Exhibit 4.26
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REVOLVING CREDIT AGREEMENT
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Among
ICG COMMUNICATIONS, INC. AND EACH OF ITS SUBSIDIARIES PARTY
HERETO,
Debtors and Debtors-in-Possession under Chapter 11 of the Bankruptcy Code
as Borrowers
and
THE LENDERS PARTY HERETO,
and
THE CHASE MANHATTAN BANK,
as Agent
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Dated as of December 4, 2000
CONFORMED COPY
REVOLVING CREDIT AGREEMENT
TABLE OF CONTENTS
Page No.
SECTION 1. DEFINITIONS......................................................... 2
SECTION 1.1 Defined Terms..................................................... 2
SECTION 1.2 Terms Generally................................................... 15
SECTION 2. AMOUNT AND TERMS OF CREDIT.......................................... 16
SECTION 2.1 Commitment of the Lenders......................................... 16
SECTION 2.2 Availability of Commitment; Borrowing Base........................ 16
SECTION 2.3 Letters of Credit................................................. 17
SECTION 2.4 Issuance.......................................................... 19
SECTION 2.5 Nature of Letter of Credit Obligations Absolute................... 19
SECTION 2.6 Making of Loans................................................... 20
SECTION 2.7 Repayment of Loans; Evidence of Debt.............................. 20
SECTION 2.8 Interest on Loans................................................. 21
SECTION 2.9 Default Interest.................................................. 21
SECTION 2.10 Optional Termination or Reduction of Commitment.................. 22
SECTION 2.11 Alternate Rate of Interest....................................... 22
SECTION 2.12 Refinancing of Loans............................................. 22
SECTION 2.13 Mandatory Prepayment; Commitment Termination; Cash Collateral.... 23
SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Lenders........... 24
SECTION 2.15 Reserve Requirements; Change in Circumstances.................... 25
SECTION 2.16 Change in Legality............................................... 27
SECTION 2.17 Pro Rata Treatment, etc.......................................... 27
SECTION 2.18 Taxes............................................................ 28
SECTION 2.19 Certain Fees..................................................... 30
SECTION 2.20 Commitment Fee; Early Termination Fee............................ 30
SECTION 2.21 Letter of Credit Fees............................................ 31
SECTION 2.22 Nature of Fees................................................... 31
SECTION 2.23 Priority and Liens............................................... 31
SECTION 2.24 Right of Set-Off................................................. 32
SECTION 2.25 Security Interest in Letter of Credit Account.................... 33
SECTION 2.26 Payment of Obligations........................................... 33
SECTION 2.27 No Discharge; Survival of Claims................................. 33
SECTION 3. REPRESENTATIONS AND WARRANTIES...................................... 33
SECTION 3.1 Organization and Authority........................................ 33
SECTION 3.2 Due Execution..................................................... 33
SECTION 3.3 Statements Made................................................... 34
SECTION 3.4 Financial Statements.............................................. 34
SECTION 3.5 Ownership......................................................... 35
SECTION 3.6 Liens......................................................... 35
SECTION 3.7 Compliance with Law........................................... 35
SECTION 3.8 Insurance..................................................... 35
SECTION 3.9 Final Order................................................... 35
SECTION 3.10 Use of Proceeds.............................................. 36
SECTION 3.11 Litigation................................................... 36
SECTION 3.12 Intellectual Property........................................ 36
SECTION 3.13 Material Contracts........................................... 36
SECTION 4. CONDITIONS OF LENDING........................................... 36
SECTION 4.1 Conditions Precedent to Closing............................... 36
SECTION 4.2 Conditions Precedent to Each Loan and Each Letter of Credit... 38
SECTION 5. AFFIRMATIVE COVENANTS........................................... 40
SECTION 5.1 Financial Statements, Reports, etc............................ 40
SECTION 5.2 Existence..................................................... 43
SECTION 5.3 Insurance..................................................... 43
SECTION 5.4 Obligations and Taxes......................................... 43
SECTION 5.5 Notice of Event of Default, etc............................... 44
SECTION 5.6 Access to Books and Records................................... 44
SECTION 5.7 Maintenance of Sweep Account.................................. 45
SECTION 5.8 Borrowing Base Certificate.................................... 45
SECTION 6. NEGATIVE COVENANTS.............................................. 45
SECTION 6.1 Liens......................................................... 45
SECTION 6.2 Merger, etc................................................... 45
SECTION 6.3 Indebtedness.................................................. 45
SECTION 6.4 Capital Expenditures.......................................... 46
SECTION 6.5 EBITDA........................................................ 46
SECTION 6.6 Guarantees and Other Liabilities.............................. 47
SECTION 6.7 Chapter 11 Claims............................................. 47
SECTION 6.8 Dividends; Capital Stock...................................... 47
SECTION 6.9 Transactions with Affiliates.................................. 48
SECTION 6.10 Investments, Loans and Advances.............................. 48
SECTION 6.11 Disposition of Assets........................................ 48
SECTION 6.12 Nature of Business........................................... 48
SECTION 6.13 Transactions among Borrowers................................. 48
SECTION 6.14 Right of Subrogation among Borrowers......................... 48
SECTION 7. EVENTS OF DEFAULT............................................... 49
SECTION 7.1 Events of Default............................................. 49
SECTION 8. THE AGENT....................................................... 52
ii
SECTION 8.1 Administration by Agent......................................... 52
SECTION 8.2 Advances and Payments........................................... 52
SECTION 8.3 Sharing of Setoffs.............................................. 52
SECTION 8.4 Agreement of Required Lenders................................... 53
SECTION 8.5 Liability of Agent.............................................. 53
SECTION 8.6 Reimbursement and Indemnification............................... 54
SECTION 8.7 Rights of Agent................................................. 54
SECTION 8.8 Independent Lenders............................................. 54
SECTION 8.9 Notice of Transfer.............................................. 54
SECTION 8.10 Successor Agent................................................ 54
SECTION 9. MISCELLANEOUS..................................................... 55
SECTION 9.1 Notices......................................................... 55
SECTION 9.2 Survival of Agreement, Representations and Warranties, etc...... 55
SECTION 9.3 Successors and Assigns.......................................... 55
SECTION 9.4 Confidentiality................................................. 58
SECTION 9.5 Expenses........................................................ 58
SECTION 9.6 Indemnity....................................................... 58
SECTION 9.7 Choice of Law................................................... 59
SECTION 9.8 No Waiver....................................................... 59
SECTION 9.9 Extension of Maturity........................................... 59
SECTION 9.10 Amendments, etc................................................ 59
SECTION 9.11 Severability................................................... 60
SECTION 9.12 Headings....................................................... 60
SECTION 9.13 Execution in Counterparts...................................... 60
SECTION 9.14 Prior Agreements............................................... 60
SECTION 9.15 Further Assurances............................................. 61
SECTION 9.16 Waiver of Jury Trial........................................... 61
SECTION 9.17 Foreign Subsidiaries........................................... 61
Annex A - Commitment Amounts
Exhibit A - Form of Final Order
Exhibit B - Form of Security and Pledge Agreement
Exhibit C - Form of Opinion of Counsel
Exhibit D - Form of Assignment and Acceptance
Schedule 3.5 - Subsidiaries
iii
Schedule 3.6 - Liens
Schedule 3.12 - Intellectual Property
Schedule 3.13 - Material Contracts
Schedule 5.2 - Certain Subsidiaries
Schedule 6.3 - Intercompany Indebtedness
Schedule 6.10 - Existing Investments
Schedule 6.13 - Borrower Transaction Restrictions
iv
REVOLVING CREDIT AGREEMENT
Dated as of December 4, 2000
REVOLVING CREDIT AGREEMENT, dated as of December 4, 2000, among ICG
COMMUNICATIONS, INC., a Delaware corporation, ICG ▇▇▇▇▇, INC., a Delaware
corporation, ICG FUNDING, LLC, a Delaware limited liability company, ICG
SERVICES, INC., a Delaware corporation, ICG MOUNTAIN VIEW, INC., a Colorado
corporation, ICG NETAHEAD, INC., a Delaware corporation, ICG EQUIPMENT, INC., a
Colorado corporation, ICG CANADIAN ACQUISITION, INC., a Delaware corporation,
ICG HOLDINGS (CANADA) CO., a Nova Scotia unlimited liability company, ICG
HOLDINGS, INC., a Colorado corporation, ICG TELECOM GROUP, INC., a Colorado
corporation, NIKONET, LLC, a Georgia limited liability company, ICG OHIO LINX,
INC., an Ohio corporation, ICG ENHANCED SERVICES, INC., a Colorado corporation,
COMMUNICATIONS BUYING GROUP, INC., an Ohio corporation, ICG TELECOM GROUP OF
VIRGINIA, INC., a Virginia corporation, ICG DATACHOICE NETWORK SERVICES, L.L.C.,
a Nevada limited liability company, PTI HARBOR BAY, INC., a Washington
corporation, BAY AREA TELEPORT, INC., a Delaware corporation, ICG ACCESS
SERVICES - SOUTHEAST, INC., a Delaware corporation, TRANS AMERICAN CABLE, INC.,
a Kentucky corporation, ICG TELECOM OF SAN DIEGO, L.P., a California limited
partnership, WESTERN PLAINS FINANCE, L.L.C., a Nevada limited liability company,
ICG CHOICECOM MANAGEMENT, LLC, a Delaware limited liability company, ICG
CHOICECOM, L.P., a Delaware limited partnership, and DOWNNORTH, INC., a Georgia
corporation (each individually a "Borrower" and collectively the "Borrowers") ,
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each of which is a debtor and debtor-in-possession in a case pending under
Chapter 11 of the Bankruptcy Code (the cases of the Borrowers, each a "Case" and
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collectively, the "Cases"), THE CHASE MANHATTAN BANK, a New York banking
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corporation ("Chase"), each of the other commercial banks, finance companies,
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insurance companies or other financial institutions or funds from time to time
party hereto (together with Chase, the "Lenders") and THE CHASE MANHATTAN BANK,
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as agent (in such capacity, the "Agent") for the Lenders.
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INTRODUCTORY STATEMENT
WHEREAS, on November 14, 2000, the Borrowers filed voluntary petitions
with the Bankruptcy Court initiating the Cases and have continued in the
possession of their assets and in the management of their businesses pursuant to
Sections 1107 and 1108 of the Bankruptcy Code; and
WHEREAS, the Borrowers have applied to the Lenders for a revolving
credit and letter of credit facility in an aggregate principal amount not to
exceed $350,000,000 and initially not to be less than $200,000,000 (subject to
the terms and conditions of this Agreement); and
WHEREAS, the proceeds of the Loans will be used for working capital
and other general corporate purposes of the Borrowers; and
WHEREAS, to provide for the repayment of the Loans, the reimbursement
of any draft drawn under a Letter of Credit and the payment of the other
obligations of the Borrowers
hereunder and under the other Loan Documents (including, without limitation, the
Obligations of the Borrowers under Section 6.3(v)), the Borrowers will provide
to the Agent and the Lenders the following (each as more fully described
herein):
(a) an allowed Superpriority Claim;
(b) a perfected first priority Lien, pursuant to Section 364(c)(2) of
the Bankruptcy Code, upon all unencumbered property of the Borrowers and on all
cash and cash equivalents in the Letter of Credit Account, provided that
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following the Termination Date, amounts in the Letter of Credit Account shall
not be subject to the Carve-Out hereinafter referred to;
(c) a perfected Lien, pursuant to Section 364(c)(3) of the Bankruptcy
Code, upon all property of the Borrowers that is subject to valid and perfected
Liens in existence on the Filing Date or that is subject to valid Liens in
existence on the Filing Date that are perfected subsequent to the Filing Date as
permitted by Section 546(b) of the Bankruptcy Code or that is subject to
Permitted Liens, junior to such valid and perfected Liens, provided that upon
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repayment of all Indebtedness under the Existing Agreement, the Obligations of
the Borrowers hereunder and under the Loan Documents and in respect of
Indebtedness permitted by Section 6.3(v) shall automatically be secured,
pursuant to Section 364(c)(2) of the Bankruptcy Code, by a perfected first
priority Lien (subject to Liens permitted pursuant to clauses (i) or (ii) of
Section 6.1) on all property of the Borrowers that then secures all Indebtedness
under the Existing Agreement; and
WHEREAS, all of the claims granted hereunder in the Cases to the Agent
and the Lenders shall be subject to the Carve-Out to the extent provided in
Section 2.23.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
SECTION 1.1 Defined Terms.
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As used in this Agreement, the following terms shall have the meanings
specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
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"ABR Loan" shall mean any Loan bearing interest at a rate determined
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by reference to the Alternate Base Rate in accordance with the provisions of
Section 2.
"Account" shall mean any right to payment for goods sold, regardless
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of how such right is evidenced and whether or not it has been earned by
performance.
"Adjusted LIBOR Rate" shall mean, with respect to any Eurodollar
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Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the quotient of (a) the LIBOR
Rate in effect for such Interest Period divided
2
by (b) a percentage (expressed as a decimal) equal to 100% minus Statutory
Reserves. For purposes hereof, the term "LIBOR Rate" shall mean the rate
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(rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits
approximately equal in principal amount to such Eurodollar Borrowing and for a
maturity comparable to such Interest Period are offered to the principal London
office of the Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period.
"Affiliate" shall mean, as to any Person, any other Person which,
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directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, a Person (a
"Controlled Person") shall be deemed to be "controlled by" another Person (a
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"Controlling Person") if the Controlling Person possesses, directly or
------------------
indirectly, power to direct or cause the direction of the management and
policies of the Controlled Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the Introduction.
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"Agreement" shall mean this Revolving Credit Agreement, as the same
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may from time to time be further amended, modified or supplemented.
"Alternate Base Rate" shall mean, for any day, a rate per annum
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(rounded upwards, if necessary, to the next 1/16 of 1%) 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 (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate of interest
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per annum publicly announced from time to time by the Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced. "Base CD
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Rate" shall mean the sum of (a) the quotient of (i) the Three-Month Secondary CD
Rate divided by (ii) a percentage expressed as a decimal equal to 100% minus
Statutory Reserves and (b) the Assessment Rate. "Three-Month Secondary CD Rate"
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shall mean, 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 shall not be
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 shall not be 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
10:00 a.m., New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Agent from three New
York City negotiable certificate of deposit dealers of recognized standing
selected by it. "Federal Funds Effective Rate" shall mean, for any day, the
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weighted average 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 which is a Business Day,
the average of the quotations for the day of such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.
If for any reason the Agent shall have determined (which determination shall be
3
conclusive absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate or both for any reason, including the
inability or failure of the Agent to obtain sufficient quotations in accordance
with the terms hereof, the Alternate Base Rate shall be determined without
regard to clause (b) or (c), or both, of the first sentence of this definition,
as appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate, the Three-
Month Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Amounts" shall have the meaning given such term in Section 2.18(a).
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"Assessment Rate" shall mean for any date the annual rate (rounded
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upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Agent as the then current net annual assessment rate that will be employed in
determining amounts payable by the Agent to the Federal Deposit Insurance
Corporation (or any successor) for insurance by such Corporation (or any
successor) of time deposits made in dollars at the Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and acceptance
-------------------------
entered into by a Lender and an Eligible Assignee, and accepted by the Agent,
substantially in the form of Exhibit C.
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"Available Commitment" shall have the meaning given such term in
--------------------
Section 2.2.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
---------------
heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
----------------
the District of Delaware or any other court having jurisdiction over the Cases
from time to time.
"Board" shall mean the Board of Governors of the Federal Reserve
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System of the United States.
"Borrower" and "Borrowers" shall have the respective meanings set
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forth in the Introduction.
"Borrowing" shall mean the incurrence of Loans of a single Type made
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from all the Lenders on a single date and having, in the case of Eurodollar
Loans, a single Interest Period (with any ABR Loan made pursuant to Section 2.16
being considered a part of the related Borrowing of Eurodollar Loans).
"Borrowing Base" shall mean, on any date from and after the expiration
--------------
of the Initial Period, the amount (which may include certain receivables,
equipment and fixtures meeting certain eligibility standards established by the
Agent) determined by the Agent. Borrowing Base standards may be fixed and
revised from time to time by the Agent in the Agent's exclusive judgment, with
such consent of the Lenders as may be required pursuant to Section 9.10.
4
"Borrowing Base Certificate" shall mean a certificate in a form
--------------------------
satisfactory to the Agent (with such changes therein as may be required by the
Agent from time to time to reflect the components of and reserves against the
Borrowing Base as provided for hereunder from time to time), executed and
certified by a Financial Officer of ICG Communications, Inc., which shall
include appropriate exhibits and schedules as referred to therein and as
provided for in Section 5.8.
"Budget" shall have the meaning given such term in Section 4.1(i).
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"Business Day" shall mean any day other than a Saturday, Sunday or
------------
other day on which banks in the State of New York are required or permitted to
close (and, for a Letter of Credit, other than a day on which the Fronting Bank
issuing such Letter of Credit is closed); provided, however, 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 on the
London interbank market.
"Capital Expenditures" shall mean, for any period, the aggregate of
--------------------
all expenditures (whether paid in cash and not theretofore accrued subsequent to
the date of this Agreement or accrued as liabilities during such period and
including that portion of Capitalized Leases which is capitalized on the
consolidated balance sheet of the Borrowers and their Subsidiaries) by the
Borrowers and their Subsidiaries during such period that, in conformity with
GAAP, are required to be included in or reflected by the property, plant,
equipment or intangibles or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrowers and their Subsidiaries (including
equipment which is purchased simultaneously with the trade-in of existing
equipment owned by any of the Borrowers or their Subsidiaries to the extent of
the gross amount of such purchase price less the book value of the equipment
being traded in at such time), but excluding expenditures made in connection
with the replacement or restoration of assets, to the extent reimbursed or
financed from insurance proceeds paid on account of the loss of or the damage to
the assets being replaced or restored, or from awards of compensation arising
from the taking by condemnation or eminent domain of such assets being replaced.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
-----------------
property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with GAAP.
"Carve-Out" shall have the meaning set forth in Section 2.23.
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"Cases" shall mean the Chapter 11 Cases of each of the Borrowers
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pending in the Bankruptcy Court.
"Change of Control" shall mean: (i) the occupation of a majority of
-----------------
the seats (other than vacant seats) on the board of directors of Parent, after
the Filing Date, by Persons who were neither (A) nominated by the board of
directors of Parent nor (B) appointed by the directors so nominated; or (ii)
following (x) the termination of the employment of the Chief Executive Officer
of the Parent for any reason or (y) the assignment to the Chief Executive
Officer of duties inconsistent with his position of Chief Executive Officer to
provide overall management of the Parent which results in a diminution of such
position, the Parent's retention
5
of a new Chief Executive Officer (or an individual discharging the customary
duties and responsibilities of such officer) who is not satisfactory to the
Agent.
"Chase" shall have the meaning set forth in the Introduction.
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"Closing Date" shall mean the date on which this Agreement has been
------------
executed and the conditions precedent set forth in Section 4.1 have been
satisfied or waived, which date shall occur promptly after the date of this
Agreement, but in no event later than ten (10) days following the entry of the
Final Order. The Agent's execution and delivery of this Agreement shall
constitute notice to the Borrowers of the satisfaction of the conditions
precedent set forth in Section 4.1 and the occurrence of the Closing Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Commitment" shall mean, with respect to each Lender, the commitment
----------
of each Lender hereunder in the amount set forth opposite its name on Annex A
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hereto or as may subsequently be set forth in the Register from time to time, as
the same may be reduced from time to time pursuant to this Agreement.
"Commitment Fee" shall have the meaning set forth in Section 2.20.
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"Commitment Letter" shall mean that certain Commitment Letter dated
-----------------
November 13, 2000 among the Agent, Chase Securities Inc. and the Borrowers.
"Commitment Percentage" shall mean at any time, with respect to each
---------------------
Lender, the percentage obtained by dividing its Commitment at such time by the
Total Commitment at such time.
"Consummation Date" shall mean the date of the substantial
-----------------
consummation (as defined in Section 1101 of the Bankruptcy Code and which for
purposes of this Agreement shall be no later than the effective date) of a
Reorganization Plan of the Borrowers that is confirmed pursuant to an order of
the Bankruptcy Court in the Cases.
"Dollars" and "$" shall mean lawful money of the United States of
------- -
America.
"Early Termination Fee" shall have the meaning given such term in
---------------------
Section 2.20.
"EBITDA" shall mean, for any period, all as determined in accordance
------
with GAAP, the consolidated net income (or net loss) of the Borrowers and their
Subsidiaries for such period, plus (a) the sum of (i) depreciation expense, (ii)
----
amortization expense, (iii) other non-cash charges, (iv) net total Federal,
state and local income tax expense, (v) gross interest expense for such period
less gross interest income for such period, (vi) extraordinary losses, (vii) any
non-recurring charge or restructuring charge, (viii) the cumulative effect of
any change in accounting principles and (ix) "Chapter 11 expenses" (or
"administrative costs reflecting Chapter 11 expenses") as shown on the
Borrowers' and their Subsidiaries' consolidated statement of income
6
for such period less (b) extraordinary gains plus or minus (c) the amount of
---- ---- -----
cash received or expended in such period in respect of any amount which, under
clause (vii) above, was taken into account in determining EBITDA for such or any
prior period.
"Eligible Assignee" shall mean (i) a commercial bank having total
-----------------
assets in excess of $1,000,000,000; (ii) a finance company, insurance company or
other financial institution or fund, in each case acceptable to the Agent, which
in the ordinary course of business extends credit of the type contemplated
herein and has total assets in excess of $200,000,000 and whose becoming an
assignee would not constitute a prohibited transaction under Section 4975 of
ERISA; and (iii) any other financial institution satisfactory to the Borrowers
and the Agent.
"Environmental Lien" shall mean a Lien in favor of any Governmental
------------------
Authority for (i) any liability under federal or state environmental laws or
regulations, or (ii) damages arising from or costs incurred by such Governmental
Authority in response to a release or threatened release of a hazardous or toxic
waste, substance or constituent, or other substance into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
---------------
incorporated) which is a member of a group of which any of the Borrowers is a
member and which is under common control within the meaning of Section 414(b) or
(c) of the Code and the regulations promulgated and rulings issued thereunder.
"Eurocurrency Liabilities" shall have the meaning assigned thereto in
------------------------
Regulation D issued by the Board, as in effect from time to time.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
--------------------
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
---------------
determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Section 2.
"Event of Default" shall have the meaning given such term in Section
----------------
7.
"Existing Agreement" shall mean that certain Credit Agreement dated as
------------------
of August 12, 1999 among ICG Equipment, Inc. and ICG NetAhead, Inc., as
borrowers, ICG Services,
Inc., as parent, the several lenders from time to time party thereto, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Senior Funding, Inc, as sole book-runner and lead arranger, Royal Bank
of Canada, as administrative agent and collateral agent, and Bank of America,
N.A. and Barclays Bank PLC, as co-documentation agents, and shall include the
"Loan Documents" (as defined therein) (each as heretofore amended, amended and
restated or otherwise modified).
7
"FCC" means the Federal Communications Commission or any successor
---
commission or agency of the United States of America having jurisdiction over
any Borrower.
"Fees" shall collectively mean the Commitment Fees, Letter of Credit
----
Fees and other fees referred to in Sections 2.19, 2.20 and 2.21.
"Filing Date" shall mean November 14, 2000.
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"Final Order" shall have the meaning given such term in Section
-----------
4.2(d).
"Financial Officer" shall mean the Chief Financial Officer, Vice
-----------------
President Finance, Vice President/Operations Controller, Corporate Controller,
Treasurer or Assistant Treasurer of a Borrower.
"Foreign Subsidiary" shall have the meaning given such term in Section
------------------
9.17.
"Fronting Bank" shall mean Chase or such other commercial bank (which
-------------
other commercial bank shall be reasonably satisfactory to the Borrowers) as may
agree with Chase to act in such capacity.
"GAAP" shall mean generally accepted accounting principles applied in
----
accordance with Section 1.2.
"Governmental Authority" shall mean any Federal, state, municipal or
----------------------
other governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case whether of the United States or
foreign.
"Indebtedness" shall mean, at any time and with respect to any Person,
------------
(i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of
such Person for the deferred purchase price of property or services (other than
property, including inventory, and services purchased, and expense accruals and
deferred compensation items arising, in the ordinary course of business), (iii)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments (other than performance, surety and appeal bonds arising in
the ordinary course of business), (iv) all indebtedness of such Person created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (v) all obligations of such Person
under leases which have been or should be, in accordance with GAAP, recorded as
capital leases, to the extent required to be so recorded, (vi) all
reimbursement, payment or similar obligations of such Person, contingent or
otherwise, under acceptance, letter of credit or similar facilities and all
obligations of such Person in respect of (x) currency swap agreements, currency
future or option contracts and other similar agreements designed to hedge
against fluctuations in foreign interest rates and (y) interest rate swap, cap
or collar agreements and interest rate future or option contracts; (vii) all
Indebtedness referred to in clauses (i) through (vi) above guaranteed directly
or indirectly by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (A) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (B) to
purchase, sell or lease (as lessee or lessor)
8
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss in respect of such Indebtedness, (C) to supply funds
to or in any other manner invest in the debtor (including any agreement to pay
for property or services irrespective of whether such property is received or
such services are rendered) or (D) otherwise to assure a creditor against loss
in respect of such Indebtedness, and (viii) all Indebtedness referred to in
clauses (i) through (vii) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness.
"Indemnified Party" shall have the meaning given such term in Section
-----------------
9.6.
"Initial Period" shall have the meaning given such term in Section
--------------
2.2.
"Insufficiency" shall mean, with respect to any Plan, the amount, if
-------------
any, of its unfunded benefit liabilities within the meaning of Section
4001(a)(18) of ERISA.
"Interest Payment Date" shall mean (i) as to any Eurodollar Loan, the
---------------------
last day of each consecutive 30 day period running from the commencement of the
applicable Interest Period, and (ii) as to all ABR Loans, the last calendar day
of each month and the date on which any ABR Loans are refinanced with Eurodollar
Loans pursuant to Section 2.12.
"Interest Period" shall mean, as to any Borrowing of Eurodollar Loans,
---------------
the period commencing on the date of such Borrowing (including as a result of a
refinancing of ABR Loans) or on the last day of the preceding Interest Period
applicable to such Borrowing and ending on the numerically corresponding day (or
if there is no corresponding day, the last day) in the calendar month that is
one or three months thereafter, as the Borrowers may elect in the related notice
delivered pursuant to Sections 2.6(b) or 2.12; provided, however, that (i) if
any Interest Period would end on a day which shall not be 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,
and (ii) no Interest Period shall end later than the Termination Date.
"Investments" shall have the meaning given such term in Section 6.10.
-----------
"Lenders" shall have the meaning set forth in the Introduction.
-------
"Letter of Credit" shall mean any irrevocable letter of credit issued
----------------
pursuant to Section 2.3, which letter of credit shall be (i) a standby or import
documentary letter of credit, (ii) issued for purposes that are consistent with
the ordinary course of business of the Borrowers or for such other purposes as
are reasonably acceptable to the Agent, (iii) denominated in Dollars and (iv)
otherwise in such form as may be reasonably approved from time to time by the
Agent and the applicable Fronting Bank.
"Letter of Credit Account" shall mean the account established by the
------------------------
Borrowers under the sole and exclusive control of the Agent maintained at the
office of the Agent at 270
▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ designated as the "ICG Communications,
Inc. Letter of Credit Account" that shall be used solely for the purposes set
forth in Sections 2.3(b) and 2.13.
"Letter of Credit Fees" shall mean the fees payable in respect of
---------------------
Letters of Credit pursuant to Section 2.21.
"Letter of Credit Outstandings" shall mean, at any time, the sum of
-----------------------------
(i) the aggregate undrawn stated amount of all Letters of Credit then
outstanding plus (ii) all amounts theretofore drawn under Letters of Credit and
not then reimbursed.
"Lien" shall mean any mortgage, pledge, security interest,
----
encumbrance, lien or charge of any kind whatsoever (including any conditional
sale or other title retention agreement or any lease in the nature thereof).
"Loan" and "Loans" shall have the respective meanings given such terms
---- -----
in Section 2.1.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
--------------
Security and Pledge Agreement and any other instrument or agreement executed and
delivered in connection herewith.
"Material Contract" means (i) each agreement described as a master
-----------------
lease agreement, and each agreement in the nature of a master lease, to which
ICG Equipment, Inc. is a party as lessor, (ii) any other material lease
agreement to which ICG Equipment, Inc. is a party as lessor and (iii) each other
contract to which a Borrower or any of their respective Subsidiaries is a party
involving aggregate consideration payable to or by such Person of $5,000,000 or
more in any year or otherwise material to the business, condition (financial or
otherwise), operations, performance, properties or prospects of the Borrowers
taken as a whole.
"Maturity Date" shall initially mean November 14, 2001, subject to
-------------
adjustment to a date not later than May 14, 2002 pursuant to Section 2.2(d).
"Minority Lenders" shall have the meaning given such term in Section
----------------
9.10(b).
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" shall mean a Single Employer Plan, which (i)
----------------------
is maintained for employees of a Borrower or an ERISA Affiliate and at least one
Person other than such Borrower and its ERISA Affiliates or (ii) was so
maintained and in respect of which a Borrower or an ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such Plan has been or
were to be terminated.
"Net Proceeds" shall mean, in respect of any sale of assets, the
------------
proceeds of such sale after the payment of or reservation for expenses that are
directly related to (or the need for
10
which arises as a result of) the transaction of sale, including, but not limited
to, related severance costs, taxes payable, brokerage commissions, professional
expenses, other similar costs that are directly related to the sale and the
amount secured by valid and perfected Liens, if any, that are senior to the
Liens on such assets held by the Agent on behalf of the Lenders.
"Obligations" shall mean (a) the due and punctual payment of principal
-----------
of and interest on the Loans and the reimbursement of all amounts drawn under
Letters of Credit, and (b) the due and punctual payment of the Fees and all
other present and future, fixed or contingent, monetary obligations of the
Borrowers to the Lenders and the Agent under the Loan Documents.
"Organizational Documents" shall mean (i) with respect to any
------------------------
corporation, its certificate or articles of incorporation, as amended, and its
by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership or formation, as amended, and its partnership
agreement, as amended, (iii) with respect to any general partnership, its
partnership agreement, as amended, (iv) with respect to any limited liability
company, its certificate of formation or articles of organization, as amended,
and its operating agreement, as amended, and (v) with respect to any unlimited
liability company, its certificate of formation, as amended, and its memorandum
and articles of association, as amended. In the event any term or condition of
this Agreement or any other Loan Document requires any Organizational Document
to be certified by a secretary of state of similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"Other Taxes" shall have the meaning given such term in Section 2.18.
-----------
"Parent" shall mean ICG Communications, Inc., a Delaware corporation.
------
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor agency or entity performing substantially the same functions.
"Pension Plan" shall mean a defined benefit pension or retirement plan
------------
which meets and is subject to the requirements of Section 401(a) of the Code.
"Permitted Investments" shall mean:
---------------------
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within twelve months from the date of acquisition thereof;
(b) without limiting the provisions of paragraph (d) below,
investments in commercial paper maturing within six months from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least "A-2" or the equivalent thereof from Standard & Poor's Corporation or of
at least "P-2" or the equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc.;
11
(c) investments in certificates of deposit, banker's acceptances and
time deposits (including Eurodollar time deposits) maturing within six months
from the date of acquisition thereof issued or guaranteed by or placed with (i)
any domestic office of the Agent or the bank with whom the Borrowers maintain
their cash management system, provided, that if such bank is not a Lender
hereunder, such bank shall have entered into an agreement with the Agent
pursuant to which such bank shall have waived all rights of setoff and confirmed
that such bank does not have, nor shall it claim, a security interest therein or
(ii) any domestic office of any other commercial bank of recognized standing
organized under the laws of the United States of America or any State thereof
that has a combined capital and surplus and undivided profits of not less than
$250,000,000 and is the principal banking Subsidiary of a bank holding company
having a long-term unsecured debt rating of at least "A-2" or the equivalent
thereof from Standard & Poor's Corporation or at least "P-2" or the equivalent
thereof from ▇▇▇▇▇'▇ Investors Service, Inc.;
(d) investments in commercial paper maturing within six months from
the date of acquisition thereof and issued by (i) the holding company of the
Agent or (ii) the holding company of any other commercial bank of recognized
standing organized under the laws of the United States of America or any State
thereof that has (A) a combined capital and surplus in excess of $250,000,000
and (B) commercial paper rated at least "A-2" or the equivalent thereof from
Standard & Poor's Corporation or of at least "P-2" or the equivalent thereof
from ▇▇▇▇▇'▇ Investors Service, Inc.;
(e) investments in repurchase obligations with a term of not more
than seven (7) days for underlying securities of the types described in clause
(a) above entered into with any office of a bank or trust company meeting the
qualifications specified in clause (c) above;
(f) investments in money market funds substantially all the assets of
which are comprised of securities of the types described in clauses (a) through
(e) above; and
(g) to the extent owned on the Filing Date, investments in the
capital stock of any direct or indirect Subsidiary of the Borrowers (including,
but without permitting any additional Investment in, the limited partnership
interests of ▇▇▇ ▇▇▇, L.P., a Delaware limited partnership).
"Permitted Liens" shall mean (i) Liens imposed by law (other than
---------------
Environmental Liens and any Lien imposed under ERISA) for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (ii) Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens (other than Environmental
Liens and any Lien imposed under ERISA) in existence on the Filing Date or
thereafter imposed by law and created in the ordinary course of business; (iii)
Liens (other than any Lien imposed under ERISA) incurred or deposits made
(including, without limitation, surety bonds and appeal bonds) in connection
with workers' compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations incurred in the ordinary course of business or
arising as a result of progress payments under government
12
contracts; (iv) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded) and interest of ground
lessors, which do not interfere with the ordinary conduct of the business of any
Borrower, and which do not detract from the value of the property to which they
attach or materially impair the use thereof to any Borrower; (v) purchase money
Liens (including Capitalized Leases) upon or in any property acquired or held in
the ordinary course of business to secure the purchase price of such property or
to secure Indebtedness permitted by Section 6.3(iii) solely for the purpose of
financing the acquisition of such property; (vi) prior to the initial extension
of credit hereunder (other than Letters of Credit issued pursuant to the proviso
set forth in Section 4.2(k)), Liens in favor of the collateral agent, the agent
or the lenders thereunder securing obligations under the Existing Agreement;
(vii) extensions, renewals or replacements, including replacement Liens granted
by the Bankruptcy Court, of any Lien referred to in paragraphs (i) through (v)
above, provided that the principal amount of the obligation secured thereby is
not increased and that any such extension, renewal or replacement is limited to
the property originally encumbered thereby; and (viii) prior to the initial
extension of credit hereunder (other than Letters of Credit issued pursuant to
the proviso set forth in Section 4.2(k)), extensions, renewals or replacements,
including replacement Liens granted by the Bankruptcy Court, of any Lien
referred to in paragraph (vi) above, provided that the principal amount of the
obligation secured thereby is not increased and that any such extension, renewal
or replacement is limited to the property originally encumbered thereby.
"Person" shall mean any natural person, corporation, division of a
------
corporation, partnership, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" shall mean a Single Employer Plan or a Multiemployer Plan.
----
"Pre-Petition Payment" shall mean a payment (by way of adequate
--------------------
protection or otherwise) of principal or interest or otherwise on account of any
pre-petition Indebtedness or trade payables or other pre-petition claims against
the Borrowers, including, without limitation, reclamation claims, but excluding
refunds or credits to customers in the ordinary course of business.
"PUC" means any state governmental authority having utility or
---
telecommunications authority over any Borrower.
"Register" shall have the meaning set forth in Section 9.3(d).
--------
"Reorganization Plan" shall mean a plan of reorganization in any of
-------------------
the Cases.
"Required Lenders" shall mean, at any time, Lenders holding Loans
----------------
representing in excess of 50% of the aggregate principal amount of such Loans
outstanding or, if no such Loans are outstanding, Lenders having Commitments
representing in excess of 50% of the Total Commitment.
13
"Security and Pledge Agreement" shall have the meaning given such term
-----------------------------
in Section 4.1(c).
"Single Employer Plan" shall mean a single employer plan, as defined
--------------------
in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of a
Borrower or an ERISA Affiliate or (ii) was so maintained and in respect of which
a Borrower could have liability under Section 4069 of ERISA in the event such
Plan has been or were to be terminated.
"Statutory Reserves" shall mean on any date the percentage (expressed
------------------
as a decimal) established by the Board and any other banking authority which is
(i) for purposes of the definition of Base CD Rate, the then stated maximum rate
of all reserves (including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City, for new three month negotiable nonpersonal time
deposits in dollars of $100,000 or more or (ii) for purposes of the definition
of Adjusted LIBOR Rate, the then stated maximum rate for all reserves (including
but not limited to any emergency, supplemental or other marginal reserve
requirements) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency Liabilities (or any successor category of liabilities
under Regulation D issued by the Board, as in effect from time to time). Such
reserve percentages shall include, without limitation, those imposed pursuant to
said Regulation. The Statutory Reserves shall be adjusted automatically on and
as of the effective date of any change in such percentage.
"Subsidiary" shall mean, with respect to any Person (herein referred
----------
to as the "parent"), any corporation, association or other business entity
(whether now existing or hereafter organized) of which at least a majority of
the securities or other ownership interests having ordinary voting power for the
election of directors is, at the time as of which any determination is being
made, owned or controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent; provided,
--------
that unless otherwise qualified, for the purposes of the Loan Documents, all
references to "Subsidiaries" shall refer to Subsidiaries of the Borrowers
excluding ▇▇▇ ▇▇▇, L.P., a Delaware limited partnership.
"Super-majority Lenders" shall have the meaning given such term in
----------------------
Section 9.10(b).
"Superpriority Claim" shall mean a claim against any Borrower in any
-------------------
of the Cases which is a superpriority administrative expense claim having
priority over any or all administrative expenses of the kind specified in
Sections 503(b), 105, 326, 328, 330, 331, 506(c), 507(a), 507(b), 546(c), 726
(to the extent permitted by law), and 1112 of the Bankruptcy Code.
"Taxes" shall have the meaning given such term in Section 2.18.
-----
"Termination Date" shall mean the earliest to occur of (i) the
----------------
Maturity Date, (ii) the Consummation Date and (iii) the acceleration of the
Loans and the termination of the Total Commitment in accordance with the terms
hereof.
"Termination Event" shall mean (i) a "reportable event", as such term
-----------------
is described in Section 4043 of ERISA and the regulations issued thereunder
(other than a
14
"reportable event" not subject to the provision for 30-day notice to the PBGC
under Section 4043 of ERISA or such regulations) or an event described in
Section 4068 of ERISA excluding events described in Section 4043(c)(9) of ERISA
or 29 CFR (S)(S) 2615.21 or 2615.23, or (ii) the withdrawal of any Borrower or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a "substantial employer", as such term is defined in Section 4001(c) of
ERISA, or the incurrence of liability by any Borrower or any ERISA Affiliate
under Section 4064 of ERISA upon the termination of a Multiple Employer Plan, or
(iii) providing notice of intent to terminate a Plan pursuant to Section 4041(c)
of ERISA or the treatment of a Plan amendment as a termination under Section
4041 of ERISA, or (iv) the institution of proceedings to terminate a Plan by the
PBGC under Section 4042 of ERISA, or (v) any other event or condition (other
than the commencement of the Cases and the failure to have made any contribution
accrued as of the Filing Date but not paid) which would reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the imposition of any
liability under Title IV of ERISA (other than for the payment of premiums to the
PBGC).
"Total Commitment" shall mean, at any time, the sum of the Commitments
----------------
at such time.
"Transferee" shall have the meaning given such term in Section 2.18.
----------
"Type" when used in respect of any Loan or Borrowing shall refer to
----
the Rate of interest by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall mean
----
the Adjusted LIBOR Rate and the Alternate Base Rate.
"Unused Total Commitment" shall mean, at any time, (i) the Total
-----------------------
Commitment less (ii) the sum of (x) the aggregate outstanding principal amount
of all Loans and (y) the aggregate Letter of Credit Outstandings.
"Withdrawal Liability" shall have the meaning given such term under
--------------------
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2 Terms Generally. The definitions in Section 1.1 shall apply
---------------
equally to both 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. All references herein to Sections, Exhibits and
Schedules shall be deemed references to Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require. 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; provided, however, that for purposes of determining compliance with any
-------- -------
covenant set forth in Section 6, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement applied on a basis
consistent with the application used in the Borrowers' audited financial
statements referred to in Section 3.4.
15
SECTION 2. AMOUNT AND TERMS OF CREDIT.
SECTION 2.1 Commitment of the Lenders.
-------------------------
(a) Each Lender severally and not jointly with the other Lenders agrees,
upon the terms and subject to the conditions herein set forth (including,
without limitation, the provisions of Section 2.26), to make revolving credit
loans (each a "Loan" and collectively, the "Loans") in U.S. Dollars to the
---- -----
Borrowers at any time and from time to time during the period commencing on the
date hereof and ending on the Termination Date (or the earlier date of
termination of the Total Commitment) in an aggregate principal amount not to
exceed, when added to such Lender's Commitment Percentage of the then aggregate
Letter of Credit Outstandings (in excess of the amount of cash then held in the
Letter of Credit Account pursuant to Section 2.3(b)), the Commitment of such
Lender, which Loans may be repaid and reborrowed in accordance with the
provisions of this Agreement. At no time shall the sum of the then outstanding
aggregate principal amount of the Loans, plus the then aggregate Letter of
Credit Outstandings, exceed (i) prior to the expiration of the Initial Period,
the Available Commitment, and (ii) from and after the expiration of the Initial
Period, the lesser of (x) the Total Commitment and (y) the Borrowing Base.
(b) Each Borrowing shall be made by the Lenders pro rata in
accordance with their respective Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve the other
Lenders of their obligations to lend.
SECTION 2.2 Availability of Commitment; Borrowing Base. (a) Subject
------------------------------------------
to the terms and conditions hereof, from the Closing Date until (i) the
completion of third-party appraisals of the Borrowers' assets, in form and
substance satisfactory to the Agent in its sole discretion, and (ii) the Agent's
determination of the Borrowing Base (the "Initial Period"), $200,000,000 of the
--------------
Total Commitment (the "Available Commitment") shall be available to the
--------------------
Borrowers, first, for repayment in full (and not in part) of all of the then
Indebtedness under the Existing Agreement, and, thereafter, for working capital
and other general corporate purposes of the Borrowers; provided that, to the
--------
extent provided under Section 4.2(k), Letters of Credit will be available prior
to repayment of the Indebtedness under the Existing Agreement. Following the
Initial Period, the Borrowing Base shall become operative with respect to the
availability of Loans or Letters of Credit under the Total Commitment and the
amount of the Total Commitment and the Maturity Date may be adjusted pursuant to
Section 2.2(d) below.
(b) Notwithstanding any other provision of this Agreement to the
contrary, the aggregate principal amount of all outstanding Loans plus the then
aggregate Letter of Credit Outstandings shall not at any time exceed (i) prior
to the expiration of the Initial Period, the Available Commitment, and (ii) from
and after the expiration of the Initial Period, the lesser of (x) the Total
Commitment and (y) the Borrowing Base, and no Loan shall be made or Letter of
Credit issued in violation of the foregoing.
(c) Prior to or simultaneously with the making of the first Loans or
the issuance of the first Letter of Credit, the Agent shall have received such
documentation and acknowledgments as the Agent in its sole discretion shall
require, evidencing the satisfaction and
16
release of (i) all Indebtedness under the Existing Agreement; and (ii) all Liens
securing that Indebtedness.
(d) Notwithstanding any other provision of this Agreement to the
contrary, the amount of the Total Commitment may be adjusted by the Agent, up to
a maximum aggregate amount of $350,000,000, at any time and from time to time
during the syndication process (as determined by the Agent) upon the Agent's
calculation of the amount in excess of the Available Commitment that has been
syndicated by Chase Securities, Inc. to one or more financial institutions.
Prior to any such adjustment by the Agent, the Agent shall provide notice to the
Borrowers of the amount of the proposed adjustment and any related proposed
adjustment to the Maturity Date in connection therewith and the Borrowers shall
advise the Agent, in writing within two (2) Business Days of receipt of such
notice, as to the amount of the Total Commitment desired by the Borrowers and
the Total Commitment shall be adjusted to reflect such increased amount desired
by the Borrowers. The Borrowers, the Lenders and the Agent shall thereafter
effect such adjustments to Annex A hereto as may be necessary to reflect the
-------
adjustments to the Total Commitment. Concurrent with any such adjustment to the
Total Commitment, the Agent and the Borrowers may agree, in writing, to adjust
the Maturity Date to a date not later than May 14, 2002 as long as the amount of
the Total Commitment (subject to the limitations of the Borrowing Base) is
sufficient to fund the Borrowers cash needs as set forth in the Budget at all
times prior to the proposed adjusted Maturity Date.
SECTION 2.3 Letters of Credit.
-----------------
(a) Upon the terms and subject to the conditions herein set forth,
the Borrowers may request a Fronting Bank, at any time and from time to time
after the date hereof and prior to the Termination Date, to issue, and, subject
to the terms and conditions contained herein, such Fronting Bank shall issue,
for the account of the Borrowers one or more Letters of Credit in support of
obligations of the Borrowers that are acceptable to the Agent, provided that no
--------
Letter of Credit shall be issued if after giving effect to such issuance (i) the
aggregate Letter of Credit Outstandings would exceed $10,000,000 and (ii) the
aggregate Letter of Credit Outstandings, when added to the aggregate outstanding
principal amount of the Loans, would exceed (i) prior to the expiration of the
Initial Period, the Available Commitment, and (ii) from and after the expiration
of the Initial Period, the lesser of (x) the Total Commitment and (y) the
Borrowing Base, and, provided further that no Letter of Credit shall be issued
if the Fronting Bank shall have received notice from the Agent or the Required
Lenders that the conditions to such issuance have not been met.
(b) No Letter of Credit shall expire later than sixty (60) days after
the Maturity Date, provided that if any Letter of Credit shall be outstanding on
the Termination Date, the Borrowers shall, at or prior to the Termination Date,
except as the Agent may otherwise agree in writing, (i) cause all Letters of
Credit which expire after the Termination Date to be returned to the Fronting
Bank undrawn and marked "canceled" or (ii) if the Borrowers are unable to do so
in whole or in part, either (x) provide a "back-to-back" letter of credit to one
or more Fronting Banks in a form satisfactory to such Fronting Bank and the
Agent (in their sole discretion), issued by a bank satisfactory to such Fronting
Bank and the Agent (in their sole discretion), in an amount equal to the greater
of (I) an amount, as determined by the Fronting Bank and the Agent,
17
equal to the face amount of all outstanding Letters of Credit plus the sum of
all projected contractual obligations to the Agent, the Fronting Bank and the
Lenders of the Borrowers thereunder through the expiration date(s) of such
Letters of Credit, and (II) 105% of the then undrawn stated amount of all
outstanding Letters of Credit issued by such Fronting Banks and/or (y) deposit
cash in the Letter of Credit Account in an amount which, together with any
amounts then held in the Letter of Credit Account, is equal to the greater of
(I) an amount, as determined by the Fronting Bank and the Agent, equal to the
face amount of all outstanding Letters of Credit plus the sum of all projected
contractual obligations to the Agent, the Fronting Bank and the Lenders of the
Borrowers thereunder and (II) 105% of the then undrawn stated amount of all
Letter of Credit Outstandings as collateral security for the Borrowers'
reimbursement obligations in connection therewith, such cash to be remitted to
the Borrowers upon the expiration, cancellation or other termination or
satisfaction of such reimbursement obligations.
(c) The Borrowers shall pay to each Fronting Bank, in addition to
such other fees and charges as are specifically provided for in Section 2.21
hereof, such fees and charges in connection with the issuance and processing of
the Letters of Credit issued by such Fronting Bank as are customarily imposed by
such Fronting Bank from time to time in connection with letter of credit
transactions.
(d) Drafts drawn under each Letter of Credit shall be reimbursed by
the Borrowers in Dollars not later than the first Business Day following the
date of draw and shall bear interest from the date of draw until the first
Business Day following the date of draw at a rate per annum equal to the
Alternate Base Rate plus 3% and thereafter until reimbursed in full at a rate
per annum equal to the Alternate Base Rate plus 5% (computed on the basis of the
actual number of days elapsed over a year of 360 days). The Borrowers shall
effect such reimbursement (x) if such draw occurs prior to the Termination Date
(or the earlier date of termination of the Total Commitment), in cash or through
a Borrowing without the satisfaction of the conditions precedent set forth in
Section 4.2 or (y) if such draw occurs on or after the Termination Date (or the
earlier date of termination of the Total Commitment), in cash. Each Lender
agrees to make the Loans described in clause (x) of the preceding sentence
notwithstanding a failure to satisfy the applicable lending conditions thereto
or the provisions of Section 2.2.
(e) Immediately upon the issuance of any Letter of Credit by any
Fronting Bank, such Fronting Bank shall be deemed to have sold to each Lender
other than such Fronting Bank and each such other Lender shall be deemed
unconditionally and irrevocably to have purchased from such Fronting Bank,
without recourse or warranty, an undivided interest and participation, to the
extent of such Lender's Commitment Percentage, in such Letter of Credit, each
drawing thereunder and the obligations of the Borrowers under this Agreement
with respect thereto. Upon any change in the Commitments pursuant to Section
9.3, it is hereby agreed that with respect to all Letter of Credit Outstandings,
there shall be an automatic adjustment to the participations hereby created to
reflect the new Commitment Percentages of the assigning and assignee Lenders.
Any action taken or omitted by a Fronting Bank under or in connection with a
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for such Fronting Bank any resulting
liability to any other Lender.
(f) In the event that a Fronting Bank makes any payment under any
Letter of Credit and the Borrowers shall not have reimbursed such amount in full
to such Fronting Bank
18
pursuant to this Section, the Fronting Bank shall promptly notify the Agent,
which shall promptly notify each Lender of such failure, and each Lender shall
promptly and unconditionally pay to the Agent for the account of the Fronting
Bank the amount of such Lender's Commitment Percentage of such unreimbursed
payment in Dollars and in same day funds. If the Fronting Bank so notifies the
Agent, and the Agent so notifies the Lenders prior to 11:00 a.m. (New York City
time) on any Business Day, such Lenders shall make available to the Fronting
Bank such Lender's Commitment Percentage of the amount of such payment on such
Business Day in same day funds. If and to the extent such Lender shall not have
so made its Commitment Percentage of the amount of such payment available to the
Fronting Bank, such Lender agrees to pay to such Fronting Bank, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Agent for the account of such Fronting
Bank at the Federal Funds Effective Rate. The failure of any Lender to make
available to the Fronting Bank its Commitment Percentage of any payment under
any Letter of Credit shall not relieve any other Lender of its obligation
hereunder to make available to the Fronting Bank its Commitment Percentage of
any payment under any Letter of Credit on the date required, as specified above,
but no Lender shall be responsible for the failure of any other Lender to make
available to such Fronting Bank such other Lender's Commitment Percentage of any
such payment. Whenever a Fronting Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Lenders pursuant to
this paragraph, such Fronting Bank shall pay to each Lender which has paid its
Commitment Percentage thereof, in Dollars and in same day funds, an amount equal
to such Lender's Commitment Percentage thereof.
SECTION 2.4 Issuance. Whenever the Borrowers desire a Fronting Bank to
--------
issue a Letter of Credit, they shall give to such Fronting Bank and the Agent at
least two (2) Business Days' prior written (including telegraphic, telex,
facsimile or cable communication) notice (or such shorter period as may be
agreed upon by the Agent, the Borrowers and the Fronting Bank) specifying the
date on which the proposed Letter of Credit is to be issued (which shall be a
Business Day), the stated amount of the Letter of Credit so requested, the
expiration date of such Letter of Credit and the name and address of the
beneficiary thereof.
SECTION 2.5 Nature of Letter of Credit Obligations Absolute. The
-----------------------------------------------
obligations of the Borrowers to reimburse the Lenders for drawings made under
any Letter of Credit shall be joint and several, unconditional and irrevocable
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including, without limitation: (i) any lack of validity or
enforceability of any Letter of Credit; (ii) the existence of any claim, setoff,
defense or other right which any Borrower may have at any time against a
beneficiary of any Letter of Credit or against any of the Lenders, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction; (iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (iv) payment by a Fronting Bank of any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit; (v) any other
circumstance or happening whatsoever, which is similar to any of the foregoing;
or (vi) the fact that any Event of Default shall have occurred and be
continuing.
19
SECTION 2.6 Making of Loans.
---------------
(a) Except as contemplated by Section 2.11, Loans shall be either ABR
Loans or Eurodollar Loans as the Borrowers may request subject to and in
accordance with this Section, provided that all Loans made pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, be Loans of the
same Type. Each Lender may fulfill its Commitment with respect to any
Eurodollar Loan or ABR Loan by causing any lending office of such Lender to make
such Loan; provided that any such use of a lending office shall not affect the
obligation of the Borrowers to repay such Loan in accordance with the terms of
this Agreement. Each Lender shall, subject to its overall policy
considerations, use reasonable efforts (but shall not be obligated) to select a
lending office which will not result in the payment of increased costs by the
Borrowers pursuant to Sections 2.15 or 2.18. Subject to the other provisions of
this Section and the provisions of Section 2.12, Borrowings of Loans of more
than one Type may be incurred at the same time, provided that no more than ten
(10) Borrowings of Eurodollar Loans may be outstanding at any time.
(b) The Borrowers shall give the Agent prior notice of each Borrowing
hereunder of at least three (3) Business Days for Eurodollar Loans and one (1)
Business Day for ABR Loans; such notice shall be irrevocable and shall specify
the amount of the proposed Borrowing (which shall not be less than $5,000,000 or
any integral multiple of $1,000,000 in excess thereof in the case of Eurodollar
Loans and $1,000,000 in the case of ABR Loans) and the date thereof (which shall
be a Business Day) and shall contain disbursement instructions. Such notice, to
be effective, must be received by the Agent not later than 12:00 noon, New York
City time, on the third Business Day in the case of Eurodollar Loans and the
first Business Day in the case of ABR Loans, preceding the date on which such
Borrowing is to be made except as provided in the last sentence of this Section
2.6(b). Such notice shall specify whether the Borrowing then being requested is
to be a Borrowing of ABR Loans or Eurodollar Loans. If no election is made as
to the Type of Loan, such notice shall be deemed a request for Borrowing of ABR
Loans. The Agent shall promptly notify each Lender of its proportionate share
of such Borrowing, the date of such Borrowing, the Type of Borrowing or Loans
being requested and the Interest Period or Interest Periods applicable thereto,
as appropriate. On the borrowing date specified in such notice, each Lender
shall make its share of the Borrowing available at the office of the Agent at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, no later than 12:00 noon, New York
City time, in immediately available funds. Upon receipt of the funds made
available by the Lenders to fund any borrowing hereunder, the Agent shall
disburse such funds in the manner specified in the notice of borrowing delivered
by the Borrowers.
SECTION 2.7 Repayment of Loans; Evidence of Debt.
------------------------------------
(a) The Borrowers hereby jointly and severally unconditionally
promise to pay to the Agent for the account of each Lender the then unpaid
principal amount of each Loan on the Termination Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
20
(c) The Agent shall maintain accounts in which it shall record (i)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrowers to each Lender hereunder and
(iii) the amount of any sum received by the Agent hereunder for the account of
the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) in a form furnished
by the Agent and reasonably acceptable to the Borrowers. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.3) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.8 Interest on Loans.
-----------------
(a) Subject to the provisions of Section 2.9, each ABR Loan shall
bear interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Alternate Base Rate plus 3%.
(b) Subject to the provisions of Section 2.9, each Eurodollar Loan
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal, during each Interest Period
applicable thereto, to the Adjusted LIBOR Rate for such Interest Period in
effect for such Borrowing plus 4%.
(c) Accrued interest on all Loans shall be payable in arrears on each
Interest Payment Date applicable thereto, at maturity (whether by acceleration
or otherwise), after such maturity on demand and (with respect to Eurodollar
Loans) upon any repayment or prepayment thereof (on the amount prepaid).
SECTION 2.9 Default Interest. If any Borrower shall default in the
----------------
payment of the principal of or interest on any Loan or in the payment of any
other amount becoming due hereunder (including, without limitation, the
reimbursement pursuant to Section 2.3(d) of any draft drawn under a Letter of
Credit), whether at stated maturity, by acceleration or otherwise, such Borrower
shall on demand from time to time pay interest, to the extent permitted by law,
on such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 360 days) equal to (x) in the
case of Borrowings consisting of Eurodollar Loans, the Adjusted LIBOR Rate in
effect for such Borrowing plus 6% and (y) in the case of all other amounts, the
Alternate Base Rate plus 5%.
21
SECTION 2.10 Optional Termination or Reduction of Commitment. Upon at
-----------------------------------------------
least two (2) Business Days' prior written notice to the Agent, the Borrowers
may at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Unused Total Commitment. Each such reduction or
termination, as applicable, of the Unused Total Commitment shall be in the
principal amount of $5,000,000 or any integral multiple of $1,000,000 in excess
thereof. Any reduction or termination, as applicable, of the Unused Total
Commitment pursuant to this Section shall be deemed to be a reduction or
termination, as applicable, in the amount of such reduction or termination of
the Total Commitment and shall be applied pro rata to reduce the Commitment of
each Lender. Simultaneously with each reduction or termination, as applicable,
of the Unused Total Commitment, the Borrowers shall pay to the Agent for the
account of each Lender the Commitment Fee accrued on the amount of the
Commitment of such Lender so terminated or reduced through the date thereof.
SECTION 2.11 Alternate Rate of Interest. In the event, and on each
--------------------------
occasion, that on the day two (2) Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan, the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers absent manifest
error) that reasonable means do not exist for ascertaining the applicable
Adjusted LIBOR Rate, the Agent shall, as soon as practicable thereafter, give
written or telegraphic notice of such determination to the Borrowers and the
Lenders, and any request by the Borrowers for a Borrowing of Eurodollar Loans
(including pursuant to a refinancing with Eurodollar Loans) pursuant to Section
2.6 or 2.12 shall be deemed a request for a Borrowing of ABR Loans. After such
notice shall have been given and until the circumstances giving rise to such
notice no longer exist, each request for a Borrowing of Eurodollar Loans shall
be deemed to be a request for a Borrowing of ABR Loans.
SECTION 2.12 Refinancing of Loans. The Borrowers shall have the right, at
--------------------
any time, on three (3) Business Days' prior irrevocable notice to the Agent
(which notice, to be effective, must be received by the Agent not later than
1:00 p.m., New York City time, on the third Business Day preceding the date of
any refinancing), (x) to refinance (without the satisfaction of the conditions
set forth in Section 4 as a condition to such refinancing) any outstanding
Borrowing or Borrowings of Loans of one Type (or a portion thereof) with a
Borrowing of Loans of the other Type or (y) to continue an outstanding Borrowing
of Eurodollar Loans for an additional Interest Period, subject to the following:
(a) as a condition to the refinancing of ABR Loans with Eurodollar
Loans and to the continuation of Eurodollar Loans for an additional Interest
Period, no Event of Default shall have occurred and be continuing at the time of
such refinancing;
(b) if less than a full Borrowing of Loans shall be refinanced, such
refinancing shall be made pro rata among the Lenders in accordance with the
respective principal amounts of the Loans comprising such Borrowing held by the
Lenders immediately prior to such refinancing;
(c) the aggregate principal amount of Loans being refinanced shall be
at least $5,000,000 or any integral multiple of $1,000,000 in excess thereof,
provided that no partial refinancing of a Borrowing of Eurodollar Loans shall
result in the Eurodollar Loans remaining outstanding pursuant to such Borrowing
being less than $5,000,000 in aggregate principal amount;
22
(d) each Lender shall effect each refinancing by applying the
proceeds of its new Eurodollar Loan or ABR Loan, as the case may be, to its Loan
being refinanced;
(e) the Interest Period with respect to a Borrowing of Eurodollar
Loans effected by a refinancing or in respect to the Borrowing of Eurodollar
Loans being continued as Eurodollar Loans shall commence on the date of
refinancing or the expiration of the current Interest Period applicable to such
continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be refinanced only on the
last day of an Interest Period applicable thereto; and
(g) each request for a refinancing with a Borrowing of Eurodollar
Loans which fails to state an applicable Interest Period shall be deemed to be a
request for an Interest Period of one month.
In the event that the Borrowers shall not give notice to refinance any Borrowing
of Eurodollar Loans, or to continue such Borrowing as Eurodollar Loans, or shall
not be entitled to refinance or continue such Borrowing as Eurodollar Loans, in
each case as provided above, such Borrowing shall automatically be refinanced
with a Borrowing of ABR Loans at the expiration of the then-current Interest
Period. The Agent shall, after it receives notice from the Borrowers, promptly
give each Lender notice of any refinancing, in whole or part, of any Loan made
by such Lender.
SECTION 2.13 Mandatory Prepayment; Commitment Termination; Cash
--------------------------------------------------
Collateral.
(a) If at any time the aggregate principal amount of the outstanding
Loans plus the aggregate Letter of Credit Outstandings exceeds (A) prior to the
expiration of the Initial Period, the Available Commitment, and (B) from and
after the expiration of the Initial Period, the lesser of (x) the Total
Commitment and (y) the Borrowing Base, the Borrowers will within three (3)
Business Days (i) prepay the Loans in an amount necessary to cause the aggregate
principal amount of the outstanding Loans plus the aggregate Letter of Credit
Outstandings to be equal to or less than (A) prior to the expiration of the
Initial Period, the Available Commitment, and (B) from and after the expiration
of the Initial Period, the lesser of (x) the Total Commitment and (y) the
Borrowing Base, and (ii) if, after giving effect to the prepayment in full of
the Loans, the aggregate Letter of Credit Outstandings in excess of the amount
of cash held in the Letter of Credit Account exceeds (A) prior to the expiration
of the Initial Period, the Available Commitment, and (B) from and after the
expiration of the Initial Period, the lesser of (x) the Total Commitment and (y)
the Borrowing Base, deposit into the Letter of Credit Account an amount equal to
105% of the amount by which the aggregate Letter of Credit Outstandings in
excess of the amount of cash held in the Letter of Credit Account so exceeds (A)
prior to the expiration of the Initial Period, the Available Commitment, and (B)
from and after the expiration of the Initial Period, the lesser of (x) the Total
Commitment and (y) the Borrowing Base.
(b) The Borrowers shall, within two (2) Business Days of the date of
receipt of the Net Proceeds by any Borrower or any of their Subsidiaries from
the sale, lease, transfer or other disposition of any assets of any Borrower or
any of its Subsidiaries, jointly and severally, apply such Net Proceeds as
follows: first, to prepay the then outstanding Loans; second, deposit an amount
----- ------
in the Letter of Credit Account (up to 105% of the aggregate Letter of Credit
23
Outstandings); and thereafter, such Net Proceeds may be retained by the
--------------
Borrowers and invested in Permitted Investments or used for expenditures in the
ordinary course of business (subject to compliance with the terms and conditions
of this Agreement). To the extent such payment is made with the proceeds of a
sale, lease, transfer or other disposition of assets permitted by Section 6.11,
but without limiting the Agent's assessment of the effect of such sale, lease,
transfer or other disposition of assets on the Borrowing Base, such prepayment
of Loans shall not effect a reduction of the Total Commitment or the Available
Commitment and such amounts may be reborrowed by the Borrowers, subject to the
terms and conditions of this Agreement.
(c) Simultaneously with the making of the first Loan or the issuance
of the first Letter of Credit, the Borrowers shall have repaid all of the then
Indebtedness under the Existing Agreement. In the event the lenders under the
Existing Agreement are required to disgorge all or any part of such payment by
the Borrowers to the extent that said payment (or portion thereof) was in excess
of the final amount of the allowed secured claim of such lenders, as determined
(if an objection is filed) by final order of the Court, such funds shall be paid
to the Borrowers and, (i) the Borrowers shall immediately apply such disgorged
amount as follows: first, to prepay the then outstanding Loans; second, deposit
----- ------
an amount in the Letter of Credit Account (up to 105% of the aggregate Letter of
Credit Outstandings); and thereafter, such Net Proceeds may be retained by the
--------------
Borrowers and invested in Permitted Investments or used for expenditures in the
ordinary course of business (subject to compliance with the terms and conditions
of this Agreement); and (ii) the Total Commitment shall be reduced in an amount
equal to the disgorged amount.
(d) Upon the Termination Date, the Total Commitment shall be
terminated in full and the Borrowers shall pay the Loans in full and, if any
Letter of Credit remains outstanding, comply with Section 2.3(b).
SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Lenders.
------------------------------------------------------
(a) The Borrowers shall have the right at any time and from time to
time to prepay any Loans, in whole or in part, (x) with respect to Eurodollar
Loans, upon at least three (3) Business Days' prior written, telex or facsimile
notice to the Agent and (y) with respect to ABR Loans on the same Business Day
if written, telex or facsimile notice is received by the Agent prior to 1:00
p.m., New York City time, and thereafter upon at least one Business Day's prior
written, telex or facsimile notice to the Agent; provided, however, that (i)
each such partial prepayment shall be in a minimum amount of $5,000,000 or
integral multiples of $1,000,000 in excess thereof, (ii) no prepayment of
Eurodollar Loans shall be permitted pursuant to this Section 2.14(a) other than
on the last day of an Interest Period applicable thereto unless such prepayment
is accompanied by the payment of the amounts described in clause (i) of the
first sentence of Section 2.14(b), and (iii) no partial prepayment of a
Borrowing of Eurodollar Loans shall result in the aggregate principal amount of
the Eurodollar Loans remaining outstanding pursuant to such Borrowing being less
than $5,000,000. Each notice of prepayment shall specify the prepayment date,
the principal amount of the Loans to be prepaid and in the case of Eurodollar
Loans, the Borrowing or Borrowings pursuant to which made, shall be irrevocable
and shall commit the Borrowers to prepay such Loan by the amount and on the date
stated therein. The Agent shall, promptly after receiving notice from the
Borrowers hereunder, notify each Lender of
24
the principal amount of the Loans held by such Lender which are to be prepaid,
the prepayment date and the manner of application of the prepayment.
(b) The Borrowers shall reimburse each Lender on demand for any loss
incurred or to be incurred by it in the reemployment of the funds released (i)
resulting from any prepayment (for any reason whatsoever, including, without
limitation, refinancing with ABR Loans) of any Eurodollar Loan required or
permitted under this Agreement, if such Loan is prepaid other than on the last
day of the Interest Period for such Loan (including, without limitation, any
such prepayment in connection with the syndication of the credit facility
evidenced by this Agreement) or (ii) in the event that after the Borrowers
deliver a notice of borrowing under Section 2.6 in respect of Eurodollar Loans,
such Loans are not made on the first day of the Interest Period specified in
such notice of borrowing for any reason other than a breach by such Lender of
its obligations hereunder. Such loss shall be the amount as reasonably
determined by such Lender as the excess, if any, of (A) the amount of interest
which would have accrued to such Lender on the amount so paid or not borrowed at
a rate of interest equal to the Adjusted LIBOR Rate for such Loan, for the
period from the date of such payment or failure to borrow to the last day (x) in
the case of a payment or refinancing with ABR Loans other than on the last day
of the Interest Period for such Loan, of the then current Interest Period for
such Loan, or (y) in the case of such failure to borrow, of the Interest Period
for such Loan which would have commenced on the date of such failure to borrow,
over (B) the amount of interest 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 London interbank market. Each Lender shall deliver to the
Borrowers from time to time one or more certificates setting forth the amount of
such loss as determined by such Lender.
(c) In the event the Borrowers fail to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.14(a), the
Borrowers on demand by any Lender shall pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any loss incurred by
such Lender as a result of such failure to prepay, including, without
limitation, any loss, cost or expenses incurred by reason of the acquisition of
deposits or other funds by such Lender to fulfill deposit obligations incurred
in anticipation of such prepayment, but without duplication of any amounts paid
under Section 2.14(b). Each Lender shall deliver to the Borrowers from time to
time one or more certificates setting forth the amount of such loss as
determined by such Lender.
(d) Any partial prepayment of the Loans by the Borrowers pursuant to
Sections 2.13 or 2.14 shall be applied as specified by the Borrowers or, in the
absence of such specification, as determined by the Agent, provided that in the
latter case no Eurodollar Loans shall be prepaid pursuant to Section 2.13 to the
extent that such Loan has an Interest Period ending after the required date of
prepayment unless and until all outstanding ABR Loans and Eurodollar Loans with
Interest Periods ending on such date have been repaid in full.
SECTION 2.15 Reserve Requirements; Change in Circumstances.
---------------------------------------------
(a) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof
25
(whether or not having the force of law) shall change the basis of taxation of
payments to any Lender of the principal of or interest on any Eurodollar Loan
made by such Lender or any fees or other amounts payable hereunder (other than
changes in respect of Taxes, Other Taxes and taxes imposed on, or measured by,
the net income or overall gross receipts or franchise taxes of such Lender by
the jurisdiction in which such Lender has its principal office or in which the
applicable lending office for such Eurodollar Loan is located or by any
political subdivision or taxing authority therein, or by any other jurisdiction
or by any political subdivision or taxing authority therein other than a
jurisdiction in which such Lender would not be subject to tax but for the
execution and performance of this Agreement), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by such Lender
(except any such reserve requirement which is reflected in the Adjusted LIBOR
Rate) or shall impose on such Lender or the London interbank market any other
condition affecting this Agreement or the Eurodollar Loans made by such Lender,
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or to reduce the amount of
any sum received or receivable by such Lender hereunder (whether of principal,
interest or otherwise) by an amount deemed by such Lender to be material, then
the Borrowers will pay to such Lender in accordance with paragraph (c) below
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption or
effectiveness after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement, the Loans
made by such Lender pursuant hereto, such Lender's Commitment hereunder or the
issuance of, or participation in, any Letter of Credit by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such adoption, change or compliance (taking into account
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time the Borrowers shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such Lender's holding company for
any such reduction suffered.
(c) A certificate of each Lender setting forth such amount or amounts
as shall be necessary to compensate such Lender or its holding company as
specified in paragraph (a) or (b) above, as the case may be, shall be delivered
to the Borrowers and shall be conclusive absent manifest error. The Borrowers
shall pay each Lender the amount shown as due on any such certificate delivered
to it within ten (10) days after its receipt of the same. Any Lender receiving
any such payment shall promptly make a refund thereof to the Borrowers if the
law, regulation, guideline or change in circumstances giving rise to such
payment is subsequently deemed or held to be invalid or inapplicable.
26
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
SECTION 2.16 Change in Legality.
------------------
(a) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, if (x) any change after the date of this Agreement in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration thereof shall make it unlawful for a Lender to
make or maintain a Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to a Eurodollar Loan or (y) at any time any
Lender determines that the making or continuance of any of its Eurodollar Loans
has become impracticable as a result of a contingency occurring after the date
hereof which adversely affects the London interbank market or the position of
such Lender in such market, then, by written notice to the Borrowers, such
Lender may (i) declare that Eurodollar Loans will not thereafter be made by such
Lender hereunder, whereupon any request by the Borrowers for a Eurodollar
Borrowing shall, as to such Lender only, be deemed a request for an ABR Loan
unless such declaration shall be subsequently withdrawn; and (ii) require that
all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which
event all such Eurodollar Loans shall be automatically converted to ABR Loans as
of the effective date of such notice as provided in paragraph (b) below. In the
event any Lender shall exercise its rights under clause (i) or (ii) of this
paragraph (a), all payments and prepayments of principal which would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting from
the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.16, a notice to the Borrowers by
any Lender pursuant to paragraph (a) above shall be effective, if lawful, and if
any Eurodollar Loans shall then be outstanding, on the last day of the then-
current Interest Period, otherwise, such notice shall be effective on the date
of receipt by the Borrowers.
SECTION 2.17 Pro Rata Treatment, etc. All payments and repayments of
-----------------------
principal and interest in respect of the Loans (except as provided in Sections
2.15 and 2.16) shall be made pro rata among the Lenders in accordance with the
then outstanding principal amount of the Loans and/or participations in Letter
of Credit Outstandings and all outstanding undrawn Letters of Credit (and the
unreimbursed amount of drawn Letters of Credit) hereunder and all payments of
Commitment Fees and Letter of Credit Fees (other than those payable to a
Fronting Bank) shall be made pro rata among the Lenders in accordance with their
Commitments. All payments by the Borrowers hereunder shall be (i) except as
otherwise provided in Section 2.18, net of any tax applicable to the Borrowers
and (ii) made in Dollars in immediately available funds at the office of the
Agent by 12:00 noon, New York City time, on the date on which such payment shall
be due. Interest in respect of any Loan hereunder shall accrue from and
including the date of such
27
Loan to but excluding the date on which such Loan is paid in full or converted
to a Loan of a different Type.
SECTION 2.18 Taxes.
-----
(a) Except as otherwise provided in this Section 2.18, any and all
payments by the Borrowers hereunder shall be made free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
taxes imposed on or measured by the net income, net profit or overall gross
receipts of the Agent or any Lender (or any transferee or assignee thereof,
including a participation holder (any such entity being called a "Transferee"))
----------
and franchise taxes imposed on the Agent or any Lender (or Transferee) by the
United States or any jurisdiction under the laws of which the Agent or any such
Lender (or Transferee) is organized or in which the applicable lending office of
any such Lender (or Transferee) or applicable office of the Agent, is located or
any political subdivision thereof or by any other jurisdiction or by any
political subdivision or taxing authority therein other than a jurisdiction in
which the Agent or such Lender (or Transferee) would not be subject to tax but
for the execution and performance of this Agreement and (ii) taxes, levies,
imposts, deductions, charges or withholdings ("Amounts") with respect to
-------
payments hereunder to a Lender (or Transferee) or the Agent in accordance with
laws in effect on the later of the date of this Agreement and the date such
Lender (or Transferee) or the Agent becomes a Lender (or Transferee or Agent, as
the case may be) but not excluding, with respect to such Lender (or Transferee)
or the Agent, any increase in such Amounts solely as a result of any change in
such laws occurring after such later date or any Amounts that would not have
been imposed but for actions (other than actions contemplated by this Agreement)
taken by the Borrowers after such later date (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrowers shall be required by law
-----
to deduct any Taxes from or in respect of any sum payable hereunder to the
Lenders (or any Transferee) or the Agent, (i) the sum payable shall be increased
by the amount necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) such Lender
(or Transferee) or the Agent (as the case may be) shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrowers shall make such deductions and (iii) the Borrowers shall pay the full
amount deducted to the relevant taxing authority or other Governmental Authority
in accordance with applicable law.
(b) In addition, the Borrowers agree to pay any current or future
stamp or documentary taxes or any other excise or property taxes, charges,
assessments or similar levies that arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
-----------
(c) The Borrowers will indemnify each Lender (or Transferee) and the
Agent for the full amount of Taxes and Other Taxes paid by such Lender (or
Transferee) or the Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Such
indemnification
28
shall be made within thirty (30) days after the date any Lender (or Transferee)
or the Agent, as the case may be, makes written demand therefor. If a Lender (or
Transferee) or the Agent shall become aware that it is entitled to receive a
refund in respect of Taxes or Other Taxes as to which it has been indemnified by
the Borrowers pursuant to this Section, it shall promptly notify the Borrowers
of the availability of such refund and shall, within thirty (30) days after
receipt of a request by the Borrowers, apply for such refund at the Borrowers'
expense. If any Lender (or Transferee) or the Agent receives a refund in respect
of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers
pursuant to this Section, it shall promptly notify the Borrowers of such refund
and shall, within thirty (30) days after receipt of a request by the Borrowers
(or promptly upon receipt, if the Borrowers have requested application for such
refund pursuant hereto), repay such refund to the Borrowers (to the extent of
amounts that have been paid by the Borrowers under this Section with respect to
such refund plus interest that is received by the Lender (or Transferee) or the
Agent as part of the refund), net of all out-of-pocket expenses of such Lender
(or Transferee) or the Agent and without additional interest thereon; provided
that the Borrowers, upon the request of such Lender (or Transferee) or the
Agent, agree to return such refund (plus penalties, interest or other charges)
to such Lender (or Transferee) or the Agent in the event such Lender (or
Transferee) or the Agent is required to repay such refund. Nothing contained in
this subsection (c) shall require any Lender (or Transferee) or the Agent to
make available any of its tax returns (or any other information relating to its
taxes that it deems to be confidential).
(d) Within thirty (30) days after the date of any payment of Taxes or
Other Taxes withheld by the Borrowers in respect of any payment to any Lender
(or Transferee) or the Agent, the Borrowers will furnish to the Agent, at its
address referred to on the signature pages hereof, the original or a certified
copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(f) Each Lender (and Transferee) and the Agent shall, if not a United
States Person (as such term is defined in Section 7701(a)(30) of the Code), on
or prior to the Closing Date (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or on or prior to the date of the Assignment
and Acceptance pursuant to which it becomes a Lender (in the case of each other
Lender), deliver to the Borrowers and the Agent such certificates, documents and
other evidence, as required by the Code or Treasury Regulations issued pursuant
thereto or by Canadian law, including two original copies of (A) Internal
Revenue Service Form W-9 (unless such Lender (or Transferee) or the Agent is an
"exempt recipient" as defined in Treasury Regulations Section 1.6049-4(c) for
which no withholding is required) and two original copies of (B) Internal
Revenue Service Forms 1001, 4224, W-8BEN or W-8ECI and any other certificate or
statement of exemption required by Treasury Regulation Section 1.1441-1, 1.1441-
4 or 1.1441-6(c) or any subsequent version thereof or successors thereto,
properly completed and duly executed by such Lender (or Transferee) or the Agent
to establish that such payment is (i) not subject to United States Federal
withholding tax under the Code because such payment is effectively connected
with the conduct by such Lender (or Transferee) or the Agent of a trade or
business in the United States or (ii) totally exempt from United States Federal
withholding tax or
29
subject to a reduced rate of such tax under a provision of an applicable tax
treaty or, (iii) in the case of a Borrower organized under the laws of Canada,
totally exempt from Canadian withholding tax or subject to a reduced rate of
withholding of such tax under a provision of an applicable tax treaty. Unless
the Borrowers and the Agent have received forms or other documents satisfactory
to them indicating that such payments hereunder are not subject to United States
Federal withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrowers or the Agent shall withhold taxes from such
payments at the applicable statutory rate.
(g) The Borrowers shall not be required to pay any additional amounts
to any Lender (or Transferee) or the Agent in respect of United States Federal
withholding tax pursuant to subsection (a) above if the obligation to pay such
additional amounts would not have arisen but for a failure by such Lender (or
Transferee) or the Agent to comply with the provisions of subsection (f) above.
(h) Any Lender (or Transferee) or the Agent claiming any additional
amounts payable pursuant to this Section 2.18 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by the Borrowers or to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such additional amounts that may
thereafter accrue and would not, in the sole determination of such Lender (or
Transferee) or the Agent, be otherwise materially disadvantageous to such Lender
(or Transferee) or the Agent.
SECTION 2.19 Certain Fees. The Borrowers shall pay to the Agent the fees
------------
set forth in that certain letter dated November 13, 2000 among the Agent, Chase
Securities Inc. and the Borrowers at the times set forth therein, excluding (but
without limiting the Borrowers' obligations under Section 2.20(b) below) the fee
described therein as the "Early Termination Fee".
SECTION 2.20 Commitment Fee; Early Termination Fee.
-------------------------------------
(a) The Borrowers shall pay to the Lenders a commitment fee (the
"Commitment Fee") for the period commencing on the date the Commitment Letter is
--------------
executed to the Termination Date or the earlier date of termination of the
Commitment, computed (on the basis of the actual number of days elapsed over a
year of 360 days) at the rate of One and One-Half Percent (1.5%) per annum on
the average daily Unused Total Commitment. Such Commitment Fee, to the extent
then accrued, shall be payable (x) monthly, in arrears, on the last calendar day
of each month, (y) on the Termination Date and (z) as provided in Section 2.10
hereof, upon any reduction or termination in whole or in part of the Total
Commitment.
(b) The Borrowers shall pay to the Lenders a fee (the "Early
-----
Termination Fee") in an amount equal to One Percent (1%) of the Total Commitment
---------------
(used and unused) on each of the following dates: (i) the earlier of (x) six
months after the Filing Date, and (y) the sale of a material portion of the
assets of the Borrowers; (ii) twelve months after the Filing Date; and (iii) in
the event that the Maturity Date is more than twelve months after the Filing
Date, the Maturity Date. In calculating such Fee, the amount of the Total
Commitment shall mean the average daily amount of the Total Commitment (used and
unused) during the six month period
30
preceding the date of such payment date, provided, however, that the Early
-------- -------
Termination Fee shall not be due and payable on any of the foregoing dates
occurring after the Total Commitment shall have been reduced to zero (other than
as a result of the occurrence of an Event of Default) and the Obligations shall
have been indefeasibly paid in full in cash.
SECTION 2.21 Letter of Credit Fees. The Borrowers shall pay with respect
---------------------
to each Letter of Credit (i) to the Agent on behalf of the Lenders a fee
calculated (on the basis of the actual number of days elapsed over a year of 360
days) at the rate of Four Percent (4%) per annum on the undrawn stated amount
thereof, and (ii) to the Fronting Bank such Fronting Bank's customary fees for
fronting, issuance, amendments and processing referred to in Section 2.3. In
addition, the Borrowers agree to pay each Fronting Bank for its account a
fronting fee in respect of each Letter of Credit issued by such Fronting Bank,
for the period from and including the date of issuance of such Letter of Credit
to and including the date of termination of such Letter of Credit, computed at a
rate, and payable at times, to be determined by such Fronting Bank, the
Borrowers and the Agent. Accrued fees described in clause (i) of the first
sentence of this paragraph in respect of each Letter of Credit shall be due and
payable monthly in arrears on the last calendar day of each month and on the
Termination Date, or such earlier date as the Total Commitment is terminated.
Accrued fees described in clause (ii) of the first sentence of this paragraph in
respect of each Letter of Credit shall be payable at times to be determined by
the Fronting Bank, the Borrowers and the Agent.
SECTION 2.22 Nature of Fees. All Fees shall be paid on the dates due, in
--------------
immediately available funds, to the Agent for the respective accounts of the
Agent and the Lenders, as provided herein and in the letter described in Section
2.19. Once paid, none of the Fees shall be refundable under any circumstances.
SECTION 2.23 Priority and Liens.
------------------
(a) The Borrowers hereby covenant, represent and warrant that, upon
entry of the Final Order, the Obligations of the Borrowers hereunder and under
the Loan Documents and in respect of Indebtedness permitted by Section 6.3(v):
(i) pursuant to Section 364(c)(1) of the Bankruptcy Code, shall at all times
constitute an allowed Superpriority Claim; (ii) pursuant to Section 364(c)(2) of
the Bankruptcy Code, shall at all times be secured by a perfected first priority
Lien on all unencumbered property of the Borrowers and on all cash maintained in
the Letter of Credit Account and any direct investments of the funds contained
therein, provided that following the Termination Date amounts in the Letter of
--------
Credit Account shall not be subject to the Carve-Out; and (iii) pursuant to
Section 364(c)(3) of the Bankruptcy Code, shall be secured by a perfected Lien
upon all property of the Borrowers that is subject to valid and perfected Liens
in existence on the Filing Date or to valid Liens in existence on the Filing
Date that are perfected subsequent to the Filing Date as permitted by Section
546(b) of the Bankruptcy Code or to Permitted Liens, junior to such valid and
perfected Liens, including Liens securing the Indebtedness under the Existing
Agreement, provided that upon repayment of all Indebtedness under the Existing
--------
Agreement, the Obligations of the Borrowers hereunder and under the Loan
Documents and in respect of Indebtedness permitted by Section 6.3(v) shall
automatically be secured, pursuant to Section 364(c)(2) of the Bankruptcy Code,
by a perfected first priority Lien (subject to Liens permitted pursuant to
clauses (i) or (ii) of Section 6.1) on all property of the
31
Borrowers that then secures the Existing Agreement, subject in the case of
clauses (i), (ii) and (iii) only to (x) in the event of the occurrence and
during the continuance of an Event of Default or an event that would constitute
an Event of Default with the giving of notice or lapse of time or both, the
payment of allowed and unpaid professional fees and disbursements incurred by
the Borrowers and any statutory committees appointed in the Cases in an
aggregate amount not in excess of $3,000,000 (plus all unpaid professional fees
and disbursements incurred prior to the occurrence of an Event of Default to the
extent allowed by the Bankruptcy Court) and (y) the payment of fees pursuant to
28 U.S.C. (S) 1930 and to the Clerk of the Bankruptcy Court (collectively, the
"Carve-Out"). The Lenders agree that so long as no Event of Default or event
---------
which with the giving of notice or lapse of time or both would constitute an
Event of Default shall have occurred and be continuing, the Borrowers shall be
permitted to pay compensation and reimbursement of expenses allowed and payable
under 11 U.S.C. (S) 330 and 11 U.S.C. (S) 331, as the same may be due and
payable, and any compensation and expenses previously paid, or accrued but
unpaid, prior to the occurrence of such Event of Default shall not reduce the
Carve-Out.
(b) As to all real property the title to which is held by a Borrower,
or the possession of which is held by a Borrower pursuant to leasehold interest,
the Borrowers hereby assign and convey as security, grant a security interest
in, hypothecate, mortgage, pledge and set over unto the Agent on behalf of the
Lenders all of the right, title and interest of the Borrowers in all of such
owned real property and in all such leasehold interests, together in each case
with all of the right, title and interest of the Borrowers in and to all
buildings, improvements, and fixtures related thereto, any lease or sublease
thereof, all general intangibles relating thereto and all proceeds thereof. The
Borrowers acknowledge that, pursuant to the Final Order, the Liens in favor of
the Agent on behalf of the Lenders in all of such real property and leasehold
instruments shall be perfected without the recordation of any instruments of
mortgage or assignment. The Borrowers further agree that, upon the request of
the Agent, the Borrowers shall enter into separate fee and leasehold mortgages
in recordable form with respect to such properties on terms satisfactory to the
Agent.
SECTION 2.24 Right of Set-Off. Subject to the provisions of Section 7.1,
----------------
upon the occurrence and during the continuance of any Event of Default, the
Agent and each Lender is hereby authorized at any time and from time to time, to
the fullest extent permitted by law and without further order of or application
to the Bankruptcy Court, 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 the Agent and each such Lender to or for the
credit or the account of any Borrower against any and all of the obligations of
such Borrower now or hereafter existing under the Loan Documents, irrespective
of whether or not such Lender shall have made any demand under any Loan Document
and although such obligations may not have been accelerated. Each Lender and
the Agent agrees promptly to notify the Borrowers after any such set-off and
application made by such Lender or by the Agent, as the case may be, provided
that the failure to give such notice shall not affect the validity of such set-
off and application. The rights of each Lender and the Agent under this Section
are in addition to other rights and remedies which such Lender and the Agent may
have upon the occurrence and during the continuance of any Event of Default.
32
SECTION 2.25 Security Interest in Letter of Credit Account. Pursuant to
---------------------------------------------
Section 364(c)(2) of the Bankruptcy Code, the Borrowers hereby assign and pledge
to the Agent, for its benefit and for the ratable benefit of the Lenders, and
hereby grant to the Agent, for its benefit and for the ratable benefit of the
Lenders, a first priority security interest, senior to all other Liens, if any,
in all of the Borrowers' right, title and interest in and to the Letter of
Credit Account and any direct investment of the funds contained therein. Cash
held in the Letter of Credit Account shall not be available for use by the
Borrowers, whether pursuant to Section 363 of the Bankruptcy Code or otherwise.
SECTION 2.26 Payment of Obligations. Subject to the provisions of Section
----------------------
7.1, upon the maturity (whether by acceleration or otherwise) of any of the
Obligations under this Agreement or any of the other Loan Documents of the
Borrowers, the Lenders shall be entitled to immediate payment of such
Obligations without further application to or order of the Bankruptcy Court.
SECTION 2.27 No Discharge; Survival of Claims. Each of the Borrowers
--------------------------------
agrees that (i) its obligations hereunder shall not be discharged by the entry
of an order confirming a Plan of Reorganization (and each of the Borrowers,
pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such
discharge) and (ii) the Superpriority Claim granted to the Agent and the Lenders
pursuant to the Order and described in Section 2.23 shall not be affected in any
manner by the entry of an order confirming a Plan of Reorganization.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to make Loans and issue and/or
participate in Letters of Credit hereunder, each of the Borrowers jointly and
severally represent and warrant as follows:
SECTION 3.1 Organization and Authority. Each of the Borrowers (i) is duly
--------------------------
organized, validly existing and in good standing under the law of its
jurisdiction of organization; (ii) is duly qualified to do business and in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the financial condition, operations, business,
properties or assets of the Borrowers taken as a whole; (iii) subject to the
entry by the Bankruptcy Court of the Final Order, has the requisite power and
authority to effect the transactions contemplated hereby, and by the other Loan
Documents to which it is a party, and (iv) subject to the entry by the
Bankruptcy Court of the Final Order, has all requisite power and authority and
the legal right to own and operate its properties, and to conduct its business
as now or currently proposed to be conducted.
SECTION 3.2 Due Execution. Upon the entry by the Bankruptcy Court of the
-------------
Final Order, the execution, delivery and performance by each of the Borrowers of
each of the Loan Documents to which it is a party, including, without
limitation, the grant and pledge by the Borrowers of the security interests
granted by the Security and Pledge Agreement, (i) are within the respective
powers of each of the Borrowers, have been duly authorized by all necessary
action, including the consent of shareholders, partners or members, where
required, and do not (A) contravene the Organizational Documents of any of the
Borrowers, (B) violate any law (including, without limitation, the Securities
Exchange Act of 1934) or regulation (including,
33
without limitation, Regulations T, U or X of the Board), or any order or decree
of any court or Governmental Authority, (C) conflict with or result in a breach
of, or constitute a default under, any indenture, mortgage or deed of trust
entered into after the Filing Date or any lease, agreement or other instrument
entered into after the Filing Date binding on the Borrowers or any of their
properties, or (D) result in or require the creation or imposition of any Lien
upon any of the property of any of the Borrowers other than Liens granted
pursuant to this Agreement; and (ii) do not require the consent, authorization
by or approval of or notice to or filing or registration with any Governmental
Authority other than the entry of the Final Order. Except for the entry of the
Final Order, no authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority or regulatory body is required for the
perfection of the security interests or, subject to Section 7.1 hereof, the
exercise by the Agent or the Lenders of their respective rights and remedies
under the Loan Documents. Upon the entry by the Bankruptcy Court of the Final
Order, this Agreement shall have been duly executed and delivered by each of the
Borrowers. Upon the entry by the Bankruptcy Court of the Final Order, this
Agreement, and each of the other Loan Documents to which the Borrowers are or
will be a party, when delivered hereunder or thereunder, will be, a legal, valid
and binding obligation of each Borrower, enforceable against the Borrowers in
accordance with its terms and the Final Order.
SECTION 3.3 Statements Made. The information that has been delivered in
---------------
writing by any of the Borrowers to the Agent or to the Bankruptcy Court in
connection with any Loan Document, and any financial statement delivered
pursuant hereto or thereto (other than to the extent that any such statements
constitute projections), taken as a whole and in light of the circumstances in
which made, contains no untrue statement of a material fact and does not omit to
state a material fact necessary to make such statements not misleading; and, to
the extent that any such information constitutes projections, such projections
were prepared in good faith on the basis of assumptions, methods, data, tests
and information believed by such Borrower to be reasonable at the time such
projections were furnished.
SECTION 3.4 Financial Statements. The Borrowers have furnished the
--------------------
Lenders with copies of (i) the audited consolidated financial statement and
schedules of the Borrowers and their Subsidiaries for the fiscal year ended
December 31, 1999 and (ii) the unaudited consolidated financial statement and
schedules of the Borrowers and their Subsidiaries for each fiscal quarter ending
after December 31, 1999. Such financial statements present fairly the financial
condition and results of operations of the Borrowers and their Subsidiaries on a
consolidated basis as of such dates and for such periods; such balance sheets
and the notes thereto disclose all liabilities, direct or contingent, of the
Borrowers and their Subsidiaries as of the dates thereof required to be
disclosed by GAAP and such financial statements were prepared in a manner
consistent with GAAP, subject (in the case of such fiscal quarter statement) to
normal year end adjustments. No material adverse change in the operations,
businesses, properties, assets, prospects or condition (financial or otherwise)
of the Borrowers and their Subsidiaries, taken as a whole, has occurred from
that set forth in the Borrowers' and their Subsidiaries' consolidated financial
statements for the fiscal year ended December 31, 1999 or the fiscal quarters
ending after December 31, 1999 other than those which customarily occur as a
result of events leading up to and following the commencement of a proceeding
under Chapter 11 of the Bankruptcy Code and the commencement of the Cases
(including, without limitation, those reflected in the financial projections
heretofore made available to the Agent).
34
SECTION 3.5 Ownership. Each of the Persons listed on Schedule 3.5 is a
--------- ------------
direct or indirect Subsidiary of the Borrowers and Schedule 3.5 correctly sets
------------
forth the ownership interest of each of the Borrowers in their respective
Subsidiaries, in each case as of the Closing Date. None of the Borrowers owns
any other Subsidiaries, whether directly or indirectly, other than as set forth
on Schedule 3.5.
------------
SECTION 3.6 Liens. Except for Liens permitted pursuant to Section 6.1,
-----
there are no Liens of any nature whatsoever on any assets of any of the
Borrowers or their Subsidiaries. Neither the Borrowers nor their Subsidiaries
are parties to any contract, agreement, lease or instrument the performance of
which, either unconditionally or upon the happening of an event, will result in
the creation of a valid and enforceable Lien on any assets of any Borrower or
any of its Subsidiaries or otherwise result in a violation of this Agreement
other than the Liens granted to the Agent and the Lenders as provided for in
this Agreement.
SECTION 3.7 Compliance with Law
-------------------
(a) (i) The operations of the Borrowers and their Subsidiaries comply
with all applicable environmental, health and safety statutes and regulations,
including, without limitation, regulations promulgated under the Resource
Conservation and Recovery Act (42 U.S.C. (S)(S) 6901 et seq.); (ii) none of the
operations of the Borrowers or their Subsidiaries is the subject of any Federal
or state investigation evaluating whether any remedial action involving a
material expenditure by the Borrowers is needed to respond to a release of any
Hazardous Waste or Hazardous Substance (as such terms are defined in any
applicable state or Federal environmental law or regulations) into the
environment; and (iii) the Borrowers and their Subsidiaries do not have any
material contingent liability in connection with any release of any Hazardous
Waste or Hazardous Substance into the environment.
(b) None of the Borrowers or their Subsidiaries is in violation of
any law, rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority the violation of which, or a
default with respect to which, would have a material adverse effect on the
financial condition, operations, businesses, properties or assets of the
Borrowers and their Subsidiaries taken as a whole.
SECTION 3.8 Insurance. All policies of insurance of any kind or nature
---------
owned by or issued to the Borrowers and their Subsidiaries, including, without
limitation, policies of life, fire, theft, product liability, public liability,
property damage, other casualty, employee fidelity, workers' compensation,
employee health and welfare, title, property and liability insurance, are in
full force and effect and are of a nature and provide such coverage as is
customarily carried by companies of the size and character of the Borrowers and
their Subsidiaries.
SECTION 3.9 Final Order. On the date of the making of any Loans or the
-----------
issuance of any Letters of Credit hereunder, whichever first occurs, the Final
Order will have been entered and will not have been stayed, amended, vacated,
reversed or rescinded. Upon the maturity (whether by the acceleration or
otherwise) of any of the obligations of the Borrowers hereunder and under the
other Loan Documents, the Lenders shall, subject to the provisions of Section
7.1, be entitled to immediate payment of such obligations, and to enforce the
remedies provided for hereunder, without further application to or order by the
Bankruptcy Court.
35
SECTION 3.10 Use of Proceeds. The proceeds of the Loans shall be used for
---------------
(i) repayment in full (and not in part) of all Indebtedness under the Existing
Agreement in accordance with Section 2.2 and (ii) for working capital and for
other general corporate purposes of the Borrowers. During the Initial Period,
use of the proceeds of the Loans for capital expenditures of the Borrowers shall
be limited to the applicable amounts set forth in the Budget. The Letters of
Credit shall be issued in support of obligations of the Borrowers that are
acceptable to the Agent.
SECTION 3.11 Litigation. Except as disclosed to the Agent in writing
----------
prior to the date hereof, there are no unstayed actions, suits or proceedings
pending or, to the best knowledge of the Borrowers, threatened against or
affecting the Borrowers or their Subsidiaries or any of their respective
properties, before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, that are reasonably
likely to be determined adversely to the Borrowers or their Subsidiaries and,
even if so adversely determined, would have a material adverse effect on the
operations, businesses, properties, assets, prospects or financial condition of
the Borrowers and their Subsidiaries taken as a whole.
SECTION 3.12 Intellectual Property. Set forth on Schedule 3.12 hereto is
--------------------- -------------
a complete and accurate list of all patents, trademarks, trade names, service
marks and copyrights, and all applications therefor and licenses thereof, of
each Borrower or any of its Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
SECTION 3.13 Material Contracts. Set forth on Schedule 3.13 hereto is a
------------------ -------------
complete and accurate list of all Material Contracts of each Borrower and its
Subsidiaries as of the date hereof, showing the parties and subject matter
thereof. Each such Material Contract has been duly authorized, executed and
delivered by the Borrower or Borrowers party thereto and, to the best of the
Borrowers' knowledge, has been duly authorized, executed and delivered by the
other party or parties thereto, and, as of the date hereof, has not been amended
or otherwise modified on or prior to the date hereof except as set forth on
Schedule 3.13. As of the date hereof, the Borrowers have not received any
-------------
written notices of termination of any of the Material Contracts from any party
or parties thereto except as set forth on Schedule 3.13.
-------------
SECTION 4. CONDITIONS OF LENDING
SECTION 4.1 Conditions Precedent to Closing. The occurrence of the Closing
-------------------------------
Date is subject to the following conditions precedent:
(a) Supporting Documents. The Agent shall have received for each of
--------------------
the Borrowers:
(i) a copy of each Organizational Document originally executed and
delivered by each Borrower, as applicable, and, to the extent applicable,
certified as of a recent date by the applicable Governmental Authority,
each dated the Closing Date or a recent date prior thereto; provided, that
--------
the Agent may, in its discretion, accept Organizational Documents of the
Borrowers certified by a Secretary or Assistant Secretary of the Borrowers
in lieu of certification by Governmental Authorities (subject to receipt of
an
36
undertaking from the Borrowers to effect delivery of such documents
certified by a Governmental Authorities on a post-Closing Date basis);
(ii) signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party, dated as of the
Closing Date;
(iii) duly adopted resolutions of the board of directors or similar
governing body of each Borrower approving and authorizing the execution,
delivery and performance of this Agreement and the other Loan Documents to
which it is a party or by which it or its assets may be bound as of the
Closing Date, certified as of the Closing Date by its secretary or
assistant secretary as being in full force and effect without modification
or amendment;
(iv) a good standing certificate (or, to the extent available, with
respect to ICG Holdings (Canada) Co., a comparable document) from the
applicable Governmental Authority of each Borrower's jurisdiction of
incorporation, organization or formation and in each jurisdiction in which
it is qualified as a foreign corporation or other entity to do business,
each dated a recent date prior to the Closing Date; and
(v) such other documents as the Agent may reasonably request.
(b) Security and Pledge Agreement. The Borrowers shall have duly
-----------------------------
executed and delivered to the Agent a Security and Pledge Agreement in
substantially the form of Exhibit B (the "Security and Pledge Agreement").
--------- -----------------------------
(c) Intellectual Property Security Agreements. The Borrowers shall
-----------------------------------------
have duly executed and delivered to the Agent such patent/trademark/copyright
filings as requested by the Agent in order to perfect the Agent's security
interest in the property of the Borrowers which is personal property of that
kind.
(d) First Day Orders. All of the "first day orders" entered by the
----------------
Bankruptcy Court at the time of the commencement of the Cases shall be
reasonably satisfactory in form and substance to the Agent.
(e) Completion of Proceedings. All partnership, corporate,
-------------------------
judicial and other proceedings and all instruments and agreements in connection
with the transactions among the Borrowers, the Agent and the Lenders
contemplated by this Agreement shall be satisfactory in form and substance to
the Agent, and the Agent shall have received all information and copies of all
documents and papers, including records of partnership, corporate, judicial and
other proceedings, which the Agent may have requested in connection therewith,
such documents and papers where appropriate to be certified by proper
partnership, corporate, governmental, judicial or other authorities.
(f) Information. The Agent shall have received such information
-----------
(financial or otherwise) as may be reasonably requested by the Agent and shall
have discussed such information with the Borrowers' management and shall be
satisfied with the nature and substance of such discussions.
37
(g) Closing Documents. The Agent shall have received all documents
-----------------
required by this Agreement satisfactory in form and substance to the Agent.
(h) UCC-11 Searches. The Agent shall have received UCC-11 searches
---------------
conducted in the jurisdictions in which the Borrowers conduct business (dated as
of a date reasonably satisfactory to the Agent), reflecting the absence of Liens
and encumbrances on the assets of the Borrowers other than such Liens as may be
satisfactory to the Agent.
(i) Budget. The Agent shall have received from (and shall have had
------
the opportunity to discuss with) the Borrowers a budget detailing the Borrowers'
anticipated cash receipts and disbursements for the period commencing on or
prior to the Filing Date and ending on or after May 31, 2002 and setting forth
the anticipated uses of the Total Commitment (the "Budget"), all on a monthly
------
basis and satisfactory in form and substance to the Agent.
SECTION 4.2 Conditions Precedent to Each Loan and Each Letter of Credit.
-----------------------------------------------------------
The obligation of the Lenders to make each Loan and of the Fronting Bank to
issue each Letter of Credit, including the initial Loans and the initial Letter
of Credit, is subject to the following conditions precedent:
(a) Notice. The Agent shall have received a notice with respect to
------
such borrowing or issuance, as the case may be, as required by Section 2.
(b) Representations and Warranties. All representations and
------------------------------
warranties contained in this Agreement and the other Loan Documents shall be
true and correct in all material respects on and as of the date of each
Borrowing or the issuance of each Letter of Credit hereunder with the same
effect as if made on and as of such date except to the extent such
representations and warranties expressly relate to an earlier date.
(c) No Default. On the date of each Borrowing hereunder or the
----------
issuance of each Letter of Credit, no Event of Default or event which upon
notice or lapse of time or both would constitute an Event of Default shall have
occurred and be continuing.
(d) Entry of Final Order. At the time of the making of the initial
--------------------
Loans or at the time of the issuance of the initial Letters of Credit
(including, without limitation, any Letter of Credit issued pursuant to the
proviso set forth in Section 4.2(k)), whichever first occurs, but in no event
later than December 21, 2000, the Agent and the Lenders shall have received a
certified copy of an order of the Bankruptcy Court in substantially the form of
Exhibit A (the "Final Order") approving the Loan Documents and granting the
--------- -----------
Superpriority Claim status and the other Liens described in Section 2.23, which
Final Order (i) shall have been entered upon an application or motion of the
Borrowers reasonably satisfactory in form and substance to the Agent, on such
prior notice to such parties as may in each case be satisfactory to the Agent,
(ii) shall require that, prior to any other uses of the Total Commitment by the
Borrowers, the Borrowers shall repay in full all Indebtedness under the Existing
Agreement, (iii) shall require that, prior to any other uses of the Total
Commitment by the Borrowers, all Liens granted under the Existing Agreement
shall be released to the satisfaction of the Agent upon payment in full of all
Indebtedness under the Existing Agreement, (iv) shall require that, upon the
repayment in full of all Indebtedness under the Existing Agreement, the
Obligations of the Borrowers hereunder
38
and under the Loan Documents and in respect of Indebtedness permitted by Section
6.3(v) shall automatically be secured, pursuant to Section 364(c)(2) of the
Bankruptcy Code, by a perfected first priority Lien (subject to Liens permitted
pursuant to clauses (i) or (ii) of Section 6.1) on all property of the Borrowers
that then secures the Existing Agreement, provided that following the
--------
Termination Date amounts in the Letter of Credit Account shall not be subject to
the Carve-Out, and (v) shall approve the payment by the Borrowers of all of the
Fees set forth in Section 2.19.
(e) Continued Effectiveness of Final Order. The Final Order shall be
--------------------------------------
in full force and effect and shall not have been stayed, reversed, modified or
amended in any respect without the prior written consent of the Agent and the
Required Lenders; and, if the Final Order is the subject of a pending appeal in
any respect, neither the making of such Loans nor the issuance of such Letter of
Credit nor the performance by any of the Borrowers of any of their obligations
hereunder or under the Loan Documents or under any other instrument or agreement
referred to herein shall be the subject of a presently effective stay pending
appeal.
(f) Opinion of Counsel. The Agent and the Lenders shall have
------------------
received the favorable written opinion of counsel to the Borrowers, reasonably
acceptable to the Agent, dated within ten (10) days following the entry of the
Final Order, substantially in the form of Exhibit C.
---------
(g) Payment of Fees upon Entry of Final Order. Upon entry of the
-----------------------------------------
Final Order, the Borrowers shall have paid to the Agent, the Lenders and Chase
Securities, Inc. the then unpaid balance of all accrued and unpaid Fees then due
and payable under and pursuant to this Agreement and the letter referred to in
Section 2.19.
(h) Payment of Fees. The Borrowers shall have paid to the Agent the
---------------
then unpaid balance of all accrued and unpaid Fees then due and payable under
and pursuant to this Agreement and the letter referred to in Section 2.19.
(i) Borrowing Base Certificate. Following receipt of the appraisals
--------------------------
described in Section 2.2(a)(i) and the Agent's determination of the Borrowing
Base, the Agent shall have received a Borrowing Base Certificate dated no more
than seven (7) days prior to each Borrowing or the issuance of each Letter of
Credit, which Borrowing Base Certificate shall include supporting schedules as
required by the Agent.
(j) Usage. The uses of such Borrowing or such Letter of Credit
-----
shall be substantially consistent with the Budget.
(k) Repayment of Existing Indebtedness. Prior to or simultaneously
----------------------------------
with the making of the first Loans or the issuance of the first Letter of
Credit, the Agent shall have received such documentation and acknowledgments as
the Agent in its sole discretion shall require, evidencing the satisfaction and
release of (i) all Indebtedness under the Existing Agreement; and (ii) all Liens
securing that Indebtedness; provided, however, that notwithstanding anything to
-------- -------
the contrary in this Agreement, but subject to the Borrowers' satisfaction of
each of the other conditions set forth in this Section 4.2 and the other
applicable terms and conditions of this Agreement, prior to the satisfaction of
such Indebtedness and the release of such Liens the Borrowers may request a
Fronting Bank to issue, for the account of the Borrowers one or more Letters of
Credit in support of obligations of the Borrowers to
39
Governmental Authorities or that are otherwise acceptable to the Agent, provided
--------
that no Letter of Credit shall be issued prior to the satisfaction of the
condition set forth in this Section 4.2(k) if after giving effect to such
issuance the aggregate Letter of Credit Outstanding would exceed $2,000,000.
The request by the Borrowers for, and the acceptance by the Borrowers of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by each of the Borrowers that the conditions specified in this Section
have been satisfied or waived at that time.
SECTION 5. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.3(b)), or any amount shall remain outstanding or
unpaid under this Agreement, each of the Borrowers agrees that, unless the
Required Lenders shall otherwise consent in writing, each of the Borrowers will:
SECTION 5.1 Financial Statements, Reports, etc. Deliver to the Agent and
----------------------------------
each of the Lenders:
(a) within ninety (90) days after the end of each fiscal year, the
Borrowers' consolidated and consolidating balance sheets and related statements
of income, stockholders' equity and cash flows, showing the financial condition
of the Borrowers and their Subsidiaries on a consolidated basis as of the close
of such fiscal year and the results of their respective operations during such
year, the consolidated statements of the Borrowers to be audited for the
Borrowers and their Subsidiaries by their current independent auditor or other
independent public accountants of recognized national standing acceptable to the
Required Lenders and accompanied by an opinion of such accountants (which shall
not be qualified other than with respect to the Cases or a going concern
qualification) and to be certified by a Financial Officer of Parent to the
effect that such consolidated financial statements fairly present the financial
condition and results of operations of the Borrowers and their Subsidiaries on a
consolidated basis in accordance with GAAP;
(b) within forty five (45) days after the end of each of the first
three fiscal quarters and within ninety (90) days after the end of the fourth
fiscal quarter of each fiscal year, the Borrowers' consolidated and
consolidating balance sheets and related statements of income, stockholders'
equity and cash flows, showing the financial condition of the Borrowers and
their Subsidiaries on a consolidated basis as of the close of such fiscal
quarter and the results of their operations during such fiscal quarter and the
then elapsed portion of the fiscal year, each certified by a Financial Officer
of Parent as fairly presenting the financial condition and results of operations
of the Borrowers and their Subsidiaries on a consolidated basis in accordance
with GAAP, subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements under (a)
or (b) above as applicable, (i) a certificate of a Financial Officer of each of
the Borrowers certifying such statements (A) certifying that no Event of Default
or event which upon notice or lapse of
40
time or both would constitute an Event of Default has occurred, or, if such an
Event of Default or event has occurred, specifying the nature and extent thereof
and any corrective action taken or proposed to be taken with respect thereto and
(B) setting forth computations in reasonable detail satisfactory to the Agent
demonstrating compliance with the provisions of Sections 6.3, 6.4, 6.5 and 6.10
and (ii) a certificate of such accountants accompanying the audited consolidated
financial statements delivered under (a) above certifying that, in the course of
the regular audit of the business of the Borrowers and their Subsidiaries, such
accountants have obtained no knowledge that an Event of Default has occurred and
is continuing, or if, in the opinion of such accountants, an Event of Default
has occurred and is continuing, specifying the nature thereof and all relevant
facts with respect thereto;
(d) as soon as available, but no more than forty five (45) days after
the end of each month, the unaudited monthly cash flow reports of the Borrowers
on a consolidated basis and as of the close of such fiscal month and the results
of their operations during such fiscal period and the then elapsed portion of
the fiscal year;
(e) concurrently with any delivery of financial statements under (b)
above, monthly financial projections for the following six fiscal month period;
(f) as soon as possible, and in any event within forty five (45) days
of the Closing Date, a consolidated pro forma balance sheet of the Borrowers'
financial condition as of the Filing Date;
(g) concurrently with any delivery of financial statements under (b)
above, updates of the Budget, satisfactory in form and substance to the Agent;
(h) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by it
with the Securities and Exchange Commission, or any governmental authority
succeeding to any of or all the functions of said commission, or with any
national securities exchange, as the case may be;
(i) as soon as available and in any event (A) within thirty (30) days
after any Borrower or any of their ERISA Affiliates knows or has reason to know
that any Termination Event described in clause (i) of the definition of
Termination Event with respect to any Single Employer Plan of any of the
Borrowers or such ERISA Affiliate has occurred and (B) within ten (10) days
after any of the Borrowers or any of their ERISA Affiliates knows or has reason
to know that any other Termination Event with respect to any such Plan has
occurred, a statement of a Financial Officer of such Borrower describing such
Termination Event and the action, if any, which such Borrower or such ERISA
Affiliate proposes to take with respect thereto;
(j) promptly and in any event within ten (10) days after receipt
thereof by any of the Borrowers or any of their ERISA Affiliates from the PBGC
copies of each notice received by such Borrower or any such ERISA Affiliate of
the PBGC's intention to terminate any Single Employer Plan of such Borrower or
such ERISA Affiliate or to have a trustee appointed to administer any such Plan;
41
(k) if requested by the Agent, promptly and in any event within
thirty (30) days after the filing thereof with the Internal Revenue Service,
copies of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Single Employer Plan of any of the Borrowers
or any of their ERISA Affiliates;
(l) within ten (10) days after notice is given or required to be
given to the PBGC under Section 302(f)(4)(A) of ERISA of the failure of any of
the Borrowers or any of their ERISA Affiliates to make timely payments to a
Plan, a copy of any such notice filed and a statement of a Financial Officer of
such Borrower setting forth (A) sufficient information necessary to determine
the amount of the lien under Section 302(f)(3), (B) the reason for the failure
to make the required payments and (C) the action, if any, which the Borrowers or
any of their ERISA Affiliates proposed to take with respect thereto;
(m) promptly and in any event within ten (10) days after receipt
thereof by any of the Borrowers or any ERISA Affiliate from a Multiemployer Plan
sponsor, a copy of each notice received by such Borrower or any ERISA Affiliate
concerning (A) the imposition of Withdrawal Liability by a Multiemployer Plan,
(B) the determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA, (C) the termination of a
Multiemployer Plan within the meaning of Title IV of ERISA, or (D) the amount of
liability incurred, or which may be incurred, by the Borrowers or any ERISA
Affiliate in connection with any event described in clause (A), (B) or (C)
above;
(n) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of any Borrower, or
compliance with the terms of any material loan or financing agreements as the
Agent, at the request of any Lender, may reasonably request;
(o) promptly after the same is available, copies of all pleadings,
motions, applications, judicial information, financial information and other
documents filed by or on behalf of any of the Borrowers with the Bankruptcy
Court in the Cases, or distributed by or on behalf of any of the Borrowers to
any official committee appointed in the Cases, providing copies of same to
counsel for the Agent;
(p) no later than the 25th of each month, a reconciliation of the
results of the Borrowers' business operations for the preceding month as
compared to the corresponding period in the Budget;
(q) promptly, and in any event within ten (10) Business Days, after
(i) any Borrower obtains knowledge of (x) a material default (or shall have
received notice alleging a material default from the other party or parties
thereto) in respect of a Borrower's performance or service obligations under a
Material Contract or (y) any other default thereunder which could reasonably be
expected to have a material adverse effect on the benefits of such Material
Contract to the Borrower or Borrowers party thereto, (ii) any Material Contract
is terminated or amended in a manner that is materially adverse to the
Borrower(s) party thereto, or (iii) any new Material Contract is entered into by
a Borrower, a written statement describing such event, with copies of such
material amendments or new contracts, delivered to the Agent (to the extent such
delivery is permitted by the terms of any such Material Contract, provided that
no prohibition on
42
delivery shall be effective if it were bargained for by such Borrower with the
intent of avoiding compliance with this Section 5.1(q)), and an explanation of
any actions being taken with respect thereto; and
(r) as soon as practicable following the date hereof, a schedule of
Material Contracts providing information regarding, as of the date hereof, (i)
any material defaults (or notices received by the Borrowers alleging a material
default from the other party or parties thereto) in respect of a Borrower's
performance or service obligations under a Material Contract or (ii) any other
default under a Material Contract which could reasonably be expected to have a
material adverse effect on the benefits of such Material Contract to the
Borrower or Borrowers party thereto.
SECTION 5.2 Existence. Preserve and maintain in full force and effect all
---------
governmental rights, privileges, qualifications, permits, licenses and
franchises (including, without limitation, any permits, licenses, approvals,
privileges and franchises issued to such Borrower by the FCC or any PUC)
necessary or desirable in the normal conduct of its businesses except (i) (A) if
in the reasonable business judgment of such Borrower it is in its best economic
interest not to preserve and maintain such rights, privileges, qualifications,
permits, licenses and franchises, and (B) such failure to preserve the same
could not, in the aggregate, reasonably be expected to have a material adverse
effect on the operations, business, properties, assets, prospects or condition
(financial or otherwise) of the Borrowers, taken as a whole, and (ii) as
otherwise permitted in connection with sales of assets permitted by Section
6.11; provided that each of the entities listed in Schedule 5.2 attached hereto
may be dissolved or liquidated without consent of the Agent or any Lender.
SECTION 5.3 Insurance. (a) Keep its insurable properties insured at all
---------
times, against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies of the same or similar size in
the same or similar businesses; and maintain in full force and effect public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by any Borrower in such amounts and with such
deductibles as are customary with companies of the same or similar size in the
same or similar businesses and in the same geographic area; and (b) maintain
such other insurance or self insurance as may be required by law.
SECTION 5.4 Obligations and Taxes. With respect to each Borrower, pay all
---------------------
its material obligations arising after the Filing Date promptly and in
accordance with their terms and pay and discharge promptly all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property arising after the Filing Date,
before the same shall become in default, as well as all material lawful claims
for labor, materials and supplies or otherwise arising after the Filing Date
which, if unpaid, would become a Lien or charge upon such properties or any part
thereof; provided, however, that each Borrower shall not be required to pay and
-------- -------
discharge or to cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings (if the Borrowers shall have
set aside on their books adequate reserves therefor).
43
SECTION 5.5 Notice of Event of Default, etc. Promptly give to the Agent
--------------------------------
notice in writing of:
(a) any Event of Default or the occurrence of any event or
circumstance which with the passage of time or giving of notice or both would
constitute an Event of Default; and
(b) any litigation, investigations or proceedings which may exist at
any time between any Borrower and any Governmental Authority.
SECTION 5.6 Access to Books and Records. (a) Maintain or cause to be
---------------------------
maintained at all times true and complete books and records in accordance with
GAAP of the financial operations of the Borrowers and their Subsidiaries; and
provide the Agent and its representatives access to all such books and records
during regular business hours, in order that the Agent may examine and make
abstracts from such books, accounts, records and other papers for the purpose of
verifying the accuracy of the various reports delivered by the Borrowers to the
Agent or the Lenders pursuant to this Agreement or for otherwise ascertaining
compliance with this Agreement. The Borrowers will permit (and will cause their
Subsidiaries to permit) any representatives designated by the Agent, upon
reasonable prior notice, to discuss its affairs, finances and condition with its
officers and independent accounts, all at such reasonable times and as often as
reasonably requested.
(b) The Borrowers will permit any representatives designated by the
Agent (including any consultants, accountants, lawyers and appraisers retained
by the Agent) to conduct evaluations and appraisals of the Borrowers'
computation of the Borrowing Base and the assets included in the Borrowing Base,
all at such reasonable times and as often as reasonably requested. The
Borrowers shall pay the reasonable fees (including reasonable and customary
internally allocated fees of employees of the Agent as to which invoices have
been furnished) and expenses of any such representatives retained by the Agent
as to which invoices have been furnished to conduct any such evaluation or
appraisal, including the reasonable fees and expenses associated with collateral
monitoring services performed by the Collateral Agent Services Group of the
Agent. To the extent required by the Agent as a result of any such evaluation,
appraisal or monitoring, the Borrowers also agree to modify or adjust the
computation of the Borrowing Base (which may include maintaining additional
reserves, modifying the advance rates or modifying the eligibility criteria for
the components of the Borrowing Base).
(c) In the event that historical accounting practices, systems or
reserves relating to the components of the Borrowing Base are modified in a
manner that is adverse to the Lenders in any material respect, the Borrowers
will agree to maintain such additional reserves (for purposes of computing the
Borrowing Base) in respect to the components of the Borrowing Base and make
such other adjustments to its parameters for including the components of the
Borrowing Base as the Agent shall reasonably require based upon such
modifications.
(d) The Borrowers will grant the Agent access to and the right to
inspect all reports, audits and other internal information of the Borrowers
relating to environmental matters upon reasonable notice, and obtain any third
party verification of matters relating to compliance with environmental laws and
regulations requested by the Agent at any time and from time to time.
44
SECTION 5.7 Maintenance of Sweep Account. The Borrowers shall, within
----------------------------
thirty (30) days after the Closing Date, and at all times thereafter, maintain
with the Agent an account or accounts to be used by the Borrowers as their
principal sweep accounts into which shall be swept the available balances in the
Borrowers' operating accounts at the end of each Business Day.
SECTION 5.8 Borrowing Base Certificate. Commencing upon the end of the
--------------------------
Initial Period, furnish to the Agent, no later than (i) three (3) Business Days
after each of the weeks ended, a completed Borrowing Base Certificate as of the
last day of the immediately preceding one week period, (ii) five (5) Business
Days following the immediately preceding fiscal month ended, a completed
Borrowing Base Certificate showing the Borrowing Base as of the close of
business on the last day of such fiscal month, and (iii) if requested by the
Agent, at any other time when the Agent reasonably believes that the then
existing Borrowing Base Certificate is materially inaccurate, as soon as
reasonably available but in no event later than five (5) Business Days after
such request, a completed Borrowing Base Certificate showing the Borrowing Base
as of the date so requested, in each case with supporting documentation and
additional reports with respect to the Borrowing Base as the Agent may
reasonably request. The components of the Borrowing Base consisting of
property, plant and equipment shall be updated from time to time upon receipt of
periodic valuation updates received from the Agent's asset valuation experts.
SECTION 6. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.3(b)) or any amount shall remain outstanding or
unpaid under this Agreement, unless the Required Lenders shall otherwise consent
in writing, each of the Borrowers will not (and will not apply to the Bankruptcy
Court for authority to), and will cause each of their respective Subsidiaries
not to:
SECTION 6.1 Liens. Incur, create, assume or suffer to exist any Lien on
-----
any asset of the Borrowers now owned or hereafter acquired by any of such
Borrowers other than (i) Liens which were existing on the Filing Date as
reflected on Schedule 3.6 hereto; (ii) Permitted Liens; and (iii) Liens in favor
------------
of the Agent and the Lenders.
SECTION 6.2 Merger, etc. Except for the consolidation or merger of any
-----------
Borrower or any of their Subsidiaries listed on Schedule 5.2 with any other
Borrower, consolidate or merge with or into another Person.
SECTION 6.3 Indebtedness. Contract, create, incur, assume or suffer to
------------
exist any Indebtedness, except for (i) Indebtedness under this Agreement; (ii)
Indebtedness incurred prior to the Filing Date (including existing Capitalized
Leases); (iii) Indebtedness incurred subsequent to the Filing Date secured by
purchase money Liens or Capitalized Leases in an aggregate amount not to exceed
$2,000,000 to the extent permitted by Section 6.4; (iv) Indebtedness arising
from Investments among the Borrowers that are permitted hereunder; (v)
Indebtedness owed to Chase or any of its banking Affiliates in respect of any
overdrafts and related liabilities arising from treasury, depository and cash
management services or in connection with any automated clearing house transfers
of funds; (vi) inter-company Indebtedness among Borrowers and set
45
forth on Schedule 6.3 or incurred subsequent to the date hereof; and (vii)
------------
Indebtedness consisting of guaranties permitted by Section 6.6.
SECTION 6.4 Capital Expenditures. Make cumulative Capital Expenditures for
--------------------
each fiscal quarter ending on each date listed below in excess of the amount
opposite such date (as calculated on a consolidated basis for the Borrowers and
their Subsidiaries):
Fiscal Quarter Ending Capital Expenditures (millions)
--------------------- -------------------------------
December 31, 2000 [1-1/2 months] $12.0
(commencing November 15, 2000)
March 31, 2001 $51.1
June 30, 2001 $18.0
September 30, 2001 $18.0
December 31, 2001 $18.0
March 31, 2002 $18.0
April 30, 2002 [1 month] $ 6.0
Commencing January 1, 2001 and for each succeeding fiscal quarter, fifty
percent (50%) of any amount of the foregoing that is not expended during a
particular quarter may be added to the amount permitted to be expended in the
next quarter. In addition to (but without duplication of) the foregoing, (a) up
to $22,600,000 of the amount permitted to be expended in the quarter ending
March 31, 2001 that is not expended during such quarter may be added to the
amount permitted to be expended in the quarter ending June 30, 2001 solely for
the purpose of the purchase of capital equipment to permit the Borrowers to
fulfill their obligations under that certain contract with Genuity Solutions,
Inc. dated as of September 13, 2000, and (b) up to an additional $10,000,000 of
the amount permitted to be expended in the quarter ending March 31, 2001 that is
not expended during such quarter may be added to the amount permitted to be
expended during any quarter ending prior to December 31, 2001 solely for the
purpose of the purchase of capital equipment for future special access customers
of the Borrowers.
SECTION 6.5 EBITDA.
------
(a) As of the end of each fiscal month of the Borrowers, permit
cumulative EBITDA loss (calculated on a consolidated basis for Borrowers and
their Subsidiaries) to be more than the amount specified opposite the fiscal
months ending set forth below:
Fiscal Month Ending EBITDA (millions)
------------------- -----------------
November 30, 2000 ($ 20.0)
(commencing November 15, 2000)
December 31, 2000 ($ 60.0)
January 31, 2001 ($100.0)
February 28, 2001 ($125.0)
March 31, 2001 ($165.0)
April 30, 2001 ($195.0)
46
May 31, 2001 ($220.0)
June 30, 2001 ($230.0)
July 31, 2001 ($245.0)
August 31, 2001 ($255.0)
September 30, 2001 ($255.0)
October 31, 2001 ($250.0)
November 30, 2001 ($240.0)
December 31, 2001 ($230.0)
January 31, 2002 ($220.0)
February 28, 2002 ($210.0)
March 31, 2002 ($200.0)
April 30, 2002 ($185.0)
The foregoing EBITDA amounts include an estimate of retention bonuses to be paid
by the Borrowers to certain of their officers and employees with the approval of
the Bankruptcy Court. The Borrowers covenant and agree that in the event the
Bankruptcy Court does not enter an order in the Cases on or prior to March 1,
2001 approving the payment of such amounts or reduces the payments from the
amounts set forth in the Budget delivered to the Agent pursuant to Section
4.1(i), the foregoing covenant amounts shall be adjusted on a dollar for dollar
basis by adding the reduction in the amounts of the retention bonus payments to
the amount of the permitted cumulative EBITDA loss (thereby effecting a
reduction in the permitted cumulative EBITDA loss).
(b) Permit the EBITDA loss to be more than ($20,000,000) for any
fiscal month of the Borrowers, commencing with August 2001.
SECTION 6.6 Guarantees and Other Liabilities. Purchase or repurchase (or
--------------------------------
agree, contingently or otherwise, so to do) the Indebtedness of, or assume,
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance of any obligation or capability of so
doing, or otherwise), endorse or otherwise become liable, directly or
indirectly, for the obligations, stock or dividends of any Person, except (i)
for any guaranty of Indebtedness or other obligations (or otherwise becoming
liable for any of the obligations) of any of the Borrowers if such Indebtedness
is permitted by this Agreement and (ii) by endorsement of negotiable instruments
for deposit or collection in the ordinary course of business.
SECTION 6.7 Chapter 11 Claims. Incur, create, assume, suffer to exist or
-----------------
permit any other Superpriority Claim or Lien which is pari passu with or senior
----------
to the claims or the Liens of the Agent and the Lenders against the Borrowers
hereunder, except for the Carve-Out and Liens permitted pursuant to clauses (i)
or (ii) of Section 6.1.
SECTION 6.8 Dividends; Capital Stock. Except for distributions or payments
------------------------
from one Borrower to another Borrower (subject to the limitations on Investments
set forth in Section 9.17) and except for dividends on preferred shares of ICG
Funding, LLC in an amount up to $2,300,000 (subject to the approval of the
Bankruptcy Court), declare or pay, directly or indirectly, any dividends or make
any other distribution or payment, whether in cash, property,
47
securities or a combination thereof, with respect to (whether by reduction of
capital or otherwise) any shares of capital stock (or any options, warrants,
rights or other equity securities or agreements relating to any capital stock),
or set apart any sum for the aforesaid purposes on anything other than an arm's-
length basis.
SECTION 6.9 Transactions with Affiliates. Sell or transfer any property
----------------------------
or assets to, or otherwise engage in or permit to exist any other material
transactions with, any of its non-Borrower Affiliates, including, without
limitation, ▇▇▇ ▇▇▇, L.P., other than in the ordinary course of the Borrowers'
businesses in good faith and at prices and on terms and conditions not less
favorable to the Borrowers than could be obtained on an arm's-length basis from
unrelated third parties. The Borrowers shall not make any payments in respect of
any mechanics liens which encumber in any respect the partially constructed
parking garage located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ or any
other property or assets of ▇▇▇ ▇▇▇, ▇.▇.
SECTION 6.10 Investments, Loans and Advances. Purchase, hold or acquire
-------------------------------
any capital stock, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment in, any other Person (all of the foregoing, "Investments"), except
-----------
for (i) ownership by the Borrowers of the capital stock or other equity
interests of each of the Subsidiaries as set forth on Schedule 3.5, (ii)
------------
Permitted Investments, (iii) advances and loans among the Borrowers, and (iv)
investments existing on the Closing Date and listed on Schedule 6.10.
-------------
SECTION 6.11 Disposition of Assets. Sell or otherwise dispose of any
---------------------
assets (including, without limitation, the capital stock of any Subsidiary)
except for (i) sales of inventory, fixtures and equipment in the ordinary course
of business and (ii) sales of surplus equipment no longer used in the
telecommunications businesses of the Borrowers, and (iii) sales of assets (other
than assets described in clauses (i) or (ii) above) for cash and for fair value
in an aggregate amount not to exceed $15,000,000 in any fiscal year of the
Borrowers; provided that in the case of sales of assets pursuant to clauses (i),
(ii) or (iii) above, each Borrower shall, within two (2) Business Days of the
date of receipt by such Borrower or any of its Subsidiaries of the Net Proceeds
from such sale, prepay the Loans in the amount and order of priority set forth
in Section 2.13(b).
SECTION 6.12 Nature of Business. Modify or alter in any material manner
------------------
the nature and type of its business as conducted at or prior to the Filing Date
or the manner in which such business is conducted (except as required by the
Bankruptcy Code), it being understood that asset sales permitted by Section 6.11
shall not constitute such a material modification or alteration.
SECTION 6.13 Transactions among Borrowers. Except to the extent existing
----------------------------
on the date the Cases were filed and disclosed on Schedule 6.13, permit, place
or agree to permit or place any restrictions on the payment of dividends or
other distributions among the Borrowers or the making of advances or any other
cash payments among the Borrowers.
SECTION 6.14 Right of Subrogation among Borrowers. Assert any right of
------------------------------------
subrogation against any other Borrower until all Borrowings and all Letters of
Credit are paid in full and the Total Commitment is terminated.
48
SECTION 7. EVENTS OF DEFAULT
SECTION 7.1 Events of Default. In the case of the happening of any of the
-----------------
following events and the continuance thereof beyond the applicable period of
grace if any (each, an "Event of Default"):
----------------
(a) any material representation or warranty made by any Borrower in
this Agreement or in any Loan Document or in connection with this Agreement or
the credit extensions hereunder or any material statement or representation made
in any report, financial statement, certificate or other document furnished by
any Borrower to the Lenders under or in connection with this Agreement, shall
prove to have been false or misleading in any material respect when made or
delivered; or
(b) default shall be made in the payment of any (i) fees or interest
on the Loans or reimbursement of expenses under any Loan Document when due, and
such default shall continue unremedied for more than two (2) Business Days, or
(ii) principal of the Loans or other amounts payable by the Borrowers hereunder
(including, without limitation, reimbursement obligations or cash
collateralization in respect of Letters of Credit), 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 by acceleration thereof or otherwise; or
(c) default shall be made by any Borrower or any of its Subsidiaries
in the due observance or performance of any of the negative covenants contained
in Section 6 hereof; or
(d) default shall be made by any Borrower or any of its Subsidiaries
in the due observance or performance of any covenant, condition or agreement
(other than the covenants contained in Section 6 hereof) to be observed or
performed pursuant to the terms of this Agreement or any of the other Loan
Documents and such default shall continue unremedied for more than ten (10)
days; or
(e) any of the Cases shall be dismissed or converted to a case under
Chapter 7 of the Bankruptcy Code or any Borrower shall file a motion or other
pleading seeking the dismissal of any of the Cases under Section 1112 of the
Bankruptcy Code or otherwise; a trustee under Chapter 7 or Chapter 11 of the
Bankruptcy Code, a responsible officer or an examiner with enlarged powers
relating to the operation of the business (powers beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of the
Bankruptcy Code shall be appointed in any of the Cases and the order appointing
such trustee, responsible officer or examiner shall not be reversed or vacated
within thirty (30) days after the entry thereof; or an application shall be
filed by any Borrower for the approval of any other Superpriority Claim (other
than the Carve-Out) in any of the Cases which is pari passu with or senior to
-----------
the claims of the Agent and the Lenders against any Borrower hereunder, or there
shall arise or be granted any such pari passu or senior Superpriority Claim; or
----------
(f) the Bankruptcy Court shall enter, over the objection of the
Borrowers, an order or orders granting relief from the automatic stay applicable
under Section 362 of the Bankruptcy Code to the holder or holders of any
security interest to permit foreclosure (or the
49
granting of a deed in lieu of foreclosure or the like) on any assets of any of
the Borrowers which have a value in excess of $1,000,000 in the aggregate; or
(g) a Change of Control shall occur; or
(h) the Borrowers shall fail to deliver a certified Borrowing Base
Certificate when due and such default shall continue unremedied for more than
three (3) Business Days; or
(i) any provision of any Loan Document shall, for any reason, cease
to be valid and binding on any of the Borrowers, or any of the Borrowers shall
so assert in any pleading filed in any court; or
(j) an order of the Bankruptcy Court shall be entered reversing,
amending, supplementing, staying for a period in excess of ten (10) days,
vacating or otherwise modifying the Final Order; or
(k) any judgment or order as to a post-petition liability or debt for
the payment of money in excess of $1,000,000 shall be rendered against any of
the Borrowers or any of their Subsidiaries and the enforcement thereof shall not
have been stayed; or
(l) any non-monetary judgment or order with respect to a post-
petition event shall be rendered against any Borrower or any of its Subsidiaries
which does or would reasonably be expected to (i) cause a material adverse
change in the financial condition, business, prospects, operations or assets of
the Borrowers and their Subsidiaries taken as a whole on a consolidated basis,
(ii) have a material adverse effect on the ability of any of the Borrowers to
perform their respective obligations under any Loan Document, or (iii) have a
material adverse effect on the rights and remedies of the Agent or any Lender
under any Loan Document, and there shall be any period of ten (10) consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(m) except as permitted by the Final Order, the Borrowers shall make
any Pre-Petition Payment other than Pre-Petition Payments authorized by the
Bankruptcy Court in respect of: (i) accrued payroll and related expenses and
employee benefits as of the Filing Date, (ii) the satisfaction and termination
of the Existing Agreement; or (iii) mechanics liens and certain other pre-
petition claims against the Borrowers in a total amount not in excess of
$10,500,000 (excluding refunds or credits to customers issued in the ordinary
course of business); or
(n) any Termination Event described in clauses (iii) or (iv) of the
definition of such term shall have occurred and shall continue unremedied for
more than ten (10) days and the sum (determined as of the date of occurrence of
such Termination Event) of the Insufficiency of the Plan in respect of which
such Termination Event shall have occurred and be continuing and the
Insufficiency of any and all other Plans with respect to which such a
Termination Event (described in such clauses (iii) or (iv)) shall have occurred
and then exist is equal to or greater than $5,000,000; or
(o) (i) any Borrower or any ERISA Affiliate thereof shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such
50
Multiemployer Plan, (ii) such Borrower or such ERISA Affiliate does not have
reasonable grounds to contest such Withdrawal Liability and is not in fact
contesting such Withdrawal Liability in a timely and appropriate manner, and
(iii) the amount of such Withdrawal Liability specified in such notice, when
aggregated with all other amounts required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the date of such
notification), exceeds $500,000 allocable to post-petition obligations or
requires payments exceeding $100,000 per annum in excess of the annual payments
made with respect to such Multiemployer Plans by such Borrower or such ERISA
Affiliate for the plan year immediately preceding the plan year in which such
notification is received; or
(p) any Borrower or any ERISA Affiliate thereof shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate annual
contributions of such Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years that include the date hereof by an amount exceeding $500,000; or
(q) any Borrower or any ERISA Affiliate shall have committed a
failure described in Section 302(f)(1) of ERISA (other than the failure to make
any contribution accrued and unpaid as of the Filing Date) and the amount
determined under Section 302(f)(3) of ERISA is equal to or greater than
$1,000,000; or
(r) it shall be determined (whether by the Bankruptcy Court or by any
other judicial or administrative forum) that any Borrower is liable for the
payment of claims arising out of any failure to comply (or to have complied)
with applicable environmental laws or regulations the payment of which will have
a material adverse effect on the financial condition, business, properties,
operations or assets of the Borrowers, taken as a whole, and the enforcement
thereof shall not have been stayed;
then, and in every such event and at any time thereafter during the continuance
of such event, and without further order of or application to the Bankruptcy
Court, the Agent may, and at the request of the Required Lenders, shall, take
one or more of the following actions without further order of or application to
the Court, provided that with respect to item (iv) below and the enforcement of
--------
liens or other remedies with respect to collateral referred to in item (v)
below, the Agent shall provide the Borrowers (with a copy to counsel for the
Official Creditors' Committee appointed in the Cases and to the United States
Trustee for the District of Delaware) with five (5) business days' prior written
notice: (i) terminate forthwith the Total Commitment; (ii) declare the Loans
then outstanding to be forthwith due and payable, whereupon the principal of the
Loans together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrowers accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrowers, anything contained herein or in any other Loan Document
to the contrary notwithstanding; (iii) require the Borrowers upon demand to
forthwith deposit in the Letter of Credit Account cash in an amount which,
together with any amounts then held in the Letter of Credit Account, is equal to
the sum of 105% of the then Letter of Credit Outstandings (and to the extent the
Borrowers shall fail to furnish such funds as demanded by the
51
Agent, the Agent shall be authorized to debit the accounts of the Borrowers
maintained with the Agent in such amount five (5) Business Days after the giving
of the notice referred to above); (iv) set-off amounts in the Letter of Credit
Account or any other accounts maintained with the Agent and apply such amounts
to the obligations of the Borrowers hereunder and in the other Loan Documents;
and (v) exercise any and all remedies under the Loan Documents and under
applicable law available to the Agent and the Lenders.
SECTION 8. THE AGENT
SECTION 8.1 Administration by Agent. The general administration of the
-----------------------
Loan Documents shall be performed by the Agent. Each Lender hereby irrevocably
authorizes the Agent, at its discretion, to take or refrain from taking such
actions as agent on its behalf and to exercise or refrain from exercising such
powers under the Loan Documents as are delegated by the terms hereof or thereof,
as appropriate, together with all powers reasonably incidental thereto
(including the release of Collateral in connection with any transaction that is
expressly permitted by the Loan Documents). The Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents.
SECTION 8.2 Advances and Payments
---------------------
(a) On the date of each Loan, the Agent shall be authorized (but not
obligated) to advance, for the account of each of the Lenders, the amount of the
Loan to be made by it in accordance with its Commitment hereunder. Should the
Agent do so, each of the Lenders agrees forthwith to reimburse the Agent in
immediately available funds for the amount so advanced on its behalf by the
Agent, together with interest at the Federal Funds Effective Rate if not so
reimbursed on the date due from and including such date but not including the
date of reimbursement.
(b) Any amounts received by the Agent in connection with this
Agreement (other than amounts to which the Agent is entitled pursuant to
Sections 2.19, 8.6, 9.5 and 9.6), the application of which is not otherwise
provided for in this Agreement, shall be applied, first, in accordance with each
Lender's Commitment Percentage to pay accrued but unpaid Commitment Fees or
Letter of Credit Fees, and second, in accordance with each Lender's Commitment
Percentage to pay accrued but unpaid interest and the principal balance
outstanding and all unreimbursed Letter of Credit drawings. All amounts to be
paid to a Lender by the Agent shall be credited to that Lender, after collection
by the Agent, in immediately available funds either by wire transfer or deposit
in that Lender's correspondent account with the Agent, as such Lender and the
Agent shall from time to time agree.
SECTION 8.3 Sharing of Setoffs. Each Lender agrees that if it shall,
------------------
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrowers, including, but not limited to, a secured claim or other security
or interest arising from, or in lieu of, such secured claim and received by such
Lender under any applicable bankruptcy, insolvency or other similar law, or
otherwise, obtain payment in respect of its Loans as a result of which the
unpaid portion of its Loans is proportionately less than the unpaid portion of
the Loans of any other Lender (a) it shall promptly purchase at par (and shall
be deemed to have thereupon purchased) from such other Lender a participation in
the Loans of such other Lender, so that the aggregate
52
unpaid principal amount of each Lender's Loans and its participation in Loans of
the other Lenders shall be in the same proportion to the aggregate unpaid
principal amount of all Loans then outstanding as the principal amount of its
Loans prior to the obtaining of such payment was to the principal amount of all
Loans outstanding prior to the obtaining of such payment and (b) such other
adjustments shall be made from time to time as shall be equitable to ensure that
the Lenders share such payment pro-rata, provided that if any such non-pro-rata
payment is thereafter recovered or otherwise set aside such purchase of
participations shall be rescinded (without interest). Each of the Borrowers
expressly consents to the foregoing arrangements and agrees that any Lender
holding (or deemed to be holding) a participation in a Loan may exercise any and
all rights of banker's lien, setoff (in each case, subject to the same notice
requirements as pertain to clause (iv) of the remedial provisions of Section
7.1) or counterclaim with respect to any and all moneys owing by the Borrowers
to such Lender as fully as if such Lender held a Note and was the original
obligee thereon, in the amount of such participation.
SECTION 8.4 Agreement of Required Lenders. Upon any occasion requiring or
-----------------------------
permitting an approval, consent, waiver, election or other action on the part of
the Required Lenders, action shall be taken by the Agent for and on behalf or
for the benefit of all Lenders upon the direction of the Required Lenders, and
any such action shall be binding on all Lenders. No amendment, modification,
consent, or waiver shall be effective except in accordance with the provisions
of Section 9.10.
SECTION 8.5 Liability of Agent.
------------------
(a) The Agent, when acting on behalf of the Lenders, may execute any
of its respective duties under this Agreement by or through any of its
respective officers, agents, and employees, and neither the Agent nor its
directors, officers, agents, employees or Affiliates shall be liable to the
Lenders or any of them for any action taken or omitted to be taken in good
faith, or be responsible to the Lenders or to any of them for the consequences
of any oversight or error of judgment, or for any loss, unless the same shall
happen through its gross negligence or willful misconduct. The Agent and its
respective directors, officers, agents, employees and Affiliates shall in no
event be liable to the Lenders or to any of them for any action taken or omitted
to be taken by them pursuant to instructions received by them from the Required
Lenders or in reliance upon the advice of counsel selected by it. Without
limiting the foregoing, neither the Agent, nor any of its respective directors,
officers, employees, agents or Affiliates shall be responsible to any Lender for
the due execution, validity, genuineness, effectiveness, sufficiency, or
enforceability of, or for any statement, warranty, or representation in, this
Agreement, any Loan Document or any related agreement, document or order, or
shall be required to ascertain or to make any inquiry concerning the performance
or observance by the Borrowers of any of the terms, conditions, covenants, or
agreements of this Agreement or any of the Loan Documents.
(b) Neither the Agent nor any of its respective directors, officers,
employees, agents or Affiliates shall have any responsibility to the Borrowers
on account of the failure or delay in performance or breach by any Lender or by
the Borrowers of any of their obligations under this Agreement or any of the
Loan Documents or in connection herewith or therewith.
(c) The Agent, in its capacity as Agent hereunder, shall be entitled
to rely on any communication, instrument, or document reasonably believed by
such person to be genuine
53
or correct and to have been signed or sent by a person or persons believed by
such person to be the proper person or persons, and such person shall be
entitled to rely on advice of legal counsel, independent public accountants, and
other professional advisers and experts selected by such person.
SECTION 8.6 Reimbursement and Indemnification. Each Lender agrees (i) to
---------------------------------
reimburse (x) the Agent for such Lender's Commitment Percentage of any expenses
and fees incurred for the benefit of the Lenders under this Agreement and any of
the Loan Documents, including, without limitation, counsel fees and compensation
of agents and employees paid for services rendered on behalf of the Lenders, and
any other expense incurred in connection with the operations or enforcement
thereof not reimbursed by the Borrowers and (y) the Agent for such Lender's
Commitment Percentage of any expenses of the Agent incurred for the benefit of
the Lenders that the Borrowers have agreed to reimburse pursuant to Section 9.5
and has failed to so reimburse and (ii) to indemnify and hold harmless the Agent
and any of its directors, officers, employees, agents or Affiliates, on demand,
in the amount of its proportionate share, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against it or any of them in any way
relating to or arising out of this Agreement or any of the Loan Documents or any
action taken or omitted by it or any of them under this Agreement or any of the
Loan Documents to the extent not reimbursed by the Borrowers (except such as
shall result from their respective gross negligence or willful misconduct).
SECTION 8.7 Rights of Agent. It is understood and agreed that Chase shall
---------------
have the same rights and powers hereunder (including the right to give such
instructions) as the other Lenders and may exercise such rights and powers, as
well as its rights and powers under other agreements and instruments to which it
is or may be party, and engage in other transactions with any Borrower, as
though it were not the Agent of the Lenders under this Agreement.
SECTION 8.8 Independent Lenders. Each Lender acknowledges that it has
-------------------
decided to enter into this Agreement and to make the Loans hereunder based on
its own analysis of the transactions contemplated hereby and of the
creditworthiness of the Borrowers and agrees that the Agent shall bear no
responsibility therefor.
SECTION 8.9 Notice of Transfer. The Agent may deem and treat a Lender
------------------
party to this Agreement as the owner of such Lender's portion of the Loans for
all purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Lender shall have been received by the Agent.
SECTION 8.10 Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereof to the Lenders and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent, which shall be reasonably satisfactory to the Borrowers. If no successor
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment, within thirty (30) days after the retiring Agent's
giving of notice of resignation, the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of a least
54
$100,000,000, which shall be reasonably satisfactory to the Borrowers. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 8 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
SECTION 9. MISCELLANEOUS
SECTION 9.1 Notices. Notices and other communications provided for herein
-------
shall be in writing (including telegraphic, telex, facsimile or cable
communication) and shall be mailed, telegraphed, telexed, transmitted, cabled or
delivered to any Borrower at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇, with a copy to
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Telecopier No. (312) 407-
0411, and to a Lender or the Agent to it at its address set forth on Annex A, or
such other address as such party may from time to time designate by giving
written notice to the other parties hereunder. 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 fifth Business Day
after the date when sent by registered or certified mail, postage prepaid,
return receipt requested, if by mail; or when delivered to the telegraph
company, charges prepaid, if by telegram; or when receipt is acknowledged, if by
any telegraphic communications or facsimile equipment of the sender; in each
case addressed to such party as provided in this Section 9.1 or in accordance
with the latest unrevoked written direction from such party; provided, however,
-------- -------
that in the case of notices to the Agent notices pursuant to the preceding
sentence with respect to change of address and pursuant to Section 2 shall be
effective only when received by the Agent.
SECTION 9.2 Survival of Agreement, Representations and Warranties, etc.
----------------------------------------------------------
All warranties, representations and covenants made by any Borrower herein or in
any certificate or other instrument delivered by it or on its behalf in
connection with this Agreement shall be considered to have been relied upon by
the Lenders and shall survive the making of the Loans herein contemplated
regardless of any investigation made by any Lender or on its behalf and shall
continue in full force and effect so long as any amount due or to become due
hereunder is outstanding and unpaid and so long as the Commitments have not been
terminated. All statements in any such certificate or other instrument shall
constitute representations and warranties by the Borrowers hereunder with
respect to the Borrowers.
SECTION 9.3 Successors and Assigns.
----------------------
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrowers, the Agent and the Lenders and their respective successors and
assigns. None of the Borrowers may assign or transfer any of their rights or
obligations hereunder without the prior written consent of all of the Lenders.
Each Lender may sell participations to any Person in all or part of any Loan, or
all or part of its Commitment, in which event, without limiting the foregoing,
the provisions of Section 2.15 shall inure to the benefit of each purchaser of a
55
participation (provided that such participant shall look solely to the seller of
such participation for such benefits and the Borrowers' liability, if any, under
Sections 2.15 and 2.18 shall not be increased as a result of the sale of any
such participation) and the pro rata treatment of payments, as described in
Section 2.17, shall be determined as if such Lender had not sold such
participation. In the event any Lender shall sell any participation, such
Lender shall retain the sole right and responsibility to enforce the obligations
of each of the Borrowers relating to the Loans, including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement (provided that such Lender may grant its participant the right to
consent to such Lender's execution of amendments, modifications or waivers which
(i) reduce any Fees payable hereunder to the Lenders, (ii) reduce the amount of
any scheduled principal payment on any Loan or reduce the principal amount of
any Loan or the rate of interest payable hereunder or (iii) extend the maturity
of the Borrowers' obligations hereunder). The sale of any such participation
shall not alter the rights and obligations of the Lender selling such
participation hereunder with respect to the Borrowers.
(b) Each Lender may assign to one or more Lenders or Eligible
Assignees all or a portion of its interests, rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment and
the same portion of the related Loans at the time owing to it), provided,
however, that (i) other than in the case of an assignment to a Person at least
50% owned by the assignor Lender, or by a common parent of both, or to another
Lender, the Agent and the Fronting Bank must give their respective prior written
consent to such assignment, which consent will not be unreasonably withheld,
(ii) the aggregate amount of the Commitment and/or 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 Agent) shall,
unless otherwise agreed to in writing by the Borrowers and the Agent, in no
event be less than $1,000,000 or the remaining portion of such Lender's
Commitment and/or Loans, if less and (iii) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance with blanks
appropriately completed, together with a processing and recordation fee of
$3,500 (for which the Borrowers shall have no liability). Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be within ten (10)
Business Days after the execution thereof (unless otherwise agreed to in writing
by the Agent), (A) the assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (B) the Lender thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents or the
execution, legality, validity,
56
enforceability, genuineness, sufficiency or value of this Agreement or any of
the other Loan Documents; (ii) such Lender assignor makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrowers or the performance or observance by the Borrowers of any of its
obligations under this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement and the other Loan Documents,
together with copies of the financial statements referred to in Section 3.4 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agent, such
Lender assignor or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by
the terms thereto, together with such powers as are reasonably incidental
hereof; and (vi) such assignee agrees that it will perform in accordance with
their terms all obligations that by the terms of this Agreement are required to
be performed by it as a Lender.
(d) The Agent shall maintain at its office 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 Commitments of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries in
--------
the Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Agent and the Lenders shall treat each Person the name of which
is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by any Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and the assignee thereunder together with the fee payable in
respect thereto, the Agent shall, if such Assignment and Acceptance has been
completed with blanks appropriately filled and consented to by the Agent and the
Fronting Bank (to the extent such consent is required hereunder), (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt written notice thereof to the Borrowers
(together with a copy thereof). No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.3, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers furnished to such Lender
by or on behalf of any of the Borrowers; provided that prior to any such
disclosure, each such assignee or participant or proposed assignee or
participant shall agree in writing to be bound by the provisions of Section 9.4.
(g) Each of the Borrowers hereby agrees to actively assist and
cooperate with the Agent in the Agent's efforts to sell participations herein
(as described in Section 9.3(a)) and
57
assign to one or more Lenders or Eligible Assignees a portion of its interests,
rights and obligations under this Agreement (as set forth in Section 9.3(b)).
SECTION 9.4 Confidentiality. Each Lender agrees to keep any information
---------------
delivered or made available by any of the Borrowers to it confidential from
anyone other than persons employed or retained by such Lender who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing herein shall prevent any Lender
from disclosing such information (i) to any of its Affiliates or to any other
Lender, provided such Affiliate agrees to keep such information confidential to
the same extent required by the Lenders hereunder, (ii) upon the order of any
court or administrative agency, (iii) upon the request or demand of any
regulatory agency or authority, (iv) which has been publicly disclosed other
than as a result of a disclosure by the Agent or any Lender which is not
permitted by this Agreement, (v) in connection with any litigation to which the
Agent, any Lender, or their respective Affiliates may be a party to the extent
reasonably required, (vi) to the extent reasonably required in connection with
the exercise of any remedy hereunder, (vii) to such Lender's legal counsel and
independent auditors, and (viii) to any actual or proposed participant or
assignee of all or part of its rights hereunder subject to the proviso in
Section 9.3(f). Each Lender shall use reasonable efforts to notify the
Borrowers of any required disclosure under clause (ii) of this Section.
SECTION 9.5 Expenses. Whether or not the transactions hereby contemplated
--------
shall be consummated, the Borrowers agree to pay all expenses incurred by the
Agent and Chase Securities Inc. (including, without limitation, the reasonable
fees and disbursements of ▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the Agent, any
other counsel that the Agent shall retain and any internal or third-party
appraisers, consultants and auditors advising the Agent and Chase Securities
Inc. and their counsel) in connection with the preparation, execution, delivery
and administration of this Agreement and the other Loan Documents, the making of
the Loans and the issuance of the Letters of Credit, the perfection of the Liens
contemplated hereby, the syndication of the transactions contemplated hereby,
the costs, fees and expenses of the Agent and Chase Securities Inc. in
connection with monthly and other periodic field audits, monitoring of assets
(including reasonable and customary internal collateral monitoring fees) and
publicity expenses, and, following the occurrence of an Event of Default, all
expenses incurred by the Lenders and the Agent in the enforcement or protection
of the rights of any one or more of the Lenders or the Agent in connection with
this Agreement or the other Loan Documents, including but not limited to the
fees and disbursements of any counsel for the Lenders or the Agent. Such
payments by the Borrowers shall be made upon delivery of a statement setting
forth such costs and expenses. Whether or not the transactions hereby
contemplated shall be consummated, the Borrowers agree to reimburse the Agent
and Chase Securities Inc. for the expenses set forth in the Commitment Letter
and the reimbursement provisions thereof are hereby incorporated herein by
reference. The obligations of the Borrowers under this Section shall survive
the termination of this Agreement and/or the payment of the Loans.
SECTION 9.6 Indemnity. Each of the Borrowers agrees to indemnify and hold
---------
harmless the Agent, Chase Securities Inc. and the Lenders and their directors,
officers, employees, agents and Affiliates (each an "Indemnified Party") from
-----------------
and against any and all expenses, losses, claims, damages and liabilities
incurred by such Indemnified Party arising out of claims made by
58
any Person in any way relating to the transactions contemplated hereby, but
excluding therefrom all expenses, losses, claims, damages, and liabilities to
the extent that they are determined by the final judgment of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Party. The obligations of the Borrowers under
this Section shall survive the termination of this Agreement and/or the payment
of the Loans.
SECTION 9.7 Choice of Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
-------------
SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE AND THE BANKRUPTCY CODE.
SECTION 9.8 No Waiver. No failure on the part of the Agent or any of the
---------
Lenders to exercise, and no delay in exercising, any right, power or remedy
hereunder or any of the other Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 9.9 Extension of Maturity. Should any payment of principal of or
---------------------
interest or any other amount due hereunder become due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, in the case of principal, interest shall be payable
thereon at the rate herein specified during such extension.
SECTION 9.10 Amendments, etc.
---------------
(a) No modification, amendment or waiver of any provision of this
Agreement or the Security and Pledge Agreement, and no consent to any departure
by the Borrowers therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given; provided, however, that no such modification or amendment shall
without the written consent of the Lender affected thereby (x) increase the
Commitment of a Lender (it being understood that a waiver of an Event of Default
shall not constitute an increase in the Commitment of a Lender), or (y) reduce
the principal amount of any Loan or the rate of interest payable thereon, or
extend any date for the payment of interest hereunder or reduce any Fees payable
hereunder or extend the final maturity of the Borrowers' obligations hereunder
(except as contemplated by Section 2.2(d), as to which no consent shall be
required); and, provided, further, that no such modification or amendment shall
without the written consent of (A) all of the Lenders (i) amend or modify any
provision of this Agreement which provides for the unanimous consent or approval
of the Lenders, (ii) amend this Section 9.10 or the definition of Required
Lenders or (iii) amend or modify the Superpriority Claim status of the Lenders
contemplated by Section 2.23 or (B) the Super-Majority Lenders (i) release any
material portion of the Collateral from the Liens created pursuant to the
Security and Pledge Agreement or (ii) alter the eligibility standards used in
determining the Borrowing Base in a manner which would increase the amount of
the Borrowing Base. No such amendment or modification may adversely affect the
rights and obligations of the Agent or any Fronting Bank hereunder or any Lender
in the capacity referred to in Section 6.3(v) without its prior written consent.
No notice to or
59
demand on any Borrower shall entitle any Borrower to any other or further notice
or demand in the same, similar or other circumstances. Each assignee under
Section 9.3(b) shall be bound by any amendment, modification, waiver, or consent
authorized as provided herein, and any consent by a Lender shall bind any Person
subsequently acquiring an interest on the Loans held by such Lender. No
amendment to this Agreement shall be effective against any Borrower unless
signed by such Borrower.
(b) Notwithstanding anything to the contrary contained in Section
9.10(a), in the event that the Borrowers request that this Agreement be modified
or amended in a manner which would require the unanimous consent of all of the
Lenders (or the consent described in clause (B) of the first sentence of Section
9.10(a)) and such modification or amendment is agreed to by the Super-majority
Lenders (as hereinafter defined), then with the consent of the Borrowers and the
Super-majority Lenders, the Borrowers and the Super-majority Lenders shall be
permitted to amend the Agreement without the consent of the Lender or Lenders
which did not agree to the modification or amendment requested by the Borrowers
(such Lender or Lenders, collectively the "Minority Lenders") to provide for (w)
----------------
the termination of the Commitment of each of the Minority Lenders, (x) the
addition to this Agreement of one or more other financial institutions (each of
which shall be an Eligible Assignee), or an increase in the Commitment of one or
more of the Super-majority Lenders, so that the Total Commitment after giving
effect to such amendment shall be in the same amount as the Total Commitment
immediately before giving effect to such amendment, (y) if any Loans are
outstanding at the time of such amendment, the making of such additional Loans
by such new financial institutions or Super-majority Lender or Lenders, as the
case may be, as may be necessary to repay in full the outstanding Loans of the
Minority Lenders immediately before giving effect to such amendment and (z) such
other modifications to this Agreement as may be appropriate. As used herein,
the term "Super-majority Lenders" shall mean, at any time, Lenders holding Loans
----------------------
representing at least 66-2/3% of the aggregate principal amount of the Loans
outstanding, or if no Loans are outstanding, Lenders having Commitments
representing at least 66-2/3% of the Total Commitment.
SECTION 9.11 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 9.12 Headings. Section headings used herein are for convenience
--------
only and are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
SECTION 9.13 Execution in Counterparts. This Agreement may be executed in
-------------------------
any number of counterparts, each of which shall constitute an original, but all
of which taken together shall constitute one and the same instrument.
SECTION 9.14 Prior Agreements. This Agreement represents the entire
----------------
agreement of the parties with regard to the subject matter hereof and the terms
of any letters and other documentation entered into between a Borrower and any
Lender or the Agent prior to the execution of this Agreement which relate to
Loans to be made hereunder shall be replaced by the
60
terms of this Agreement (except as otherwise expressly provided herein with
respect to the Commitment Letter and the fee letter referred to therein,
including without limitation the Borrower's agreement to actively assist the
Agent in the syndication of the transactions contemplated hereby referred to in
Section 9.3(g) and including also the provisions of Section 2.19 and except for
the commitment of Chase Securities Inc. to use commercially reasonable efforts
to effect the syndication of the transactions contemplated hereby).
SECTION 9.15 Further Assurances. Whenever and so often as reasonably
------------------
requested by the Agent, the Borrowers will promptly execute and deliver or cause
to be executed and delivered all such other and further instruments, documents
or assurances, and promptly do or cause to be done all such other and further
things as may be necessary and reasonably required in order to further and more
fully vest in the Agent all rights, interests, powers, benefits, privileges and
advantages conferred or intended to be conferred by this Agreement and the other
Loan Documents.
SECTION 9.16 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
--------------------
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
SECTION 9.17 Foreign Subsidiaries Notwithstanding any provision of any
--------------------
Loan Document to the contrary, (i) no more than 65% of the capital stock in or
of any Subsidiary of any Borrower, which Subsidiary is incorporated under the
laws of a jurisdiction outside the United States and which is a "controlled
foreign corporation" within the meaning of Section 957(a) of the Code (each, a
"Foreign Subsidiary"), shall be pledged or similarly hypothecated to guaranty or
------------------
support any Obligations of any Borrower, (ii) no Foreign Subsidiary shall
guaranty or support any Obligation of any Borrower, and (iii) no security or
similar interest shall be granted in the assets of any Foreign Subsidiary, which
security or similar interest guarantees or supports any Obligation of any
Borrower. The parties agree that any pledge, guaranty or security or similar
interest made or granted in contravention of this Section 9.17 shall be void ab
--
initio. The Borrowers may not (x) make any additional Investments in their
------
Foreign Subsidiaries or (y) transfer any assets or the proceeds of any Loans to
any jurisdiction outside of the United States of America.
[The remainder of this page is intentionally left blank.]
61
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
BORROWERS:
ICG COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG ▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG FUNDING, LLC
By: ICG Communications, Inc.,
its Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG MOUNTAIN VIEW, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG NETAHEAD, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG EQUIPMENT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG CANADIAN ACQUISITION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG HOLDINGS (CANADA) CO.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG TELECOM GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
NIKONET, LLC
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG OHIO LINX, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG ENHANCED SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
COMMUNICATIONS BUYING GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG TELECOM GROUP OF VIRGINIA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG DATACHOICE NETWORK SERVICES, L.L.C.
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PTI HARBOR BAY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BAY AREA TELEPORT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG ACCESS SERVICES - SOUTHEAST, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
TRANS AMERICAN CABLE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG TELECOM OF SAN DIEGO, L.P.
By: ICG Telecom Group, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
WESTERN PLAINS FINANCE, L.L.C.
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG CHOICECOM MANAGEMENT, LLC
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG CHOICECOM, L.P.
By: ICG ChoiceCom Management, LLC
its General Partner
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
DOWNNORTH, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
THE CHASE MANHATTAN BANK,
Individually and as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Annex A to the
Revolving Credit Agreement
COMMITMENT AMOUNTS
Dated as of December 4, 2000
COMMITMENT COMMITMENT
BANK AMOUNT PERCENTAGE
The Chase Manhattan Bank $200,000,000 100.0000%
Loan and Agency Services
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Total $200,000,000 100.0000%
-----------------------------------------------------------------------------
Exhibit A to the
Revolving Credit Agreement
FORM OF FINAL ORDER
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
______________________________________X
In re: : Chapter 11
ICG COMMUNICATIONS, INC., et al., : Case No. 00-4238
-- ---
: (Jointly Administered)
Debtors.
______________________________________X
FINAL ORDER AUTHORIZING DEBTORS TO OBTAIN
POST-PETITION FINANCING PURSUANT TO
11 U.S.C. (S)(S) 364(c)(1), 364(c)(2) and 364(c)(3)
AND TO
REPAY CERTAIN PRE-PETITION SECURED INDEBTEDNESS
-----------------------------------------------
Upon the Motion For Order Authorizing Post-Petition Financing Pursuant
-------------------------------------------------------------
To 11 U.S.C. (S)(S) 364(c) And 105 (the "Motion") of ICG Communications, Inc.
---------------------------------- ------
and certain of its direct and indirect subsidiaries identified on Schedule 1
hereto, each as a debtor and debtor in possession (hereinafter referred to
collectively as the "Debtors"):
-------
(i) seeking this Court's authorization, pursuant to Sections
364(c)(1), 364(c)(2), 364(c)(3) and 105 of the United States Bankruptcy
Code, 11 U.S.C. (S)(S)101, et seq. (the "Code"), and Rules 2002, 4001 and
-- --- ----
9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"),
----------------
for the Debtors to obtain post-petition financing as described more fully
below and in the Documents (as defined below) (the "Financing") up to the
---------
aggregate principal amount of $350,000,000 from The Chase Manhattan
---------
Bank ("Chase" or "Agent"), 270 Park
----- -----
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, with Chase acting as Agent for
itself and a syndicate of banks, financial institutions and other
institutional lenders to be arranged by Chase (together with Chase, the
-------
"Lenders"), (x) with priority over any and all administrative expenses of
the kind specified in any sections of the Code, including, without
limitation, or arising or ordered under Sections 503(b), 105, 326, 328,
330, 331, 506(c), 507(a), 507(b), 546(c), 726 (to the extent permitted by
law) and 1112 of the Code (other than the Carve-Out (as defined below))
pursuant to Section 364(c)(1) of the Code, (y) to be secured pursuant to
Section 364(c)(2) of the Code by a valid and perfected first priority
security interest in and lien upon all pre-petition and post-petition
property, wherever located, of the Debtors, including, without limitation,
all cash and cash balances of the Debtors wherever located, not subject to
valid and perfected liens in existence at the time of the commencement of
the Cases or to valid liens in existence at the time of such commencement
that are perfected subsequent to such commencement as permitted by Section
546(b) of the Code (the "Unencumbered Collateral"), subject only to the
-----------------------
Carve-Out, provided that following the Termination Date amounts in the
--------
Letter of Credit Account shall not be subject to the Carve-Out, and (z) to
be secured pursuant to Section 364(c)(3) of the Code by a valid and
perfected junior lien on all pre-petition and post-petition property,
wherever located, of the Debtors, including, without limitation, all cash
and cash balances of the Debtors wherever located, property of the Debtors,
including, without limitation, all cash and cash balances of the Debtors
wherever located, that is subject to valid and perfected liens in existence
at the time of the commencement
of the Cases or to valid liens in existence at the time of such
commencement that are perfected subsequent to such commencement as
permitted by Section 546(b) of the Code, including liens securing the
Indebtedness (as defined in the Credit Agreement) under the Existing
Agreement (as defined in the Credit Agreement)1/ (all of such property
referred to in this clause (z) being hereinafter referred to as the
"Encumbered Collateral"), junior to such valid and perfected Liens and
---------------------
subject only to the Carve-Out, provided that upon repayment in full of
--------
all Indebtedness under the Existing Agreement, the obligations of the
Borrowers under the Credit Agreement and under the Documents and in respect
of Indebtedness permitted by Section 6.3(v) of the Credit Agreement shall
automatically be secured, pursuant to Section 364(c)(2) of the Bankruptcy
Code, by a valid and perfected first priority senior security interest and
lien (subject to Liens permitted pursuant to clauses (i) and
(ii) of Section 6.1 of the Credit Agreement) upon all pre-petition and
post-petition property, wherever located, of the Borrowers that then
secures the Indebtedness under the Existing Agreement, including, without
limitation, all cash and cash balances of the Borrowers wherever located
(subject only to the Carve-Out); and
(ii) seeking this Court's authorization to repay, in full in
accordance
_____________________
1/ Existing Agreement is defined in the Credit Agreement to mean:
"that certain Credit Agreement dated as of August 12, 1999 among ICG Equipment,
Inc. and ICG NetAhead, Inc., as borrowers, ICG Services, Inc., as parent, the
several lenders from time to time party thereto, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
Inc, as sole book-runner and lead arranger, Royal Bank of Canada, as
administrative agent and collateral agent, and Bank of America, N.A. and
Barclays Bank PLC, as co-documentation agents, and shall include the "Loan
Documents" (as defined therein) (each as heretofore amended, amended and
restated or otherwise modified)."
with the Credit Agreement and the terms of this Order, the Indebtedness
arising under the Existing Agreement,
and, due notice of the Motion having been given by the Debtors pursuant to
Bankruptcy Rule 4001(c), and upon the entire record made at the Final Hearing
and after due deliberation and consideration and good and sufficient cause
appearing therefor;
IT IS FOUND, DETERMINED, ORDERED AND ADJUDGED, that:
1. This Court has core jurisdiction over these proceedings and the
parties and property affected hereby pursuant to 28 U.S.C. (S)(S)157(b) and
1334. Consideration of the Motion constitutes a core proceeding as defined in
28 U.S.C. (S)157(b)(2).
2. The Debtors have a need to obtain financing in order to permit, among
other things, the orderly continuation of the operation of its businesses, to
maintain business relationships with vendors and suppliers, to make certain
strategic capital expenditures, to repay all Indebtedness under the Existing
Agreement and to satisfy other working capital needs. The ability of the
Debtors to obtain sufficient working capital and liquidity through the
incurrence of new Indebtedness for borrowed money and other financial
accommodations is vital to the Debtors. The preservation and maintenance of the
going concern values of the Debtors is integral to a successful Chapter 11
proceeding of the Debtors pursuant to the provisions of Chapter 11 of the Code.
The Debtors are unable to obtain for these necessary purposes adequate unsecured
credit allowable under Section 503(b)(1) of the Code as an administrative
expense. A facility in the amount provided by the Financing is unavailable to
the Borrower without the Debtors granting to the Agent and the Lenders (x)
pursuant to Section 364(c)(1) of the Code, allowed superpriority claims, with
respect to all Indebtedness and obligations of the Debtors
--------------------------------------------------------------------------------
under the Credit Agreement (and with respect to all Indebtedness and obligations
in respect of overdrafts and related liabilities referred to in Section 6.3(v)
of the Credit Agreement), having priority over any and all administrative
expenses of the kind specified in any sections of the Code, including, without
limitation, or arising or ordered under Sections 503(b), 105, 326, 328, 330,
331, 506(c), 507(a), 507(b), 546(c), 726 (to the extent permitted by law) and
1112 of the Code (other than the Carve-Out), (y) pursuant to Section 364(c)(2)
of the Code, security for such Indebtedness and obligations by the granting of a
valid and perfected first priority senior security interest in and lien upon all
Unencumbered Collateral (subject only to the Carve-Out), provided that following
--------
the Termination Date, amounts in the Letter of Credit Account shall not be
subject to the Carve-Out; and (z) pursuant to Section 364(c)(3) of the Code,
security for such Indebtedness and obligations by the granting of a valid and
perfected junior security interest in and lien upon Encumbered Collateral
(subject only to the Carve-Out), provided that upon repayment in full of all
--------
Indebtedness under the Existing Agreement, the obligations of the Borrowers
under the Credit Agreement and under the Documents and in respect of
Indebtedness permitted by Section 6.3(v) of the Credit Agreement shall
automatically and additionally be secured, pursuant to Section 364(c)(2) of the
Bankruptcy Code, by a valid and perfected first priority senior security
interest and lien (subject to Liens permitted by clauses (i) and (ii) of Section
6.1 of the Credit Agreement) upon all pre-petition and post-petition property,
wherever located, of the Borrowers that then secures the Indebtedness under the
Existing Agreement, including, without limitation, all cash and cash balances of
the Borrowers wherever located (subject only to the Carve-Out).
3. The terms of the Financing are fair and reasonable, reflect the
Debtors' exercise of prudent business judgment consistent with their fiduciary
duty and are supported by reasonably
equivalent value and fair consideration. The Financing has been negotiated in
good faith and at arm's-length between the Debtors and the Agent and any credit
extended, letters of credit issued for the account of and loans made to the
Debtors by the Lenders pursuant to, and any credit extended in respect of
overdrafts referred to in, the Revolving Credit Agreement dated as of December
1, 2000, among the Debtors, the Lenders and the Agent (the "Credit Agreement"),
----------------
the Credit Agreement, shall be deemed to have been extended by the Lenders in
"good faith," as that term is used in Section 364(e) of the Code.
4. The Documents are hereby approved and the Debtors are immediately
authorized and empowered to borrow or to obtain standby or import documentary
letters of credit (up to a maximum sublimit of $10,000,000 for such standby
letters of credit) pursuant to and in accordance with the Credit Agreement up to
an aggregate of $350,000,000, which shall be used for the purposes set forth in
the Credit Agreement. In addition, the Debtors are immediately authorized to
the extent permitted in the Credit Agreement to incur overdrafts and related
liabilities arising from treasury, depository and cash management services or in
connection with any automated clearing house fund transfers provided to or for
the benefit of the Debtors by Chase or any of its affiliates. Notwithstanding
anything herein to the contrary, no Loans, Letters of Credit, or related cash or
any portion of the Carve-Out amount provided for herein may be used to object to
or contest in any manner, or raise any defenses to, the validity, priority or
enforceability of the Indebtedness owing to the Agent or Lenders, or the claims
or rights in favor of the Agent or Lenders securing such Indebtedness, or to
assert any claims or causes of action against the Agent or Lenders in their
capacity as Lenders or Agents under the Financing.
5. The Debtors are expressly authorized, empowered and directed to
execute and deliver to the Lenders, among other documents, the Credit Agreement
and the Security and
Pledge Agreement (as defined in the Credit Agreement) to which the Debtors are
parties (collectively, and together with the letter agreement referred to in
paragraph 13(iii) hereof, the "Documents"). The Debtors are hereby authorized,
---------
obligated and directed to perform and do all acts that may be required in
connection with the Documents. Upon execution and delivery of the Documents, the
Documents shall constitute valid and binding obligations of the Debtors that are
parties thereto, enforceable against each Debtor that is a party thereto in
accordance with their terms.
6. As security for all of the Debtors' obligations and Indebtedness
arising under the Financing and the Documents (and in respect of the overdrafts
and related liabilities entered into with the Lenders referred to above), the
Agent and the Lenders are granted, pursuant to Section 364(c)(1) of the Code, an
allowed superpriority claim having priority over any and all administrative
expenses of the kind specified in Sections 503(b), 105, 326, 328, 330, 331,
506(c), 507(a), 507(b), 546(c), 726 (to the extent permitted by law) and 1112 of
the Code, subject only to (x) in the event of the occurrence of an Event of
Default (as defined in the Credit Agreement) or an event that would constitute
an Event of Default with the giving of notice or lapse of time or both, the
payment of allowed and unpaid professional fees and disbursements incurred by
the Debtors and any statutory committee (each, a "Committee") appointed in the
---------
Debtors' Chapter 11 cases (the "Cases") in an amount not in excess of $3,000,000
-----
(plus all professional fees and disbursements incurred prior to the occurrence
of an Event of Default to the extent allowed by the Bankruptcy Court) and (y)
the payment of fees pursuant to 28 U.S.C. (S)1930 and to the Clerk of the Court
(collectively, the "Carve-Out"). No claim (other than claims or liens granted
---------
prior to the date hereof) having a priority superior or pari passu with that
---- -----
granted by this Order to the Agent and the Lenders shall arise or be granted
while any portion of the Financing (or
refinancing thereof by the Lenders during the pendency of these cases) or the
commitment thereunder remains outstanding.
7. So long as no Event of Default or an event which with the giving of
notice or lapse of time or both would constitute an Event of Default shall have
occurred and be continuing, the Debtors shall be permitted to pay compensation
and reimbursement of expenses allowed and payable under Sections 330 and 331 of
the Code, as the same may be due and payable. Any such compensation and
expenses previously paid, or accrued but unpaid, prior to the occurrence of such
Event of Default may also be paid and shall not be applied against the Carve-
Out. Except to the extent of the Carve-Out, no expenses of the administration
of the Cases or any future proceeding or case which may result therefrom,
including liquidation in bankruptcy or other proceedings under the Code, shall
be charged against the Agent, the Lenders or the Collateral, pursuant to Section
506(c) of the Code or otherwise, without the prior written consent of the Agent,
and no such consent shall be implied from any other action, inaction, or
acquiescence by the Agent or the Lenders.
8. As security for all of the Debtors' obligations and Indebtedness
arising under the Financing and the Documents (and in respect of overdrafts and
related liabilities arising from cash management services provided by Chase or
any of its affiliates referred to above), the Agent, on behalf of the Lenders,
is hereby granted (effective upon the date of this Order and without the
necessity of the execution by the Debtors of mortgages, security agreements or
otherwise), pursuant to Section 364(c)(2) of the Code, a valid and perfected
first priority senior security interest in and lien upon all Unencumbered
Collateral (subject only to the Carve-Out), provided that following the
--------
Termination Date, amounts in the Letter of Credit Account shall not be subject
to the Carve-Out. The security interests and liens granted to the Agent on
behalf of
the Lenders hereunder shall not (i) be subject to any lien or security interest
which is avoided and preserved for the benefit of the Debtors' estates under
Section 551 of the Code, (ii) be subordinated to or made pari passu with any
---- ----
other lien or security interest under Section 364(d) of the Code, or otherwise,
or (iii) include Debtors' avoidance powers under Sections 544-549 of the Code.
9. As security for all of the Debtors' obligations and Indebtedness
arising under the Financing and the Documents (and in respect of overdrafts and
related liabilities arising from cash management services provided by Chase or
any of its affiliates referred to above), the Agent, on behalf of the Lenders,
is hereby granted (effective upon the date of this Order and without the
necessity of the execution by the Debtors of mortgages, security agreements or
otherwise), pursuant to Section 364(c)(3) of the Code, a valid and perfected
junior security interest in and lien upon all Encumbered Collateral (subject
only to the Carve-Out), provided that upon repayment in full of all Indebtedness
--------
under the Existing Agreement pursuant to Paragraph 11 hereof, the obligations of
the Borrowers under the Credit Agreement and under the Documents and in respect
of Indebtedness permitted by Section 6.3(v) of the Credit Agreement shall
automatically and additionally be secured, pursuant to Section 364(c)(2) of the
Bankruptcy Code, by a valid and perfected first priority senior security
interest and lien (subject to Liens permitted pursuant to clauses (i) and (ii)
of Section 6.1 of the Credit Agreement) upon all pre-petition and post-petition
property, wherever located, of the Borrowers that then secures the Existing
Agreement, including, without limitation, all cash and cash balances of the
Borrowers wherever located (subject only to the Carve-Out). The security
interests and liens granted to the Agent on behalf of the Lenders hereunder,
including the resulting first priority arising upon payment of the Indebtedness
under the Existing Agreement pursuant to Paragraph 11 below shall
not be (i) subject to any lien or security interest which is avoided and
preserved for the benefit of the Debtors' estates under Section 551 of the Code
or (ii) subordinated to or made pari passu with any lien or security interest
---- -----
under Section 364(d) of the Code, or otherwise.
10. The Agent and the Lenders shall not be required to file or to record
financing statements, mortgages, notices of lien or similar instruments in any
jurisdiction or take any other action in order to validate and perfect the
security interests and liens granted to them pursuant to this Order. If the
Agent, on behalf of the Lenders, shall, in its sole discretion, choose to file
such financing statements, mortgages, notices of lien or similar instruments or
otherwise confirm perfection of such security interests and liens, the Debtors
shall execute such documents as requested by the Agent, and all such documents
shall be deemed to have been filed or recorded at the time and on the date of
entry of this Order.
11. Each of the Debtors is authorized and empowered to use proceeds of the
Financing in accordance with the terms of the Credit Agreement. The Borrowers
are hereby authorized in accordance with the Credit Agreement to pay in full
(and not in part) simultaneously with the making of the first Loan or the
issuance of the first Letter of Credit (as defined in the Credit Agreement) all
of the then Indebtedness under the Existing Agreement. No Letter of Credit
shall be issued to the Debtors prior to the payment in full (and not in part) of
the Indebtedness under the Existing Agreement if after giving effect to such
issuance the aggregate outstanding Letters of Credit would exceed $2,000,000.
12. Nothing in this Order shall prejudice the right of any committee or
party in interest in these proceedings to seek to (i) disallow the claims of the
Existing Lenders, (ii) avoid any security or collateral interests claimed by the
Existing Lenders in the assets of the Debtors, (iii) otherwise challenge the
validity, priority or extent of the liens and/or claims of the Existing
Lenders, or (iv) disgorge all or any part of the payment by the Debtors to the
Existing Lenders pursuant to Paragraph 11 above to the extent that said payment
(or portion thereof) was in excess of the final amount of the allowed secured
claim of the Existing Lenders, as determined (if an objection is filed) by final
order of this Court. In the event that the Existing Lenders are required to
disgorge any such amount in excess of their allowed secured claim, (i) the
Debtors shall immediately cause said amount to be paid to the Agent for
application against the then outstanding Indebtedness under the Financing; and
(ii) the Commitment shall be reduced in an equal amount. Accordingly, in the
event that the Existing Lenders are required to disgorge all or any part of said
payment by the Debtors, the resulting unsecured claims of the Existing Lenders
shall in all respects be subject to the rights and liens of the Agent and the
Lenders under this Order and the Credit Agreement. Any committee or party in
interest shall have ninety days from the date hereof within which to file an
objection or commence an action with respect to the claims or liens of the
Existing Lenders. Thereafter, any and all challenges by any committee or party
in interest to the validity, sufficiency, extent or perfection of the
Indebtedness or liens of the Existing Lenders shall be forever barred. Until
such time as the Indebtedness under the Existing Agreement is paid in full, the
Debtors may provide the lenders under the Existing Agreement with such adequate
protection of their interests under the Existing Agreement as the Court may
authorize pursuant to separate order of the Court. Upon payment in full pursuant
to Paragraph 11 above of all of the Indebtedness under the Existing Agreement,
the obligations of the Borrowers under the Credit Agreement and under the
Documents and in respect of Indebtedness permitted by Section 6.3(v) of the
Credit Agreement shall automatically and in addition to the other liens and
claims authorized by this Order be secured, pursuant to Section 364(c)(2) of the
Bankruptcy Code, by a valid and perfected first priority senior security
interest and lien (subject to Liens
permitted pursuant to clauses (i) and (ii) of Section 6.1 of the Credit
Agreement) upon all pre-petition and post-petition property of the Borrowers,
including, without limitation, all cash and cash balance of the Borrowers
wherever located, that then secures the Existing Agreement (subject only to the
Carve-Out).
13. Each of the Debtors is authorized and directed to do and perform all
acts, to make, execute and deliver all instruments and documents (including,
without limitation, the execution of security agreements, mortgages and
financing statements), and to pay fees, which may be reasonably required or
necessary for the Debtors' performance under the Financing, including, without
limitation: (i) the execution of the Documents, (ii) the execution of one or
more amendments to the Credit Agreement for, among other things, the purpose of
adding additional banks, financial institutions or other institutional lenders
as Lenders and reallocating the commitments for the Financing among the Lenders,
and modifying the affirmative and negative covenants set forth in the Credit
Agreement, in each case in such form as the Debtors, the Agent and the Lenders
may agree, and (iii) the non-refundable payment to Chase or the Lenders, as the
case may be, of the Fees referred to in the Credit Agreement (and in the
separate letter agreement dated November 13, 2000, between the Borrowers and
Chase referred to in the Credit Agreement) and such Letter of Credit Fees,
Commitment Fees and reasonable costs and expenses as may be due from time to
time (without duplication) including, without limitation, reasonable attorneys'
fees and disbursements as provided in the Documents, all as such terms are
defined in the Documents. To the extent that, prior to the entry of this Order,
the Debtors did or performed any acts, made, executed or delivered any
instruments or documents or paid any fees, reasonably required or necessary for
the Debtors' performance under the Financing, the same are hereby ratified.
14. The Debtors, the Agent and the Lenders may amend, modify, supplement
or waive any provision of the Documents if such amendment, modification,
supplement or waiver is permitted under the terms of the Documents and is not
material (in the good faith judgment of the Debtors and the Agent), without the
need to apply to, or receive further approval from, the Court, provided,
--------
however, that the Debtors shall give notice to any Committee and the Office of
the United States Trustee of any non-material amendments, waivers, supplements
or modifications.
15. Subject only to the provisions of the Credit Agreement, the automatic
stay provisions of Section 362 of the Code are vacated and modified to the
extent necessary so as to permit the Agent and the Lenders to exercise, upon the
occurrence of an Event of Default and upon five (5) Business Days' (as that term
is defined in the Credit Agreement) written notice to the Debtors, the Office of
the United States Trustee and counsel to any Committee, all rights and remedies
provided for in the Documents (including, without limitation, the right to
setoff monies of the Debtors in accounts maintained with the Agent or any
Lender).
16. The Documents and the provisions of this Order shall be binding upon
the Agent, the Lenders and the Debtors and their respective successors and
assigns (including any Chapter 7 or Chapter 11 trustee hereinafter appointed or
elected for the estate of any of the Debtors) and inure to the benefit of the
Agent, the Lenders and the Debtors and (except with respect to any trustee
hereinafter appointed or elected for the estate of any of the Debtors) their
respective successors and assigns.
17. Upon (i) final satisfaction and repayment in full of all obligations
and Indebtedness to the Agent and the Lenders under the Credit Agreement, and
(ii) termination of the Commitment, then each of the Debtors shall thereafter
have such rights of subrogation as
between and among themselves based upon each respective Debtor's actual usage
of or benefit from the proceeds of the Financing (subject to final determination
of such amounts by this Court).
18. Unless all obligations and Indebtedness owing to the Agent and the
Lenders under the Credit Agreement shall theretofore have been indefeasibly paid
in full (and, with respect to outstanding Letters of Credit issued pursuant to
the Credit Agreement, the Debtors shall be in compliance with the provisions of
Section 2.3(b) the Credit Agreement), the Debtors shall not seek, and it shall
constitute an Event of Default if any of the Debtors seek, or if there is
entered, an order dismissing or converting any of the Cases, or a plan (or
confirmation of such plan) that does not provide for the indefeasible payment in
full in cash of the Indebtedness (including cash collateralization of all
Letters of Credit or the deposit of standby Letters of Credit with the Agent as
provided in the Credit Agreement) on the effective date of such plan. If an
order dismissing or converting any of the Cases under Section 1112 of the Code
or otherwise is at any time entered, such order shall provide (in accordance
with Sections 105 and 349(b) of the Code) that (x) the superpriority claims,
liens and security interests granted to the Agent and the Lenders pursuant to
this Order shall continue in full force and effect and shall maintain their
priorities as provided in this Order until all obligations in respect thereof
shall have been paid and satisfied in full (and that such superpriority claims,
liens and security interests, shall, notwithstanding such dismissal, remain
binding on all parties in interest) and (y) this Court shall retain exclusive
jurisdiction, notwithstanding such dismissal, for the purposes of enforcing the
claims, liens and security interests referred to in (x) above.
19. If any or all of the provisions of this Order are hereafter reversed,
modified, vacated or stayed, such reversal, stay, modification or vacation shall
not affect (x) the validity of
any obligation, Indebtedness or liability incurred by the Debtors to the Lenders
prior to written notice to the Agent of the effective date of such reversal,
stay, modification or vacation, or (y) the validity and enforceability of any
lien or priority authorized or created hereby or pursuant to the Credit
Agreement with respect to any such obligations, Indebtedness or liability.
Notwithstanding any such reversal, stay, modification or vacation, any
Indebtedness, obligation or liability incurred by the Debtors to the Lenders
prior to written notice to the Agent of the effective date of such reversal,
stay, modification or vacation shall be governed in all respects by the original
provisions of this Order, and the Lenders shall be entitled to all the rights,
remedies, privileges and benefits, granted herein and/or pursuant to the Credit
Agreement with respect to such Indebtedness, obligation or liability. The
obligations of the Debtors under this Order and the Financing shall not be
discharged by the entry of an order confirming a plan of reorganization in any
of the Cases and, pursuant to Section 1141(d)(4) of the Code, the Debtors have
waived such discharge.
20. The notice given by the Debtors of the Motion and of the Final Hearing
constitutes due and sufficient notice of the Motion and of the Final Hearing.
Dated: Wilmington, Delaware
December ____, 2000
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UNITED STATES BANKRUPTCY JUDGE
SCHEDULE 1 TO FINAL ORDER
Subsidiaries
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Bay Area Teleport, Inc.
Communications Buying Group, Inc.
DownNorth, Inc.
ICG Access Services - Southeast, Inc.
ICG Canadian Acquisition, Inc.
ICG ChoiceCom, L.P.
ICG ChoiceCom Management, LLC
ICG DataChoice Network Services, LLC
ICG Enhanced Services, Inc.
ICG Equipment, Inc.
ICG Funding LLC
ICG Holdings (Canada) Co.
ICG Holdings, Inc.
ICG Mountain View, Inc.
ICG NetAhead, Inc.
ICG Ohio LINX, Inc.
ICG Services, Inc.
ICG Telecom Group, Inc.
ICG Telecom Group of Virginia, Inc.
ICG Telecom of San Diego, L.P.
ICG ▇▇▇▇▇, Inc.
NikoNet, LLC
PTI Harbor Bay, Inc.
Trans American Cable, Inc.
Western Plains Finance, LLC
Exhibit B to the
Revolving Credit Agreement
FORM OF SECURITY AND PLEDGE AGREEMENT
SECURITY AND PLEDGE AGREEMENT (the "Agreement"), dated as of December ___,
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2000, by and among ICG COMMUNICATIONS, INC., a Delaware corporation, and each of
its direct or indirect subsidiaries party to the Credit Agreement (as
hereinafter defined) (the "Grantors"), each of which Grantors is a debtor and
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debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code,
and THE CHASE MANHATTAN BANK, a New York banking corporation as agent (in such
capacity, the "Agent") for the lenders (the "Lenders") party to the Credit
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Agreement.
WITNESSETH:
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WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Agent, the Lenders and the Grantors are entering into a Revolving
Credit Agreement dated as of the date hereof (as amended, modified or
supplemented from time to time, the "Credit Agreement"); and
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WHEREAS, unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined; and
WHEREAS, it is a condition precedent to the making of Loans and the
issuance of Letters of Credit that the Grantors shall have granted a security
interest, pledge and lien on (x) all cash maintained in the Letter of Credit
Account pursuant to Section 364(c)(2) of the Bankruptcy Code and (y) certain of
the Grantors' assets and properties and the proceeds thereof pursuant to
Sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code; and
WHEREAS, upon entry of the Final Order, the grant of such security
interest, pledge and lien will have been authorized pursuant to Sections
364(c)(2) and 364(c)(3) of the Bankruptcy Code ; and
WHEREAS, to supplement the Final Order without in any way diminishing or
limiting the effect of the Final Order or the security interest, pledge and lien
granted thereunder, the parties hereto desire to more fully set forth their
respective rights in connection with such security interest, pledge and lien;
and
WHEREAS, upon entry of the Final Order, this Agreement will have been
approved by the Bankruptcy Court;
NOW, THEREFORE, in consideration of the premises and in order to induce the
Lenders to make Loans and issue Letters of Credit, the Grantors hereby agree
with the Agent as follows:
SECTION 1. Grant of Security and Pledge. Subject to entry of the Final
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Order, each of the Grantors hereby transfers, grants, bargains, sells, conveys,
hypothecates, assigns, pledges and sets over to the Agent for its benefit and
the ratable benefit of the Lenders, and hereby grants to the Agent for its
benefit and the ratable benefit of the Lenders a perfected pledge and security
interest in, all of the Grantors' right, title and interest in and to the
following (the "Collateral"), which pledge and security interest shall be (x)
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junior to valid and perfected Liens permitted pursuant to clauses (i) and (ii)
of Section 6.1 of the Credit Agreement, provided that upon repayment of all
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Indebtedness under the Existing Agreement, the Obligations of the Borrowers
hereunder and under the Loan Documents and in respect of Indebtedness permitted
by Section 6.3(v) of the Credit Agreement shall automatically be secured,
pursuant to Section 364(c)(2) of the Bankruptcy Code, by a perfected first
priority Lien (subject to valid and perfected Liens permitted pursuant to
clauses (i) and (ii) of Section 6.1 of the Credit Agreement) on all property of
the Borrowers that then secures the Existing Agreement, and (y) subject to the
Carve-Out:
(a) all "accounts" as defined in the Uniform Commercial Code as in
effect from time to time in the State of New York, or when the context implies,
the Uniform Commercial Code as in effect from time to time in any other
applicable jurisdiction (the "UCC"), including, without limitation, all present
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and future accounts, accounts receivable and other rights of each of the
Grantors to payment for goods sold or leased or for services rendered (except
those evidenced by instruments or chattel paper), whether now existing or
hereafter arising and wherever arising, and whether or not they have been earned
by performance (collectively, the "Accounts");
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(b) (i) all "inventory" as defined in the UCC, and (ii) all goods and
merchandise now owned or hereafter acquired by each of the Grantors wherever
located, whether in the possession of a Grantor or of a bailee or other person
for sale, storage, transit, processing, use or otherwise consisting of whole
goods, components, supplies, materials, or consigned, returned or repossessed
goods) which are held for sale or lease or to be furnished (or have been
furnished) under any contract of service or which are raw materials, work-in-
process, finished goods or materials used or consumed in such Grantor's business
or processed by or on behalf of any Grantor (regardless of whether characterized
as inventory under the UCC) (collectively, the "Inventory");
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(c) (i) all "equipment" as defined in the UCC, and (ii) all
machinery, all manufacturing, distribution, selling, data processing and office
equipment, all furniture, furnishings, appliances, fixtures and trade fixtures,
tools, tooling, molds, dies, vehicles, vessels, aircraft and all other goods of
every type and description (other than Inventory), in each instance whether now
owned or hereafter acquired by each of the Grantors and wherever located
(collectively, the "Equipment");
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(d) all works of art now owned or hereafter acquired by each of the
Grantors, including, without limitation, paintings, sketches, drawings, prints,
sculptures, crafts, tapestries, porcelain, carvings, artifacts, renderings and
designs;
(e) all "general intangibles" as defined in the UCC, including,
without limitation, all rights, interests, choses in action, causes of action,
claims and all other intangible
property of each of the Grantors of every kind and nature (other than Accounts,
Trademarks, Patents and Copyrights), in each instance whether now owned or
hereafter acquired by such Grantor, including, without limitation, all general
intangibles; all corporate and other business records; all loans, royalties, and
other obligations receivable; all inventions, designs, trade secrets, computer
programs, software, printouts and other computer materials, goodwill,
registrations, copyrights, licenses, franchises, customer lists, credit files,
correspondence, and advertising materials; all customer and supplier contracts,
firm sale orders, rights under license and franchise agreements (including all
license agreements with any other Person in connection with any of the Patents
and Trademarks or such other Person's names or marks, whether such Grantor is a
licensor or licensee under any such license agreement), and other contracts and
contract rights (including, without limitation, all Material Contracts); all
interests in partnerships and joint ventures; all tax refunds and tax refund
claims; all right, title and interest under leases, subleases, licenses and
concessions and other agreements to the extent assignable relating to real or
personal property; all payments due or made to each of the Grantors in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of any property by any person or governmental authority; all deposit
accounts (general or special) with any bank or other financial institution; all
credits with and other claims against carriers and shippers; all rights to
indemnification; all reversionary interests in pension and profit sharing plans
and reversionary, beneficial and residual interest in trusts; all proceeds of
insurance of which each of the Grantors is beneficiary; and all letters of
credit, guaranties, liens, security interest and other security held by or
granted to each of the Grantors; and all other intangible property, whether or
not similar to the foregoing (collectively, the "General Intangibles");
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(f) all chattel paper (as that term is defined in Article 9 of the
UCC, including, without limitation, electronic chattel paper, as that term is
defined in Revised Article 9), all instruments (as that term is defined in
Article 9 of the UCC), all notes and debt instruments and all payments
thereunder and instruments and other property from time to time delivered in
respect thereof or in exchange therefor, and all bills of lading, warehouse
receipts and other documents of title and documents, in each instance whether
now owned or hereafter acquired by each of the Grantors;
(g) all property or interests in property now or hereafter acquired
by each of the Grantors which may be owned or hereafter may come into the
possession, custody or control of the Agent or any agent or affiliate of the
Agent in any way or for any purpose (whether for safekeeping, deposit, custody,
pledge, transmission, collection or otherwise), and all rights and interests of
each of the Grantors, now existing or hereafter arising and however and wherever
arising, in respect of any and all (i) notes, drafts, letters of credits,
stocks, bonds, and debt and equity securities, whether or not certificated, and
warrants, options, puts and calls and other rights to acquire or otherwise
relating to the same; (ii) money (including all cash and cash equivalents held
in the Letter of Credit Account (as defined and referred to in the Credit
Agreement)); (iii) proceeds of loans, including, without limitation, Loans made
under the Credit Agreement; and (iv) insurance proceeds and books and records
relating to any of the property covered by this Agreement; together, in each
instance, with all accessions and additions thereto, substitutions therefor, and
replacements, proceeds and products thereof;
(h) all of each Grantor's now owned or existing and filed and
hereafter acquired or arising and filed trademarks, service marks, trademark or
service ▇▇▇▇ registrations, trade names, trademark or service ▇▇▇▇ applications,
trade styles, prints and labels on which said trademarks, trade names, trade
styles and service marks have appeared or appear, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, and
all registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof, or any other country or political subdivision thereof (except for
"intent to use" applications for trademark or service ▇▇▇▇ registrations filed
pursuant to Section 1(b) of the ▇▇▇▇▇▇ Act, unless and until an Amendment to
Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has
been filed), and including, without limitation, each ▇▇▇▇, registration, and
application listed on Schedule 3 attached hereto and made a part hereof (as the
same may be amended pursuant hereto from time to time), and (i) renewals
thereof, (ii) all income, royalties, damages and payments now and hereafter due
and/or payable with respect thereto, including, without limitation, damages and
payment for past or future infringements thereof, (iii) the right to ▇▇▇ for
past, present and future infringements thereof, (iv) all rights corresponding
thereto throughout the world, and (v) together in each case with the good will
of each Grantor's business connected with the use of each such trademark,
service ▇▇▇▇, trade name and trade dress (all of the foregoing being herein
referred to as the "Trademarks");
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(i) all of each Grantor's now owned or existing and filed and
hereafter acquired or arising and filed patents and patent applications of the
United States and any other country, and all registrations and recordings
thereof, including, without limitation, applications, registrations and
recordings in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof, all whether now owned or hereafter acquired
by each Grantor, and including without limitation the inventions and
improvements described and claimed therein, and those patents and patent
applications listed on Schedule 4 attached hereto and made a part hereof, and
(a) all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (b) all income, royalties, damages and payments
now and hereafter due and/or payable under and with respect thereto, including,
without limitation, damages and payments for past or future infringements
thereof, (c) the right to ▇▇▇ for past, present and future infringements
thereof, (d) all rights, title and interests corresponding thereto throughout
the world (all of the foregoing patents and applications, and (e) the goodwill
of Assignor's business connected with and symbolized by the foregoing, together
with the items described in clauses (a)-(d), are sometimes hereinafter
individually and/or collectively referred to as the "Patents");
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(j) all of each Grantor's now owned, registered and unregistered, and
hereafter acquired or arising, registered and unregistered, copyrights and
copyright applications of the United States, or any other country, and all
registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the United States Copyright
Office, the Library of Congress or in any similar office or agency of the United
States, any State thereof, or any other country or political subdivision
thereof, including those listed on Schedule 5 attached hereto and made a part
hereof (as the same may be amended pursuant hereto from time to time), and (i)
the renewals thereof, (ii) all income, royalties, damages and payments now and
hereafter due and/or payable with respect thereto, including damages and
payments for past or future infringements thereof, (iii) the right to ▇▇▇ for
past, present and future infringements thereof, and (iv) all rights, title, and
interests corresponding thereto throughout the world (all of the foregoing being
herein referred to as the "Copyrights");
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(k) all books, records, ledger cards and other property at any time
evidencing or relating to the Accounts, Equipment, General Intangibles,
Trademarks, Patents or Copyrights;
(l) all shares of capital stock owned by any Grantor, including,
without limitation, all shares of capital stock listed on Schedule 6 hereto (as
such schedule may be amended or supplemented from time to time) of the issuers
listed thereon (individually, an "Issuer", and collectively, the "Issuers") and
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all shares of capital stock of any Issuer obtained in the future by such Grantor
and the certificates, if any, representing or evidencing such shares and any
interest of such Grantor on the books and records of such Issuer or on the books
and records of any securities intermediary pertaining to such shares, and,
subject to Section 9 below, all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares, and all rights and privileges of any
Grantor with respect to such shares (the "Pledged Shares");
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(m) all interests in any general partnership, limited partnership,
limited liability partnership or other partnership held by any Grantor,
including, without limitation, all partnership interests listed in Schedule 7
hereto (as such schedule may be amended or supplemented from time to time) of
the partnerships listed thereon (individually, a "Partnership", and
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collectively, the "Partnerships") and all partnership interests in any
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Partnership obtained in the future by such Grantor and the certificates, if any,
representing or evidencing such interests and any interest of such Grantor on
the books and records of such Partnership or on the books and records of any
securities intermediary pertaining to such interest, and, subject to Section 9
below, all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such interests, and all rights and privileges of any Grantor with
respect to such interests (the "Pledged Partnership Interests");
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(n) all interests in any limited liability company or unlimited
liability company held by any Grantor, including, without limitation, all
limited liability company and unlimited liability company interests listed in
Schedule 8 hereto (as such schedule may be amended or supplemented from time to
time) of the limited liability companies and the unlimited liability company
listed thereon (individually, a "Company", and collectively, the "Companies")
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and all interests in any Company obtained in the future by such Grantor and the
certificates, if any, representing or evidencing such interests and any interest
of such Grantor on the books and records of such Company or on the books and
records of any securities intermediary pertaining to such interest, and, subject
to Section 9 below, all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such interests, and all rights and privileges of any Grantor
with respect to such interests (the "Pledged Company
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Interests") (the Pledged Shares, the Pledged Partnership Interests and the
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Pledged Company Interests being collectively called the "Pledged Collateral");
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(o) all health-care-insurance receivables (the "Health-Care-Insurance
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Receivables)", as such term is defined in the 1999 Official Text of Article 9 of
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the Uniform Commercial Code with conforming amendments to Articles 1, 2, 2a, 4,
5, 6, 7 and 8 ("Revised Article 9");
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(p) all letter of credit rights, as such term is defined in Revised
Article 9 (the "Letter of Credit Rights")
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(q) all other personal property of each of the Grantors, whether
tangible or intangible, and whether now owned or hereafter acquired; and
(r) all proceeds and products of any of the foregoing, in any form,
including, without limitation, any claims against third parties for loss or
damage to or destruction of any or all of the foregoing and, to the extent not
otherwise included, all (i) payments under insurance (whether or not the Agent
is the loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral and (ii) cash.
Notwithstanding anything contained herein to the contrary, the total amount of
shares of capital stock or other ownership interests of any Person pledged
pursuant to this Agreement that is not incorporated or organized in the United
States shall in no event exceed sixty-five percent (65%) of the total
outstanding shares of capital stock or such other ownership interests thereof.
For avoidance of doubt, it is expressly understood and agreed that, to the
extent the UCC is revised subsequent to the date hereof such that the definition
of any of the foregoing terms included in the description of Collateral is
changed, the parties hereto desire that any property which is included in such
changed definitions which would not otherwise be included in the foregoing grant
on the date hereof be included in such grant immediately upon the effective date
of such revision. Notwithstanding the immediately preceding sentence, the
foregoing grant is intended to apply immediately on the date hereof to all
Collateral to the fullest extent permitted by applicable law regardless of
whether any particular item of Collateral is currently subject to the UCC.
SECTION 2. Security for Obligations. This Agreement and the Collateral
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secure the payment of all obligations of each of the Grantors, now or hereafter
existing, under the Credit Agreement and the other Loan Documents (and any other
documents in respect of such Obligations), and in respect of Indebtedness
permitted by Section 6.3(v) of the Credit Agreement, whether for principal,
interest, fees, expenses or otherwise, and all obligations of each of the
Grantors now or hereafter existing under or in respect of this Agreement (all
such obligations of the Grantors being herein called the "Obligations").
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SECTION 3. Delivery of Pledged Collateral; Other Actions. Upon written
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request by the Agent (and without further order of the Bankruptcy Court), all
certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by the Agent pursuant hereto and shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Agent. Upon the occurrence and during the
continuance of any Event of Default, the Agent shall have the right (for the
ratable benefit of the Lenders) to give (to the extent required) the five (5)
Business Day notice referred to in the final proviso of Section 7.1 of the
Credit Agreement (the "Default Notice") and, at any time after the expiration of
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five (5) Business Days from the date of the Default Notice (the "Default Notice
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Period") in its discretion and without further notice to the Grantors, to
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transfer to or to register in the name of the Agent or any of its nominees any
or all of the Pledged Collateral.
SECTION 4. Representations and Warranties. Each Grantor, jointly and
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severally, represents and warrants as follows:
(a) As of the Filing Date, all of the Inventory and/or Equipment
(other than motor vehicles and other immaterial amounts of Inventory and
Equipment not exceeding, in the aggregate, $10,000,000 in value) is located at
the places specified in Schedule 1 hereto. As of the Filing Date, the
jurisdictions of formation, organization or incorporation, as the case may be,
the chief places of business and chief executive offices of each of the Grantors
and the offices where each Grantor keeps its records concerning any Accounts and
any Health-Care-Insurance Receivables and all originals of all chattel paper
which evidence any Account are located at the places specified in Schedule 2
hereto. As of the Filing Date, all trade names under which each of the Grantors
have sold and will sell Inventory are listed on Schedule 3 hereto.
(b) Each of the Grantors owns the Collateral free and clear of any
lien, security interest, charge or encumbrance except for the security interest
created by this Agreement and except as otherwise permitted under Section 6.1 of
the Credit Agreement. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
recording office, except such as may have been filed (x) in favor of the Agent
relating to this Agreement and (y) in favor of any holder of a Lien permitted
under Section 6.1 of the Credit Agreement.
(c) As of the Filing Date, no Grantor owns any material Trademarks,
Patents or Copyrights or has any material Trademarks, Patents or Copyrights
registered in, or the subject of pending applications in, the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office or agency in any other country or any political subdivision thereof,
other than those described in Schedules 3, 4 and 5 hereto. As of the Filing
Date, the registrations for the Trademarks, Patents and Copyrights disclosed on
such Schedules 3, 4 and 5 hereto are subsisting and have not been adjudged
invalid or unenforceable, in whole or in part, and each Patent, Trademark and
Copyright is valid and enforceable. None of the material Trademarks, Patents or
Copyrights has been abandoned or dedicated.
(d) Each Grantor, as the case may be, is the sole and exclusive owner
of the entire right, title and interest in and to each of its Trademarks,
Patents and Copyrights, free and clear of any liens, charges and encumbrances
except for Liens permitted pursuant to Section 6.1 of the Credit Agreement.
(e) As of the Filing Date, no Grantor owns or holds any Pledged
Collateral other than that described in Schedules 6, 7 and 8.
(f) The Pledged Shares have been duly authorized and validly issued
and are fully paid and non-assessable.
(g) As of the Filing Date, each Grantor, as the case may be, is the
record and beneficial owner of the Pledged Collateral described in Schedules 6,
7 and 8 free and clear of any Lien, security interest, option or other charge or
encumbrance, except as permitted under Section 6.1 of the Credit Agreement.
(h) As of the Filing Date, except as disclosed on Schedule 6, the
Pledged Shares constitute all of the issued and outstanding shares of stock of
each of the Issuers which is a Borrower or a Subsidiary of a Borrower and no
such Issuer is under any contractual obligation to issue any additional shares
of stock or any other securities, rights or indebtedness.
(i) As of the Filing Date, except as disclosed on Schedule 7, the
Pledged Partnership Interests constitute all of the issued and outstanding
interests in each of the Partnerships and no Partnership is under any
contractual obligation to issue any additional interests or any other rights or
indebtedness.
(j) As of the Filing Date, except as disclosed on Schedule 8, the
Pledged Company Interests constitute all of the issued and outstanding interests
in each of the Companies and no Company is under any contractual obligation to
issue any additional interests or any other rights or indebtedness.
(k) Upon the entry by the Bankruptcy Court of the Final Order, (i)
each Grantor will be duly authorized to execute and deliver this Agreement to
the Agent, and (ii) this Agreement will constitute the legal, valid and binding
obligation of the Grantors, enforceable against the Grantors in accordance with
its terms.
(l) As of the Filing Date, all material letters of credit to which
any Grantor has rights are listed on Schedule 9 (as amended or supplemented from
time to time) hereto, and the Grantors have obtained the consent of each issuer
of any material letter of credit to the assignment of the proceeds of the letter
of credit to the Agent.
SECTION 5. Further Assurances.
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(a) Each of the Grantors agrees that from time to time, at its
expense, it will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary, or that the Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Agent to exercise and
enforce any of its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, and without further order of
the Bankruptcy Court, each of the Grantors will execute and file such financing
or continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the Agent may
reasonably request, in order to perfect and preserve the security interests
granted or purported to be granted hereby.
(b) Each Grantor hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. A carbon, photographic or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof is sufficient as
a financing statement where permitted by law.
(c) Each Grantor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
(d) Each Grantor hereby covenants and agrees that with respect to any
material letter of credit hereafter arising it shall obtain the consent of the
issuer thereof to the assignment of the proceeds of the letter of credit to the
Agent.
SECTION 6. As to Equipment and Inventory. Each Grantor shall:
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(a) Keep the Equipment and Inventory (other than Inventory sold in
the ordinary course of business, motor vehicles and other immaterial amounts of
Inventory and Equipment not exceeding, in the aggregate, $10,000,000 in value)
at the places specified therefor in Schedule 1 hereto or, upon 30 days' prior
written notice to the Agent, at other places in jurisdictions where all action
required by Section 5 hereof shall have been taken to assure the continuation of
the perfection of the security interest of the Agent (for its benefit and the
ratable benefit of the Lenders) with respect to the Equipment and Inventory.
(b) Subject to provisions of the Credit Agreement, maintain or cause
to be maintained in good repair, working order and condition, excepting ordinary
wear and tear and damage due to casualty, all of the Equipment, and make or
cause to be made all appropriate repairs, renewals and replacements thereof, to
the extent not obsolete and consistent with past practice of such Grantor, as
quickly as practicable after the occurrence of any loss or damage thereto which
are necessary or reasonably desirable to such end, except where the failure to
do any of the foregoing would not result in a material adverse effect on the
assets, properties or condition (financial or otherwise) of the Grantors, taken
as a whole.
(c) Until satisfaction in full of the Obligations, at any time when
an Event of Default has occurred and is continuing: (i) each Grantor will
perform any and all reasonable actions requested by the Agent to enforce the
Agent's security interest in the Inventory and all of the Agent's rights
hereunder, such as leasing warehouses to the Agent or its designee, placing and
maintaining signs, appointing custodians, transferring Inventory to warehouses,
and delivering to the Agent warehouse receipts and documents of title in the
Agent's name; (ii) if any Inventory is in the possession or control of any of
the Grantors' agents, contractors or processors or any other third party, each
such Grantor will notify the Agent thereof and will notify such agents,
contractors or processors or third party of the Agent's security interest
therein and, upon request, instruct them to hold all such Inventory for the
Agent and such Grantor's account, as their
interests may appear, and subject to the Agent's instructions; (iii) the Agent
shall have the right to hold all Inventory subject to the security interest
granted hereunder; and (iv) the Agent shall have the right to give the Default
Notice and, at any time after the expiration of the Default Notice Period, to
take possession of the Inventory or any part thereof and to maintain such
possession on such Grantor's premises or to remove any or all of the Inventory
to such other place or places as the Agent desires in its sole discretion. If
the Agent exercises its right to take possession of the Inventory, such Grantor,
upon the Agent's demand, will assemble the Inventory and make it available to
the Agent at such Grantor's premises at which it is located.
SECTION 7. As to Accounts.
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(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts, and the offices where it keeps all originals of all chattel paper
which evidence Accounts, at the location therefor specified in Section 4(a)
hereof or, upon 30 days' prior written notice to the Agent, at such other
locations in a jurisdiction where all actions required by Section 5 hereof shall
have been taken with respect to the Accounts. Each Grantor will hold and
preserve such records and chattel paper and will permit representatives of the
Agent, at any time during normal business hours, to inspect and make abstracts
from such records and chattel paper in accordance with Section 5.6 of the Credit
Agreement.
(b) Except as otherwise provided in this subsection (b), each Grantor
shall continue to collect in accordance with its customary practice, at its own
expense, all amounts due or to become due to such Grantor under the Accounts
and, prior to the occurrence and continuance of an Event of Default, such
Grantor shall have the right to adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon, all in accordance with
its customary practices. In connection with such collections, the Grantors may,
upon the occurrence and during the continuation of an Event of Default, take
(and at the direction of the Agent shall take) such action as the Grantors or
the Agent may reasonably deem necessary or advisable to enforce collection of
the Accounts; provided, that upon written notice by the Agent to any Grantor,
--------
following the occurrence and during the continuation of an Event of Default and
after the expiration of the Default Notice Period, of its intention so to do,
the Agent shall have the right to notify the account debtors or obligors under
any Accounts of the assignment of such Accounts to the Agent and to direct such
account debtors or obligors to make payment of all amounts due or to become due
to such Grantor thereunder directly to the Agent and, upon such notification and
at the expense of such Grantor, to enforce collection of any such Accounts, and
to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done. After receipt by
such Grantor of the notice referred to in the proviso to the preceding sentence,
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(i) all amounts and proceeds (including instruments) received by such Grantor in
respect of the Accounts shall be received in trust for the benefit of the Agent
(for the ratable benefit of the Lenders) hereunder, shall be segregated from
other funds of the Grantors and shall be forthwith paid over to the Agent in the
same form as so received (with any necessary endorsement) to be held as cash
collateral and either (A) released to the Grantors if such Event of Default
shall have been cured or waived or (B) if such Event of Default shall be
continuing, applied as provided by Section 16 hereof, and (ii) the Grantors
shall
not adjust, settle or compromise the amount or payment of any Account, or
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon.
SECTION 8. As to Trademarks, Patents and Copyrights.
----------------------------------------
(a) (i) Each Grantor shall, either itself or through licensees,
continue to use the Trademarks as each is currently used in the Grantor's
business in order to maintain the Trademarks in full force free from any claim
of abandonment for nonuse, and (ii) each such Grantor will not (and will not
permit any licensee thereof to) do any act or knowingly omit to do any act
whereby any Trademark may become invalidated, unless, in the cases of clauses
(i) and (ii), such failure to maintain or use a Trademark is not reasonably
likely to have a material adverse effect on the condition (financial or
otherwise), operation or properties of the Grantors taken as a whole.
(b) Unless and until an Event of Default shall have occurred, the
Agent hereby grants to the Grantors the exclusive and nontransferable right and
license to make, have made, use and sell the inventions disclosed and claimed in
the Patents for the Grantors' own benefit and account and for none other. Each
Grantor agrees that it will not sell or assign its interest in, or grant any
sublicense under, the license granted to the Grantors under this subsection (b)
without the prior written consent of the Agent. From and after the occurrence
of any Default or Event of Default, the Grantors' license with respect to the
Patents as set forth in this subsection (b) shall terminate, and the Agent shall
have, in addition to all other rights and remedies given it by this Agreement,
those allowed by law.
(c) Each Grantor hereby agrees that the license granted to the Agent
with respect to each of the Patents shall be without any liability for royalties
or other related charges from the Agent to the Grantors. The assignment granted
to the Agent herein with respect to each of the Patents shall terminate on the
earlier of (i) the expiration of such Patent, and (ii) the payment in full of
all of the Obligations and the termination of the Commitments.
(d) No Grantor will do any act, or omit to do any act, whereby the
Patents or Copyrights may become abandoned or dedicated and each such Grantor
shall notify the Agent immediately if it knows of any reason or has reason to
know that the application or registration of any of the Patents or Copyrights
may become abandoned or dedicated, unless such abandonment or dedication is not
reasonably likely to have a material adverse effect on the condition (financial
or otherwise), operations or properties of the Grantors taken as a whole.
(e) No Grantor will, either itself or through any agent, employee,
licensee or designee, (i) file an application for the registration of any Patent
or Trademark with the United States Patent and Trademark Office or any similar
office or agency in any other country or any political subdivision thereof or
(ii) file any assignment of any Patent or Trademark, which such Grantor may
acquire from a third party, with the United States Patent and Trademark Office
or any similar office or agency in any other country or any political
subdivision thereof, unless such Grantor shall, within 30 days after the date of
------
such filing, notify the Agent thereof, and, upon request of the Agent, execute
and deliver any and all assignments, agreements, instruments, documents and
papers as the Agent may request to evidence the Agent's interest in such Patent
or
Trademark and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby, and such Grantor hereby constitutes the Agent
its attorney-in-fact to execute and file all such writings for the foregoing
purposes, all lawful acts of such attorney being hereby ratified and confirmed;
such power being coupled with an interest is irrevocable until the Obligations
are paid in full.
(f) Each Grantor will take all necessary steps in any proceeding
before the United States Patent and Trademark Office, the United States
Copyright Office, the Library of Congress or any similar office or agency in any
other country or any political subdivision thereof, in order to maintain in all
material respects each registered Trademark, Patent and Copyright, and to pursue
each application for registration of any Trademark, Patent and Copyright not
listed on Schedules 3, 4 or 5 hereto, including, without limitation, filing of
renewals, payment of maintenance fees, filing of affidavits of use, filing of
affidavits of incontestability and opposition, and participation in opposition,
interference and cancellation proceedings, unless failure to take such steps is
not reasonably likely to have a material adverse effect on the condition
(financial or otherwise), operation or properties of the Grantors, taken as a
whole.
(g) Each Grantor will, without further order of the Bankruptcy Court,
perform all acts and execute and deliver all further instruments and documents,
including, without limitation, assignments for security in form suitable for
filing with the United States Patent and Trademark Office, and the United States
Copyright Office, respectively, reasonably requested by the Agent at any time to
evidence, perfect, maintain, record and enforce the Agent's interest in all
Trademarks, Patents and Copyrights or otherwise in furtherance of the provisions
of this Agreement, and each Grantor hereby authorizes the Agent to execute and
file one or more accurate financing statements (and similar documents) or copies
thereof or of this Agreement with respect to Patents, Trademarks and Copyrights
signed only by the Agent.
(h) Each Grantor will, upon acquiring knowledge of any use by any
person of any term or design likely to cause confusion with any Trademark,
promptly notify the Agent of such use, and if requested by the Agent, shall join
with the Agent, at such Grantor's expense, in such action as the Agent, in its
reasonable discretion, may deem advisable for the protection of the Agent's
interest in and to the Trademarks.
(i) Each Grantor agrees that, should it obtain rights to any Patent,
Trademark or Copyright which is not now identified on Schedules 3, 4 or 5, or
become entitled to the benefit of any reissue, division, continuation, renewal,
extension, or continuation-in-part of any Trademark, Patent or Copyright, (i)
such Grantor shall give prompt written notice thereof to the Agent, (ii) the
provisions of Section 1 of this Agreement shall automatically apply to any such
Trademark, Patent or Copyright, and (iii) any such Trademark, Patent or
Copyright shall automatically become part of the Collateral.
(j) If any Grantor becomes aware that any Trademark, Patent or
Copyright is infringed or misappropriated by a third party, such Grantor shall
promptly notify the Agent and shall, if reasonably requested by the Agent,
promptly ▇▇▇ for infringement or misappropriation and for recovery of all
damages caused by such infringement or misappropriation, or, with the
prior written consent of the Agent, shall take such other actions as the Agent
shall reasonably deem appropriate under the circumstances to protect such
Trademark, Patent or Copyright.
(k) Each Grantor shall continue to use reasonable and proper
statutory notice in connection with its use of each registered Patent, Trademark
and Copyright.
(l) This Agreement is executed by collateral purposes only and upon
payment in full of the Obligations and termination of the Commitments, the Agent
shall, at the Grantors' expense, execute and deliver to the Grantors all deeds,
assignments and other instruments as may be necessary or proper to re-vest in
the Grantors full title to the Trademarks, Patents and Copyrights, subject to
any disposition thereof which may have been made by the Agent pursuant hereto or
pursuant to the Credit Agreement.
SECTION 9. As to the Pledged Collateral; Voting Rights; Dividends; Etc.
------------------------------------------------------------
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) the Grantors (as applicable) shall be entitled to exercise
any and all voting and other consensual rights pertaining to the
Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Credit Agreement;
(ii) notwithstanding the provisions of Section 1 hereof, such
Grantors shall be entitled to receive and retain any and all
dividends, interest or distributions paid in respect of the Pledged
Collateral; provided, that any and all
--------
(A) dividends, interest or distributions paid or payable other
than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Collateral, and
(B) dividends, interest or distributions paid or payable in cash
in respect of any Pledged Collateral (other than the Pledged
Collateral consisting of Pledged Shares, Pledged Partnership
Interests or Pledged Company Interests of Subsidiaries of
the Borrowers) in connection with a partial or total
liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in-surplus; and
(C) cash paid, payable or otherwise distributed in respect of,
or in redemption of, or in exchange for, any Pledged
Collateral (other than the Pledged Collateral consisting of
Pledged Shares, Pledged Partnership Interests or Pledged
Company Interests of Subsidiaries of the Borrowers);
shall be, and shall be forthwith delivered to the Agent, to hold as Pledged
Collateral and shall, if received by any of the Grantors, be received in
trust for the benefit of the Agent,
be segregated from the other property or funds of such Grantor, and be
forthwith delivered to the Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement); and
(iii) the Agent shall execute and deliver (or cause to be
executed and delivered) to the Grantors (as applicable) all such
proxies and other instruments as the Grantors (as applicable) may
reasonably request for the purpose of enabling such Grantor to
exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends which it
is authorized to receive and retain pursuant to paragraph (ii) above;
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) upon written notice from the Agent to the Grantors (as
applicable) to such effect, all rights of such Grantors (as
applicable) to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to Section 9(a)(i)
and to receive the dividends which it would otherwise be authorized to
receive and retain pursuant to Section 9(a)(ii) shall cease, and all
such rights shall thereupon become vested in the Agent, who shall
thereupon have the sole right to exercise such voting and other
consensual rights and to receive and hold as Pledged Collateral any
such dividends; and
(ii) all dividends which are received by such Grantors contrary
to the provisions of paragraph (i) of this Section 9(b) shall be
received in trust for the benefit of the Agent, shall be segregated
from other funds of the Grantors and shall be forthwith paid over to
the Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).
SECTION 10. As to Material Contracts.
------------------------
(a) Each Grantor agrees that the Agent may at any time notify, or
require any Grantor to so notify, the counterparty on any Material Contract of
the security interest of the Agent therein. In addition, after the occurrence
and during the continuance of an Event of Default, the Agent may upon written
notice to the applicable Grantor, notify, or require any Grantor to notify, the
counterparty to make all payments under the Material Contracts directly to the
Agent.
(b) Each Grantor shall perform in all material respects all of its
obligations with respect to the Material Contracts, except where the failure to
do so would not result in a material adverse effect on the condition (financial
or otherwise), operation or properties of the Grantors, taken as a whole.
(c) Each Grantor shall promptly and diligently exercise each material
right it may have under any Material Contract, at its own expense, and in
connection with such collections and exercise, such Grantor shall take such
action as such Grantor may deem necessary or advisable in its good faith
business judgment.
SECTION 11. Insurance. Upon the occurrence and during the continuance
---------
of any Event of Default, all insurance payments in respect of Inventory and
Equipment shall be held, applied and paid to the Agent as specified in Section
16 hereof.
SECTION 12. Transfers to Others; Liens; Additional Shares and Interests.
-----------------------------------------------------------
(a) Each Grantor shall not sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral, except for
dispositions otherwise permitted by the Credit Agreement or other Loan
Documents.
(b) Each Grantor shall not create or suffer to exist any lien,
security interest or other charge or encumbrance upon or with respect to any of
the Collateral to secure any obligation of any person or entity, except for the
security interest created by this Agreement and the Final Order, or except as
otherwise permitted under Section 6.1 of the Credit Agreement.
(c) Each of the Grantors (as applicable) agrees that it will (i)
cause each of the Issuers that are wholly-owned Subsidiaries not to issue any
stock or other securities in addition to or substitution for the Pledged Shares
issued by such Issuer, except to the respective Grantor, and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all such additional shares of stock or other securities of each Issuer.
(d) Each of the Grantors (as applicable) agrees that it will (i)
cause each of the Partnerships that are wholly-owned Subsidiaries not to issue
any interests in addition to or substitution for the Pledged Partnership
Interests issued by such Issuer, except to the respective Grantor, and (ii)
pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all such additional interests of each Partnership.
(e) Each of the Grantors (as applicable) agrees that it will (i)
cause each of the Companies that are wholly-owned Subsidiaries not to issue any
interests in addition to or substitution for the Pledged Company Interests
issued by such Company, except to the respective Grantor and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all such additional interests of each Company.
SECTION 13. Agent Appointed Attorney-in-Fact. Each Grantor hereby
--------------------------------
irrevocably appoints the Agent such Grantor's attorney-in-fact (which
appointment shall be irrevocable and deemed coupled with an interest), with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Agent's discretion, upon and during the
occurrence and continuation of an Event of Default at any time after the Agent
has given the Default Notice and the Default Notice Period has expired, to take
any action and to execute any instrument which the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation:
(i) to obtain and adjust insurance required to be paid to the
Agent pursuant to Section 11 hereof,
(ii) to ask, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral,
(iii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(i) or (ii) above,
(iv) to receive, endorse and collect all instruments made
payable to the Grantors representing any dividend or other
distribution in respect of the Pledged Collateral or any part thereof
and to give full discharge for the same, and
(v) to file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of the Agent with respect to any of the Collateral.
SECTION 14. Agent May Perform. If any Grantor fails to perform any
-----------------
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by the Grantors under Section 17(b) hereof.
SECTION 15. The Agent's Duties. The powers conferred on the Agent
------------------
hereunder are solely to protect its interest and the interests of the Lenders in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral,
including, without limitation, ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Pledged Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters.
SECTION 16. Remedies. If any Event of Default shall have occurred and
--------
be continuing at any time after the Agent has given the Default Notice and the
Default Notice Period has expired, and subject to the provisions of Section 7 of
the Credit Agreement:
(a) The Agent may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to it,
and without application to or order of the Bankruptcy Court, all the rights and
remedies of a secured party on default under the UCC and also may (i) require
each Grantor to, and each Grantor hereby agrees that it will at its expense and
upon request of the Agent forthwith, assemble all or part of the Collateral as
directed by the Agent and make it available to the Agent at a place to be
designated by the Agent which is reasonably convenient to both parties and (ii)
without notice except as specified in the following sentence, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Agent's offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the Agent may
deem commercially reasonable. Each Grantor agrees that, to the extent notice of
such sale shall be required by law,
at least ten days' notice to the Grantors of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(b) The Agent may instruct the Grantors not to make any further use
of the Patents, Copyrights or Trademarks or any ▇▇▇▇ similar thereto for any
purpose to the extent that such use would be inconsistent with the exercise by
the Agent of any other remedies under this Section.
(c) The Agent may license, whether general, special or otherwise, and
whether on an exclusive or nonexclusive basis, any of the Trademarks, Patents or
Copyrights throughout the world for such term or terms, on such conditions, and
in such manner, as the Agent shall in its sole discretion determine.
(d) The Agent may (without assuming any obligations or liability
thereunder), at any time, enforce (and shall have the exclusive right to
enforce) against any licensee or sublicensee all rights and remedies of the
Grantors in, to and under any one or more license agreements with respect to the
Collateral, and take or refrain from taking any action under any thereof, and
each of the Grantors hereby releases the Agent from, and agrees to hold the
Agent free and harmless from and against any claims arising out of, any action
taken or omitted to be taken with respect to any such license agreement.
(e) In the event of any such license, assignment, sale or other
disposition of the Collateral, or any of it, each Grantor shall supply its know-
how and expertise relating to the manufacture and sale of the products bearing
or in connection with the Trademarks, Patents or Copyrights, and its customer
lists and other records relating to the Trademarks, Patents or Copyrights and to
the distribution of said products, to the Agent or its designee.
(f) In order to implement the assignment, sale or other disposal of
any of the Trademarks, Patents or Copyrights, the Agent may, at any time,
pursuant to the authority granted in Section 13 hereof, execute and deliver on
behalf of the Grantors, one or more instruments of assignment of the Trademarks,
Patents or Copyrights (or any application of registration thereof), in form
suitable for filing, recording or registration in any country.
(g) All cash proceeds received by the Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Agent, be held by the Agent as collateral for, and
then or at any time thereafter applied (after payment of any amounts payable to
the Agent pursuant to Section 17 hereof) in whole or in part against, all or any
part of the Obligations in such order as the Agent shall elect. Any surplus of
such cash or cash proceeds held by the Agent and remaining after payment in full
of all the Obligations shall be paid over to the Grantors or to whomsoever may
be lawfully entitled to receive such surplus.
(h) If at any time when the Agent shall determine to exercise its
right to sell all or any part of the Pledged Collateral pursuant to this Section
16, such Pledged Collateral or the part thereof to be sold shall not be
effectively registered under the Securities Act of 1933, as amended, and as from
time to time in effect, and the rules and regulations thereunder (the
"Securities Act"), the Agent is hereby expressly authorized to sell such Pledged
--------------
Collateral or such part thereof by private sale in such manner and under such
circumstances as the Agent may deem necessary or advisable in order that such
sale may legally be effected without such registration. Without limiting the
generality of the foregoing, in any such event the Agent, in compliance with
applicable securities laws, (a) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Collateral or such part thereof shall have been filed under such
Securities Act, (b) may approach and negotiate with a restricted number of
potential purchasers to effect such sale and (c) may restrict such sale to
purchasers as to their number, nature of business and investment intention
including without limitation to purchasers each of whom will represent and agree
to the satisfaction of the Agent that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of such
Pledged Collateral, or part thereof, it being understood that the Agent may
cause or require each Grantor, and each Grantor hereby agrees upon the written
request of the Agent, to cause (i) a legend or legends to be placed on the
certificates to be delivered to such purchasers to the effect that the Pledged
Collateral represented thereby have not been registered under the Securities Act
and setting forth or referring to restrictions on the transferability of such
securities; and (ii) the issuance of stop transfer instructions to such Issuer's
transfer agent, if any, with respect to the Pledged Collateral, or, if such
Issuer transfers its own securities, a notation in the appropriate records of
such Issuer. In the event of any such sale, each Grantor does hereby consent
and agree that the Agent shall incur no responsibility or liability for selling
all or any part of the Pledged Collateral at a price which the Agent may deem
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were public and
deferred until after registration as aforesaid.
SECTION 17. Indemnity and Expenses.
----------------------
(a) Each Grantor, jointly and severally, agrees to indemnify the
Agent from and against any and all claims, losses and liabilities growing out of
or resulting from this Agreement (including, without limitation, enforcement of
this Agreement), except claims, losses or liabilities directly arising from the
Agent's own gross negligence, willful misconduct or bad faith.
(b) The Grantors will upon demand pay to the Agent the amount of any
and all reasonable expenses, including the reasonable fees and disbursements of
its counsel and of any experts and agents, which the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent hereunder or (iv) the failure by any of the
Grantors to perform or observe any of the provisions hereof.
(c) The Grantors assume all responsibility and liability arising from
the use of the Trademarks, Patents and Copyrights, and the Grantors hereby,
jointly and severally, indemnify and hold the Agent harmless from and against
any claim, suit, loss, damage or expense (including reasonable attorneys' fees)
arising out of any alleged defect in any product manufactured, promoted or sold
by any of the Grantors in connection with any Trademark or out of the
manufacture, promotion, labeling, sale or advertisement of any such product by
any of the Grantors except as the same may have resulted from the gross
negligence, willful misconduct or bad faith of the Agent.
(d) Each of the Grantors agree that the Agent does not assume, and
shall have no responsibility for, the payment of any sums due or to become due
under any agreement or contract included in the Collateral or the performance of
any obligations to be performed under or with respect to any such agreement or
contract by any of the Grantors, and except as the same may have resulted from
the gross negligence or willful misconduct of the Agent, each of the Grantors
hereby jointly and severally agree to indemnify and hold the Agent harmless with
respect to any and all claims by any person relating thereto.
SECTION 18. Security Interest Absolute. All rights of the Agent and
--------------------------
security interests hereunder, and all obligations of each of the Grantors
hereunder, shall be absolute and unconditional, irrespective of any circumstance
which might constitute a defense available to, or a discharge of, any guarantor
or other obligor in respect of the Obligations.
SECTION 19. Amendments; Etc. No amendment or waiver of any provision of
---------------
this Agreement, nor any consent to any departure by any of the Grantors
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the party against whom enforcement is sought, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 20. Addresses for Notices. All notices and other communications
---------------------
provided for hereunder shall be in writing and shall be given in accordance with
the applicable provisions of the Credit Agreement.
SECTION 21. Continuing Security Interest. This Agreement shall create a
----------------------------
continuing security interest in the Collateral and shall (i) remain in full
force and effect until payment in full of the Obligations, (ii) be binding upon
each of the Grantors, their successors and assigns and (iii) inure, together
with the rights and remedies of the Agent hereunder, to the benefit of the Agent
and each of the Lenders and their respective successors, transferees and
assigns. Upon the payment in full of the Obligations, the security interest
granted hereby shall terminate and all rights to the Collateral shall revert to
the Grantors subject to any existing liens, security interests or encumbrances
on such Collateral. Upon any such termination, the Agent will, at the Grantor's
expense, execute and deliver to the Grantors such documents as the Grantors
shall reasonably request to evidence such termination.
SECTION 22. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, except as
required by mandatory provisions of law and except to the extent that the
validity or perfection of the security interest hereunder, or
remedies hereunder, in respect of any particular Collateral are governed by the
laws of a jurisdiction other than the State of New York and by Federal law
(including, without limitation, the Bankruptcy Code) to the extent the same has
pre-empted the law of the State of New York or such other jurisdiction.
SECTION 23. Headings. Section headings in this Agreement are included
--------
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
IN WITNESS WHEREOF, each of the Grantors and the Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
GRANTORS:
ICG COMMUNICATIONS, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG ▇▇▇▇▇, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG FUNDING, LLC
By: ICG Communications, Inc.,
its Managing Member
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG SERVICES, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG MOUNTAIN VIEW, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG NETAHEAD, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG EQUIPMENT, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG CANADIAN ACQUISITION, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG HOLDINGS (CANADA) CO.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG HOLDINGS, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ICG TELECOM GROUP, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
NIKONET, LLC
By: ICG Telecom Group, Inc.,
its Managing Member
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG OHIO LINX, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG ENHANCED SERVICES, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
COMMUNICATIONS BUYING GROUP, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG TELECOM GROUP OF VIRGINIA, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG DATACHOICE NETWORK SERVICES, L.L.C.
By: ICG Telecom Group, Inc.,
its Managing Member
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PTI HARBOR BAY, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BAY AREA TELEPORT, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG ACCESS SERVICES - SOUTHEAST, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
TRANS AMERICAN CABLE, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG TELECOM OF SAN DIEGO, L.P.
By: ICG Telecom Group, Inc.,
its General Partner
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
WESTERN PLAINS FINANCE, L.L.C.
By: ICG Telecom Group, Inc.,
its Managing Member
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG CHOICECOM MANAGEMENT, LLC
By: ICG Telecom Group, Inc.,
its Managing Member
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ICG CHOICECOM, L.P.
By: ICG ChoiceCom Management, LLC
its General Partner
By: ICG Telecom Group, Inc.,
its Managing Member
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
DOWNNORTH, INC.
By: _________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AGENT:
THE CHASE MANHATTAN BANK
By: _________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
SCHEDULE 1
Locations of Equipment and Inventory
SCHEDULE 2
Locations of Chief Executive
Office, Chief Place of Business
and Locations Where Records
Concerning Accounts are Kept
SCHEDULE 3
Trademarks
SCHEDULE 4
Patents
SCHEDULE 5
Copyrights
SCHEDULE 6
Pledged Shares
Grantor Issuer Class No. Of Shares
------- ------ ----- -------------
SCHEDULE 7
Pledged Partnership Interests
Grantor Partnership Percentage of Partnership Interests Held
------ ----------- ----------------------------------------
SCHEDULE 8
Pledged Company Interests
Grantor Company Percentage of Interests Held
------- ------- ----------------------------
SCHEDULE 9
Material Letters of Credit
Exhibit C to the
Revolving Credit Agreement
FORM OF OPINION OF COUNSEL
December ___, 2000
To Each Addressee
Listed on Schedule I hereto
Re: ICG Communications, Inc.
------------------------
Ladies and Gentlemen:
We have acted as special counsel to (i) ICG Communications, Inc., a
Delaware corporation and a debtor and debtor-in-possession (the "Company") in a
-------
pending case under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C.
(S)(S) 101-1330 (the "Bankruptcy Code"), and (ii) each of the entities listed on
---------------
Schedule II, each of which is a direct or indirect subsidiary of the Company
-----------
(each, individually, a "Borrower" and collectively, with the Company, the
--------
"Borrowers") and each of which is a debtor and debtor-in-possession in a pending
---------
case (each, individually a "Case" and collectively, with the Chapter 11 case of
----
the Company, the "Cases"), in connection with the preparation, execution and
-----
delivery of the Revolving Credit Agreement, dated as of November __, 2000 (the
"Credit Agreement"), among the Borrowers, The Chase Manhattan Bank, a New York
----------------
banking corporation ("Chase"), each of the other financial institutions party
-----
thereto (together with Chase, the "Lenders") and Chase, as agent (in such
-------
capacity, the "Agent") for the Lenders. This opinion is being delivered
-----
pursuant to Section 4.2(f) of the Credit Agreement. Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to them
in the Credit Agreement.
December __, 2000
Page 2
In our examination we have assumed the genuineness of all signatures
including indorsements, the legal capacity of natural persons, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic copies,
and the authenticity of the originals of such copies. As to any facts material
to this opinion which we did not independently establish or verify, we have
relied upon representations of the Borrowers and of public officials, including
the facts and conclusions set forth in the Officer's Certificate described in
item 4 below.
In rendering the opinions set forth herein, we have examined and
relied on originals or copies of the following:
(1) the Credit Agreement;
(2) the Security and Pledge Agreement, dated as of November ___,
2000, by and among the Borrowers, as grantors, and the Agent
(the "Security Agreement");
------------------
(3) the Order, dated December __, 2000 (the "Final Order"), a
-----------
copy of which is annexed hereto as Exhibit A;
---------
(4) the Certificate of the Borrowers dated the date hereof, a
copy of which is annexed hereto as Exhibit B (the "Officer's
--------- ---------
Certificate"); and
-----------
(5) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction other than
(i) the Applicable Laws of the State of New York and (ii) the Applicable Laws of
the United States of America. We have relied with your consent as to matters of
the laws of the State of New York on the opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP dated the date hereof and addressed to us.
The documents listed at items 1 and 2 above shall hereinafter be
referred to collectively as the "Loan Documents". The following terms shall
--------------
have the following meanings when used herein:
(i) "Applicable Laws" shall mean those laws, rules and regulations
---------------
which, in our experience, are normally applicable to transactions
of the type contemplated by the Loan Documents (including the
Bankruptcy Code) without our having made any special
investigation as to the applicability of any specific law, rule
or regulation and which are not the subject of a specific opinion
herein referring to a particular law or laws; and
(ii) "Governmental Approval" shall mean any consent, approval,
---------------------
license, authorization or validation of, or filing, recording or
registration with, any governmental authority pursuant to (x) the
Applicable Laws of the State of New York or (y) the Applicable
Laws of the United States of America.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Each of the Loan Documents constitutes the valid and binding
obligation of each Borrower party thereto enforceable against such Borrower in
accordance with its terms under the laws of the State of New York. Our opinion
in this paragraph is subject to the following qualifications:
(a) enforcement of the Loan Documents is subject to the
Bankruptcy Court's general powers (including its powers as a court of
equity), to applicable New York state bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is sought in equity or at law);
(b) certain of the remedial provisions with respect to the
Collateral (as defined in the Security Agreement) including waivers with
respect to the exercise of remedies against the Collateral contained in the
Loan Documents may be unenforceable in whole or in part, but the inclusion
of such provisions does not affect the validity of any such agreement,
taken as a whole;
(c) enforcement of the Loan Documents as each relates to
the grant of a security interest in the Collateral may be subject to the
terms of instruments, leases, contracts or other agreements between each
Borrower party thereto and the other parties to such agreements, the rights
of such other parties and any claims or defenses of such other parties
against such Borrowers arising under or outside such instruments, leases or
contracts or other agreements;
(d) we express no opinion as to the creation, perfection or
priority of any lien on or security interest in the Collateral purported to
be created by any Loan Document;
(e) we express no opinion regarding any provision of any
Loan Document to the extent that it authorizes or permits any purchaser of
a participation interest to set off or apply any deposit, property or
indebtedness with respect to any participation interest;
(f) we express no opinion as to the enforceability of any
rights to contribution or indemnification provided for in the Loan
Documents which are violative of the public policy underlying any law, rule
or regulation (including any federal or state securities law, rule or
regulation); and
(g) the enforceability of the Loan Documents may be limited
to the extent any term or provision of the Loan Documents conflicts or is
found to conflict with any term or provision of the Final Order.
2. The execution and delivery by each Borrower of each Loan Document
to which it is a party and the performance by each such Borrower of its
obligations thereunder do not violate any provision of any Applicable Law of the
State of New York or any Applicable Law of the United States of America.
3. Other than the entry by the Bankruptcy Court of the Final Order,
no Governmental Approval, which has not been obtained or taken and is not in
full force and effect, is required under any Applicable Law of the State of New
York or the United States of America to authorize, or is required in connection
with, the execution, delivery or performance of any Loan Documents.
4. The Final Order was entered on the docket of the Clerk of the
Bankruptcy Court for the Cases of the Borrowers (the "Docket") on December __,
------
2000 (the "Effective Time"). Based solely upon our review of the Docket as it
--------------
existed as of __ a.m. on December __, 2000, (x) we believe that the Final Order
is in full force and effect and (y) no order amending, staying, vacating or
rescinding the Final Order has been entered by the Bankruptcy Court. In
connection with the foregoing, please note that there may be a delay between the
time when papers are filed with the Bankruptcy Court and the time when such
papers entered into the Docket. To our knowledge, as of the Effective Time, no
order amending, staying, vacating or rescinding the Final Order has been entered
by the Bankruptcy Court.
QUALIFICATIONS AND ASSUMPTIONS
------------------------------
A. In rendering the foregoing opinions as they relate to or are
affected by the Final Order, we have the following qualifications and
assumptions relating to the Final Order:
(a) we have assumed that each interested party, to the
extent entitled thereto, has received or will receive due, sufficient and
adequate notice of the Final Order and the Bankruptcy Court's hearing on
the Final Order;
(b) you have not asked for, and we express no opinion
herein, on the substantive effect of the Final Order or the provisions
thereof;
(c) we have assumed that the evidence in the record at the
hearing was adequate to support the relief requested in the Motion (as
defined in the Final Order) and the entry of the Final Order; and
(d) in rendering our opinions in paragraphs 1, 2 and 3, we
have relied on the terms of the Final Order as in effect at the Effective
Time and reflected on the Docket at such time, and we express no opinion as
to whether the Final Order may be subject to subsequent alteration or
revocation by the Bankruptcy Court or another court of competent
jurisdiction or effects of any such alteration or revocation on the
transactions contemplated by the Loan Documents.
B. In rendering the foregoing opinions, we also have assumed, with
your consent, that:
(b) each Borrower has been duly incorporated or formed, as
applicable, and is validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation, as applicable;
(c) each Borrower has the requisite power and authority,
corporate or otherwise, to execute, deliver and perform all of its
obligations under each of the Loan Documents to which it is a party, and
the execution and delivery of such Loan Documents and the consummation by
each Borrower of the transactions contemplated thereby have been duly
authorized by all requisite action, corporate or otherwise, on the part of
such Borrower;
(d) each of the Loan Documents has been duly executed and
delivered by each Borrower that is a party thereto;
(e) the execution and delivery by each Borrower of the Loan
Documents to which it is a party and the performance of its obligations
thereunder do not and will not conflict with, contravene, violate or
constitute a default under (i) the articles or certificate of incorporation
or the by-laws (or the equivalent organizational and governing documents)
of such Borrower, (ii) any law, rule, or regulation to which any Borrower
is subject including, without limitation, the Investment Company Act of
1940, as amended, and the Public Utilities Holding Company Act of 1935, as
amended (other than Applicable Laws, as to which we express our opinion in
paragraph 2 herein), (iii) any judicial or administrative order or decree
of any governmental authority or (iv) any consent, approval, license,
authorization or validation of, or filing, recording or registration with
any governmental authority (other than Governmental Approvals as to which
we express our opinion in paragraph 3 herein); and
(f) no authorization, consent or other approval of, notice
to or filing with any court, governmental authority or regulatory body
(other than Governmental Approvals as to which we express our opinion in
paragraph 3 herein) is required to authorize or is required in connection
with the execution, delivery or performance by each Borrower of any Loan
Document to which it is a party or the transactions contemplated thereby.
We understand that you are separately receiving an opinion with
respect to certain of the foregoing assumptions from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
▇▇▇▇▇-
▇▇▇▇ General Counsel to the Company, and we are advised that such opinion
contains qualifications. Our opinions herein stated are based on the assumptions
specified above and we express no opinion as to the effect on the opinions
herein stated of the qualifications contained in such other opinion.
C. Finally, our opinions are also subject to the following assumptions
and qualifications:
(b) each Loan Document constitutes the legal, valid and
binding obligation of each party to such Loan Document (other than the
Borrowers) enforceable against such party (other than the Borrowers) in
accordance with its terms;
(c) we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of any Agent,
Lender or other party (other than the Borrowers to the extent set forth
herein) to the Loan Documents with any state, federal or other laws or
regulations applicable to them or (ii) the legal or regulatory status or
the nature of the business of the Agent, any Lender or other such party;
(d) each Lender and the Agent has acted in good faith in
the execution, delivery and performance of the Loan Documents and the
transactions contemplated thereby;
(e) in rendering our opinions expressed herein, we express
no opinion as to the applicability or effect of any fraudulent transfer or
similar law on the Loan Documents or any transactions contemplated thereby;
and
(f) we call to your attention that the execution, delivery
and performance by the Borrowers of the Loan Documents, the grant by the
Borrowers pursuant thereto of security interests and other liens in respect
of their assets, the issuance by each Borrower of the notes issued
thereunder to which it is a party and the borrowing by the Borrowers of
Borrowings thereunder may violate or constitute defaults under other
agreements and instruments to which any Borrower or its property is
subject, and, in giving our opinions herein, we are relying upon the
effectiveness of the Final Order and the Bankruptcy Code.
This opinion is being furnished only to the addressees named above in
connection with the Loan Documents and is solely for their benefit and is not to
be used, circulated, quoted, relied upon or otherwise referred to by any other
Person or for any other purpose without our prior written consent, except that
(i) an assignee of a Lender which becomes a party to (and a Lender under) the
Credit Agreement pursuant to subsection 9.3(b) of the Credit Agreement may rely
on this opinion as if it were addressed and delivered to such assignee on the
date hereof; and (ii) you may deliver a copy of this opinion to (A) any
permitted assignee, transferee or participant in respect of your interest under
the Credit Agreement, or (B) any regulatory authority having jurisdiction over
any Agent or Lender; provided that, except as set forth in the preceding clause
--------
(i), no Person who receives a copy of this opinion pursuant to the preceding
clause (ii) may use, quote, rely upon or otherwise refer to this opinion.
Very truly yours,
Schedule I to
SASM&F (Illinois) Opinion
-------------------------
Addressees of Opinion
---------------------
Schedule II to
SASM&F (Illinois) Opinion
-------------------------
Subsidiaries
------------
Exhibit A to
SASM&F (Illinois) Opinion
-------------------------
Final Order
-----------
Exhibit B to
SASM&F (Illinois) Opinion
-------------------------
Officer's Certificate
---------------------
EXHIBIT C
to the
Revolving Credit Agreement
(Continued)
[Letterhead of ICG Communications, Inc.]
December __, 2000
To Each Addressee
Listed on Schedule I hereto
Re: ICG Communications, Inc. Credit Facility
----------------------------------------
Ladies and Gentlemen:
I am the Assistant General Counsel of ICG Communications, Inc.
("ICG"), a Delaware corporation, and each of its subsidiaries (each a "Borrower"
--- --------
and collectively, the "Borrowers"), each a Debtor and Debtor-in-Possession in a
---------
case (each, individually a "Case" and collectively, with the Chapter 11 case of
----
the Company, the "Cases"), pending under Chapter 11 of the Bankruptcy Code in
-----
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
----------
Court"), and am familiar with the transactions contemplated by the Revolving
-----
Credit Agreement, dated as of December ___, 2000 (the "Credit Agreement"), among
----------------
the Borrowers, the Lenders party thereto and The Chase Manhattan Bank, as agent
(the "Agent") for the Lenders. Capitalized terms used herein and not otherwise
-----
defined have the meanings assigned thereto in the Credit Agreement.
This opinion is being delivered pursuant to Section 4.2(f) of the
Credit Agreement.
December __, 2000
Page 2
In my examination, I have assumed the genuineness of all signatures,
including indorsements, the legal capacity of natural persons, the authenticity
of all documents submitted to me as originals, the conformity to original
documents of all copies submitted to me as telefacsimile, certified or
photostatic copies, and the authenticity of the originals of such copies. As to
any facts material to this opinion, I have relied solely upon statements,
representations and warranties of the Borrowers, the Lenders and the Agent, and
their respective officers and representatives, and of public officials, and I
have made no independent investigation or inquiry with respect to such factual
matters.
In rendering the opinions set forth herein, I have examined and relied
on executed originals or copies of the following:
(a) the Credit Agreement;
(b) the Security and Pledge Agreement;
(c) the Order, dated December __, 2000 (the "Final Order"), a copy of
-----------
which is annexed hereto as Exhibit A;
---------
(d) copies of the Articles of Incorporation, Certificates of
Incorporation, Certificates of Formation, By-Laws, Operating Agreements, or
equivalent organizational documents of the Opinion Parties;
(e) copies of certain resolutions of the Board of Directors or other
governing body of each of the Borrowers adopted on November 13, 2000;
(f) certificates of good standing or certificates of existence, from
the applicable Governmental Authority of each Borrower's jurisdiction of
incorporation, organization or formation; and
(g) such other documents as I have deemed necessary or appropriate as
a basis for the opinions set forth below.
With your permission, I have further assumed the due authorization,
execution and delivery of the Loan Documents by all of the parties thereto other
than
December ___, 2000
Page 3
the Borrowers, and that all parties thereto other than the Borrowers have
complied or will comply with all applicable laws and regulations in connection
with the consummation of the transactions contemplated thereby.
Based on the foregoing and subject to the qualifications and
assumptions set forth herein, after giving effect to the Final Order, it is my
opinion that:
1. Each Borrower (i) has been duly incorporated or formed, as
applicable, (ii) is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, as applicable, and (iii) has all
requisite power and authority to own and operate its properties and to conduct
its business as now being conducted.
2. Each Borrower has all requisite power and authority, corporate or
otherwise, to execute and deliver the Loan Documents to which it is a party and
to perform its obligations thereunder. The execution, delivery and performance
by each Borrower of the Loan Documents to which it is a party and the
consummation by each Borrower of the transactions contemplated by the Loan
Documents have been duly authorized by all requisite action, corporate or
otherwise, on the part of such Borrower.
3. Each of the Loan Documents has been duly and validly executed and
delivered by each Borrower that is a party thereto.
4. The execution and delivery by each Borrower of the Loan Documents
to which it is a party and the performance of the obligations thereunder do not
and will not conflict with, contravene, violate or constitute a default under
(a) the articles or certificate of incorporation or the by-laws (or the
equivalent organizational and governing documents) of such Borrower, (b) any
law, rule, or regulation to which any Borrower is subject including, without
limitation, the Investment Company Act of 1940, as amended, and the Public
Utilities Holding Company Act of 1935, as amended, (c) any judicial or
administrative order or decree of any governmental authority, or (d) any
consent, approval, license, authorization or validation of, or filing, recording
or registration with any governmental authority.
December ___, 2000
Page 4
The opinions stated herein are subject to the following assumptions
and qualifications:
(a) In rendering our opinions herein I have relied on the terms
of the Final Order as in effect on December __, 2000 and reflected on the
docket of the Clerk of the Bankruptcy Court for the Cases of the Borrowers
at such time, and we express no opinion as to whether the Final Order may
be subject to subsequent alteration or revocation by the Bankruptcy Court
or another court of competent jurisdiction or effects of any such
alteration or revocation on the transactions contemplated by the Loan
Documents.
(b) I call to your attention that the execution, delivery and
performance by the Borrowers of the Loan Documents, the grant by the
Borrowers pursuant thereto of security interests and other liens in respect
of their assets, the issuance by each Borrower of the Notes to which it is
a party and the borrowing by the Borrowers of Borrowings thereunder may
violate or constitute defaults under other agreements and instruments to
which any Borrower or its property is subject, and, in giving the opinions
herein, I am relying upon the effectiveness of the Final Order and the
Bankruptcy Code.
I do not express any opinion as to matters governed by any law other
than the corporation law of the States of Delaware and of Colorado. I express
no opinion as to the effect on the matters covered by this letter of the federal
laws of the United States, including without limitation federal bankruptcy law,
or the laws of any other jurisdiction.
This opinion is predicated solely upon laws and regulations in
existence as of the present date and as they currently apply and to the facts as
they currently exist. I assume no obligation to revise or supplement this
opinion should the present facts change or the present laws be changed by
legislative action, judicial decision or otherwise.
This opinion is being furnished only to the addressees named above in
connection with the Loan Documents and is solely for their benefit and is not to
be used, circulated, quoted, relied upon or otherwise referred to by any other
Person or for any other purpose without our prior written consent, except that
(i) an assignee of
December ___, 2000
Page 5
a Lender which becomes a party to (and a Lender under) the Credit Agreement
pursuant to subsection 9.3(b) of the Credit Agreement may rely on this opinion
as if it were addressed and delivered to such assignee on the date hereof; and
(ii) you may deliver a copy of this opinion to (A) any permitted assignee,
transferee or participant in respect of your interest under the Credit
Agreement, or (B) any regulatory authority having jurisdiction over any Agent or
Lender; provided that, except as set forth in the preceding clause (i), no
--------
Person who receives a copy of this opinion pursuant to the preceding clause (ii)
may use, quote, rely upon or otherwise refer to this opinion.
Very truly yours,
Schedule I
----------
Addressees of Opinion
---------------------
Exhibit A
---------
Final Order
-----------
Exhibit D to the
Revolving Credit Agreement
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated: _____________, 200_
Reference is made to the Revolving Credit Agreement, dated as of December
___, 2000 (as restated, amended, modified, supplemented and in effect from time
to time, the "Credit Agreement"), among ICG Communications, Inc. and each of its
----------------
Subsidiaries party thereto, each a debtor and debtor-in-possession under Chapter
11 of the Bankruptcy Code (collectively, the "Borrowers"), and The Chase
---------
Manhattan Bank, as agent (in such capacity, the "Agent") for the lenders (the
-----
"Lenders") party to the Credit Agreement. Capitalized terms used herein and not
-------
otherwise defined shall have the meanings assigned to such terms in the Credit
Agreement. This Assignment and Acceptance between the Assignor (as set forth on
Schedule I hereto and made a part hereof) and the Assignee (as set forth on
Schedule I hereto and made a part hereof) is dated as of the Effective Date (as
set forth on Schedule I hereto and made a part hereof).
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date, an undivided interest (the "Assigned Interest") in and to all
-----------------
the Assignor's rights and obligations under the Credit Agreement in a principal
amount as set forth on Schedule I.
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other of the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other of the Loan Documents or
any other instrument or document furnished pursuant thereto, other than that it
is the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrowers or the performance or observance by the
Borrowers of any of their respective obligations under the Credit Agreement, any
of the other Loan Documents or any other instrument or document furnished
pursuant thereto; and (iii) requests that the Agent evidence the Assigned
Interest by recording the information contained on Schedule I in the Register
which reflects the assignment being made hereby (and after giving effect to any
other assignments which have become effective on the Effective Date).
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance and that it is an Eligible
Assignee; (ii) confirms that it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section 5.1 thereof, and such other documents and information as it has
deemed appropriate to make its own credit analysis; (iii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iv) appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement and the other Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will be bound by the provisions of the Credit
Agreement and will perform in accordance with its terms all the obligations
which by the terms of the Credit Agreement are required to be performed by it as
a Lender; (vi) if the Assignee is organized under the laws of a jurisdiction
outside the United States, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's exemption from
United States withholding taxes with respect to all payments to be made to the
Assignee under the Credit Agreement or such other documents as are necessary to
indicate that all such payments are subject to such tax at a rate reduced by an
applicable tax treaty; and (vii) has supplied the information requested on the
administrative questionnaire heretofore supplied by the Agent.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent, together with a processing and recordation fee of
$3,500, for acceptance by it and recording by the Agent pursuant to Section 9.3
of the Credit Agreement, effective as of the Effective Date (which Effective
Date shall, unless otherwise agreed to by the Agent, be within ten Business Days
after the execution of this Assignment and Acceptance).
5. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignee,
whether such amounts have accrued prior to the Effective Date or accrue
subsequent to the Effective Date. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date by
the Agent or with respect to the making of this assignment directly between
themselves.
6. From and after the Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder, and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement provided that Assignor hereby represents and warrants that the
restrictions set forth in Section 9.3 of the Credit Agreement pertaining to the
minimum amount of assignments have been satisfied.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
Schedule I to Assignment and Acceptance
Respecting the Revolving Credit Agreement,
dated as of December ___, 2000, among
ICG Communications, Inc. and its Subsidiaries party thereto,
the Lenders named therein, and
The Chase Manhattan Bank, as Agent
Legal Name of Assignor:
Legal Name of Assignee:
Effective Date of Assignment:
Principal Percentage Assigned (to at least 8 decimals)
Amount shown as a percentage of aggregate
Assigned principal amount of all Banks
-------- -----------------------------
$__________ ______%
CONSENTED TO AND ACCEPTED:
THE CHASE MANHATTAN BANK, ____________________________,
as Agent as Assignor
By___________________________ By___________________________
Name: Name:
Title: Title:
____________________________, ___________________________,
as Fronting Bank as Assignee
By___________________________ By___________________________
Name: Name:
Title: Title:
Schedule 3.5 to the
Revolving Credit Agreement
SUBSIDIARIES
Schedule 3.6 to the
Revolving Credit Agreement
LIENS
Schedule 3.12 to the
Revolving Credit Agreement
INTELLECTUAL PROPERTY
Schedule 3.13 to the
Revolving Credit Agreement
MATERIAL CONTRACTS
Schedule 5.2 to the
Revolving Credit Agreement
CERTAIN SUBSIDIARIES
Schedule 6.3 to the
Revolving Credit Agreement
INTERCOMPANY INDEBTEDNESS
Schedule 6.10 to the
Revolving Credit Agreement
EXISTING INVESTMENTS
Schedule 6.13 to the
Revolving Credit Agreement
BORROWER TRANSACTION RESTRICTIONS