EXHIBIT 10.8
EXECUTION COPY
FOURTH AMENDMENT AND WAIVER dated
as of March 31, 2003 (this "Amendment"), to
the Credit Agreement dated as of September
28, 2000, as amended and restated as of
April 11, 2001, and amended by the First
Amendment dated as of October 31, 2001, the
Second Amendment dated as of December 14,
2001 and the Third Amendment dated as of
March 29, 2002 (the "Credit Agreement") and
the Security Agreement dated as of September
28, 2000 (the "Security Agreement") among
CCL Historical, Inc., formerly named
CoreComm Limited (the "Parent"), ATX
Communications, Inc., formerly named
CoreComm Holdco, Inc. ("CCI"), CoreComm
Communications, Inc. (the "Borrower"), the
lenders party thereto (the "Lenders") and
JPMorgan Chase Bank, as administrative agent
and collateral agent (in such capacity, the
"Agent").
WHEREAS, the Borrower, CCI and the Parent have requested that
the Lenders (such term and other capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement) approve amendments to certain provisions of the Credit Agreement and
waive certain provisions thereof; and
WHEREAS, the undersigned Lenders are willing, on the terms and
subject to the conditions set forth herein, to approve such amendments and
waivers to the Credit Agreement;
ACCORDINGLY, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:
1. Waivers. Upon effectiveness of this Amendment in accordance
with Section 6 hereof, each Lender hereby agrees to waive, until January 31,
2004, compliance by the Parent, CCI and the Borrower with the covenants set
forth in Section 6.13, 6.19, 6.20, 6.21 and 6.22 of the Credit Agreement;
provided, however, that such waiver shall automatically expire on January 31,
2004 with the same effect as if it had never been granted.
2. Amendment of Credit Agreement. Upon the effectiveness of
this Amendment in accordance with Section 6 hereof, the Credit Agreement is
hereby amended as follows:
(a) Section 1.01 is amended by adding the following
definitions in the appropriate alphabetical order:
"Operating Cash Flow" means, for any period,
Consolidated EBITDA for such period minus the aggregate amount
of Capital Expenditures during such period.
2
"Payment Deferral Period" means the period from and
including March 12, 2003, to and excluding February 2, 2004.
(b) Section 2.09 of the Credit Agreement is amended by:
(i) deleting the word "quarterly" in paragraph (a)
thereof and replacing each reference to "December 31, 2003" in
paragraph (a) with a reference to "February 2, 2004"; and
(ii) replacing the reference to "December 31, 2003",
in paragraph (c) thereof with a reference to "February 2,
2004".
(c) Section 2.10(c) is amended by deleting the proviso thereto
in its entirety.
(d) Section 2.12(d) is amended to read in its entirety as
follows:
"(d) Accrued interest on each Loan shall be payable
in arrears on each Interest Payment Date for such Loan and, in
the case of Revolving Loans, upon termination of the Revolving
Commitments; provided that (i) payment of accrued interest on
each Loan that would otherwise be payable on an Interest
Payment Date occurring during the Payment Deferral Period
("Deferred Interest") shall be deferred until February 2,
2004, on which date all such Deferred Interest shall be due
and payable in full, (ii) all amounts of Deferred Interest
shall bear interest on each day from the Interest Payment Date
therefor referred to in clause (i) above until the date on
which such Deferred Interest is paid at a rate per annum equal
to the Alternate Base Rate plus 5.50%, and all such interest
shall be due and payable on February 2, 2004, (iii) interest
accrued pursuant to paragraph (c) of this Section shall be
payable on demand, (iv) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Revolving Availability
Period) or of any Deferred Interest, accrued interest on the
principal amount or amount of Deferred Interest repaid or
prepaid shall be payable on the date of such repayment or
prepayment and (v) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest
Period therefor accrued interest on such Loan shall be payable
on the effective date of such conversion."
(e) Section 2.12 is further amended by adding a new paragraph
(f) thereto to read as follows:
"(f) Notwithstanding the foregoing or any provision
to the contrary in this Agreement, (i) all outstanding
Eurodollar Loans shall automatically be (and be deemed to have
been) converted to ABR Loans on and as of March 12, 2003, and
all Loans shall bear interest on each day during the Payment
Deferral Period at a rate per annum equal to the Alternate
Base Rate plus 5.50%; provided, however, that the provisions
of paragraph (c) shall not apply to any unpaid principal of or
interest on Loans during the Payment Deferral Period and (ii)
except for the Interest Payment Date occurring on March 12,
2003, the Interest Payment Dates for all Loans during the
Payment Deferral Period will be the last day of each
3
calendar month, commencing with March 31, 2003, and concluding
with January 31, 2004."
(f) Sections 5.14, 5.16 and 5.18 of the Credit Agreement are
deleted with the same effect as if such Sections had never been
included in the Credit Agreement.
(g) Section 6.09(a) is amended by deleting clause (iv) thereof
in its entirety and the proviso to clause (ii) of Section 6.09(b) is
amended to read as follows: "provided, that any payment of interest
accruing (x) under the ATX Note shall be made only with common stock of
CCI and (y) under CCI's 10.75% Convertible PIK Notes shall be made only
in additional 10.75% Convertible PIK Notes or with common stock of
CCI;"
(h) Section 6.14 is amended to read in its entirety as
follows:
"SECTION 6.14. Minimum On-Net Access Lines. The
Borrower, CCI and the Parent will not permit the number of
On-Net Access Lines, on any date set forth below, to be less
than the number indicated below for such date:
Minimum On-Net
Date Access Lines
---- ------------
March 31, 2003 197,000
June 30, 2003 200,000
September 30, 2003 208,000
December 31, 2003 218,000"
(i) Section 6.15 is amended to read in its entirety as
follows:
"SECTION 6.15. Minimum Consolidated Service Revenue.
The Borrower, CCI and the Parent will not permit Consolidated
Service Revenue for any fiscal quarter ending on March 31,
2003, June 30, 2003, September 30, 2003, or December 31, 2003
to be less than $65,000,000."
(j) Section 6.23 is amended to read in its entirety as
follows:
"SECTION 6.23. Maximum Capital Expenditures. The
Borrower, CCI and the Parent will not permit Capital
Expenditures of the Parent, CCI, the Borrower and the other
Restricted Subsidiaries in either period of two consecutive
fiscal quarters set forth below to exceed the amount set forth
below opposite such period:
Period of Two Maximum Capital
Fiscal Quarters Ending Expenditures
---------------------- ------------
June 30, 2003 $ 5,198,000
December 31, 2003 5,212,000
4
; provided, however, that the amount of Capital Expenditures
in the period of two consecutive fiscal quarters ending
December 31, 2003 permitted to be incurred pursuant to the
table above shall be increased by an amount equal to the
unused Capital Expenditures permitted pursuant to the table
above for the period of two consecutive fiscal quarters ending
June 30, 2003."
(k) Article VI of the Credit Agreement is amended by adding a
new Section 6.27 to read as follows:
"SECTION 6.27. Minimum Operating Cash Flow. The
Borrower, CCI and the Parent will not permit Operating Cash
Flow for any fiscal quarter set forth below to be less than
the amount set forth below opposite such period:
Fiscal Quarter Ending Minimum Operating Cash Flow
--------------------- ---------------------------
March 31, 2003 $ (832,000)
June 30, 2003 364,000
September 30, 2003 487,000
December 31, 2003 596,000
(l) Article VI of the Credit Agreement is amended by adding a
new Section 6.28 to read as follows:
"SECTION 6.28. Settlement of Claims. On and after
March 31, 2003, the Borrower, CCI and the Parent will not, and
will not cause or permit any Restricted Subsidiary to, make
any payment or transfer any assets in payment, satisfaction,
compromise or settlement of all or any portion of a Specified
Claim in an aggregate cumulative amount with respect to any
such Specified Claim in excess of $500,000 (any such assets
transferred being valued at their fair market value for
purposes of determining compliance with such limitation),
unless, in each case, the Required Lenders have given their
prior written consent to such payment or transfer. For
purposes of the foregoing, the term "Specified Claim" means
any claim asserted in any litigation or arbitration proceeding
against the Borrower, CCI, the Parent or any Subsidiary that
was pending on March 31, 2003, and any claim at any time
asserted in any litigation or arbitration proceeding against
any such Person relating to or in respect of the Convertible
Notes or the 10.75% Convertible PIK Notes of CCI."
(m) Article VII of the Credit Agreement is amended by (i)
deleting clause (p) thereof and (ii) replacing the reference to
"$2,000,000" in clause (k) thereof with a reference to "$500,000" and
adding the following proviso at the end of clause (k):
"provided, however, that the existing $1,080,000 judgment in
favor of Easton Telecom shall not result in an Event of
Default hereunder so long as no portion of any such judgment
is paid and no attachment of or levy upon any assets of the
Parent, CCI, the Borrower or any other Restricted Subsidiary
having assets in excess of $20,000 is legally effected to
enforce such judgment;"
5
3. Amendment of Security Agreement. Upon the effectiveness of
this Amendment in accordance with Section 6 hereof, the Security Agreement is
hereby amended as follows:
(a) The definition of "Collateral" in Section 1.01 is hereby
amended and restated in its entirety as follows:
"Collateral" shall mean all (a) Accounts Receivable,
(b) Documents, (c) Equipment, (d) General Intangibles, (e)
Inventory, (f) cash and cash accounts (g) Investment Property,
(h) any Proceeds, (i) all other assets, rights and interests
that uniquely reflect or embody goodwill associated with the
Trademarks and (j) all Commercial Tort Claims; provided that
"Collateral" shall not include Excluded Assets.
(b) Section 1.01 is amended by adding the following definition
in the appropriate alphabetical order:
"Commercial Tort Claims" shall mean any and all
right, title and interest of any Grantor in any Commercial
Tort Claim, including but not limited to claims that are the
subject of pending litigation against Ameritech and certain of
its affiliates (Ohio ▇▇▇▇ Telephone d/b/a Ameritech vs.
CoreComm Newco, Inc., C.A. No. 1:01CV02057 (N.D. Ohio, Eastern
Division)) and Verizon Communications, Inc. and certain of its
affiliates (Verizon Communications, Inc., et. al vs. ATX
Communications, Inc., et al. C.A. No. 02-1374 (SLR) (D. Del)).
The amendments to the Security Agreement effected hereby shall not, by
implication or otherwise, affect any security interest in Commercial Tort Claims
or General Intangibles existing under the Security Agreement prior to the
effectiveness of this Amendment.
4. No Other Amendments or Waivers; Confidentiality. (a) Except
as expressly amended and waived hereby, the provisions of the Credit Agreement
and each other Loan Document are and shall remain in full force and effect.
Nothing herein shall be deemed to entitle any Loan Party to a consent to, or a
waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any Loan Document in similar or different circumstances.
(b) The Borrower, CCI and the Parent will not, and will not
permit any Subsidiary to, name or identify the Lenders in any press release,
public communication or governmental filing made of or with respect to this
Amendment or relating to the subject matter hereof (including pursuant to the
filing of any signature pages hereto). The provisions of this paragraph (b) will
be deemed a covenant under Article VI of the Credit Agreement the breach of
which will result in an immediate Event of Default under Article VII of the
Credit Agreement.
5. Representations and Warranties. After giving effect to this
Amendment, each Loan Party hereby represents and warrants to the Agent and the
Lenders that:
(a) As of the date hereof, no Default or Event of Default has
occurred and is continuing;
6
(b) Except as set forth in Exhibit A to this Amendment, all
representations and warranties of each Loan Party set forth in the Loan
Documents are true and correct in all material respects as of the date
hereof, except to the extent that any representation or warranty
relates to an earlier date (in which case such representation or
warranty is true and correct in all material respects as of such
earlier date); and
(c) No fee or other compensation has been or will be paid to
the Agent or any Lender (other than as set forth in this Amendment)
that is in any way intended to compensate the Agent or such Lender for
its agreement to the terms of this Amendment, and no contractual
relationship currently exists or is contemplated between the Agent or
any Lender and the Borrower (other than as set forth in this Amendment)
that is in any way intended to compensate the Agent or such Lender for
its agreement to the terms of this Amendment.
6. Conditions Precedent to Effectiveness. This Amendment shall
become effective on the date on which each of the following conditions is
satisfied (the "Effective Date"):
(a) The Agent shall have received counterparts hereof duly
executed and delivered by the Parent, CCI, the Borrower, each of the
other Loan Parties, the Agent and each of the Lenders.
(b) The Agent shall have received all fees and other amounts
due and payable on or prior to the Effective Date, including
reimbursement or payment of all out-of-pocket expenses (including fees,
charges and disbursements of counsel) required to be reimbursed or paid
by an Loan Party hereunder or under any Loan Document, in each case to
the extent invoiced on or prior to the Effective Date.
In the case of provisions relating to changes in interest rates, deferrals of
interest payments and conversions of outstanding Loans to ABR Loans, this
Amendment will be retroactively effective to the dates specified herein for such
changes, deferrals and conversions.
7. Expenses. The Borrower agrees to reimburse the Agent for
its out-of-pocket expenses in connection with this Amendment, including the
fees, charges and disbursements of Cravath, Swaine & ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇, counsel for the Agent, and of FTI Consulting, Inc., advisor to the
Agent.
8. Governing Law; Counterparts. (a) This Amendment shall be
governed by and construed in accordance with the laws of the State of New York.
(b) This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts, and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument. This Amendment may be delivered by facsimile transmission of the
signature pages hereof.
EXHIBIT A TO FOURTH AMENDMENT
These Schedules are intended to update, solely for purposes of the
representations made in this Fourth Amendment, certain Schedules and certain
representations and warranties in the Credit Agreement.
SCHEDULE 3.04(b)
Financial Condition; No Material Adverse Change
Except for matters occurring prior to the Effective Date of the Fourth Amendment
which have been disclosed to the Lenders or their representatives in writing
prior to such date, there has been no material adverse change in the actual or
prospective businesses, assets, operations or condition of the Parent, Borrower
or other Restricted Subsidiaries, taken as a whole.
SCHEDULE 3.05(c)
Properties
Set forth below is the address of each real property that is leased by the
Parent (the Parent has no owned property), the Borrower or any other Restricted
Subsidiary.
--------------------------------------------------------------------------------------------------
PHYSICAL ADDRESS CITY STATE ZIP
--------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ Executive Campus; ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ #▇▇▇ ▇▇▇▇▇▇ ▇▇
--------------------------------------------------------------------------------------------------
▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇, 6, 7, 8 / ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ IN
--------------------------------------------------------------------------------------------------
Cormwell Center; ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ #▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇▇▇ / ▇▇-▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ View ▇▇▇▇▇▇▇▇ Traverse City MI
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇,▇▇,▇▇,▇▇ & ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
Plaza 9 Building; ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
--------------------------------------------------------------------------------------------------
Century Corp Center; ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇
--------------------------------------------------------------------------------------------------
65 a.k.a ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, 120 & ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
535 to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
Evergreen Center, ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
One Presidential Blvd (2nd and ▇▇▇ ▇▇▇▇▇▇) ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇ ▇▇ -- ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇ ▇▇ -- ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇ ▇▇ -- ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇ ▇▇ -- ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
SCHEDULE 3.06
Disclosed Matters
Litigation Involving Claims for Damages against ATX Communications,
Inc. and/or its Subsidiaries(1)
---------------------------------------------------------------------------------------------------------------------------
(APPROXIMATE) AMOUNT AT
CAPTION JURISDICTION ISSUE
---------------------------------------------------------------------------------------------------------------------------
Verizon Communications, Inc., et. U.S. District Court for the $22.6 million by Verizon;
al. v. ATX Communications, Inc., et District of Delaware unspecified amounts in antritrust,
al.; ATX Communications, Inc., et breach of contract and
al v. Verizon Communications, Inc., misepresentation counterclaims by
et al. ATX.
---------------------------------------------------------------------------------------------------------------------------
Ohio ▇▇▇▇ Telephone d/b/a U.S. District Court for the $8 - 14.4 million; unspecified
Ameritech vs. CoreComm Newco, Northern District of Ohio amounts in antitrust, breach of
Inc.; CoreComm Newco, Inc., et al contract and misrepresentation
v. Ameritech, et. al. counterclaims by Newco.
---------------------------------------------------------------------------------------------------------------------------
General Electric Capital Corporation Circuit Court, ▇▇▇▇ $8 million plus return of
v. Megsinet, Inc., CoreComm County, IL equipment
Holdco, Inc. and CoreComm
Limited
---------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ v. CoreComm Circuit Court, ▇▇▇▇
Limited, CoreComm Acquisition County, IL
Sub, Inc., MegsInet, Inc., ▇▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------------
General Electric Capital Corporation Circuit Court, ▇▇▇▇ Return of equipment
v. MegsINet, Inc., CoreComm County, IL
Holdco and CoreComm Limited Adverse Decision Rendered
9/24/02; equipment being
returned; no material adverse
effect on operations or financial
condition
---------------------------------------------------------------------------------------------------------------------------
Easton Telecom Services, LLC v. U.S. District Court for the $1,085,000 million plus interest
CoreComm Internet Group, Inc., Northern District of Ohio
Voyager, Information Networks,
Inc. and MegsINet, Inc.
---------------------------------------------------------------------------------------------------------------------------
KMC Telecom, Inc., KMC Telecom Supreme Court of New $2 million
II, Inc., and KMC Telecom of York, New York County
Virginia, Inc. v. CoreComm
---------------------------------------------------------------------------------------------------------------------------
-----------
1 Litigation involving claims of less than $20,000 have been omitted.
---------------------------------------------------------------------------------------------------------------------------
Limited, Cellular Communications
of Puerto Rico, Inc., CoreComm
New York, Inc., and Megsinet, Inc.
CoreComm Limited, et al. vs.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------------
CoreComm Mass. Inc. v. Verizon Superior Court, Suffolk $1.1 million
New England d/b/a Verizon Mass. County, Mass.
---------------------------------------------------------------------------------------------------------------------------
3Com Corporation v. ATX Court of Common Pleas, $900,000
Communications, Inc. ▇▇▇▇▇▇▇▇▇▇ County, PA
Preliminary Objections pending
---------------------------------------------------------------------------------------------------------------------------
Focal Communications Corp. Of Ill., $802,687
PA, DE & NY v. ATX
Communications, Inc., ATX
Telecommunications Services, Inc.
ATX Licensing, Inc. and
CoreComm Communications, Inc.
---------------------------------------------------------------------------------------------------------------------------
ATX Telecommunications Services, Commonwealth Ct. of PA $631,429
Inc. v. Commonwealth of
Pennsylvania, No. 340 F.R. 2002.
(Appeal from PA Board of Finance
and Revenue pending)
---------------------------------------------------------------------------------------------------------------------------
TJS v. ATX Telecom Services ADR Options $500,000
---------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. CoreComm Limited and Circuit Court of ▇▇▇▇ $472,442
MegsINet County, Ill
---------------------------------------------------------------------------------------------------------------------------
Enavis Networks, Inc. v. Circuit Court, Pinellas $419,843.53
CoreComm Limited County, FL
---------------------------------------------------------------------------------------------------------------------------
CIT Communications Finance Corp. Superior Court of New $360,279
v. Voyager Information Networks, Jersey ▇▇▇▇▇▇ County
Inc.
---------------------------------------------------------------------------------------------------------------------------
Information Complaint of APCC Federal Communications $300,000 to 350,000
Services, Inc. v. ATX Licensing, Commission
Inc.
---------------------------------------------------------------------------------------------------------------------------
ATX Telecom. Services v. BAB Court of Common Pleas, Action by CoreComm for $95,000
Bucks County, PA in unpaid bills; counterclaims by
BAB v. ATX Telecom. Services BAB for $275,000 in alleged lost
profits
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
Sunrise Leasing Corporation as Chicago, Illinois $258,271.43
Assignee of Sun Microsystems
Finance v. Megsinet, Inc.
---------------------------------------------------------------------------------------------------------------------------
Corporate Interiors of Delaware v. Court of Common Pleas, $209,900.91
ATX Telecommunications Services ▇▇▇▇▇▇▇▇▇▇ County, PA
---------------------------------------------------------------------------------------------------------------------------
Paradyne Corp. v. CoreComm Court of Common Pleas, $171,845.21
Cuyahoga County, OH
(CoreComm Newco has been
identified as proper defendant)
---------------------------------------------------------------------------------------------------------------------------
Shared Telecom v. Voyager and Superior Court, ▇▇▇▇▇▇ $169,009.28
Net Direct County, IN
---------------------------------------------------------------------------------------------------------------------------
GATX Technologies, Inc. v. Thirteenth Judicial Circuit, $150,000
CoreComm Voyager Inc. FLA
---------------------------------------------------------------------------------------------------------------------------
BVFU Funding, LLC v. MegsINet, Massachusetts Superior $105,330
Inc, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ Court
▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ & Partners, Inc. v. ATX Court of Common Pleas, $104, 431.21
Telecommunications Services ▇▇▇▇▇▇▇▇▇▇ County PA
---------------------------------------------------------------------------------------------------------------------------
Fresh Start Industries, Inc. v. ATX U.S. District Court, In excess of $100,000;
Telecommunications Services, Inc. Eastern District of PA counterclaims by ATX in excess
of $60,000
(predecessor in interest to
CoreComm-ATX, Inc.)
---------------------------------------------------------------------------------------------------------------------------
▇.▇. ▇▇▇▇ & Associates, Inc. v. Court of Common Pleas, In excess of $100,000
CoreComm Services, Inc. Cuyahoga County, OH
RHWelf Demand: $20,000
CoreComm Offer: $5000
---------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ Electric v. CoreComm Court of Common Pleas, $80,000
Columbus OH
---------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Construction Company v. Superior Court, Suffolk $72,731.66
CoreComm Communications, Inc. County, MA
---------------------------------------------------------------------------------------------------------------------------
Eastrich No. 167 ▇. ▇▇▇▇▇▇ Toledo ▇. ▇▇▇▇▇▇▇▇ County, Ohio $70,000
CoreComm Newco, Inc.
---------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Electric Supply v. ATX Court of Common Please, In excess of $50,000
Telecommunications Services, Inc. Bucks County PA
---------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇ v. ATX Court of Common Pleas, $50,000 salary demand +
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
Telecommunications Services, Inc. ▇▇▇▇▇▇▇▇▇▇ County 6524 shares of stock claimed due
---------------------------------------------------------------------------------------------------------------------------
Citicorp Vendor Finance, Inc. f/k/a Supreme Court, New In excess of $40,000
▇▇▇▇▇▇▇▇ Capital, Inc. v CoreComm York, New York
Limited (CitiCorp settlement demand of
$23,000 + return of the
equipment).
---------------------------------------------------------------------------------------------------------------------------
Tasman v. ATX Philadelphia County Court $50,000
of Common Pleas
---------------------------------------------------------------------------------------------------------------------------
Full Service Computing v. Court of Common Pleas, $25,000.00
CoreComm-ATX, Inc. Allegheny County, PA
---------------------------------------------------------------------------------------------------------------------------
Crescent Public Communications v. U.S. Bankruptcy Court, Approx.
ATX Telecom. Services Southern District of New
York $20,000.00
---------------------------------------------------------------------------------------------------------------------------
SCHEDULE 3.12
Subsidiaries
Set forth below are the names, and the ownership interest, of the Parent, CCI
and the Borrower in each subsidiary of the Parent and CCI, along with the names
of each Subsidiary that is a Subsidiary Loan Party.
------------------------------------------------------------------------------------------------------------------------
AUTHORIZED ISSUED
SUBSIDIARY COMMON COMMON PAR VALUE CURRENT HOLDER
------------------------------------------------------------------------------------------------------------------------
ATX Licensing, Inc. 100 10 $ 0.01 Corecomm-ATX, Inc.
------------------------------------------------------------------------------------------------------------------------
ATX Telecommunications of Virginia,
LLC. N/A N/A N/A ATX Licensing, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm California, Inc. 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Communications, Inc. 1,500 1,500 $.01 Par ATX Communications, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Illinois, Inc 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Indiana, Inc. 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Internet Group, Inc. 1,500 1,500 No Par Corecomm Communications, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Maryland, Inc. 1,000 1,000 $.01 Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Massachusetts, Inc. 1,000 1,000 $.01 Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Michigan, Inc. 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Missouri, Inc. 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm New Jersey, Inc. 1,000 1,000 $.01 Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm New York, Inc. 100 100 $.01 Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Newco, Inc. 1,500 1,500 No Par Corecomm Communications, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Ohio, Inc. 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Oregon, Inc. 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Pennsylvania, Inc. 1,000 1,000 $.01 Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Rhode Island, Inc. 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Services, LLC (formerly,
CoreComm Services, Inc.) N/A N/A N/A Corecomm Communications, Inc.
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
CoreComm Vermont, Inc. 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm West Virginia, Inc. 1,000 1,000 $.01 Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm Wisconsin, Inc. 1,500 1,500 No Par Corecomm Newco, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm-ATX, Inc 1,500 1,500 $.01 Par Corecomm Communications, Inc.
------------------------------------------------------------------------------------------------------------------------
CoreComm-Voyager, Inc 1,500 1,500 $.01 Par Corecomm Communications, Inc.
------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ Communications, Corp. 1,500 1,500 No Par FCC Holdco I, Inc.
------------------------------------------------------------------------------------------------------------------------
Digicom, Inc. 750 200 No Par Corecomm Communications, Inc.
------------------------------------------------------------------------------------------------------------------------
FCC Holdco I, Inc. 1,500 1,500 No Par Corecomm Communications, Inc.
------------------------------------------------------------------------------------------------------------------------
Fiberstream of New York, Inc. 100 100 No Par CCL Historical, Inc.
------------------------------------------------------------------------------------------------------------------------
Fiberstream, Inc.. 100 100 No Par CCL Historical, Inc.
------------------------------------------------------------------------------------------------------------------------
Horizon Telecommunications, Inc. 1,000 1,000 No Par Voyager Information Networks,
Inc.
------------------------------------------------------------------------------------------------------------------------
MegsINet Internet, Inc.
(formerly, MegsINet, Inc.) 1,500 1,500 $.01 Par Corecomm Internet Group, Inc.
------------------------------------------------------------------------------------------------------------------------
Voyager Data Services, Inc 850 800 $.01 Par Corecomm-Voyager, Inc.
------------------------------------------------------------------------------------------------------------------------
Voyager Information Networks, Inc. 3,000,000 787,819 $.0001 Par Corecomm-Voyager, Inc.
------------------------------------------------------------------------------------------------------------------------
SCHEDULE 3.13
Description of Insurance
Set forth below is a description of all material insurance maintained by or on
behalf of the Parent, the Borrower and the Restricted Subsidiaries.
SCHEDULE OF INSURANCE Date: March 31, 2003
ASSURED: ATX COMMUNICATIONS, INC. AND SUBSIDIARIES
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------------------------------------
INSURANCE POLICY
POLICY NO. COMPANY PERIOD LIMITS DESCRIPTION OF COVERAGE
--------------------------------------------------------------------------------------------------------------------------------
486407237 Atlantic Mutual 06/01/02- Commercial Package Policy
06/01/03 Locations: As on file with insurance company
Property
All Risk; Replacement Cost
Exposure $ 25,000,000 Blanket Building, Personal Property, EDP and media
$170,856,000 Any One Location
$ 1,000 Deductible (Windstorm Ded. = 2%)
$ 1,000,000 Flood ($25,000 deductible)
$ 1,000,000 Earthquake (5% deductible)
$25,000,000 $ 10,000,000 Blanket Business Interruption (36 Hour Ded.)
$ 1,000,000 Boiler & Machinery
Inland Marine
$600,000 $ 600,000 Transit Coverage($500 deductible)
Per Shipment
$ 100,000 Business Income - Stock in Transit
$275.357 $ 45,000 Equipment Floater ($500 deductible)
Per Vehicle
Accounts Receivable; Valuable Papers and Record; Fine
Arts; Outside Sign; Salesman's Floater; and R&D
$ 25,000 Coverages
Crime
$ 500,000 Employee Dishonesty ($1,000 deductible)
$ 500,000 Depositors Forgery ($1,000 deductible)
Money & Securities (In & Out)
$ 30,000 Includes Phone Cards ($1,000 deductible)
Exposure General Liability
$42,000,000 $ 2,000,000 General Aggregate
Payroll $ 1,000,000 Each Occurrence
$ 1,000,000 Personal/Advertising Injury
$84,000,000 $ 2,000,000 Products/Completed Operations
Sales $ 100,000 Fire Damage Legal Liability
$ 10,000 Medical Payments
Ohio Stop Gap
Employee Benefits Liability
Claims Made Form
$ 1,000,000 Each Occurrence
$ 2,000,000 Annual Aggregate
$ 1,000 Deductible
104 vehicles Automobile
$ 1,000,000 Liability
$ 5,000 Medical Payment
$ 1,000,000 Uninsured Motoris
$ 500 Comprehensive Deductible
$ 500 Collision Deductible
$25 Each Day Rental Reimbursement
$ 750
Maximum
$ 25,000 Hired Car Physical Damage
Umbrella
$ 25,000,000 Each Occurrence
$ 25,000,000 Annual Aggregate
$ 10,000 Retention
Global Endorsements
Excess Liability Policy:
3SR130243-02 ▇▇▇▇▇▇ 06/01/02 - $ 25,000,000 Each Occurrence
06/01/03 excess of $25,000,000
$ 25,000,000 Aggregate
$ 2,500 $25,000,000
401550938 Atlantic Mutual 09/01/02 - Worker's Compensation & Employer's Liability
09/01/03 Statutory Workers Compensation
Limits
Employer's Liability
$ 500,000 BI by Accident/Each Accident
$ 500,000 BI by Disease/Each Employee
$ 500,000 BI by Disease/Policy Limit
16886-002 Guardian Life 07/01/99 - Disability Benefits (New York)
Continuous Statutory Short Term NY State Disability
GO449100 Gulf Insurance 05/9/02 - CyberLiability Plus Policy
05/9/03 $ 1,000,000 Each Claim
$ 1,000,000 Annual Aggregate
$ 25,000 Deductible
Directors & Officers Liability Program
5696864 National Union 09/01/02 - Directors & Officers Liability
09/01/03 $ 10,000,000 Aggregate Limit of Liability
$ 750,000 Retention - Securities Claims
$ 750,000 Retention - Employment Practices Claims
$ 750,000 Retention - All Other Claims
GA4635915 Gulf Ins. 09/01/02 - Excess Directors & Officers Liability
09/01/03 (Excess of $10,000,000)
$ 5,000,000 Aggregate Limit of Liability