stock have the right to elect a person to
the Board of Directors under the terms of the Series A-1 Preferred Stock set
forth in the Certificate of Designation. In the event the members of the
Liberty Group are entitled under this Section 5.2 to designate an Additional
Liberty Director for election to the Company's Board of Directors and elect to
so designate an Additional Liberty Director, they shall so notify the Company in
writing and the Company shall use its best efforts (a) to cause the size of the
Board of Directors to be increased by one and the vacancy created thereby to be
filled by electing an Additional Liberty Director and (b) in connection with the
meeting of stockholders of the Company next following such election, to cause an
Additional Liberty Director to be nominated for election as director by the
stockholders and to cause an Additional Liberty Director to be so elected. If
the members of the Liberty Group are entitled under this Section 5.2 to
designate an Additional Liberty Director for election to the Company's Board of
Directors and a vacancy shall exist in the office of an Additional Liberty
Director, the members of the Liberty Group, voting together as a single class by
a plurality of the votes cast or by the written consent of a majority in
interest of such members, shall be entitled to designate a successor and the
Board of Directors shall use its best efforts to (x) elect such successor and
(y) in connection with the meeting of stockholders of the Company next following
such election, cause such successor to be nominated for election as director by
the stockholders and to be elected."
5. Amendment of Section 5.16. Section 5.16 of the Purchase Agreement is
hereby amended by deleting the third sentence in it entirety and substituting,
in lieu thereof, the following sentence:
" This proportional purchase right shall not apply to shares issued pursuant to
the Share Exchange Agreement, any rights or obligations referenced on Schedule
3.2, any shares of capital stock issued by the Company in lieu of any fees
payable in connection with the Transaction to the Company's financial advisors,
any shares issued pursuant to any stock option plan or arrangement or employee
benefit plan or arrangement existing as of the date hereof or hereafter approved
by the Board of Directors of the Company or the shares of Common Stock issued
from time to time upon conversion of the Series A Preferred Stock or upon
exercise of the Warrants."
6. Amendment of Schedule I. Schedule I to the Purchase Agreement is
hereby amended by deleting it in its entirety and substituting, in lieu thereof,
Schedule I attached hereto.
PAGE 6
<PAGE>
7. No Other Waivers. Except as expressly provided in this Agreement,
each of the terms and provisions of the Purchase Agreement shall remain in full
force and effect in accordance with its terms.
8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
9. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York (without giving effect to
principles of conflicts of law).
10. Headings. The headings used herein are for convenience of
reference only and shall not affect the construction of, nor shall they be taken
in consideration in interpreting, this Agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Amendment as of the date first written above.
ICG COMMUNICATIONS, INC.
By:/s/ H. Don Teague
Name: H. Don Teague
Title: Executive Vice President
<PAGE>
HMTF BRIDGE ICG, LLC
HM4 ICG QUALIFIED FUND, LLC
HM4 ICG PRIVATE FUND, LLC
HM PG-IV ICG, LLC
HM 4-SBS ICG COINVESTORS, LLC
HM 4-EQ ICG COINVESTORS, LLC
By:/s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
<PAGE>
LIBERTY MEDIA CORPORATION
By:/s/ Charles Y. Tanabe
Name: Charles Y. Tanabe
Title: Senior Vice President
<PAGE>
GLEACHER/ICG INVESTORS, LLC
By:/s/ Richard Trabulsi
Name: Richard Trabulsi
Title: Member
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SCHEDULE I
Series of Number
Purchasers. . . . . . . . . . Preferred of Preferred Number of Purchase Price
Stock Shares Warrants of the Shares
Liberty Media Corporation . . Series A-1 50,000 6,666,667 $ 500,000,000
HMTF Bridge ICG, LLC. . . . . Series A-2 11,500 1,533,334 $ 115,000,000
HM4 ICG Qualified Fund, LLC . Series A-2 10,464 1,395,253 $ 104,644,000
HM4 ICG Private Fund, LLC . . Series A-2 74 9,885 $ 741,000
HM PG-IV ICG, LLC . . . . . . Series A-2 557 74,281 $ 5,571,000
HM 4-SBS ICG Coinvestors, LLC Series A-2 251 33,412 $ 2,506,000
HM 4-EQ ICG Coinvestors, LLC. Series A-2 154 20,502 $ 1,538,000
Gleacher/ICG Investors LLC. . Series A-3 2,000 266,666 $ 20,000,000
</TABLE>
EXHIBIT 10.3
================================================================================
REGISTRATION RIGHTS AGREEMENT
between
ICG COMMUNICATIONS, INC.
AND
THE PURCHASERS LISTED ON SCHEDULE I
dated as of April 7, 2000
================================================================================
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
1.1 Definitions. 1
1.2 Internal References 3
ARTICLE II REGISTRATION RIGHTS 3
2.1 Demand Registration 3
2.2 Piggyback Registration 6
2.3 Shelf Registration 7
ARTICLE III REGISTRATION PROCEDURES 9
3.1 Filings; Information 9
3.2 Registration Expenses 13
ARTICLE IV INDEMNIFICATION AND CONTRIBUTION 14
4.1 Indemnification by the Company 14
4.2 Indemnification by Selling Holders 15
4.3 Conduct of Indemnification Proceedings 15
4.4 Contribution 16
ARTICLE V MISCELLANEOUS 16
5.1 Participation in Underwritten Registrations 16
5.2 Rule 144 17
5.3 Holdback Agreements 17
5.4 Termination 18
5.5 Amendments, Waivers, Etc. 18
5.6 Counterparts 18
5.7 Entire Agreement 18
5.8 Governing Law 18
5.9 Assignment of Registration Rights 18
</TABLE>
<PAGE>
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), is made as of April
7, 2000, by and between ICG Communications, Inc., a Delaware corporation (the
"Company") and the entities listed on Schedule I to this Agreement.
WHEREAS, the Company, Liberty Media Corporation, HMTF Bridge ICG, LLC and
Gleacher/ICG Investors LLC entered into a Preferred Stock and Warrant Purchase
Agreement dated as of February 27, 2000 (the "Stock Purchase Agreement");
WHEREAS, pursuant to an Assignment of Rights under Preferred Stock and
Warrant Purchase Agreement dated as of March 8, 2000, the remaining Initial HMTF
Holders (as defined below) became parties to the Stock Purchase Agreement;
WHEREAS, it is a condition precedent to the closing of the transactions
contemplated in the Stock Purchase Agreement that the parties hereto execute and
deliver this Agreement;
NOW THEREFORE, in consideration of the premises, mutual promises and
covenants contained in this Agreement and intending to be legally bound, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
Terms defined in the Stock Purchase Agreement are used herein as therein
defined except as otherwise indicated below. In addition, the following terms,
as used herein, have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Demand Registration" means a registration under the Securities Act
requested in accordance with Section 2.1.
"Gleacher Holder" means Gleacher/ICG Investors LLC.
"HMTF Holders" means the Initial HMTF Holders and any direct or indirect
transferee of any Registrable Securities initially held by the Initial HMTF
Holders.
"Holders" means, collectively, the HMTF Holders, the Liberty Holders and
the Gleacher Holder (including their respective Affiliates) and any direct or
indirect transferee of any Registrable Securities held by any of such Persons.
PAGE 2
<PAGE>
"Initial Amount," on any particular date and with respect to the Liberty
Holders or the HMTF Holders, as applicable, means the number of shares of Common
Stock that would have been issuable on such date upon conversion of all of the
shares of Series A Preferred Stock and the exercise of all Warrants issued to
the Liberty Holders or the HMTF Holders, respectively, on the Closing Date (as
adjusted for stock splits, stock dividends and similar events affecting the
Series A Preferred Stock).
"Initial HMTF Holders" means HM4 ICG Qualified Fund, LLC, HM4 ICG Private
Fund, LLC, HM PG-IV ICG, LLC, HM 4-SBS ICG Coinvestors, LLC, HM 4-EQ ICG
Coinvestors, LLC, and HMTF Bridge ICG, LLC.
"Liberty Holders" means Liberty and each of its Affiliates.
"Piggyback Registration" has the meaning set forth in Section 2.2.
"Registrable Common Stock" means (a) shares of Common Stock issued or
issuable upon conversion of the Series A Preferred Stock purchased pursuant to
the Stock Purchase Agreement, plus any additional shares of Series A Preferred
Stock issued in respect thereof in connection with any stock split, stock
dividend or similar event with respect to the Series A Preferred Stock, plus any
additional shares of Common Stock issued with respect to such issued shares of
Common Stock in connection with any stock splits, stock dividends, or similar
events with respect to the Common Stock, (b) shares of Common Stock issued or
issuable upon exercise of the Warrants, plus any additional shares of Common
Stock issued in respect of such issued shares of Common Stock in connection with
any stock split, stock dividend or similar event with respect to the Common
Stock and (c) any shares of Common Stock owned by a Holder that are restricted
securities within the meaning of Rule 144 or all such shares if such Holder
reasonably believes at such time that it may be deemed to be an "affiliate" (as
that term is defined in Rule 144) of the Company.
"Registrable Securities" means (a) the Registrable Common Stock and (b) any
securities of the Company or any successor entity into which Registrable Common
Stock may hereafter be converted or changed. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of under such registration statement, (ii) such securities shall have
been transferred pursuant to Rule 144, (iii) such securities shall have been
otherwise transferred or disposed of, and new certificates therefor not bearing
a legend restricting further transfer shall have been delivered by the Company,
and subsequent transfer or disposition of them shall not require their
registration or qualification under the Securities Act or any similar state law
then in force, or (iv) such securities shall have ceased to be outstanding.
"Requesting Holders" means the Holders requesting a Demand Registration,
and shall include parties deemed "Requesting Holders" pursuant to Section
2.1(a)(iv).
"Rule 144" means Rule 144 (or any successor rule of similar effect)
promulgated under the Securities Act.
PAGE 3
<PAGE>
"Selling Holder" means any Holder who is selling Registrable Securities
pursuant to a public offering registered hereunder.
"Series A Preferred Stock" means collectively the Company's (i) 8% Series
A-1 Convertible Preferred Stock, par value $0.01 per share, (ii) 8% Series A-2
Convertible Preferred Stock, par value $0.01 per share, and (iii) 8% Series A-3
Convertible Preferred Stock, par value $0.01 per share.
"Shelf Registration" has the meaning set forth in Section 2.3(b).
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
"Warrants" means the Warrants (as defined in the Stock Purchase Agreement)
to purchase Common Stock.
1.2 Internal References
Unless the context indicates otherwise, references to Articles, Sections
and paragraphs shall refer to the corresponding articles, sections and
paragraphs in this Agreement, and references to the parties shall mean the
parties to the Stock Purchase Agreement.
ARTICLE II
REGISTRATION RIGHTS
2.1 Demand Registration
(a)
(i) Holders of a majority of the Registrable Securities held by the
HMTF Holders may make up to three (3) written requests for a Demand Registration
of all or any part of the Registrable Securities held by the HMTF Holders and
their direct or indirect transferees; provided, that (A) each such Demand
Registration by the HMTF Holders must be in respect of Registrable Securities
with a fair market value of at least $50,000,000 or all of the Registrable
Securities held by the requesting HMTF Holders if the aggregate fair market
value of all of such Registrable Securities is less than $50,000,000 and (B) the
HMTF Holders shall not be entitled to a Demand Registration if, during the 120
days preceding such request, the HMTF Holders had requested a Demand
Registration unless the Company preempted such Demand Registration in accordance
with Section 2.1(e) or the Company postponed the filing thereof in accordance
with Section 3.1(a) and the requesting HMTF Holders withdrew the request for
such Demand Registration. Upon exercise of all or any portion of the Warrants
held by the HMTF Holders, the Holders of a majority of the Registrable
Securities held by the HMTF Holders may make one (1) additional written request
for a Demand Registration, subject to the proviso set forth in the foregoing
sentence.
PAGE 4
<PAGE>
(ii) Holders of a majority of the Registrable Securities held by the
Liberty Holders may make up to six (6) written requests for a Demand
Registration of all or any part of the Registrable Securities held by the
Liberty Holders and their direct or indirect transferees; provided, that (A)
each such Demand Registration by the Liberty Holders must be in respect of
Registrable Securities with a fair market value of at least $50,000,000 or all
of the Registrable Securities held by the requesting Liberty Holders if the
aggregate fair market value of all of such Registrable Securities is less than
$50,000,000, and (B) the Liberty Holders shall not be entitled to a Demand
Registration if, during the 120 days preceding such request, the Liberty Holders
had requested a Demand Registration unless the Company preempted such Demand
Registration in accordance with Section 2.1(e) or the Company postponed the
filing thereof in accordance with Section 3.1(a) and the requesting Liberty
Holders withdrew the request for such Demand Registration. Upon exercise of all
or any portion of the Warrants held by the Liberty Holders, the Holders of a
majority of the Registrable Securities held by the Liberty Holders may make up
to two (2) additional written requests for a Demand Registration, subject to the
proviso set forth in the foregoing sentence.
(iii) Any request for a Demand Registration will specify the aggregate
number of shares of Registrable Securities proposed to be sold by the Requesting
Holders and will also specify the intended method of disposition thereof. A
registration will not count as a Demand Registration until it has become
effective. Should a Demand Registration not become effective due to the failure
of a Holder to perform its obligations under this Agreement or the inability of
the Requesting Holders to reach agreement with the Underwriters for the proposed
sale on price or other customary terms for such transaction, or in the event the
Requesting Holders withdraw or do not pursue the request for the Demand
Registration (in each of the foregoing cases, provided that at such time the
Company is in compliance in all material respects with its obligations under
this Agreement), then, subject to Section 2.1(b), such Demand Registration shall
be deemed to have been effected (provided that (i) if, the Demand Registration
does not become effective because a material adverse change has occurred, or is
reasonably likely to occur, in the condition (financial or otherwise), business,
assets or results of operations of the Company and its subsidiaries taken as a
whole subsequent to the date of the written request made by the Requesting
Holders (ii) if the Company withdraws the Demand Registration for any reason or
preempts the request for the Demand Registration or (iii) if, after the Demand
Registration has become effective, an offering of Registrable Securities
pursuant to a registration is interfered with by any stop order, injunction, or
other order or requirement of the Commission or other governmental agency or
court or (iv) if the Demand Registration is withdrawn at the request of the
Requesting Holders pursuant to Section 2.1(f) or Section 3.1(a), then the Demand
Registration shall not be deemed to have been effected and will not count as a
Demand Registration).
(iv) Upon receipt of any request for a Demand Registration by holders
of a majority of the Registrable Securities held by the HMTF Holders or the
Liberty Holders, as the case may be, the Company shall promptly (but in any
event within ten (10) days) give written notice of such proposed Demand
Registration to the HMTF Holders, in the case of a request by an HMTF Holder,
and to the Liberty Holders, in the case of a request by a Liberty Holder, and
all such HMTF Holders or Liberty Holders, as the case may be
PAGE 5
<PAGE>
(including their respective direct or indirect transferees) shall have the
right, exercisable by written notice to the Company within twenty (20) days of
their receipt of the Company's notice, to elect to include in such Demand
Registration such portion of their Registrable Securities as they may request.
All such Holders requesting to have their Registrable Securities included in a
Demand Registration in accordance with the preceding sentence shall be deemed to
be "Requesting Holders" for purposes of this Section 2.1.
(b) In the event that the Requesting Holders withdraw or do not pursue
a request for a Demand Registration and, pursuant to Section 2.1(a) hereof, such
Demand Registration is deemed to have been effected, the Holders may reacquire
such Demand Registration (such that the withdrawal or failure to pursue a
request will not count as a Demand Registration hereunder) if the Selling
Holders reimburse the Company for any and all Registration Expenses incurred by
the Company in connection with such request for a Demand Registration that was
withdrawn or not pursued.
(c) If the Requesting Holders so elect, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the form
of a "firm commitment" underwritten offering. A majority in interest of the
Requesting Holders shall have the right to select the managing Underwriters and
any additional investment bankers and managers to be used in connection with any
offering under this Section 2.1, subject to the Company's approval, which
approval shall not be unreasonably withheld.
(d) The Requesting Holders will inform the Company of the time and
manner of any disposition of Registrable Common Stock, and agree to reasonably
cooperate with the Company in effecting the disposition of the Registrable
Common Stock in a manner that does not unreasonably disrupt the public trading
market for the Common Stock; provided, however, that the Holders' only right to
a shelf registration statement shall be pursuant to Section 2.3.
(e) The Company will have the right to preempt any Demand Registration
with a primary registration by delivering written notice (within seven business
days after the Company has received a request for such Demand Registration) of
such intention to the Requesting Holders indicating that the Company has
identified a specific business need and use for the proceeds of the sale of such
securities and had contemplated such sale of securities prior to receiving the
Requesting Holders' notice, and the Company shall use commercially reasonable
efforts to effect a primary registration within 90 days of such notice. In the
ensuing primary registration, the Holders will have such piggyback registration
rights as are set forth in Section 2.2 hereof. Upon the Company's preemption
of a requested Demand Registration, such requested registration will not count
as the Holders' Demand Registration. If the Company thereafter decides to
abandon its intention to pursue such sale of securities, it shall give notice
thereof to any preempted Holders within two business days following the
Company's decision. The Company may exercise the right to preempt a Demand
Registration only once in any 360-day period; provided, that during any 360-day
period the Company shall use its reasonable best efforts to permit a period of
at least 180 consecutive days during which the Selling Holders may effect a
Demand Registration.
PAGE 6
<PAGE>
(f) Securities to be sold for the account of any Person (including the
Company) other than a Requesting Holder shall not be included in a Demand
Registration if the managing Underwriter or Underwriters shall advise the
Company and the Requesting Holders in writing that the inclusion of such
securities will materially and adversely affect the price of the offering (a
"Material Adverse Effect"). Furthermore, in the event the managing Underwriter
or Underwriters shall advise the Company or the Requesting Holders that even
after exclusion of all securities of other Persons (including the Company)
pursuant to the immediately preceding sentence, the amount of Registrable
Securities proposed to be included in such Demand Registration by Requesting
Holders is sufficiently large to cause a Material Adverse Effect, the
Registrable Securities of the Requesting Holders to be included in such Demand
Registration shall equal the number of shares which the Company and the
Requesting Holders are so advised can be sold in such offering without a
Material Adverse Effect and such shares shall be allocated pro rata among the
Requesting Holders on the basis of the number of Registrable Securities
requested to be included in such registration by each such Requesting Holder;
provided, however, that if any Registrable Securities requested to be registered
pursuant to a Demand Registration under Section 2.1 are excluded from
registration hereunder, then the Holder(s) having shares excluded ("Excluded
Holders") shall have the right to withdraw all, or any part, of their shares
from such registration and if withdrawn in full such Demand Registration shall
not be deemed to have been effected and will not count as a Demand Registration.
2.2 Piggyback Registration
(a) If the Company proposes to file a registration statement under the
Securities Act with respect to an offering of Common Stock for its own account
or for the account of another Person (other than a registration statement on
Form S-4 or S-8, or, except as provided for in Section 2.3, pursuant to Rule 415
(or any substitute form or rule, respectively, that may be adopted by the
Commission)), the Company shall give written notice of such proposed filing to
the Holders at the address set forth in the share register of the Company as
soon as reasonably practicable (but in no event less than 15 days before the
anticipated filing date), undertaking to provide each Holder the opportunity to
register on the same terms and conditions such number of shares of Registrable
Securities as such Holder may request (a "Piggyback Registration"). Each Holder
will have seven business days after receipt of any such notice to notify the
Company as to whether it wishes to participate in a Piggyback Registration
(which notice shall not be deemed to be a request for a Demand Registration);
provided that should a Holder fail to provide timely notice to the Company, such
Holder will forfeit any rights to participate in the Piggyback Registration with
respect to such proposed offering other than as described in Section 2.1(a)(iv).
In the event that the registration statement is filed on behalf of a Person
other than the Company, the Company will use its best efforts to have the shares
of Registrable Securities that the Holders wish to sell included in the
registration statement. If the Company or the Person for whose account such
offering is being made shall determine in its sole discretion not to register or
to delay the proposed offering, the Company may, at its election, provide
written notice of such determination to the Holders and (i) in the case of a
determination not to effect the proposed offering, shall thereupon be relieved
of the obligation to register such Registrable Securities in connection
therewith, and (ii) in the case of a determination to delay a proposed offering,
shall thereupon be permitted to delay registering such Registrable Securities
for the same period as the delay in respect of the proposed offering. As
between the Company and the Selling Holders, the
PAGE 7
<PAGE>
Company shall be entitled to select the Underwriters in connection with any
Piggyback Registration.
(b) If the Registrable Securities requested to be included in the
Piggyback Registration by any Holder differ from the type of securities proposed
to be registered by the Company and the managing Underwriter advises the Company
that due to such differences the inclusion of such Registrable Securities would
cause a Material Adverse Effect, then (i) the number of such Holders'
Registrable Securities to be included in the Piggyback Registration shall be
reduced to an amount which, in the opinion of the managing Underwriter, would
eliminate such Material Adverse Effect or (ii) if no such reduction would, in
the opinion of the managing Underwriter, eliminate such Material Adverse Effect,
then the Company shall have the right to exclude all such Registrable Securities
from such Piggyback Registration, provided, that no other securities of such
type are included and offered for the account of any other Person in such
Piggyback Registration. Any partial reduction in number of Registrable
Securities of any Holder to be included in the Piggyback Registration pursuant
to clause (i) of the immediately preceding sentence shall be effected pro rata
based on the ratio which such Holder's requested shares bears to the total
number of shares requested to be included in such Piggyback Registration by all
Persons other than the Company who have the contractual right to request that
their shares be included in such registration statement and who have requested
that their shares be included. If the Registrable Securities requested to be
included in the registration statement are of the same type as the securities
being registered by the Company and the managing Underwriter advises the Company
that the inclusion of such Registrable Securities would cause a Material Adverse
Effect, the Company will be obligated to include in such registration statement,
as to each Holder only a portion of the shares such Holder has requested be
registered equal to the ratio which such Holder's requested shares bears to the
total number of shares requested to be included in such registration statement
by all Persons (other than the Person or Persons initiating such registration
request) who have the contractual right to request that their shares be included
in such registration statement and who have requested their shares be included.
If the Company initiated the registration, then the Company may include all of
its securities in such registration statement before any such Holder's requested
shares are included. If another security holder initiated the registration,
then the Company may not include any of its securities in such registration
statement unless all Registrable Securities requested to be included in the
registration statement by all Holders are included in such registration
statement. If as a result of the provisions of this Section 2.2(b) any Holder
shall not be entitled to include all Registrable Securities in a registration
that such Holder has requested to be so included, such Holder may withdraw such
Holder's request to include Registrable Securities in such registration
statement prior to its effectiveness.
2.3 Shelf Registration
(a) Holders of a majority of the Registrable Securities held by the
Liberty Holders ("Majority Liberty Holders") may, at any time after the first
anniversary of the Closing Date, make a written request that the Company effect
a shelf registration of a portion of the Registrable Securities held by the
Liberty Holders and their direct or indirect transferees (the "Liberty Shelf
Registration") pursuant to Rule 415; provided, that the aggregate amount of
Registrable Securities that may be included in such Liberty Shelf Registration
may not exceed 25% of the Liberty Holders' Initial Amount. Upon receipt of a
request for the Liberty Shelf Registration, the
PAGE 8
<PAGE>
Company shall promptly (but in any event within 10 business days) give written
notice of the proposed Liberty Shelf Registration to all other Liberty Holders,
and all such Holders (including their direct and indirect transferees) shall
have the right to include Registrable Securities in the Liberty Shelf
Registration subject to the foregoing limitation. From and after the second
anniversary of the Closing Date, the Majority Liberty Holders may make a written
request that the Company amend the Liberty Shelf Registration to include in the
Liberty Shelf Registration no more than 50% of the Liberty Holders' Initial
Amount. Upon receipt of such request, the Company shall promptly (but in any
event within 10 business days) give written notice of the proposed amendment to
all other Liberty Holders, and all such Holders (including their direct and
indirect transferees) shall have the right to include Registrable Securities in
the amended Liberty Shelf Registration subject to the foregoing limitation.
From and after the third anniversary of the Closing Date, the Majority Liberty
Holders' may make a written request that the Company amend the Liberty Shelf
Registration to include in the Liberty Shelf Registration no more than 75% of
the Liberty Holders' Initial Amount. Upon receipt of such request, the Company
shall promptly (but in any event within 10 business days) give written notice of
the proposed amendment to all other Liberty Holders, and all such Holders
(including their direct and indirect transferees) shall have the right to
include Registrable Securities in the amended Liberty Shelf Registration subject
to the foregoing limitation. From and after the fourth anniversary of the
Closing Date, the Majority Liberty Holders may make a written request that the
Company amend the Liberty Shelf Registration to include in the Liberty Shelf
Registration up to 100% of the Liberty Holders' Initial Amount. Upon receipt of
such request, the Company shall promptly (but in any event within 10 business
days) give written notice of the proposed amendment to all other Liberty
Holders, and all such Holders (including their direct and indirect transferees)
shall have the right to include Registrable Securities in the amended Liberty
Shelf Registration up to 100% of the Liberty Holders' Initial Amount.
(b) Holders of a majority of the Registrable Securities held by the
HMTF Holders ("Majority HMTF Holders") may, at any time after the first
anniversary of the Closing Date, make a written request that the Company effect
a shelf registration of a portion of the Registrable Securities held by the HMTF
Holders and their direct or indirect transferees (the "HMTF Shelf Registration")
pursuant to Rule 415; provided, that the aggregate amount of Registrable
Securities that may be included in such HMTF Shelf Registration may not exceed
25% of the HMTF Holders' Initial Amount. Upon receipt of a request for the HMTF
Shelf Registration, the Company shall promptly (but in any event within 10
business days) give written notice of the proposed HMTF Shelf Registration to
all other HMTF Holders, and all such Holders (including their direct and
indirect transferees) shall have the right to include Registrable Securities in
the HMTF Shelf Registration subject to the foregoing limitation. From and after
the second anniversary of the Closing Date, the Majority HMTF Holders may make a
written request that the Company amend the HMTF Shelf Registration to include in
the HMTF Shelf Registration no more than 50% of the HMTF Holders' Initial
Amount. Upon receipt of such request, the Company shall promptly (but in any
event within 10 business days) give written notice of the proposed amendment to
all other HMTF Holders, and all such Holders (including their direct and
indirect transferees) shall have the right to include Registrable Securities in
the amended HMTF Shelf Registration subject to the foregoing limitation. From
and after the third anniversary of the Closing Date, the Majority HMTF Holders'
may make a written request that the Company amend the HMTF Shelf Registration to
include in the HMTF Shelf Registration no more than 75% of the HMTF Holders'
Initial Amount. Upon receipt of such request, the Company shall promptly
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(but in any event within 10 business days) give written notice of the proposed
amendment to all other HMTF Holders, and all such Holders (including their
direct and indirect transferees) shall have the right to include Registrable
Securities in the amended HMTF Shelf Registration subject to the foregoing
limitation. From and after the fourth anniversary of the Closing Date, the
Majority HMTF Holders may make a written request that the Company amend the HMTF
Shelf Registration to include in the HMTF Shelf Registration up to 100% of the
HMTF Holders' Initial Amount. Upon receipt of such request, the Company shall
promptly (but in any event within 10 business days) give written notice of the
proposed amendment to all other HMTF Holders, and all such Holders (including
their direct and indirect transferees) shall have the right to include
Registrable Securities in the amended HMTF Shelf Registration up to 100% of the
HMTF Holders' Initial Amount.
(c) If the Company's ability to amend the registration statement for
the Liberty Shelf Registration or the HMTF Shelf Registration (each, a "Shelf
Registration") to increase the number of Registrable Securities included therein
(or to file a new shelf registration statement in respect thereof) in accordance
with this Section 2.3 is subject to any contractual limitations that could delay
the Company's ability to file or cause to become effective such registration
statement, then, if requested by the Majority Liberty Holders (in the case of
Section 2.3(a)) or the Majority HMTF Holders (in the case of Section 2.3(b)) the
Company shall, in lieu of following the procedure set forth in Section 2.3(a) or
Section 2.3(b), as the case may be, file a single registration statement for the
Shelf Registration referred to in the applicable provisions of such Sections
(and cause such registration statement to become and remain effective for the
period set forth in Section 3.1) that would permit the offering of such portion
of the Registrable Securities (up to 100%) as may be requested by the Majority
Liberty Holders (in the case of Section 2.3(a)) or the Majority HMTF Holders (in
the case of Section 2.3(b)), (it being understood and agreed that the Holders of
the Registrable Securities would not have the right to offer and sell from such
Shelf Registration Registrable Securities other than in accordance with the
schedule and amounts set forth in Section 2.3(a) or Section 2.3(b), as
applicable).
ARTICLE III
REGISTRATION PROCEDURES
3.1 Filings; Information
In connection with the registration of Registrable Securities pursuant to
Section 2.1, Section 2.2 and Section 2.3 hereof, the Company will use its
reasonable best efforts to effect the registration of such Registrable
Securities as promptly as is reasonably practicable, and in connection with any
such request:
(a) The Company will expeditiously prepare and file with the Commission
a registration statement on any form for which the Company then qualifies and
which counsel for the Company shall deem appropriate and available for the sale
of the Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and use its reasonable best efforts to
cause such filed registration statement to become and remain effective (i) with
respect to any Demand Registration or Piggyback Registration, for such period,
not to exceed 60 days, as may be reasonably necessary to effect the sale of such
securities, (ii) with
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respect to a Shelf Registration, until the earlier of the sale of all
Registrable Securities thereunder and the fifth anniversary of the Closing Date
(or if such Shelf Registration is filed or amended on or after the fourth
anniversary of the Closing Date, then the earlier of the sale of all Registrable
Securities thereunder and the second anniversary of the effective date of such
Shelf Registration) (it being understood that if at any time all the Registrable
Securities then permitted to be sold under such Shelf Registration pursuant to
Section 2.3 have been sold but the Holders have the right to request the
addition of additional Registrable Securities to the Shelf Registration in the
future pursuant to Section 2.3, the Company may (at its option) either cause the
registration statement to remain effective (notwithstanding the fact that all
securities then registrable on such shelf registration statement shall have been
sold) and file post-effective amendments when required to permit the sale of the
additional Registrable Securities or prepare and file, and cause to become and
remain effective, a new shelf registration statement to effect the registration
of the additional Registrable Securities when required pursuant to Section 2.3);
provided that if the Company shall furnish to the Selling Holder a certificate
signed by the Company's Chairman, President or any Executive Vice-President or
Vice-President stating that the Company's Board of Directors has determined in
good faith that it would be detrimental or otherwise disadvantageous to the
Company or its stockholders for such a registration statement to be filed as
expeditiously as possible because the sale of Registrable Securities covered by
such Registration Statement or the disclosure of information in any related
prospectus or prospectus supplement would materially interfere with any
acquisition, financing or other material event or transaction which is then
intended or the public disclosure of which at the time would be materially
prejudicial to the Company, the Company may postpone the filing or effectiveness
of a registration statement for a period of not more than 120 days; provided
that during any 360-day period the Company shall use its reasonable best efforts
to permit a period of at least 180 consecutive days during which the Company
will make a registration statement available under this Agreement; and provided
further that if (i) the effective date of any registration statement filed
pursuant to a Demand Registration would otherwise be at least 45 calendar days,
but fewer than 90 calendar days, after the end of the Company's fiscal year, and
(ii) the Securities Act requires the Company to include audited financials as of
the end of such fiscal year, the Company may delay the effectiveness of such
registration statement for such period as is reasonably necessary to include
therein its audited financial statements for such fiscal year. If the Company
exercises its right to postpone the filing or effectiveness of a registration
statement, the applicable Requesting Holders shall be entitled to withdraw their
request for such Demand Registration and it shall not count as a Demand
Registration.
(b) Anything in this Agreement to the contrary notwithstanding, it is
understood and agreed that the Company shall not be required to keep any shelf
registration effective or useable for offers and sales of the Registrable
Securities, file a post effective amendment to a shelf registration statement or
prospectus supplement or to supplement or amend any registration statement, if
the Company is then involved in discussions concerning, or otherwise engaged in,
any material financing or investment, acquisition or divestiture transaction or
other material business purpose if the Company determines in good faith that the
making of such a filing, supplement or amendment at such time would interfere
with such transaction or purpose. The Company shall promptly give the Holders
of Registrable Securities written notice of such postponement containing a
general statement of the reasons for such postponement and an approximation of
the anticipated delay. Upon receipt by a Holder of Registrable Securities of
notice of an event of the kind described in this Section 3.1(b), such Holder
shall forthwith
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discontinue such Holder's disposition of Registrable Securities until such
Holder's receipt of notice from the Company that such disposition may continue
and of any supplemented or amended prospectus indicated in such notice. The
Company shall use its reasonable best efforts to permit sales of Registrable
Securities on such shelf registration statement for at least 180 days during any
360-day period. In the event the Company shall give notice of an event of the
kind described in this Section 3.1(b), the Company shall extend the period
during which the applicable registration statement shall be maintained effective
as provided in Section 3.1(a) hereof by the number of days during the period
from and including the date of the giving of such notice to the date when the
Company shall give notice to the Selling Holders that such dispositions of such
Registrable Securities may continue and shall have made available to the Selling
Holders any such supplemented or amended prospectus.
(c) The Company will, if requested, prior to filing such registration
statement or any amendment or supplement thereto, furnish to the Selling
Holders, and each applicable managing Underwriter, if any, copies thereof, and
thereafter furnish to the Selling Holders and each such Underwriter, if any,
such number of copies of such registration statement, amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein) and the prospectus included in such registration statement
(including each preliminary prospectus) as the Selling Holders or each such
Underwriter may reasonably request in order to facilitate the sale of the
Registrable Securities by the Selling Holders.
(d) After the filing of the registration statement, the Company will
promptly notify the Selling Holders of any stop order issued or, to the
Company's knowledge, threatened to be issued by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
(e) The Company will use its commercially reasonable efforts to qualify
the Registrable Securities for offer and sale under such other securities or
blue sky laws of such jurisdictions in the United States as the Selling Holders
reasonably request; keep each such registration or qualification (or exemption
therefrom) effective during the period in which such registration statement is
required to be kept effective; and do any and all other acts and things which
may be reasonably necessary or advisable to enable each Selling Holder to
consummate the disposition of the Registrable Securities owned by such Selling
Holder in such jurisdictions; provided that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph 3.1(e), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction.
(f) The Company will as promptly as is practicable notify the Selling
Holders, at any time when a prospectus relating to the sale of the Registrable
Securities is required by law to be delivered in connection with sales by an
Underwriter or dealer, of the occurrence of any event requiring the preparation
of a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading and
promptly make available to the Selling Holders and to the Underwriters any such
supplement or amendment. Upon receipt of any notice of the occurrence
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of any event of the kind described in the preceding sentence, Selling Holders
will forthwith discontinue the offer and sale of Registrable Securities pursuant
to the registration statement covering such Registrable Securities until receipt
by the Selling Holders and the Underwriters of the copies of such supplemented
or amended prospectus and, if so directed by the Company, the Selling Holders
will deliver to the Company all copies, other than permanent file copies then in
the possession of Selling Holders, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event the
Company shall give such notice, the Company shall extend the period during which
such registration statement shall be maintained effective as provided in Section
3.1(a) hereof by the number of days during the period from and including the
date of the giving of such notice to the date when the Company shall make
available to the Selling Holders such supplemented or amended prospectus.
(g) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions
(including, without limitation, participation in road shows and investor
conference calls) as are required in order to expedite or facilitate the sale of
such Registrable Securities.
(h) At the request of any Underwriter in connection with an
underwritten offering the Company will furnish (i) an opinion of counsel,
addressed to the Underwriters, covering such customary matters as the managing
Underwriter may reasonably request and (ii) a comfort letter or comfort letters
from the Company's independent public accountants covering such customary
matters as the managing Underwriter may reasonably request.
(i) If requested by the managing Underwriter or any Selling Holder, the
Company shall promptly incorporate in a prospectus supplement or post effective
amendment such information as the managing Underwriter or any Selling Holder
reasonably requests to be included therein, including without limitation, with
respect to the Registrable Securities being sold by such Selling Holder, the
purchase price being paid therefor by the Underwriters and with respect to any
other terms of the underwritten offering of the Registrable Securities to be
sold in such offering, and promptly make all required filings of such prospectus
supplement or post effective amendment.
(j) The Company shall promptly make available for inspection by any
Selling Holder or Underwriter participating in any disposition pursuant to any
registration statement, and any attorney, accountant or other agent or
representative retained by any such Selling Holder or Underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information requested by any such Inspector in connection with such
registration statement; provided, however, that unless the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in the
registration statement or the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, the Company
shall not be required to provide any information under this subparagraph (j) if
(A) the Company believes, after consultation with counsel for the Company, that
to do so would cause the Company to forfeit an attorney-client privilege that
was applicable to such information or (B) if either (1) the Company has
requested and been granted from the Commission confidential treatment of such
information contained in any filing with the
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Commission or documents provided supplementally or otherwise or (2) the Company
reasonably determines in good faith that such Records are confidential and so
notifies the Inspectors in writing unless prior to furnishing any such
information with respect to (A) or (B) such Holder of Registrable Securities
requesting such information agrees to enter into a confidentiality agreement in
customary form and subject to customary exceptions; provided further, however,
that each Holder of Registrable Securities agrees that it will, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company, at its expense, to undertake
appropriate action and to prevent disclosure of the Records deemed confidential.
(k) The Company shall cause the Registrable Securities included in any
registration statement to be (A) listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed, or (B)
authorized to be quoted and/or listed (to the extent applicable) on the Nasdaq
National Market if the Registrable Securities so qualify.
(l) The Company shall provide a CUSIP number for the Registrable
Securities included in any registration statement not later than the effective
date of such registration statement.
(m) The Company shall cooperate with each Selling Holder and each
Underwriter participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc.
(n) The Company shall during the period when the prospectus is required
to be delivered under the Securities Act, promptly file all documents required
to be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act.
(o) The Company will make generally available to its security holders,
as soon as reasonably practicable, an earnings statement covering a period of 12
months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
The Company may require Selling Holders promptly to furnish in writing to
the Company such information regarding such Selling Holders, the plan of
distribution of the Registrable Securities and other information as the Company
may from time to time reasonably request or as may be legally required in
connection with such registration.
3.2 Registration Expenses
In connection with any Registration effected hereunder, the Company shall
pay the following expenses incurred in connection with such registration (the
"Registration Expenses"): (i) registration and filing fees with the Commission
and the National Association of Securities Dealers, Inc., (ii) fees and expenses
of compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) printing expenses, (iv) fees and expenses
incurred in connection with the listing or quotation of the Registrable
Securities, (v) fees and expenses of counsel to the
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Company and the reasonable fees and expenses of independent certified public
accountants for the Company (including fees and expenses associated with the
special audits or the delivery of comfort letters), (vi) the reasonable fees and
expenses of any additional experts retained by the Company in connection with
such registration, (vii) all roadshow costs and expenses not paid by the
Underwriters and (viii) the reasonable fees and expenses of one counsel for the
Selling Holders.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification by the Company
The Company agrees to indemnify and hold harmless each Selling Holder and
its Affiliates and their respective officers, directors, partners, stockholders,
members, employees, agents and representatives and each Person (if any) which
controls a Selling Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities, costs and expenses (including reasonable
attorneys' fees) caused by, arising out of, resulting from or related to any
untrue statement or alleged untrue statement of a material fact contained or
incorporated by reference in any registration statement or prospectus relating
to the Registrable Securities (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by or based upon any information furnished in writing to
the Company by or on behalf of such Selling Holder expressly for use therein or
by the Selling Holder's failure to deliver a copy of the registration statement
or prospectus or any amendments or supplements thereto after the Company has
furnished the Selling Holder with copies of the same; provided, however, that
the Company shall have no obligation to indemnify under this sentence to the
extent any such losses, claims, damages or liabilities have been finally and
non-appealably determined by a court to have resulted from such Selling Holder's
willful misconduct or gross negligence. The Company also agrees to indemnify
any Underwriters of the Registrable Securities, their officers and directors and
each person who controls such Underwriters on substantially the same basis as
that of the indemnification of the Selling Holders provided in this Section 4.1,
except insofar as such losses, claims, damages or liabilities are caused by or
based upon any information furnished in writing to the Company by or on behalf
of such Underwriter expressly for use therein or by the Underwriter's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Underwriter with copies
of the same; provided, however, that the Company shall have no obligation to
indemnify under this sentence to the extent any such losses, claims, damages or
liabilities have been finally and non-appealably determined by a court to have
resulted from any such Underwriter's willful misconduct or gross negligence.
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4.2 Indemnification by Selling Holders
Each Selling Holder agrees to indemnify and hold harmless the Company, its
officers and directors, and each Person, if any, which controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to each Selling Holder, but only with reference to information furnished in
writing by or on behalf of such Selling Holder expressly for use in any
registration statement or prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus. Each
Selling Holder also agrees to indemnify and hold harmless any Underwriters of
the Registrable Securities, their officers and directors and each person who
controls such Underwriters on substantially the same basis as that of the
indemnification of the Company provided in this Section 4.2, but only with
reference to information furnished in writing by or on behalf of such Selling
Holder expressly for use in any registration statement or prospectus relating to
the Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus. Each such Selling Holder's liability under this Section
4.2 shall be limited to an amount equal to the net proceeds (after deducting the
underwriting discount and expenses) received by such Selling Holder from the
sale of such Registrable Securities by such Selling Holder. The obligation of
each Selling Holder shall be several and not joint.
4.3 Conduct of Indemnification Proceedings
In case any proceeding (including any governmental investigation) shall be
instituted involving any Person in respect of which indemnity may be sought
pursuant to Section 4.1 or Section 4.2, such Person (the "Indemnified Party")
shall promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon the request of
the Indemnified Party, shall retain counsel reasonably satisfactory to such
Indemnified Party to represent such Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and, in the written
opinion of counsel for the Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Indemnified
Parties, such firm shall be designated in writing by the Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent (not to
be unreasonably withheld), or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.
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4.4 Contribution
If the indemnification provided for in this Article IV is unavailable to an
Indemnified Party in respect of any losses, claims, damages or liabilities in
respect of which indemnity is to be provided hereunder, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the
fullest extent permitted by law contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of such party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company, a Selling Holder and the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such party and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and each Selling Holder agrees that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article IV, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and each Selling
Holder shall not be required to contribute any amount in excess of the amount by
which the net proceeds of the offering (before deducting expenses) received by
such Selling Holder exceeds the amount of any damages which such Selling Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE V
MISCELLANEOUS
5.1 Participation in Underwritten Registrations
No Person may participate in any underwritten registered offering
contemplated hereunder unless such Person (a) agrees to sell its securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, custody arrangements, indemnities,
underwriting agreements and other documents reasonably required
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under the terms of such underwriting arrangements and this Agreement and (c)
furnishes in writing to the Company such information regarding such Person, the
plan of distribution of the Registrable Securities and other information as the
Company may from time to time request or as may be legally required in
connection with such registration; provided, however, that no such Person shall
be required to make any representations or warranties in connection with any
such registration other than representations and warranties as to (i) such
Person's ownership of his or its Registrable Securities to be sold or
transferred free and clear of all liens, claims and encumbrances, (ii) such
Person's power and authority to effect such transfer and (iii) such matters
pertaining to compliance with securities laws as may be reasonably requested;
provided further, however, that the obligation of such Person to indemnify
pursuant to any such underwriting agreements shall be several, not joint and
several, among such Persons selling Registrable Securities, and the liability of
each such Person will be in proportion to, and provided further that such
liability will be limited to, the net amount received by such Person from the
sale of such Person's Registrable Securities pursuant to such registration.
5.2 Rule 144
The Company covenants that it will file any reports required to be filed by
it under the Securities Act and the Exchange Act and that it will take such
further action as the Holders may reasonably request to the extent required from
time to time to enable the Holders to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Holder, the Company will deliver to such
Holder a written statement as to whether it has complied with such reporting
requirements.
5.3 Holdback Agreements
The Liberty Holders, for so long as they collectively own Registrable
Securities representing 10% or more of the voting power of the outstanding
voting securities of the Company, and the HMTF Holders, for so long as they
collectively own Registrable Securities representing 10% or more of the voting
power of the outstanding voting securities of the Company, severally agree, in
the event of an underwritten offering by the Company (whether for the account of
the Company or otherwise) not to offer, sell, contract to sell or otherwise
dispose of any Registrable Securities, or any securities convertible into or
exchangeable or exercisable for such securities, including any sale pursuant to
Rule 144 under the Securities Act (except as part of such underwritten
offering), during the 14 days prior to, and during the 90-day period (or such
lesser period as the lead or managing underwriters may require) beginning on,
the effective date of the registration statement for such underwritten offering
(or, in the case of an offering pursuant to an effective shelf registration
statement pursuant to Rule 415, the pricing date for such underwritten
offering), provided that in connection with such underwritten offering each
officer and director of the Company and holder of 10% or more of the Common
Stock is subject to restrictions substantially equivalent to those imposed on
the Liberty Holders and the HMTF Holders.
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5.4 Termination
The registration rights granted under this Agreement will terminate on
April 10, 2015, or such earlier time as there shall no longer be any Registrable
Securities; provided, however, that if all shares of Series A Preferred Stock
outstanding on such date shall not have been redeemed in full in accordance with
Section 10 of the Certificate of Designations, this Agreement shall remain in
full force and effect with respect to the Registrable Securities until such time
as the shares of Series A Preferred Stock have been so redeemed in full.
5.5 Amendments, Waivers, Etc.
This Agreement may not be amended, waived or otherwise modified or
terminated except by an instrument in writing signed by the Company and the
Holders of at least 50% of the Registrable Securities then held by all the
Holders, if the amendment is to be effective against the Holders.
5.6 Counterparts
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement. Each party need not sign the
same counterpart.
5.7 Entire Agreement
This Agreement (i) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
5.8 Governing Law
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York regardless of the laws that might otherwise govern
under applicable principles of conflicts of law thereof.
5.9 Assignment of Registration Rights
Each Holder of the Registrable Securities may assign all or any part of its
rights under this Agreement to any person to whom such Holder sells, transfers,
assigns or pledges such Registrable Securities. In the event that the Holder
shall assign its rights pursuant to this Agreement in connection with the
transfer of less than all its Registrable Securities, the Holder shall also
retain its rights with respect to its remaining Registrable Securities.
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IN WITNESS WHEREOF, the Company and each Holder has caused this Agreement to be
signed on its behalf by its officer thereunto duly authorized as of the date
first written above.
ICG COMMUNICATIONS, INC.
By: /s/ H. Don Teague
Name: H. Don Teague
Title: Executive Vice President
<PAGE>
HMTF BRIDGE ICG, LLC
HM4 ICG QUALIFIED FUND, LLC
HM4 ICG PRIVATE FUND, LLC
HM PG-IV ICG, LLC
HM 4-SBS ICG COINVESTORS, LLC
HM 4-EQ ICG COINVESTORS, LLC
By: /s/ David W. Knickel
Name: David W. Knickel
Title: Vice President
<PAGE>
LIBERTY MEDIA CORPORATION
By: /s/ Charles Y. Tanabe
Name: Charles Y.Tanabe
Title: Senior Vice President
<PAGE>
GLEACHER/ICG INVESTORS LLC
By: /s/ Richard Trabulsi
Name: Richard Trabulsi
Title: Member
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SCHEDULE I
Series of Number
. . . . . . Preferred. . of Preferred Number of Purchase Price
Purchasers Stock Shares Warrants of the Shares
Liberty Media Corporation . . Series A-1 50,000 6,666,667 $ 500,000,000
HMTF Bridge ICG, LLC. . . . . Series A-2 11,500 1,533,334 $ 115,000,000
HM4 ICG Qualified Fund, LLC . Series A-2 10,464 1,395,253 $ 104,644,000
HM4 ICG Private Fund, LLC . . Series A-2 74 9,885 $ 741,000
HM PG-IV ICG, LLC . . . . . . Series A-2 557 74,281 $ 5,571,000
HM 4-SBS ICG Coinvestors, LLC Series A-2 251 33,412 $ 2,506,000
HM 4-EQ ICG Coinvestors, LLC. Series A-2 154 20,502 $ 1,538,000
Gleacher/ICG Investors LLC. . Series A-3 2,000 266,666 $ 20,000,000
</TABLE>
<PAGE>
PAGE 1 EXHIBIT 10.4
<PAGE>
ICG COMMUNICATIONS, INC.
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF 8% SERIES A-1
CONVERTIBLE PREFERRED STOCK, 8% SERIES A-2
CONVERTIBLE PREFERRED STOCK AND 8% SERIES A-3
CONVERTIBLE PREFERRED STOCK, AND
QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
8% Series A-1 Convertible
Preferred Stock due 2015
8% Series A-2 Convertible
Preferred Stock due 2015
8% Series A-3 Convertible
Preferred Stock due 2015
ICG COMMUNICATIONS, INC., a company organized and existing under the
General Corporation Law of the State of Delaware (the "Company"), certifies that
pursuant to the authority contained in its Certificate of Incorporation (the
"Certificate of Incorporation") and its By-laws (the "By-laws"), and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware (the "DGCL"), the board of directors of the Company (the "Board of
Directors") at a meeting duly called and held on April 6, 2000 duly approved and
adopted the following resolution, which resolution remains in full force and
effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of Directors
by the Certificate of Incorporation and By-laws, the Board of Directors does
hereby create, authorize and provide for the issue of three series of the
Company's preferred stock, par value $0.01 per share ("Preferred Stock"), having
the following designation, voting powers, preferences and relative,
participating, optional and other special rights:
Certain capitalized terms used herein are defined in Section 17.
1. Number and Designation.
The Company shall have a series of Preferred Stock, which shall be
designated as its 8% Series A-1 Convertible Preferred Stock due 2015 (the
"Series A-1 Preferred Stock"). The number of shares constituting the Series A-1
Preferred Stock shall be 50,000. The Company shall have a series of Preferred
Stock, which shall be designated as its 8% Series A-2 Convertible Preferred
Stock due 2015 (the "Series A-2 Preferred Stock"). The number of shares
constituting the Series A-2 Preferred Stock shall be 23,000. The Company shall
have a series of Preferred Stock, which shall be designated as its 8% Series A-3
Convertible Preferred Stock due 2015 (the "Series A-3 Preferred Stock"). The
number of shares constituting the Series A-3 Preferred Stock shall be 75,000.
The Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3
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<PAGE>
Preferred Stock are referred to collectively herein, either conjunctively or
disjunctively as appropriate from the context, as the "Series A Preferred
Stock." Except to the extent otherwise specified in this Certificate of
Designation, the powers, preferences and relative, participating, optional and
other special rights of the Series A-1 Preferred Stock, Series A-2 Preferred
Stock and Series A-3 Preferred Stock shall be identical and, except as provided
herein or as may be required by applicable law, the Series A-1 Preferred Stock,
Series A-2 Preferred Stock and Series A-3 Preferred Stock shall be treated as a
single class. Unless otherwise specified, references herein to any "Section"
refer to the Section number specified in this Certificate of Designation.
2. Issuance.
The Company may issue up to 50,000 shares of Series A-1 Preferred Stock,
23,000 shares of Series A-2 Preferred Stock and 75,000 shares of Series A-3
Preferred Stock, each in accordance with the Purchase Agreement; provided,
however, that without the unanimous consent of the holders of the Series A
Preferred Stock the Company shall not issue (i) any additional shares of Series
A Preferred Stock such that the aggregate number of shares of Series A-1
Preferred Stock, Series A-2 Preferred Stock and Series A-3 Preferred Stock at
any one time outstanding exceeds 75,000 shares, (ii) more than 2,000 shares of
Series A-3 Preferred Stock to the initial purchaser thereof in accordance with
the Purchase Agreement or (iii) more than 73,000 shares of Series A-3 Preferred
Stock from time to time upon automatic conversion of shares of Series A-1
Preferred Stock or Series A-2 Preferred Stock into Series A-3 Preferred Stock as
provided in Section 12(i).
3. Registered Form; Liquidation Preference; Registrar.
Certificates for shares of Series A Preferred Stock shall be issuable only
in registered form. The initial Liquidation Preference per share of Series A
Preferred Stock shall be $10,000 per share plus accrued and unpaid dividends.
The Company shall serve as initial Registrar and Transfer Agent (the
"Registrar") for the Series A Preferred Stock.
4. Registration; Transfer.
Shares of the Series A Preferred Stock have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and may not be
resold, pledged or otherwise transferred prior to the date when they may be
resold pursuant to Rule 144 under the Securities Act other than (i) to the
Company, (ii) pursuant to an exemption from registration under the Securities
Act or (iii) pursuant to an effective registration statement under the
Securities Act, in each case in accordance with any applicable securities laws
of any state of the United States. Until such time as it is no longer required
pursuant to the Securities Act, certificates evidencing the Series A Preferred
Stock shall contain a legend (the "Restricted Shares Legend") evidencing the
foregoing restrictions in substantially the form set forth on the form of Series
A Preferred Stock attached hereto as Exhibit A. In the event of certain
transfers of shares of Series A-1 Preferred Stock or Series A-2 Preferred Stock,
the transferred shares shall automatically be converted into shares of Series
A-3 Preferred Stock as provided in Section 12(i).
5. Paying Agent and Conversion Agent.
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<PAGE>
(a) The Company shall maintain (i) an office or agency where shares of
Series A Preferred Stock may be presented for payment (the "Paying Agent"), (ii)
an office or agency where shares of Series A Preferred Stock may be presented
for conversion (the "Conversion Agent"), and (iii) a Registrar, which shall be
an office or an agency where shares of Series A Preferred Stock may be presented
for transfer. The Company may appoint the Registrar, the Paying Agent and the
Conversion Agent and may appoint one or more additional paying agents and one or
more additional conversion agents in such other locations as it shall determine.
The term "Paying Agent" includes any additional paying agent, and the term
"Conversion Agent" includes any additional conversion agent. The Company may
change any Paying Agent or Conversion Agent without prior notice to any holder.
The Company shall notify the Registrar of the name and address of any Paying
Agent or Conversion Agent appointed by the Company. If the Company fails to
appoint or maintain another entity as Paying Agent or Conversion Agent, the
Registrar shall act as such. Notwithstanding the foregoing, the Company or any
of its Affiliates may act as Paying Agent, Registrar, coregistrar or Conversion
Agent.
(b) Neither the Company nor the Registrar shall be required (A) to
issue, countersign or register the transfer of or exchange any share of Series A
Preferred Stock during a period beginning at the opening of business 15 days
before any Redemption Date (as defined under Section 10(d)) and ending at the
close of business on such Redemption Date or (B) to register the transfer of or
exchange any share of Series A Preferred Stock so selected for redemption.
(c) If shares of Series A Preferred Stock are issued upon the transfer,
exchange or replacement of shares of Series A Preferred Stock bearing the
Restricted Shares Legend, or if a request is made to remove such Restricted
Shares Legend on shares of Series A Preferred Stock, the shares of Series A
Preferred Stock so issued shall bear the Restricted Shares Legend, or the
Restricted Shares Legend shall not be removed, as the case may be, unless the
holders of such shares shall request such Legend be removed, and outside counsel
for such holders reasonably determines that the transfer of such shares is no
longer restricted by the Securities Act and outside counsel for the Company
reasonably concurs in such determination.
(d) Each holder of a share of Series A Preferred Stock agrees to
indemnify the Company and the Registrar against any liability that directly
results from the transfer, exchange or assignment by such holder of such
holder's share of Series A Preferred Stock in violation of any provision of this
Certificate of Designation and/or applicable Federal or state securities law;
provided, however, that such indemnity shall not apply to acts of willful
misconduct or gross negligence on the part of the Company or the Registrar, as
the case may be.
(e) Payments due on the shares of Series A Preferred Stock shall be
payable at the office or agency of the Paying Agent maintained for such purpose
in The City of New York and at any other office or agency maintained by the
Paying Agent for such purpose. If any such payment is in cash, it shall be
payable in United States dollars by check drawn on, or wire transfer (provided
that appropriate wire instructions have been received by the Paying Agent at
least 15 days prior to the applicable date of payment) to a United States dollar
account maintained by the holder with, a bank located in New York City; provided
that at the option of the Company payment of dividends in cash may be made by
check mailed to the address of the person entitled thereto as such address shall
appear in the Series A Preferred Share Register; and
PAGE 4
<PAGE>
provided further that any payment to a holder in excess of $100,000 shall be
made by wire transfer at the request of such holder.
6. Dividend Rights.
(a) The holders of Series A Preferred Stock shall be entitled to
cumulative dividends, in preference to dividends on any Junior Shares, which
shall accrue as provided herein. Dividends on each share of Series A Preferred
Stock will accrue on a daily basis at the rate of 8.00% per annum of the then
effective Liquidation Preference of such share from and including the Closing
Date to the first to occur of (i) the date on which such share is redeemed in
accordance with Section 10, (ii) the date on which such share is converted in
accordance with Section 12 (except for a conversion of shares of Series A-1
Preferred Stock or Series A-2 Preferred Stock into shares of Series A-3
Preferred Stock pursuant to Section 12(i))or (iii) the date the Company is
liquidated, dissolved or wound up in accordance with Section 9(c). Dividends
shall accrue as provided herein whether or not such dividends have been
declared, whether or not there are any unrestricted funds of the Company legally
available for the payment of dividends and whether or not such dividends are
then payable in cash as provided in Section 11. The Company will take all
actions required or permitted under the DGCL to permit the payment or accrual of
dividends on the Series A Preferred Stock. On each Dividend Payment Date,
commencing June 30, 2000, to and including the June 30, 2005 Dividend Payment
Date, accrued dividends on a share of the Series A Preferred Stock for the
preceding Dividend Period shall be added cumulatively to and thereafter remain a
part of the Liquidation Preference of such share. Thereafter, accrued dividends
shall be payable quarterly on each Dividend Payment Date, commencing on
September 30, 2005, as and when declared out of funds legally available
therefor, to the holders of record of the Series A Preferred Stock as of the
close of business on the applicable Dividend Record Date. Accrued dividends
that are not paid in full in cash on any such Dividend Payment Date (whether or
not declared and whether or not there are sufficient funds legally available for
the payment thereof) shall be added cumulatively to the Liquidation Preference
on the applicable Dividend Payment Date and thereafter remain a part thereof.
Accrued dividends added to the Liquidation Preference of a share of Series A
Preferred Stock in accordance with the foregoing provisions of this Section 6(a)
are sometimes referred to in this Certificate as "Accumulated Dividends". For
purposes of determining the amount of dividends "accrued" (i) as of the first
Dividend Payment Date and as of any date that is not a Dividend Payment Date,
such amount shall be calculated on the basis of the rate per annum specified
above in this paragraph for the actual number of days elapsed from and including
the Closing Date (in case of the first Dividend Payment Date and any date prior
to the first Dividend Payment Date) or the last preceding Dividend Payment Date
(in case of any other date) to the date as of which such determination is to be
made, based on a 360-day year, and (ii) as of any Dividend Payment Date after
the first Dividend Payment Date, such amount shall be calculated on the basis of
such rate per annum based on a 360-day year of twelve 30-day months. Whenever
the Company shall declare or pay any dividend on any Series A Preferred Stock,
the holders of each share of Series A Preferred Stock shall be entitled to
receive such dividend on a per share basis.
(b) If a Change of Control occurs prior to June 30, 2005 (the time and
date such Change of Control occurs being the "Change of Control Date"), an
amount equal to the Special Dividend shall be added to the Liquidation
Preference of each share of the Series A Preferred
PAGE 5
<PAGE>
Stock as of the Change of Control Date and thereafter remain a part thereof.
The Special Dividend shall be added to the Liquidation Preference without regard
to whether or not the Company has made or intends to make a Change of Control
Offer or Purchase Offer.
(c) In addition to all dividends provided for above, whenever the
Company shall declare or pay any dividend in cash on any Common Stock, the
holders of Series A Preferred Stock shall be entitled to receive such dividend
on an as converted basis. Dividends payable pursuant to this Section 6(c) shall
not reduce any dividends otherwise payable pursuant to Section 6(a) or 6(b).
7. Payment of Dividend; Mechanics of Payment; Dividend Rights
Preserved.
(a) Subject to Sections 6 and 11, dividends on any share of Series A
Preferred Stock that are payable, and are punctually paid or duly provided for,
on any Dividend Payment Date shall be paid in cash to the person in whose name
such share of Series A Preferred Stock (or one or more predecessor shares of
Series A Preferred Stock) is registered at the close of business on the next
preceding March 15, June 15, September 15 and December 15 (each, a "Dividend
Record Date").
(b) Except as required by instruments governing the Preferred Stock
Mandatorily Redeemable 2009 of the Company in accordance with their terms on the
date hereof, unless full cumulative dividends on all outstanding shares of
Series A Preferred Stock for all past Dividend Periods shall have been declared
and paid, or declared and a sufficient sum for the payment thereof set apart,
then:
(i) no dividend (other than (A) with respect to Junior Shares, a
dividend payable solely in Junior Shares, (B) with respect to Parity Shares, a
dividend payable solely in Junior Shares or Parity Shares or (C) with respect to
Parity Shares, a partial dividend paid pro rata on such Parity Shares and the
shares of Series A Preferred Stock) shall be declared or paid upon, or any sum
set apart for the payment of dividends upon, any Junior Shares or Parity Shares,
respectively;
(ii) no other distribution shall be declared or made upon, or any sum
set apart for the payment of any distribution upon, any Junior Shares or Parity
Shares;
(iii) no Junior Shares or Parity Shares or any warrants, rights, calls
or options (other than any cashless exercises of options or buybacks of options
or restricted stock from present or former employees, directors or consultants)
exercisable for or convertible into any Parity Share or Junior Share shall be
purchased, redeemed or otherwise acquired (other than in exchange for or
conversion of other Junior Shares or Parity Shares, respectively) by the Company
or any of its subsidiaries;
(iv) no monies shall be paid into or set apart or made available for a
sinking or other like fund for the purchase, redemption or other acquisition of
any Junior Shares or Parity Shares or any warrants, rights, calls or options
exercisable for or convertible into any Parity Shares or Junior Shares by the
Company or any of its subsidiaries (other than any cashless exercises of options
or option buybacks); and
PAGE 6
<PAGE>
(v) other than in accordance with Section 13 or 14 of this Certificate
of Designation, no Series A Preferred Stock shall be purchased, redeemed or
otherwise acquired by the Company or any of its subsidiaries and no monies shall
be paid into, or set apart or made available for a sinking or other like fund
for any such purpose, unless all outstanding shares of Series A Preferred Stock
shall be purchased, redeemed or otherwise acquired by the Company.
Except as provided in Sections 6, 12 or 13, holders of Series A Preferred
Stock will not be entitled to any dividends, whether payable in cash, property
or stock, in excess of the full cumulative dividends as herein described.
(c) The Company will notify the Registrar and make a public
announcement no later than the close of business on the tenth Business Day prior
to the Record Date for each dividend as to whether it will pay such dividend.
(d) Subject to the foregoing provisions of this Section 7, each share
of Series A Preferred Stock delivered under this Certificate of Designation upon
registration of transfer of or in exchange for or in lieu of any other share of
Series A Preferred Stock shall carry the rights to dividends accumulated and
unpaid, and to accrue, that were carried by such other shares of Series A
Preferred Stock.
(e) The holder of record of a share of Series A Preferred Stock at the
close of business on a Dividend Record Date with respect to the payment of
dividends on the shares of Series A Preferred Stock will be entitled to receive
such dividends with respect to such share of Series A Preferred Stock on the
corresponding Dividend Payment Date, notwithstanding the conversion of such
share after such Dividend Record Date and prior to such Dividend Payment Date.
8. Voting Rights.
(a) The holders of record of shares of Series A Preferred Stock shall
not be entitled to any voting rights except as hereinafter provided in this
Section 8 or as otherwise provided by law.
(b) The holders of record of shares of Series A Preferred Stock shall
be entitled to vote on all matters that the holders of the Company's Common
Stock are entitled to vote upon.
(c) In addition to the voting rights set forth above, the approval of
the holders of at least the Applicable Percentage of the then Outstanding shares
of Series A Preferred Stock voting or consenting, as the case may be, as one
separate class, will be required for the Company to:
(i) amend the Certificate of Incorporation, this Certificate of
Designation or the By-Laws so as to (A) affect adversely the rights, preferences
(including, without limitation, liquidation preferences, conversion price,
dividend rate and Optional Redemption provisions), privileges or voting rights
of holders of any shares of Series A Preferred Stock, or (B) increase or
decrease the number of authorized shares of Series A Preferred Stock, or (C)
alter the relative rights, preferences (including, without limitation,
PAGE 7
<PAGE>
liquidation preferences, conversion price, dividend rate and Optional
Redemption provisions), privileges or voting rights as among holders of the
shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock or Series
A-3 Preferred Stock;
(ii) in a single transaction or series of related transactions,
consolidate or merge with or into, or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets to, any person or
adopt a plan of liquidation or dissolution;
(iii) enter into, or permit any of its subsidiaries to enter into, any
agreement or transaction that would impose material restrictions on the
Company's ability to honor the exercise of any rights of the holders of the
Series A Preferred Stock or on the ability of a holder of shares of Series A
Preferred Stock to exercise full rights of ownership thereof;
(iv) other than as contemplated by Section 12(d)(vi) and Section
12(d)(vii) or as otherwise required by instruments governing securities of the
Company in existence on the date of the Purchase Agreement in accordance with
their terms on such date, authorize, create, modify the terms of, increase the
authorized amount of or issue any shares of any class or series of equity of the
Company that would be deemed to be Parity Shares or Senior Shares with respect
to rights relating to (a) payments of dividends or distributions, (b) rights to
redemption, or (c) distribution of assets upon liquidation, dissolution or
winding-up, other than issuances of shares of Series A-3 Preferred Stock upon
the conversion of shares of Series A-1 Preferred Stock or Series A-2 Preferred
Stock in accordance with Section 12(i); or
(v) commence or effect any tender or exchange offer for all or any
portion of the Common Stock or permit any subsidiary to do so.
As used in this Section 8(c), the "Applicable Percentage" shall mean (A) in
the case of clauses (i) and (iii), 75%; (B) in the case of clause (ii) in the
case of a transaction that constitutes a "Qualifying Transaction", a majority,
and in the case of a transaction that does not constitute a Qualifying
Transaction, 69%; (C) in the case of clause (iv) with respect to Senior Shares,
75%, and with respect to Parity Shares, 69%; and (D) in the case of clause (v),
a majority. As used herein, a "Qualifying Transaction" shall mean a transaction
in which the Company consolidates or merges with or into, or sells, assigns,
transfers, leases, conveys or otherwise disposes of all or substantially all of
its assets to, a person (i) if the Company is the surviving or continuing person
and the Series A Preferred Stock shall remain outstanding without any amendment
that would adversely affect the preferences, rights or powers of the Series A
Preferred Stock, or (ii) if the Company is not the surviving or continuing
person, (a) the entity formed by such consolidation or merger or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made (in any such case, the "resulting entity") is a corporation or limited
liability company organized and existing under the laws of Bermuda, the United
States or any State thereof or the District of Columbia; and (b) the shares of
Series A Preferred Stock are converted into or exchanged for and become shares
of such resulting entity, having in respect of such resulting entity the same
(or more favorable) powers, preferences and relative, participating, optional or
other special rights that the shares of Series A Preferred Stock had immediately
prior to such transaction; and, in either case, the Company shall have delivered
PAGE 8
<PAGE>
to the Registrar an Officers' Certificate and an opinion of counsel, reasonably
satisfactory in form and content, each stating that such consolidation, merger,
conveyance or transfer complies with this Section 8 and that all conditions
precedent herein provided for relating to such transaction have been complied
with.
In addition to, and not in lieu of, any approval otherwise required
pursuant to Section 8(c)(i), the approval of the holders of a majority of the
outstanding shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock or
Series A-3 Preferred Stock, as the case may be, shall be required for the
Company to amend the Certificate of Incorporation, this Certificate of
Designation or the By-laws so as to affect adversely the rights, preferences
(including, without limitation, liquidation preferences, conversion price,
dividend rate and Optional Redemption provisions), privileges or voting rights
of the holders of Series A-1 Preferred Stock, Series A-2 Preferred Stock or
Series A-3 Preferred Stock, respectively.
(d) (i) For so long as the members of the HMTF Group in the
aggregate own any combination of shares of Common Stock and Series A-2 Preferred
Stock representing an amount of Common Stock (on an as-converted basis) that,
taken together, equals at least 4,107,143 shares of Common Stock (as adjusted
for any stock dividends, splits and combinations and similar events affecting
the Common Stock from time to time), the holders of the Series A-2 Preferred
Stock, voting as a single class by a plurality of the votes cast, shall be
entitled to elect, at any annual meeting of stockholders or special meeting held
in place thereof, or at a special meeting of the holders of the Series A-2
Preferred Stock called as hereinafter provided, one director, or if greater,
such number (rounded up to the next whole number) equal to 10% of the then
authorized number of members of the Company's Board of Directors, to serve on
the Board of Directors. At any time after voting power to elect such
director(s) shall have become vested and be continuing in the holders of the
Series A-2 Preferred Stock pursuant to this paragraph, or if a vacancy shall
exist in the office of a director elected by the holders of the Series A-2
Preferred Stock at a time when the holders of the Series A-2 Preferred Stock are
entitled to elect a director pursuant to this paragraph, a proper officer of the
Company may, and upon the written request of the holders of record of at least
twenty-five percent (25%) of the Series A-2 Preferred Stock then outstanding
addressed to the Secretary of the Company shall, call a special meeting of the
holders of the Series A-2 Preferred Stock for the sole purpose of electing the
director that such holders are entitled to elect. If such meeting shall not be
called by a proper officer of the Company within twenty (20) days after personal
service of said written request upon the Secretary of the Company, or within
twenty (20) days after mailing the same within the United States by certified
mail, addressed to the Secretary of the Company at its principal executive
offices, then the holders of at least twenty-five percent (25%) of the Series
A-2 Preferred Stock then outstanding may designate in writing one of their
number to call such meeting at the expense of the Company, and such meeting may
be called by the person so designated upon the notice required for the annual
meeting of stockholders of the Company and shall be held at the place for
holding the annual meetings of stockholders. As used herein, "HMTF Group" means
Hicks, Muse, Tate & Furst Incorporated, a Texas corporation, and its Affiliates
and their respective officers, directors, partners, members, stockholders and
employees (and members of their respective families and trusts for the primary
benefit of such family members) and HM4 ICG Qualified Fund, LLC; HM4 ICG Private
Fund, LLC; HM PG-IV ICG, LLC; HM 4-SBS ICG Coinvestors, LLC; HM4-EQ ICG
Coinvestors, LLC and HMTF Bridge ICG, LLC; and their respective Affiliates. The
action permitted or required to be taken by the holders of the Series A-
PAGE 9
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2 Preferred Stock pursuant to this Section 8(d)(i) may be taken (1) at any
annual or special meeting of stockholders or at a special meeting of the holders
of the Series A-2 Preferred Stock, or (2) without a meeting, without prior
notice, and without a vote if a consent or consents in writing, setting forth
the action so taken, shall be signed by the holders of the Series A-2 Preferred
Stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares held by the
holders of the Series A-2 Preferred Stock entitled to vote thereon were present
and voted and shall be delivered to the Company by delivery to its address
listed in Section 8.2 of the Purchase Agreement.
(ii) For so long as the members of the Liberty Group in the aggregate own
any combination of shares of Common Stock and Series A-1 Preferred Stock
representing an amount of Common Stock (on an as-converted basis) that, taken
together, equals 2,687,571 shares of Common Stock (as adjusted for any stock
dividends, splits and combinations and similar events affecting the Common Stock
from time to time), the holders of the Series A-1 Preferred Stock, voting as a
single class by a plurality of the votes cast or by written consent of a
majority in interest of the holders of the Series A-1 Preferred Stock, shall be
entitled to elect one director, or if greater, such number (rounded up to the
next whole number) equal to 10% of the then authorized number of members of the
Company's Board of Directors, to serve on the Board of Directors, at any annual
meeting of stockholders or special meeting held in place thereof, or at a
special meeting of the holders of the Series A-1 Preferred Stock called as
hereinafter provided. At any time after voting power to elect such director(s)
shall have become vested and be continuing in the holders of the Series A-1
Preferred Stock pursuant to this paragraph, or if a vacancy shall exist in the
office of a director elected by the holders of the Series A-1 Preferred Stock at
a time when the holders of the Series A-1 Preferred Stock are entitled to elect
a director pursuant to this paragraph, a proper officer of the Company may, and
upon the written request of the holders of record of at least twenty-five
percent (25%) of the Series A-1 Preferred Stock then outstanding addressed to
the Secretary of the Company shall, call a special meeting of the holders of the
Series A-1 Preferred Stock for the sole purpose of electing the director that
such holders are entitled to elect. If such meeting shall not be called by a
proper officer of the Company within twenty (20) days after personal service of
said written request upon the Secretary of the Company, or within twenty (20)
days after mailing the same within the United States by certified mail,
addressed to the Secretary of the Company at its principal executive offices,
then the holders of at least twenty-five percent (25%) of the Series A-1
Preferred Stock then outstanding may designate in writing one of their number to
call such meeting at the expense of the Company, and such meeting may be called
by the person so designated upon the notice required for the annual meeting of
stockholders of the Company and shall be held at the place for holding the
annual meetings of stockholders. As used herein, (i) "Liberty Group" means
Liberty and its Affiliates, and (ii) "Liberty" means Liberty Media Corporation,
a Delaware corporation, provided that if substantially all of the assets of
Liberty Media Corporation are at any time thereafter contributed to Liberty
Media Group LLC, a Delaware limited liability company, then from and after such
contribution, Liberty shall mean Liberty Media Group LLC. The action permitted
or required to be taken by the holders of the Series A-1 Preferred Stock
pursuant to this Section 8(d)(ii) may be taken (1) at any annual or special
meeting of stockholders or at a special meeting of the holders of the Series A-1
Preferred Stock, or (2) without a meeting, without prior
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notice, and without a vote if a consent or consents in writing, setting forth
the action so taken, shall be signed by the holders of the Series A-1 Preferred
Stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares held by the
holders of the Series A-1 Preferred Stock entitled to vote thereon were present
and voted and shall be delivered to the Company by delivery to its address
listed in Section 8.2 of the Purchase Agreement.
(iii) For so long as the members of the Liberty Group own any
combination of shares of Common Stock and Series A-1 Preferred Stock
representing an amount of Common Stock (on an as-converted basis) that, taken
together, equals 8,928,571 shares of Common Stock (as adjusted for any stock
dividends, splits and combinations and similar events affecting the Common Stock
from time to time), the holders of the Series A-1 Preferred Stock, voting as a
single class by plurality of the votes cast or by written consent of a majority
in interest of the holders of the Series A-1 Preferred Stock, shall be entitled
to elect one additional director, or if greater, such number (rounded up to the
next whole number) of additional directors equal to 10% of the then authorized
number of members of the Company's Board of Directors, to serve on the Board of
Directors, at any annual meeting of stockholders or special meeting held in
place thereof, or at a special meeting of the holders of the Series A-1
Preferred Stock called as hereinafter provided. At any time after voting power
to elect such director(s) shall have become vested and be continuing in the
holders of the Series A-1 Preferred Stock pursuant to this paragraph, or if a
vacancy shall exist in the office of a director elected by the holders of the
Series A-1 Preferred Stock at a time when the holders of the Series A-1
Preferred Stock are entitled to elect a director pursuant to this paragraph, a
proper officer of the Company may, and upon the written request of the holders
of record of at least twenty-five percent (25%) of the Series A-1 Preferred
Stock then outstanding addressed to the Secretary of the Company shall, call a
special meeting of the holders of the Series A-1 Preferred Stock for the sole
purpose of electing the director that such holders are entitled to elect. If
such meeting shall not be called by a proper officer of the Company within
twenty (20) days after personal service of said written request upon the
Secretary of the Company, or within twenty (20) days after mailing the same
within the United States by certified mail, addressed to the Secretary of the
Company at its principal executive offices, then the holders of at least
twenty-five percent (25%) of the Series A-1 Preferred Stock then outstanding may
designate in writing one of their number to call such meeting at the expense of
the Company, and such meeting may be called by the person so designated upon the
notice required for the annual meeting of stockholders of the Company and shall
be held at the place for holding the annual meetings of stockholders. The action
permitted or required to be taken by the holders of the Series A-1 Preferred
Stock pursuant to this Section 8(d)(iii) may be taken (1) at any annual or
special meeting of stockholders or at a special meeting of the holders of the
Series A-1 Preferred Stock, or (2) without a meeting, without prior notice, and
without a vote if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holders of the Series A-1 Preferred Stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares held by the holders of the
Series A-1 Preferred Stock entitled to vote thereon were present and voted and
shall be delivered to the Company by delivery to its address listed in Section
8.2 of the Purchase Agreement.
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(e) In exercising the voting rights set forth in Section 8(b), each
share of Series A Preferred Stock shall be entitled to vote on an as-converted
basis with the holders of the Company's Common Stock. Except as set forth in
the preceding sentence and in Section 8(d), each share of Series A Preferred
Stock entitled to vote shall have one vote per share, provided, however, that if
the Company issues any other series of preferred stock which has the right to
vote with the Series A Preferred Stock as a single class on any matter not
specified in this Section 8, then the Series A Preferred Stock shall have with
respect to such matters one vote per $10,000 of the aggregate liquidation
preference of all shares of Series A Preferred Stock; and provided further that
without the unanimous consent of the holders of the Series A Preferred Stock,
the Company shall not issue any other series of preferred stock which has the
right to vote with the Series A Preferred Stock as a single class on any matter
not specified in this Section 8, unless such other series of preferred stock
shall have with respect to such matters one vote per $10,000 of the aggregate
liquidation preference of all shares of such other series of preferred stock and
such issuance is otherwise permitted hereunder. Except as otherwise required by
applicable law or as set forth herein, the shares of Series A Preferred Stock
shall not have any relative, participating, optional or other special voting
rights and powers and the consent of the holders thereof shall not be required
for the taking of any corporate action.
9. Ranking; Liquidation.
(a) The shares of Series A Preferred Stock will, with respect to
dividend rights and rights on liquidation, winding-up and dissolution, rank (i)
senior to all shares of Common Stock (whether issued in one or more classes) and
to each other class of capital stock or series of Preferred Stock of the Company
(other than the Preferred Stock Mandatorily Redeemable 2009 of the Company) the
terms of which do not expressly provide that it ranks senior to or on a parity
with the shares of Series A Preferred Stock as to dividend rights and rights on
liquidation, winding-up and dissolution of the Company (collectively referred
to, together with all shares of Common Stock (whether issued in one or more
classes) of the Company, as "Junior Shares"); (ii) on a parity with the
Preferred Stock Mandatorily Redeemable 2009 of the Company and with each other
class of capital stock or series of Preferred Stock of the Company issued by the
Company in compliance with Section 8, the terms of which expressly provide that
such class or series will rank on a parity with the shares of Series A Preferred
Stock as to dividend rights and rights on liquidation, winding-up and
dissolution of the Company (collectively referred to as "Parity Shares"); and
(iii) junior to each class of capital stock or series of Preferred Stock of the
Company issued by the Company in compliance with Section 8, the terms of which
expressly provide that such class or series will rank senior to the shares of
Series A Preferred Stock as to dividend rights and rights upon liquidation,
winding-up and dissolution of the Company (collectively referred to as "Senior
Shares"). The Series A-2 Preferred Stock and Series A-3 Preferred Stock shall
be deemed to be Parity Shares with respect to the Series A-1 Preferred Stock;
the Series A-1 Preferred Stock and Series A-3 Preferred Stock shall be deemed to
be Parity Shares with respect to the Series A-2 Preferred Stock; and the Series
A-1 Preferred Stock and Series A-2 Preferred Stock shall be deemed to be Parity
Shares with respect to the Series A-3 Preferred Stock.
(b) No dividend whatsoever shall be declared or paid upon, or any sum
set apart for the payment of dividends upon, any outstanding shares of Series A
Preferred Stock with respect to any dividend period unless all dividends for all
preceding dividend periods have been
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declared and paid, or declared and a sufficient sum set apart for the payment of
such dividends, upon all outstanding Senior Shares.
(c) In the event of any liquidation, dissolution or winding-up of the
Company, whether voluntary or involuntary, the holders of the shares of Series A
Preferred Stock then Outstanding shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Company to the
holders of shares of Common Stock or Junior Shares by reason of their ownership
thereof, an amount equal to the greater of (i) the then effective Liquidation
Preference of their shares of Series A Preferred Stock, plus an amount equal to
all dividends accrued and unpaid thereon from the last Dividend Payment Date to
the date fixed for liquidation, dissolution or winding-up or (ii) the amount
such holders would receive if such holders converted their shares of Series A
Preferred Stock into Common Stock immediately prior to such liquidation,
dissolution or winding up. If upon the occurrence of such event the assets of
the Company shall be insufficient to permit the payment to such holders of the
full preferential amount and all liquidating payments on all shares of Series A
Preferred Stock and any Parity Shares, the entire assets of the Company legally
available for distribution shall be distributed among the holders of the shares
of Series A Preferred Stock and the holders of all Parity Shares ratably in
accordance with the respective amounts that would be payable on such shares of
Series A Preferred Stock and any such Parity Shares if all amounts payable
thereon were paid in full. After payment of the full preferential amount (and,
if applicable, an amount equal to a pro rata dividend to the holders of
Outstanding shares of Series A Preferred Stock), such holders shall not be
entitled to any additional distribution of assets of the Company.
10. Redemption.
(a) The shares of Series A Preferred Stock may be redeemed by the
Company at any time commencing on or after June 30, 2005, in whole or from time
to time in part, at the election of the Company (an "Optional Redemption"), at a
redemption price (the "Redemption Price") payable in cash equal to 100% of the
then effective Liquidation Preference (after giving effect to the Special
Dividend, if applicable), plus accrued and unpaid dividends thereon from the
last Dividend Payment Date to the date of redemption (the "Optional Redemption
Date").
(b) Shares of Series A Preferred Stock (if not earlier redeemed or
converted) shall be mandatorily redeemed by the Company on June 30, 2015 (the
"Mandatory Redemption Date"); provided, however, that if such date is not a
Business Day, then the Mandatory Redemption Date shall be the next Business Day,
at a Redemption Price per share in cash equal to the then effective Liquidation
Preference (after giving effect to the Special Dividend, if applicable), plus
accrued and unpaid dividends thereon from the last Dividend Payment Date to the
Mandatory Redemption Date.
(c) In the event of a redemption of fewer than all the shares of Series
A Preferred Stock, the shares of Series A Preferred Stock will be chosen for
redemption by the Registrar from the Outstanding shares of Series A Preferred
Stock not previously called for redemption, pro rata or by lot or by such other
method as the Registrar shall deem fair and appropriate; provided, that the
Company may redeem (an "Odd-lot Redemption") all shares held by holders of fewer
than 100 shares of Series A Preferred Stock (or by holders that would hold fewer
than 100 shares of Series A Preferred Stock following such redemption) prior to
its redemption of
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other shares of Series A Preferred Stock; provided, further, that the Company
may not redeem a portion of any share without redeeming the entire share.
Notwithstanding the foregoing, the Company may not effect an Odd-lot Redemption
with respect to any shares of Series A Preferred Stock held by the members of
the Liberty Group or the HMTF Group. If fewer than all the shares of Series A
Preferred Stock represented by any share certificate are so to be redeemed, (i)
the Company shall issue a new certificate for the shares not redeemed and (ii)
if any shares represented thereby are converted before termination of the
conversion right with respect to such shares, such converted shares shall be
deemed (so far as may be) to be the shares represented by such share certificate
that was selected for redemption. Shares of Series A Preferred Stock that have
been converted during a selection of shares of Series A Preferred Stock to be
redeemed shall be treated by the Registrar as outstanding for the purpose of
such selection but not for the purpose of the payment of the Redemption Price.
(d) In the event the Company elects to effect an Optional Redemption,
the Company shall (i) make a public announcement of the redemption and (ii) give
a redemption notice (the "Redemption Notice") to the holders not fewer than 30
days nor more than 60 days before the redemption date (the "Redemption Date").
Whenever a Redemption Notice is required to be delivered to the holders, such
notice shall provide the information set forth below and be given by first class
mail, postage prepaid to each holder of shares of Series A Preferred Stock to be
redeemed, at such holder's address appearing in the Series A Preferred Share
Register. All Redemption Notices shall identify the shares of Series A
Preferred Stock to be redeemed (including CUSIP number) and shall state:
(i) the Redemption Date;
(ii) the applicable Redemption Price;
(iii) if fewer than all the outstanding shares of Series A Preferred
Stock are to be redeemed, the identification (and, in the case of partial
redemption, the certificate number, the total number of shares represented
thereby and the number of such shares being redeemed on the Redemption Date) of
the particular shares of Series A Preferred Stock to be redeemed;
(iv) that on the Redemption Date the Redemption Price, together with
all accrued and unpaid dividends from the last Dividend Payment Date to the
Redemption Date, will become due and payable upon each such share of Series A
Preferred Stock to be redeemed and that dividends thereon will cease to accrue
on and after said date;
(v) the conversion price, the date on which the right to convert shares
of Series A Preferred Stock to be redeemed will terminate and the place or
places where such shares of Series A Preferred Stock may be surrendered for
conversion; and
(vi) the place or places where such shares of Series A Preferred Stock
are to be surrendered for payment of the Redemption Price and the other amounts
which are then payable.
The Redemption Notice shall be given by the Company or, at the Company's
request, by the Registrar in the name and at the expense of the Company;
provided that if the
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Company so requests, it shall provide the Registrar adequate time, as reasonably
determined by the Registrar, to deliver such notices in a timely fashion.
(e) Prior to any Redemption Date, the Company shall deposit with the
Registrar or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust) an amount of consideration sufficient to pay
the Redemption Price of all the shares of Series A Preferred Stock that are to
be redeemed on that date plus all accrued and unpaid dividends thereon from the
last Dividend Payment Date to the Redemption Date. If any share of Series A
Preferred Stock called for redemption is converted, any consideration deposited
with the Registrar or with any Paying Agent or so segregated and held in trust
for the redemption of such share of Series A Preferred Stock shall be paid or
delivered to the Company upon Company Order or, if then held by the Company,
shall be discharged from such trust.
(f) Notice of redemption having been given as aforesaid, the shares of
Series A Preferred Stock so to be redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price therein specified plus all accrued and
unpaid dividends thereon from the last Dividend Payment Date to the Redemption
Date, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued but unpaid dividends) dividends on
such shares of Series A Preferred Stock shall cease to accrue and such shares
shall cease to be convertible into shares of Common Stock. Upon surrender of
any such shares of Series A Preferred Stock for redemption in accordance with
said notice, such shares of Series A Preferred Stock shall be redeemed by the
Company at the applicable Redemption Price, together with all accrued and unpaid
dividends thereon from the last Dividend Payment Date to the Redemption Date.
If any share of Series A Preferred Stock called for redemption shall not be so
paid upon surrender thereof for redemption, the Redemption Price thereof, and
all accrued and unpaid dividends thereon from the last Dividend Payment Date to
the Redemption Date, shall, until paid, bear interest from the Redemption Date
at the dividend rate payable on the shares of Series A Preferred Stock and such
shares shall remain convertible.
(g) Any certificate that represents more than one share of Series A
Preferred Stock and is to be redeemed only in part shall be surrendered at any
office or agency of the Company designated for that purpose (with, if the
Company or the Registrar so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Registrar shall countersign and
deliver to the holder of such share of Series A Preferred Stock without service
charge, a new Series A Preferred Stock certificate or certificates, representing
any number of shares of Series A Preferred Stock as requested by such holder, in
aggregate amount equal to and in exchange for the number of shares not redeemed
and represented by the Series A Preferred Stock certificate so surrendered.
(h) If a share of Series A Preferred Stock is redeemed subsequent to a
Dividend Record Date with respect to any Dividend Payment Date and on or prior
to such Dividend Payment Date, then the accrued dividends payable on such
Dividend Payment Date will be paid to the person in whose name such share of
Series A Preferred Stock is registered at the close of business on such Dividend
Record Date.
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(i) Any redemption pursuant to this Section 10 shall be made only to
the extent the Company has sufficient funds legally available therefor; provided
that if the shares of Series A Preferred Stock are not redeemed on the Mandatory
Redemption Date because sufficient funds are not available, the Company shall
have a continuing obligation to redeem such shares as and when sufficient funds
become available.
11. Method of Payments.
The Company may make any dividend payments in cash with respect to any
dividend period beginning after June 30, 2005. Any dividends not paid in cash
on a current basis on the applicable Dividend Payment Date with respect to all
periods after June 30, 2005, and all dividends with respect to periods prior to
June 30, 2005, shall not be paid in cash but rather shall constitute Accumulated
Dividends. No payment may be made in respect of Accumulated Dividends as
dividends. Rather, Accumulated Dividends shall be added to the Liquidation
Preference. Dividends may not be paid by delivery of shares of Series A
Preferred Stock.
12. Conversion.
(a) Subject to and upon compliance with the provisions of this
Certificate of Designation, at the option of the holder thereof, any share of
Series A Preferred Stock (including without limitation any share of Series A-3
Preferred Stock issued upon automatic conversion of a share of Series A-1
Preferred Stock or Series A-2 Preferred Stock pursuant to Section 12(i)) may be
converted at any time into a number of fully paid and nonassessable shares of
Common Stock (calculated as to each conversion to the nearest 1/100 of a share)
equal to (i) the then effective Liquidation Preference thereof plus accrued and
unpaid dividends to the date of conversion divided by (ii) the Conversion Price
in effect at the time of conversion. Such conversion right shall expire at the
close of business on the Business Day next preceding the Mandatory Redemption
Date. In case a share of Series A Preferred Stock is called for redemption,
such conversion right in respect of the share so called shall expire at the
close of business on the Business Day next preceding the Redemption Date, unless
the Company defaults in making the payment due upon redemption.
The Conversion Price shall initially be $28.00 per share of Common Stock.
The Conversion Price shall be adjusted in certain instances as provided in
Section 12(d) and Section 12(e).
(b) In order to exercise the conversion privilege, the holder of any
share of Series A Preferred Stock to be converted shall surrender the
certificate for such share, duly endorsed or assigned to the Company or in
blank, at any office or agency of the Company maintained for that purpose,
accompanied by written notice to the Company at such office or agency that the
holder elects to convert such share or, if fewer than all the shares of Series A
Preferred Stock represented by a single share certificate are to be converted,
the number of shares represented thereby to be converted.
Shares of Series A Preferred Stock shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
shares for conversion in accordance with the foregoing provisions, and at such
time the rights of the holders of such
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shares as holders shall cease, and the person or persons entitled to receive the
shares of Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion.
In the case of any conversion of fewer than all the shares of Series A
Preferred Stock evidenced by a certificate, upon such conversion the Company
shall execute and the Registrar shall countersign and deliver to the holder
thereof, at the expense of the Company, a new certificate or certificates
representing the number of unconverted shares of Series A Preferred Stock.
(c) No fractional shares of Common Stock shall be issued upon the
conversion of a share of Series A Preferred Stock. If more than one share of
Series A Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares of Common Stock which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate number
of shares of Series A Preferred Stock so surrendered. Instead of any fractional
shares of Common Stock which would otherwise be issuable upon conversion of any
share of Series A Preferred Stock, the Company shall round down to the nearest
whole share if such fraction is an amount less than 0.5 and round up to the
nearest whole share if such fraction is an amount equal to or greater than 0.5
and shall issue the appropriate number of full shares of Common Stock which
shall be issuable upon conversion in accordance with the foregoing.
(d) The Conversion Price shall be adjusted from time to time by the
Company as follows:
(i) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding shares of Common Stock in shares
of Common Stock, the Conversion Price in effect at the opening of business on
the date following the date fixed for the determination of shareholders entitled
to receive such dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the Common
Stock Record Date (as defined in Section 12(d)(vi)) fixed for such determination
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business on the
day following the Common Stock Record Date. If any dividend or distribution of
the type described in this Section 12(d)(i) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(ii) (a) In case the Company shall issue or sell any Common Stock, or
securities convertible into or exercisable or exchangeable for shares of Common
Stock (other than Common Stock, or securities convertible into or exercisable or
exchangeable for shares of Common Stock, issued (A) pursuant to the Company's
existing or future stock option plans or pursuant to any other existing or
future Common Stock-related director or employee compensation plan or
arrangement of the Company approved by the
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Board of Directors (provided that, with respect to any stock option or other
right granted after April 7, 2000, the per share exercise price of such option
or right is equal to or greater than the per share Closing Price of the Common
Stock on the date of the grant thereof), (B) as consideration for the
acquisition of a business or of assets (provided that the fair market value of
such business or assets, as determined by the Board of Directors in good faith,
is equal to or greater than the aggregate Current Market Price of the Common
Stock to be issued as consideration for such acquisition, in each case
determined at the time the Company enters into a binding agreement with respect
to such acquisition), (C) pursuant to warrants outstanding on the date hereof,
(D) upon the conversion of any shares of Series A Preferred Stock pursuant to
Section 12(a), (E) upon the automatic conversion of shares of Series A-1
Preferred Stock or Series A-2 Preferred Stock pursuant to Section 12(i) or (F)
upon exercise or conversion of any security the issuance of which caused an
adjustment under the provisions hereof or the issuance of which did not require
adjustments hereunder), for a consideration per share (or, in the case of
convertible or exchangeable securities having a conversion or exchange price per
share of Common Stock) less than the Current Market Price of the Common Stock on
the date of such issuance the Conversion Price in effect immediately prior to
such issuance or sale shall be reduced effective as of immediately following
such issuance or sale by multiplying such Conversion Price by a fraction, (1)
the numerator of which shall be the sum of (x) the number of shares of Common
Stock outstanding immediately prior to such issuance or sale and (y) the number
of shares of Common Stock which the aggregate consideration receivable by the
Company for the total number of additional shares of Common Stock so issued or
sold (or issuable on conversion, exercise or exchange) would purchase at the
Current Market Price in effect immediately prior to such issuance or sale and
(2) the denominator of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to such issuance or sale and the number of
additional shares of Common Stock to be issued or sold (or, in the case of
convertible or exchangeable securities, issuable on conversion, exercise or
exchange);
(b) If the Company shall offer or issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined in Section 12(d)(viii)) on the Common Stock Record Date
fixed for the determination of shareholders entitled to receive such rights or
warrants, the Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect at the
opening of business on the date after such Common Stock Record Date by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Common Stock Record Date plus the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock subject to such rights or warrants would
purchase at such Current Market Price and of which the denominator shall be the
number of shares of Common Stock outstanding at the close of business on the
Common Stock Record Date plus the total number of additional shares of Common
Stock subject to such rights or warrants for subscription or purchase. Such
adjustment shall become effective immediately after the opening of business on
the day following the Common Stock Record Date fixed for determination of
shareholders entitled to purchase or receive such rights or warrants. To the
extent that shares of Common Stock are not delivered pursuant
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to such rights or warrants, upon the expiration or termination of such rights or
warrants the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. If such rights or warrants are not
so issued, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such date fixed for the determination of
shareholders entitled to receive such rights or warrants had not been fixed. In
determining whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than such Current Market Price, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account (x) any consideration received for such rights
or warrants, with the value of such consideration and the amount of such
exercise or subscription price, if other than cash, to be determined by the
Board of Directors and (y) the amount of any exercise price or subscription
price required to be paid upon exercise of such warrants or rights.
(iii) If the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and, conversely,
if the outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(iv) If the Company shall, by dividend or otherwise, distribute to all
holders of its shares of Common Stock any class of capital stock of the Company
(other than any dividends or distributions to which Section 12(d)(i) applies) or
evidences of its indebtedness, cash or other assets (including securities, but
excluding any rights or warrants of a type referred to in Section 12(d)(ii)(b)
and Spinoff Securities and dividends and distributions paid exclusively in cash
and excluding any capital stock, evidences of indebtedness, cash or assets
distributed upon a merger or consolidation to which Section 12(e) applies) (the
foregoing hereinafter in this Section 12(d)(iv) called the "Distributed
Securities"), then, in each such case, the Conversion Price shall be reduced so
that the same shall be equal to the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on the
Common Stock Record Date (as defined in Section 12(d)(viii) with respect to such
distribution by a fraction of which the numerator shall be the Current Market
Price (determined as provided in Section 12(d)(viii)) on such date less the fair
market value (as determined by the Board of Directors, whose good faith
determination shall be conclusive and described in a resolution of the Board of
Directors) on such date of the portion of the Distributed Securities so
distributed applicable to one share of Common Stock and the denominator shall be
such Current Market Price, such reduction to become effective immediately prior
to the opening of business on the day following the Common Stock Record Date;
provided, however, that, in the event the then fair market value (as so
determined) of the portion of the Distributed Securities so distributed
applicable to one share of Common
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Stock is equal to or greater than the Current Market Price on the Common Stock
Record Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of shares of Series A Preferred Stock shall have the
right to receive upon conversion of a share of Series A Preferred Stock(or any
portion thereof) the amount of Distributed Securities such holder would have
received had such holder converted such share of Series A Preferred Stock(or
portion thereof) immediately prior to such Common Stock Record Date. If such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 12(d)(iv) by reference to the actual or when issued trading market for
any securities constituting all or part of such distribution, it must in doing
so consider the prices in such market over the same period used in computing the
Current Market Price pursuant to Section 12(d)(vi) to the extent possible.
Rights or warrants distributed by the Company to all holders of shares of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Dilution Trigger Event"): (A) are deemed to be transferred
with such shares of Common Stock; (B) are not exercisable; and (C) are also
issued in respect of future issuances of shares of Common Stock, shall be deemed
not to have been distributed for purposes of this Section 12(d)(iv) (and no
adjustment to the Conversion Price under this Section 12(d)(iv) shall be
required) until the occurrence of the earliest Dilution Trigger Event, whereupon
such rights or warrants shall be deemed to have been distributed and an
appropriate adjustment to the Conversion Price under this Section 12(d)(iv)
shall be made. If any such rights or warrants, including any such existing
rights or warrants distributed prior to the first issuance of shares of Series A
Preferred Stock, are subject to subsequent events, upon the occurrence of each
of which such rights or warrants shall become exercisable to purchase
securities, evidences of indebtedness or other assets, then the occurrence of
each such event shall be deemed to be such date of issuance and record date with
respect to new rights or warrants (and a termination or expiration of the
existing rights or warrants, without exercise by the holder thereof). In
addition, in the event of any distribution (or deemed distribution) of rights or
warrants, or any Dilution Trigger Event with respect thereto, that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 12(d)(iv) was made, (1) in the case of any
such rights or warrants which shall all have been redeemed or repurchased
without exercise by any holders thereof, the Conversion Price shall be
readjusted upon such final redemption or repurchase to give effect to such
distribution or Dilution Trigger Event, as the case may be, as though it were a
cash distribution to which this Section 12(d)(iv) were applicable, equal to the
per share redemption or repurchase price received by a holder or holders of
shares of Common Stock with respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to all holders of shares of
Common Stock as of the date of such redemption or repurchase, and (2) in the
case of such rights or warrants which shall have expired or been terminated
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
Notwithstanding any other provision of this Section 12(d)(iv) to the
contrary, rights, warrants, evidences of indebtedness, other securities, cash or
other assets (including,
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without limitation, any rights distributed pursuant to any shareholder rights
plan) shall be deemed not to have been distributed for purposes of this Section
12(d)(iv) if the Company makes proper provision so that each holder of shares of
Series A Preferred Stock on the date fixed for determination of shareholders
entitled to receive such distribution shall receive upon such distribution, the
amount and kind of such distributions that such holder would have been entitled
to receive if such holder had, immediately prior to such determination date,
converted such share of Series A Preferred Stock into a share of Common Stock.
For purposes of this Section 12(d)(iv) and Sections 12(d)(i) and (ii), any
dividend or distribution to which this Section 12(d)(iv) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 12(d)(ii) applies (or both),
shall be deemed instead to be (A) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants other than
such shares of Common Stock or rights or warrants to which Section 12(d)(ii)
applies (and any Conversion Price reduction required by this Section 12(d)(iv)
with respect to such dividend or distribution shall then be made) immediately
followed by (B) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 12(d)(i) or 12(d)(ii) with respect to such dividend or distribution
shall then be made), except that (1) the Common Stock Record Date of such
dividend or distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution", "the Common Stock Record Date fixed for such determination" and
"the Common Stock Record Date" within the meaning of Section 12(d)(i) and as
"the date fixed for the determination of shareholders entitled to receive such
rights or warrants", "the Common Stock Record Date fixed for the determination
of the share holders entitled to receive such rights or warrants" and "such
Common Stock Record Date" for purposes of Section 12(d)(ii), and (2) any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such determination"
for the purposes of Section 12(d)(i).
(v) If a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock expires and such tender offer (as
amended upon the expiration thereof) requires the payment to shareholders (based
on the acceptance (up to any maximum specified in the terms of the tender offer)
of Purchased Shares) of an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose good faith determination shall
be conclusive and described in a resolution of the Board of Directors) that,
combined together with the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose good faith determination shall be
conclusive and described in a resolution of the Board of Directors) as of the
expiration of such tender offer, of consideration payable in respect of any
other tender offers by the Company or any of its subsidiaries for all or any
portion of the shares of Common Stock expiring within the 12 months preceding
the expiration of such tender offer and in respect of which no adjustment
pursuant to this Section 12(d)(v) has been made, exceeds 5% of the net income of
the Company reported for the 12 month period ending with the fiscal quarter next
preceding such payment (the "12 Month Net Income") (determined as of the last
time (the "Expiration Time") tenders could have been made pursuant to such
tender offer (as it may be amended)), then, and in each such case, immediately
prior to the opening of business on the day after the date of the Expiration
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Time, the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on the date of the Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time multiplied by the Current
Market Price of a share of Common Stock on the trading day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
shareholders based on the acceptance (up to any maximum specified in the terms
of the tender offer) of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Current Market Price of the shares of Common Stock on the trading
day next succeeding the Expiration Time, such reduction (if any) to become
effective immediately prior to the opening of business on the day following the
Expiration Time. If the Company is obligated to purchase shares pursuant to any
such tender offer, but the Company is permanently prevented by applicable law
from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender offer had not been made. If the application of
this Section 12(d)(v) to any tender offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender offer under this
Section 12(d)(v).
(vi) If the Company effects a Spinoff, the Company shall make
appropriate provision so that the holders of Series A Preferred Stock have the
right to exchange their shares of Series A Preferred Stock on the effective date
of the Spinoff for (a) shares of Exchange Preferred Stock of the Company and (b)
shares of Mirror Preferred Stock of the issuer of the Spinoff Securities. The
sum of the initial liquidation preference of the shares of Exchange Preferred
Stock and Mirror Preferred Stock delivered in exchange for a share of Series A
Preferred Stock will equal the Liquidation Preference of, plus accrued and
unpaid dividends on, a share of Series A Preferred Stock on the effective date
of the Spinoff. The Mirror Preferred Stock will have an aggregate initial
liquidation preference equal to the product of the aggregate Liquidation
Preference of, plus accrued and unpaid dividends on, the shares of Series A
Preferred Stock exchanged therefor and the quotient of (x) the product of the
number (or fraction) of Spinoff Securities that would have been receivable upon
such Spinoff by a holder of the number of shares of Common Stock issuable upon
conversion of a share of Series A Preferred Stock immediately prior to the
record date for the Spinoff and the average of the daily Closing Prices of the
Spinoff Securities for the period of ten consecutive trading days commencing on
the tenth trading day following the effective date of the Spinoff, divided by
(y) the sum of the amount determined pursuant to clause (x), plus the fair value
of the shares of Common Stock and other securities or property (other than
Spinoff Securities) that would have been receivable by a holder of a share of
Series A Preferred Stock upon conversion thereof immediately prior to the record
date for the Spinoff (such fair value to be determined in the case of Common
Stock or other securities with a Closing Price in the same manner as provided in
clause (x) and otherwise by the Board of Directors in the exercise of its
judgment). The shares of Exchange Preferred Stock will have an aggregate
initial
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liquidation preference equal to the difference between the aggregate Liquidation
Preference of plus accrued and unpaid dividends on the shares of Series A
Preferred Stock exchanged therefor and the aggregate initial liquidation
preference of the Mirror Preferred Stock. From and after the effective date of
such Spinoff, the holders of any shares of Series A Preferred Stock that have
not been exchanged for Mirror Preferred Stock and Exchange Preferred Stock as
provided above shall have no conversion rights under these provisions with
respect to such Spinoff Securities.
(vii) If the Company or a subsidiary of the Company (the applicable of
the foregoing being the "Offeror") makes an Exchange Offer, the Offeror shall
concurrently therewith make an equivalent offer to the holders of Series A
Preferred Stock pursuant to which such holders may tender Series A Preferred
Stock, based upon the number of shares of Common Stock into which such tendered
shares of Series A Preferred Stock are then convertible (and in lieu of
tendering outstanding shares of Common Stock), together with any other
consideration that may be required to be tendered pursuant to the Exchange
Offer, and receive in exchange therefor, in lieu of Exchange Securities (and
other property, if applicable), Mirror Preferred Stock with an aggregate
liquidation preference equal to the aggregate Liquidation Preference of plus
accrued and unpaid dividends on the shares of Series A Preferred Stock exchanged
therefor. Whether or not a holder of Series A Preferred Stock elects to accept
the offer and tender Series A Preferred Stock, no adjustment to the Conversion
Price will be made in connection with the Exchange Offer. If an Exchange Offer
is made as discussed above, the Offeror shall, concurrently with the
distribution of the offering circular or prospectus and related documents to
holders of Common Stock, provide each holder of Series A Preferred Stock with a
notice setting forth the offer described herein and describing the Exchange
Offer, the Exchange Securities and the Mirror Preferred Stock. Such notice
shall be accompanied by the offering circular, prospectus or similar document
provided to holders of Common Stock in respect of the Exchange Offer and a copy
of the certificate of designations (or similar document) proposed to be filed by
the Offeror in order to establish the Mirror Preferred Stock. No failure to
mail the notice contemplated herein or any defect therein or in the mailing
thereof shall affect the validity of the applicable Exchange Offer.
(viii) For purposes of this Section 12(d), the following terms shall
have the meaning indicated:
"Closing Price" with respect to any securities on any day means the closing
sale price as of 4:00 p.m. Eastern Time on such day or any earlier final closing
on such day or, if no such sale takes place on such day, the average of the
reported high and low bid prices on such day, in each case on the Nasdaq
National Market, or the New York Stock Exchange, as applicable, or, if such
security is not listed or admitted to trading on such national market or
exchange, on the national stock exchange or Commission recognized trading market
in the United States on which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any national
stock exchange or Commission recognized trading market in the United States, the
average of the high and low bid prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation Bureau
Incorporated or a similar generally accepted reporting service in the United
States, or, if
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not so available, in such manner as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors for that
purpose, or a price determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors.
"Common Stock Record Date" means, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
"Current Market Price" means the average of the daily Closing Prices per
share of Common Stock for the 10 consecutive trading days immediately prior to
the date in question; provided, however, that (A) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Conversion Price
pursuant to Section 12(d)(i), (ii), (iii), (iv), (v) or (vi) occurs during such
10 consecutive trading days, the Closing Price for each trading day prior to the
"ex" date for such other event shall be adjusted by multiplying such Closing
Price by the same fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (B) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Section 12(d)(i),
(ii), (iii), (iv),(v) or (vi) occurs on or after the "ex" date for the issuance
or distribution requiring such computation and prior to the day in question, the
Closing Price for each trading day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Conversion Price is so required to be adjusted as a
result of such other event and (C) if the "ex" date for the issuance or
distribution requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause (A) or (B) of
this proviso, the Closing Price for each trading day on or after such "ex" date
shall be adjusted by adding thereto the amount of any cash and the fair market
value (as determined by the Board of Directors in a manner consistent with any
good faith determination of such value for purposes of Section 12(d)(iv), whose
good faith determination shall be conclusive and described in a resolution of
the Board of Directors) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of Common Stock as of
the close of business on the day before such "ex" date. For purposes of any
computation under Section 12(d)(v), the Current Market Price on any date shall
be deemed to be the average of the daily Closing Prices per share of Common
Stock for such day and the next two succeeding trading days; provided, however,
that, if the "ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
Section 12(d)(i), (ii), (iii), (iv), (v) or (vi) occurs on or after the
Expiration Time for the tender or exchange offer requiring such computation and
prior to the day in question, the Closing Price for each trading day on and
after the "ex" date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the Conversion Price is
so required to be adjusted as a result of such other event. For purposes of
this paragraph, the term "ex" date (1) when used with respect to any issuance or
distribution, means the first date on which the shares of Common Stock trade
regular way on the relevant exchange or in the relevant market from which the
Closing Price was obtained without the right to receive such issuance or
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distribution, (2) when used with respect to any subdivision or combination of
shares of Common Stock, means the first date on which the shares of Common Stock
trade regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective and (3) when used with respect
to any tender or exchange offer means the first date on which the shares of
Common Stock trade regular way on such exchange or in such market after the
Expiration Time of such offer. Notwithstanding the foregoing, whenever
successive adjustments to the Conversion Price are called for pursuant to this
Section 12(d), such adjustments shall be made to the Current Market Price as may
be necessary or appropriate to effectuate the intent of this Section 12(d) and
to avoid unjust or inequitable results, as determined in good faith by the Board
of Directors.
"Exchange Offer" means an issuer tender offer (within the meaning of Rule
13e-4(a)(2) of the rules and regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, as
such Rule is in effect on the date hereof), including, without limitation, one
that is effected through the distribution of rights or warrants, made to holders
of Common Stock (or to holders of other stock of the Company receivable by a
holder of Series A Preferred Stock upon conversion thereof), to issue stock of
the Company or of a subsidiary of the Company and/or other property to a
tendering stockholder in exchange for shares of Common Stock (or such other
stock) validly tendered pursuant to such issuer tender offer.
"Exchange Preferred Stock" means a series of convertible preferred stock of
the Company, having terms, conditions, designations, dividend rights, voting
powers, rights on liquidation and other preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof that are identical, or as nearly so as is practicable in
the judgment of the Company's Board of Directors, to those of the Series A
Preferred Stock for which such Exchange Preferred Stock is exchanged, except
that (a) the liquidation preference will be determined as provided in Section
12(d)(vi), (b) the running of any time periods pursuant to the terms of the
Series A Preferred Stock shall be tacked to the corresponding time periods in
the Exchange Preferred Stock and (c) the Exchange Preferred Stock will not be
convertible into, and the holders will have no conversion rights thereunder with
respect to the Spinoff Securities.
"Exchange Securities" means stock of the Company or of a subsidiary of the
Company that is issued in exchange for shares of Common Stock (or other stock of
the Company receivable by a holder of Series A Preferred Stock upon conversion
thereof) pursuant to an Exchange Offer.
"Fair Market Value" means the amount which a willing buyer would pay a
willing seller in an arm's-length transaction.
"Mirror Preferred Stock" means convertible preferred stock issued by (a) in
the case of a Spinoff, the issuer of the applicable Spinoff Securities, and (b)
in the case of an Exchange Offer, the issuer of the applicable Exchange
Securities, and having terms, conditions, designations, dividend rights, voting
powers, rights on liquidation and other preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof that are identical, or as nearly so as practicable in the
judgment of the Company's Board of Directors, to those of the Series A Preferred
Stock for which such Mirror
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Preferred Stock is exchanged, except that (i) the liquidation preference will be
determined as provided in Sections 12(d)(vi) or 12(d)(vii), as applicable, (ii)
the running of any time periods pursuant to the terms of the Series A Preferred
Stock shall be tacked to the corresponding time periods in the Mirror Preferred
Stock, and (iii) the Mirror Preferred Stock shall be convertible into the kind
and amount of Spinoff Securities or Exchange Securities, as applicable, and
other securities and property that the holder of Series A Preferred Stock in
respect of which such Mirror Preferred Stock is issued pursuant to the terms
hereof would have received (x) in the case of a Spinoff, in such Spinoff had
such Series A Preferred Stock been converted immediately prior to the record
date for such Spinoff and (y) in the case of an Exchange Offer, upon
consummation thereof had such Series A Preferred Stock that such holder elects
to tender been converted and the shares of Common Stock received upon such
conversion been tendered in full pursuant to such Exchange Offer prior to the
expiration thereof and the same percentage of such tendered shares had been
accepted for exchange as the percentage of validly tendered shares of Common
Stock were accepted for exchange pursuant to such Exchange Offer, as the case
may be.
"Spinoff" means the distribution in a transaction that is generally not
taxable to the recipients under the Internal Revenue Code of 1986 (as amended or
any equivalent successor statute) of stock of a subsidiary of the Company as a
dividend to all holders of Common Stock.
"Spinoff Securities" means stock of a subsidiary of the Company that is
distributed to holders of Common Stock in a Spinoff.
(ix) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this Section
12(d)(ix) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 12
shall be made by the Company and shall be made to the nearest cent. No
adjustment need be made for a change in the par value or no par value of the
Common Stock.
(x) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Registrar an Officer's Certificate setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Promptly after delivery of
such certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each holder of shares of Series A
Preferred Stock at such holder's last address appearing on the register of
holders maintained for that purpose within 20 days of the effective date of such
adjustment. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(xi) In any case in which this Section 12(d) provides that an
adjustment shall become effective immediately after a Common Stock Record Date
for an event, the Company may defer until the occurrence of such event issuing
to the holder of any share of Series A Preferred Stock converted after such
Common Stock Record Date and before
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the occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and
above the shares of Common Stock issuable upon such conversion before giving
effect to such adjustment.
(xii) For purposes of this Section 12(d), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company or by any of its Subsidiaries. The Company shall not
pay any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company or by any of its Subsidiaries.
(xiii) In the event that a holder of Series A Preferred Stock would be
entitled to receive upon conversion thereof any Redeemable Capital Stock and the
Company redeems, exchanges or otherwise acquires all of the outstanding shares
or other units of such Redeemable Capital Stock (such event being a "Redemption
Event"), then, from and after the effective date of such Redemption Event, the
holders of shares of Series A Preferred Stock then outstanding shall be entitled
to receive upon conversion of such shares, in lieu of shares or units of such
Redeemable Capital Stock, the kind and amount of shares of stock and other
securities and property receivable upon the Redemption Event by a holder of the
number of shares or units of such Redeemable Capital Stock into which such
shares of Series A Preferred Stock could have been converted immediately prior
to the effective date of such Redemption Event (assuming, to the extent
applicable, that such holder failed to exercise any rights of election with
respect thereto and received per share or unit of such Redeemable Capital Stock
the kind and amount of stock and other securities and property received per
share or unit by a plurality of the non-electing shares or units of such
Redeemable Capital Stock), and (from and after the effective date of such
Redemption Event) the holders of the Series A Preferred Stock shall have no
other conversion rights under these provisions with respect to such Redeemable
Capital Stock. For purposes of this Section 12(d)(xiii) "Redeemable Capital
Stock" means a class or series of capital stock of the Company that provides by
its terms a right in favor of the Company to call, redeem, exchange or otherwise
acquire all of the outstanding shares or units of such class or series.
(e) In case of any consolidation of the Company with, or merger of the
Company into, any other Person, or in case of any merger of another Person into
the Company (other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), or in case of any sale, conveyance or transfer of all or
substantially all the assets of the Company, the holder of each share of Series
A Preferred Stock shall have the right thereafter, during the period such share
of Series A Preferred Stock shall be convertible as specified in Section 12(a),
to convert such share of Series A Preferred Stock into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance or transfer by a holder of the number of shares of Common Stock of
the Company into which such share of Series A Preferred Stock might have been
converted immediately prior to such consolidation, merger, conveyance or
transfer, assuming such holder of shares of Common Stock of the Company failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance or transfer (provided that, if the kind or amount of securities, cash
and other property receivable upon such consolidation, merger, conveyance or
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transfer is not the same for each share of Common Stock of the Company in
respect of which such rights of election shall not have been exercised
("nonelecting share"), then for the purpose of this Section 12 the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance or transfer by each nonelecting share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
nonelecting shares). Such securities shall provide for adjustments which, for
events subsequent to the effective date of the triggering event, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 12. The above provisions of this Section 12 shall similarly apply to
successive consolidations, mergers, conveyances or transfers.
(f) In case:
(i) the Company shall declare a dividend (or any other distribution) on
its Common Stock payable otherwise than in cash out of its earned surplus; or
(ii) the Company shall authorize the granting to all holders of its
shares of Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any other rights; or
(iii) of any reclassification of the Common Stock (other than a
subdivision or combination of the Company's outstanding shares of Common Stock),
or of any consolidation or merger to which the Company is a party and for which
approval of any shareholders of the Company is required, or the sale, conveyance
or transfer of all or substantially all the assets of the Company; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(v) the Company shall take any other action referred to in this Section
12;
then the Company shall cause to be filed with the Registrar and at each
office or agency maintained for the purpose of conversion of shares of Series A
Preferred Stock, and shall cause to be mailed to all holders at their last
addresses as they shall appear in the shares of Series A Preferred Stock
Register, at least 20 Business Days (or 10 Business Days in any case specified
in clause (i) or (ii) above) prior to the applicable date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of shares of Common Stock of record to
be entitled to such dividend, distribution, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of shares
of Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. Failure to give the notice required by this Section
12(f) or any defect therein shall not affect the legality or validity of any
dividend, distribution, right, warrant, reclassification,
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consolidation, merger, sale, transfer, dissolution, liquidation or winding-up,
or the vote upon any such action.
(g) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of Common
Stock, for the purpose of effecting the conversion of shares of Series A
Preferred Stock, the full number of shares of Common Stock then issuable upon
the conversion of all outstanding shares of Series A Preferred Stock.
(h) The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
shares of Series A Preferred Stock pursuant hereto. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that of the holder of the share of Series A Preferred Stock or shares
of Series A Preferred Stock to be converted, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid or is not payable.
(i) (i) Each share of (A) Series A-1 Preferred Stock transferred to
any person other than a member of the Liberty Group and (B) Series A-2 Preferred
Stock transferred to any person other than a member of the HMTF Group shall be
deemed to be automatically converted into a share of Series A-3 Preferred Stock
with the same Liquidation Preference and otherwise of the same tenor (except as
provided herein) as then in effect with respect to the share of the Series A-1
Preferred Stock or Series A-2 Preferred Stock transferred, such conversion to be
effected in accordance with this Section 12(i) and to be effective as of the
effective time of such transfer.
(ii) Upon any transfer of a share of Series A-1 Preferred Stock or Series
A-2 Preferred Stock triggering an automatic conversion into a share of Series
A-3 Preferred Stock pursuant to Section 12(i)(i), the transferor shall surrender
the certificate or certificates representing the share or shares transferred
(the "Converting Shares") at any office or agency of the Company designated for
that purpose together with written notice stating the number of shares that are
to be transferred to a person other than a member of the Liberty Group (in the
case of shares of Series A-1 Preferred Stock) or a member of the HMTF Group (in
the case of Series A-2 Preferred Stock) and that are thus to be converted into
an equal number of shares of Series A-3 Preferred Stock (the "Converted
Shares"). Such notice shall also state the name or names (with addresses) of
the transferee and denominations in which the certificate or certificates for
Converted Shares are to be issued and shall include instructions for the
delivery thereof. Promptly after such surrender and the receipt of such written
notice, the Company will issue and deliver in accordance with the transferor's
instructions the certificate or certificates evidencing the Converted Shares
issuable upon such conversion, and the Company will deliver to the transferor a
certificate (which shall contain such legends as were set forth on the
surrendered certificate or certificates) representing any shares which were
represented by the certificate or certificates that were delivered to the
Company in connection with such conversion, but which were not transferred.
Upon issuance of shares in accordance with this Section 12(i)(ii), such
Converted Shares shall be duly authorized, validly issued, fully paid and
non-assessable and entitled to the benefits of this Certificate of
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<PAGE>
Designation. The Company shall take all such actions as may be necessary to
assure that all such shares of Series A-3 Preferred Stock may be so issued
without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which shares of Series A-3
Preferred Stock may be listed (except for official notice of issuance which will
be immediately transmitted by the Company upon issuance).
(iii) As used in this Section 12(i), the term "transfer" and derivatives
thereof refers to any sale, gift or other transfer, voluntary or involuntary
(except for transfers, pledges and security interests in connection with bona
fide financing or hedging transactions). A conversion of Series A-1 Preferred
Stock or Series A-2 Preferred Stock into Common Stock pursuant to Section 12(a)
hereof shall not constitute a transfer for purposes of this Section 12(i).
(j) Without the unanimous consent of the holders of the Series A
Preferred Stock, the Company shall not in any manner subdivide (by stock split,
stock dividend or otherwise) or combine (by reverse stock split or otherwise)
the outstanding shares of the Series A-1 Preferred Stock, Series A-2 Preferred
Stock or Series A-3 Preferred Stock unless the outstanding shares of each other
series of Series A Preferred Stock shall be subdivided or combined, as the case
may be, to the same extent, share and share alike, and appropriate provision
shall be made for the protection of the conversion rights hereunder.
13. Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall have
the right, but not the obligation, to offer (the "Change of Control Offer") to
repurchase all, but not less than all, of the shares of Series A Preferred Stock
at a purchase price per share in cash equal to 101% of the Liquidation
Preference of each share of Series A Preferred Stock repurchased (after giving
effect to the Special Dividend, if applicable), plus an amount equal to 101% of
all dividends accrued and unpaid thereon to the date fixed for repurchase (the
"Change of Control Purchase Amount"). Within 20 days following the Change of
Control Date, the Company shall mail a notice to each holder of shares of Series
A Preferred Stock (with a copy to the Registrar) describing the transaction or
transactions that constitute the Change of Control and, if the Company so
elects, offering to repurchase shares of Series A Preferred Stock on a date
specified in such notice (the "Change of Control Purchase Date"), which date
shall be no earlier than 90 days and no later than 120 days from the date such
notice is mailed, pursuant to the procedures required by Section 10 and
described in such notice. The failure of the Company to make such Change of
Control Offer within such 20-day period shall constitute an irrevocable waiver
of the Company's right to make such Change of Control Offer solely with the
respect to the relevant Change of Control and shall result in the dividend rate
on the Series A Preferred Stock referred to in Section 6 hereof being increased
to 16% effective as of the Change of Control Date. The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations to the extent such laws and regulations are
applicable in connection with the repurchase of the Series A Preferred Stock as
a result of a Change of Control.
PAGE 30
<PAGE>
(b) On the Change of Control Purchase Date, the Company shall, to the
extent lawful:
(i) accept for payment all shares of Series A Preferred Stock properly
tendered pursuant to the Change of Control Offer;
(ii) deposit with the paying agent an amount equal to the Change of
Control Purchase Amount in respect of all shares of Series A Preferred Stock so
tendered; and
(iii) deliver or cause to be delivered to the Registrar all
certificates for shares of Series A Preferred Stock so accepted together with an
officer's certificate stating the aggregate number of shares being purchased by
the Company.
(c) The paying agent shall promptly mail to each holder of shares of
Series A Preferred Stock so tendered the Change of Control Purchase Amount for
such shares of Series A Preferred Stock, and the Registrar shall promptly
authenticate and mail (or cause to be transferred by book entry) to each holder
a new certificate for any shares of Series A Preferred Stock not tendered that
are represented by the surrendered certificate. The Company shall notify each
holder of Series A Preferred Stock the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Purchase Date.
(d) The provisions of this paragraph that permit the Company to make a
Change of Control Offer shall be applicable regardless of whether any other
provisions of this certificate are applicable. Except as set forth in this
paragraph, no holder of shares of Series A Preferred Stock shall have any right
to require the Company to repurchase or redeem the shares of Series A Preferred
Stock in the event of a takeover, recapitalization or other similar transaction.
14. Purchase Offer.
(a) If the Company shall elect not to make, or shall fail to make, the
Change of Control Offer following the occurrence of a Change of Control pursuant
to Section 13 hereof within the 20-day period specified therein, then in
addition to the redemption rights that the Company may exercise pursuant to
Section 10 hereof after June 30, 2005, the Company shall also have the right
(but not the obligation), (i) at any time and from time to time prior to June
30, 2005, to offer (the "Purchase Offer") to repurchase all, but not less than
all, of the outstanding shares of Series A Preferred Stock at a purchase price
per share in cash equal to 101% of the Liquidation Preference of each share of
Series A Preferred Stock repurchased (after giving effect to the Special
Dividend, if any), plus an amount equal to 101% of all dividends accrued and
unpaid thereon from the last Dividend Payment Date to the date fixed for
repurchase (the "Purchase Payment") and (ii) at any time and from time to time
following June 30, 2005, to make a Purchase Offer to repurchase all, but not
less than all, of the outstanding shares of Series A Preferred Stock at a
purchase price per share in cash equal to 100% of the Liquidation Preference of
each share of Series A Preferred Stock repurchased (after giving effect to the
Special Dividend, if any), plus an amount equal to 100% of all dividends accrued
and unpaid thereon from the last Dividend Payment Date to the date fixed for
repurchase (the "Par Purchase Payment"). If the Company elects to make a
Purchase Offer, the Company shall mail a notice to
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<PAGE>
each holder of shares of Series A Preferred Stock (with a copy to the Registrar)
offering to repurchase shares of Series A Preferred Stock on a date specified in
such notice (the "Purchase Payment Date"), which date shall be no earlier than
90 days and no later than 120 days from the date such notice is mailed, pursuant
to the procedures required by Section 6 and described in such notice. The
Company shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations to the extent such laws and
regulations are applicable in connection with the repurchase of the Series A
Preferred Stock hereunder.
(b) On the Purchase Payment Date, the Company shall, to the extent
lawful:
(i) accept for payment all shares of Series A Preferred Stock properly
tendered pursuant to the Purchase Offer;
(ii) deposit with the paying agent an amount equal to the Purchase
Payment or the Par Purchase Payment, as applicable, in respect of all shares of
Series A Preferred Stock so tendered; and
(iii) deliver or cause to be delivered to the Registrar all
certificates for shares of Series A Preferred Stock so accepted together with an
officer's certificate stating the aggregate number of shares being purchased by
the Company.
(c) The paying agent shall promptly mail or transmit by wire transfer
to each holder of shares of Series A Preferred Stock so tendered the Purchase
Payment or the Par Purchase Payment, as applicable, for such shares of Series A
Preferred Stock, and the Registrar shall promptly authenticate and mail (or
cause to be transferred by book entry) to each such holder a new certificate for
any shares of Series A Preferred Stock not tendered that are represented by the
surrendered certificate. The Company shall notify the holders of Series A
Preferred Stock the results of the Purchase Offer on or as soon as practicable
after the Purchase Payment Date.
(d) If a holder of shares of Series A Preferred Stock elects not to, or
otherwise fails to, properly tender shares of Series A Preferred Stock into the
Purchase Offer, then with respect to each share of Series A Preferred Stock that
such holder fails to tender, any dividends applicable to periods following the
expiration of the Purchase Offer with respect to each such share shall be
computed at a rate of eight percent (8%) per annum.
15. Special Covenant.
Without the vote or consent of the holders of a majority of the then
Outstanding shares of Series A Preferred Stock, the Company shall not make, or
permit any of its subsidiaries to make, any material capital expenditures,
acquisitions or divestitures outside the ordinary course of business unless such
expenditures, acquisitions or divestitures were otherwise approved by the Board
of Directors (including the affirmative vote of at least one director elected by
either the holders of the Series A-1 Preferred Stock or the holders of the
Series A-2 Preferred Stock).
16. SEC Reports; Reports by Company.
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<PAGE>
So long as any shares of Series A Preferred Stock are outstanding, the
Company shall file with the SEC and, within 15 days after it files them with the
SEC, with the Registrar and, if requested, furnish to each holder of shares of
Series A Preferred Stock all annual and quarterly reports and the information,
documents, and other reports that the Company is required to file with the SEC
pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC Reports"). In the
event the Company is not required or shall cease to be required to file SEC
Reports, pursuant to the Exchange Act, the Company will nevertheless file such
reports with the SEC (unless the SEC will not accept such a filing). Whether or
not required by the Exchange Act to file SEC Reports with the SEC, so long as
any shares of Series A Preferred Stock are Outstanding, the Company will furnish
or cause to be furnished reports equivalent to the SEC Reports to the holders of
shares of Series A Preferred Stock.
17. Definitions.
For purposes of this Certificate of Designation, the following terms shall
have the meaning set forth below:
"Accumulated Dividends" has the meaning set forth in Section 6.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing; provided that neither
AT&T Corp. ("AT&T") nor any subsidiary of AT&T which is not included in AT&T's
Liberty Media Group (as defined in AT&T's Certificate of Incorporation) will be
deemed to be an Affiliate of Liberty.
"Board of Directors" has the meaning set forth in the Recitals.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to be closed.
"By-laws" has the meaning set forth in the Recitals.
"Capital Stock" means, with respect to any person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting and/or non-voting) of such person's capital stock, whether
outstanding on the Closing Date or issued after the Closing Date, and any and
all rights (other than any evidence of indebtedness) or warrants exercisable or
exchangeable for or convertible into such capital stock.
"Certificate of Incorporation" has the meaning set forth in the recitals.
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 and 13d-5 under the
PAGE 33
<PAGE>
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total Voting Capital Stock of
the Company or (b) the Company consolidates with, or merges with or into,
another person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any person, or any person
consolidates with, or merges with or into the Company, in any such event
pursuant to a transaction in which the holders of the outstanding Voting Capital
Stock of the Company immediately prior to such transaction hold less than 50% of
the outstanding Voting Capital Stock of the surviving or transferee company or
its parent company immediately after such transaction or immediately after such
transaction any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), is the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total Voting Capital
Stock of the surviving or transferee company or its parent company or (c) during
any consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved and together with any directors elected pursuant to Sections 8(d)(i),
(ii) and (iii)) cease for any reason to constitute a majority of the Board of
Directors then in office or (d) any transaction subject to Rule 13e-3 under the
Exchange Act if following such Rule 13e-3 transaction a person or group (as such
terms are used in Section 13(d) and 14(d) of the Exchange Act) owns more than
50% of the total Voting Capital Stock of the Company. Notwithstanding the
foregoing, any form of business combination between the Company and Teligent,
Inc. within the 24 month period following the Closing Date shall not be deemed
to be a Change of Control, unless after the date hereof and prior to such
business combination, there shall have occurred a "Teligent Change of Control."
For the purposes hereof, a Teligent Change of Control shall have the same
meaning as a Change of Control, substituting Teligent, Inc. for the Company in
such definition; provided, however, that a Teligent Change of Control shall not
occur with respect to any event or circumstance that involves an acquiror, 25%
or more of the Voting Capital Stock of which is beneficially owned by any member
of the HMTF Group or Liberty.
"Change of Control Date" has the meaning set forth in Section 6(b).
"Closing Date" means the Closing Date under the Purchase Agreement.
"Closing Price" has the meaning set forth in Section 12(d)(viii).
"Common Stock Record Date" has the meaning set forth in Section
12(d)(viii).
"Common Stock" means the common stock of the Company, par value $.01 per
share and capital stock of any other class or series into which the Common Stock
may hereafter be changed.
PAGE 34
<PAGE>
"Company" has the meaning set forth in the Recitals and includes any
successor to the Company hereunder.
"Company Order" means a written request or order signed in the name of the
Company by its Chairman of the Board, its President or a Vice President and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary.
"Conversion Agent" has the meaning set forth in Section 5(a).
"Conversion Price" means the price at which shares of Common Stock shall be
delivered upon conversion.
"Current Market Price" has the meaning set forth in Section 12(d)(viii).
"Dilution Trigger Event" has the meaning set forth in Section 12(d)(iv).
"Distributed Securities" has the meaning set forth in Section 12(d)(iv).
"Dividend Payment Date" shall mean the last day of March, June, September
and December of each year, commencing June 30, 2000, or the next succeeding
Business Day if any such day is not a Business Day.
"Dividend Period" shall mean the period from and including the Closing Date
to but excluding the first Dividend Payment Date and thereafter each quarterly
period from and including a Dividend Payment Date to but excluding the next
Dividend Payment Date.
"Dividend Record Date" has the meaning set forth in Section 7(a).
"Exchange Offer" has the meaning set forth in Section 12(d)(vi).
"Exchange Preferred Stock" has the meaning set forth in Section
12(d)(viii).
"Exchange Securities" has the meaning set forth in Section 12(d)(viii).
"Expiration Time" has the meaning set forth in Section 12(d)(v).
"Fair Market Value" has the meaning set forth in Section 12(d)(viii).
"Junior Shares" has the meaning set forth in Section 9(a).
"Liquidation Preference" means an amount initially equal to $10,000 per
share of Series A Preferred Stock, subject to increase in accordance with
Section 6, Section 7 and Section 11 hereof, including, without limitation, by
the addition of Accumulated Dividends and, if applicable, the Special Dividend.
"Mandatory Redemption Date" has the meaning set forth in Section 10(b);
provided, however, that if such date shall not be a Business Day, then such date
shall be the next Business Day.
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<PAGE>
"Mirror Preferred Stock" has the meaning set forth in Section 12(d)(viii).
"Nonelecting Share" has the meaning set forth in Section 12(e).
"Odd-lot Redemption" has the meaning set forth in Section 10(c).
"Officers' Certificate" means a certificate of the Company signed in the
name of the Company by its Chairman of the Board, its President or a Vice
President and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary.
"Optional Redemption" has the meaning set forth in Section 10(a).
"Optional Redemption Date" has the meaning set forth in Section 10(a).
"Outstanding" means when used with respect to shares of Series A Preferred
Stock, as of the date of determination, all shares of Series A Preferred Stock
theretofore delivered under this Certificate of Designation, except (a) shares
of Series A Preferred Stock theretofore converted into shares of Common Stock in
accordance with Section 12 and shares of Series A Preferred Stock theretofore
canceled by the Registrar or delivered to the Registrar for cancellation; (b)
shares of Series A Preferred Stock for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Registrar or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the holders
of such shares of Series A Preferred Stock; provided that, if such shares of
Series A Preferred Stock are to be redeemed, notice of such redemption has been
duly given pursuant to this Certificate of Designation or provision therefor
satisfactory to the Registrar has been made; and (c) shares of Series A
Preferred Stock in exchange for or in lieu of which other shares of Series A
Preferred Stock have been delivered pursuant to this Certificate of Designation;
provided, however, that, in determining whether the holders of the shares of
Series A Preferred Stock have given any request, demand, authorization,
direction, notice, consent or waiver or taken any other action hereunder, shares
of Series A Preferred Stock owned by the Company or any other obligor upon the
shares of Series A Preferred Stock or any subsidiary of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Registrar shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent, waiver or
other action, only shares of Series A Preferred Stock which the Registrar has
actual knowledge of being so owned shall be so disregarded.
"Parity Shares" has the meaning set forth in Section 9(a).
"Paying Agent" has the meaning set forth in Section 5(a).
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.
"Preferred Stock" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting)
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<PAGE>
of such person's preferred or preference stock, whether now outstanding or
issued after the date hereof, including all series and classes of such preferred
or preference stock.
"Purchase Agreement" means the Preferred Stock and Warrant Purchase
Agreement dated as of February 27, 2000, among the Company and the Purchasers
named therein, as it may be amended from time to time.
"Purchased Shares" has the meaning set forth in Section 12(d)(v).
"Redemption Date" has the meaning set forth in Section 10(d).
"Redemption Notice" has the meaning set forth in Section 10(d).
"Redemption Price" has the meaning set forth in Section 10(a).
"Registrar" has the meaning set forth in Section 3.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of April 7, 2000, among the Company and the Purchasers.
"Restricted Shares Legend" has the meaning set forth in Section 4(a).
"SEC" means the Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, or, if at any
time after the adoption of this Certificate of Designation such commission is
not existing and performing the duties now assigned to it, then the body
performing such duties at such time.
"SEC Reports" has the meaning set forth in Section 16.
"Securities Act" has the meaning set forth in Section 4(a).
"Senior Shares" has the meaning set forth in Section 9(a).
"Series A Preferred Stock" has the meaning set forth in Section 1.
"Series A-1 Preferred Stock" has the meaning set forth in Section 1.
"Series A-2 Preferred Stock" has the meaning set forth in Section 1.
"Series A-3 Preferred Stock" has the meaning set forth in Section 1.
"Special Dividend" means, with respect to each share of Series A Preferred
Stock, the difference between (i) $14,859.47 (as such number shall be
appropriately adjusted for stock splits, stock dividends or similar events
affecting the Series A Preferred Stock) and (ii) the amount of the actual
Liquidation Preference of such share immediately prior to the Change of Control
Date.
"Voting Capital Stock" means with respect to any Person, securities of any
class or classes of Capital Stock in such Person ordinarily entitling the
holders thereof (whether at all
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<PAGE>
times or at the times that such class of Capital Stock has voting power by
reason of the happening of any contingency) to vote in the election of members
of the board of directors or comparable governing body of such Person.
18. No Reissuances.
Subject to Section 12(i), any share of Series A Preferred Stock that is
purchased, redeemed or otherwise acquired by the Company or any subsidiary shall
be cancelled and restored to the status of authorized but unissued Preferred
Stock but shall not be reissued as Series A Preferred Stock.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate of Designation
to be duly executed by H. Don Teague, Executive Vice President of the Company,
this 7th day of April, 2000.
ICG COMMUNICATIONS, INC.
By: /s/ Don Teague
Name: H. Don Teague
Title: Executive Vice President
A-1
<PAGE>
EXHIBIT A
FACE OF SECURITY
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND, UNLESS SO
REGISTERED, THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT AND
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
Number of Shares
Number: ____ ____ Shares
8% SERIES [A-1, A-2 or A-3] CONVERTIBLE PREFERRED STOCK
DUE 2015
OF
ICG COMMUNICATIONS, INC.
ICG COMMUNICATIONS, INC., a company organized under the laws of Delaware
(the "Company"), hereby certifies that {HOLDER} (the "Holder") is the registered
owner of fully paid and non-assessable preference securities of the Company
designated the 8% Series [A-1, A-2 or A-3] Convertible Preferred Stock due 2015,
par value U.S.$0.01 and initial liquidation preference U.S. $10,000 per share
(the "Preferred Stock"). The shares of Preferred Stock are transferable on the
books and records of the Registrar, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Stock represented hereby are issued
and shall in all respects be subject to the provisions of the Certificate of
Designation of the Company dated April 7, 2000, as the same may be amended from
time to time in accordance with its terms (the "Preferred Stock Certificate of
Designation"). Capitalized terms used herein but not defined shall have the
meaning given them in the Preferred Stock Certificate of Designation. The
Company will provide a copy of the Preferred Stock Certificate of Designation to
a Holder without charge upon written request to the Company at its principal
place of business.
[THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE SHALL BE
AUTOMATICALLY CONVERTED INTO SHARES OF THE COMPANY'S 8% SERIES A-3 CONVERTIBLE
PREFERRED STOCK UPON CERTAIN
A-2
<PAGE>
TRANSFERS OF SUCH SHARES AS PROVIDED IN SECTION 12(i) OF THE COMPANY'S PREFERRED
STOCK CERTIFICATE OF DESIGNATION.]*
Reference is hereby made to select provisions of the Preferred Stock set
forth on the reverse hereof, and to the Preferred Stock Certificate of
Designation, which select provisions and the Preferred Stock Certificate of
Designation shall for all purposes have the same effect as if set forth at this
place.
Upon receipt of this certificate, the Holder is bound by the Preferred Stock
Certificate of Designation and is entitled to the benefits thereunder.
Unless the Transfer Agent's valid counter-signature appears hereon, the
shares of Preferred Stock evidenced hereby shall not be entitled to any benefit
under the Preferred Stock Certificate of Designation or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has executed this certificate as of the date set
forth below.
ICG COMMUNICATIONS, INC.
By:
Name:
Title:
{Seal}
By:
Name:
Title:
Dated:
* include for Series A-1 Preferred Stock and Series A-2 Preferred Stock
R-1
<PAGE>
REVERSE OF SECURITY
ICG COMMUNICATIONS, INC.
8% Series [A-1, A-2 or A-3] Convertible Preferred Stock
due 2015
Dividends on each share of Preferred Stock shall be payable at a rate per
annum set forth on the face hereof or as provided in the Preferred Stock
Certificate of Designation. Subject to the limitations set forth in Section 11
of the Preferred Stock Certificate of Designation, dividends may be paid, at the
option of the Company, in cash.
The shares of Preferred Stock shall be redeemable as provided in the
Preferred Stock Certificate of Designation. The shares of Preferred Stock shall
be convertible into the Company's Common Stock in the manner and according to
the terms set forth in the Preferred Stock Certification of Designation.
The Company shall furnish to any Holder upon request and without charge, a
copy of the voting rights, preferences, limitations and special rights of the
shares of each class or series authorized to be issued by the Company so far as
they have been fixed and determined and the authority of the Board of Directors
to fix and determine the designations, voting rights, preferences, limitations
and special rights of the class or series of shares of the Company.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of
Preferred Stock evidenced hereby to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints:
agent to transfer the shares of Preferred Stock evidenced hereby on the books of
the Transfer Agent and Registrar. The agent may substitute another to act for
him or her.
Date: Signature:
(Sign exactly as your name appears on the other side of this Convertible
Preferred Stock Certificate)
Signature Guarantee:*
R-2
<PAGE>
*Signature must be guaranteed by an "eligible guarantor institution" (i.e.,
a bank, stockbroker, savings and loan association or credit union) meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.
N-1
<PAGE>
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Preferred Stock)
The undersigned hereby irrevocably elects to convert (the "Conversion")
_________ shares of 8% Series [A-1, A-2 or A-3] Convertible Preferred Stock due
2015 (the "Preferred Stock"), represented by stock certificate No(s).
______________ (the "Preferred Stock Certificates") into shares of common stock,
par value U.S. $.01 per share ("Common Stock"), of ICG Communications, Inc. (the
"Company") according to the conditions of the Certificate of Designation
establishing the terms of the Preferred Stock (the "Preferred Stock Certificate
of Designation"), as of the date written below. If shares are to be issued in
the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such
certificates. No fee will be charged to the holder for any conversion, except
for transfer taxes, if any. A copy of each Preferred Stock Certificate is
attached hereto (or evidence of loss, theft or destruction thereof).*
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Preferred Stock shall be made pursuant to registration of the
Common Stock under the Securities Act of 1933 (the "Act"), or pursuant to an
exemption from registration under the Act.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in or pursuant to the Preferred Stock Certificate of Designation.
Date of Conversion:
Applicable Conversion Price:
Number of shares of Preferred Stock to be Converted:
Number of shares of Common Stock to be Issued:
Signature:
Name:
Address:
Fax No.:
*The Company is not required to issue shares of Common Stock until the
original Preferred Stock Certificate(s) (or evidence of loss, theft or
destruction thereof) to be converted are received by the Company or its Transfer
Agent. The Company shall issue and deliver shares of Common Stock to an
overnight courier not later than three business days following receipt of the
original Preferred Stock Certificate(s) to be converted.
**Address where shares of Common Stock and any other payments or
certificates shall be sent by the Company.
PAGE 1 EXHIBIT 10.5
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. SUCH SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
Name
COMMON STOCK WARRANT
Void after April 10, 2005
Warrant No. Certificate
April 10, 2000
This certifies that, for value received, Name or its permitted assigns is
entitled, subject to the terms and conditions set forth herein (including the
exercise conditions of Section 2), to purchase from ICG Communications, Inc., a
Delaware corporation, up to No fully paid and nonassessable shares (the
"Shares") of Common Stock (as defined herein) at the exercise price of $34.00
per share (the "Exercise Price"). The Exercise Price and number of Shares is
subject to adjustment as provided in this Warrant. The term "Warrant" as used
herein shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein.
Section 1. Definitions.
As used in this Warrant, the following terms, unless the context otherwise
requires, have the following meanings:
(a) "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in the City of New York
are authorized or obligated by law or executive order to be closed.
(b) "Capital Stock" or "capital stock" means, with respect to any
Person, any and all shares, interests, participations, rights in, or other
equivalents (however designated and whether voting and/or non-voting) of such
Person's capital stock, whether outstanding on the date of the Warrant or issued
after the date of the Warrant, and any and all rights (other than any evidence
of indebtedness) or warrants exercisable or exchangeable for or convertible into
such capital stock.
(c) "Certificate of Designation" means the Certificate of Designation
of the Powers, Preferences and Relative, Participating, Optional and Other
Special Rights, Qualifications, Limitations and Restrictions thereof relating to
the Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3
Preferred Stock.
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(d) "Common Stock" means shares of the Company's common stock, par
value $0.01 per share, and capital stock of any other class or series into which
the Common Stock may hereafter be changed.
(e) "Company" means ICG Communications, Inc. and any Person that shall
succeed to or assume the obligations of the Company under this Warrant.
(f) "Person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.
(g) "Series A Preferred Stock" means the Series A-1 Preferred Stock,
the Series A-2 Preferred Stock and the Series A-3 Preferred Stock.
(h) Series A-1 Preferred Stock" means the 8% Series A-1 Convertible
Preferred Stock due 2015, initial liquidation preference $10,000 per share, par
value $0.01 per share, of the Company.
(i) "Series A-2 Preferred Stock" means the 8% Series A-2 Convertible
Preferred Stock due 2015, initial liquidation preference $10,000 per share, par
value $0.01 per share, of the Company.
(j) "Series A-3 Preferred Stock" means the 8% Series A-3 Convertible
Preferred Stock due 2015, initial liquidation preference $10,000 per share, par
value $0.01 per share, of the Company.
(k) "Warrantholder", "holder of Warrant", "holder", or similar terms
refers to the holder of this Warrant.
Section 2. Exercise Provisions.
(a) Exercisability.
The holder of this Warrant may exercise it in whole or in part to the
extent then exercisable by surrender of this Warrant, with the form of
subscription at the end of this Warrant duly executed by the holder, to the
Company at its principal office (or to the office of the Warrant Agent as
contemplated in Section 6(b), if applicable), accompanied by payment, in lawful
money of the United States, of the amount obtained by multiplying the Exercise
Price (as adjusted from time to time pursuant to the terms of this Warrant) by
the number of shares of Common Stock designated in such completed subscription
form. This Warrant shall be deemed to have been exercised immediately prior to
the close of business on the day of surrender of such Warrant, and the person or
persons entitled to receive shares of Common Stock issuable upon exercise of
this Warrant shall be treated for all purposes as the record holder or holders
of such shares of Common Stock at such time.
(b) Payment of Exercise Price.
Payment shall be made by check payable to the Company.
PAGE 3
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(c) Net Issue Exercise.
Notwithstanding any provisions herein to the contrary, if the fair market
value (as defined below) of one share of Common Stock is greater than the
Exercise Price (on the date of exercise of this Warrant), in lieu of exercising
this Warrant in exchange for cash, the holder may elect to exercise all or a
portion of this Warrant by canceling all or a portion of this Warrant and
receiving in exchange therefor shares of Common Stock (as determined below)
equal to the value of this Warrant, or the portion thereof being canceled, by
surrender of this Warrant at the principal office of the Company (or the office
of the Warrant Agent contemplated by Section 6(b), if applicable) together with
a duly executed form of subscription, in which event the Company shall issue to
the holder a number of shares of Common Stock computed using the following
formula:
X=Y(A-B)
A
Where X = the number of shares of Common Stock
to be issued to the holder
Y = the number of shares of Common Stock
purchasable under the Warrant or,
if only a portion of the Warrant
is being exercised, under the portion of
the Warrant being exercised
(on the date of exercise)
A = the fair market value of one share of the
Common Stock (on the date of exercise)
B = the Exercise Price (as adjusted to
the date of exercise)
For purposes of the above calculation, "fair market value" of one share of
Common Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, where a public market exists for the Common Stock at
the time of such exercise, the "fair market value", per share shall be equal to
the average for the five (5) trading days prior to the date of such exercise of
the average of the closing bid and asked prices of the Common Stock quoted in
the Over-The-Counter Market Summary or the last reported sale price of the
Common Stock quoted on the Nasdaq National Market System or the principal
exchange on which the Common Stock is then listed, whichever is applicable, as
published in The Wall Street Journal.
(d) Restrictions on Exercise.
This Warrant is exercisable at any time and from time to time from the date
hereof, provided this Warrant has not terminated pursuant to Section 10.
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<PAGE>
Section 3. Delivery of Stock Certificates.
As soon as possible after full or partial exercise of this Warrant in
accordance with the terms hereof and in any event within ten (10) days after
such exercise, the Company, at its expense, will cause to be issued in the name
of and delivered to the holder of this Warrant, a certificate or certificates
for the number of fully paid and nonassessable shares of Common Stock to which
that holder shall be entitled upon such exercise. In the event that this
Warrant is exercised in part, the Company at its expense will also execute and
deliver a new Warrant of like tenor exercisable for the number of Shares for
which this Warrant may then be exercised. No fractional shares or scrip
representing fractional shares will be issued upon exercise of this Warrant. If
upon any exercise of this Warrant a fraction of a share would otherwise be
issuable, the Company will, in lieu of issuing such fraction of a share, round
down to the nearest whole share if such fraction is an amount less than 0.5 and
round up to the nearest whole share if such fraction is an amount equal to or
greater than 0.5 and shall issue the appropriate number of full shares of Common
Stock that shall be issuable upon exercise of this Warrant.
Section 4. Adjustment Provisions.
The Exercise Price shall be adjusted from time to time by the Company as
follows:
(a) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding shares of Common Stock in shares
of Common Stock, the Exercise Price in effect at the opening of business on the
date following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Exercise Price by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the Common Stock
Record Date (as defined in Section 4(f)) fixed for such determination and the
denominator of which shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business on the
day following the Common Stock Record Date. If any dividend or distribution of
the type described in this Section 4(a) is declared but not so paid or made, the
Exercise Price shall again be adjusted to the Exercise Price which would then be
in effect if such dividend or distribution had not been declared.
(b)
(i) In case the Company shall issue or sell any Common Stock, or
securities convertible into or exercisable or exchangeable for shares of Common
Stock (other than Common Stock, or securities convertible into or exercisable or
exchangeable for shares of Common Stock, issued (A) pursuant to the Company's
existing or future stock option plans or pursuant to any other existing or
future Common Stock-related director or employee compensation plan or
arrangement of the Company approved by the Board of Directors (provided that,
with respect to any stock option or other right granted after April 7, 2000, the
per share exercise price of such option or right is equal to or greater than the
per share Closing Price of the Common Stock on the date of the grant thereof),
(B) as consideration for the acquisition of a business or of assets (provided
that
PAGE 5
<PAGE>
the fair market value of such business or assets, as determined by the Board of
Directors in good faith, is equal to or greater than the aggregate Current
Market Price of the Common Stock to be issued as consideration for such
acquisition, in each case determined at the time the Company enters into a
binding agreement with respect to such acquisition), (C) pursuant to warrants
outstanding on the date hereof, (D) upon the conversion of any shares of Series
A Preferred Stock pursuant to Section 12(a) of the Certificate of Designation,
(E) upon the automatic conversion of shares of Series A-1 Preferred Stock or
Series A-2 Preferred Stock pursuant to Section 12(i) of the Certificate of
Designation, or (F) upon exercise or conversion of any security the issuance of
which caused an adjustment under the provisions hereof or the issuance of which
did not require adjustments hereunder), for a consideration per share (or, in
the case of convertible or exchangeable securities having a conversion or
exercise price per share of Common Stock) less than the Current Market Price of
the Common Stock on the date of such issuance, the Exercise Price in effect
immediately prior to such issuance or sale shall be reduced effective as of
immediately following such issuance or sale by multiplying such Exercise Price
by a fraction, (1) the numerator of which shall be the sum of (x) the number of
shares of Common Stock outstanding immediately prior to such issuance or sale
and (y) the number of shares of Common Stock which the aggregate consideration
receivable by the Company for the total number of additional shares of Common
Stock so issued or sold (or issuable on conversion, exercise or exchange) would
purchase at the Current Market Price in effect immediately prior to such
issuance or sale and (2) the denominator of which shall be the sum of the number
of shares of Common Stock outstanding immediately prior to such issuance or sale
and the number of additional shares of Common Stock to be issued or sold (or, in
the case of convertible or exchangeable securities, issuable on conversion,
exercise or exchange).
(ii) If the Company shall offer or issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price (as defined in Section 4(f)) on the Common Stock Record
Date fixed for the determination of shareholders entitled to receive such rights
or warrants, the Exercise Price shall be adjusted so that the same shall equal
the price determined by multiplying the Exercise Price in effect at the opening
of business on the date after such Common Stock Record Date by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding at
the close of business on the Common Stock Record Date plus the number of shares
of Common Stock which the aggregate offering price of the total number of shares
of Common Stock subject to such rights or warrants would purchase at such
Current Market Price and of which the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the Common Stock Record
Date plus the total number of additional shares of Common Stock subject to such
rights or warrants for subscription or purchase. Such adjustment shall become
effective immediately after the opening of business on the day following the
Common Stock Record Date fixed for determination of shareholders entitled to
purchase or receive such rights or warrants. To the extent that shares of
Common Stock are not delivered pursuant to such rights or warrants, upon the
expiration or termination of such rights or warrants the Exercise Price shall
again be adjusted to be the Exercise Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made
PAGE 6
<PAGE>
on the basis of delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants are not so issued, the Exercise Price
shall again be adjusted to be the Exercise Price which would then be in effect
if such date fixed for the determination of shareholders entitled to receive
such rights or warrants had not been fixed. In determining whether any rights
or warrants entitle the holders to subscribe for or purchase shares of Common
Stock at less than such Current Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into account
(x) any consideration received for such rights or warrants, with the value of
such consideration and the amount of such exercise or subscription price, if
other than cash, to be determined by the Board of Directors and (y) the amount
of any exercise price or subscription price required to be paid upon exercise of
such warrants or rights.
(c) If the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Exercise Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and,
conversely, if the outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Exercise Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(d)
(i) If the Company shall, by dividend or otherwise, distribute to all
holders of its shares of Common Stock any class of capital stock of the Company
(other than any dividends or distributions to which Section 4(a) applies) or
evidences of its indebtedness, cash or other assets (including securities, but
excluding any rights or warrants of a type referred to in Section 4(b)(ii) and
dividends and distributions paid exclusively in cash and excluding any capital
stock, evidences of indebtedness, cash or assets distributed upon a merger or
consolidation to which Section 4(k) applies) (the foregoing hereinafter in this
Section 4(d) called the "Distributed Securities"), then, in each such case, the
Exercise Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Exercise Price in effect immediately prior to the
close of business on the Common Stock Record Date (as defined in Section 4(f))
with respect to such distribution by a fraction of which the numerator shall be
the Current Market Price (determined as provided in Section 4(f)) on such date
less the fair market value (as determined by the Board of Directors, whose good
faith determination shall be conclusive and described in a resolution of the
Board of Directors) on such date of the portion of the Distributed Securities so
distributed applicable to one share of Common Stock and the denominator shall be
such Current Market Price, such reduction to become effective immediately prior
to the opening of business on the day following the Common Stock Record Date;
provided, however, that, in the event the then fair market value (as so
determined) of the portion of the Distributed Securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Common Stock Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that a Warrantholder shall have
the right to receive upon exercise of this Warrant (or any
PAGE 7
<PAGE>
portion thereof) the amount of Distributed Securities such holder would have
received had such holder exercised this Warrant (or portion thereof) immediately
prior to such Common Stock Record Date. If such dividend or distribution is not
so paid or made, the Exercise Price shall again be adjusted to be the Exercise
Price which would then be in effect if such dividend or distribution had not
been declared. If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 4(d) by reference to the actual or
when issued trading market for any securities constituting all or part of such
distribution, it must in doing so consider the prices in such market over the
same period used in computing the Current Market Price pursuant to Section 4(f))
to the extent possible.
(ii) Rights or warrants distributed by the Company to all holders of
shares of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company's capital stock (either initially or under
certain circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Dilution Trigger Event"): (A) are deemed to be
transferred with such shares of Common Stock; (B) are not exercisable; and (C)
are also issued in respect of future issuances of shares of Common Stock, shall
be deemed not to have been distributed for purposes of this Section 4(d) (and no
adjustment to the Exercise Price under this Section 4(d) shall be required)
until the occurrence of the earliest Dilution Trigger Event, whereupon such
rights and warrants shall be deemed to have been distributed and an appropriate
adjustment to the Exercise Price under this Section 4(d) shall be made. If any
such rights or warrants, including any such existing rights or warrants
distributed prior to the first issuance of the Warrants, are subject to
subsequent events, upon the occurrence of each of which such rights or warrants
shall become exercisable to purchase securities, evidences of indebtedness or
other assets, then the occurrence of each such event shall be deemed to be such
date of issuance and record date with respect to new rights or warrants (and a
termination or expiration of the existing rights or warrants, without exercise
by the holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Dilution Trigger Event with respect
thereto, that was counted for purposes of calculating a distribution amount for
which an adjustment to the Exercise Price under this Section 4(d) was made, (1)
in the case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Exercise Price shall be
readjusted upon such final redemption or repurchase to give effect to such
distribution or Dilution Trigger Event, as the case may be, as though it were a
cash distribution to which this Section 4(d) were applicable, equal to the per
share redemption or repurchase price received by a holder or holders of shares
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of shares of Common
Stock as of the date of such redemption or repurchase, and (2) in the case of
such rights or warrants which shall have expired or been terminated without
exercise by any holders thereof, the Exercise Price shall be readjusted as if
such rights and warrants had not been issued.
(iii) Notwithstanding any other provision of this Section 4(d) to the
contrary, rights, warrants, evidences of indebtedness, other securities, cash or
other assets (including, without limitation, any rights distributed pursuant to
any shareholder rights plan) shall be deemed not to have been distributed for
purposes of this Section 4(d) if the
PAGE 8
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Company makes proper provision so that a Warrantholder who exercises this
Warrant (or any portion thereof) after the date fixed for determination of
shareholders entitled to receive such distribution shall be entitled to receive
upon such exercise, in addition to the shares of Common Stock issuable upon such
exercise, the amount and kind of such distributions that such Warrantholder
would have been entitled to receive if such holder had immediately prior to such
determination date, exercised this Warrant.
(iv) For purposes of this Section 4(d) and Sections 4(a) and 4(b), any
dividend or distribution to which this Section 4(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which 4(b) applies (or both), shall be deemed
instead to be (A) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants other than such shares of
Common Stock or rights or warrants to which Section 4(b) applies (and any
Exercise Price reduction required by this Section 4(d) with respect to such
dividend or distribution shall then be made) immediately followed by (B) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Exercise Price reduction required by Sections 4(a) or
4(b) with respect to such dividend or distribution shall then be made), except
that (1) the Common Stock Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution", "the Common Stock Record Date
fixed for such determination" and "the Common Stock Record Date" within the
meaning of Section 4(a) and as "the date fixed for the determination of
shareholders entitled to receive such rights or warrants", "the Common Stock
Record Date fixed for the determination of the shareholders entitled to receive
such rights or warrants" and "such Common Stock Record Date" for purposes of
Section 4(b), and (2) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" for the purposes of Section 4(a).
(e) If a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common
Stock expires and such tender offer (as amended upon the expiration thereof)
requires the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose good faith determination shall be conclusive and described in a
resolution of the Board of Directors) that, combined together with the aggregate
of the cash plus the fair market value (as determined by the Board of Directors,
whose good faith determination shall be conclusive and described in a resolution
of the Board of Directors) as of the expiration of such tender offer, of
consideration payable in respect of any other tender offers by the Company or
any of its subsidiaries for all or any portion of the shares of Common Stock
expiring within the 12 months preceding the expiration of such tender offer and
in respect of which no adjustment pursuant to this Section 4(e) has been made,
exceeds 5% of the net income of the Company reported for the 12 month period
ending with the fiscal quarter next preceding such payment (the "12 Month Net
Income") (determined as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender offer (as it may be amended)), then, and
in each such case, immediately prior to the opening of business on the day after
the date of the Expiration Time, the Exercise Price shall be adjusted so that
the same shall equal the price determined by multiplying the Exercise Price in
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effect immediately prior to the close of business on the date of the Expiration
Time by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding (including any tendered shares) at the Expiration Time
multiplied by the Current Market Price of a share of Common Stock on the trading
day next succeeding the Expiration Time and the denominator shall be the sum of
(x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Current Market Price of the shares of
Common Stock on the trading day next succeeding the Expiration Time, such
reduction (if any) to become effective immediately prior to the opening of
business on the day following the Expiration Time. If the Company is obligated
to purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Exercise Price shall again be adjusted to be
the Exercise Price which would then be in effect if such tender offer had not
been made. If the application of this Section 4(e) to any tender offer would
result in an increase in the Exercise Price, no adjustment shall be made for
such tender offer under this Section 4(e).
(f) For purposes of this Section 4, the following terms shall have the
meaning indicated:
"Closing Price" with respect to any securities on any day means the closing
sale price as of 4:00 p.m. Eastern Time on such day or any earlier final closing
on such day or, if no such sale takes place on such day, the average of the
reported high and low bid prices on such day, in each case on the Nasdaq
National Market, or the New York Stock Exchange, as applicable, or, if such
security is not listed or admitted to trading on such national market or
exchange, on the national stock exchange or Commission recognized trading market
in the United States on which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any national
stock exchange or Commission recognized trading market in the United States, the
average of the high and low bid prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation Bureau
Incorporated or a similar generally accepted reporting service in the United
States, or, if not so available, in such manner as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of Directors
for that purpose, or a price determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors.
"Common Stock Record Date" means, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
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"Current Market Price" means the average of the daily Closing Prices per
share of Common Stock for the 10 consecutive trading days immediately prior to
the date in question; provided, however, that (A) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Exercise Price
pursuant to Section 4(a), 4(b), 4(c), 4(d) or 4(e) occurs during such 10
consecutive trading days, the Closing Price for each trading day prior to the
"ex" date for such other event shall be adjusted by multiplying such Closing
Price by the same fraction by which the Exercise Price is so required to be
adjusted as a result of such other event, (B) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Exercise Price pursuant to Section 4(a), 4(b),
4(c), 4(d) or 4(e) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in question, the
Closing Price for each trading day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Exercise Price is so required to be adjusted as a
result of such other event and (C) if the "ex" date for the issuance or
distribution requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause (A) or (B) of
this proviso, the Closing Price for each trading day on or after such "ex" date
shall be adjusted by adding thereto the amount of any cash and the fair market
value (as determined by the Board of Directors in a manner consistent with any
good faith determination of such value for purposes of Section 4(d), whose good
faith determination shall be conclusive and described in a resolution of the
Board of Directors) of the evidences of indebtedness, shares of capital stock or
assets being distributed applicable to one share of Common Stock as of the close
of business on the day before such "ex" date. For purposes of any computation
under Section 4(e), the Current Market Price on any date shall be deemed to be
the average of the daily Closing Prices per share of Common Stock for such day
and the next two succeeding trading days; provided, however, that, if the "ex"
date for any event (other than the tender offer requiring such computation) that
requires an adjustment to the Exercise Price pursuant to Section 4(a), 4(b),
4(c), 4(d) or 4(e) occurs on or after the Expiration Time for the tender or
exchange offer requiring such computation and prior to the day in question, the
Closing Price for each trading day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Exercise Price is so required to be adjusted as a
result of such other event. For purposes of this paragraph, the term "ex" date
(1) when used with respect to any issuance or distribution, means the first date
on which the shares of Common Stock trade regular way on the relevant exchange
or in the relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution, (2) when used with respect to
any subdivision or combination of shares of Common Stock, means the first date
on which the shares of Common Stock trade regular way on such exchange or in
such market after the time at which such subdivision or combination becomes
effective and (3) when used with respect to any tender or exchange offer means
the first date on which the shares of Common Stock trade regular way on such
exchange or in such market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the Exercise
Price are called for pursuant to this Section 4, such adjustments shall be made
to the Current Market Price as may be necessary or
PAGE 11
<PAGE>
appropriate to effectuate the intent of this Section 4 and to avoid unjust or
inequitable results, as determined in good faith by the Board of Directors.
"Fair Market Value" means the amount which a willing buyer would pay a
willing seller in an arm's-length transaction.
(g) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 4(g) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4 shall be made by
the Company and shall be made to the nearest cent. No adjustment need be made
for a change in the par value or no par value of the Common Stock.
(h) Whenever the Exercise Price is adjusted as herein provided, the
Company shall promptly file with the Warrant Agent an Officer's Certificate
setting forth the Exercise Price after such adjustment and the number of shares
of Common Stock for which this Warrant will be exercisable after such adjustment
pursuant to Section 4(l) and setting forth a brief statement of the facts
requiring such adjustment. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Exercise Price setting
forth the adjusted Exercise Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Exercise Price to
each Warrantholder at such holder's last address appearing on the register of
holders maintained for that purpose within 20 days of the effective date of such
adjustment. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(i) In any case in which this Section 4 provides that an adjustment
shall become effective immediately after a Common Stock Record Date for an
event, the Company may defer until the occurrence of such event issuing to the
holder of any Warrant exercised after such Common Stock Record Date and before
the occurrence of such event the additional shares of Common Stock issuable upon
such exercise by reason of the adjustment required by such event over and above
the shares of Common Stock issuable upon such exercise before giving effect to
such adjustment.
(j) For purposes of this Section 4, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company or by any of its subsidiaries. The Company shall not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company or by any of its subsidiaries.
(k) In case of any consolidation of the Company with, or merger of the
Company into, any other Person, or in case of any merger of another Person into
the Company (other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), or in case of any sale, conveyance or transfer of all or
substantially all the assets of the Company, the Warrantholders shall have the
right thereafter, during the period such Warrant shall be exercisable as
specified in Section 2(d), to convert such Warrants into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance or transfer by a holder of the number of shares of Common Stock of
the Company for which the Warrants might have been exercised
PAGE 12
<PAGE>
immediately prior to such consolidation, merger, conveyance or transfer,
assuming such holder of shares of Common Stock of the Company failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance or
transfer (provided that, if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer is
not the same for each share of Common Stock of the Company in respect of which
such rights of election shall not have been exercised ("nonelecting share"),
then for the purpose of this Section 4(k) the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, conveyance
or transfer by each nonelecting share shall be deemed to be the kind and amount
so receivable per share by a plurality of the nonelecting shares). Such
securities shall provide for adjustments which, for events subsequent to the
effective date of the triggering event, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 4(k). The above
provisions of this Section 4(k) shall similarly apply to successive
consolidations, mergers, conveyances or transfers.
(l) Upon each adjustment of the Exercise Price as a result of the
operation of this Section 4, this Warrant shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of shares of Common Stock
obtained by multiplying the number of shares covered by this Warrant immediately
prior to this adjustment by the Exercise Price in effect immediately prior to
such adjustment and dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment of the Exercise Price.
(m) In the event that a Warrantholder would be entitled to receive upon
exercise hereof any Redeemable Capital Stock and the Company redeems, exchanges
or otherwise acquires all of the outstanding shares or other units of such
Redeemable Capital Stock (such event being a "Redemption Event"), then, from and
after the effective date of such Redemption Event, the Warrantholder shall be
entitled to receive upon exercise, in lieu of shares or units of such Redeemable
Capital Stock, the kind and amount of shares of stock and other securities and
property receivable upon the Redemption Event by a holder of the number of
shares or units of such Redeemable Capital Stock for which this Warrant could
have been exercised immediately prior to the effective date of such Redemption
Event (assuming, to the extent applicable, that such holder failed to exercise
any rights of election with respect thereto and received per share or unit of
such Redeemable Capital Stock the kind and amount of stock and other securities
and property received per share or unit by a plurality of the non-electing
shares or units of such Redeemable Capital Stock), and (from and after the
effective date of such Redemption Event) the Warrantholder shall have no other
purchase rights under this Warrant with respect to such Redeemable Capital
Stock. For purposes of this Section 4(m) "Redeemable Capital Stock" means a
class or series of capital stock of the Company that provides by its terms a
right in favor of the Company to call, redeem, exchange or otherwise acquire all
of the outstanding shares or units of such class or series.
Section 5. Notice of Certain Events.
In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock payable otherwise than in cash out of its earned surplus; or
PAGE 13
<PAGE>
(b) the Company shall authorize the granting to all holders of its
shares of Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock (other than a
subdivision or combination of the Company's outstanding shares of Common Stock),
or of any consolidation or merger to which the Company is a party and for which
approval of any shareholders of the Company is required, or the sale, conveyance
or transfer of all or substantially all the assets of the Company;
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(e) of the taking of any other action referred to in Section 4;
then the Company shall cause to be mailed to all Warrantholders at their last
addresses as they shall appear on the books of the Company, at least 20 Business
Days (or 10 Business Days in any case specified in clause (a) or (b) above)
prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of shares of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective, and the
date as of which it is expected that holders of shares of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up. Failure to give the
notice required by this Section 5 or any defect therein shall not affect the
legality or validity of any dividend, distribution, right, warrant,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up, or the vote upon any such action.
Section 6. Transfer of Warrants.
(a) Warrant Register.
The Company shall maintain a register (the "Warrant Register") containing
the names, addresses and facsimile numbers of the holder(s). Any holder of this
Warrant or any portion thereof may change its address as shown on the Warrant
Register by written notice to the Company requesting such a change. Until this
Warrant is transferred on the Warrant Register, the Company may treat the holder
as shown on the Warrant Register as the absolute owner of this Warrant for all
purposes, notwithstanding any notice to the contrary.
(b) Warrant Agent.
The Company may, by written notice to the holder, appoint an agent for the
purpose of maintaining the Warrant Register referred to in Section 6(a) above,
issuing any other securities then issuable upon the exercise of this Warrant,
exchanging this Warrant, replacing
PAGE 14
<PAGE>
this Warrant or any or all of the foregoing. Thereafter, any such registration,
issuance or replacement, as the case may be, shall be made at the office of such
agent.
(c) Transferability and Negotiability of Warrant.
Title to this Warrant may be transferred by endorsement (by the holder
executing the Assignment Form attached hereto) and delivery in the same manner
as negotiable instruments transferable by endorsement and delivery.
(d) Exchange of Warrant Upon a Transfer.
On surrender of this Warrant for exchange, properly endorsed on the
Assignment Form and subject to the provisions of this Warrant with respect to
compliance with the Securities Act, the Company at its expense shall issue to or
on the order of the holder a new warrant or warrants of like tenor, in the name
of the holder or as the holders (on payment by the holder of any applicable
transfer taxes) may direct, exercisable for the number of Shares issuable upon
the exercise hereof.
Section 7. Registration Rights.
If the holder of this Warrant is a party to, or an assignee of rights
under, that certain Registration Rights Agreement, dated April 7, 2000 (the
"Registration Rights Agreement"), such holder shall be entitled to include any
shares of Common Stock or other securities received upon exercise of the Warrant
with such holder's Registrable Securities (as such term is defined in the
Registration Rights Agreement), on the terms and conditions as set forth in the
Registration Rights Agreement.
Section 8. Amendment and Waivers.
No amendment, modification or termination of this Warrant shall be binding
unless executed in writing by the Company and the Warrantholder intending to be
bound thereby.
Section 9. Waivers and Extensions.
Any provision of this Warrant may be amended, waived or modified only if
such amendment, waiver or modification is in writing, is signed by the party
intending to be bound, and specifically refers to this Warrant. Waivers may be
made in advance or after the right waived has arisen or the breach or default
waived has occurred. Any waiver may be conditional. No waiver of any breach of
any agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
PAGE 15
<PAGE>
Section 10. Termination.
The right to exercise this Warrant shall expire and shall be void at 5:00
p.m., New York City time on April 10, 2005.
Section 11. Reservation of Stock.
The Company covenants that it will at all times reserve and keep available,
solely for issuance upon exercise of this Warrant, all shares of Common Stock or
other securities from time to time issuable upon exercise of this Warrant and,
subject to any existing contractual limitations, from time to time, will take
all steps necessary to amend its Certificate of Incorporation to provide
sufficient reserves of shares of Common Stock or other securities issuable upon
exercise of this Warrant. The Company further covenants that all shares that
may be issued upon the exercise of rights represented by this Warrant and
payment of the Exercise Price, as set forth herein, will be fully paid and
non-assessable and free from all taxes, liens and charges in respect of the
issue thereof. The Company also agrees that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon exercise of this Warrant.
Section 12. Replacement.
On receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction, or mutilation of this Warrant and, in the case of loss,
theft, or destruction, on delivery of any indemnity agreement or bond reasonably
satisfactory in form and amount to the Company or, in the case of mutilation, on
surrender and cancellation of this Warrant, the Company at its expense will
execute and deliver, in lieu of this Warrant, a new Warrant of like tenor.
Section 13. No Rights as Stockholder.
Except as provided in Section 2 or Section 4, no holder of this Warrant, as
such, shall be entitled to vote or receive dividends or be considered a
stockholder of the Company for any purpose, nor shall anything in this Warrant
be construed to confer on any holder of this Warrant as such, any rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action, to receive notice of meeting of stockholders, to receive
dividends or subscription rights or otherwise.
Section 14. Miscellaneous Provisions.
(a) Governing Law.
This Warrant shall be governed by, interpreted under, and construed in
accordance with the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
(b) Notices.
PAGE 16
<PAGE>
All notices, demands, requests, consents, approvals or other communications
(collectively, "Notices") required or permitted to be given hereunder or which
are given with respect to this Warrant shall be in writing and shall be
personally served, delivered by reputable air courier service with charges
prepaid, or transmitted by hand delivery, telegram, telex or facsimile, to such
address as such party shall have specified most recently by written notice.
Notice shall be deemed given on the date of service or transmission if
personally served or transmitted by telegram, telex or facsimile. Notice
otherwise sent as provided herein shall be deemed given on the next business day
following delivery of such notice to a reputable air courier service.
(c) Binding Effect.
The provisions of this Warrant shall be binding upon the Company and its
successors and assigns.
(d) Remedies.
In the event of a breach of this Warrant, the holder shall be entitled to
injunctive relief and specific performance of its rights under this Warrant, in
addition to all of its rights granted by law, including, without limitation,
recovery of damages. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach of this
Warrant by the Company and hereby waives any defense in any action for
injunctive relief or specific performance that a remedy at law would be
adequate.
(e) Headings.
Titles and headings of sections of this Warrant are for convenience only
and shall not affect the construction of any provision of this Warrant.
<PAGE>
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
set forth above.
ICG COMMUNICATIONS, INC.
By: /s/ H. Don Teague
Name: H. Don Teague
Title: Executive Vice President
<PAGE>
SUBSCRIPTION FORM
(To be signed only upon exercise of Warrant)
To: ICG Communications, Inc.
Attention: Secretary
1. The undersigned, the holder of the attached Warrant, hereby
irrevocably elects to [exercise the purchase right represented by that Warrant
for, and to purchase under that Warrant, ___________1 shares of Common Stock and
herewith tenders any necessary payment of the purchase price in such number of
shares in full.] [to exercise [all][a portion] of the purchase right represented
by that Warrant by canceling the Warrant with respect to ___________ shares of
Common Stock in exchange for a number of shares of Common Stock equal to the
value [as determined pursuant to the Warrant] as the [portion of the] Warrant
[being canceled].
2. In exercising the Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock or other securities to be issued
upon exercise thereof are being acquired solely for the account of the
undersigned and not as a nominee for any other party, and that the undersigned
will not sell, offer for sale, pledge, hypothecate or otherwise dispose of any
shares of Common Stock, except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any applicable state
securities laws.
3. Please issue a certificate(s) representing said shares of Common
Stock in the name of the undersigned or in the name of the transferee specified
below.
4. Please issue a new Warrant for the unexercised portion in the name
of the undersigned or in the name of the permitted transferee specified below.
5. Please deliver any certificate(s) or Warrant to the following
address.
Name:___________________________
Address:_________________________
Attention:________________________
Dated:
By: _______________________________
Name
Footnote: Insert here the number of shares called for on the face of the Warrant
(or, in the case of partial exercise, the portion as to which the Warrant is
being exercised), without making any adjustment for additional shares of Common
Stock or any other securities or property which, under the adjustment provisions
of the Warrant, may be deliverable upon exercise.
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
and does hereby irrevocably constitute and appoint _______________________
attorney-in-fact to register such transfer onto the books of ICG Communications,
Inc. maintained for the purpose, with full power of substitution in the
premises.
Date: Print
Name:
Signature:
Witness:
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
EXHIBIT 10.6
CREDIT AGREEMENT
dated as of
December 28, 1999
among
HMTF Bridge Partners, L.P.
and
HM/Europe Coinvestors, C.V.,
as Initial Borrowers,
and any Future Borrowers from time to time parties hereto,
The Lenders and the Issuing Bank Parties Hereto,
and
The Chase Manhattan Bank,
as Administrative Agent,
Chase Securities Inc.,
as Co-Lead Arranger and Co-Book Manager,
Bank of America, N.A.,
as Syndication Agent,
and
Banc of America Securities LLC,
as Co-Lead Arranger and Co-Book Manager
U.S. $1,780,000,000 TERM LOAN FACILITY
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE 1 Definitions. . . . . . . . . . . . . . . 1
SECTION 1.1 . . . . . . . . . . . . . . . . . . . Defined Terms 1
SECTION 1.2 . . . . . . . . . . . . . . . . . . . Terms Generally 12
SECTION 1.3 . . . . . . . . . . . . . . . . . . . Accounting Terms; GAAP 13
ARTICLE 2 Term Loans . . . . . . . . . . . . . . . 13
SECTION 2.1 . . . . . . . . . . . . . . . . . . . Term Loans 13
SECTION 2.2 . . . . . . . . . . . . . . . . . . . Procedure for Term Loan Borrowing 13
SECTION 2.3 . . . . . . . . . . . . . . . . . . . Letters of Credit 14
SECTION 2.4 . . . . . . . . . . . . . . . . . . . Repayment of Loans; Evidence of Debt; etc 17
SECTION 2.5 . . . . . . . . . . . . . . . . . . . Termination and Reduction of Commitments 18
SECTION 2.6 . . . . . . . . . . . . . . . . . . . Prepayments 18
SECTION 2.7 . . . . . . . . . . . . . . . . . . . Conversion and Continuation Options 20
SECTION 2.8 . . . . . . . . . . . . . . . . . . . Minimum Amounts and Maximum Number of Tranches 20
SECTION 2.9 . . . . . . . . . . . . . . . . . . . Interest 20
SECTION 2.10 . . . . . . . . . . . . . . . . . . . Fees 21
SECTION 2.11 . . . . . . . . . . . . . . . . . . . Inability to Determine Interest Rate 22
SECTION 2.12 . . . . . . . . . . . . . . . . . . . Pro Rata Treatment and Payments. 22
SECTION 2.13 . . . . . . . . . . . . . . . . . . . Requirements of Law. 23
SECTION 2.14 . . . . . . . . . . . . . . . . . . . Taxes 24
SECTION 2.15 . . . . . . . . . . . . . . . . . . . Indemnity 26
SECTION 2.16 . . . . . . . . . . . . . . . . . . . Change of Lending Office 27
SECTION 2.17 . . . . . . . . . . . . . . . . . . . Replacement of Lenders 27
SECTION 2.18 . . . . . . . . . . . . . . . . . . . Nature of Obligations 28
SECTION 2.19 . . . . . . . . . . . . . . . . . . . Increase of Commitments 28
ARTICLE 3 Representations and Warranties . . . . . 29
SECTION 3.1 . . . . . . . . . . . . . . . . . . . Organization; Powers 29
SECTION 3.2 . . . . . . . . . . . . . . . . . . . Authorization; Enforceability 30
SECTION 3.3 . . . . . . . . . . . . . . . . . . . Governmental Approvals; No Conflicts 30
SECTION 3.4 . . . . . . . . . . . . . . . . . . . Compliance with Laws and Agreements 30
SECTION 3.5 . . . . . . . . . . . . . . . . . . . Investment and Holding Company Status 30
SECTION 3.6 . . . . . . . . . . . . . . . . . . . Material Adverse Effect 30
SECTION 3.7 . . . . . . . . . . . . . . . . . . . No Material Litigation 30
SECTION 3.8 . . . . . . . . . . . . . . . . . . . Disclosure 30
SECTION 3.9 . . . . . . . . . . . . . . . . . . . Investments 31
ARTICLE 4 Conditions Precedent . . . . . . . . . . 31
SECTION 4.1 . . . . . . . . . . . . . . . . . . . Conditions to Initial Funding 31
SECTION 4.2 . . . . . . . . . . . . . . . . . . . Additional Conditions for Each Credit Event 32
ARTICLE 5 Covenants. . . . . . . . . . . . . . . . 34
SECTION 5.1 . . . . . . . . . . . . . . . . . . . Notices of Material Events 34
SECTION 5.2 . . . . . . . . . . . . . . . . . . . Existence; Conduct of Business 34
SECTION 5.3 . . . . . . . . . . . . . . . . . . . Payment of Obligations 34
SECTION 5.4 . . . . . . . . . . . . . . . . . . . Compliance with Laws 34
SECTION 5.5 . . . . . . . . . . . . . . . . . . . Use of Proceeds 34
SECTION 5.6 . . . . . . . . . . . . . . . . . . . Additional Collateral 35
SECTION 5.7 . . . . . . . . . . . . . . . . . . . Financial Reporting 35
SECTION 5.8 . . . . . . . . . . . . . . . . . . . Additional Guarantors 36
SECTION 5.9 . . . . . . . . . . . . . . . . . . . Management and Advisory Agreements 36
SECTION 5.10 . . . . . . . . . . . . . . . . . . . Covenant to Pay 36
SECTION 5.11 . . . . . . . . . . . . . . . . . . . Margin Securities 36
ARTICLE 6 Negative Covenants . . . . . . . . . . . 36
SECTION 6.1 . . . . . . . . . . . . . . . . . . . Indebtedness 36
SECTION 6.2 . . . . . . . . . . . . . . . . . . . Liens 37
SECTION 6.3 . . . . . . . . . . . . . . . . . . . Fundamental Changes 37
SECTION 6.4 . . . . . . . . . . . . . . . . . . . Restricted Payments 37
SECTION 6.5 . . . . . . . . . . . . . . . . . . . Sale of Assets 37
ARTICLE 7 Events of Default. . . . . . . . . 38
ARTICLE 8 The Administrative Agent . . . . . . . . 41
SECTION 8.1 . . . . . . . . . . . . . . . . . . . Generally 41
SECTION 8.2 . . . . . . . . . . . . . . . . . . . Joint and Several Creditorship 43
ARTICLE 9 Miscellaneous. . . . . . . . . . . . . . 43
SECTION 9.1 . . . . . . . . . . . . . . . . . . . Notices 43
SECTION 9.2 . . . . . . . . . . . . . . . . . . . Waivers; Amendments 43
SECTION 9.3 . . . . . . . . . . . . . . . . . . . Expenses; Indemnity; Damage Waiver 44
SECTION 9.4 . . . . . . . . . . . . . . . . . . . Successors and Assigns 45
SECTION 9.5 . . . . . . . . . . . . . . . . . . . Survival 47
SECTION 9.6 . . . . . . . . . . . . . . . . . . . Counterparts; Integration; Effectiveness 48
SECTION 9.7 . . . . . . . . . . . . . . . . . . . Severability 48
SECTION 9.8 . . . . . . . . . . . . . . . . . . . Right of Setoff 48
SECTION 9.9 . . . . . . . . . . . . . . . . . . . GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS 48
SECTION 9.10 . . . . . . . . . . . . . . . . . . . WAIVER OF JURY TRIAL 49
SECTION 9.11 . . . . . . . . . . . . . . . . . . . Headings 49
SECTION 9.12 . . . . . . . . . . . . . . . . . . . Confidentiality 49
SECTION 9.13 . . . . . . . . . . . . . . . . . . . Syndication 50
SECTION 9.14 . . . . . . . . . . . . . . . . . . . Certainty of Funds 50
INDEX OF EXHIBITS
Exhibit A . . . . . . . . . . . . . . . . . . . . . Assignment and Acceptance
Exhibit B . . . . . . . . . . . . . . . . . . . . . Legal Opinion of Weil, Gotshal & Manges LLP
Exhibit C . . . . . . . . . . . . . . . . . . . . . Legal Opinion of Nauta Dutilh
Exhibit D . . . . . . . . . . . . . . . . . . . . . Legal Opinion of Walkers
Exhibit E . . . . . . . . . . . . . . . . . . . . . Closing Certificate
Exhibit F . . . . . . . . . . . . . . . . . . . . . Affiliate Guarantee
Exhibit G . . . . . . . . . . . . . . . . . . . . . Investment Guarantee
Exhibit H . . . . . . . . . . . . . . . . . . . . . Note
Exhibit I . . . . . . . . . . . . . . . . . . . . . Pledge Agreement
Exhibit J . . . . . . . . . . . . . . . . . . . . . Letter Agreement
Exhibit K . . . . . . . . . . . . . . . . . . . . . Joinder Agreement
Exhibit L . . . . . . . . . . . . . . . . . . . . . Principal Agreement
INDEX OF SCHEDULES
Schedule 2.1. . . . . . . . . . . . . . . . . . . . Lender's Commitments
</TABLE>
<PAGE>
CREDIT AGREEMENT, dated as of December 28, 1999, among HMTF Bridge
Partners, L.P., a Delaware limited partnership, and HM/Europe Coinvestors, C.V.,
a limited partnership organized under the laws of the Kingdom of the Netherlands
(collectively, the "Initial Borrowers"), any Future Borrowers from time to time
parties hereto, the Lenders from time to time parties hereto, the Issuing Bank
referred to below, The Chase Manhattan Bank, as Administrative Agent, and Bank
of America, N.A., as Syndication Agent.
The parties hereto agree as follows:
ARTICLE 1
Definitions
SECTION 1.1 Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR Loans" means Term Loans the rate of interest applicable to which is
based upon the Alternate Base Rate.
"Additional Lenders" has the meaning set forth in Section 9.13.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity as
administrative agent for the Lenders hereunder.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Affiliate Guarantees" means the collective reference to each guarantee
agreement executed and delivered by an Affiliate Guarantor, substantially in the
form of Exhibit F, as the same may be amended, supplemented or otherwise
modified from time to time.
"Affiliate Guarantors" means the collective reference to (a) each Affiliate
of Hicks Muse or Olympus that holds carried interests in any New Portfolio
Company (except to the extent that a carried interest is attributable to an
investment by a Specified Fund in such New Portfolio Company) and (b) HM & Co.
and each other Affiliate of Hicks Muse or Olympus that receives fee income
(whether in the form of management fees, transaction fees, investment banking
fees, advisory fees or otherwise) from or in respect of any New Fund, any New
Portfolio Company or any Investment Party (except to the extent that such fee
income is attributable to an investment by a Specified Fund in such New
Portfolio Company, with any allocation of such fee income attributable to a
Specified Fund and a New Fund being made in a manner equitable to the Lenders
hereunder), in each case whether now existing or subsequently formed.
"Agreement" means this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and
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(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any
change in the Alternate Base Rate due to a change in the Prime Rate, the Base CD
Rate or the Federal Funds Effective Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate, respectively.
"Applicable Margin" means, for any day and for each Type of Term Loan,
based on the then Available Qualified Subscription Amount, the rate per annum
set forth below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Available Qualified
Level. . . Subscription Amount ABR Loans Eurodollar Loans
Level I. . $0 - $625,000,000 1.50% 2.50%
Level II. 625,000,001 - $1,250,000,000 1.00% 2.00%
Level III 1,250,000,001 - $1,875,000,000 .50% 1.50%
Level IV. Greater than $1,875,000,001 0% 1.00%
</TABLE>
; provided that for the first 45 days following the Closing Date the Applicable
Margin shall be determined by reference to Level I of the above grid and
provided further that Level I of the above grid shall apply at all times while
an Event of Default shall have occurred and be continuing.
"Assessment Rate" means, for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined in good faith by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Assignee" has the meaning set forth in Section 9.4(b).
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.4), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Available Commitment" means, as to any Lender at any time, an amount equal
to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's
Credit Exposure.
"Available Excess Investment Commitment Amount" means, as to any Lender at
any time, an amount equal to the excess, if any, of (a) such Lender's Investment
Commitment Amount over (b) such Lender's Credit Exposure.
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"Available Qualified Subscription Amount" means the Qualified Subscription
Amount less the aggregate Qualified Subscription Amounts utilized to make any
and all investments by the New Fund.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System of the
United States.
"Borrowers" means the Initial Borrowers and any Future Borrower.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Dallas, Texas are authorized or
required by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term Business Day shall also exclude any day on which banks
are not open for dealings in dollar deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including any limited liability company interests in a limited liability
company, any limited or general partnership interests in a partnership, and any
and all warrants, rights or options to purchase any of the foregoing.
"Change in Control" means any of the following events: (a) Hicks Muse,
Olympus, or any of their respective principals or Affiliates cease to own of
record and beneficially a majority of the economic interests in any Borrower and
the power, directly or indirectly, to vote or direct the voting of Capital Stock
having a majority of the power to direct the management and policies of any
Borrower, (b) Hicks Muse, Olympus, or their respective principals or Affiliates
cease to Control each Guarantor, (c) Hicks Muse, its principals or Affiliates
cease to own of record and beneficially a majority of the economic interests in
Olympus and the power, directly or indirectly, to vote or direct the voting of
Capital Stock having a majority of the power to direct the management and
policies of Olympus, or (d) Hicks Muse, its principals or Affiliates cease to
Control Olympus.
"Chase" means The Chase Manhattan Bank.
"Closing Date" means December 28, 1999.
"Co-Investor" means a Direct Co-Investor or an Indirect Co-Investor, as the
case may be.
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"Co-Investment" means a Direct Co-Investment or an Indirect Co-Investment,
as the case may be.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, as to any Lender, the commitment of such Lender to make
Term Loans and to participate in Letters of Credit hereunder, in an amount so
that such Lender's Credit Exposure does not exceed such Lender's commitment
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.5 or 6.1(e), (b) reduced or increased from time to time as the result
of an Assignment and Acceptance or (c) increased pursuant to Section 2.19. The
initial amount of each Lender's Commitment is set forth on Schedule 2.1, or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Commitment, as applicable.
"Control" means the possession of the power, directly or indirectly, to
vote more than 50% of the Capital Stock having ordinary voting power for the
election of directors (or persons performing similar functions) of a Person.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Exposure" means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender's Term Loans and its LC Exposure
at such time.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Direct Co-Investment" means an investment in any Borrower in connection
with such Borrower's Investment in a New Portfolio Company in an amount not less
than 2.98% of such Borrower's total Investment in such New Portfolio Company.
"Direct Co-Investor" means the principals of Hicks Muse or Olympus, their
families and employees of Hicks Muse and Olympus who make a Direct Co-Investment
in any Borrower with respect to such Borrower's investment in a New Portfolio
Company.
"Directly Owned Investment Party" means any Person in which any Borrower
and, if the Co-Investment is made as an Indirect Co-Investment, any Indirect
Co-Investor, directly makes an Investment, and which Person directly or
indirectly makes the same Investment in the New Portfolio Company.
"Document Party" has the meaning set forth in Section 9.12.
"dollars" or "$" refers to lawful money of the United States.
"EquityCo" means HM/Europe Equity Investors, C.V., a limited partnership
organized under the laws of the Kingdom of the Netherlands.
"Eurodollar Base Rate" means with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate at
which Chase is offered dollar deposits at or about 10:00 A.M., New York, New
York time, two Business Days prior to
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the beginning of such Interest Period in the interbank eurodollar market where
the eurodollar and foreign currency and exchange operations in respect of its
Eurodollar Loans are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of its Eurodollar Loan to be outstanding during such
Interest Period.
"Eurodollar Loans" means Term Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate" with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day
(rounded upward to the nearest 1/100th of 1%) equal to (a) the Eurodollar Base
Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
"Eurodollar Tranche" the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Eurodollar Loans shall
originally have been made on the same day).
"Event of Default" has the meaning assigned to such term in Article 7.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding 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 (rounded upwards, if
necessary, to the next 1/100 of 1%) 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.
"Fees" means the fees payable pursuant to Section 2.10.
"Funding Fee" has the meaning assigned to such term in Section 2.10(a).
"Future Borrower" means any Person that becomes a borrower hereunder
pursuant to any Joinder Agreement.
"GAAP" means generally accepted accounting principles in the United States
from time to time.
"Governmental Authority" means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner,
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whether directly or indirectly, and including any obligation of the guarantor,
direct or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or
to advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantor" shall mean any Affiliate Guarantor or Investment Guarantor.
"Hicks Muse" means HMTF Operating, L.P., a Texas limited partnership
(formerly known as Hicks, Muse, Tate & Furst Incorporated).
"HM & Co." means Hicks, Muse & Co. Partners, L.P., a Texas limited
partnership.
"Increase Effective Date" has the meaning set forth in Section 2.19.
"Increase Response Date" has the meaning set forth in Section 2.19.
"Increase Request" has the meaning set forth in Section 2.19.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indirect Co-Investment" means an investment with any Borrower in
connection with such Borrower's Investment in a New Portfolio Company in an
amount not less than 2.98% of such total Investment in such New Portfolio
Company.
"Indirect Co-Investor" means (a) EquityCo or (b) any other Person formed
for the purpose of making an Indirect Co-Investment with any Borrower in a New
Portfolio Company,
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in any case, which is owned by the principals of Hicks Muse or Olympus, or the
families and employees of Hicks Muse or Olympus.
"Initial Borrowers" means HMTF Bridge Partners, L.P., a Delaware limited
partnership, and HM/Europe Coinvestors, C.V., a limited partnership organized
under the laws of the Kingdom of the Netherlands.
"Interest Payment Date" means (a) as to any ABR Loan, the date which is the
three month anniversary of the Closing Date and each date which is the three
month anniversary of the prior Interest Payment Date to occur while such ABR
Loan is outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, (c) as to any
Eurodollar Loan having an Interest Period longer than three months, each day
which is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (d) as to any Term
Loan, the date of any repayment or prepayment made in respect thereof.
"Interest Period" means, as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three, six, or to the
extent available to all Lenders, nine or twelve months thereafter, as selected
by any Borrower in its notice of borrowing or notice of conversion, as the case
may be, given with respect thereto and (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three, six, or to the extent available to all Lenders,
nine or twelve months thereafter, as selected by any Borrower by irrevocable
notice to the Administrative Agent not less than three Business Days prior to
the last day of the then current Interest Period with respect thereto; provided
that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
(ii) any Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period and (iii) no Borrower may
select an Interest Period that would extend beyond the Maturity Date.
"Investment" means the collective reference to any direct or indirect
investment in a New Portfolio Company by a Borrower. Investments shall not
include debt securities or borrowings of an Investment Party that, in the
judgment of the Borrower, would customarily be issued or borrowed in a bridge
financing to an offering or private placement in anticipation of or to a
registered public offering or in a private placement under Rule 144A of the
Securities Act of 1933, as amended.
"Investment Commitment Amount" means the amount on the date giving rise to
this calculation, as calculated by the Borrowers and the Administrative Agent,
rounded upward to the nearest $500,000.00, that represents (i) the Term Loans,
(ii) the LC Exposure and (iii) all interest and fees previously accrued or which
will be payable pursuant to Sections 2.9, 2.10(a) and 2.10(c) through the
Maturity Date assuming no pre-payments pursuant to Section 2.6 prior to the
Maturity Date (using for future periods not covered by existing Interest
Periods, the Eurodollar
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Rate available on the date of any determination for a three (3) month Interest
Period and using the current Applicable Margin). The Investment Commitment
Amount of any Lender at any time shall be its Loan Percentage of the total
Investment Commitment Amount.
"Investment Guarantee" means the collective reference to each Investment
Guarantee Agreement executed and delivered by an Investment Guarantor,
substantially in the form of Exhibit G, as the same may be amended, supplemented
or otherwise modified from time to time.
"Investment Guarantor" shall mean any Indirect Co-Investor.
"Investment Party" means any Person in which any Borrower directly or
indirectly makes an Investment, which Person directly or indirectly makes the
same Investment in a New Portfolio Company.
"Investment Term Loan" has the meaning set forth in Section 2.10(a) hereof.
"Investor" means any Person which has executed a Subscription Agreement
(that has become effective pursuant to its terms) and the signature page to the
limited partnership agreement of New Fund and has thereby become obligated to
make capital contributions to New Fund in exchange for limited partnership
interests therein, subject only to such customary conditions as are reasonably
acceptable to the Administrative Agent.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.3(i).
"Joinder Agreement" means an agreement substantially in the form of Exhibit
K, as the same may be amended, supplemented or otherwise modified from time to
time.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of any outstanding Letter of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of any Borrower at such time. The LC Exposure of any Lender at any time shall
be its Loan Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.1 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"Letter Agreement" means the Letter Agreement dated as of the date hereof
between Hicks Muse, Olympus and the Administrative Agent on behalf of the
Lenders, substantially in the form of Exhibit J, as the same may be amended,
supplemented or otherwise modified from time to time.
"Letter of Credit" means a letter of credit issued pursuant to Section 2.3,
a bank guaranty or similar instrument treated as a letter of credit for bank
regulatory purposes, in a form
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reasonably acceptable to the Administrative Agent and the Issuing Bank, to
support the Borrowers' agreement to make an Investment.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means the collective reference to this Agreement, the
Affiliate Guarantees, the Investment Guarantees, the Pledge Agreement, the
Letter Agreement, the Principal Agreement, the Joinder Agreements and the Notes.
"Loan Parties" means the collective reference to the Initial Borrowers, any
Future Borrowers, the Guarantors, Hicks Muse, Olympus and any other Person party
to a Loan Document.
"Loan Percentage" means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender's Commitment, and, if the
Commitments have terminated, the aggregate outstanding principal amount of the
Term Loans represented by such Lender's Term Loans.
"Material Adverse Effect" means a material adverse effect on (a) the
ability of any Loan Party to perform any of its obligations under any Loan
Document or (b) the rights of or benefits available to the Lenders under any
Loan Document.
"Maturity Date" means the date which is 364 days after the Closing Date.
"New Fund" or "New Funds" means (a) any investment fund or funds formed
after the date hereof and sponsored, advised or managed by Hicks Muse, Olympus
or any of their respective Affiliates and (b) any other Person which may acquire
an Investment in an Investment Party or a New Portfolio Company or any part
thereof.
"New Portfolio Company" means a Person, having as some or all of its
shareholders, partners or members, as the case may be, directly or indirectly,
any of the Borrowers, and, if applicable, one or more Indirect Co-Investors.
"Non-Consenting Lender" has the meaning specified in Section 2.17.
"Non-Excluded Taxes" has the meaning set forth in Section 2.14(a).
"Non-Funding Lender" has the meaning set forth in Section 2.12(c).
"Non-U.S. Lender" has the meaning set forth in Section 2.14(b).
"Note" has the meaning set forth in Section 2.4(e).
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"Obligations" means the collective reference to the unpaid principal of and
interest on the Term Loans, the LC Disbursements and all other obligations and
liabilities of the Borrowers to the Administrative Agent and the Lenders
(including, without limitation, interest accruing at the then applicable rate
provided in this Agreement after the maturity of the Term Loans and Letters of
Credit, LC Disbursements and interest accruing at the then applicable rate
provided in this Agreement after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to any of the Borrowers whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement or any other
document made, delivered or given in connection therewith, in each case whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that are
required to be paid by the Borrowers pursuant to the terms of this Agreement).
"Olympus" means Olympus Real Estate Corporation, a Delaware corporation.
"Participant" has the meaning set forth in Section 9.4(e).
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity of whatever nature.
"Pledge Agreement" means the Pledge Agreement executed and delivered by the
Pledgors, substantially in the form of Exhibit I, as the same may be amended,
supplemented or otherwise modified from time to time.
"Pledged Interests" shall have the meaning set forth in the Pledge
Agreement.
"Pledgors" shall mean (i) on the Closing Date, the Initial Borrowers and
EquityCo, and (ii) thereafter, any Future Borrower and any Indirect Co-Investor.
"Principal Agreement" means the Principal Agreement executed and delivered
by each principal of Hicks Muse and Olympus, substantially in the form of
Exhibit L, as the same may be amended, supplemented or otherwise modified from
time to time.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by Chase as its prime rate in effect at its principal office in New
York, New York; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to a customer.
"Qualified Investors" means those Investors reasonably acceptable to the
Administrative Agent. Any Investor shall be subject to exclusion for: (i)
default under or breach of (A) its respective Subscription Agreement or (B) the
limited partnership agreement of New Fund; (ii) bankruptcy or other insolvency
event or proceeding with respect to such Investor; (iii) appointment of a
receiver with respect to such Investor; (iv) repudiation by such Investor of its
obligation to make capital contributions to New Fund pursuant to its
Subscription Agreement
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and the limited partnership agreement of New Fund; and (v) any material adverse
change which affects the ability of such Investor to fulfill its obligations
under the limited partnership agreement of New Fund or its Subscription
Agreement.
"Qualified Subscription Amount" means the aggregate dollar amount of all
subscriptions to New Fund by all Qualified Investors as to which the Borrowers
have delivered to the Administrative Agent a fully executed copy of one or more
Subscription Agreements (including all supporting documentation including, but
not limited to, the executed signature page to the limited partnership agreement
of New Fund).
"Register" has the meaning set forth in Section 9.4(c).
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents,
partners and advisors of such Person and such Person's Affiliates.
"Requested Amount" has the meaning set forth in Section 2.19.
"Required Lenders" at any time, Lenders holding more than 50% of (a) the
Commitments or (b) if the Commitments have been terminated, the sum of (i)
aggregate unpaid principal amount of the Term Loans and (ii) outstanding LC
Exposure.
"Requirement of Law" as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" means the Chief Executive Officer, the President, any
Vice President, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary or any officer having
responsibilities similar to any of the foregoing.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
Capital Stock of any Person, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such shares of Capital Stock of such Person or any option, warrant or
other right to acquire any such shares of Capital Stock of such Person.
"Specified Fund" means Hicks, Muse, Tate & Furst Equity Fund II, L.P.,
Hicks, Muse, Tate & Furst Equity Fund III, L.P., Hicks, Muse, Tate & Furst
Equity Fund IV, L.P., Hicks, Muse, Tate & Furst Private Equity Fund IV, L.P.,
Hicks, Muse, Tate & Furst Europe Fund, L.P., Hicks, Muse, Tate & Furst Europe
Private Fund, L.P., Hicks, Muse, Tate & Furst Latin America Fund, L.P. and
Hicks, Muse, Tate & Furst Latin America Private Fund, L.P.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental
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reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject (a) with respect to the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the Eurodollar Rate,
for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subscription Agreement" shall mean the Subscription Agreement in the form
customarily used by Hicks Muse or Olympus (and then by any New Fund) pursuant to
which a Person agrees to acquire limited partnership interests in New Fund in
accordance with the terms thereof, which such Subscription Agreement obligates
such Person to sign the limited partnership agreement of New Fund.
"Term Loans" has the meaning set forth in Section 2.1.
"Three-Month Secondary CD Rate" means, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next preceding Business Day) by
the Board through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 12:00 noon, New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Ticking Fee" has the meaning set forth in Section 2.10(b).
"Transactions" means the execution, delivery and performance by the Loan
Parties of the Loan Documents, the borrowing of Term Loans, the issuance of
Letters of Credit and the use of the proceeds thereof, the grant of the Liens
under the Loan Documents and the making of each Investment.
"Type" as to any Term Loans, its nature as an ABR Loan or a Eurodollar
Loan.
"United States" means the United States of America.
SECTION 1.2 Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any
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agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.3 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time.
ARTICLE 2
Term Loans
SECTION 2.1 Term Loans. Subject to the terms and conditions
hereof, each Lender severally agrees to make one or more term loans (each, a
"Term Loan") to the Borrowers on the Closing Date and on any Business Day
thereafter prior to the Maturity Date in an aggregate principal amount not to
exceed such Lender's Available Commitment. The initial amount of each Lender's
Commitment is set forth on Schedule 2.1, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable.
The Term Loans may from time to time be (a) Eurodollar Loans or (b) ABR Loans,
as determined by the applicable Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.7. Each Term Loan shall be made as
part of a borrowing consisting of Term Loans made by the Lenders ratably in
accordance with their respective Commitments. Amounts repaid or prepaid on
account of the Term Loans may not be reborrowed. The Term Loans shall be made
only if the total Investment Commitment Amounts shall not exceed the total
Commitments.
SECTION 2.2 Procedure for Term Loan Borrowing. Any Borrower shall
give the Administrative Agent irrevocable notice (including telephonic notice
confirmed in writing) (which notice must be received by the Administrative Agent
(a) in the case of Eurodollar Loans, not later than 11:00 a.m., New York, New
York time, three Business Days prior to the date of the anticipated borrowing
and (b) in the case of ABR Loans, not later than 12:00 noon, New York, New York
time, one Business Day prior to the date of the anticipated borrowing)
requesting that the Lenders make the Term Loans on such borrowing date and
specifying the amount to be borrowed; provided that a notice of an ABR Loan to
finance the reimbursement of an LC Disbursement as required by Section 2.3(e)
shall be deemed given one Business Day prior to the date of such drawing. The
Term Loans made on the Closing Date shall initially be ABR Loans. Upon receipt
of such notice, the Administrative Agent shall promptly notify each Lender
thereof. Not later than 11:00 a.m., New York, New York time, on the relevant
borrowing date, each Lender shall make available to the Administrative Agent at
its office specified in Section 9.1 an
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amount in immediately available funds equal to the Term Loan to be made by such
Lender. The Administrative Agent shall credit the account of the applicable
Borrower on the books of such office of the Administrative Agent with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders in immediately available funds; provided that ABR Loans made to fund the
reimbursement of an LC Disbursement as provided in Section 2.3(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
SECTION 2.3 Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, any Borrower may request the issuance of a
Letter of Credit, for the account of such Borrower on the Closing Date and on
any Business Day thereafter not later than 5 Business Days prior to the Maturity
Date. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by such Borrower to, or entered into by
such Borrower with, the Issuing Bank relating to such Letter of Credit, the
terms and conditions of this Agreement shall control.
(b) Notice of Issuance; Certain Conditions. To request the issuance of
a Letter of Credit, a Borrower shall deliver to the Issuing Bank and the
Administrative Agent (at least three Business Days in advance of the requested
date of issuance, unless otherwise agreed to with the Issuing Bank), a notice
requesting the issuance of such Letter of Credit, the date of issuance, the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare such Letter of
Credit, accompanied by a duly completed and executed letter of credit
application in the Issuing Bank's standard form for such Letter of Credit. A
Letter of Credit, shall be issued only if (and upon issuance, the Borrowers
shall be deemed to represent and warrant that), after giving effect to such
issuance, (i) the LC Exposure shall not exceed $250,000,000, (ii) no Letter of
Credit shall have a face amount in excess of $100,000,000, and (iii) the total
Investment Commitment Amounts shall not exceed the total Commitments.
(c) Expiration Date. Each Letter of Credit shall expire not later than
five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Loan Percentage of the aggregate amount available to be drawn under such Letter
of Credit. In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Bank, such Lender's Loan Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrowers on the
date due as provided in Section 2.3(e), or of any reimbursement payment required
to be refunded to the Borrowers for any reason. Each Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of each Letter of Credit is absolute and unconditional and shall not
be affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
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(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrowers shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than (a) 12:00 noon, New York, New York time, on the date
that such LC Disbursement is made, if the applicable Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., New York, New York
time, one Business Day prior to such date or (b) if such notice has not been
received by the applicable Borrower prior to such time on such date, then not
later than 12:00 noon, New York, New York time, two Business Days immediately
following the day that the Borrowers receive such notice; provided that, if an
Event of Default set forth in Article 7(g) shall not have occurred and be
continuing, the Borrowers shall be deemed to have requested in accordance with
Section 2.2 that such payment be financed with an ABR Loan in an equivalent
amount and, to the extent so financed, the Borrowers' obligation to make such
payment shall be discharged and replaced by the resulting ABR Loan. If the
Borrowers fail to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from
the Borrowers in respect thereof and such Lender's Loan Percentage thereof.
Promptly following receipt of such notice, each Lender shall pay to
Administrative Agent its Loan Percentage of the payment then due from the
Borrowers, in the same manner as provided in Section 2.2 with respect to Term
Loans made by such Lender (and Section 2.2 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrowers pursuant to this Section 2.3(e), the Administrative Agent shall
distribute such payment to the Issuing Bank or, to the extent that Lenders have
made payments pursuant to this Section 2.3(e) to reimburse the Issuing Bank,
then to such Lenders and the Issuing Bank as their interest may appear. Any
payment made by a Lender pursuant to this Section 2.3(e) to reimburse the
Issuing Bank for any LC Disbursement (other than the funding of ABR Loans as
contemplated above) shall not constitute a Term Loan and shall not relieve the
Borrowers of their obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrowers' obligation to reimburse LC
Disbursements as provided in Section 2.3(e) shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of:
(i) any lack of validity or enforceability of a Letter of Credit or
this Agreement, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all or
any of the provisions of a Letter of Credit or this Agreement;
(iii) the existence of any claim, setoff, defense or other right that
any Borrower, or any other Person may at any time have against the beneficiary
under a Letter of Credit, the Issuing Bank, the Administrative Agent or any
Lender or any other Person, whether in connection with this Agreement or any
other related or unrelated agreement or transaction;
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(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect; and
(v) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other Person or any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might but for the provisions of this Section, constitute a legal
or equitable discharge of any Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of a Letter of Credit or any
payment or failure to make any payment thereunder, including any of the
circumstances specified in clauses (i) through (v) above, as well as any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to a Letter of Credit (including
any document required to make a drawing thereunder), any error in interpretation
of technical terms or any consequence arising from causes beyond the control of
the Issuing Bank; provided that the foregoing shall not be construed to excuse
the Issuing Bank from liability to the Borrowers to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by each of the Borrowers to the extent permitted by applicable
law) suffered by any Borrower that are caused by the Issuing Bank's failure to
exercise the agreed standard of care (as set forth below) in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that the Issuing Bank shall
have exercised the agreed standard of care in the absence of gross negligence or
willful misconduct on the part of the Issuing Bank. Without limiting the
generality of the foregoing, it is understood that the Issuing Bank may accept
documents that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, without responsibility for further investigation,
and may make payment upon presentation of documents that appear on their face to
be in substantial compliance with the terms of such Letter of Credit; provided
that the Issuing Bank shall have the right, in its reasonable discretion, to
decline to accept such documents and to make such payment if such documents are
not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under each Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the applicable Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrowers of their
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrowers reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans;
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provided, that, if the Borrowers fail to reimburse such LC Disbursement when due
pursuant to Section 2.3(e), then Section 2.9(c) shall apply. Interest accrued
pursuant to this paragraph shall be for the account of the Issuing Bank, except
that interest accrued on and after the date of payment by any Lender pursuant to
Section 2.3(e) to reimburse the Issuing Bank shall be for the account of such
Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrowers, the Administrative Agent,
and the successor Issuing Bank. The Administrative Agent shall notify the
Lenders of any such replacement of the Issuing Bank. At the time any such
replacement shall become effective, the applicable Borrower shall pay all unpaid
fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.10. From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of the Issuing
Bank under this Agreement with respect to any Letter of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to any Letter of Credit issued by
it prior to such replacement.
SECTION 2.4 Repayment of Loans; Evidence of Debt; etc. (a) The
Borrowers hereby unconditionally promise to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of the Term Loans of
such Lender on the Maturity Date (or such earlier date on which the Term Loans
shall become due and payable pursuant to Article 7).
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of each Borrower to such Lender
resulting from the Term Loans of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
Section 9.4(c), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Term Loan made hereunder, including each Term
Loan evidenced by a Note, the applicable Borrower and Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the respective Borrowers to
each Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the various Borrowers and each Lender's
share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.4(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded, absent manifest error; provided,
however, that the failure of any Lender or the Administrative Agent to maintain
the Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrowers to repay (with applicable interest) the
Term Loans made to the Borrowers by such Lender in accordance with the terms of
this Agreement.
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(e) Each Borrower hereby agrees that, upon the request to the
Administrative Agent by any Lender, such Borrower will execute and deliver to
such Lender a promissory note of such Borrower evidencing the Term Loans of such
Lender, substantially in the form of Exhibit H, with appropriate insertions as
to date and principal amount (a "Note").
SECTION 2.5 Termination and Reduction of Commitments. (a) Unless
previously terminated by the Borrowers in accordance with this Agreement, the
Commitments shall terminate on the Maturity Date.
(b) The Borrowers may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $1,000,000 and (ii) the Borrowers shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Term
Loans in accordance with Section 2.6, the sum of the Credit Exposures would
exceed the total Commitments.
(c) The Borrowers shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under Section 2.5(b) at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by a Borrower pursuant to this Section
2.5(c) shall be irrevocable; provided that a notice of termination of the
Commitments delivered by a Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by such Borrower (by notice to the Administrative Agent on or prior
to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
SECTION 2.6 Prepayments. (a) The Borrowers may at any time and
from time to time prepay the Term Loans, in whole or in part, without premium or
penalty, upon irrevocable notice (including telephonic notice confirmed in
writing) delivered to the Administrative Agent at least three Business Days
prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR
Loans or a combination thereof, and, if of a combination thereof, the amount
allocable to each; provided that, if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrowers
shall also pay any amounts owing pursuant to Section 2.15. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice, together with
accrued interest thereon, shall be due and payable on the date specified
therein; provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.5, then such notice of prepayment may be revoked if such notice is revoked in
accordance with Section 2.5.
(b) If any Capital Stock shall be issued by, or any capital
contribution shall be made to, any Borrower, any Indirect Co-Investor or any
Investment Party (other than with respect to an
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Investment in a New Portfolio Company and other than with respect to any
Co-Investment) or if any Borrower, any Indirect Co-Investor or any Investment
Party (other than a New Portfolio Company and other than ratably with respect to
any Co-Investment) receives any Restricted Payment, 100% of the net cash
proceeds thereof received by such Borrower or Indirect Co-Investor shall be
applied toward the prepayment in full of the Term Loans, second, to repay all LC
Disbursements and third, to cash collateralize any outstanding Letter of Credit
on terms reasonably satisfactory to the Administrative Agent. All prepayments
made by a Borrower or an Indirect Co-Investor in accordance with this Section
2.6(b) shall result in a pro rata reduction of the Commitments.
(c) Upon any sale, assignment, conveyance, transfer or other
disposition (in whole or in part) of any outstanding interest in a Borrower or
in an Indirect Co-Investor (other than any sale, assignment, conveyance,
transfer or other disposition by a Co-Investor to any other Co-Investor) or any
outstanding interest of a Borrower or any Indirect Co-Investor in any Investment
Party or a New Portfolio Company, 100% of the net cash proceeds (taking into
account any necessary escrows) thereof received by such Borrower or such
Indirect Co-Investor (less the ratable interest of any Co-Investors) shall be
applied on the date thereof first toward the prepayment in full of the Term
Loans, together with accrued interest thereon, second, to repay all LC
Disbursements and third, to cash collateralize any outstanding Letter of Credit
on terms reasonably satisfactory to the Administrative Agent; provided, however,
if Borrower or any Investment Party shall sell, transfer or otherwise dispose of
"margin stock" as such term is defined in Regulation U of the Board, the net
proceeds from such sale shall be held by the Borrower or such Investment Party,
as the case may be, in cash or marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government maturing on or
within one year from the date of such sale until the Maturity Date; provided,
further, that in the event that an interest in a Borrower or an Indirect
Co-Investor, or the interest of a Borrower or Indirect Co-Investor in any
Investment Party or New Portfolio Company which shall not constitute "margin
stock" shall be sold for more than the cost of the Investments held by such
Borrower, Indirect Co-Investor, Investment Party or New Portfolio Company
(including, without limitation, any interest and fees relating thereto), the
amount of net cash proceeds in excess of such cost shall be held in a cash
collateral account in the name and under the sole dominion and control of the
Administrative Agent as security for the Obligations. All prepayments made by a
Borrower in accordance with this Section 2.6(c) shall result in a pro rata
reduction of the Commitments.
(d) The application of any prepayment pursuant to paragraphs (b) or (c)
of this Section 2.6 shall be made first to ABR Loans and second to Eurodollar
Loans. Amounts prepaid on account of the Term Loans may not be reborrowed.
(e) Notwithstanding anything to the contrary contained herein, in the
event that a Borrower would incur costs pursuant to Section 2.15 as a result of
any payment due as a result of any prepayment to be made pursuant to this
Section 2.6, such Borrower, at its option, may deposit the amount of such
payment with the Administrative Agent, for the benefit of the Lenders who would
have received such payment, in a cash collateral account until the end of the
applicable Interest Period at which time such payment shall be made. Each
Borrower hereby grants to the Administrative Agent, for the benefit of such
Lenders, a security interest in all amounts in which such Borrower has any
right, title or interest which are from time to time on
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deposit in such cash collateral account and expressly waives all rights (which
rights the Borrowers hereby acknowledge and agree are vested exclusively in the
Administrative Agent) to exercise dominion or control over any such amounts.
SECTION 2.7 Conversion and Continuation Options. (a) Any Borrower
may elect from time to time to convert its Eurodollar Loans to ABR Loans by
giving the Administrative Agent at least one Business Day's prior irrevocable
notice of such election, provided that if such conversion of Eurodollar Loans is
made other than on the last day of an Interest Period with respect thereto, then
such Borrower shall pay the Lenders any amounts due pursuant to Section 2.15.
Any Borrower may elect from time to time to convert its ABR Loans to Eurodollar
Loans by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election (which notice shall specify the length of
the initial Interest Period therefor), provided that no ABR Loan may be
converted into a Eurodollar Loan when (i) any Event of Default has occurred and
is continuing and (ii) the Administrative Agent or the Required Lenders have
determined in its or their reasonable discretion not to permit such conversions.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the giving of
irrevocable notice by the applicable Borrower to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loans, provided that no Eurodollar Loan may be continued as such when
any Event of Default has occurred and is continuing and the Administrative Agent
has or the Required Lenders have determined in its or their reasonable
discretion not to permit such continuations, and provided, further, that if any
Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso such Loans shall be automatically converted to ABR Loans on the last day
of such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.
SECTION 2.8 Minimum Amounts and Maximum Number of Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in minimum
amounts of $5,000,000 and incremental amounts of $500,000 in excess thereof and
shall be made pursuant to such elections so that, after giving effect thereto no
more than ten Eurodollar Tranches shall be outstanding at any one time.
SECTION 2.9 Interest. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Term Loan, (ii) any
interest payable thereon or (iii) any Fees or any other amount payable hereunder
(including LC Disbursements)
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shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), the principal of the Term Loans and any such overdue interest, Fees
or other amount shall bear interest at a rate per annum which is (x) in the case
of principal, the rate that would otherwise be applicable thereto pursuant to
the foregoing provisions of this Section 2.9 plus 2% or (y) in the case of any
such overdue interest, Fees or other amount, the rate in effect at such time
pursuant to paragraph (b) of this Section 2.9 plus 2%, in each case from the
date of such non-payment until such overdue principal, interest, Fees or other
amount is paid in full (before as well as after receipt of a judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date
and the Maturity Date, provided that interest accruing pursuant to paragraph (c)
of this Section 2.9 shall be payable from time to time on demand.
(e) Whenever it is calculated on the basis of the Prime Rate, interest
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed; and, otherwise, interest shall be calculated
on the basis of a 360-day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the applicable Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Term Loan resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall as soon as practicable notify
the applicable Borrower and the Lenders of the effective date and the amount of
each such change in interest rate.
(f) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of any Borrower, deliver to such
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate in respect of its Eurodollar Loan.
SECTION 2.10 Fees. (a) The Borrowers agree to pay to the
Administrative Agent, for the account of each Lender, a funding fee (the
"Funding Fee") equal to (i) 1.0% of each Term Loan made to fund an Investment
(and not for the payment of interest and fees) (each borrowing of such a Term
Loan, an "Investment Term Loan"), payable on the date of the funding of each
such Investment Term Loan, plus (ii) 0.5% of the outstanding amount of each
Investment Term Loan on the seven month anniversary of the funding of such
Investment Term Loan, plus (iii) 0.5% of the outstanding amount of each
Investment Term Loan on the nine month anniversary of the funding of such
Investment Term Loan and (iv) 1.0% of the outstanding amount of each Investment
Term Loan on the eleven month anniversary of the funding of such Investment Term
Loan. Each Funding Fee in respect of an Investment Term Loan shall be payable
on the borrowing date of such Investment Term Loan and on the seven, nine and
eleven month anniversaries of the borrowing date of such Investment Term Loan.
(b) The Borrowers agree to pay to the Administrative Agent, for the
account of each Lender, a ticking fee (the "Ticking Fee") in the amount of 0.5%
per annum on the average daily amount of the Available Excess Investment
Commitment Amount, which shall be paid by the Borrowers to the Administrative
Agent on June 30, 2000 and the Maturity Date (or if this
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Agreement is terminated prior to the Maturity Date, the date this Agreement is
terminated), respectively.
(c) Each Borrower shall pay to the Administrative Agent, for the
account of the Issuing Bank and the Lenders, a letter of credit commission with
respect to each Letter of Credit issued for its account, in an amount equal to
the Applicable Margin with respect to Eurodollar Loans on the average daily face
amount of such Letter of Credit, payable quarterly in arrears on each Interest
Payment Date and on the Maturity Date. A portion of such letter of credit
commission equal to 0.125% of the average daily face amount of the Letters of
Credit shall be payable to the Issuing Bank for its own account, and the
remaining portion of such letter of credit commission shall be payable to the
Issuing Bank and the Lenders to be shared ratably among them in accordance with
their respective Loan Percentages.
(d) For purposes of calculating the fees payable by the Borrowers under
this Section 2.10, all prepayments or repayments of the Term Loans shall be
treated as being paid in the order such Term Loans were made from and after the
Closing Date irrespective of the Borrower thereof.
SECTION 2.11 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period (or during any Interest Period):
(a) the Administrative Agent shall have determined (which
determination, in the absence of manifest error, shall be conclusive and binding
upon the Borrowers) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their Term Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
each Borrower and the Lenders as soon as practicable thereafter. If such notice
is given (i) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (ii) any Term Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (iii) any outstanding Eurodollar Loans shall
be converted to ABR Loans on the last day of the Interest Period applicable
thereto. Until such notice has been withdrawn by the Administrative Agent
(which the Administrative Agent agrees to do when the circumstances that
prompted the delivery of such notice no longer exist), no further Eurodollar
Loans shall be made or continued as such, nor shall any Borrower have the right
to convert ABR Loans to Eurodollar Loans.
SECTION 2.12 Pro Rata Treatment and Payments. (a) Each payment
(including each prepayment) by a Borrower on account of principal of and
interest on, and fees with respect to, the Term Loans and the Letters of Credit
shall be made pro rata according to the respective outstanding principal amounts
of the Term Loans then held by the Lenders or Issuing Bank, as the case may be.
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(b) All payments (including prepayments) to be made by a Borrower
hereunder, whether on account of principal, interest or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 12:00 Noon, New York,
New York time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified in
Section 9.1, in dollars and in immediately available funds. The Administrative
Agent shall distribute such payments to the Lenders promptly upon receipt in
like funds as received. If any payment hereunder becomes due and payable on a
day other than a Business Day, such payment shall be extended to the next
succeeding Business Day (except, in the case of Eurodollar Loans, as otherwise
provided in clause (i) of the definition of "Interest Period"). In the case of
any extension of any payment of principal pursuant to the preceding sentence,
interest thereon shall be payable at the then applicable rate during such
extension.
(c) Notwithstanding that a Lender (a "Non-Funding Lender") has (x)
failed to make a Term Loan required to be made by it hereunder, and the
Administrative Agent has determined that such Lender is not likely to make such
Term Loan or (y) given notice to any Borrower or the Administrative Agent that
it will not make, or that it has disaffirmed or repudiated any obligation to
make, any Term Loans, in each case, by reason of the provisions of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 or otherwise, any
payment made on account of the principal of the Term Loans outstanding shall be
made pro rata according to the respective outstanding principal amounts of such
Term Loans; and any payment made on account of interest on the Term Loans shall
be made pro rata according to the respective amounts of accrued and unpaid
interest and/or fees due and payable on such Term Loans with respect to which
such payment is being made. The Borrowers agree to give the Administrative
Agent such assistance in making any determination pursuant to this paragraph as
the Administrative Agent may reasonably request. Any such determination by the
Administrative Agent shall be conclusive and binding on the Lenders.
SECTION 2.13 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender or the Issuing Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender or the Issuing Bank to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender or Issuing Bank in respect thereof (except Non-Excluded Taxes covered by
Section 2.14, the establishment of a tax based on the net income of such Lender
or Issuing Bank and changes in the rate of tax on the net income of such Lender
or Issuing Bank);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender which is not otherwise included in the determination of the
Eurodollar Rate hereunder or on any Issuing Lender with respect to any Letter of
Credit; or
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(iii) shall impose on such Lender or Issuing Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Lender or
Issuing Bank, by an amount which such Lender or Issuing Bank deems to be
material, of making, converting into, continuing or maintaining Eurodollar Loans
or to increase the cost to such Lender or Issuing Bank of participating in,
issuing or maintaining Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the applicable Borrower
shall promptly pay such Lender or the Issuing Bank, as the case may be, upon its
demand, any additional amounts necessary to compensate such Lender or Issuing
Bank for such increased cost or reduced amount receivable. If a Borrower
notifies the Administrative Agent within five Business Days after any Lender
notifies such Borrower of any increased cost pursuant to the foregoing
provisions of this Section 2.13(a), such Borrower may covert all Eurodollar
Loans of such Lender then outstanding into ABR Loans in accordance with Section
2.7 and shall, additionally, reimburse such Lender for any cost in accordance
with Section 2.15.
(b) If any Lender or the Issuing Bank shall have determined that the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Lender or
Issuing Bank or any corporation controlling such Lender or Issuing Bank with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof shall
have the effect of reducing the rate of return on such Lender's, such Issuing
Bank's or such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Lender, such Issuing Bank or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender or Issuing Bank
to be material, then from time to time, after submission by such Lender or
Issuing Bank to the Borrowers through the Administrative Agent of a written
request therefor, the Borrowers shall pay to such Lender or Issuing Bank such
additional amount or amounts as will compensate such Lender or Issuing Bank for
such reduction.
(c) A certificate as to any additional amounts payable pursuant to this
Section 2.13 showing in reasonable detail the calculation thereof and certifying
that it is generally charging such costs to other similarly situated borrowers
under similar credit facilities submitted by any Lender or Issuing Bank to the
Borrowers through the Administrative Agent shall be conclusive in the absence of
manifest error, provided that the determination of such amounts shall be made in
good faith in a manner generally consistent with such Lender's or Issuing Bank's
standard practices. The obligations of the Borrowers pursuant to this Section
2.13 shall survive the termination of this Agreement and the payment of the Term
Loans and all other amounts payable hereunder for a period of nine months
thereafter. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.13, it shall promptly (and in any event no later than
90 days after such Lender becomes entitled to make such claim) notify the
Borrowers through the Administrative Agent of the event by reason of which it
has become so entitled.
SECTION 2.14 Taxes. (a) All payments made by the Borrowers under this
Agreement, except as provided in this Section 2.14, shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter
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imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent or any Lender as a result of a
present or former connection between the Administrative Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder, the amounts so
payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrowers shall not be required to increase any such amounts
payable to any Lender with respect to any Non-Excluded Taxes (i) that are
attributable to such Lender's failure to comply with the requirements of this
Section, (ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time the Lender becomes a party to this Agreement,
or (iii) that are United States withholding taxes imposed as a result of an
event occurring after the date the Lender becomes a Lender other than a change
in law (including any income tax treaty) or regulation or the introduction of
any law or regulation or a change in interpretation or administration of any
law. Whenever any Non-Excluded Taxes are payable by a Borrower, as promptly as
possible thereafter such Borrower paying such Non-Excluded Taxes shall send to
the Administrative Agent for its own account or for the account of such Lender,
as the case may be, a certified copy of an original official receipt received by
such Borrower showing payment thereof. If the Borrowers fail to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrowers shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section 2.14 shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder for a period of nine months thereafter.
(b) Each Lender (or Transferee) that is not a person described in
Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrowers and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8BEN, or any subsequent versions
thereof or successors thereto and an annual certificate representing, under
penalty of perjury, that such Non-U.S. Lender is not a "bank" for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of any Borrower and is not a controlled
foreign corporation related to the Borrowers (within the meaning of Section
864(d)(4) of the Code), properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrowers under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S.
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Lender on or before the date it becomes a party to this Agreement (or, in the
case of any Participant, on or before the date such Participant purchases the
related participation). In addition, each Non-U.S. Lender shall deliver such
forms on or before the expiration or obsolescence and promptly upon the
invalidity of any form previously delivered by such Non-U.S. Lender and after
the occurrence of any event requiring a change in the most recently provided
form and, if necessary, obtain any extensions of time reasonably requested by
any Borrower or the Administrative Agent for filing and completing such forms.
Each Non-U.S. Lender agrees, to the extent legally entitled to do so, upon
reasonable request by any Borrower, to provide to such Borrower (for the benefit
of the Borrowers and the Administrative Agent) such other forms as may be
reasonably required in order to establish the legal entitlement of such Lender
to an exemption from withholding with respect to payments of interest under this
Agreement or the other Loan Documents, provided that in determining the
reasonableness of such a request, such Lender shall be entitled to consider the
cost of complying with such request (to the extent unreimbursed by the
Borrowers) that would be imposed on such Lender. Each Non-U.S. Lender shall
promptly notify the Borrowers at any time it determines that it is no longer in
a position to provide any previously delivered certificate to any Borrower (or
any other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this Section 2.14(b), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.14(b) that such Non-U.S. Lender is not legally able to deliver.
(c) If the Administrative Agent or any Lender receives a refund in
respect of Non-Excluded Taxes paid by any Borrower, which in the good faith
judgment of such Lender is allocable to such payment, it shall promptly pay such
refund, together with any other amounts paid by the Borrowers in connection with
such refunded Non-Excluded Taxes, to the Borrowers, net of all out-of-pocket
expenses of such Lender incurred in obtaining such refund, provided, however,
that each Borrower agrees to promptly return such refund to the Administrative
Agent or the applicable Lender, as the case may be, if it receives notice from
the Administrative Agent or applicable Lender that such Administrative Agent or
Lender is required to repay such refund.
SECTION 2.15 Indemnity. Each Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss (excluding loss of profit) or
expense which such Lender may sustain or incur as a consequence of (a) default
by any Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Loans after such Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by any Borrower in
making any prepayment after such Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal
to the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, any margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. A
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certificate as to any amounts payable pursuant to this Section 2.15, showing in
reasonable detail the calculation thereof, submitted to the Borrowers by any
Lender shall be conclusive in the absence of manifest error. This covenant
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder for a period of nine months thereafter.
SECTION 2.16 Change of Lending Office. Each Lender agrees that if it
makes any demand for payment under Section 2.14(a), or if any adoption or change
of the type described in Section 2.13 shall occur with respect to it, it will
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions and so long as such efforts would not be disadvantageous
to it, as determined in its reasonable discretion) to designate a different
lending office if the making of such a designation would reduce or obviate the
need for the Borrowers to make payments under Section 2.14(a), or would
eliminate or reduce the effect of any adoption or change described in Section
2.13.
SECTION 2.17 Replacement of Lenders. If, at any time (a) the Borrowers
become obligated to pay additional amounts described in Sections 2.13 or 2.14 as
a result of any conditions described in such Sections, (b) any Lender becomes
insolvent and its assets become subject to a receiver, liquidator, trustee,
custodian or other Person having similar powers, (c) any Lender becomes a
"Nonconsenting Lender" (as defined below in this Section 2.17) or (d) any Lender
becomes a Non-Funding Lender, then the Borrowers may, on ten Business Days'
prior written notice to the Administrative Agent and such Lender, replace such
Lender by causing such Lender to (and such Lender shall) assign pursuant to
Section 9.4(b) all of its rights and obligations under this Agreement to a
Lender or other entity selected by the Borrowers and reasonably acceptable to
the Administrative Agent for a purchase price equal to the outstanding principal
amount of such Lender's Loans and all accrued interest and fees and other
amounts payable hereunder; provided that (i) the Borrowers shall have no right
to replace the Administrative Agent, (ii) neither the Administrative Agent nor
any Lender shall have any obligation to the Borrower to find a replacement
Lender or other such entity, (iii) in the event of replacement of a
Nonconsenting Lender or a Lender to which the Borrowers become obligated to pay
additional amounts pursuant to clause (a) of this Section, in order for the
Borrowers to be entitled to replace such a Lender, such replacement must take
place no later than 180 days after (A) the date the Nonconsenting Lender shall
have notified the Borrowers and the Administrative Agent of its failure to agree
to any requested consent, waiver or amendment or (B) the Lender shall have
demanded payment of additional amounts under one of the Sections described in
clause (a) of this Section, as the case may be and (iv) in no event shall the
Lender hereby replaced be required to pay or surrender to such replacement
Lender or other entity any of the fees received by such Lender hereby replaced
pursuant to this Agreement. In the case of a replacement of a Lender to which
the Borrower becomes obligated to pay additional amounts pursuant to clause (a)
of this Section, the Borrower shall pay such additional amounts to such Lender
prior to such Lender being replaced and the payment of such additional amounts
shall be a condition to the replacement of such Lender. In the event that (x)
the Borrower or the Administrative Agent has requested the Lenders to consent to
a departure or waiver of any provisions of the Loan Documents or to agree to any
amendment thereto, (y) the consent, waiver or amendment in question requires the
consent of all Lenders and (z) the Required Lenders have agreed to such consent,
waiver or amendment, then any such Lender who does not agree to such consent,
waiver or amendment shall be deemed a "Nonconsenting Lender". The Borrower's
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right to replace a Non-Funding Lender pursuant to this Section 2.17 is, and
shall be, in addition to, and not in lieu of, all other rights and remedies
available to the Borrower against such Non-Funding Lender under this Agreement,
at law, in equity, or by statute.
SECTION 2.18 Nature of Obligations. (a) The Borrowers shall be jointly
and severally liable for the payment and performance of all obligations and
covenants required by this Agreement to be performed by any of them, and each
Borrower shall be bound by any notices (including, without limitation, notices
of borrowings and notices of conversion or continuation), consents or other
actions furnished or taken by any other Borrower hereunder. At the request of
the Administrative Agent or the Required Lenders, each Borrower shall confirm in
writing any action taken or proposed to be taken by such Borrower hereunder,
provided that the failure of any Borrower to furnish such confirmation shall not
affect such Borrower's obligations under the preceding sentence or any other
provision of this Agreement. Each Borrower hereby agrees that it shall be
jointly and severally liable for all Obligations and that such liability shall
be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provision of this
Agreement, any other Loan Document or any other agreement or instrument relating
to this Agreement or any other Loan Document, or avoidance or subordination of
any of the Obligations;
(ii) any change in the time, manner or place of payment of, or in any
other term of, or any increase in the amount of, all or any of the Obligations,
or any other amendment or waiver of any term of, or any consent to departure
from any requirement of, the Agreement or any of the other Loan Documents;
(iii) any exchange, release or non-perfection of any Lien on any
collateral for, or any release or amendment or waiver of any term of any consent
to departure from any requirement of any other guaranty of, all or any of the
Obligations;
(iv) the absence of any attempt to collect any of the Obligations, from
any Borrower or from any Loan Party or any other guarantor or any other action
to enforce the same or the election of any remedy by the Lender;
(v) any waiver, consent, extensions, forbearance or granting of any
indulgence by the Lenders with respect to any provision of this Agreement or any
Loan Document; or
(vi) any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a borrower or a guarantor.
(b) Notwithstanding anything to the contrary contained herein, in the
event of a sale of all or substantially all of the Capital Stock or assets of or
by any Borrower (directly or indirectly) to a New Fund and the application of
the proceeds thereof in accordance with this Agreement and the other Loan
Documents, such Borrower shall be released of its obligations under this
Agreement and the other Loan Documents.
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SECTION 2.19 Increase of Commitments. (a) The Borrower shall have the
right with the consent of the Administrative Agent and the Syndication Agent, to
request in writing, from time to time (but not more than twice), that the
aggregate amount of the Commitments then in effect be increased effective upon a
specific date (the "Increase Effective Date") set forth in such request (the
"Increase Request") upon the same terms and conditions as set forth herein,
provided that no such increase shall be permitted if, after giving effect
thereto the total aggregate Commitments would exceed $2,500,000,000. Any such
increase shall be in incremental aggregate amounts of not less than the lesser
of (i) $10,000,000 or (ii) $2,500,000,000 minus the amount of the total
aggregate Commitments then in effect (the "Requested Amount") and shall increase
permanently the amount of the total aggregate Commitments then in effect
(subject to the Borrower's right to terminate or reduce the amount of the
Commitments pursuant to Section 2.5).
(b) If on the date (the "Increase Response Date") specified in any
Increase Request any Lenders or any new lenders selected by the Borrower with
the consent of the Administrative Agent and the Syndication Agent (such consent
not to be unreasonably withheld) elect in their sole discretion, to increase
their Commitments (each an "Increasing Lender") by an aggregate amount equal to
the Requested Amount, then, subject to the provisions of this Section 2.19, on
the Increase Effective Date therefor, the Commitments of such Increasing
Lenders, and correspondingly, the total aggregate Commitments, shall be
increased accordingly.
(c) Each increase in the Commitment of an Increasing Lender (including
any new lender) shall be evidenced by a written instrument executed by such
Increasing Lender, the Borrower and the Administrative Agent, and shall take
effect on the related Increase Effective Date.
(d) Upon the request to the Administrative Agent by any Increasing
Lender, the Borrower shall deliver to each such Increasing Lender, in exchange
for the Note held by such Increasing Lender, a new Note, in the principal amount
of such Increasing Lender's Commitment after giving effect to the adjustments
made pursuant to this Section 2.19.
(e) If any Lender or group of Lenders shall have elected to increase
their Commitments as provided in this Section 2.19, then as of the related
Increase Effective Date (i) the Commitments of each Increasing Lender shall take
effect and (ii) the Commitments of the Lenders which are not Increasing Lenders
shall remain constant.
ARTICLE 3
Representations and Warranties
Each Borrower represents and warrants to the Lenders, on the Closing Date
and on the date of each borrowing by such Borrower hereunder, that:
SECTION 3.1 Organization; Powers. Such Borrower is duly formed,
validly existing and in good standing under the laws of the jurisdiction of its
organization or formation, has all requisite power and authority to carry on its
business as now conducted and, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in
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a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
SECTION 3.2 Authorization; Enforceability. The Transactions are
within the Borrower's powers and have been duly authorized by all necessary
corporate, partnership, limited liability company or other actions. The Loan
Documents have been duly executed and delivered on behalf of each Loan Party
thereto and constitute a legal, valid and binding obligation of each such Loan
Party, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.3 Governmental Approvals; No Conflicts. The
Transactions (a) do not require any material consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the organizational or
formation documents of any Loan Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
material agreement or other material instrument binding upon any Loan Party or
its assets, or give rise to a right thereunder to require any payment to be made
by any Loan Party, and (d) will not result in the creation or imposition of any
Lien on any asset of any Loan Party, other than pursuant to the Loan Documents.
SECTION 3.4 Compliance with Laws and Agreements. Each Loan Party
is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 3.5 Investment and Holding Company Status. No Borrower is
(a) an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.6 Material Adverse Effect. There has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.7 No Material Litigation. No litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of such Borrower, threatened by or against any Loan Party
or any Investment Party or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.8 Disclosure. No information, financial statement,
report, certificate or other document prepared or furnished by or on behalf of
any Loan Party to the Administrative Agent or any Lender in connection with this
Agreement or any other Loan Document (but
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excluding all projections and pro forma financial statements which shall have
been prepared in good faith and based upon reasonable assumptions) contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements herein or therein not misleading.
SECTION 3.9 Investments. On and after the date of the making of
each Investment, each applicable Investment Party and New Portfolio Company in
which such Investment is made will be duly organized or formed, validly existing
and in good standing under the laws of the jurisdiction of its organization or
formation, will have all requisite power and authority to carry out its business
as then conducted and proposed to be conducted and, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, will be qualified to do business in, and in
good standing in every jurisdiction where such qualification is required. The
making of each Investment (i) will be within the power of the applicable
Borrower, and each Investment Party and will be duly authorized by all necessary
appropriate action on the part of each such Borrower and Investment Party, (ii)
will not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as will have been
obtained or made and be in full force and effect, (iii) will not violate any
applicable law or regulation, in any material respect, or any organizational
document of any applicable Borrower, Investment Party or New Portfolio Company
or any order of any Governmental Authority, (iv) will not violate or result in a
default under any material indenture, agreement or other instrument binding upon
the applicable Borrower, Investment Party or New Portfolio Company or its
assets, or give rise to a right thereunder to require any payment to be made by
the applicable Borrower, Investment Party or New Portfolio Company (other than
payments made simultaneously with such Investment), (v) will not result in the
creation or imposition of any Lien on any asset of the applicable Borrower,
Investment Party or New Portfolio Company except Liens under the Pledge
Agreement and Liens on the acquired assets to secure Indebtedness owed to third
party lenders incurred in connection with the making of an Investment in the
assets acquired thereby, and (vi) will be consistent with investments made by,
or permitted under, any Specified Fund (other than with respect to geographic
region).
ARTICLE 4
Conditions Precedent
SECTION 4.1 Conditions to Initial Funding. The obligations of the
Lenders to make the Term Loans and of the Issuing Bank to issue any Letter of
Credit hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.2):
(a) Loan Documents. The Administrative Agent (or its counsel) shall
have received (i) this Agreement, duly executed and delivered by each Initial
Borrower, (ii) an Affiliate Guarantee, duly executed and delivered by each
Affiliate Guarantor in existence on the Closing Date, (iii) an Investment
Guarantee duly executed and delivered by each Investment Guarantor in existence
on the Closing Date; (iv) the Pledge Agreement, duly executed and delivered by
each Initial Borrower and EquityCo, together with all documents required to be
delivered thereunder, all certificates representing the Pledged Interests listed
on Schedule I thereto and stock powers
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endorsed in blank, (v) the Letter Agreement, duly executed and delivered by each
party thereto, and (vi) the Principal Agreement, duly executed and delivered by
each party thereto.
(b) Closing Certificate. The Administrative Agent shall have received,
with a counterpart for each Lender, a certificate of each Loan Party, dated the
Closing Date, substantially in the form of Exhibit E, with appropriate
insertions and attachments.
(c) Legal Opinion. The Administrative Agent shall have received the
executed legal opinion of (i) Weil, Gotshal & Manges LLP, counsel to the Loan
Parties, substantially in the form of Exhibit B, (ii) Nauta Dutilh, counsel to
HM/Europe Coinvestors, C.V. and EquityCo, substantially in the form of Exhibit
C, and (iii) Walkers, counsel to TOH/Europe Cayman Ltd, substantially in the
form of Exhibit D.
(d) Approvals. All governmental and third party approvals necessary
or, in the discretion of the Administrative Agent, advisable in connection with
the Transactions shall have been obtained and be in full force and effect, and
all applicable waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on any Initial Borrower's ability to perform
its obligations under the Loan Documents.
(e) Fees. The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the date hereof.
(f) Filings. Any documents (including, without limitation, financing
statements) required to be filed, registered or recorded in order to create, for
the benefit of the Administrative Agent and the Lenders, a perfected, first
priority security interest shall have been properly prepared for filing,
registration or recording in each office in each jurisdiction in which such
filings, registrations and recordations are required to perfect such first
priority security interests created by the Pledge Agreement, and the
Administrative Agent shall be satisfied that such recordings and filings will be
completed promptly after the date hereof.
SECTION 4.2 Additional Conditions for Each Credit Event. The
obligation of each Lender to make Term Loans on the occasion of any borrowing
(other than a Loan made pursuant to Section 2.3(e) and Term Loans made for the
payment of interest and Fees), and of the Issuing Bank to issue any Letter of
Credit, is subject to the satisfaction of the following conditions:
(a) Joinder Agreement. In the event the Term Loans are to be drawn by
a Future Borrower not a party to this Agreement, the Administrative Agent shall
have received from such Future Borrower a Joinder Agreement signed by the
appropriate Future Borrower together with such other documentation required
thereunder.
(b) Guarantee. The Administrative Agent shall have received, if
applicable, an Investment Guarantee or an Affiliate Guarantee signed by the
appropriate Investment Guarantor or Affiliate Guarantor.
(c) Pledge Agreement. The Administrative Agent shall have received (i)
from the Borrower a Pledge Supplement (as defined in the Pledge Agreement) to
the Pledge Agreement
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signed by the Borrower and the Indirect Co-Investor, if applicable, or (ii) in
the case of any Future Borrower not a party to a Pledge Agreement, a Pledge
Agreement signed by such Future Borrower and the Indirect Co-Investor, if
applicable.
(d) Representations and Warranties. The representations and warranties
of the Loan Parties set forth in this Agreement and the Loan Documents shall be
true and correct in all material respects on and as of the date of such
borrowing or the date of issuance of such Letter of Credit, as applicable,
except to the extent they relate to an earlier date, in which case they shall be
true and correct in all material respects as of such earlier date.
(e) No Default. At the time of and immediately after giving effect to
such borrowing or the issuance of such Letter of Credit, as applicable, no
Default or Event of Default shall have occurred and be continuing.
(f) Certificate. With respect to each Term Loan the proceeds of which
will be used to fund an Investment, the Administrative Agent (which shall
forward the same to the Lenders and Issuing Bank) shall have received a
certificate of the applicable Borrower setting forth in reasonable detail, and
to such Borrower's knowledge, information with respect to the following items:
(i) a description of such Investment; (ii) the total cost of such Investment;
(iii) the amount, maturity, source and collateral security for all debt, equity
and other financing for such Investment and the acquisition by or of the
applicable New Portfolio Company of such Investment; and (iv) the name, form of
organization and jurisdiction of organization of such Borrower and, if
applicable, the appropriate Indirect Co-Investor, the applicable New Portfolio
Company and any Investment Party and the respective direct ownership interests
of such Borrower, the Indirect Co-Investor, each Investment Party and the New
Portfolio Company and their respective subsidiaries. In addition, the
Administrative Agent (which shall forward the same to the Lenders) shall receive
from the Borrower: (i) a copy of all purchase documents relating to the
acquisition of the applicable New Portfolio Company and (ii) such other
information reasonably requested by the Lenders regarding the applicable New
Portfolio Company, the Indirect Co-Investor, and the Investment Parties (in each
case, if any).
(g) Co-Investment. The amount of the borrowing shall not equal more
than 97.02% of the Investment in a Directly Owned Investment Party or New
Portfolio Company, as the case may be, and in each case the Co-Investors shall
have made the Co-Investment in an amount not less than 2.98% of such Investment.
(h) Legal Opinion. The Administrative Agent shall have received an
executed legal opinion from the Loan Parties' outside counsel and local counsel,
as to all matters reasonably requested by Administrative Agent including,
without limitation, (a) Regulation U and (b) perfection of the Administrative
Agent's security interest in the Investment pledged by the Pledgors of Pledged
Interests.
(i) Investment. Each Investment shall be reasonably expected by the
Loan Parties to be suitable for purchase by New Fund (the determination of which
will include a determination that the Investment is consistent with past
investments by any Specified Fund). Each borrowing and the issuance of any
Letter of Credit shall be deemed to constitute a representation and
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warranty by each Borrower on the date thereof as to the matters specified in
paragraphs (c) and (d) of this Section.
ARTICLE 5
Covenants
Until the principal of and interest on each Term Loan and all other amounts
payable hereunder shall have been paid in full and the Commitments are
terminated and any Letter of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each Borrower hereby covenants and
agrees with the Lenders that (with references to "the Borrower" being deemed to
be references to "such Borrower"):
SECTION 5.1 Notices of Material Events. The Borrower will furnish
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Loan
Party or any Affiliate thereof that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect; and
(c) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
the Borrower setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.2 Existence; Conduct of Business. The Borrower will do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect (a) its legal existence and (b) the rights, licenses, permits,
privileges and franchises material to the conduct of its business other than
those in the case of clause (b) above, the failure of which to maintain, could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.3 Payment of Obligations. The Borrower will pay its
material obligations, including material tax liabilities, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) the Borrower
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.4 Compliance with Laws. The Borrower will comply with
all laws, rules, regulations and orders of any Governmental Authority applicable
to it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
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SECTION 5.5 Use of Proceeds. The proceeds of the Term Loans will
be used only to finance the Investments in New Portfolio Companies and the
payment of interest, fees and expenses due hereunder and Letters of Credit shall
be used only in connection with the consummation of the proposed Investments;
provided that (i) Term Loans may not be borrowed and Letters of Credit may not
be issued for the purpose of making any Investment if the aggregate Investment
Commitment Amount (after giving effect to such Term Loan or Letter of Credit, as
the case may be), would exceed the aggregate Commitments, (ii) no part of the
proceeds of any Term Loan and no Letter of Credit will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and X and (iii) the amount of
Term Loans borrowed and the aggregate face amount of Letters of Credit issued
shall not exceed (x) $500,000,000 in the aggregate, in the case of any
Investment in real estate, and (y) $175,000,000 individually or $375,000,000 in
the aggregate, in the case of Investments in New Portfolio Companies domiciled
in Mexico, Central America or South America.
SECTION 5.6 Additional Collateral. (a) With respect to any
investment by a Borrower and an Indirect Co-Investor, if any, in a Directly
Owned Investment Party or a New Portfolio Company, as the case may be, the
applicable Borrower and Indirect Co-Investor, if any, shall execute and deliver
to the Administrative Agent, for the benefit of the Lenders, such Pledge
Agreements or Pledge Supplements to the Pledge Agreement or such other documents
as the Administrative Agent shall deem necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a Lien on the Capital
Stock issued by the Directly Owned Investment Party or, to the extent there is
no Directly Owned Investment Party, the Capital Stock of the New Portfolio
Company, or in the case of an Investment in Indebtedness, a Lien on such
Indebtedness.
(b) In all cases, the appropriate Pledgor shall, as soon as practicable
but in any event not more than five Business Days after any borrowing, (i)
deliver to the Administrative Agent the stock certificates, notes or other
evidence of ownership representing the Investment in such New Portfolio Company
or such Directly Owned Investment Party, as applicable, together with undated
stock or transfer powers, executed, endorsed and delivered in blank, for any
stock certificates or notes representing such Investment, by a Responsible
Officer of such Pledgor, and (ii) take all actions necessary or advisable to
cause such Lien to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be required by the Pledge Agreement or
by law or as may be requested by the Administrative Agent and (iii) if
reasonably requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions, including legal opinions of local counsel, relating to the
matters described in this Section 5.6, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
SECTION 5.7 Financial Reporting. Each Borrower will provide to
the Administrative Agent, for distribution to the Lenders, (a) each of the
financial statements and related certificates and other business and financial
information regularly distributed to the lenders pursuant to any credit
agreement for a New Portfolio Company as well as such additional information as
the Lenders may reasonably request hereunder, and (b) within 45 days after the
expiration of the applicable quarter, quarterly unconsolidated financial
statements for each
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Borrower for the periods ending as of such quarter, commencing with the quarter
ended December 31, 1999.
SECTION 5.8 Additional Guarantors. Within ten Business Days after
the formation of any Affiliate Guarantor or Investment Guarantor on the date any
entity becomes an Affiliate Guarantor or Investment Guarantor within the
definition of Affiliate Guarantor set forth in Section 1.1 hereof, the Borrower
shall cause each such Affiliate Guarantor or Investment Guarantor, as
applicable, to execute and deliver to the Administrative Agent, as appropriate,
an Affiliate Guarantee substantially in the form of Exhibit F attached hereto or
an Investment Guarantee substantially in the form of Exhibit G attached hereto.
SECTION 5.9 Management and Advisory Agreements. Upon the request
of the Administrative Agent, the Borrower shall provide to the Administrative
Agent a copy of each management and advisory agreement in respect of the New
Fund or an Investment in a New Portfolio Company, if any.
SECTION 5.10 Covenant to Pay. Each Borrower covenants in favor of the
Administrative Agent, with the agreement of the Lenders and the Issuing Bank, to
pay the Obligations to the Administrative Agent as joint and several creditor
thereof when and to the extent due from such Borrower under the terms of and
subject always to any express limits set out in this Agreement, to such bank
account as the Administrative Agent may direct, except that each Borrower may
also, subject to the terms of this Agreement until otherwise notified in writing
by the Administrative Agent, pay the Obligations directly to the Administrative
Agent for itself or to the relevant Lender or Issuing Bank, as the case may be,
and each such payment will constitute a pro rata discharge of the covenant to
pay in favor of the Administrative Agent set forth herein.
SECTION 5.11 Margin Securities. All Investments in "margin stock", as
such term is defined in Regulation U of the Board, shall be made through one or
more Investment Parties.
ARTICLE 6
Negative Covenants
Until the principal of and interest on each Term Loan and all other amounts
payable hereunder shall have been paid in full and the Commitments are
terminated and any Letter of Credit shall have expired or terminated and all LC
disbursements shall have been reimbursed, each Borrower hereby covenants and
agrees with the Lenders that (with references to "the Borrower" being deemed to
be references to "such Borrower"):
SECTION 6.1 Indebtedness. The Borrower will not, and will not
permit any Indirect Co-Investor (if applicable) or Investment Party to, create,
incur, assume or permit to exist any Indebtedness, except (a) Indebtedness
created hereunder and under the other Loan Documents, (b) nonconsensual
obligations imposed by operation of law, (c) indemnification obligations arising
under the Borrower's constituent documents, (d) administrative expenses and
taxes, and (e) Indebtedness arising out of any Guarantee or similar agreement
entered into by any
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Borrower, Indirect Co-Investor or Investment Party in support of the obligation
of a New Portfolio Company or its Subsidiaries; provided, however, (i) the
remaining Commitment after giving effect to such Guarantee, shall be sufficient
to make payments of interest and fees previously accrued or which will be
payable hereunder through the Maturity Date (using for future periods not
covered by existing Interest Periods, the Eurodollar Rate available on the date
of any determination for a three (3) month Interest Period and using the then
current Applicable Margin, (ii) the Commitments shall be deemed to be utilized
in an amount equal to the full amount of such Indebtedness during the time such
Indebtedness remains outstanding, (iii) such Guarantees shall not exceed $250
million in the aggregate at any one time outstanding, and (iv) promptly after
entering into a permitted Guarantee, give the Administrative Agent written
notice thereof.
SECTION 6.2 Liens. The Borrower will not, and will not permit any
Indirect Co-Investor (if applicable) or any Investment Party to, create, incur,
assume or permit to exist any Lien (other than Liens created pursuant to the
Pledge Agreement) on any property or asset now owned or hereafter acquired by
it, or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof other than (a) Liens for taxes not yet due or
which are being contested in good faith by appropriate proceedings, provided
that adequate reserves with respect thereto are maintained on the books of the
Borrower in accordance with GAAP, (b) Liens in favor of banking institutions
arising as a matter of law and encumbering the deposits (including the right of
setoff) held by such banking institutions in the ordinary course of business and
which are within the general parameters customary in the banking industry, and
(c) attachment and judgment Liens not constituting an Event of Default;
provided, however, that this Section 6.2 shall not apply to any "margin stock"
as such term is defined in Regulation U of the Board, if such margin stock
represents more than 25% of the value of the assets of the Borrower as such
value is required to be computed by Regulation U of the Board.
SECTION 6.3 Fundamental Changes. (a) The Borrower will not, and
will not permit any Indirect Co-Investor (if applicable) or any Investment Party
to, merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with it, or liquidate or dissolve; provided that
any Borrower, Indirect Co-Investor or Investment Party may (i) merge into or
consolidate with any other Borrower, Indirect Co-Investor or Investment Party,
or (ii) liquidate or dissolve if, in connection thereunder, all of its assets
are transferred to another Borrower, Indirect Co-Investor or Investment Party,
or if such transfer is done in accordance with Section 6.5.
(b) The Borrower will not engage in any business other than a business
consistent with its current operations and activities on the date of execution
of this Agreement.
SECTION 6.4 Restricted Payments. The Borrower will not, and will
not permit any Investment Party to, make any Restricted Payments (except that
the Investment Parties may make Restricted Payments to the Borrower (and the
Indirect Co-Investor, if any) to repay Term Loans and other amounts due
hereunder and the Borrower may make Restricted Payments to a Co-Investor in
respect of any Co-Investment amount in connection with a sale of assets
permitted under Sections 2.6(b) or 6.5 or with the proceeds funded by a
Co-Investor in connection with transfer among the Co-Investors).
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SECTION 6.5 Sale of Assets. The Borrower shall not and will not
permit any Indirect Co-Investor or Investment Party to sell, transfer or
otherwise dispose of any of its respective property other than for cash
(yielding net proceeds) representing at least such Person's cost of such
property (including, without limitation, any interest and fees relating
thereto), the net proceeds (less the ratable interest of any Co-Investors and
any necessary escrows) of which (to the extent attributable to the Investment)
are distributed to the Borrowers to repay the Term Loans; provided, however, the
Borrower or any Investment Party may sell, transfer or otherwise dispose of
"margin stock" as such term is defined in Regulation U of the Board so long as
the net proceeds from such sale shall be held by the Borrower or such Investment
Party, as the case may be, in cash or marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government maturing on or
within one year from the date of such sale until the Maturity Date; provided
further, that in the event that any such property which shall not constitute
"margin stock" is sold for more than the cost thereof (including, without
limitation, any interest and fees relating thereto), the amount of net cash
proceed in excess of such cost shall be held in a cash collateral account in the
name and under the sole dominion and control of the Administrative Agent as
security for the Obligations.
ARTICLE 7
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) any Borrower shall fail to pay any principal of any Term Loan or LC
Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Term Loan or LC
Disbursement or to pay any Fee or any other amount (other than an amount
referred to in clause (a) of this Article) payable under or in connection with
this Agreement, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on behalf
of any Loan Party in or in connection with any Loan Document or any amendment or
modification thereof, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof, shall prove to have been incorrect in any
material respect when made or deemed made;
(d) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.2(a) or Article 6 or any Guarantor
shall fail to observe or perform any covenant, condition or agreement contained
in Section 10(a)(i) or (d) of its Affiliate Guarantee or Investment Guarantee,
as applicable;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b), (c), (d) or (g) of this Article), and such failure
shall continue unremedied for a period of 30 days;
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(f) any Loan Party, Investment Party, or any New Portfolio Company
shall (i) default in making any payment of any principal of or interest on any
Indebtedness (including any Guarantee, but excluding the Term Loans, LC
Disbursements and Guarantees pursuant to the Affiliate Guarantees and Investment
Guarantees) beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or (in
the case of any such Indebtedness constituting a Guarantee) to become payable;
provided that a default, event or condition described in clause (i) or (ii) of
this paragraph (f) shall not at any time constitute an Event of Default under
this Agreement unless, at such time, one or more defaults, events or conditions
(without duplication as to the same item of Indebtedness) of the type described
in clauses (i) and (ii) of this paragraph (f) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $500,000 in the case of any Borrower or
$10,000,000 in the case of any New Portfolio Company, Investment Party or any
other Loan Party; or
(g) (i) any Loan Party, Investment Party, or any New Portfolio Company
shall commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or any Loan
Party, Investment Party or any New Portfolio Company shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Loan Party, Investment Party or any New Portfolio Company, any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against any Loan Party, Investment
Party or any New Portfolio Company any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or (iv)
any Loan Party shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) any Loan Party, Investment Party or any New
Portfolio Company shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(h) one or more judgments or decrees shall be entered against any Loan
Party, Investment Party or New Portfolio Company involving in the aggregate a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has not denied coverage) of $500,000 or more in the case of
any Borrower and $10,000,000 or more in the case of any
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New Portfolio Company, Investment Party or any other Loan Party, and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or
(i) any Loan Document shall, at any time, cease to be in full force and
effect (unless released by the Administrative Agent at the direction of the
Required Lenders or as otherwise permitted under this Agreement or the other
Loan Documents) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any Loan Party; or
(j) any Person constituting a "Guarantor" shall not be a party to an
Affiliate Guarantee or an Investment Guarantee, as applicable, within ten
Business Days after such Person has been organized or formed;
(k) a Change in Control shall occur; or
(l) any Investment Party shall fail to distribute any payment made to
it on account of any Investment (net of reasonable expenses and reasonably
required escrows).
then, and in every such event (other than an event with respect to any Borrower
described in clause (g) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrowers, declare the Term Loans
and LC Disbursements then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable) and the Commitments to be
terminated, and thereupon the principal of the Term Loans and LC Disbursements
so declared to be due and payable, together with accrued interest thereon and
all other obligations of the Borrowers accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Borrower; and in case of any event
with respect to any Borrower described in clause (g) of this Article, the
principal of the Term Loans and LC Disbursements then outstanding, together with
accrued interest thereon and all other obligations of the Borrowers accrued
hereunder, shall automatically become due and payable and the Commitments shall
be automatically terminated, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Borrower; and at any
time thereafter during the continuance of such event, the Administrative Agent
may exercise all of its rights and remedies under the Pledge Agreement in
accordance with all applicable laws.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrowers shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. Each
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Bank, a security interest in such cash collateral to secure all
obligations of such Borrower in respect of such Letters of Credit under this
Agreement and the other Loan Documents. The Borrowers shall execute and deliver
to the Administrative Agent, for the account of the Issuing Bank, such further
documents and instruments as the Administrative Agent may request to evidence
the creation and perfection of such security interest in such cash collateral
account. Amounts held in
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such cash collateral account shall be applied by the Administrative Agent to the
payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other obligations of the Borrowers
hereunder and under any Notes. After all such Letters of Credit shall have
expired or been fully drawn upon, all obligations under the Letters of Credit
shall have been satisfied and all other obligations of the Borrowers hereunder
and under any Notes shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to Borrowers.
ARTICLE 8
The Administrative Agent
SECTION 8.1 Generally.
Each of the Lenders hereby irrevocably appoints the Administrative Agent as
its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with any Loan Party or any Affiliate thereof as if it
were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Loan Party or any of its Affiliates that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the contents
of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article 4 or
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elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for any Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrowers, to
appoint a successor, which successor shall be approved by the Borrowers (which
approval shall not be unreasonably withheld or delayed). If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank
reasonably acceptable to the Borrowers. Upon the acceptance of its appointment
as Administrative Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. Any fees payable by the
Borrowers to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrowers and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.3 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such 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 the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
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taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
SECTION 8.2 Joint and Several Creditorship. The Administrative
Agent shall be the joint and several creditor together with each Lender and the
Issuing Bank of each and every Obligation of any Borrower towards such Bank
under this Agreement or any Loan Document so that accordingly the Administrative
Agent in its individual capacity will have its own independent right to demand
performance by the relevant Borrower of those Obligations, and such Obligations
will be discharged by and to the extent of any discharge thereof either to the
Administrative Agent in its capacity referred to above or to the Administrative
Agent for itself or to the relevant Bank, as the case may be. In case of a
resignation of the Administrative Agent pursuant to Section 8.1, the rights of
the Administrative Agent hereunder shall be assigned by the retiring
Administrative Agent to the successor Administrative Agent by an assignment not
constituting a novation of debt.
ARTICLE 9
Miscellaneous
SECTION 9.1 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows:
(a) if to any Borrower, to it c/o Hicks, Muse Tate & Furst
Incorporated, 200 Crescent Court, Suite 1600, Dallas, Texas 75201, Attention:
Lawrence D. Stuart, Jr., (Telecopy No. 214-740-7313), with a copy to each other
Borrower);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, Loan
and Agency Services, One Chase Manhattan Plaza, New York, New York 10081,
Attention: Janet Belden (Telecopy No. 212-552-5658), with a copy to The Chase
Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention: Neil
Boylan (Telecopy No. 212-972-0009); and
(c) if to any Lender, to it at its address (or telecopy number) set
forth in an administrative questionnaire delivered to the Administrative Agent
and as otherwise notified in writing to the Borrowers.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.2 Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any
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abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Term Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.
(b) Neither any Loan Document nor any provision thereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Required Lenders and each affected Loan Party; provided that
no such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the amount of, or extend any
scheduled date for payment of, any principal or interest in respect of the Term
Loans, any LC Disbursements or any Letter of Credit fees, without the written
consent of each Lender directly affected thereby, (iii) change any of the
provisions of this Section or the definition of "Required Lenders" without the
written consent of each Lender, (iv) release any Loan Party from its obligations
under the Loan Documents without the written consent of each Lender (except upon
payment in full in cash of the Obligations or, with respect to a given Borrower
or Indirect Co-Investor, upon a sale of the Directly Owned Investment Party or
New Portfolio Company in a transaction permitted hereunder and repayment in full
of such Borrower's Term Loans) or (v) release all or substantially all of the
collateral (except as expressly provided in the Loan Documents) under the
Affiliate Guarantees or Investment Guarantees and the Pledge Agreement (provided
that a partial release of collateral thereunder shall require the consent of the
Required Lenders); provided, further, that no such agreement shall amend, modify
or otherwise affect the rights or duties of the Administrative Agent hereunder
without the prior written consent of the Administrative Agent.
SECTION 9.3 Expenses; Indemnity; Damage Waiver. (a) The Borrowers
shall pay or cause to be paid (i) all reasonable out-of-pocket expenses incurred
by the Administrative Agent, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, in connection with the
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof and (ii) all reasonable out-of-pocket expenses incurred by
the Administrative Agent or any Lender, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including in connection with any workout, restructuring or
negotiations in respect thereof, the reasonable fees and disbursements of
counsel to the Administrative Agent and after the occurrence and during the
continuance of an Event of Default a single counsel to the Lenders collectively.
(b) Each Borrower shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (other
than non-Non-Excluded Taxes), including the
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reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of the Loan Documents or
any agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations under the Loan Documents or the
consummation of the Transactions or any other transactions contemplated by the
Loan Documents, (ii) any Term Loan or the use of the proceeds therefrom, or
(iii) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or, in the case of any indemnified liabilities arising out of
this Agreement or the other Loan Documents, from the material breach by any such
Indemnitee of this Agreement or the other Loan Documents, as the case may be;
provided that, for purpose of clarity, no provision of this paragraph (b) shall
be deemed to negate Section 9.3(a)(ii) to the extent that it provides that after
the occurrence and during the continuance of an Event of Default, the Lenders
shall be reimbursed for a single counsel.
(c) To the extent that the Borrowers fail to pay any amount required to
be paid by it to the Administrative Agent, each Lender severally agrees to pay
to the Administrative Agent such Lender's Loan Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.
(d) To the extent permitted by applicable law, the Borrowers shall not
assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Term Loan or the use of the proceeds
thereof.
(e) The agreements in this Section 9.3 shall survive repayment of the
Loans and all other amounts payable hereunder.
SECTION 9.4 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by such Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
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(b) Any Lender may assign to one or more assignees a portion of its
rights and obligations under this Agreement (an "Assignee"); provided that (i)
each of the Lenders party to this Agreement on the Closing Date may not assign
more than 49% of its Commitments, Term Loans and LC Exposure without the consent
of the Borrowers, (ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender, each of the Borrowers (such consent not to be
unreasonably withheld) and the Administrative Agent (the consent of the
Administrative Agent may be withheld in its sole discretion) must give their
prior written consent to such assignment, (iii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment, Term Loans and LC
Exposure, the amount of the Term Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Borrowers and the Administrative
Agent otherwise consent, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $4,000 (provided, however, if the Borrowers
request the replacement of any Lender pursuant to Section 2.17 hereof, the
Borrowers shall pay such processing and recordation fee, which shall be funded
with the proceeds of the Term Loans), and (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an administrative
questionnaire; provided further that any consent of the Borrowers otherwise
required under this paragraph shall not be required if an Event of Default under
clause (g) of Article 7 has occurred and is continuing. Upon acceptance and
recording pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.3). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section. Notwithstanding
anything to the contrary provided herein, in the event of any proposed
assignment by a Lender pursuant to this Section 9.4(b), such assignment shall be
offered to the Lenders pro rata based on their respective Loan Percentages.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in New York, New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Term Loans whether or not evidenced by a Note owing
to, each Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. Any
assignment of any Loan whether or not evidenced by a Note shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). Any assignment or transfer of all
or part of
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a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing such
Loan, accompanied by a duly executed Assignment and Acceptance, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the designated Assignee and the old Notes shall be returned by the
Administrative Agent to appropriate Borrower marked "cancelled".
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
administrative questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrowers but with the
consent of the Administrative Agent (the consent of the Administrative Agent may
be withheld in its sole discretion) sell participations to one or more banks or
other entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Term Loans owing to it); provided that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrowers, the Administrative Agent and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.2(b) that
affects such Participant. Subject to paragraph (f) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that, in the case of Section 2.14, such Participant shall have complied
with the requirements of said Section and provided, further, that no Participant
shall be entitled to receive any greater amount pursuant to any such Section
than the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred. Notwithstanding anything to the
contrary provided herein, in the event of any proposed participation by a Lender
pursuant to this Section 9.4(e), such participation shall be offered to the
Lenders pro rata based on their respective Loan Percentages.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any such pledge or assignment to a Federal Reserve Bank,
and this Section shall not apply to any such pledge or assignment to a Federal
Reserve Bank; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
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SECTION 9.5 Survival. All covenants, agreements, representations
and warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Term
Loans, regardless of any investigation made by any such other party or on its
behalf.
SECTION 9.6 Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts and by facsimile (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement and any separate agreements with respect to Fees
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof.
SECTION 9.7 Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.8 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender 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 Lender to or
for the credit or the account of any Borrower against any of and all the
obligations of the Borrowers now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 9.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
(b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, 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 such New
York State or, to the extent permitted by law, in such Federal court. 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 the Administrative Agent or any Lender may otherwise
have to bring
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any action or proceeding relating to this Agreement against any Borrower or any
of its properties in the courts of any jurisdiction.
(c) The Borrowers hereby irrevocably and unconditionally waive, to the
fullest extent they may legally and effectively do so, any objection which they
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. 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.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.1. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality. Each Lender agrees to keep information
obtained by it pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery confidential in accordance with
such Lender's customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's
employees, representatives, directors, attorneys, auditors, agents or affiliates
who are advised of the confidential nature of such information, (b) to the
extent such information presently is or hereafter becomes available to such
Lender on a non-confidential basis from any source or such information that is
in the public domain at the time of disclosure, (c) to the extent disclosure is
required by law (including applicable securities laws), regulation, subpoena or
judicial order or process (provided that notice of such requirement or order
shall be promptly furnished to the Borrowers unless such notice is legally
prohibited) or requested or required by bank, securities or investment company
regulations or auditors or any administrative body or commission to whose
jurisdiction such Lender may be subject, (d) to actual or prospective Assignees
or Participants who agree to be bound by the provisions of this Section 9.12,
(e) to the extent required in connection with any litigation between any Loan
Party and any Lender with respect to the Term
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Loans or this Agreement and the other Loan Documents or (f) with the Borrowers'
prior written consent. The agreements in this Section 9.12 shall survive
repayment of the Term Loans and all other amounts payable hereunder. Each of
the parties hereto (each, a "Document Party") agrees to keep confidential this
Agreement and the other Loan Documents and the transactions contemplated hereby
and thereby; provided that nothing herein shall prevent any Document Party from
disclosing such information (a) to any other Document Party or any Affiliate of
any Document Party, or any officer, director, employee, agent, or advisor of any
Document Party or Affiliate of any Document Party, (b) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any law, rule, or regulation, (d) upon the order of
any court or administrative agency, (e) upon the request or demand of any
regulatory agency or authority, (f) to any New Portfolio Company (or prospective
New Portfolio Company) or any officer, director, employee, agent, or advisor of
any Document Party or Affiliate of such New Portfolio Company in connection with
a proposed Investment by any Borrower in such New Portfolio Company, (g) in
connection with any litigation to which such Document Party or any of its
Affiliates may be a party, or (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Loan Document.
SECTION 9.13 Syndication. The Borrowers agree that the Administrative
Agent has the right to syndicate the Commitments and the Term Loans at any time
or from time to time to a group of financial institutions (the "Additional
Lenders") identified by the Administrative Agent in consultation with the
Borrowers, if the Administrative Agent and its affiliates determine to syndicate
the Commitments and the Term Loans. The Borrowers agree to actively assist the
Administrative Agent and its affiliates in completing a syndication satisfactory
to the Administrative Agent and the Borrowers, including (a) using commercially
reasonable efforts to ensure that the syndication efforts benefit materially
from the Borrower's lending and equity relationships, (b) direct contact between
the Borrowers and any Additional Lenders, (c) furnishing, or, as the
Administrative Agent may request, assisting in the preparation of, information,
projections and marketing materials to be used in connection with the
syndication and (d) the hosting, with the Administrative Agent and its
affiliates, of one or more meetings of any Additional Lenders. The
Administrative Agent and its affiliates would manage all aspects of the
syndication, in consultation with the Borrowers, including decisions as to the
selection of institutions to be approached and when they will be approached,
when their commitments will be accepted, which institutions will participate,
the allocations of the commitments among any Additional Lenders and the amount
and distribution of fees among any Additional Lenders. The Borrowers
acknowledge that the information the Borrowers may be asked to furnish to the
Administrative Agent and its affiliates and to any Additional Lenders may
include sensitive competitive information, and the Administrative Agent and its
affiliates agree to take appropriate and customary confidentiality precautions
with respect thereto. Notwithstanding anything to the contrary contained
herein, in the event of a syndication (i) no Lender shall be permitted to
syndicate more than 49% of the Commitments, Term Loans and LC Disbursements held
by it on the Closing Date without the prior written consent of the Borrowers and
(ii) any syndication shall be offered to the Lenders pro rata (to the extent
desired by any Lenders) based on their respective Loan Percentages.
SECTION 9.14 Certainty of Funds. At the request of any Borrower, the
Administrative Agent on behalf of the Lenders shall provide such documentation
as may be reasonably agreed between such Borrower and the Administrative Agent
to evidence the
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availability of the unused Commitment to make Investments by any Borrower or a
proposed Future Borrower.
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S-1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
Initial Borrowers:
HM/Europe Coinvestors, C.V.
By: TOH/Europe Cayman Ltd.,
its general partner
By: /s/ Michael D. Salim
Name: Michael D. Salim
Title: Principal
HMTF Bridge Partners, L.P.
By: HMTF Bridge Partners, LLC
its general partner
By: /s/ Michael D. Salim
Name: Michael D. Salim
Title: Principal
S-2
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THE CHASE MANHATTAN BANK
as Administrative Agent,
Issuing Bank, and a Lender
By: /s/ Deborah Davey
Name: Deborah Davey
Title: Vice President
S-3
<PAGE>
BANK OF AMERICA, N.A.
as Syndication Agent and
a Lender
By: /s/ Curtis D. Leuker
Name: Curtis D. Leuker
Title: Vice President
S-4
<PAGE>
BANKERS TRUST COMPANY
as a Lender
By: /s/ William Archer
Name: William Archer
Title: Managing Director
S-5
<PAGE>
CREDIT SUISSE FIRST BOSTON
as a Lender
By: /s/ Robert Hetu and
Chris T. Horgan
Name: Robert HHetu and
Chris T. Horgan
Title: Vice President/
Vice President
S-6
<PAGE>
MORGAN STANLEY SENIOR FUNDING, INC.
as a Lender
By: /s/ Cameron Fleming
Name: Cameron Fleming
Title: Vice President
S-7
<PAGE>
MERRILL LYNCH CAPITAL CORPORATION
as a Lender
By: /s/ Christopher Birosak
Name: Christopher Birosak
Title: Vice President
S-8
<PAGE>
MFBL FUNDING, INC.
as a Lender
By: /s/ Michael Hart
Name: Michael Hart
Title: Principal
S-9
<PAGE>
SCHEDULE 2.1
Lenders' Commitments
Lender. . . . . . . . . . . . . . . Commitment
The Chase Manhattan Bank. . . . . . $ 400,000,000
Bank of America, N.A. . . . . . . . $ 400,000,000
Bankers Trust Company . . . . . . . $ 200,000,000
Credit Suisse First Boston. . . . . $ 200,000,000
Morgan Stanley Senior Funding, Inc. $ 200,000,000
Merrill Lynch Capital Corporation . $ 180,000,000
MFBL Funding, Inc.. . . . . . . . . $ 200,000,000
Total Commitments. . . . . $1,780,000,000
