-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vh+YrMnBOiOdPODabwt5Leao+9R48EovWj1msb/mMabdXzRHAt4pX6V6EgK0H7ZU S6aGVryRqUiHjb+TXLKegg== 0000914752-00-000004.txt : 20000421 0000914752-00-000004.hdr.sgml : 20000421 ACCESSION NUMBER: 0000914752-00-000004 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20000420 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ICG COMMUNICATIONS INC /DE/ CENTRAL INDEX KEY: 0001013240 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841342022 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-47577 FILM NUMBER: 605960 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: PO BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 8004145000 MAIL ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O OX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80112 FORMER COMPANY: FORMER CONFORMED NAME: ICG HOLDINGS CANADA CO DATE OF NAME CHANGE: 19990226 FORMER COMPANY: FORMER CONFORMED NAME: ICG COMMUNICATIONS INC DATE OF NAME CHANGE: 19960430 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HICKS THOMAS O CENTRAL INDEX KEY: 0000938201 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 459720171 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 200 CRESCENT COURT STREET 2: SUITE 1600 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2147407300 MAIL ADDRESS: STREET 1: 200 CRESCENT COURT STREET 2: SUITE 1600 CITY: DALLAS STATE: TX ZIP: 75201 SC 13D 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 ICG Communications, Inc. (Name of Issuer) Common Stock, par value $0.01 per share (Title of Class of Securities) 449246107 (CUSIP Number) Thomas O. Hicks c/o Hicks, Muse, Tate & Furst Incorporated 200 Crescent Court Suite 1600 Dallas, Texas 75201 (214) 740-7300 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Eric S. Shube Vinson & Elkins, L.L.P. 1325 Avenue of the Americas New York, New York 10019 (917) 206-8005 April 10, 2000 (Date of Event which Requires Filing of this Statement) PAGE 2 If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [ ] (Continued on following pages) PAGE 3 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) Mr. Thomas O. Hicks - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds N/A - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 11,280,954 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 11,280,954 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 11,280,954 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 18.84% - -------------------------------------------------------------------------------- 14 Type of Reporting Person IN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 4 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM4 ICG Qualified Fund, LLC - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 5,132,396 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 5,132,396 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 5,132,396 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 9.56% - -------------------------------------------------------------------------------- 14 Type of Reporting Person OO - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 5 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HMTF Equity Fund IV (1999), L.P. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 5,132,396 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 5,132,396 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 5,132,396 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 9.56% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 6 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM4 ICG Private Fund, LLC - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 36,314 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 36,314 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 36,314 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.08% - -------------------------------------------------------------------------------- 14 Type of Reporting Person OO - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 7 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HMTF Private Equity Fund IV (1999), L.P. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 36,314 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 36,314 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 36,314 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.08% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 8 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM4/GP (1999) Partners, L.P. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 5,168,710 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 5,168,710 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 5,168,710 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 9.62% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 9 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM 4-EQ (1999)ICG Coinvestors, LLC - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 75,502 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 75,502 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 75,502 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.15% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 10 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM 4-EQ (1999)ICG Coinvestors, L.P. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 75,502 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 75,502 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 75,502 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.15% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 11 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM 4-SBS ICG Coinvestors, LLC - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 123,055 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 123,055 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 123,055 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.25% - -------------------------------------------------------------------------------- 14 Type of Reporting Person 00 - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 12 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM 4-SBS (1999) Coinvestors, L.P. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 123,055 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 123,055 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 123,055 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.25% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 13 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) Hicks, Muse GP (1999) Partners IV, L.P. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 5,367,267 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 5,367,267 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 5,367,267 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 9.95% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 14 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) Hicks, Muse (1999) Fund IV, LLC - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 5,367,267 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 5,367,267 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 5,367,267 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 9.95% - -------------------------------------------------------------------------------- 14 Type of Reporting Person OO - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 15 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM PG-IV ICG, LLC - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 273,210 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 273,210 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 273,210 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.56% - -------------------------------------------------------------------------------- 14 Type of Reporting Person OO - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 16 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) Hicks, Muse PG-IV (1999), C.V. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Netherlands - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 273,210 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 273,210 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 273,210 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.56% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 17 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM Equity Fund IV/GP Partners (1999), C.V. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Netherlands - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 273,210 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 273,210 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 273,210 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.56% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 18 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM GP Partners IV Cayman, L.P. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Cayman Islands - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 273,210 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power 273,210 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 273,210 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.56% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 19 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HM Fund IV Cayman LLC - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Cayman Islands - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 273,210 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 273,210 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 273,210 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 0.56% - -------------------------------------------------------------------------------- 14 Type of Reporting Person OO - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 20 - -------------------------------------------------------------------------------- CUSIP No. 762430 10 6 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HMTF Bridge ICG, LLC - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 5,640,477 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 5,640,477 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 5,640,477 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 10.40% - -------------------------------------------------------------------------------- 14 Type of Reporting Person OO - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 21 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HMTF Bridge Partners, L.P. - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 5,640,477 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 5,640,477 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 5,640,477 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 10.40% - -------------------------------------------------------------------------------- 14 Type of Reporting Person PN - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 22 - -------------------------------------------------------------------------------- CUSIP No. 449246107 - -------------------------------------------------------------------------------- 1 Name of Reporting Person I.R.S. Identification No. of above person (entities only) HMTF Bridge Partners, LLC - -------------------------------------------------------------------------------- 2 Check the appropriate box if a member of a group* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3 SEC use only - -------------------------------------------------------------------------------- 4 Source of Funds OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 Number of ----------------------------------------------------------------- Shares 8 Shared Voting Power* 5,640,477 Beneficially Owned by ----------------------------------------------------------------- Each 9 Sole Dispositive Power 0 Reporting ----------------------------------------------------------------- Person With 10 Shared Dispositive Power* 5,640,477 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by each Reporting Person** 5,640,477 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11)** 10.40% - -------------------------------------------------------------------------------- 14 Type of Reporting Person OO - -------------------------------------------------------------------------------- * The Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such reporting person. ** Assuming (1) conversion of all 8% Series A Convertible Preferred Stock beneficially owned by such reporting person, but without giving effect to the conversion into Common Stock of (a) any 8% Series A Convertible Preferred Stock held by other holders or (b) any capital stock held by other holders and (2) exercise of all five-year Common Stock warrants beneficially owned by such reporting person, but without giving effect to the exercise of any warrants held by other holders. PAGE 23 Item 1. Security and Issuer. The class of equity securities to which this Schedule 13D (this "Statement") relates is the Common Stock, par value $0.01 per share (the "Common Stock"), of ICG Communications, Inc., a Delaware corporation (the "Issuer"). The address of the Issuer's principal executive offices is 161 Inverness Drive West, Englewood, Colorado 80112. Item 2. Identity and Background. (a) Name of Person(s) Filing this Statement (the "Reporting Persons"): Mr. Thomas O. Hicks HM4 ICG Qualified Fund, LLC, a Delaware limited liability company ("Qualified LLC") HMTF Equity Fund IV (1999), L.P., a Texas limited partnership ("Equity L.P.") HM4 ICG Private Fund, LLC, a Delaware limited liability company ("Private LLC") HMTF Private Equity Fund IV (1999), L.P., a Texas limited partnership ("Private L.P.") HM4/GP (1999) Partners, L.P., a Texas limited partnership ("HM4/GP Partners") HM 4-EQ ICG Coinvestors, LLC, a Delaware limited liability company ("4-EQ LLC") HM 4-EQ (1999) Coinvestors, L.P., a Texas limited partnership ("4-EQ L.P.") HM 4-SBS ICG Coinvestors, LLC, a Delaware limited liability company ("4-SBS LLC") HM 4-SBS (1999) Coinvestors, L.P., a Texas limited partnership ("4-SBS L.P.") Hicks, Muse GP (1999) Partners IV, L.P., a Texas limited partnership ("Hicks GP Partners") Hicks, Muse (1999) Fund IV, LLC, a Texas limited liability company ("Fund IV LLC") HM PG-IV ICG, LLC, a Delaware limited liability company ("PG-IV LLC") Hicks, Muse PG-IV (1999), C.V., a limited partnership organized under the laws of the Netherlands ("PG-IV C.V.") HM Equity Fund IV/GP Partners (1999), C.V., a limited partnership organized under the laws of the Netherlands ("HM Equity C.V.") HM GP Partners IV Cayman, L.P., a Cayman Islands exempted limited partnership ("GP Cayman L.P.") HM Fund IV Cayman LLC, an exempted Cayman Islands limited liability company ("Fund IV Cayman LLC") HMTF Bridge ICG, LLC, a Delaware limited liability company ("Bridge LLC") HMTF Bridge Partners, L.P., a Delaware limited partnership ("Bridge Partners L.P.") PAGE 24 HMTF Bridge Partners, LLC, a Texas limited liability company ("Bridge Partners LLC") (b) - (c) Mr. Thomas O. Hicks Mr. Thomas O. Hicks is chief executive officer of Hicks, Muse, Tate & Furst Incorporated ("Hicks, Muse"), a private investment firm primarily engaged in leveraged acquisitions, recapitalizations and other investment activities. Mr. Hicks is also the sole member and sole manager of Fund IV LLC, which is the sole general partner of Hicks GP Partners, which is the sole general partner of HM4/GP Partners, which is the sole general partner of each of Equity L.P. and Private L.P. Equity L.P. is the sole member of Qualified LLC, and Private L.P. is the sole member of Private LLC. Hicks GP Partners is also the sole general partner of each of 4-SBS L.P. and 4-EQ L.P. 4-SBS L.P. is the sole member of 4-SBS LLC, and 4-EQ L.P. is the sole member of 4-EQ LLC. Mr. Hicks is also the sole member of Fund IV Cayman LLC, which is the sole general partner of GP Cayman L.P., which is the sole general partner of HM Equity C.V., which is the sole general partner of PG-IV C.V. PG-IV C.V. is the sole member of PG-IV LLC. Mr. Hicks is also the sole member of Bridge Partners LLC, which is the sole general partner of Bridge Partners L.P., which is the sole member of Bridge LLC. The business address of Mr. Hicks is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Qualified LLC Qualified LLC is a Delaware limited liability company formed to invest in the 8% Series A Convertible Preferred Stock of the Issuer (the "Preferred Stock") and the five year warrants (the "Warrants"). The business address of Qualified LLC, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), information with respect to Equity L.P., the sole member of Qualified LLC, is set forth below. Equity L.P. Equity L.P. is a Texas limited partnership, the principal business of which is to invest directly or indirectly in various companies. The business address of Equity L.P., which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to HM4/GP Partners, the sole general partner of Equity L.P., is set forth below. PAGE 25 Private LLC Private LLC is a Delaware limited liability company formed to invest in the Preferred Stock and Warrants. The business address of Private LLC, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Private L.P., the sole member of Private LLC, is set forth below. Private L.P. Private L.P. is a Texas limited partnership, the principal business of which is to invest directly or indirectly in various companies. The business address of Private L.P., which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to HM4/GP Partners, the sole general partner of Private L.P., is set forth below. HM4/GP Partners HM4/GP Partners is a Texas limited partnership, the principal business of which is serving as the sole general partner of various limited partnerships whose principal business is to serve as partners in various investment partnerships. The principal business address of HM4/GP Partners, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Hicks GP Partners, the sole general partner of HM4/GP Partners, is set forth below. 4-EQ LLC 4-EQ LLC is a Delaware limited liability company formed to invest in the Preferred Stock and Warrants. The business address of 4-EQ LLC, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to 4-EQ L.P., the sole member of 4-EQ LLC, is set forth below. 4-EQ L.P. 4-EQ L.P. is a Texas limited partnership, the principal business of which is to invest directly or indirectly in various companies. The business address of 4-EQ L.P., which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Hicks GP Partners, the sole general partner of 4-EQ L.P., is set forth below. PAGE 26 4-SBS LLC 4-SBS LLC is a Delaware limited liability company formed to invest in the Preferred Stock and Warrants. The business address of 4-SBS LLC, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to 4-SBS L.P., the sole member of 4-SBS LLC, is set forth below. 4-SBS L.P. 4-SBS L.P. is a Texas limited partnership, the principal business of which is to invest directly or indirectly in various companies. The business address of 4-SBS L.P., which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Hicks GP Partners, the sole general partner of 4-SBS L.P., is set forth below. Hicks GP Partners Hicks GP Partners is a Texas limited partnership, the principal business of which is serving as the sole general partner of various limited partnerships whose principal business is to serve as partners in various investment partnerships. The principal business address of Hicks GP Partners, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Fund IV LLC, the sole general partner of Hicks GP Partners, is set forth below. Fund IV LLC Fund IV LLC is a Texas limited liability company, the principal business of which is serving as the sole general partner in various limited partnerships whose principal business is to serve as partners in various investment partnerships. The business address of Fund IV LLC, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Mr. Thomas O. Hicks, the sole member of Fund IV LLC, is set forth above. PG-IV LLC PG-IV LLC is a Delaware limited liability company formed to invest in the Preferred Stock and Warrants. The business address of PG-IV LLC, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to PG-IV C.V., the sole member of PG-IV LLC, is set forth below. PG-IV C.V. PAGE 27 PG-IV C.V. PG-IV C.V. is a limited partnership organized under the laws of the Netherlands, the principal business of which is to invest directly or indirectly in various companies. The business address of PG-IV C.V., which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to HM Equity C.V., the sole general partner of PG-IV C.V., is set forth below. HM Equity C.V. HM Equity C.V. is a limited partnership organized under the laws of the Netherlands, the principal business of which is serving as the sole general partner of various limited partnerships whose principal business is to serve as partners in various investment partnerships. The principal business address of HM Equity C.V., which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to GP Cayman L.P., the sole general partner of HM Equity C.V., is set forth below. GP Cayman L.P. GP Cayman L.P. is a Cayman Islands exempted limited partnership, the principal business of which is serving as the sole general partner of various limited partnerships whose principal business is to serve as partners in various investment partnerships. The business address of GP Cayman L.P., which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Fund IV Cayman LLC, the sole general partner of GP Cayman L.P., is set forth below. Fund IV Cayman LLC Fund IV Cayman LLC is an exempted Cayman Islands limited liability company, the principal business of which is serving as the sole general partner in various limited partnerships whose principal business is to serve as partners in various investment partnerships. The business address of Fund IV Cayman LLC, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Mr. Thomas O. Hicks, the sole member of Fund IV Cayman LLC, is set forth above. Bridge LLC Bridge LLC is a Delaware limited liability company formed to invest in the Preferred Stock and Warrants. The business address of Bridge LLC, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to PAGE 28 Instruction C to Schedule 13D of the Exchange Act, information with respect to Bridge Partners L.P., the sole member of Bridge LLC, is set forth below. Bridge Partners L.P. Bridge Partners L.P. is a Delaware limited partnership, the principal business of which to invest directly or indirectly in various companies. The business address of Bridge Partners L.P., which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Bridge Partners LLC, the general partner of Bridge Partners L.P., is set forth below. Bridge Partners LLC Bridge Partners LLC is Texas limited liability company, the principal business of which is serving as the sole general partner of various limited partnerships whose principal business is to serve as partners in various investment partnerships. The principal business address of Bridge Partners LLC, which also serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act, information with respect to Mr. Thomas O. Hicks, the sole member of Bridge Partners LLC, is set forth above. (d) None of the entities or persons identified in this Item 2 has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the entities or persons identified in this Item 2 has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws. (f) Mr. Hicks is a United States citizen. Item 3. Source and Amount of Funds or Other Consideration. As more fully described in Item 6 below, on April 10, 2000, Bridge LLC, Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC each purchased from the Issuer the number of shares of Preferred Stock and the number of Warrants set forth opposite their respective names below at the purchase price set forth opposite their respective names below. PAGE 29 ___________________________________________________________________________ Name of entity Number of shares Number of Purchase of Preferred Stock Warrants Price purchased purchased ___________________________________________________________________________ Qualified LLC 10,464 1,395,253 $104,644,000 Private LLC 74 9,885 $741,000 4-EQ LLC 154 20,502 $1,538,000 4-SBS LLC 251 33,412 $2,506,000 PG-IV LLC 557 74,281 $5,571,000 Bridge LLC 11,500 1,533,334 $115,000,000 ____________________________________________________________________________ Qualified LLC obtained funds for the purchase price of its shares of Preferred Stock and its Warrants from capital contributions provided by Equity L.P.; Equity L.P. obtained such funds from capital contributions provided by its limited partners and HM4/GP Partners; HM4/GP Partners obtained such funds from capital contributions provided by its limited partners and Hicks GP Partners; and Hicks GP Partners obtained such funds from capital contributions provided by its limited partners and Fund IV LLC. Fund IV LLC obtained such funds from capital contributions provided by Mr. Thomas O. Hicks, who obtained such funds from personal funds. Private LLC obtained funds for the purchase price of its shares of Preferred Stock and its Warrants from capital contributions provided by Private L.P.; Private L.P. obtained such funds from capital contributions provided by its limited partners and HM4/GP Partners; HM4/GP Partners obtained such funds from capital contributions provided by its limited partners and Hicks GP Partners; and Hicks GP Partners obtained such funds from capital contributions provided by its limited partners and Fund IV LLC. Fund IV LLC obtained such funds from capital contributions provided by Mr. Thomas O. Hicks, who obtained such funds from personal funds. 4-EQ LLC obtained funds for the purchase price of its shares of Preferred Stock and its Warrants from capital contributions provided by 4-EQ L.P.; 4-EQ L.P. obtained such funds from capital contributions provided by its limited partners and Hicks GP Partners, and Hicks GP Partners obtained such funds from capital contributions provided by its limited partners and Fund IV LLC. Fund IV LLC obtained such funds from capital contributions provided by Mr. Thomas O. Hicks, who obtained such funds from personal funds. 4-SBS LLC obtained funds for the purchase price of its shares of Preferred Stock and its Warrants from capital contributions provided by 4-SBS L.P.; 4-SBS L.P. obtained such funds from capital contributions provided by its limited partners and Hicks GP Partners, and Hicks GP PAGE 30 Partners obtained such funds from capital contributions provided by its limited partners and Fund IV LLC. Fund IV LLC obtained such funds from capital contributions provided by Mr. Thomas O. Hicks, who obtained such funds from personal funds. PG-IV LLC obtained funds for the purchase price of its shares of Preferred Stock and its Warrants from capital contributions provided by PG-IV C.V.; PG-IV C.V. obtained such funds from capital contributions provided by its limited partners and HM Equity C.V.; HM Equity C.V. obtained such funds from capital contributions provided by its limited partners and G.P. Cayman L.P.; and G.P. Cayman L.P. obtained such funds from capital contributions provided by its limited partners and Fund IV Cayman LLC. Fund IV Cayman LLC obtained such funds from capital contributions provided by Mr. Thomas O. Hicks, who obtained such funds from personal funds. Bridge LLC obtained funds for the purchase price of its shares of Preferred Stock and its Warrants from capital contributions provided by Bridge Partners L.P.; Bridge Partners L.P. obtained $3,489,230.00 of such funds from capital contributions provided by its general partner, Bridge Partners LLC, and its limited partners, and it obtained the remainder of the funds, $114,735,029.39 (including fees), from borrowings under a credit agreement dated December 28, 1999, among HMTF Partners, L.P. and HM/Europe Coinvestors, C.V., as Initial Borrowers, and any Future Borrowers from time to time parties thereto, the Lenders from time to time parties thereto, the Issuing Bank, The Chase Manhattan Bank, as Administrative Agent, and Bank of America, N.A., as Syndication Agent ("Credit Agreement"). Such funds include amounts allocated to fees and expenses. Bridge Partners L.P. intends to repay the Credit Agreement either with funds drawn under a new credit facility or with funds contributed by affiliates of Hicks, Muse. The terms of the line of credit facility are set forth in the Credit Agreement, a copy of which is filed as Exhibit 10.4 hereto, and is incorporated by reference. Bridge Partners LLC obtained the funds it contributed to Bridge Partners L.P. from capital contributions provided by Mr. Thomas O. Hicks, who obtained such funds from personal funds. Item 4. Purpose of the Transaction. The Reporting Persons consummated the transactions described herein in order to acquire an interest in the Issuer for investment purposes. The Reporting Persons intend to review continuously their position in the Issuer. Depending upon future evaluations of the business prospects of the Issuer and upon other developments, including, but not limited to, general economic and business conditions and stock market conditions, the Reporting Persons may retain or from time to time increase their holdings or dispose of all or a portion of their holdings, subject to any applicable legal and contractual restrictions on their ability to do so. In addition, the matters set forth in Item 6 below are incorporated in this Item 4 by reference as if fully set forth herein. PAGE 31 Except as set forth in this Item 4 (including the matters described in Item 6 below which are incorporated in this Item 4 by reference), the Reporting Persons have no present plans or proposals that relate to or that would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D under the Exchange Act. Item 5. Interest in Securities of the Issuer. (a) (1) Qualified LLC is the record and beneficial owner of 10,464 shares of Preferred Stock and 1,395,253 Warrants. Assuming conversion of all such shares of Preferred Stock and exercise of all such Warrants, Qualified LLC is the beneficial owner of 5,132,396 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 9.56% of the outstanding shares of Common Stock. (2) Assuming conversion of all 10,464 shares of Preferred Stock and exercise of all 1,395,253 Warrants owned of record by Qualified LLC, Equity L.P., in its capacity as sole member of Qualified LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 5,132,396 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 9.56% of the outstanding shares of Common Stock. (3) Private LLC is the record and beneficial owner of 74 shares of Preferred Stock and 9,885 Warrants. Assuming conversion of all such shares of Preferred Stock and assuming exercise of all such Warrants, Private LLC is the beneficial owner of 36,314 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.08% of the outstanding shares of Common Stock. (4) Assuming conversion of all 74 shares of Preferred Stock and exercise of all 9,885 Warrants owned of record by Private LLC, Private L.P., in its capacity as sole member of Private LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 36,314 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.08% of the outstanding shares of Common Stock. (5) Assuming conversion of all 10,538 shares of Preferred Stock and exercise of all 1,405,138 Warrants owned of record by Qualified LLC and Private LLC, HM4/GP Partners, in its capacity as the sole general partner of each of Equity L.P. and Private L.P., may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 5,168,710 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of PAGE 32 the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 9.62% of the outstanding shares of Common Stock. (6) 4-EQ LLC is the record and beneficial owner of 154 shares of Preferred Stock and 20,502 Warrants. Assuming conversion of all such shares of Preferred Stock and assuming exercise of all such Warrants, 4-EQ LLC is the beneficial owner of 75,502 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.15% of the outstanding shares of Common Stock. (7) Assuming conversion of all 154 shares of Preferred Stock and exercise of all 20,502 Warrants owned of record by 4-EQ LLC, 4-EQ L.P., in its capacity as sole member of 4-EQ LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 75,502 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.15% of the outstanding shares of Common Stock. (8) 4-SBS LLC is the record and beneficial owner of 251 shares of Preferred Stock and 33,412 Warrants. Assuming conversion of all such shares of Preferred Stock and exercise of all such Warrants, 4-SBS LLC is the beneficial owner of 122,055 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.25% of the outstanding shares of Common Stock. (9) Assuming conversion of all 251 shares of Preferred Stock and exercise of all 33,412 Warrants owned of record by 4-SBS LLC, 4-SBS L.P., in its capacity as sole member of 4-SBS LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 123,055 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.25% of the outstanding shares of Common Stock. (10) Assuming conversion of all 10,943 shares of Preferred Stock and exercise of all 1,459,052 Warrants owned of record by Qualified LLC, Private LLC, 4-EQ LLC and 4-SBS LLC, Hicks GP Partners, in its capacity as sole general partner of each of HM4/GP Partners, 4-EQ L.P. and 4-SBS L.P., may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 5,367,267 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 9.95% of the outstanding shares of Common Stock. PAGE 33 (11) Assuming conversion of all 10,943 shares of Preferred Stock and exercise of all 1,459,052 Warrants owned of record by Qualified LLC, Private LLC, 4-EQ LLC and 4-SBS LLC, Fund IV LLC, in its capacity as the sole general partner of Hicks GP Partners, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 5,367,267 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 9.95% of the outstanding shares of Common Stock. (12) PG-IV LLC is the record and beneficial owner of 557 shares of Preferred Stock and 74,281 Warrants. Assuming conversion of all such shares of Preferred Stock and exercise of all such Warrants, PG-IV LLC is the beneficial owner of 273,210 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.56% of the outstanding shares of Common Stock. (13) Assuming conversion of all 557 shares of Preferred Stock and exercise of all 74,281 Warrants owned of record by PG-IV LLC, PG-IV C.V., in its capacity as sole member of PG-IV LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 273,210 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.56% of the outstanding shares of Common Stock. (14) Assuming conversion of all 557 shares of Preferred Stock and exercise of all 74,281 Warrants owned of record by PG-IV LLC, HM Equity C.V., in its capacity as sole general partner of PG-IV C.V., may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 273,210 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.56% of the outstanding shares of Common Stock. (15) Assuming conversion of all 557 shares of Preferred Stock and exercise of all 74,281 Warrants owned of record by PG-IV LLC, GP Cayman L.P., in its capacity as sole general partner of HM Equity C.V., may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 273,210 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.56% of the outstanding shares of Common Stock. (16) Assuming conversion of all 557 shares of Preferred Stock and exercise of all 74,281 Warrants owned of record by PG-IV LLC, Fund IV Cayman LLC, in its capacity as the sole general partner of GP Cayman L.P. may, pursuant to Rule 13d-3 of the Exchange Act, be PAGE 34 deemed to be the beneficial owner of 273,210 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 0.56% of the outstanding shares of Common Stock. (17) Bridge LLC is the record and beneficial owner of 11,500 shares of Preferred Stock and 1,533,334 Warrants. Assuming conversion of all such shares and exercise of all such Warrants, Bridge LLC is the beneficial owner of 5,640,477 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 10.40% of the outstanding shares of Common Stock. (18) Assuming conversion of all 11,500 shares of Preferred Stock and exercise of all 1,533,334 Warrants owned of record by Bridge LLC, Bridge Partners L.P., in its capacity as sole member of Bridge LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 5,640,477 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 10.40% of the outstanding shares of Common Stock. (19) Assuming conversion of all 11,500 shares of Preferred Stock and exercise of all 1,533,334 Warrants owned of record by Bridge LLC, Bridge Partners LLC, in its capacity as general partner of Bridge Partners L.P., may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 5,640,477 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 10.40% of the outstanding shares of Common Stock. (20) Assuming conversion of all 23,000 shares of Preferred Stock and exercise of all 3,066,667 Warrants owned of record by Qualified LLC, Private LLC, 4-EQ LLC, 4-SBS LLC, PG-IV LLC and Bridge LLC, Mr. Thomas O. Hicks, in his capacity as sole member of Fund IV LLC, Fund IV Cayman LLC and Bridge Partners LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial owner of 11,280,954 shares of Common Stock, which, based on calculations made in accordance with Rule 13d-3 of the Exchange Act and, as at March 27, 2000, there being 48,582,035 shares of Common Stock outstanding, represents approximately 18.84% of the outstanding shares of Common Stock. The Reporting Persons expressly disclaim (a) the existence of any group and (b) beneficial ownership with respect to any shares other than the shares owned of record by such Reporting Person. PAGE 35 (b) The information set forth in Items 7 through 11 of the cover pages hereto is incorporated herein by reference. (c) Except as set forth herein, none of the persons named in response to paragraph (a) has effected any transactions in shares of Common Stock during the past 60 days. (d) The right to receive dividends on, and proceeds from the sale of, the shares of Common Stock which may be beneficially owned by the persons described in (a) and (b) above is governed by the limited liability company agreements and limited partnership agreements of each such entity, and such dividends or proceeds may be distributed with respect to numerous member interests and general and limited partnership interests. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. The matters set forth in Item 2 are incorporated in this Item 6 by reference as if fully set forth herein. Securities Purchase Agreement Pursuant to the Preferred Stock and Warrant Purchase Agreement (as amended by the Amendment Agreement referred to below, the "Securities Purchase Agreement"), dated as of February 27, 2000 between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors, LLC and Bridge LLC, the Issuer agreed, inter alia, to sell to Bridge LLC, and Bridge LLC agreed to purchase from the Issuer, 230,000 shares of Preferred Stock and 3,066,667 Warrants for a purchase price of $230,000,000. Prior to the issuance of the shares of Preferred Stock and Warrants at the Closing (as defined below), pursuant to an Assignment of Rights Under Preferred Stock and Warrant Purchase Agreement dated February 16, 2000 (the "Assignment Agreement"), Bridge LLC assigned 50% of its rights, titles, interests and obligations in, to and under the Securities Purchase Agreement to Qualified LLC, Private LLC, 4-EQ LLC, 4-SBS LLC and PG-IV LLC (the "Assignees"). The number of shares of Preferred Stock to be sold to Bridge LLC and the Assignees was reduced to 23,000 and the Liquidation Preference of each share was increased from $1,000 to $10,000 (with no change to the aggregate purchase price) by way of an Amendment dated April 10, 2000 ("Amendment Agreement"). The number of shares to be sold to the other purchasers under the Securities Purchase Agreement was also correspondingly reduced. Pursuant to the Amendment Agreement, the parties also agreed to redesignate the Preferred Stock such that Liberty Media Corporation would be issued Series A-1 Preferred Stock, Bridge LLC and the Assignees would be issued Series A-2 Preferred Stock and Gleacher/ICG Investors, LLC would be issued Series A-3 Preferred Stock. Unless the context otherwise requires, PAGE 36 references herein to the "Preferred Stock" shall mean, collectively, the Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3 Preferred Stock. On April 10, 2000 at the closing held pursuant to the Securities Purchase Agreement (the "Closing"), the Issuer sold to each of the persons listed below (the "HMTF Holders") the number of shares of Preferred Stock and the number of Warrants set forth opposite such person's name below in exchange for the purchase price set forth opposite such person's name below. ___________________________________________________________________________ Name of entity Number of shares Number of Purchase of Preferred Stock Warrants Price purchased purchased ___________________________________________________________________________ Qualified LLC 10,464 1,395,253 $104,644,000 Private LLC 74 9,885 $741,000 4-EQ LLC 154 20,502 $1,538,000 4-SBS LLC 251 33,412 $2,506,000 PG-IV LLC 557 74,281 $5,571,000 Bridge LLC 11,500 1,533,334 $115,000,000 ____________________________________________________________________________ The foregoing description of the Securities Purchase Agreement is not, and does not purport to be, complete and is qualified in its entirety by reference to the Stock Purchase Agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference and the Amendment, Consent and Waiver, a copy of which is filed herewith as Exhibit 10.2 and is incorporated herein by reference. Registration Rights Agreement At Closing, the Issuer and the holders of Preferred Stock entered into a Registration Rights Agreement (the "Registration Rights Agreement"), pursuant to which the Issuer has agreed to effect three "demand" registrations at the request of the holders of a majority of the Registrable Securities held by the HMTF Holders and any direct or indirect transferee of any Registrable Securities held by the HMTF Holders, provided that each such demand registration must be in respect of Registrable Securities (as defined below) with a fair market value of at least $50,000,000 and provided that certain other restrictions are met. The HMTF Holders may make one additional demand for registration upon exercise of all or a portion of the Warrants held by them. The Registration Rights Agreement also grants demand registration rights to holders of Registrable Securities affiliated with Liberty Media Corporation. In addition, the purchasers have certain piggyback registration rights in connection with registrations of the Issuer's securities under the Securities Act of 1933 (the "Securities Act") as well as rights to request a shelf registration of portions of the Registrable Securities. PAGE 37 "Registrable Securities" means (a) the shares of Common Stock issued or issuable upon conversion of the Preferred Stock or upon exercise of the Warrants, plus any additional shares of Common Stock or Warrants issued in connection with any stock split, stock dividend or similar event with respect to the Common Stock and (b) any securities that the Issuer or any successor entity into which such Common Stock or such Preferred Stock may be converted or changed. The foregoing description of the Registration Rights Agreement is not, and does not purport to be, complete and is qualified in its entirety by reference to the Registration Rights Agreement, a copy of which is filed herewith as Exhibit 10.3 and is incorporated herein by reference. Certificate of Designation As contemplated by the Securities Purchase Agreement, the Board of Directors of the Issuer approved and adopted the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series A-1 Convertible Preferred Stock, 8% Series A-2 Convertible Preferred Stock and 8% Series A-3 Convertible Preferred Stock, and Qualifications, Limitations and Restrictions Thereof (the "Certificate of Designation") to create three series of Preferred Stock. Except in relation to director appointment rights, the powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock are identical. Under the Certificate of Designation, the shares of Preferred Stock will, with respect to dividend rights and rights on liquidation, winding-up and dissolution, rank (i) senior to all shares of Common Stock and to each other class of capital stock or preferred stock of the Issuer (other than Preferred Stock Mandatorily Redeemable 2009 of the Issuer), the terms of which do not expressly provide that it ranks senior to or on a parity with the shares of the Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Issuer; (ii) on a parity with the Preferred Stock Mandatorily Redeemable 2009 of the Issuer and with each other class of capital stock or series of preferred stock of the Issuer issued by Issuer, the terms of which expressly provide that such class or series will rank on a parity with the shares of the Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution, if the Issuer, in issuing the shares, complies with applicable provisions in the Certificate of Designation; and (iii) junior to each class of capital stock or series of preferred stock of the Issuer issued by the Issuer, the terms of which expressly provide that such class or series will rank senior to the shares of Preferred Stock as to dividend rights and rights upon liquidation, winding-up and dissolution, if the Issuer, in issuing the shares, complies with applicable provisions in the Certificate of Designation. The holders of the shares of Preferred Stock will be entitled to receive with respect to each share of Preferred Stock, out of funds legally available for the payment of dividends, PAGE 38 dividends at a rate per annum of 8% of the then-effective Liquidation Preference (as defined below). Such dividends shall be cumulative from the date of issuance of the Preferred Stock and shall be payable quarterly in arrears. On each Dividend Payment Date, commencing on the June 30, 2000 Dividend Payment Date, to and including the June 30, 2005 Dividend Payment Date, accrued dividends on a share of Preferred Stock for the preceding Dividend Period shall be added cumulatively to and thereafter remain a part of the Liquidation Preference of such share. Thereafter, accrued dividends shall be payable quarterly on each Dividend Payment Date, commencing on September 30, 2005, to the holders of record of Preferred Stock as of the close of business on the applicable Dividend Record Date. Accrued Dividends that are not paid in full in cash on any Dividend Payment Date (whether or not declared and whether or not there are sufficient funds legally available for the payment thereof) shall be added cumulatively to the Liquidation Preference on the applicable Dividend Payment Date and thereafter remain a part thereof. The holders of shares of Preferred Stock will have the right, generally, at any time, to convert any or all their shares of Preferred Stock into a number of fully paid and nonassessable shares of Common Stock equal to the then effective Liquidation Preference thereof plus accrued and unpaid dividends to the date of conversion divided by the Conversion Price in effect at the time of conversion. The initial Conversion Price is $28.00 per share. The shares of Preferred Stock may be redeemed at any time commencing on or after June 30, 2000, in whole or from time to time in part, at the election of the Issuer, at a redemption price payable in cash equal to 100% of the then effective Liquidation Preference (after giving effect to the Special Dividend (as defined in the Certificate of Designation) if applicable) plus accrued and unpaid dividends from the last Dividend Payment Date to the date fixed for redemption. Shares of Preferred Stock (if not earlier redeemed or converted) shall be mandatorily redeemed by the Issuer on June 30, 2015, at a redemption price per share in cash equal to the then effective Liquidation Preference (after giving effect to the Special Dividend, if applicable), plus accrued and unpaid dividends thereon from the last Dividend Payment Date to the date of mandatory redemption. If a "Change of Control" (as defined in the Certificate of Designation) occurs prior to June 30, 2005, an amount equal to the Special Dividend is to be added to the Liquidation Preference of each share of Preferred Stock. The Special Dividend, for each share of Preferred Stock, is the difference between (i) $14,859.47 (as that number may be adjusted for stock splits, stock dividends or similar events) and (ii) the amount of the actual Liquidation Preference of such share immediately prior to the Change of Control. Upon occurrence of a Change of Control, the Issuer has the right, but not the obligation, to offer to repurchase all the shares of Preferred Stock at a purchase price per share in cash equal to 101% of the Liquidation Preference of each share of Preferred Stock repurchased (after giving effect to the Special Dividend, if applicable), plus an amount equal to 101% of all dividends PAGE 39 accrued and unpaid thereon to the date fixed for the repurchase. If the Issuer does not offer to repurchase all the shares of Preferred Stock in accordance with the Certificate of Designation, the dividend rate on the Preferred Stock will increase to 16%. If the dividend rate is so increased, the Issuer will have the right (but not the obligation) (i) at any time prior to June 30, 2005 to offer to repurchase all the shares of Preferred Stock at a purchase price per share in cash equal to 101% of the Liquidation Preference of each share of Preferred Stock repurchased (after giving effect to the Special Dividend, if applicable), plus an amount equal to 101% of all dividends accrued and unpaid thereon to the date fixed for the repurchase and (ii) at any time after June 30, 2005, to offer to repurchase all the shares of Preferred Stock at a purchase price per share in cash equal to 100% of the Liquidation Preference of each share of Preferred Stock repurchased (after giving effect to the Special Dividend, if applicable), plus an amount equal to 100% of all dividends accrued and unpaid thereon to the date fixed for the repurchase. If the Issuer makes such an offer, the dividend rate on the Preferred Stock will be thereafter reduced to 8%. The holders of the shares of Preferred Stock will be entitled to vote on all matters that the holders of the Issuer's Common Stock are entitled to vote upon. In exercising these voting rights, each share of Preferred Stock shall be entitled to vote on an as-converted basis with the holders of the Issuer's Common Stock. The approval of the holders of between 51% and 75% the then-outstanding shares of Preferred Stock, voting as one class, will be required for the Issuer to take certain actions. In addition, for so long as members of the HMTF Group own any combination of the shares of Common Stock (on an as converted basis) that, taken together, equal at least 4,107,143 shares of Common Stock (as adjusted for any stock dividends, splits and combinations and similar events affecting the Common Stock from time to time), the holders of Series A-2 Preferred Stock, voting as a class, may elect one director, or if greater, such number (rounded up to the nearest whole number) equal to 10% of the then authorized number of members of members of the Issuer's board of directors, to serve on the board of directors of the Issuer. Pursuant to this right, the holders of the Series A-2 Preferred Stock have elected Thomas O. Hicks to the board of directors of the Issuer. The Securities Purchase Agreement contains a parallel provision for the election of a director that is inoperative for so long as the above described provision is in effect. Pursuant to the Certificate of Designation, holders of the Series A-1 Preferred Stock have the right to elect up to two directors under certain circumstances. "Liquidation Preference" means an amount equal to $10,000 per share of Preferred Stock plus accrued and unpaid dividends, subject to change in accordance with the provisions of the Certificate of Designation. The foregoing description is not, and does not purport to be, complete and is qualified in its entirety by reference to the Certificate of Designation, a copy of which is filed as Exhibit 10.4 and is incorporated herein by reference. PAGE 40 Common Stock Warrant Certificate As contemplated by the Securities Purchase Agreement, at the Closing the Issuer issued the Warrants. The Warrants entitle the HMTF Holders or their permitted assigns to purchase from the Issuer fully paid and nonassessable shares of Common Stock at an exercise price of $34.00 per share, as adjusted from time to time pursuant to the terms of the Warrant Certificate. The Warrants are void after April 10, 2005. Warrants were also issued to the other purchasers. The foregoing description of the Warrants is not, and does not purport to be, complete and is qualified in its entirety by reference to the form of Common Stock Warrant, a copy of which is filed herewith as Exhibit 10.5 and is incorporated herein by reference. Item 7. Material to be Filed as Exhibits. Exhibit 10.1: Securities Purchase Agreement, dated as of February 27, 2000, between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors LLC and Bridge LLC relating to the purchase and sale of 8% Cumulative Convertible Preferred Stock and Warrants of ICG Communications, Inc. Exhibit 10.2 Amendment dated as of April 10, 2000, between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors, LLC and Bridge LLC, Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC. Exhibit 10.3: Registration Rights Agreement, dated as of April 7, 2000, between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors, LLC and Bridge LLC, Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC. Exhibit 10.4: Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of the 8% Series A-1 Convertible Preferred Stock, 8% Series A-2 Convertible Preferred Stock and 8% Series A-3 Convertible Preferred Stock and Qualifications, Limitations and Restrictions Thereof. Exhibit 10.5: Form of Common Stock Warrant dated as of April 10, 2000. Exhibit 10.6: Credit Agreement, dated December 28, 1999, by and among HMTF Bridge Partners, L.P., and HM/Europe Coinvestors, C.V. as Initial Borrowers, the Lenders named therein, the Issuing Bank, The Chase Manhattan Bank, as Administrative Agent, and Bank of America, N.A., as Syndication Agent. Exhibit 99.1: Joint Filing Agreement among the parties regarding filing of Schedule 13D. S-1 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 /s/ David W. Knickel* Name: Thomas O. Hicks * By: David W. Knickel Attorney-in-Fact S-2 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM4 ICG QUALIFIED FUND, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-3 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HMTF EQUITY FUND IV (1999), L.P. By: HM4/GP (1999) Partners, L.P., its General Partner By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-4 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM4 ICG PRIVATE FUND, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-5 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HMTF PRIVATE EQUITY FUND IV (1999), L.P. By: HM4/GP (1999) Partners, L.P., its General Partner By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-6 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM4/GP (1999) PARTNERS, L.P. By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-7 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM 4-EQ ICG COINVESTORS, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-8 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM 4-EQ (1999) COINVESTORS, L.P. By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-9 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM 4-SBS ICG COINVESTORS, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-10 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM 4-SBS (1999) COINVESTORS, L.P. By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-11 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HICKS, MUSE GP (1999) PARTNERS IV, L.P. By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-12 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HICKS, MUSE (1999) FUND IV, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-13 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM PG-IV ICG, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-14 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HICKS, MUSE PG-IV (1999), C.V. By: HM Equity Fund IV/GP Partners (1999), C.V., its General Partner By: HM GP Partners IV Cayman, L.P., its General Partner By: HM Fund IV Cayman LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-15 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM EQUITY FUND IV/GP PARTNERS (1999),C.V. By: HM GP Partners IV Cayman, L.P., its General Partner By: HM Fund IV Cayman LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-16 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM GP PARTNERS IV CAYMAN, L.P. By: HM Fund IV Cayman LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-17 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HM FUND IV CAYMAN LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-18 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HMTF BRIDGE ICG, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President S-19 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HMTF BRIDGE PARTNERS, L.P. By: HMTF Bridge Partners, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. April 20, 2000 HMTF BRIDGE PARTNERS, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President EXHIBIT INDEX Exhibit 10.1: Securities Purchase Agreement, dated as of February 27, 2000, between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors LLC and Bridge LLC relating to the purchase and sale of 8% Cumulative Convertible Preferred Stock and Warrants of ICG Communications, Inc.* Exhibit 10.2 Amendment dated as of April 10, 2000, between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors, LLC and Bridge LLC, Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC.* Exhibit 10.3: Registration Rights Agreement, dated as of April 7, 2000, between the Issuer, Liberty Media Corporation, Gleacher/ICG Investors, LLC and Bridge LLC, Qualified LLC, Private LLC, PG-IV LLC, 4-SBS LLC and 4-EQ LLC.* Exhibit 10.4: Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of the 8% Series A-1 Convertible Preferred Stock, 8% Series A-2 Convertible Preferred Stock and 8% Series A-3 Convertible Preferred Stock and Qualifications, Limitations and Restrictions Thereof.* Exhibit 10.5: Form of Common Stock Warrant dated as of April 10, 2000.* Exhibit 10.6: Credit Agreement, dated December 28, 1999, by and among HMTF Bridge Partners, L.P., and HM/Europe Coinvestors, C.V. as Initial Borrowers, the Lenders named therein, the Issuing Bank, The Chase Manhattan Bank, as Administrative Agent, and Bank of America, N.A., as Syndication Agent.* Exhibit 99.1: Joint Filing Agreement among the parties regarding filing of Schedule 13D.* __________________ * Filed herewith PAGE 1 JOINT FILING STATEMENT Each of the undersigned agrees that (i) the statement on Schedule 13D relating to the Common Stock, par value $.001 per share, of ICG Communications, Inc. has been adopted and filed on behalf of each of them, (ii) all future amendments to such statement on Schedule 13D will, unless written notice to the contrary is delivered as described below, be jointly filed on behalf of each of them, and (iii) the provisions of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934 apply to each of them. This agreement may be terminated with respect to the obligations to jointly file future amendments to such statement on Schedule 13D as to any of the undersigned upon such person giving written notice thereof to each of the other persons signatory hereto, at the principal office thereof. April 20, 2000 /s/ David W. Knickel * Name: Thomas O. Hicks * By David W. Knickel Attorney-in-Fact HM4 ICG QUALIFIED FUND, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HMTF EQUITY FUND IV (1999), L.P. By: HM4/GP (1999) Partners, L.P., its General Partner By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President PAGE 2 HM4 ICG PRIVATE FUND, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HMTF PRIVATE EQUITY FUND IV (1999), L.P. By: HM4/GP (1999) Partners, L.P., its General Partner By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HM4/GP (1999) PARTNERS, L.P. By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HM 4-EQ ICG COINVESTORS, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President PAGE 3 HM 4-EQ (1999) COINVESTORS, L.P. By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HM 4-SBS ICG COINVESTORS, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HM 4-SBS (1999) COINVESTORS, L.P. By: Hicks, Muse GP (1999) Partners IV, L.P., its General Partner By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HICKS, MUSE GP (1999) PARTNERS IV, L.P. By: Hicks, Muse (1999) Fund IV, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel PAGE 4 Title: Vice President HICKS, MUSE (1999) FUND IV, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HM PG-IV ICG, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HICKS, MUSE PG-IV (1999), C.V. By: HM Equity Fund IV/GP Partners (1999), C.V., its General Partner By: HM GP Partners IV Cayman, L.P., its General Partner By: HM Fund IV Cayman LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HM EQUITY FUND IV/GP PARTNERS (1999), C.V. By: HM GP Partners IV Cayman, L.P., its General Partner By: HM Fund IV Cayman LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel PAGE 5 Title: Vice President HM GP PARTNERS IV CAYMAN, L.P. By: HM Fund IV Cayman LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HM FUND IV CAYMAN LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HMTF BRIDGE ICG, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HMTF BRIDGE PARTNERS, L.P. By: HMTF Bridge Partners, LLC, its General Partner By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President HMTF BRIDGE PARTNERS, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President EX-10.1 2 SECURITIES PURCHASE AGREEMENT EXHIBIT 10.1 ================================================================================ PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT BY AND BETWEEN ICG COMMUNICATIONS, INC. AND THE PURCHASERS LISTED ON SCHEDULE I HERETO Dated as of February 27, 2000 ================================================================================
TABLE OF CONTENTS ARTICLE I DEFINITIONS 1 ARTICLE II SALE AND PURCHASE 6 2.1 Agreement to Sell and to Purchase; Purchase Price. 6 2.2 Closing. 6 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 7 3.1 Organization and Standing. 7 3.2 Capital Stock. 8 3.3 Authorization; Enforceability. 9 3.4 No Violation; Consents. 9 3.5 Commission Filings; Financial Statements. 10 3.6 Private Offering. 10 3.7 Provided Information. 11 3.8 Material Adverse Change. 11 3.9 Litigation. 11 3.10 Permits and Licenses. 11 3.11 Intellectual Property, etc. 12 3.12 Board Approval. 12 3.13 British Telecommunications. 12 3.14 Share Exchange Agreement. 12 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS 13 4.1 Organization; Authorization; Enforceability. 13 4.2 Private Placement. 13 4.3 No Violation; Consents. 14 4.4 No Litigation. 15 4.5 No Group Status. 15 ARTICLE V COVENANTS OF THE COMPANY 15 5.1 Operation of Business. 15 5.2 HMTF and Liberty Directors. 16 5.3 Access to Books and Records. 18 5.4 Agreement to Take Necessary and Desirable Actions. 18 5.5 Compliance with Conditions; Commercially Reasonable Efforts. 18 5.6 HSR Act Notification. 19 5.7 Consents and Approvals. 19 5.8 Reservation of Shares. 19 5.9 Use of Proceeds. 20 5.10 Filing of Certificate of Designation. 20 5.11 Listing of Shares. 20 5.12 Periodic Information. 20 5.13 Legends. 20 5.14 Payment; Paying Agent; Certain Information. 21 5.15 Rights Plan. 21 5.16 Proportional Purchase Right. 21 5.17 Modification of Share Exchange Agreement. 22 ARTICLE VI COVENANTS OF THE PURCHASERS 22 6.1 Agreement to Take Necessary and Desirable Actions. 22 6.2 Compliance with Conditions; Commercially Reasonable Efforts. 22 6.3 HSR Act Notification. 22 6.4 Consents and Approvals. 23 6.5 Restrictions on Transfer. 23 6.6 Standstill. 23 ARTICLE VII CONDITIONS PRECEDENT TO CLOSING 24 7.1 Conditions to the Company's Obligations. 24 7.2 Conditions to Each Purchaser's Obligations. 25 ARTICLE VIII MISCELLANEOUS 26 8.1 Survival; Indemnification. 26 8.2 Notices. 28 8.3 Governing Law. 31 8.4 Termination. 31 8.5 Entire Agreement. 32 8.6 Modifications and Amendments. 32 8.7 Waivers and Extensions. 32 8.8 Titles and Headings. 32 8.9 Exhibits and Schedules. 32 8.10 Expenses. 32 8.11 Press Releases and Public Announcements. 32 8.12 Assignment; No Third Party Beneficiaries. 33 8.13 Severability. 33 8.14 Counterparts. 33 8.15 Further Assurances. 33 8.16 Remedies Cumulative. 33 8.17 Several Liability of the Purchasers. 34 8.18 No Duty to Other Purchasers. 34 8.19 Specific Performance. 34 8.20 No Purchaser Affiliate Liability. 34 Exhibits Exhibit A - Form of Warrant Exhibit B - Certificate of Designation Exhibit C - Form of Registration Rights Agreement Exhibit D - Form of Legal Opinion Exhibit E - Form of Management Rights Agreement Schedules Schedule 3.1(b) - Equity Interests Schedule 3.2 - Company Capital Stock Schedule 5.1(iv) - Dividends or Distributions on Capital Stock
This PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT is dated as of February 27, 2000 (this"Agreement"), by and between ICG the "Purchasers"). WHEREAS, the Company proposes, subject to the terms and conditions set forth herein, to issue and sell to the Purchasers 750,000 shares of its 8% Series A Convertible Preferred Stock, initial liquidation preference $1,000 per share, par value $0.01 per share (the "Series A Preferred Stock"); WHEREAS, the Company proposes, subject to the terms and conditions set forth herein, to issue and sell to the Purchasers warrants (each a "Warrant" and together, the "Warrants") to purchase 10,000,000 shares of the Company's Common Stock, par value $0.01 per share (the "Warrant Shares"), in substantially the form of Exhibit A attached hereto; WHEREAS, subject to the terms and conditions set forth herein, each Purchaser desires to purchase such Series A Preferred Stock and Warrants from the Company; NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE I DEFINITIONS (a) As used in this Agreement, the following terms shall have the following meanings: "Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing; provided that neither AT&T Corp. ("AT&T") nor any Subsidiary of AT&T which is not included in AT&T's Liberty Media Group (as defined in AT&T's Certificate of Incorporation) will be deemed to be an Affiliate of Liberty. "Applicable Law" means (a) any United States Federal, state, local or foreign law, statute, rule, regulation, order, writ, injunction, judgment, decree or permit of any Governmental Authority and (b) any rule or listing requirement of any applicable national stock exchange or listing requirement of any national stock exchange or Commission recognized trading market on which securities issued by the Company or any of the Subsidiaries are listed or quoted. PAGE 2 "Business Day" means any day other than a Saturday, a Sunday, the day after Thanksgiving or a day when banks in The City of New York are authorized by Applicable Law to be closed. "Capital Stock" means (i) with respect to any Person that is a corporation, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock and (ii) with respect to any other Person, any and all partnership or other equity interests of such Person. "Certificate of Designation" means the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights and Qualifications, Limitations and Restrictions thereof relating to the Series A Preferred Stock, in the form attached hereto as Exhibit B. "Commission" means the United States Securities and Exchange Commission. "Commission Filings" means all reports, registration statements and other filings filed by the Company with the Commission (and all notes and schedules thereto and documents incorporated by reference therein). "Common Stock" means the common stock, par value $0.01 per share, of the Company. "Contract" means any contract, lease, loan agreement, mortgage, security agreement, trust indenture, note, bond, or other agreement (whether written or oral) or instrument. "Conversion Shares" means the shares of Common Stock issuable upon the conversion of the Series A Preferred Stock in accordance with the terms of the Certificate of Designation. "Equity Documents" means this Agreement, the Registration Rights Agreement, the Certificate of Designation, the Management Rights Agreements, the Share Exchange Agreement and the Warrants. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. "filed," when used with respect to a Commission Filing, means filed with the Commission and publicly available. "GAAP" means United States generally accepted accounting principles, consistently applied. "Gleacher Group" means Gleacher/ICG Investors LLC and its Affiliates. "Gleacher Holders" means members of the Gleacher Group that are holders of all or a portion of the Gleacher Shares. PAGE 3 "Gleacher Shares" means (i) the shares of Series A Preferred Stock issued to Gleacher on the Closing Date under this Agreement held by members of the Gleacher Group plus (ii) the shares of Common Stock issued to and held by members of the Gleacher Group upon conversion of the shares referred to in clause (i) above. "Governmental Authority" means (i) any foreign, Federal, state or local court or governmental or regulatory agency or authority, (ii) any arbitration board, tribunal or mediator and (iii) any national stock exchange or Commission recognized trading market on which securities issued by the Company or any of the Subsidiaries are listed or quoted. "HMTF" means Hicks, Muse, Tate & Furst Incorporated, a Texas corporation. "HMTF Funds" means the funds affiliated with the HMTF Purchaser identified by the HMTF Purchaser on or prior to the Closing Date. "HMTF Group" means HMTF and its Affiliates and their respective officers, directors, partners, members, stockholders and employees (and members of their respective families and trusts for the primary benefit of such family members), and HMTF Purchaser and its Affiliates. "HMTF Holders" means members of the HMTF Group that are holders of all or a portion of the HMTF Shares. "HMTF Purchaser" means HM4 ICG Qualified Fund, LLC; HM4 ICG Private Fund, LLC; HM PG-IV ICG, LLC; HM 4-SBS ICG Coinvestors, LLC; HM 4-EQ ICG Coinvestors, LLC and HMTF Bridge ICG, LLC. "HMTF Shares" means the HMTF Issued Series A Preferred Shares held by members of the HMTF Group plus the shares of Common Stock issued to and held by members of the HMTF Group upon conversion of the HMTF Issued Series A Preferred Shares or upon exercise of the Warrants held by members of the HMTF Group. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and applicable rules and regulations. "Liberty" means Liberty Media Corporation, a Delaware corporation, provided that if substantially all of the assets of Liberty Media Corporation are at any time hereafter contributed to Liberty Media Group LLC, a Delaware limited liability company, then from and after such contribution, Liberty shall mean Liberty Media Group LLC. "Liberty Group" means Liberty and its Affiliates. "Liberty Holders" means members of the Liberty Group that are holders of all or a portion of the Liberty Shares. "Liberty Shares" means the Liberty Issued Series A Preferred Shares held by members of the Liberty Group plus the shares of Common Stock issued to and held by members PAGE 4 of the Liberty Group upon conversion of the Liberty Issued Series A Preferred Shares or upon exercise of the Warrants held by members of the Liberty Group. "Lien" means any mortgage, pledge, lien, security interest, claim, restriction, charge or encumbrance of any kind. "Management Rights Agreements" means the Management Rights Agreements to be dated as of the Closing Date, to be executed by the Company and delivered to the HMTF Funds, a form of which is attached as Exhibit E. "Material Adverse Effect" means a material adverse effect on the condition (financial or otherwise), business, assets or results of operations of the Company and its Subsidiaries, taken as a whole. "Permitted Transferee" means, with respect to any Purchaser, or any Permitted Transferee of any Purchaser, (i) any Purchaser Affiliate of such Purchaser that is not a holder of Common Stock on the date hereof or an Affiliate of such holder; (ii) any Person that is a member of the Liberty Group; and (iii) any Person that is a member of the HMTF Group and any Person investing, directly or indirectly, in or in parallel with any member of the HMTF Group; provided, however, that each Permitted Transferee must agree in writing pursuant to a Permitted Transferee Agreement, in accordance with the provisions of Section 6.5, to be bound by the terms, and subject to the conditions, of this Agreement to the same extent, and in the same manner, as the transferring Purchaser prior to the transfer of any Securities to such Permitted Transferee; and provided, further, that the transfer of Securities from such Purchaser to such Permitted Transferee is in compliance with all applicable securities laws. "Person" means any individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or agency or political subdivision thereof, or other entity. "Purchaser Affiliate" means (a) any direct or indirect holder of any equity interests or securities in any Purchaser (whether limited or general partners, members, stockholders or otherwise), (b) any Affiliate of any Purchaser or (c) any director, officer, employee, representative or agent of (i) such Purchaser, (ii) any Affiliate of such Purchaser or (iii) any holder of equity interests or securities referred to in clause (a) above. "Registration Rights Agreement" means the Registration Rights Agreement, to be dated as of the Closing Date, to be entered into by and among the Company and the Purchasers, in the form attached hereto as Exhibit C. "Securities" means the Shares and the Warrants. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "Series A Preferred Stock" has the meaning set forth in the first recital to this Agreement. The Series A Preferred Stock has the designation, powers, preferences and rights, and qualifications, limitations and restrictions thereof set forth in the Certificate of Designation. PAGE 5 "Share Exchange Agreement" means the Share Exchange Agreement between Quadrangle Investments, Inc. and a Subsidiary of the Company to be dated as of February 28, 2000. "Shares" means the shares of Series A Preferred Stock to be issued and sold by the Company to the Purchasers pursuant to Section 2.1 hereof. "Subsidiary" means, with respect to any Person (i) a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by a subsidiary of such Person, or by such Person and one or more subsidiaries of such Person, (ii) a partnership in which such Person or a subsidiary of such Person is, at the date of determination, a general partner of such partnership and has the power to direct the policies and management of such partnership or (iii) any other Person (other than a corporation) in which such Person, a subsidiary of such Person or such Person and one or more subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has (A) at least a majority ownership interest or (B) the power to elect or direct the election of the directors or other governing body of such Person. "Transactions" means the transactions contemplated by this Agreement and the other Equity Documents. (b) As used in this Agreement, the following terms shall have the meanings given thereto in the Sections set forth opposite such terms:
Term Section Agreement. . . . . . . . . . . . . . . . Preamble Closing. . . . . . . . . . . . . . . . . 2.2 Closing Date . . . . . . . . . . . . . . 2.2 Company. . . . . . . . . . . . . . . . . Preamble Conversion Agent . . . . . . . . . . . . 5.14(b)(ii) DGCL . . . . . . . . . . . . . . . . . . 3.2(b) HMTF Director. . . . . . . . . . . . . . 5.2(a) HMTF Issued Series A Preferred Shares. . 5.2(a) Indemnified Party. . . . . . . . . . . . 8.1(c) Indemnified Person . . . . . . . . . . . 8.1(b) Indemnifying Party . . . . . . . . . . . 8.1(c) Information. . . . . . . . . . . . . . . 3.7 Issuance . . . . . . . . . . . . . . . . 2.1 Liberty Director . . . . . . . . . . . . 5.2(b) Liberty Issued Series A Preferred Shares 5.2(b)(i) Losses . . . . . . . . . . . . . . . . . 8.1(b) Notices. . . . . . . . . . . . . . . . . 8.2 Paying Agent . . . . . . . . . . . . . . 5.14(b)(i) Permitted Transferee Agreement . . . . . 6.5 Projections. . . . . . . . . . . . . . . 3.7 PAGE 6 Term . . . . . . . . . . . . . . . . Section Purchaser; Purchasers. . . . . . . . . . Preamble Purchase Price . . . . . . . . . . . . . 2.1 Registrar. . . . . . . . . . . . . . . . 5.14(b)(iii) Securities Transfer. . . . . . . . . . . 6.5 Supplying Purchasers . . . . . . . . . . 8.18 Warrants . . . . . . . . . . . . . . . . Recitals Warrant Shares . . . . . . . . . . . . . Recitals
ARTICLE II SALE AND PURCHASE 2.1 Agreement to Sell and to Purchase; Purchase Price. On the Closing Date, and upon the terms and subject to the conditions set forth in this Agreement, the Company shall issue and sell to each Purchaser, and each Purchaser, severally and not jointly, shall purchase and accept from the Company such number of Shares and Warrants as is set forth opposite such Purchaser's name on Schedule 1 hereto (the "Issuance"), for a purchase price of one thousand dollars ($1,000) per Share (the "Purchase Price"), payable by wire transfer of immediately available funds to a bank account or bank accounts designated by the Company described in Section 2.2(a)(i). 2.2 Closing. The closing of the Issuance to each Purchaser (the "Closing") shall take place on a date to be specified by the Company and such Purchaser, which shall be no later than the later of (A) the 2nd Business Day after the date as of which all of the conditions set forth in Article VII hereof shall have been satisfied as to the purchase by such Purchaser (or, to the extent permitted, waived by the party or parties entitled to the benefit thereof) and (B) 15 Business Days after the date hereof or at such other time and date as the parties hereto shall agree in writing (such date and time, the "Closing Date"), at the offices of O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza, New York, New York 10112 or at such other place as the parties hereto shall agree in writing. At the Closing: (a) Each Purchaser shall deliver: (i) against delivery of a certificate or certificates representing the Shares and the Warrants being purchased by such Purchaser pursuant to Section 2.1, an amount equal to the aggregate Purchase Price of such Securities via wire transfer of immediately available funds to such bank account as the Company shall designate not later than two Business Days prior to the Closing Date; (ii) a copy of the Registration Rights Agreement executed by such Purchaser. (b) The Company shall deliver to each Purchaser: PAGE 7 (i) against payment of the Purchase Price therefor, a certificate or certificates representing the Shares and Warrants being purchased by such Purchaser pursuant to Section 2.1, which shall be in definitive form and registered in the name of such Purchaser or its nominee or designee and in a single certificate or in such other denominations as such Purchaser shall request not later than two Business Days prior to the Closing Date; (ii) an opinion of (A) H. Don Teague, General Counsel of the Company and (B) O'Sullivan Graev & Karabell, LLP, special counsel to the Company, in each case dated the Closing Date, covering the matters set forth on Exhibit D, in form and substance reasonably acceptable to the Purchasers; (iii) an officer's certificate of the Company as contemplated by Section 7.2(f); (iv) a certificate of the secretary of the Company covering such matters as are customarily covered by such certificates, in form and substance reasonably acceptable to the Purchasers; (v) a long-form good standing certificate of the Company issued by the Secretary of State of the State of Delaware; and (vi) a copy of the Registration Rights Agreement executed by the Company. (c) The Company shall deliver to each Purchaser (or its designee) a transaction fee equal to 3% of the Purchase Price of the Shares purchased by such Purchaser, in immediately available funds by wire transfer to an account designated by Purchasers at least two Business Days prior to the Closing Date. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to each Purchaser on the date hereof and on and as of the Closing Date as follows: 3.1 Organization and Standing. (a) Each of the Company and its material Subsidiaries (the "ICG Subsidiaries") is duly organized, validly existing and in good standing under the laws of its state of organization and has all corporate, limited liability company and partnership power and authority to own its properties and assets and to carry on its business as it is now being conducted. Each of the Company and the ICG Subsidiaries is duly qualified to transact business as a foreign entity and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of its business makes such qualification necessary, except for any such failures to so qualify or be in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. PAGE 8 (b) All of the outstanding shares of Capital Stock of each ICG Subsidiary have been validly issued and are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all Liens. The Company does not own any equity interest in any corporation, partnership, limited liability company, joint venture, or other entity except as provided on Schedule 3.1(b) hereof. (c) The Company has delivered to each Purchaser true and complete copies of the Company's Certificate of Incorporation, as amended to date, and By-laws, as in effect on the date hereof. 3.2 Capital Stock. (a) As of the date of this Agreement, the authorized Capital Stock of the Company consists solely of (i) 100,000,000 shares of Common Stock, par value $0.01 per share, of which 48,208,955 shares were issued and outstanding as of the close of business on February 24, 2000 and (ii) 1,000,000 shares of preferred stock, par value $0.01 per share, of which 12,650.25 shares are issued and outstanding. Each share of Capital Stock of the Company that will be issued and outstanding immediately following the Closing, including without limitation the Shares, will be duly authorized and validly issued and fully paid and nonassessable, and the issuance thereof will not have been subject to any preemptive rights or made in violation of any Applicable Law. (b) Except as set forth on Schedule 3.2, as of the date of this Agreement, there are (i) no outstanding options, warrants, agreements, conversion rights, exchange rights, preemptive rights or other rights (whether contingent or not) to subscribe for, purchase or acquire any issued or unissued shares of Capital Stock of the Company or any ICG Subsidiary, (ii) no authorized or outstanding stock appreciation, phantom stock, profit participation, or similar rights with respect to the Company or any Subsidiary, (iii) no rights, contracts, commitments or arrangements (contingent or otherwise) obligating the Company or any ICG Subsidiary to either (A) redeem, purchase or otherwise acquire, or offer to purchase, redeem, or otherwise acquire, any outstanding shares of, or any outstanding warrants or rights of any kind to acquire any shares of, or any outstanding securities that are convertible into or exchangeable for any shares of, Capital Stock of the Company, or (B) pay any dividend or make any distribution in respect of any shares of, or any outstanding securities that are convertible or exchangeable for any shares of, Capital Stock of the Company, (iv) no agreements or arrangements under which the Company or any ICG Subsidiary is obligated to register the sale of any of its securities under the Securities Act (except as provided hereunder) and (v) no restrictions upon, or Contracts or understandings of the Company or any Subsidiary, or, to the knowledge of the Company, Contracts or understandings of any other Person, with respect to, the voting or transfer of any shares of Capital Stock of the Company or any Subsidiary. Except as set forth on Schedule 3.2, there are no securities or instruments containing antidilution or similar provisions that will be triggered by the consummation of the Transactions. Except as set forth on Schedule 3.2, no party has any right of first refusal, right of first offer, right of co-sale or other similar right regarding the Company's securities. Except as set forth on Schedule 3.2, there are no provisions of the Certificate of Incorporation, as amended, or the By-laws of the Company, no agreements to which the Company is a party and no agreements by which the Company or any ICG Subsidiary are bound, that would (a) require the vote of the holders of more than a majority of the shares of PAGE 9 the Company's issued and outstanding Common Stock, voting together as a single class, to take or prevent any corporate action, other than those matters requiring a class vote under General Corporation Law of the State of Delaware (the "DGCL"), or (b) entitle any party to nominate or elect any director of the Company or require any of the Company's stockholders to vote for any such nominee or other person as a director of the Company. (c) The Conversion Shares and Warrant Shares have been duly authorized and adequately reserved in contemplation of the conversion of the Series A Preferred Stock and the exercise of the Warrants, respectively, and, when issued and delivered in accordance with the terms of the Certificate of Designation or the Warrants, as the case may be, will have been validly issued and will be fully paid and nonassessable, and the issuance thereof will not have been subject to any preemptive rights or made in violation of any Applicable Law. (d) The holders of the Series A Preferred Stock will, upon issuance thereof, have the rights set forth in the Certificate of Designation (subject to the limitations and qualifications set forth therein and under the DGCL). 3.3 Authorization; Enforceability. The Company has the power and authority to execute, deliver and perform its obligations under each of the Equity Documents to which it is a party, and has taken all action necessary to authorize the execution, delivery and performance by it of each of such Equity Documents and to consummate the Transactions. No other corporate or stockholder proceeding on the part of the Company or any ICG Subsidiary is necessary for such authorization, execution, delivery and consummation. The Company has duly executed and delivered this Agreement and, at the Closing, the Company will have duly executed and delivered each of the other Equity Documents to which it is a party to be executed and delivered at or prior to Closing. This Agreement constitutes, and each of the other Equity Documents to which it is a party, when executed and delivered by the Company, will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, or other laws of general application affecting enforcement of creditors' rights or (b) general principles of equity that restrict the availability of equitable remedies. 3.4 No Violation; Consents. (a) The execution, delivery and performance by the Company of each of the Equity Documents and the consummation by the Company of the Transactions do not and will not contravene any Applicable Law, except for any such contravention that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The execution, delivery and performance by the Company of each of the Equity Documents and the consummation of the Issuance (i) will not (A) violate, result in a breach of or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any Contract to which the Company is a party or by which the Company is bound or to which any of its assets is subject, or (B) result in the creation or imposition of any Lien upon any of the assets of the Company, except for any such violations, breaches, defaults or Liens that would not, individually or in the aggregate, reasonably be PAGE 10 expected to have a Material Adverse Effect and (ii) will not conflict with or violate any provision of the certificate of incorporation or bylaws of the Company currently in effect or in effect as of the Closing. (b) Except for (i) the filings by the Company, if any, required by the HSR Act, (ii) applicable filings, if any, required by applicable federal and state securities laws, (iii) applicable filings, if any, required by the Federal Communication Commission and state public utility commissions and (iv) filing of the Certificate of Designation with the Secretary of State of the State of Delaware, which, in each case referred to in clauses (i) - (iv), shall be made (or are not required to be made) on or prior to the Closing Date, no consent, authorization or order of, or filing or registration with, any Governmental Authority or other Person is required to be obtained or made by the Company or the ICG Subsidiaries for the execution and delivery of the Equity Documents or the consummation by the Company of the Transactions except where the failure to obtain such consents, authorizations or orders, or make such filings or registrations, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or a material adverse effect on the ability of the Company to consummate the Transactions. 3.5 Commission Filings; Financial Statements. (a) The Company has filed all reports, registration statements and other filings, together with any amendments or supplements required to be made with respect thereto, that it has been required to file with the Commission under the Securities Act and the Exchange Act. As of the respective dates of their filing with the Commission, the Commission Filings complied in all material respects with the applicable provisions of the Securities Act and the Exchange Act and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. (b) Each of the historical consolidated financial statements of the Company (including any related notes or schedules) included in the Commission Filings was prepared in accordance with GAAP (except as may be disclosed therein), and complied in all material respects with the rules and regulations of the Commission. Such financial statements fairly present the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of operations, cash flows and changes in stockholders' equity for the periods then ended (subject, in the case of the unaudited interim financial statements, to normal, recurring year-end audit adjustments). Except as reflected in the Commission Filings filed prior to the date hereof, the Company does not have any liabilities or obligations of any nature (whether accrued, absolute, contingent, unasserted or otherwise) that individually or in the aggregate would be expected to have a Material Adverse Effect. 3.6 Private Offering. Based, in part, on the Purchasers' representations in Section 4.2, the offer and sale of the Securities is exempt from the registration and prospectus delivery requirements of the Securities Act. Neither the Company, nor anyone acting on behalf of it, has offered or sold or will offer or sell any securities, or has taken or will take any other action (including, without limitation, any offering of any securities of the Company under circumstances that would require, under the PAGE 11 Securities Act, the integration of such offering with the offering and sale of the Securities), that would subject the Issuance to the registration provisions of the Securities Act. 3.7 Provided Information. To the knowledge of the Company, all written information (excluding information of a general economic nature and financial projections) concerning the Company and the Transactions (the "Information") that has been prepared by or on behalf of the Company or any of the Company's authorized representatives and that has been provided to the Purchasers or any of their authorized representatives in connection with the Issuance, when taken as a whole, was, at the time made available, correct in all material respects and did not, at the time made available, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statements are made. All financial projections concerning the Company and the Transactions (the "Projections") that have been prepared by or on behalf of the Company or any of the Company's authorized representatives and that have been delivered to the Purchasers or any of their authorized representatives in connection with the Transactions have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the Company's management as to the future financial performance of the Company and the individual business segments thereof. 3.8 Material Adverse Change. Except as disclosed in the Commission Filings filed prior to the date hereof, since September 30, 1999, there has not been any event, occurrence or development of a state of circumstances or facts that has had, or could have reasonably been expected to have, (i) a Material Adverse Effect or (ii) a material adverse effect on the ability of the Company to perform its obligations under this Agreement or the other Equity Documents. 3.9 Litigation. Except as disclosed in Commission Filings filed prior to the date hereof, there are not any (a) outstanding judgments against or affecting the Company or any of the ICG Subsidiaries, (b) proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any of the ICG Subsidiaries or (c) investigations by any Governmental Authority that are, to the knowledge of the Company, pending or threatened against or affecting the Company or any of the ICG Subsidiaries that (i) in any manner challenge or seek to prevent, enjoin, alter or materially delay the Transactions or (ii) if resolved adversely to the Company or any ICG Subsidiary, would have, individually or in the aggregate, a Material Adverse Effect. 3.10 Permits and Licenses. The Company and the ICG Subsidiaries have obtained all governmental permits, licenses, franchises and authorizations required for the Company and its Subsidiaries to conduct their respective businesses as currently conducted, except for those of which the failure to obtain would not have a Material Adverse Effect. PAGE 12 3.11 Intellectual Property, etc. The Company and the ICG Subsidiaries have all right, title and interest in, or a valid and binding license to use, all Company Intellectual Property (as defined below). The Company and the ICG Subsidiaries (i) have not defaulted in any material respect under any license to use any Company Intellectual Property, (ii) are not the subject of any proceeding or litigation for infringement of any third party intellectual property, (iii) have no knowledge of circumstances that would be reasonably expected to give rise to any such proceeding or litigation and (iv) have no knowledge of circumstances that are causing or would be reasonably expected to cause the loss or impairment of any Company Intellectual Property, other than a default, proceeding, litigation, loss or impairment that is not having or would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. "ICG Communications, Inc." is a registered trademark of the Company in the United States and such registration has been duly maintained by the Company. For purposes of this Agreement, "Company Intellectual Property" means patents and patent rights, trademarks and trademark rights, tradenames and tradename rights, service marks and service mark rights, copyrights and copyright rights, trade secret and trade secret rights, and other intellectual property rights, and all pending applications for and registrations of any of the foregoing that are used in the conduct of the business of the Company and the ICG Subsidiaries as presently conducted. 3.12 Board Approval. Prior to the execution of this Agreement, the Board of Directors of the Company has approved the Transactions, including without limitation the acquisition of the Shares, the Warrants, the Conversion Shares and the Warrant Shares by the Purchasers and their respective "affiliates" and "associates" (as those terms are defined in Section 203 of the DGCL) for all purposes, including without limitation Section 203 of the DGCL, and no Purchaser or affiliate or associate (as so defined) of a Purchaser shall as a result of the execution of this Agreement or consummation of the transactions contemplated by this Agreement, be subject to any of the restrictions of Section 203 of the DGCL or any similar provisions of Applicable Law. 3.13 British Telecommunications. As of the date hereof, the Company and its Subsidiaries do not, directly or indirectly, beneficially own (within the meaning of Rule 13d-3 promulgated under the Exchange Act) any shares of any class of capital stock of British Telecommunications plc, a company organized under the laws of England and Wales ("BT"), or any of its Subsidiaries, or any direct or indirect rights or options to acquire (through purchase, exchange, conversion or otherwise) any shares of any class of capital stock of BT or any of its Subsidiaries. 3.14 Share Exchange Agreement. The representations and warranties of the Subsidiary of the Company that will be a party to the Share Exchange Agreement to be set forth in the Share Exchange Agreement will be true and correct when made. PAGE 13 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS Each Purchaser severally as to itself only, and not jointly, hereby represents and warrants to the Company as of the date hereof and as of the Closing Date as follows: 4.1 Organization; Authorization; Enforceability. Such Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all corporate or limited liability company power and authority to own its properties and assets and to carry on its business as it is now being conducted and as currently proposed to be conducted. Such Purchaser has the power to execute, deliver and perform its obligations under each of the Equity Documents to which it is a party and has taken all action necessary to authorize the execution, delivery and performance by it of such Equity Documents and to consummate the Transactions. No other proceedings on the part of such Purchaser are necessary for such authorization, execution, delivery and consummation. Such Purchaser has duly executed and delivered this Agreement and, at the Closing, such Purchaser will have duly executed and delivered each of the other Equity Documents to be executed and delivered by it at or prior to Closing. This Agreement constitutes, and each of the other Equity Documents to which such Purchaser is a party, when executed and delivered by such Purchaser, will constitute, a legal, valid and binding obligation of such Purchaser enforceable against such Purchaser in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, or other laws of general application affecting enforcement of creditors' rights or (b) general principles of equity that restrict the availability of equitable remedies. 4.2 Private Placement. (a) Such Purchaser understands that (i) the offering and sale of the Securities, the Conversion Shares and the Warrant Shares in the Issuance by the Company is intended to be exempt from registration under the Securities Act pursuant to Section 4(2) thereof and (ii) there is no existing public or other market for the Securities. (b) Such Purchaser (either alone or together with its advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Securities, the Conversion Shares and the Warrant Shares, and is capable of bearing the economic risks of such investment. (c) Such Purchaser is acquiring the Securities, the Conversion Shares and the Warrant Shares to be acquired hereunder for its own account (or for accounts over which it exercises investment authority or as otherwise provided herein), for investment and not with a view to the public resale or distribution thereof in violation of any securities law. (d) Such Purchaser understands that the Securities, the Conversion Shares and the Warrant Shares will be issued in a transaction exempt from the registration or qualification requirements of the Securities Act and applicable state securities laws, and that such securities must be held indefinitely unless a subsequent disposition thereof is registered or qualified under PAGE 14 the Securities Act and such state securities laws or is exempt from such registration or qualification. (e) Such Purchaser (A) has been furnished with or has had full access to all of the information that it considers necessary or appropriate to make an informed investment decision with respect to the Securities, the Conversion Shares and the Warrant Shares and that it has requested from the Company, (B) has had an opportunity to discuss with management of the Company the intended business and financial affairs of the Company and to obtain information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to it or to which it had access and (C) can bear the economic risk of (x) an investment in the Securities, the Conversion Shares and the Warrant Shares indefinitely and (y) a total loss in respect of such investment, and (D) has such knowledge and experience in business and financial matters so as to enable it to understand and evaluate the risks of and form an investment decision with respect to its investment in the Securities, the Conversion Shares and the Warrant Shares and to protect its own interest in connection with such investment. (f) The foregoing representations with respect to the Conversion Shares and the Warrant Shares are made only if and to the extent the offering of the Shares and the Warrants constitutes an offering of the Conversion Shares and the Warrant Shares. 4.3 No Violation; Consents. (a) Subject to making the filings and obtaining the consents and approvals referred to in Section 4.3(b), the execution, delivery and performance by such Purchaser of each of the Equity Documents to which it is a party and the consummation of the Transactions, do not and will not contravene any Applicable Law, except for such contraventions as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to timely perform its obligations under this Agreement. The execution, delivery and performance by such Purchaser of each of the Equity Documents to which it is a party and the consummation of the Transactions (i) will not (A) violate, result in a breach of or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any Contract to which such Purchaser is party or by which such Purchaser is bound or to which any of its assets is subject, or (B) result in the creation or imposition of any Lien upon any of the assets of such Purchaser, except for any such violations, breaches, defaults or Liens that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to timely perform its obligations under this Agreement, and (ii) will not conflict with or violate any provision of the certificate of incorporation or bylaws or other governing documents of such Purchaser. (b) Except for (i) the filings by the Purchaser, if any, required by the HSR Act, and (ii) applicable filings, if any, with the Commission pursuant to the Exchange Act, which, in each case, shall be made (or are not required to be made) on or prior to the Closing Date, no consent, authorization or order of, or filing or registration with, any Governmental Authority or other Person is required to be obtained or made by such Purchaser for the execution, delivery and performance of any of the Equity Documents to which it is a party or the consummation of the PAGE 15 Transactions, except where the failure to obtain such consents, authorizations or orders, or make such filings or registrations, would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to timely perform its obligations under this Agreement. 4.4 No Litigation. There are not any (a) outstanding judgments against or affecting the Purchaser or any of its Subsidiaries, (b) proceedings pending or, to the knowledge of the Purchaser, threatened against or affecting the Purchaser or any of its Subsidiaries or (c) investigations by any Governmental Authority that are, to the knowledge of the Purchaser, pending or threatened against or affecting the Purchaser or any of its Subsidiaries that, in any case, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the ability of such Purchaser to timely perform its obligations under this Agreement. 4.5 No Group Status. Neither the Liberty Group, on the one hand, nor the HMTF Group, on the other hand, is acting as a "group" (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) together with, in the case of the Liberty Group, the HMTF Group, and in the case of the HTMF Group, the Liberty Group, in each case, with respect to acquiring, holding, voting or disposing of the Securities. ARTICLE V COVENANTS OF THE COMPANY 5.1 Operation of Business. (a) From the date hereof until the Closing Date, the Company shall, and shall cause each of the ICG Subsidiaries to: (i) operate its business in all material respects in the ordinary course and in compliance with Applicable Laws; (ii) not adopt any amendment to its charter or bylaws or comparable organizational documents; (iii) not split, combine or reclassify any shares of the Company's Capital Stock; (iv) except as set forth on Schedule 5.1(iv), not declare or pay any dividend or distribution (whether in cash, stock or property) in respect of its Capital Stock or increase the number of shares subject to the Company's stock incentive and option plan; (v) not take any action, or knowingly omit to take any action, that would, or that would reasonably be expected to, result in (A) any of the representations and warranties of the Company set forth in Article III becoming untrue or (B) any of the PAGE 16 conditions to the obligations of the Purchasers set forth in Section 7.2 not being satisfied or (C) the triggering of any of the anti-dilution adjustments contained in the Certificate of Designation (had such Certificate been in effect); or (vi) enter into any agreement or commitment to do any of the foregoing. (b) Without the consent of Liberty, neither the Company nor any of its Subsidiaries will voluntarily acquire or agree to acquire (through purchase, exchange, conversion or otherwise) beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of any shares of any class of capital stock of BT or its Subsidiaries or any direct or indirect rights or options to so acquire any shares of any class of capital stock of BT or any of its Subsidiaries. 5.2 HMTF and Liberty Directors. (a) For so long as members of the HMTF Group own any combination of shares of Common Stock and Series A Preferred Stock representing an amount of Common Stock (on an as-converted basis) that, taken together, equals at least the amount of Common Stock that would then have been issuable upon conversion of 50% or more of the shares of Series A Preferred Stock issued to members of the HMTF Group on the Closing Date under this Agreement (the "HMTF Issued Series A Preferred Shares"), the holders of a majority of the then outstanding HMTF Shares shall have the right to designate one member of the Company's Board of Directors or, if greater, such number of members of the Company's Board of Directors (rounded up to the next whole number) equal to 10% of the then authorized number of members of the Company's Board of Directors (each such director an "HMTF Director"); provided, however, that the right to designate an HMTF Director under this Section 5.2 shall be suspended at any time that the HMTF Holders have the right to elect a person to the Board of Directors under the terms of the Series A Preferred Stock set forth in the Certificate of Designation. In the event the holders of a majority of the then outstanding HMTF Shares are entitled under this Section 5.2 to designate an HMTF Director for election to the Company's Board of Directors and elect to have the Board of Directors appoint an HMTF Director, they shall so notify the Company in writing and the Company shall (a) increase the size of the Board of Directors by one and fill the vacancy created thereby by electing an HMTF Director and (b) in connection with the meeting of stockholders of the Company next following such election, nominate an HMTF Director for election as a director by the stockholders and use its commercially reasonable efforts to cause the HMTF Director to be so elected. If the holders of a majority of the then outstanding HMTF Shares are entitled under this Section 5.2 to designate an HMTF Director for election to the Company's Board of Directors and a vacancy shall exist in the office of an HMTF Director, the holders of a majority of the then outstanding HMTF Shares shall be entitled to designate a successor and the Board of Directors shall elect such successor and, in connection with the meeting of stockholders of the Company next following such election, nominate such successor for election as director by the stockholders and use its commercially reasonable efforts to cause the successor to be elected. (b) (i) For so long as members of the Liberty Group in the aggregate own any combination of shares of Common Stock and Series A Preferred Stock representing an amount of Common Stock (on an as-converted basis) that, taken together, equals at least the amount of Common Stock that would then have been issuable upon conversion of 15% of the shares of PAGE 17 Series A Preferred Stock issued to members of the Liberty Group on the Closing Date under this Agreement (the "Liberty Issued Series A Preferred Shares"), the members of the Liberty Group voting together as a single class, by a plurality of the votes cast or by the written consent of a majority in interest of such members, shall have a right to designate one member of the Company's Board of Directors or, if greater, such number of members of the Company's Board of Directors (rounded up to the next whole number) equal to 10% of the then authorized number of members of the Company's Board of Directors (each such director a "Liberty Director"); provided, however, that the right to designate a Liberty Director under this Section 5.2 shall be suspended at any time that the Liberty Holders have the right to elect a person to the Board of Directors under the terms of the Series A Preferred Stock set forth in the Certificate of Designation. In the event the members of the Liberty Group are entitled under this Section 5.2 to designate the Liberty Director for election to the Company's Board of Directors and elect to have the Board of Directors appoint a Liberty Director, they shall so notify the Company in writing and the Company shall (a) increase the size of the Board of Directors by one and fill the vacancy created thereby by electing a Liberty Director and (b) in connection with the meeting of stockholders of the Company next following such election, nominate a Liberty Director for election as director by the stockholders and use its commercially reasonable efforts to cause the Liberty Director to be so elected. If the members of the Liberty Group are entitled under this Section 5.2 to designate a Liberty Director for election to the Company's Board of Directors and a vacancy shall exist in the office of a Liberty Director, the members of the Liberty Group voting together as a single class, by a plurality of the votes cast or by the written consent of a majority in interest of such members, shall be entitled to designate a successor and the Board of Directors shall elect such successor and, in connection with the meeting of stockholders of the Company next following such election, nominate such successor for election as director by the stockholders and use its commercially reasonable efforts to cause the successor to be elected. (ii) For so long as members of the Liberty Group in the aggregate own any combination of shares of Common Stock and Series A Preferred Stock representing an amount of Common Stock (on an as-converted basis) that, taken together, equals at least the amount of Common Stock that would then have been issuable upon conversion of 50% of the Liberty Issued Series A Preferred Shares, the members of the Liberty Group voting together as a single class, by a plurality of the votes cast or by the written consent of a majority in interest of such members, shall have a right, in addition to the rights set forth in clause (i) above, to designate one additional member of the Company's Board of Directors or, if greater, such number of additional members of the Company's Board of Directors (rounded up to the next whole number) equal to 10% of the then authorized number of members of the Company's Board of Directors (each such director an "Additional Liberty Director"); provided, however, that the right to designate an Additional Liberty Director under this Section 5.2 shall be suspended at any time that the Liberty Holders have the right to elect a person to the Board of Directors under the terms of the Series A Preferred Stock set forth in the Certificate of Designation. In the event the members of the Liberty Group are entitled under this Section 5.2 to designate an Additional Liberty Director for election to the Company's Board of Directors and elect to have the Board of Directors appoint an Additional Liberty Director, they shall so notify the Company in writing and the Company shall (a) increase the size of the Board of Directors by one and fill the vacancy created thereby by electing an Additional Liberty Director and (b) in connection with the meeting of stockholders of the Company next following such election, nominate an Additional Liberty Director for election as director by the stockholders and use its commercially reasonable PAGE 18 efforts to cause an Additional Liberty Director to be so elected. If the members of the Liberty Group are entitled under this Section 5.2 to designate an Additional Liberty Director for election to the Company's Board of Directors and a vacancy shall exist in the office of an Additional Liberty Director, the members of the Liberty Group voting together as a single class, by a plurality of the votes cast or by the written consent of a majority in interest of such members, shall be entitled to designate a successor and the Board of Directors shall elect such successor and, in connection with the meeting of stockholders of the Company next following such election, nominate such successor for election as director by the stockholders and use its commercially reasonable efforts to cause the successor to be elected. 5.3 Access to Books and Records. (a) The Company shall afford to each of the Purchasers and the Purchasers' accountants, counsel and representatives full access upon reasonable notice during normal business hours throughout the period prior to the Closing Date (or the earlier termination of this Agreement pursuant to Section 8.4) to all its properties, books, Contracts, commitments and records (including, but not limited to, tax returns) and, during such period, shall, upon request, furnish promptly to each of the Purchasers (i) a copy of each report, schedule and other document filed or received by any of them pursuant to the requirements of Federal or state securities laws and (ii) all other information concerning its business, properties and personnel as the Purchasers may reasonably request, provided that no investigation or receipt of information pursuant to this Section 5.3 shall affect any representation or warranty of the Company or the conditions to the obligations of the Purchasers. (b) The Company shall supplement the Information and the Projections from time to time until the Closing Date if there is a material change in the Information and the Projections previously provided, but no such supplement shall be given effect for purposes of determining whether the Company has breached any representations or warranties for purposes of Section 7.2 and Section 8.1. 5.4 Agreement to Take Necessary and Desirable Actions. The Company shall (a) subject to the satisfaction of the conditions set forth in Section 7.1, execute and deliver the Equity Documents and such other documents, certificates, agreements and other writings, and (b) take such other actions, in each case, as may be reasonably necessary, desirable or requested by the Purchasers in order to consummate or implement the Issuance in accordance with the terms of this Agreement. 5.5 Compliance with Conditions; Commercially Reasonable Efforts. The Company shall use all commercially reasonable efforts to cause all of the obligations imposed upon it in this Agreement to be duly complied with, and to cause the conditions precedent to the obligations of the Purchasers in Sections 7.2(a) and (b) to be satisfied. Upon the terms and subject to the conditions of this Agreement, the Company will use all commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable consistent with Applicable Law to consummate and make PAGE 19 effective in the most expeditious manner practicable the Issuance in accordance with the terms of this Agreement. 5.6 HSR Act Notification. To the extent required by the HSR Act, the Company shall, to the extent it has not already done so, (a) use all commercially reasonable efforts to file or cause to be filed, as promptly as practicable after the execution and delivery of this Agreement, with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice, all reports and other documents required to be filed by it under the HSR Act concerning the Transactions and (b) use all commercially reasonable efforts to promptly comply with or cause to be complied with any requests by the United States Federal Trade Commission or the Antitrust Division of the United States Department of Justice for additional information concerning such Transactions, in each case so that the waiting period applicable to this Agreement and the Transactions under the HSR Act shall expire as soon as practicable after the execution and delivery of this Agreement. The Company agrees to request, and to cooperate with the Purchasers in requesting, early termination of any applicable waiting period under the HSR Act. 5.7 Consents and Approvals. The Company (a) shall use all commercially reasonable efforts to obtain all necessary consents, waivers, authorizations and approvals of all Governmental Authorities and of all other Persons required in connection with the execution, delivery and performance by the Company of the Equity Documents or the consummation of the Issuance and (b) shall diligently assist and cooperate with the Purchasers in preparing and filing all documents required to be submitted by the Purchasers to any Governmental Authority in connection with the Issuance (which assistance and cooperation shall include, without limitation, timely furnishing, upon written requests, to the Purchasers all information concerning the Company and the Subsidiaries that counsel to the Purchasers reasonably determines is required to be included in such documents or would be helpful in obtaining any such required consent, waiver, authorization or approval). 5.8 Reservation of Shares. The Company shall: (a) cause to be authorized and reserve and keep available at all times during which any of the Shares and Warrants remain outstanding, free from preemptive rights, out of its treasury stock or authorized but unissued shares of Capital Stock, or both, solely for the purpose of effecting the conversion or exercise of the Shares or Warrants pursuant to the terms of the Certificate of Designation or the Warrants, sufficient shares of Common Stock to provide for the issuance of the maximum number of shares issuable upon conversion and exercise of outstanding Shares and Warrants; (b) issue and cause the transfer agent to deliver such shares of Common Stock as required upon conversion or exercise of the Shares and Warrants; and PAGE 20 (c) if any shares of Common Stock reserved for the purpose of issuance upon conversion of the Shares and exercise of the Warrants require registration with or approval of any Governmental Authority under any Applicable Law before such shares may be validly issued or delivered, secure such registration or approval, as the case may be, and maintain such registration or approval in effect so long as so required. 5.9 Use of Proceeds. The Company shall use the proceeds from the Issuance for building out its network, payment of expenses incurred in connection with the Transactions and for general corporate purposes. 5.10 Filing of Certificate of Designation. Prior to the Issuance, the Company shall file the Certificate of Designation with the Secretary of State of the State of Delaware pursuant to Section 151(g) of the DGCL. 5.11 Listing of Shares. The Company shall use all commercially reasonable efforts to cause the Conversion Shares and the Warrant Shares to be listed or otherwise eligible for trading on the NASDAQ National Market System or other national securities exchange. 5.12 Periodic Information. For so long as the Securities are outstanding the Company shall file all reports required to be filed by the Company under Section 13 or 15(d) of the Exchange Act and shall provide the holders of the Securities and prospective purchasers of such shares with the information specified in Rule 144A(d) under the Securities Act. 5.13 Legends. So long as applicable, each certificate representing any portion of the Securities, shall contain, be stamped or otherwise imprinted with a legend in the following form (in addition to any legend required under applicable state securities laws): "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. SUCH SHARES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS." After the above requirement for a legend is no longer applicable with respect to all or any of the Securities because the applicable Securities are freely transferable under the Securities Act, the PAGE 21 Company shall remove such legend upon request from a holder of the applicable Securities, if outside counsel for such holder reasonably determines that the transfer of such Securities is no longer restricted by the Securities Act and outside counsel for the Company reasonably concurs in such determination. 5.14 Payment; Paying Agent; Certain Information. The Company shall: (a) make any required payments on the Securities; (b) maintain (i) an office or agency where the Securities may be presented for payment (the "Paying Agent"), (ii) an office or agency where the Securities may be presented for conversion (the "Conversion Agent"), and (iii) a Registrar, which shall be an office or an agency where the Securities may be presented for transfer; and (c) provide certain information to the Purchasers, including such information and notices as may be necessary for the Purchasers to exercise their rights under this Agreement and in connection with conversion or exercise of the Securities. 5.15 Rights Plan. The Company shall not adopt a "poison pill" shareholder rights plan unless (a) the Company distributes to holders of the shares of Series A Preferred Stock, and to the holders of the Warrant Shares upon exercise of the Warrants, such number of rights as such holders would have received had they converted their Shares immediately prior to the record date for such distribution and (b) the terms of such rights plan exempt the ownership and acquisition of securities of the Company (i) by the Liberty Group, or any member thereof, and (ii) by the HMTF Group, or any member thereof, in each case subject to compliance with Section 6.6. 5.16 Proportional Purchase Right. The Liberty Holders, the HMTF Holders and the Gleacher Holders shall each have the right, for a period beginning on the Closing Date and ending on the second anniversary of the Closing Date, to purchase from the Company their pro rata portion (based on the percentage of the outstanding shares of Common Stock then held by the Liberty Holders, the HMTF Holders or the Gleacher Holders, as the case may be, on an as-converted basis) of any securities issued by the Company so that such Holders, after giving effect to such issuance and corresponding purchase by such Holders, shall be able to maintain their proportional ownership interest in the Company. The purchase price for such purchases shall be equal to the price per share received by the Company in the issuance giving rise to the purchase right. This proportional purchase right shall not apply to shares issued pursuant to the Share Exchange Agreement, any rights or obligations referenced on Schedule 3.2, any shares of capital stock issued by the Company in lieu of any fees payable in connection with the Transaction to the Company's financial advisors, or any shares issued pursuant to any stock option plan or employee benefit plan existing as of the date hereof or approved by the Board of Directors of the Company. In the event the shares are issued in connection with an acquisition or other transaction not involving a financing, the Company will permit the Liberty Holders, the HMTF Holders and the Gleacher Holders to PAGE 22 purchase the appropriate number of shares in a separate transaction, with the purchase price per share equal to the valuation per share of the Common Stock established by the Board of Directors of the Company in the transaction giving rise to the purchase right. 5.17 Modification of Share Exchange Agreement. The Company shall not, and shall cause its Subsidiaries not to, amend, modify or terminate the Share Exchange Agreement without the prior written consent of the Liberty Holders and the HMTF Holders. ARTICLE VI COVENANTS OF THE PURCHASERS Each Purchaser, severally as to itself only and not jointly with any other Purchaser, hereby covenants as follows: 6.1 Agreement to Take Necessary and Desirable Actions. Each Purchaser shall (a) subject to the satisfaction of the conditions set forth in Section 7.2, execute and deliver each of the Equity Documents to which it is a party and such other documents, certificates, agreements and other writings and (b) take such other actions, in each case, as may be reasonably necessary, desirable or requested by the Company in order to consummate or implement the Transactions in accordance with the terms of this Agreement. 6.2 Compliance with Conditions; Commercially Reasonable Efforts. Each Purchaser shall use all commercially reasonable efforts to cause all of the obligations imposed upon it in this Agreement to be duly complied with, and to cause the conditions precedent to the obligations of the Company in Sections 7.1(a) and (b) (as they relate to such Purchaser) to be satisfied. Upon the terms and subject to the conditions of this Agreement, each Purchaser will use all commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable consistent with Applicable Law to consummate and make effective in the most expeditious manner practicable the Transactions in accordance with the terms of this Agreement. Nothing herein shall be construed to require a Purchaser or any of its Affiliates to divest or otherwise rearrange the composition of any assets or agree to any conditions or requirements which are, or are reasonably likely to be, materially adverse or burdensome to such Purchaser or its Affiliates, as applicable. Nothing set forth in this Section 6.2 shall impose any obligations with respect to any filing or approval under the HSR Act, which requirements are the subject of Section 6.3. 6.3 HSR Act Notification. To the extent required by the HSR Act, each Purchaser shall, if it has not already done so, (a) use all commercially reasonable efforts to file or cause to be filed, as promptly as practicable after the execution and delivery of this Agreement, with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice, all reports and other documents required to be filed by it under the HSR Act concerning the transactions PAGE 23 contemplated hereby and (b) use all commercially reasonable efforts to promptly comply with or cause to be complied with any requests by the United States Federal Trade Commission or the Antitrust Division of the United States Department of Justice for additional information concerning such transactions in each case so that the waiting period applicable to this Agreement and the transactions contemplated hereby under the HSR Act shall expire as soon as practicable after the execution and delivery of this Agreement. Each Purchaser agrees to request, and to cooperate with the Company in requesting, early termination of any applicable waiting period under the HSR Act. 6.4 Consents and Approvals. Each Purchaser (a) shall use all commercially reasonable efforts to obtain all necessary consents, waivers, authorizations and approvals of all Governmental Authorities other than as expressly set forth in Section 6.3 regarding the HSR Act, and of all other Persons required in connection with the execution, delivery and performance by such Purchaser of this Agreement or the consummation of the Transactions and (b) shall diligently assist and cooperate with the Company in preparing and filing all documents required to be submitted by the Company to any Governmental Authority in connection with such Transactions (which assistance and cooperation shall include, without limitation, timely furnishing to the Company all information concerning such Purchaser that counsel to the Company reasonably determines is required to be included in such documents or would be helpful in obtaining any such required consent, waiver, authorization or approval). Nothing herein shall be construed to require a Purchaser or any of its Affiliates to divest or otherwise rearrange the composition of any assets or agree to any conditions or requirements which are, or are reasonably likely to be, materially adverse or burdensome to such Purchaser or its Affiliates, as applicable. 6.5 Restrictions on Transfer. No Purchaser shall sell, assign, transfer, pledge, hypothecate, deposit in a voting trust or otherwise dispose of any portion of the Securities (any such disposition, a "Securities Transfer"), other than (a) to a Permitted Transferee of such Purchaser that has agreed in writing (each, a "Permitted Transferee Agreement") to be bound by the terms and provisions of this Section 6.5 to the same extent that the transferring Purchaser would be bound if it beneficially owned the Securities transferred to such Permitted Transferee or (b)(i) in any transaction in compliance with Rule 144 under the Securities Act or any successor rule or regulation, (ii) in a transaction exempt from the registration requirements of the Securities Act or (iii) pursuant to a registration statement. Each Purchaser shall promptly notify the Company of any Securities Transfer to a Permitted Transferee of such Purchaser, which notification shall include a Permitted Transferee Agreement executed by each Permitted Transferee of such Purchaser to whom any Securities have been transferred. 6.6 Standstill. (a) Prior to the fifth anniversary of the Closing Date, no Liberty Holder shall purchase any shares of Common Stock (or securities convertible into or exchangeable for shares of Common Stock), other than from the Company, if after giving effect thereto and to the shares of Common Stock that the Liberty Holders would have the right to acquire on or prior to the fifth PAGE 24 anniversary of the Closing Date upon conversion or exercise of securities acquired by such Holders on the Closing Date, the Liberty Holders, taken as a whole, would beneficially own more than 37% of the outstanding shares of Common Stock (assuming that all shares of Common Stock that would be issuable upon the conversion, on the fifth anniversary of the Closing Date, of all shares of Series A Preferred Stock issued on the Closing Date are outstanding, but otherwise calculated in accordance with Rule 13d-3(d)(1)(i) promulgated under the Exchange Act). In no event will any Liberty Holder be deemed to be in violation of the foregoing provision at any time that the aggregate voting power of the outstanding voting securities of the Company owned by the Liberty Holders, taken as a whole, does not exceed 25.1% of the aggregate voting power of all outstanding voting securities of the Company. (b) Prior to the fifth anniversary of the Closing Date, no HMTF Holder shall purchase any shares of Common Stock (or securities convertible into or exchangeable for shares of Common Stock), other than from the Company, if after giving effect thereto and to the shares of Common Stock that the HMTF Holders would have the right to acquire on or prior to the fifth anniversary of the Closing Date upon conversion or exercise of securities acquired by such Holders on the Closing Date, the HMTF Holders, taken as a whole, would beneficially own more than 17.5% of the outstanding shares of Common Stock (assuming that all shares of Common Stock that would be issuable upon the conversion, on the fifth anniversary of the Closing Date, of all shares of Series A Preferred Stock issued on the Closing Date are outstanding, but otherwise calculated in accordance with Rule 13d-3(d)(1)(i) promulgated under the Exchange Act). (c) Prior to the fifth anniversary of the Closing Date, no Gleacher Holder shall purchase any shares of Common Stock (or securities convertible into or exchangeable for shares of Common Stock), other than from the Company, if after giving effect thereto and to the shares of Common Stock that the Gleacher Holders would have the right to acquire on or prior to the fifth anniversary of the Closing Date upon conversion or exercise of securities acquired by such Holders on the Closing Date, the Gleacher Holders, taken as a whole, would beneficially own more than 3% of the outstanding shares of Common Stock (assuming that all shares of Common Stock that would be issuable upon the conversion, on the fifth anniversary of the Closing Date, of all shares of Series A Preferred Stock issued on the Closing Date are outstanding, but otherwise calculated in accordance with Rule 13d-3(d)(1)(i) promulgated under the Exchange Act). ARTICLE VII CONDITIONS PRECEDENT TO CLOSING 7.1 Conditions to the Company's Obligations. The obligations of the Company with respect to a Purchaser hereunder required to be performed on the Closing Date shall be subject to the satisfaction or waiver, at or prior to the Closing, of the following conditions: (a) The representations and warranties of such Purchaser contained in this Agreement shall have been true and correct when made and, in addition, shall be repeated and PAGE 25 true and correct in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date. (b) Such Purchaser shall have performed in all material respects all obligations and agreements, and complied in all material respects with all covenants contained in this Agreement to be performed and complied with by such Purchaser at or prior to the Closing Date. (c) Any applicable waiting period under the HSR Act with respect to the purchase by such Purchaser shall have expired or been terminated. (d) The Company shall have obtained all necessary consents, waivers, authorizations and approvals of all Governmental Authorities and of all other Persons required in connection with the execution, delivery and performance of the Equity Documents or the consummation of the Issuance, such waivers to be satisfactory in form and substance to the Company. (e) Such Purchaser shall have entered into the Registration Rights Agreement. (f) The Shares to be purchased at the Closing shall be issued for an aggregate amount of no less than $600,000,000.00. 7.2 Conditions to Each Purchaser's Obligations. The obligations of a Purchaser hereunder required to be performed on the Closing Date shall be subject to the satisfaction or waiver, at or prior to the Closing, of the following conditions: (a) The representations and warranties of the Company contained in this Agreement (i) shall have been true and correct when made and (ii) shall be (A) in the case of representations and warranties that are qualified as to materiality or Material Adverse Effect, true and correct and (B) in all other cases, true and correct in all material respects, in the case of clauses (A) and (B), as of the Closing Date with the same force and effect as though made on and as of the Closing Date. (b) The Company shall have performed in all material respects all of its obligations and agreements and complied in all material respects with all covenants contained in this Agreement to be performed and complied with at or prior to the Closing Date. (c) The Company shall have entered into the Registration Rights Agreement. (d) The Company shall have filed the Certificate of Designation with the Secretary of State of the State of Delaware. (e) Any applicable waiting period under the HSR Act with respect to the purchase by such Purchaser shall have expired or been terminated and no litigation arising therefrom shall have been commenced and remain outstanding. PAGE 26 (f) The Company shall have delivered to such Purchaser a certificate executed on its behalf by a duly authorized representative, dated the Closing Date, to the effect that each of the conditions specified in paragraph (a) through (e) of this Section 7.2 has been satisfied. (g) No provision of any Applicable Law, injunction, order or decree of any Governmental Entity shall be in effect which has the effect of making the Transactions illegal or shall otherwise restrain or prohibit the consummation of the Transactions. (h) Such Purchaser shall have received an opinion of (i) H. Don Teague, General Counsel of the Company and (ii) O'Sullivan Graev & Karabell, LLP, special counsel to the Company, in each case dated the Closing Date, and addressed to such Purchaser, covering the matters set forth in Exhibit D, in form and substance reasonably acceptable to the Purchaser. (i) Such Purchaser shall have received certificates representing the Securities purchased by such Purchaser concurrently with the Company's receipt of the Purchase Price for such Securities. (j) There shall not have occurred (i) any event, circumstance, condition, fact, effect or other matter which has had or could reasonably be expected to have a material adverse effect (x) on the business, assets, financial condition, prospects, or results of operations of the Company and its Subsidiaries taken as a whole or (y) on the ability of the Company and its Subsidiaries to perform on a timely basis any material obligation under this Agreement or the other Equity Documents or to consummate the Issuance contemplated hereby; or (ii) any material disruption of or material adverse change in financial, banking or capital market conditions. (k) The Share Exchange Agreement shall be in full force and effect and there shall not have been any amendment or waiver of any of its material terms or conditions. (l) The Company shall have delivered duly executed copies of the Management Rights Agreements to the HMTF Funds. (m) The Company shall have made all filings with, given all notices to, and received all approvals from, all Governmental Authorities (including, without limitation, the Federal Communications Commission and state public utility commissions) required in connection with the consummation of the Transactions, unless the failure to make such filings, give such notices or receive such approvals would not, individually or in the aggregate, have a Material Adverse Effect or a material adverse effect on the ability of the Company to consummate the Transactions. ARTICLE VIII MISCELLANEOUS 8.1 Survival; Indemnification. (a) All representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing for 18 months (except (i) covenants and agreements that are required to be performed after the Closing Date (including without limitation the covenants and PAGE 27 agreements contained in Sections 5.1(b), 5.2, 5.8, 5.9, 5.11, 5.12, 5.13, 5.14, 5.15, 5.16, 5.17, 6.5 and 6.6) and (ii) Sections 3.12 and 3.13 and the last sentence of Section 3.2(a), which shall survive indefinitely). Notwithstanding the foregoing, with respect to claims asserted pursuant to this Section 8.1 before the expiration of the applicable representation, warranty, covenant or agreement, such claims shall survive until the date they are finally adjudicated or otherwise resolved. (b) The Company agrees to indemnify and hold harmless each Purchaser and each Purchaser Affiliate (each an "Indemnified Person"), from and against (and to reimburse each indemnified person as the same are incurred) any and all losses (including, but not limited to, impairment of the value of the Shares and Warrants as of the date such loss first becomes known, but excluding consequential damages), claims, damages, liabilities, costs and expenses (collectively, "Losses") to which any Indemnified Person may become subject or which any Indemnified Person may incur based upon, arising out of, or in connection with (i) a breach of any representation, warranty or covenant of this Agreement by the Company or (ii) any claim, litigation, investigation or proceeding brought by or on behalf of any Person other than the Company relating to the Issuance, and to reimburse each Indemnified Person upon demand for any reasonable legal or other reasonable out of pocket expenses incurred in connection with investigating or defending any of the foregoing, provided the maximum amount indemnifiable to each Purchaser (and its successors or assigns) under clause (i) shall not exceed the purchase price of the Securities purchased by such Purchaser. (c) If a Person entitled to indemnity hereunder (an "Indemnified Party") asserts that the Company (the "Indemnifying Party") has become obligated to the Indemnified Party pursuant to Section 8.1(b), or if any suit, action, investigation, claim or proceeding is begun, made or instituted as a result of which the Indemnifying Party may become obligated to the Indemnified Party hereunder, the Indemnified Party shall notify the Indemnifying Party promptly and shall cooperate with the Indemnifying Party, at the Indemnifying Party's expense, to the extent reasonably necessary for the resolution of such claim or in the defense of such suit, action or proceedings, including making available any information, documents and things in the possession of the Indemnified Party. Notwithstanding the foregoing notice requirement, the right to indemnification hereunder shall not be affected by any failure to give, or delay in giving, notice unless, and only to the extent that, the rights and remedies of the Indemnifying Party shall have been materially prejudiced as a result of such failure or delay. (d) In fulfilling its obligations under this Section 8.1, after the Indemnifying Party has provided each Indemnified Party with a written notice of its acceptance of liability under this Section 8.1, as between such Indemnified Party and the Indemnifying Party, the Indemnifying Party shall have the right to investigate, defend, settle or otherwise handle, with the aforesaid cooperation, any claim, suit, action or proceeding brought by a third party in such manner as the Indemnifying Party may in its sole discretion reasonably deem appropriate; provided, that (i) counsel retained by the Indemnifying Party is reasonably satisfactory to the Indemnified Party and (ii) the Indemnifying Party will not consent to any settlement or entry of judgment imposing any obligations on any other party hereto other than financial obligations for which such party will be indemnified hereunder, unless such party has consented in writing to such settlement or judgment (which consent may be given or withheld in its sole discretion) and (iii) the Indemnifying Party will not consent to any settlement or entry of judgment unless, in connection PAGE 28 therewith, the Indemnifying Party obtains a full and unconditional release of the Indemnified Party from all liability with respect to such suit, action, investigation claim or proceeding. Notwithstanding the Indemnifying Party's election to assume the defense or investigation of such claim, action or proceeding, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense or investigation of such claim, action or proceeding, which participation shall be at the expense of the Indemnifying Party, if (i) on the advice of counsel to the Indemnified Party use of counsel of the Indemnifying Party's choice could reasonably be expected to give rise to a material conflict of interest, (ii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the assertion of any such claim or institution of any such action or proceeding, (iii) if the Indemnifying Party shall authorize the Indemnified Party to employ separate counsel at the Indemnifying Party's expense or (iv) such action shall seek relief other than monetary damages against the Indemnified Party. (e) The Company and the Purchasers agree that any payment of Losses made hereunder will be treated by the parties on their tax returns as an adjustment to the Purchase Price. If, notwithstanding such treatment by the parties, a final determination (which shall include the form 870-AD or successor form) with respect to the Indemnified Party or any of its Affiliates causes any such payment not to be treated as an adjustment to Purchase Price, then the Indemnifying Party shall indemnify the Indemnified Party for any taxes payable by the Indemnified Party or any subsidiary by reason of the receipt of such payment (including any payments under this Section 8.1(e)), determined at an assumed marginal tax rate equal to the highest marginal tax rate then in effect for corporate taxpayers in the relevant jurisdiction. 8.2 Notices. All notices, demands, requests, consents, approvals or other communications (collectively, "Notices") required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice. Notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile. Notice otherwise sent as provided herein shall be deemed given on the next business day following delivery of such notice to a reputable air courier service. PAGE 29 To the Company: ICG Communications, Inc. 161 Inverness Drive West P.O. Box 6742 Englewood, Colorado 80155-6742 Attn: H. Don Teague, Executive Vice President, General Counsel and Secretary Telephone: (303) 414-5444 Fax: (303) 414-8839 with a copy to: O'Sullivan Graev & Karabell, LLP 30 Rockefeller Plaza New York, New York 10112 Attn: Audrey A. Rohan Telephone: (212) 408-2419 Fax: (212) 728-5950 To the Purchasers: (as to matters relating to the HMTF Purchasers) To the appropriate member of the HMTF Group c/o Hicks, Muse, Tate & Furst Incorporated 1325 Avenue of the Americas 25th Floor New York, New York 10019 Attn: Michael J. Levitt Telephone: (212) 424-1400 Fax: (212) 424-1450 PAGE 30 with a copy to: Hicks, Muse, Tate & Furst Incorporated 200 Crescent Court, Suite 1600 Dallas, Texas 75201 Attn: Lawrence D. Stuart Telephone: (214) 740-7300 Fax: (214) 720-7888 with a copy to: Vinson & Elkins L.L.P. 1325 Avenue of the Americas (17th Floor) New York, New York 10019 Attn: Eric S. Shube Telephone: (917) 206-8005 Fax: (917) 206-8100 (as to matters relating to Liberty) To: Liberty Media Corporation 9197 South Peoria Street Englewood, Colorado 80112 Attn: Gary S. Howard Telephone: (720) 875-5400 Fax: (720) 875-5268 with copies to: Liberty Media Corporation 9197 South Peoria Street Englewood, Colorado 80112 Attn: Legal Department Telephone: (720) 875-5400 Fax: (720) 875-5382 and: Baker Botts, L.L.P. 599 Lexington Avenue New York, New York 10022 Attn: Elizabeth M. Markowski Telephone: (212) 705-5000 Fax: (212) 705-5125 PAGE 31 (as to matters relating to the Gleacher Purchaser) To: Gleacher & Co. 660 Madison Avenue, 17th Floor New York, New York 10019 Attn: Micheal E. Garstin Telephone: (212) 418-4200 Fax: (212) 418-4599 8.3 Governing Law. This Agreement shall be governed by, interpreted under, and construed in accordance with the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof. 8.4 Termination. (a) This Agreement may be terminated as between the Company and any Purchaser (i) at any time prior to the Closing Date by mutual written agreement of the Company and such Purchaser, (ii) if the Closing shall not have occurred on or prior to May 31, 2000 either the Company or such Purchaser, at any time after May 31, 2000, provided that the right to terminate this Agreement under this Section 8.4(a)(ii) shall not be available to any party whose failure to fulfill any obligation under this Agreement was the cause of or resulted in the failure of the Closing to occur on or before such date, (iii) if any Governmental Authority shall have issued a nonappealable final order, decree or ruling or taken any other action having the effect of permanently restraining, enjoining or otherwise prohibiting the Transactions, by either the Company or such Purchaser, (iv) if either the Company or such Purchaser shall have breached any of its material obligations under this Agreement, by the non-breaching party, or (v) if an event described in Section 7.2(j) shall have occurred, by such Purchaser. Any party desiring to terminate this Agreement pursuant to clauses 8.4(a)(ii), (iii), (iv) or (v) shall promptly give notice of such termination to the other party. (b) If this Agreement is terminated as between the Company and a Purchaser, as permitted by Section 8.4(a), such termination shall be without liability of any party (or any stockholder, director, officer, partner, employee, agent, consultant or representative of such party) to any other party to this Agreement; provided that if such termination shall result from the willful (a) failure of any party to fulfill a condition to the performance of the obligations of the other party, (b) failure to perform a covenant of this Agreement or (c) breach by any party hereto of any representation or warranty contained herein, such failing or breaching party shall be fully liable for any and all losses (excluding consequential damages) incurred or suffered by the other party as a result of such failure or breach. The provisions of Sections 8.1(b)-(d), 8.2, 8.3, this Section 8.4, Sections 8.5, 8.8, 8.10, 8.11, 8.12, 8.13, 8.14, 8.16, 8.17, 8.18 and 8.20 shall survive any termination hereof pursuant to Section 8.4(a). PAGE 32 8.5 Entire Agreement. As between the Company and each Purchaser, this Agreement and the other Equity Documents (including all agreements entered into pursuant hereto and thereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written, with respect to the subject matter hereof. 8.6 Modifications and Amendments. No amendment, modification or termination of this Agreement as between the Company and a Purchaser shall be binding unless executed in writing by the Company and such Purchaser intending to be bound thereby. 8.7 Waivers and Extensions. Any party to this Agreement may waive any condition, right, breach or default that such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts. 8.8 Titles and Headings. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement. 8.9 Exhibits and Schedules. Each of the exhibits and schedules referred to herein and attached hereto is an integral part of this Agreement and is incorporated herein by reference. 8.10 Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense; provided, however, that the Company shall pay the filing fees in respect of any filings pursuant to the HSR Act. 8.11 Press Releases and Public Announcements. All public announcements or disclosures relating to the Issuance or this Agreement shall be made only if mutually agreed upon by the Company and the Purchasers, except to the extent such disclosure is, in the opinion of counsel, required by law or by regulation of any applicable PAGE 33 national stock exchange or Commission recognized trading market; provided that (a) any such required disclosure shall only be made, to the extent consistent with law and regulation of any applicable national stock exchange or Commission recognized trading market, after consultation with each Purchaser and the Company and (b) no such announcement or disclosure (except as required by law or by regulation of any applicable national stock exchange or Commission recognized trading market) shall identify any Purchaser without such Purchaser's prior consent. 8.12 Assignment; No Third Party Beneficiaries. This Agreement and the rights, duties and obligations hereunder may not be assigned or delegated by the Company without the prior written consent of the Purchasers, and may not assigned or delegated by any Purchaser without the Company's prior written consent except that each Purchaser may assign any or all of its rights and obligations under this Agreement to any one or more of its Affiliates. Any assignment or delegation of rights, duties or obligations hereunder made by the Company without the prior written consent of the Purchasers, shall be void and of no effect. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective successors and permitted assigns. This Agreement is not intended to confer any rights or benefits on any Persons other than the parties hereto, except as expressly set forth in Section 5.2, Section 8.1, this Section 8.12 or Section 8.20. 8.13 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable. 8.14 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. 8.15 Further Assurances. As between the Company and a Purchaser, each party hereto, upon the request of any other party hereto, shall do all such further acts and execute, acknowledge and deliver all such further instruments and documents as may be necessary or desirable to carry out the transactions contemplated by this Agreement, including, in the case of the Company, such acts, instruments and documents as may be necessary or desirable to convey and transfer to each Purchaser the Shares and Warrants to be purchased by it hereunder. 8.16 Remedies Cumulative. The remedies provided herein shall be cumulative and shall not preclude the assertion by any party hereto of any other rights or the seeking of any remedies against the other party hereto. PAGE 34 8.17 Several Liability of the Purchasers. Nothing in this Agreement (including, without limitation, Article VI) shall be construed to impose on any Purchaser any liability for any action or failure to act of any other Purchaser, including any breach of this Agreement by any such other Purchaser. 8.18 No Duty to Other Purchasers. Each Purchaser confirms with each other Purchaser that such Purchaser has conducted its own due diligence in connection with its investment in the Securities and the other Purchasers may therefore have information different from, or additional to, the information possessed by such Purchaser. In addition, although certain of such other Purchasers (the "Supplying Purchasers") may have shared information received by them (including information contained in third party reports prepared for such other Purchasers) with such Purchaser, no representation or warranty is being made with respect to such information by any Supplying Purchaser or any such third party. Nothing in this Section 8.18 is meant to limit any duty, obligation or liability the Company may have to any Purchaser under this Agreement or otherwise. 8.19 Specific Performance. The parties hereto agree that the remedy at law for any breach of this Agreement may be inadequate, and that as between the Company and a Purchaser any party by whom this Agreement is enforceable shall be entitled to specific performance in addition to any other appropriate relief or remedy. Such party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper in order to enforce this Agreement as between the Company and a Purchaser, or prevent any violation hereof, and, to the extent permitted by applicable as between the Company and a Purchaser law, each party waives any objection to the imposition of such relief. 8.20 No Purchaser Affiliate Liability. No Purchaser Affiliate shall have any liability or obligation of any nature whatsoever in connection with or under this Agreement or the transactions contemplated hereby, and the Company hereby waives and releases all claims of any such liability and obligation, it being understood that no such Person or entity (other than Purchaser) shall be liable for or in respect of Purchaser's obligations under this Agreement or with respect to the transactions contemplated hereby. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. ICG COMMUNICATIONS, INC. By:/s/ Don Teague Name: Don Teague Title: Executive Vice President HMTF BRIDGE ICG, LLC By: /s/ David Knickel Name: David Knickel Title: Vice President LIBERTY MEDIA CORPORATION By: /s/ Charles Y. Tanabe Name: Charles Y. Tanabe Title: Senior Vice President GLEACHER/ICG INVESTORS, LLC By: /s/ Jeffrey Tepper Name: Jeffrey Tepper Title: Managing Director
SCHEDULE I Purchaser. . . . . . . . . Number of Shares Number of Warrants Purchase Price HMTF Bridge ICG, LLC . . . 230,000 3,066,667 $ 230,000,000 Liberty Media Corporation. 500,000 6,666,667 $ 500,000,000 Gleacher/ICG Investors LLC 20,000 266,666 $ 20,000,000
EXHIBIT A FORM OF WARRANT EXHIBIT B CERTIFICATE OF DESIGNATION EXHIBIT C FORM OF REGISTRATION RIGHTS AGREEMENT EXHIBIT D FORM OF LEGAL OPINION EXHIBIT E FORM OF MANAGEMENT RIGHTS AGREEMENT EX-10.2 3 AMENDMENT PAGE 1 EXHIBIT 10.2 AMENDMENT, dated as of April 10, 2000 (the "Agreement"), between ICG Communications, Inc., a Delaware corporation (the "Company"), and the Purchasers whose signatures appear below (the "Purchasers"). WHEREAS, reference is made to the Preferred Stock and Warrant Purchase Agreement dated as of February 27, 2000 (the "Purchase Agreement"), by and between the Company and the Purchasers. Capitalized terms used herein but not otherwise defined shall be given the meaning ascribed to them in the Purchase Agreement; WHEREAS, pursuant to an Assignment of Rights Under Preferred Stock and Warrant Purchase Agreement dated as of March 8, 2000, HM4 ICG Qualified Fund, LLC, HM4 ICG Private Fund, LLC, HM PG-IV ICG, LLC, HM 4-SBS ICG Coinvestors, LLC, and HM 4-EQ ICG Coinvestors became parties to the Purchase Agreement; WHEREAS, in accordance with Section 8.6 of the Purchase Agreement, the parties hereto desire to amend the Purchase Agreement as more fully set forth below in order to reflect (1) the redesignation of the Series A Preferred Stock into Series A-1 Preferred Stock (as defined below), Series A-2 Preferred Stock (as defined below) and Series A-3 Preferred Stock (as defined below), (2) the increase of the initial Liquidation Preference per share of Series A Preferred Stock from $1,000 to $10,000 per share and the concomitant reduction in the number of shares of Series A Preferred Stock being issued by the Company and purchased by the Purchasers and (3) related conforming changes; NOW, THEREFORE, in consideration of the foregoing, and of the covenants and agreements contained herein, the parties hereby agree as follows: 1. Amendment of Recitals. The recitals of the Purchase Agreement shall be amended by deleting the first "Whereas" clause in its entirety and substituting, in lieu thereof, the following: "WHEREAS, the Company proposes, subject to the terms and conditions set forth herein, to issue and sell to the Purchasers 50,000 shares of its 8% Series A-1 Convertible Preferred Stock due 2015, initial liquidation preference $10,000 per share, par value $0.01 per share (the "Series A-1 Preferred Stock"), 23,000 shares of its 8% Series A-2 Convertible Preferred Stock due 2015, initial liquidation preference $10,000 per share, par value $0.01 per share (the "Series A-2 Preferred Stock") and 2,000 shares of its 8% Series A-3 Convertible Preferred Stock due 2015, initial liquidation preference $10,000 per share, par value $0.01 per share (the "Series A-3 Preferred Stock" and together with the Series A-1 Preferred Stock and the Series A-2 Preferred Stock, the "Series A Preferred Stock");" PAGE 2 2. Amendment of Definitions. Section (a) of Article I is hereby amended by inserting or amending, as the case may be, the following definitions: ""Amending Agreement" means the Amendment dated as of April 10, 2000 by and among the Company and the other parties listed on the signature pages thereof." ""Equity Documents" means this Agreement, the Registration Rights Agreement, the Certificate of Designation, the Management Rights Agreements, the Share Exchange Agreement, the Warrants and the Amending Agreement." ""HMTF Issued Series A Preferred Shares" shall mean the shares of Series A-2 Preferred Stock issued to members of the HMTF Group on the Closing Date under this Agreement." ""Liberty Issued Series A Preferred Shares" shall mean the shares of Series A-1 Preferred Stock issued to members of the Liberty Group on the Closing Date under this Agreement." ""Registration Rights Agreement" means the Registration Rights Agreement dated as of April 7, 2000, by and among the Company and the Purchasers, in the form attached hereto as Exhibit C." ""Series A-1 Preferred Stock" has the meaning set forth in the first recital to this Agreement." ""Series A-2 Preferred Stock" has the meaning set forth in the first recital to this Agreement." ""Series A-3 Preferred Stock" has the meaning set forth in the first recital to this Agreement." 3. Amendment of Section 2.1. The Purchase Agreement is hereby amended by deleting "one thousand dollars ($1,000) per share" in the fifth line of Section 2.1 and substituting, in lieu thereof, "ten thousand dollars ($10,000) per share." 4. Amendment of Section 5.2. (a) The Purchase Agreement is hereby amended by deleting Section 5.2(a) in its entirety and substituting, in lieu thereof, the following: " For so long as the members of the HMTF Group in the aggregate own any combination of shares of Common Stock and Series A-2 Preferred Stock representing an amount of Common Stock (on an as-converted basis) that, taken together, equals at least 4,107,143 shares of Common Stock (as adjusted for any stock dividends, splits and combinations and similar events affecting the Common Stock from time to time), the holders of a majority of the then outstanding HMTF Shares shall have the right to designate one PAGE 3 person for election to the Company's Board of Directors or, if greater, such number of persons (rounded up to the next whole number) equal to 10% of the then authorized number of members of the Company's Board of Directors (each such person an "HMTF Director"); provided, however, that the right to designate an HMTF Director under this Section 5.2 shall be suspended at any time that the holders of the Series A-2 Preferred Stock have the right to elect a person to the Board of Directors under the terms of the Series A-2 Preferred Stock set forth in the Certificate of Designation. In the event the holders of a majority of the then outstanding HMTF Shares are entitled under this Section 5.2 to designate an HMTF Director for election to the Company's Board of Directors and so designate an HMTF Director, they shall so notify the Company in writing and the Company shall use its best efforts (a) to cause the size of the Board of Directors to be increased by one and the vacancy created thereby to be filled by electing an HMTF Director and (b) in connection with the meeting of stockholders of the Company next following such election, to cause an HMTF Director to be nominated for election as a director by the stockholders and to cause the HMTF Director to be so elected. If the holders of a majority of the then outstanding HMTF Shares are entitled under this Section 5.2 to designate an HMTF Director for election to the Company's Board of Directors and a vacancy shall exist in the office of an HMTF Director, the holders of a majority of the then outstanding HMTF Shares shall be entitled to designate a successor and the Board of Directors shall use its best efforts to (x) elect such successor and (y) in connection with the meeting of stockholders of the Company next following such election, cause such successor to be nominated for election as director by the stockholders and to be elected." (b) The Purchase Agreement is hereby amended by deleting Section 5.2(b)(i) in its entirety and substituting, in lieu thereof, the following: " For so long as the members of the Liberty Group in the aggregate own any combination of shares of Common Stock and Series A-1 Preferred Stock representing an amount of Common Stock (on an as-converted basis) that, taken together, equals at least 2,687,571 shares of Common Stock (as adjusted for any stock dividends, splits and combinations and similar events affecting the Common Stock from time to time), the members of the Liberty Group, voting together as a single class by a plurality of the votes cast or by the written consent of a majority in interest of such members, shall have a right to designate one person for election to the Company's Board of Directors or, if greater, such number of persons (rounded up to the next whole number) equal to 10% of the then authorized number of members of the Company's Board PAGE 4 of Directors (each such person a "Liberty Director"); provided, however, that the right to designate a Liberty Director under this Section 5.2 shall be suspended at any time that the holders of the Series A-1 Preferred Stock have the right to elect a person to the Board of Directors under the terms of the Series A-1 Preferred Stock set forth in the Certificate of Designation. In the event the members of the Liberty Group are entitled under this Section 5.2 to designate the Liberty Director for election to the Company's Board of Directors and elect to so designate a Liberty Director, they shall so notify the Company in writing and the Company shall use its best efforts (a) to cause the size of the Board of Directors to be increased by one and the vacancy created thereby to be filled by electing a Liberty Director and (b) in connection with the meeting of stockholders of the Company next following such election, to cause a Liberty Director to be nominated for election as director by the stockholders and to cause the Liberty Director to be so elected. If the members of the Liberty Group are entitled under this Section 5.2 to designate a Liberty Director for election to the Company's Board of Directors and a vacancy shall exist in the office of a Liberty Director, the members of the Liberty Group, voting together as a single class by a plurality of the votes cast or by the written consent of a majority in interest of such members, shall be entitled to designate a successor and the Board of Directors shall use its best efforts to (x) elect such successor and (y) in connection with the meeting of stockholders of the Company next following such election, cause such successor to be nominated for election as director by the stockholders and to be elected." (c) The Purchase Agreement is hereby amended by deleting Section 5.2(b)(ii) in its entirety and substituting, in lieu thereof, the following: " For so long as the members of the Liberty Group own any combination of shares of Common Stock and Series A-1 Preferred Shares representing an amount of Common Stock (on an as-converted basis) that, taken together, equals 8,928,571 shares of Common Stock (as adjusted for any stock dividends, splits and combinations and similar events affecting the Common Stock from time to time), the members of the Liberty Group, voting together as a single class by a plurality of the votes cast or by the written consent of a majority in interest of such members, shall have a right, in addition to the rights set forth in clause (i) above, to designate one additional person for election to the Company's Board of Directors or, if greater, such number of additional persons (rounded up to the next whole number) equal to 10% of the then authorized number of members of the Company's Board of Directors (each such person an "Additional Liberty Director"); provided, however, that the right to designate an Additional PAGE 5 Liberty Director under this Section 5.2 shall be suspended at any time that the holders of the Series A-1 Preferred Stock have the right to elect a person to the Board of Directors under the terms of the Series A-1 Preferred Stock set forth in the Certificate of Designation. In the event the members of the Liberty Group are entitled under this Section 5.2 to designate an Additional Liberty Director for election to the Company's Board of Directors and elect to so designate an Additional Liberty Director, they shall so notify the Company in writing and the Company shall use its best efforts (a) to cause the size of the Board of Directors to be increased by one and the vacancy created thereby to be filled by electing an Additional Liberty Director and (b) in connection with the meeting of stockholders of the Company next following such election, to cause an Additional Liberty Director to be nominated for election as director by the stockholders and to cause an Additional Liberty Director to be so elected. If the members of the Liberty Group are entitled under this Section 5.2 to designate an Additional Liberty Director for election to the Company's Board of Directors and a vacancy shall exist in the office of an Additional Liberty Director, the members of the Liberty Group, voting together as a single class by a plurality of the votes cast or by the written consent of a majority in interest of such members, shall be entitled to designate a successor and the Board of Directors shall use its best efforts to (x) elect such successor and (y) in connection with the meeting of stockholders of the Company next following such election, cause such successor to be nominated for election as director by the stockholders and to be elected." 5. Amendment of Section 5.16. Section 5.16 of the Purchase Agreement is hereby amended by deleting the third sentence in it entirety and substituting, in lieu thereof, the following sentence: " This proportional purchase right shall not apply to shares issued pursuant to the Share Exchange Agreement, any rights or obligations referenced on Schedule 3.2, any shares of capital stock issued by the Company in lieu of any fees payable in connection with the Transaction to the Company's financial advisors, any shares issued pursuant to any stock option plan or arrangement or employee benefit plan or arrangement existing as of the date hereof or hereafter approved by the Board of Directors of the Company or the shares of Common Stock issued from time to time upon conversion of the Series A Preferred Stock or upon exercise of the Warrants." 6. Amendment of Schedule I. Schedule I to the Purchase Agreement is hereby amended by deleting it in its entirety and substituting, in lieu thereof, Schedule I attached hereto. PAGE 6 7. No Other Waivers. Except as expressly provided in this Agreement, each of the terms and provisions of the Purchase Agreement shall remain in full force and effect in accordance with its terms. 8. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument. 9. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to principles of conflicts of law). 10. Headings. The headings used herein are for convenience of reference only and shall not affect the construction of, nor shall they be taken in consideration in interpreting, this Agreement. IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Amendment as of the date first written above. ICG COMMUNICATIONS, INC. By:/s/ H. Don Teague Name: H. Don Teague Title: Executive Vice President HMTF BRIDGE ICG, LLC HM4 ICG QUALIFIED FUND, LLC HM4 ICG PRIVATE FUND, LLC HM PG-IV ICG, LLC HM 4-SBS ICG COINVESTORS, LLC HM 4-EQ ICG COINVESTORS, LLC By:/s/ David W. Knickel Name: David W. Knickel Title: Vice President LIBERTY MEDIA CORPORATION By:/s/ Charles Y. Tanabe Name: Charles Y. Tanabe Title: Senior Vice President GLEACHER/ICG INVESTORS, LLC By:/s/ Richard Trabulsi Name: Richard Trabulsi Title: Member
SCHEDULE I Series of Number Purchasers. . . . . . . . . . Preferred of Preferred Number of Purchase Price Stock Shares Warrants of the Shares Liberty Media Corporation . . Series A-1 50,000 6,666,667 $ 500,000,000 HMTF Bridge ICG, LLC. . . . . Series A-2 11,500 1,533,334 $ 115,000,000 HM4 ICG Qualified Fund, LLC . Series A-2 10,464 1,395,253 $ 104,644,000 HM4 ICG Private Fund, LLC . . Series A-2 74 9,885 $ 741,000 HM PG-IV ICG, LLC . . . . . . Series A-2 557 74,281 $ 5,571,000 HM 4-SBS ICG Coinvestors, LLC Series A-2 251 33,412 $ 2,506,000 HM 4-EQ ICG Coinvestors, LLC. Series A-2 154 20,502 $ 1,538,000 Gleacher/ICG Investors LLC. . Series A-3 2,000 266,666 $ 20,000,000
EX-10.3 4 REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.3 ================================================================================ REGISTRATION RIGHTS AGREEMENT between ICG COMMUNICATIONS, INC. AND THE PURCHASERS LISTED ON SCHEDULE I dated as of April 7, 2000 ================================================================================
TABLE OF CONTENTS ARTICLE I DEFINITIONS 1 1.1 Definitions. 1 1.2 Internal References 3 ARTICLE II REGISTRATION RIGHTS 3 2.1 Demand Registration 3 2.2 Piggyback Registration 6 2.3 Shelf Registration 7 ARTICLE III REGISTRATION PROCEDURES 9 3.1 Filings; Information 9 3.2 Registration Expenses 13 ARTICLE IV INDEMNIFICATION AND CONTRIBUTION 14 4.1 Indemnification by the Company 14 4.2 Indemnification by Selling Holders 15 4.3 Conduct of Indemnification Proceedings 15 4.4 Contribution 16 ARTICLE V MISCELLANEOUS 16 5.1 Participation in Underwritten Registrations 16 5.2 Rule 144 17 5.3 Holdback Agreements 17 5.4 Termination 18 5.5 Amendments, Waivers, Etc. 18 5.6 Counterparts 18 5.7 Entire Agreement 18 5.8 Governing Law 18 5.9 Assignment of Registration Rights 18
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), is made as of April 7, 2000, by and between ICG Communications, Inc., a Delaware corporation (the "Company") and the entities listed on Schedule I to this Agreement. WHEREAS, the Company, Liberty Media Corporation, HMTF Bridge ICG, LLC and Gleacher/ICG Investors LLC entered into a Preferred Stock and Warrant Purchase Agreement dated as of February 27, 2000 (the "Stock Purchase Agreement"); WHEREAS, pursuant to an Assignment of Rights under Preferred Stock and Warrant Purchase Agreement dated as of March 8, 2000, the remaining Initial HMTF Holders (as defined below) became parties to the Stock Purchase Agreement; WHEREAS, it is a condition precedent to the closing of the transactions contemplated in the Stock Purchase Agreement that the parties hereto execute and deliver this Agreement; NOW THEREFORE, in consideration of the premises, mutual promises and covenants contained in this Agreement and intending to be legally bound, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS 1.1 Definitions. Terms defined in the Stock Purchase Agreement are used herein as therein defined except as otherwise indicated below. In addition, the following terms, as used herein, have the following meanings: "Commission" means the Securities and Exchange Commission. "Demand Registration" means a registration under the Securities Act requested in accordance with Section 2.1. "Gleacher Holder" means Gleacher/ICG Investors LLC. "HMTF Holders" means the Initial HMTF Holders and any direct or indirect transferee of any Registrable Securities initially held by the Initial HMTF Holders. "Holders" means, collectively, the HMTF Holders, the Liberty Holders and the Gleacher Holder (including their respective Affiliates) and any direct or indirect transferee of any Registrable Securities held by any of such Persons. PAGE 2 "Initial Amount," on any particular date and with respect to the Liberty Holders or the HMTF Holders, as applicable, means the number of shares of Common Stock that would have been issuable on such date upon conversion of all of the shares of Series A Preferred Stock and the exercise of all Warrants issued to the Liberty Holders or the HMTF Holders, respectively, on the Closing Date (as adjusted for stock splits, stock dividends and similar events affecting the Series A Preferred Stock). "Initial HMTF Holders" means HM4 ICG Qualified Fund, LLC, HM4 ICG Private Fund, LLC, HM PG-IV ICG, LLC, HM 4-SBS ICG Coinvestors, LLC, HM 4-EQ ICG Coinvestors, LLC, and HMTF Bridge ICG, LLC. "Liberty Holders" means Liberty and each of its Affiliates. "Piggyback Registration" has the meaning set forth in Section 2.2. "Registrable Common Stock" means (a) shares of Common Stock issued or issuable upon conversion of the Series A Preferred Stock purchased pursuant to the Stock Purchase Agreement, plus any additional shares of Series A Preferred Stock issued in respect thereof in connection with any stock split, stock dividend or similar event with respect to the Series A Preferred Stock, plus any additional shares of Common Stock issued with respect to such issued shares of Common Stock in connection with any stock splits, stock dividends, or similar events with respect to the Common Stock, (b) shares of Common Stock issued or issuable upon exercise of the Warrants, plus any additional shares of Common Stock issued in respect of such issued shares of Common Stock in connection with any stock split, stock dividend or similar event with respect to the Common Stock and (c) any shares of Common Stock owned by a Holder that are restricted securities within the meaning of Rule 144 or all such shares if such Holder reasonably believes at such time that it may be deemed to be an "affiliate" (as that term is defined in Rule 144) of the Company. "Registrable Securities" means (a) the Registrable Common Stock and (b) any securities of the Company or any successor entity into which Registrable Common Stock may hereafter be converted or changed. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of under such registration statement, (ii) such securities shall have been transferred pursuant to Rule 144, (iii) such securities shall have been otherwise transferred or disposed of, and new certificates therefor not bearing a legend restricting further transfer shall have been delivered by the Company, and subsequent transfer or disposition of them shall not require their registration or qualification under the Securities Act or any similar state law then in force, or (iv) such securities shall have ceased to be outstanding. "Requesting Holders" means the Holders requesting a Demand Registration, and shall include parties deemed "Requesting Holders" pursuant to Section 2.1(a)(iv). "Rule 144" means Rule 144 (or any successor rule of similar effect) promulgated under the Securities Act. PAGE 3 "Selling Holder" means any Holder who is selling Registrable Securities pursuant to a public offering registered hereunder. "Series A Preferred Stock" means collectively the Company's (i) 8% Series A-1 Convertible Preferred Stock, par value $0.01 per share, (ii) 8% Series A-2 Convertible Preferred Stock, par value $0.01 per share, and (iii) 8% Series A-3 Convertible Preferred Stock, par value $0.01 per share. "Shelf Registration" has the meaning set forth in Section 2.3(b). "Underwriter" means a securities dealer who purchases any Registrable Securities as principal and not as part of such dealer's market-making activities. "Warrants" means the Warrants (as defined in the Stock Purchase Agreement) to purchase Common Stock. 1.2 Internal References Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Agreement, and references to the parties shall mean the parties to the Stock Purchase Agreement. ARTICLE II REGISTRATION RIGHTS 2.1 Demand Registration (a) (i) Holders of a majority of the Registrable Securities held by the HMTF Holders may make up to three (3) written requests for a Demand Registration of all or any part of the Registrable Securities held by the HMTF Holders and their direct or indirect transferees; provided, that (A) each such Demand Registration by the HMTF Holders must be in respect of Registrable Securities with a fair market value of at least $50,000,000 or all of the Registrable Securities held by the requesting HMTF Holders if the aggregate fair market value of all of such Registrable Securities is less than $50,000,000 and (B) the HMTF Holders shall not be entitled to a Demand Registration if, during the 120 days preceding such request, the HMTF Holders had requested a Demand Registration unless the Company preempted such Demand Registration in accordance with Section 2.1(e) or the Company postponed the filing thereof in accordance with Section 3.1(a) and the requesting HMTF Holders withdrew the request for such Demand Registration. Upon exercise of all or any portion of the Warrants held by the HMTF Holders, the Holders of a majority of the Registrable Securities held by the HMTF Holders may make one (1) additional written request for a Demand Registration, subject to the proviso set forth in the foregoing sentence. PAGE 4 (ii) Holders of a majority of the Registrable Securities held by the Liberty Holders may make up to six (6) written requests for a Demand Registration of all or any part of the Registrable Securities held by the Liberty Holders and their direct or indirect transferees; provided, that (A) each such Demand Registration by the Liberty Holders must be in respect of Registrable Securities with a fair market value of at least $50,000,000 or all of the Registrable Securities held by the requesting Liberty Holders if the aggregate fair market value of all of such Registrable Securities is less than $50,000,000, and (B) the Liberty Holders shall not be entitled to a Demand Registration if, during the 120 days preceding such request, the Liberty Holders had requested a Demand Registration unless the Company preempted such Demand Registration in accordance with Section 2.1(e) or the Company postponed the filing thereof in accordance with Section 3.1(a) and the requesting Liberty Holders withdrew the request for such Demand Registration. Upon exercise of all or any portion of the Warrants held by the Liberty Holders, the Holders of a majority of the Registrable Securities held by the Liberty Holders may make up to two (2) additional written requests for a Demand Registration, subject to the proviso set forth in the foregoing sentence. (iii) Any request for a Demand Registration will specify the aggregate number of shares of Registrable Securities proposed to be sold by the Requesting Holders and will also specify the intended method of disposition thereof. A registration will not count as a Demand Registration until it has become effective. Should a Demand Registration not become effective due to the failure of a Holder to perform its obligations under this Agreement or the inability of the Requesting Holders to reach agreement with the Underwriters for the proposed sale on price or other customary terms for such transaction, or in the event the Requesting Holders withdraw or do not pursue the request for the Demand Registration (in each of the foregoing cases, provided that at such time the Company is in compliance in all material respects with its obligations under this Agreement), then, subject to Section 2.1(b), such Demand Registration shall be deemed to have been effected (provided that (i) if, the Demand Registration does not become effective because a material adverse change has occurred, or is reasonably likely to occur, in the condition (financial or otherwise), business, assets or results of operations of the Company and its subsidiaries taken as a whole subsequent to the date of the written request made by the Requesting Holders (ii) if the Company withdraws the Demand Registration for any reason or preempts the request for the Demand Registration or (iii) if, after the Demand Registration has become effective, an offering of Registrable Securities pursuant to a registration is interfered with by any stop order, injunction, or other order or requirement of the Commission or other governmental agency or court or (iv) if the Demand Registration is withdrawn at the request of the Requesting Holders pursuant to Section 2.1(f) or Section 3.1(a), then the Demand Registration shall not be deemed to have been effected and will not count as a Demand Registration). (iv) Upon receipt of any request for a Demand Registration by holders of a majority of the Registrable Securities held by the HMTF Holders or the Liberty Holders, as the case may be, the Company shall promptly (but in any event within ten (10) days) give written notice of such proposed Demand Registration to the HMTF Holders, in the case of a request by an HMTF Holder, and to the Liberty Holders, in the case of a request by a Liberty Holder, and all such HMTF Holders or Liberty Holders, as the case may be PAGE 5 (including their respective direct or indirect transferees) shall have the right, exercisable by written notice to the Company within twenty (20) days of their receipt of the Company's notice, to elect to include in such Demand Registration such portion of their Registrable Securities as they may request. All such Holders requesting to have their Registrable Securities included in a Demand Registration in accordance with the preceding sentence shall be deemed to be "Requesting Holders" for purposes of this Section 2.1. (b) In the event that the Requesting Holders withdraw or do not pursue a request for a Demand Registration and, pursuant to Section 2.1(a) hereof, such Demand Registration is deemed to have been effected, the Holders may reacquire such Demand Registration (such that the withdrawal or failure to pursue a request will not count as a Demand Registration hereunder) if the Selling Holders reimburse the Company for any and all Registration Expenses incurred by the Company in connection with such request for a Demand Registration that was withdrawn or not pursued. (c) If the Requesting Holders so elect, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of a "firm commitment" underwritten offering. A majority in interest of the Requesting Holders shall have the right to select the managing Underwriters and any additional investment bankers and managers to be used in connection with any offering under this Section 2.1, subject to the Company's approval, which approval shall not be unreasonably withheld. (d) The Requesting Holders will inform the Company of the time and manner of any disposition of Registrable Common Stock, and agree to reasonably cooperate with the Company in effecting the disposition of the Registrable Common Stock in a manner that does not unreasonably disrupt the public trading market for the Common Stock; provided, however, that the Holders' only right to a shelf registration statement shall be pursuant to Section 2.3. (e) The Company will have the right to preempt any Demand Registration with a primary registration by delivering written notice (within seven business days after the Company has received a request for such Demand Registration) of such intention to the Requesting Holders indicating that the Company has identified a specific business need and use for the proceeds of the sale of such securities and had contemplated such sale of securities prior to receiving the Requesting Holders' notice, and the Company shall use commercially reasonable efforts to effect a primary registration within 90 days of such notice. In the ensuing primary registration, the Holders will have such piggyback registration rights as are set forth in Section 2.2 hereof. Upon the Company's preemption of a requested Demand Registration, such requested registration will not count as the Holders' Demand Registration. If the Company thereafter decides to abandon its intention to pursue such sale of securities, it shall give notice thereof to any preempted Holders within two business days following the Company's decision. The Company may exercise the right to preempt a Demand Registration only once in any 360-day period; provided, that during any 360-day period the Company shall use its reasonable best efforts to permit a period of at least 180 consecutive days during which the Selling Holders may effect a Demand Registration. PAGE 6 (f) Securities to be sold for the account of any Person (including the Company) other than a Requesting Holder shall not be included in a Demand Registration if the managing Underwriter or Underwriters shall advise the Company and the Requesting Holders in writing that the inclusion of such securities will materially and adversely affect the price of the offering (a "Material Adverse Effect"). Furthermore, in the event the managing Underwriter or Underwriters shall advise the Company or the Requesting Holders that even after exclusion of all securities of other Persons (including the Company) pursuant to the immediately preceding sentence, the amount of Registrable Securities proposed to be included in such Demand Registration by Requesting Holders is sufficiently large to cause a Material Adverse Effect, the Registrable Securities of the Requesting Holders to be included in such Demand Registration shall equal the number of shares which the Company and the Requesting Holders are so advised can be sold in such offering without a Material Adverse Effect and such shares shall be allocated pro rata among the Requesting Holders on the basis of the number of Registrable Securities requested to be included in such registration by each such Requesting Holder; provided, however, that if any Registrable Securities requested to be registered pursuant to a Demand Registration under Section 2.1 are excluded from registration hereunder, then the Holder(s) having shares excluded ("Excluded Holders") shall have the right to withdraw all, or any part, of their shares from such registration and if withdrawn in full such Demand Registration shall not be deemed to have been effected and will not count as a Demand Registration. 2.2 Piggyback Registration (a) If the Company proposes to file a registration statement under the Securities Act with respect to an offering of Common Stock for its own account or for the account of another Person (other than a registration statement on Form S-4 or S-8, or, except as provided for in Section 2.3, pursuant to Rule 415 (or any substitute form or rule, respectively, that may be adopted by the Commission)), the Company shall give written notice of such proposed filing to the Holders at the address set forth in the share register of the Company as soon as reasonably practicable (but in no event less than 15 days before the anticipated filing date), undertaking to provide each Holder the opportunity to register on the same terms and conditions such number of shares of Registrable Securities as such Holder may request (a "Piggyback Registration"). Each Holder will have seven business days after receipt of any such notice to notify the Company as to whether it wishes to participate in a Piggyback Registration (which notice shall not be deemed to be a request for a Demand Registration); provided that should a Holder fail to provide timely notice to the Company, such Holder will forfeit any rights to participate in the Piggyback Registration with respect to such proposed offering other than as described in Section 2.1(a)(iv). In the event that the registration statement is filed on behalf of a Person other than the Company, the Company will use its best efforts to have the shares of Registrable Securities that the Holders wish to sell included in the registration statement. If the Company or the Person for whose account such offering is being made shall determine in its sole discretion not to register or to delay the proposed offering, the Company may, at its election, provide written notice of such determination to the Holders and (i) in the case of a determination not to effect the proposed offering, shall thereupon be relieved of the obligation to register such Registrable Securities in connection therewith, and (ii) in the case of a determination to delay a proposed offering, shall thereupon be permitted to delay registering such Registrable Securities for the same period as the delay in respect of the proposed offering. As between the Company and the Selling Holders, the PAGE 7 Company shall be entitled to select the Underwriters in connection with any Piggyback Registration. (b) If the Registrable Securities requested to be included in the Piggyback Registration by any Holder differ from the type of securities proposed to be registered by the Company and the managing Underwriter advises the Company that due to such differences the inclusion of such Registrable Securities would cause a Material Adverse Effect, then (i) the number of such Holders' Registrable Securities to be included in the Piggyback Registration shall be reduced to an amount which, in the opinion of the managing Underwriter, would eliminate such Material Adverse Effect or (ii) if no such reduction would, in the opinion of the managing Underwriter, eliminate such Material Adverse Effect, then the Company shall have the right to exclude all such Registrable Securities from such Piggyback Registration, provided, that no other securities of such type are included and offered for the account of any other Person in such Piggyback Registration. Any partial reduction in number of Registrable Securities of any Holder to be included in the Piggyback Registration pursuant to clause (i) of the immediately preceding sentence shall be effected pro rata based on the ratio which such Holder's requested shares bears to the total number of shares requested to be included in such Piggyback Registration by all Persons other than the Company who have the contractual right to request that their shares be included in such registration statement and who have requested that their shares be included. If the Registrable Securities requested to be included in the registration statement are of the same type as the securities being registered by the Company and the managing Underwriter advises the Company that the inclusion of such Registrable Securities would cause a Material Adverse Effect, the Company will be obligated to include in such registration statement, as to each Holder only a portion of the shares such Holder has requested be registered equal to the ratio which such Holder's requested shares bears to the total number of shares requested to be included in such registration statement by all Persons (other than the Person or Persons initiating such registration request) who have the contractual right to request that their shares be included in such registration statement and who have requested their shares be included. If the Company initiated the registration, then the Company may include all of its securities in such registration statement before any such Holder's requested shares are included. If another security holder initiated the registration, then the Company may not include any of its securities in such registration statement unless all Registrable Securities requested to be included in the registration statement by all Holders are included in such registration statement. If as a result of the provisions of this Section 2.2(b) any Holder shall not be entitled to include all Registrable Securities in a registration that such Holder has requested to be so included, such Holder may withdraw such Holder's request to include Registrable Securities in such registration statement prior to its effectiveness. 2.3 Shelf Registration (a) Holders of a majority of the Registrable Securities held by the Liberty Holders ("Majority Liberty Holders") may, at any time after the first anniversary of the Closing Date, make a written request that the Company effect a shelf registration of a portion of the Registrable Securities held by the Liberty Holders and their direct or indirect transferees (the "Liberty Shelf Registration") pursuant to Rule 415; provided, that the aggregate amount of Registrable Securities that may be included in such Liberty Shelf Registration may not exceed 25% of the Liberty Holders' Initial Amount. Upon receipt of a request for the Liberty Shelf Registration, the PAGE 8 Company shall promptly (but in any event within 10 business days) give written notice of the proposed Liberty Shelf Registration to all other Liberty Holders, and all such Holders (including their direct and indirect transferees) shall have the right to include Registrable Securities in the Liberty Shelf Registration subject to the foregoing limitation. From and after the second anniversary of the Closing Date, the Majority Liberty Holders may make a written request that the Company amend the Liberty Shelf Registration to include in the Liberty Shelf Registration no more than 50% of the Liberty Holders' Initial Amount. Upon receipt of such request, the Company shall promptly (but in any event within 10 business days) give written notice of the proposed amendment to all other Liberty Holders, and all such Holders (including their direct and indirect transferees) shall have the right to include Registrable Securities in the amended Liberty Shelf Registration subject to the foregoing limitation. From and after the third anniversary of the Closing Date, the Majority Liberty Holders' may make a written request that the Company amend the Liberty Shelf Registration to include in the Liberty Shelf Registration no more than 75% of the Liberty Holders' Initial Amount. Upon receipt of such request, the Company shall promptly (but in any event within 10 business days) give written notice of the proposed amendment to all other Liberty Holders, and all such Holders (including their direct and indirect transferees) shall have the right to include Registrable Securities in the amended Liberty Shelf Registration subject to the foregoing limitation. From and after the fourth anniversary of the Closing Date, the Majority Liberty Holders may make a written request that the Company amend the Liberty Shelf Registration to include in the Liberty Shelf Registration up to 100% of the Liberty Holders' Initial Amount. Upon receipt of such request, the Company shall promptly (but in any event within 10 business days) give written notice of the proposed amendment to all other Liberty Holders, and all such Holders (including their direct and indirect transferees) shall have the right to include Registrable Securities in the amended Liberty Shelf Registration up to 100% of the Liberty Holders' Initial Amount. (b) Holders of a majority of the Registrable Securities held by the HMTF Holders ("Majority HMTF Holders") may, at any time after the first anniversary of the Closing Date, make a written request that the Company effect a shelf registration of a portion of the Registrable Securities held by the HMTF Holders and their direct or indirect transferees (the "HMTF Shelf Registration") pursuant to Rule 415; provided, that the aggregate amount of Registrable Securities that may be included in such HMTF Shelf Registration may not exceed 25% of the HMTF Holders' Initial Amount. Upon receipt of a request for the HMTF Shelf Registration, the Company shall promptly (but in any event within 10 business days) give written notice of the proposed HMTF Shelf Registration to all other HMTF Holders, and all such Holders (including their direct and indirect transferees) shall have the right to include Registrable Securities in the HMTF Shelf Registration subject to the foregoing limitation. From and after the second anniversary of the Closing Date, the Majority HMTF Holders may make a written request that the Company amend the HMTF Shelf Registration to include in the HMTF Shelf Registration no more than 50% of the HMTF Holders' Initial Amount. Upon receipt of such request, the Company shall promptly (but in any event within 10 business days) give written notice of the proposed amendment to all other HMTF Holders, and all such Holders (including their direct and indirect transferees) shall have the right to include Registrable Securities in the amended HMTF Shelf Registration subject to the foregoing limitation. From and after the third anniversary of the Closing Date, the Majority HMTF Holders' may make a written request that the Company amend the HMTF Shelf Registration to include in the HMTF Shelf Registration no more than 75% of the HMTF Holders' Initial Amount. Upon receipt of such request, the Company shall promptly PAGE 9 (but in any event within 10 business days) give written notice of the proposed amendment to all other HMTF Holders, and all such Holders (including their direct and indirect transferees) shall have the right to include Registrable Securities in the amended HMTF Shelf Registration subject to the foregoing limitation. From and after the fourth anniversary of the Closing Date, the Majority HMTF Holders may make a written request that the Company amend the HMTF Shelf Registration to include in the HMTF Shelf Registration up to 100% of the HMTF Holders' Initial Amount. Upon receipt of such request, the Company shall promptly (but in any event within 10 business days) give written notice of the proposed amendment to all other HMTF Holders, and all such Holders (including their direct and indirect transferees) shall have the right to include Registrable Securities in the amended HMTF Shelf Registration up to 100% of the HMTF Holders' Initial Amount. (c) If the Company's ability to amend the registration statement for the Liberty Shelf Registration or the HMTF Shelf Registration (each, a "Shelf Registration") to increase the number of Registrable Securities included therein (or to file a new shelf registration statement in respect thereof) in accordance with this Section 2.3 is subject to any contractual limitations that could delay the Company's ability to file or cause to become effective such registration statement, then, if requested by the Majority Liberty Holders (in the case of Section 2.3(a)) or the Majority HMTF Holders (in the case of Section 2.3(b)) the Company shall, in lieu of following the procedure set forth in Section 2.3(a) or Section 2.3(b), as the case may be, file a single registration statement for the Shelf Registration referred to in the applicable provisions of such Sections (and cause such registration statement to become and remain effective for the period set forth in Section 3.1) that would permit the offering of such portion of the Registrable Securities (up to 100%) as may be requested by the Majority Liberty Holders (in the case of Section 2.3(a)) or the Majority HMTF Holders (in the case of Section 2.3(b)), (it being understood and agreed that the Holders of the Registrable Securities would not have the right to offer and sell from such Shelf Registration Registrable Securities other than in accordance with the schedule and amounts set forth in Section 2.3(a) or Section 2.3(b), as applicable). ARTICLE III REGISTRATION PROCEDURES 3.1 Filings; Information In connection with the registration of Registrable Securities pursuant to Section 2.1, Section 2.2 and Section 2.3 hereof, the Company will use its reasonable best efforts to effect the registration of such Registrable Securities as promptly as is reasonably practicable, and in connection with any such request: (a) The Company will expeditiously prepare and file with the Commission a registration statement on any form for which the Company then qualifies and which counsel for the Company shall deem appropriate and available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its reasonable best efforts to cause such filed registration statement to become and remain effective (i) with respect to any Demand Registration or Piggyback Registration, for such period, not to exceed 60 days, as may be reasonably necessary to effect the sale of such securities, (ii) with PAGE 10 respect to a Shelf Registration, until the earlier of the sale of all Registrable Securities thereunder and the fifth anniversary of the Closing Date (or if such Shelf Registration is filed or amended on or after the fourth anniversary of the Closing Date, then the earlier of the sale of all Registrable Securities thereunder and the second anniversary of the effective date of such Shelf Registration) (it being understood that if at any time all the Registrable Securities then permitted to be sold under such Shelf Registration pursuant to Section 2.3 have been sold but the Holders have the right to request the addition of additional Registrable Securities to the Shelf Registration in the future pursuant to Section 2.3, the Company may (at its option) either cause the registration statement to remain effective (notwithstanding the fact that all securities then registrable on such shelf registration statement shall have been sold) and file post-effective amendments when required to permit the sale of the additional Registrable Securities or prepare and file, and cause to become and remain effective, a new shelf registration statement to effect the registration of the additional Registrable Securities when required pursuant to Section 2.3); provided that if the Company shall furnish to the Selling Holder a certificate signed by the Company's Chairman, President or any Executive Vice-President or Vice-President stating that the Company's Board of Directors has determined in good faith that it would be detrimental or otherwise disadvantageous to the Company or its stockholders for such a registration statement to be filed as expeditiously as possible because the sale of Registrable Securities covered by such Registration Statement or the disclosure of information in any related prospectus or prospectus supplement would materially interfere with any acquisition, financing or other material event or transaction which is then intended or the public disclosure of which at the time would be materially prejudicial to the Company, the Company may postpone the filing or effectiveness of a registration statement for a period of not more than 120 days; provided that during any 360-day period the Company shall use its reasonable best efforts to permit a period of at least 180 consecutive days during which the Company will make a registration statement available under this Agreement; and provided further that if (i) the effective date of any registration statement filed pursuant to a Demand Registration would otherwise be at least 45 calendar days, but fewer than 90 calendar days, after the end of the Company's fiscal year, and (ii) the Securities Act requires the Company to include audited financials as of the end of such fiscal year, the Company may delay the effectiveness of such registration statement for such period as is reasonably necessary to include therein its audited financial statements for such fiscal year. If the Company exercises its right to postpone the filing or effectiveness of a registration statement, the applicable Requesting Holders shall be entitled to withdraw their request for such Demand Registration and it shall not count as a Demand Registration. (b) Anything in this Agreement to the contrary notwithstanding, it is understood and agreed that the Company shall not be required to keep any shelf registration effective or useable for offers and sales of the Registrable Securities, file a post effective amendment to a shelf registration statement or prospectus supplement or to supplement or amend any registration statement, if the Company is then involved in discussions concerning, or otherwise engaged in, any material financing or investment, acquisition or divestiture transaction or other material business purpose if the Company determines in good faith that the making of such a filing, supplement or amendment at such time would interfere with such transaction or purpose. The Company shall promptly give the Holders of Registrable Securities written notice of such postponement containing a general statement of the reasons for such postponement and an approximation of the anticipated delay. Upon receipt by a Holder of Registrable Securities of notice of an event of the kind described in this Section 3.1(b), such Holder shall forthwith PAGE 11 discontinue such Holder's disposition of Registrable Securities until such Holder's receipt of notice from the Company that such disposition may continue and of any supplemented or amended prospectus indicated in such notice. The Company shall use its reasonable best efforts to permit sales of Registrable Securities on such shelf registration statement for at least 180 days during any 360-day period. In the event the Company shall give notice of an event of the kind described in this Section 3.1(b), the Company shall extend the period during which the applicable registration statement shall be maintained effective as provided in Section 3.1(a) hereof by the number of days during the period from and including the date of the giving of such notice to the date when the Company shall give notice to the Selling Holders that such dispositions of such Registrable Securities may continue and shall have made available to the Selling Holders any such supplemented or amended prospectus. (c) The Company will, if requested, prior to filing such registration statement or any amendment or supplement thereto, furnish to the Selling Holders, and each applicable managing Underwriter, if any, copies thereof, and thereafter furnish to the Selling Holders and each such Underwriter, if any, such number of copies of such registration statement, amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein) and the prospectus included in such registration statement (including each preliminary prospectus) as the Selling Holders or each such Underwriter may reasonably request in order to facilitate the sale of the Registrable Securities by the Selling Holders. (d) After the filing of the registration statement, the Company will promptly notify the Selling Holders of any stop order issued or, to the Company's knowledge, threatened to be issued by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered. (e) The Company will use its commercially reasonable efforts to qualify the Registrable Securities for offer and sale under such other securities or blue sky laws of such jurisdictions in the United States as the Selling Holders reasonably request; keep each such registration or qualification (or exemption therefrom) effective during the period in which such registration statement is required to be kept effective; and do any and all other acts and things which may be reasonably necessary or advisable to enable each Selling Holder to consummate the disposition of the Registrable Securities owned by such Selling Holder in such jurisdictions; provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph 3.1(e), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction. (f) The Company will as promptly as is practicable notify the Selling Holders, at any time when a prospectus relating to the sale of the Registrable Securities is required by law to be delivered in connection with sales by an Underwriter or dealer, of the occurrence of any event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and promptly make available to the Selling Holders and to the Underwriters any such supplement or amendment. Upon receipt of any notice of the occurrence PAGE 12 of any event of the kind described in the preceding sentence, Selling Holders will forthwith discontinue the offer and sale of Registrable Securities pursuant to the registration statement covering such Registrable Securities until receipt by the Selling Holders and the Underwriters of the copies of such supplemented or amended prospectus and, if so directed by the Company, the Selling Holders will deliver to the Company all copies, other than permanent file copies then in the possession of Selling Holders, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. In the event the Company shall give such notice, the Company shall extend the period during which such registration statement shall be maintained effective as provided in Section 3.1(a) hereof by the number of days during the period from and including the date of the giving of such notice to the date when the Company shall make available to the Selling Holders such supplemented or amended prospectus. (g) The Company will enter into customary agreements (including an underwriting agreement in customary form) and take such other actions (including, without limitation, participation in road shows and investor conference calls) as are required in order to expedite or facilitate the sale of such Registrable Securities. (h) At the request of any Underwriter in connection with an underwritten offering the Company will furnish (i) an opinion of counsel, addressed to the Underwriters, covering such customary matters as the managing Underwriter may reasonably request and (ii) a comfort letter or comfort letters from the Company's independent public accountants covering such customary matters as the managing Underwriter may reasonably request. (i) If requested by the managing Underwriter or any Selling Holder, the Company shall promptly incorporate in a prospectus supplement or post effective amendment such information as the managing Underwriter or any Selling Holder reasonably requests to be included therein, including without limitation, with respect to the Registrable Securities being sold by such Selling Holder, the purchase price being paid therefor by the Underwriters and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering, and promptly make all required filings of such prospectus supplement or post effective amendment. (j) The Company shall promptly make available for inspection by any Selling Holder or Underwriter participating in any disposition pursuant to any registration statement, and any attorney, accountant or other agent or representative retained by any such Selling Holder or Underwriter (collectively, the "Inspectors"), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information requested by any such Inspector in connection with such registration statement; provided, however, that unless the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the registration statement or the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, the Company shall not be required to provide any information under this subparagraph (j) if (A) the Company believes, after consultation with counsel for the Company, that to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such information or (B) if either (1) the Company has requested and been granted from the Commission confidential treatment of such information contained in any filing with the PAGE 13 Commission or documents provided supplementally or otherwise or (2) the Company reasonably determines in good faith that such Records are confidential and so notifies the Inspectors in writing unless prior to furnishing any such information with respect to (A) or (B) such Holder of Registrable Securities requesting such information agrees to enter into a confidentiality agreement in customary form and subject to customary exceptions; provided further, however, that each Holder of Registrable Securities agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake appropriate action and to prevent disclosure of the Records deemed confidential. (k) The Company shall cause the Registrable Securities included in any registration statement to be (A) listed on each securities exchange, if any, on which similar securities issued by the Company are then listed, or (B) authorized to be quoted and/or listed (to the extent applicable) on the Nasdaq National Market if the Registrable Securities so qualify. (l) The Company shall provide a CUSIP number for the Registrable Securities included in any registration statement not later than the effective date of such registration statement. (m) The Company shall cooperate with each Selling Holder and each Underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (n) The Company shall during the period when the prospectus is required to be delivered under the Securities Act, promptly file all documents required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act. (o) The Company will make generally available to its security holders, as soon as reasonably practicable, an earnings statement covering a period of 12 months, beginning within three months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. The Company may require Selling Holders promptly to furnish in writing to the Company such information regarding such Selling Holders, the plan of distribution of the Registrable Securities and other information as the Company may from time to time reasonably request or as may be legally required in connection with such registration. 3.2 Registration Expenses In connection with any Registration effected hereunder, the Company shall pay the following expenses incurred in connection with such registration (the "Registration Expenses"): (i) registration and filing fees with the Commission and the National Association of Securities Dealers, Inc., (ii) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing expenses, (iv) fees and expenses incurred in connection with the listing or quotation of the Registrable Securities, (v) fees and expenses of counsel to the PAGE 14 Company and the reasonable fees and expenses of independent certified public accountants for the Company (including fees and expenses associated with the special audits or the delivery of comfort letters), (vi) the reasonable fees and expenses of any additional experts retained by the Company in connection with such registration, (vii) all roadshow costs and expenses not paid by the Underwriters and (viii) the reasonable fees and expenses of one counsel for the Selling Holders. ARTICLE IV INDEMNIFICATION AND CONTRIBUTION 4.1 Indemnification by the Company The Company agrees to indemnify and hold harmless each Selling Holder and its Affiliates and their respective officers, directors, partners, stockholders, members, employees, agents and representatives and each Person (if any) which controls a Selling Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities, costs and expenses (including reasonable attorneys' fees) caused by, arising out of, resulting from or related to any untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in any registration statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by or based upon any information furnished in writing to the Company by or on behalf of such Selling Holder expressly for use therein or by the Selling Holder's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished the Selling Holder with copies of the same; provided, however, that the Company shall have no obligation to indemnify under this sentence to the extent any such losses, claims, damages or liabilities have been finally and non-appealably determined by a court to have resulted from such Selling Holder's willful misconduct or gross negligence. The Company also agrees to indemnify any Underwriters of the Registrable Securities, their officers and directors and each person who controls such Underwriters on substantially the same basis as that of the indemnification of the Selling Holders provided in this Section 4.1, except insofar as such losses, claims, damages or liabilities are caused by or based upon any information furnished in writing to the Company by or on behalf of such Underwriter expressly for use therein or by the Underwriter's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished the Underwriter with copies of the same; provided, however, that the Company shall have no obligation to indemnify under this sentence to the extent any such losses, claims, damages or liabilities have been finally and non-appealably determined by a court to have resulted from any such Underwriter's willful misconduct or gross negligence. PAGE 15 4.2 Indemnification by Selling Holders Each Selling Holder agrees to indemnify and hold harmless the Company, its officers and directors, and each Person, if any, which controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to each Selling Holder, but only with reference to information furnished in writing by or on behalf of such Selling Holder expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus. Each Selling Holder also agrees to indemnify and hold harmless any Underwriters of the Registrable Securities, their officers and directors and each person who controls such Underwriters on substantially the same basis as that of the indemnification of the Company provided in this Section 4.2, but only with reference to information furnished in writing by or on behalf of such Selling Holder expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus. Each such Selling Holder's liability under this Section 4.2 shall be limited to an amount equal to the net proceeds (after deducting the underwriting discount and expenses) received by such Selling Holder from the sale of such Registrable Securities by such Selling Holder. The obligation of each Selling Holder shall be several and not joint. 4.3 Conduct of Indemnification Proceedings In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 4.1 or Section 4.2, such Person (the "Indemnified Party") shall promptly notify the Person against whom such indemnity may be sought (the "Indemnifying Party") in writing and the Indemnifying Party, upon the request of the Indemnified Party, shall retain counsel reasonably satisfactory to such Indemnified Party to represent such Indemnified Party and any others the Indemnifying Party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the Indemnified Party and the Indemnifying Party and, in the written opinion of counsel for the Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent (not to be unreasonably withheld), or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. PAGE 16 4.4 Contribution If the indemnification provided for in this Article IV is unavailable to an Indemnified Party in respect of any losses, claims, damages or liabilities in respect of which indemnity is to be provided hereunder, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the fullest extent permitted by law contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of such party in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company, a Selling Holder and the Underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and each Selling Holder agrees that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Article IV, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and each Selling Holder shall not be required to contribute any amount in excess of the amount by which the net proceeds of the offering (before deducting expenses) received by such Selling Holder exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. ARTICLE V MISCELLANEOUS 5.1 Participation in Underwritten Registrations No Person may participate in any underwritten registered offering contemplated hereunder unless such Person (a) agrees to sell its securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements, (b) completes and executes all questionnaires, powers of attorney, custody arrangements, indemnities, underwriting agreements and other documents reasonably required PAGE 17 under the terms of such underwriting arrangements and this Agreement and (c) furnishes in writing to the Company such information regarding such Person, the plan of distribution of the Registrable Securities and other information as the Company may from time to time request or as may be legally required in connection with such registration; provided, however, that no such Person shall be required to make any representations or warranties in connection with any such registration other than representations and warranties as to (i) such Person's ownership of his or its Registrable Securities to be sold or transferred free and clear of all liens, claims and encumbrances, (ii) such Person's power and authority to effect such transfer and (iii) such matters pertaining to compliance with securities laws as may be reasonably requested; provided further, however, that the obligation of such Person to indemnify pursuant to any such underwriting agreements shall be several, not joint and several, among such Persons selling Registrable Securities, and the liability of each such Person will be in proportion to, and provided further that such liability will be limited to, the net amount received by such Person from the sale of such Person's Registrable Securities pursuant to such registration. 5.2 Rule 144 The Company covenants that it will file any reports required to be filed by it under the Securities Act and the Exchange Act and that it will take such further action as the Holders may reasonably request to the extent required from time to time to enable the Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such reporting requirements. 5.3 Holdback Agreements The Liberty Holders, for so long as they collectively own Registrable Securities representing 10% or more of the voting power of the outstanding voting securities of the Company, and the HMTF Holders, for so long as they collectively own Registrable Securities representing 10% or more of the voting power of the outstanding voting securities of the Company, severally agree, in the event of an underwritten offering by the Company (whether for the account of the Company or otherwise) not to offer, sell, contract to sell or otherwise dispose of any Registrable Securities, or any securities convertible into or exchangeable or exercisable for such securities, including any sale pursuant to Rule 144 under the Securities Act (except as part of such underwritten offering), during the 14 days prior to, and during the 90-day period (or such lesser period as the lead or managing underwriters may require) beginning on, the effective date of the registration statement for such underwritten offering (or, in the case of an offering pursuant to an effective shelf registration statement pursuant to Rule 415, the pricing date for such underwritten offering), provided that in connection with such underwritten offering each officer and director of the Company and holder of 10% or more of the Common Stock is subject to restrictions substantially equivalent to those imposed on the Liberty Holders and the HMTF Holders. PAGE 18 5.4 Termination The registration rights granted under this Agreement will terminate on April 10, 2015, or such earlier time as there shall no longer be any Registrable Securities; provided, however, that if all shares of Series A Preferred Stock outstanding on such date shall not have been redeemed in full in accordance with Section 10 of the Certificate of Designations, this Agreement shall remain in full force and effect with respect to the Registrable Securities until such time as the shares of Series A Preferred Stock have been so redeemed in full. 5.5 Amendments, Waivers, Etc. This Agreement may not be amended, waived or otherwise modified or terminated except by an instrument in writing signed by the Company and the Holders of at least 50% of the Registrable Securities then held by all the Holders, if the amendment is to be effective against the Holders. 5.6 Counterparts This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement. Each party need not sign the same counterpart. 5.7 Entire Agreement This Agreement (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. 5.8 Governing Law This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof. 5.9 Assignment of Registration Rights Each Holder of the Registrable Securities may assign all or any part of its rights under this Agreement to any person to whom such Holder sells, transfers, assigns or pledges such Registrable Securities. In the event that the Holder shall assign its rights pursuant to this Agreement in connection with the transfer of less than all its Registrable Securities, the Holder shall also retain its rights with respect to its remaining Registrable Securities. PAGE 19 IN WITNESS WHEREOF, the Company and each Holder has caused this Agreement to be signed on its behalf by its officer thereunto duly authorized as of the date first written above. ICG COMMUNICATIONS, INC. By: /s/ H. Don Teague Name: H. Don Teague Title: Executive Vice President HMTF BRIDGE ICG, LLC HM4 ICG QUALIFIED FUND, LLC HM4 ICG PRIVATE FUND, LLC HM PG-IV ICG, LLC HM 4-SBS ICG COINVESTORS, LLC HM 4-EQ ICG COINVESTORS, LLC By: /s/ David W. Knickel Name: David W. Knickel Title: Vice President LIBERTY MEDIA CORPORATION By: /s/ Charles Y. Tanabe Name: Charles Y.Tanabe Title: Senior Vice President GLEACHER/ICG INVESTORS LLC By: /s/ Richard Trabulsi Name: Richard Trabulsi Title: Member
SCHEDULE I Series of Number . . . . . . Preferred. . of Preferred Number of Purchase Price Purchasers Stock Shares Warrants of the Shares Liberty Media Corporation . . Series A-1 50,000 6,666,667 $ 500,000,000 HMTF Bridge ICG, LLC. . . . . Series A-2 11,500 1,533,334 $ 115,000,000 HM4 ICG Qualified Fund, LLC . Series A-2 10,464 1,395,253 $ 104,644,000 HM4 ICG Private Fund, LLC . . Series A-2 74 9,885 $ 741,000 HM PG-IV ICG, LLC . . . . . . Series A-2 557 74,281 $ 5,571,000 HM 4-SBS ICG Coinvestors, LLC Series A-2 251 33,412 $ 2,506,000 HM 4-EQ ICG Coinvestors, LLC. Series A-2 154 20,502 $ 1,538,000 Gleacher/ICG Investors LLC. . Series A-3 2,000 266,666 $ 20,000,000
EX-10.4 5 CERTIFICATE OF DESIGNATION PAGE 1 EXHIBIT 10.4 ICG COMMUNICATIONS, INC. CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF 8% SERIES A-1 CONVERTIBLE PREFERRED STOCK, 8% SERIES A-2 CONVERTIBLE PREFERRED STOCK AND 8% SERIES A-3 CONVERTIBLE PREFERRED STOCK, AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF 8% Series A-1 Convertible Preferred Stock due 2015 8% Series A-2 Convertible Preferred Stock due 2015 8% Series A-3 Convertible Preferred Stock due 2015 ICG COMMUNICATIONS, INC., a company organized and existing under the General Corporation Law of the State of Delaware (the "Company"), certifies that pursuant to the authority contained in its Certificate of Incorporation (the "Certificate of Incorporation") and its By-laws (the "By-laws"), and in accordance with Section 151 of the General Corporation Law of the State of Delaware (the "DGCL"), the board of directors of the Company (the "Board of Directors") at a meeting duly called and held on April 6, 2000 duly approved and adopted the following resolution, which resolution remains in full force and effect on the date hereof: RESOLVED, that pursuant to the authority vested in the Board of Directors by the Certificate of Incorporation and By-laws, the Board of Directors does hereby create, authorize and provide for the issue of three series of the Company's preferred stock, par value $0.01 per share ("Preferred Stock"), having the following designation, voting powers, preferences and relative, participating, optional and other special rights: Certain capitalized terms used herein are defined in Section 17. 1. Number and Designation. The Company shall have a series of Preferred Stock, which shall be designated as its 8% Series A-1 Convertible Preferred Stock due 2015 (the "Series A-1 Preferred Stock"). The number of shares constituting the Series A-1 Preferred Stock shall be 50,000. The Company shall have a series of Preferred Stock, which shall be designated as its 8% Series A-2 Convertible Preferred Stock due 2015 (the "Series A-2 Preferred Stock"). The number of shares constituting the Series A-2 Preferred Stock shall be 23,000. The Company shall have a series of Preferred Stock, which shall be designated as its 8% Series A-3 Convertible Preferred Stock due 2015 (the "Series A-3 Preferred Stock"). The number of shares constituting the Series A-3 Preferred Stock shall be 75,000. The Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3 PAGE 2 Preferred Stock are referred to collectively herein, either conjunctively or disjunctively as appropriate from the context, as the "Series A Preferred Stock." Except to the extent otherwise specified in this Certificate of Designation, the powers, preferences and relative, participating, optional and other special rights of the Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3 Preferred Stock shall be identical and, except as provided herein or as may be required by applicable law, the Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3 Preferred Stock shall be treated as a single class. Unless otherwise specified, references herein to any "Section" refer to the Section number specified in this Certificate of Designation. 2. Issuance. The Company may issue up to 50,000 shares of Series A-1 Preferred Stock, 23,000 shares of Series A-2 Preferred Stock and 75,000 shares of Series A-3 Preferred Stock, each in accordance with the Purchase Agreement; provided, however, that without the unanimous consent of the holders of the Series A Preferred Stock the Company shall not issue (i) any additional shares of Series A Preferred Stock such that the aggregate number of shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3 Preferred Stock at any one time outstanding exceeds 75,000 shares, (ii) more than 2,000 shares of Series A-3 Preferred Stock to the initial purchaser thereof in accordance with the Purchase Agreement or (iii) more than 73,000 shares of Series A-3 Preferred Stock from time to time upon automatic conversion of shares of Series A-1 Preferred Stock or Series A-2 Preferred Stock into Series A-3 Preferred Stock as provided in Section 12(i). 3. Registered Form; Liquidation Preference; Registrar. Certificates for shares of Series A Preferred Stock shall be issuable only in registered form. The initial Liquidation Preference per share of Series A Preferred Stock shall be $10,000 per share plus accrued and unpaid dividends. The Company shall serve as initial Registrar and Transfer Agent (the "Registrar") for the Series A Preferred Stock. 4. Registration; Transfer. Shares of the Series A Preferred Stock have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be resold, pledged or otherwise transferred prior to the date when they may be resold pursuant to Rule 144 under the Securities Act other than (i) to the Company, (ii) pursuant to an exemption from registration under the Securities Act or (iii) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Until such time as it is no longer required pursuant to the Securities Act, certificates evidencing the Series A Preferred Stock shall contain a legend (the "Restricted Shares Legend") evidencing the foregoing restrictions in substantially the form set forth on the form of Series A Preferred Stock attached hereto as Exhibit A. In the event of certain transfers of shares of Series A-1 Preferred Stock or Series A-2 Preferred Stock, the transferred shares shall automatically be converted into shares of Series A-3 Preferred Stock as provided in Section 12(i). 5. Paying Agent and Conversion Agent. PAGE 3 (a) The Company shall maintain (i) an office or agency where shares of Series A Preferred Stock may be presented for payment (the "Paying Agent"), (ii) an office or agency where shares of Series A Preferred Stock may be presented for conversion (the "Conversion Agent"), and (iii) a Registrar, which shall be an office or an agency where shares of Series A Preferred Stock may be presented for transfer. The Company may appoint the Registrar, the Paying Agent and the Conversion Agent and may appoint one or more additional paying agents and one or more additional conversion agents in such other locations as it shall determine. The term "Paying Agent" includes any additional paying agent, and the term "Conversion Agent" includes any additional conversion agent. The Company may change any Paying Agent or Conversion Agent without prior notice to any holder. The Company shall notify the Registrar of the name and address of any Paying Agent or Conversion Agent appointed by the Company. If the Company fails to appoint or maintain another entity as Paying Agent or Conversion Agent, the Registrar shall act as such. Notwithstanding the foregoing, the Company or any of its Affiliates may act as Paying Agent, Registrar, coregistrar or Conversion Agent. (b) Neither the Company nor the Registrar shall be required (A) to issue, countersign or register the transfer of or exchange any share of Series A Preferred Stock during a period beginning at the opening of business 15 days before any Redemption Date (as defined under Section 10(d)) and ending at the close of business on such Redemption Date or (B) to register the transfer of or exchange any share of Series A Preferred Stock so selected for redemption. (c) If shares of Series A Preferred Stock are issued upon the transfer, exchange or replacement of shares of Series A Preferred Stock bearing the Restricted Shares Legend, or if a request is made to remove such Restricted Shares Legend on shares of Series A Preferred Stock, the shares of Series A Preferred Stock so issued shall bear the Restricted Shares Legend, or the Restricted Shares Legend shall not be removed, as the case may be, unless the holders of such shares shall request such Legend be removed, and outside counsel for such holders reasonably determines that the transfer of such shares is no longer restricted by the Securities Act and outside counsel for the Company reasonably concurs in such determination. (d) Each holder of a share of Series A Preferred Stock agrees to indemnify the Company and the Registrar against any liability that directly results from the transfer, exchange or assignment by such holder of such holder's share of Series A Preferred Stock in violation of any provision of this Certificate of Designation and/or applicable Federal or state securities law; provided, however, that such indemnity shall not apply to acts of willful misconduct or gross negligence on the part of the Company or the Registrar, as the case may be. (e) Payments due on the shares of Series A Preferred Stock shall be payable at the office or agency of the Paying Agent maintained for such purpose in The City of New York and at any other office or agency maintained by the Paying Agent for such purpose. If any such payment is in cash, it shall be payable in United States dollars by check drawn on, or wire transfer (provided that appropriate wire instructions have been received by the Paying Agent at least 15 days prior to the applicable date of payment) to a United States dollar account maintained by the holder with, a bank located in New York City; provided that at the option of the Company payment of dividends in cash may be made by check mailed to the address of the person entitled thereto as such address shall appear in the Series A Preferred Share Register; and PAGE 4 provided further that any payment to a holder in excess of $100,000 shall be made by wire transfer at the request of such holder. 6. Dividend Rights. (a) The holders of Series A Preferred Stock shall be entitled to cumulative dividends, in preference to dividends on any Junior Shares, which shall accrue as provided herein. Dividends on each share of Series A Preferred Stock will accrue on a daily basis at the rate of 8.00% per annum of the then effective Liquidation Preference of such share from and including the Closing Date to the first to occur of (i) the date on which such share is redeemed in accordance with Section 10, (ii) the date on which such share is converted in accordance with Section 12 (except for a conversion of shares of Series A-1 Preferred Stock or Series A-2 Preferred Stock into shares of Series A-3 Preferred Stock pursuant to Section 12(i))or (iii) the date the Company is liquidated, dissolved or wound up in accordance with Section 9(c). Dividends shall accrue as provided herein whether or not such dividends have been declared, whether or not there are any unrestricted funds of the Company legally available for the payment of dividends and whether or not such dividends are then payable in cash as provided in Section 11. The Company will take all actions required or permitted under the DGCL to permit the payment or accrual of dividends on the Series A Preferred Stock. On each Dividend Payment Date, commencing June 30, 2000, to and including the June 30, 2005 Dividend Payment Date, accrued dividends on a share of the Series A Preferred Stock for the preceding Dividend Period shall be added cumulatively to and thereafter remain a part of the Liquidation Preference of such share. Thereafter, accrued dividends shall be payable quarterly on each Dividend Payment Date, commencing on September 30, 2005, as and when declared out of funds legally available therefor, to the holders of record of the Series A Preferred Stock as of the close of business on the applicable Dividend Record Date. Accrued dividends that are not paid in full in cash on any such Dividend Payment Date (whether or not declared and whether or not there are sufficient funds legally available for the payment thereof) shall be added cumulatively to the Liquidation Preference on the applicable Dividend Payment Date and thereafter remain a part thereof. Accrued dividends added to the Liquidation Preference of a share of Series A Preferred Stock in accordance with the foregoing provisions of this Section 6(a) are sometimes referred to in this Certificate as "Accumulated Dividends". For purposes of determining the amount of dividends "accrued" (i) as of the first Dividend Payment Date and as of any date that is not a Dividend Payment Date, such amount shall be calculated on the basis of the rate per annum specified above in this paragraph for the actual number of days elapsed from and including the Closing Date (in case of the first Dividend Payment Date and any date prior to the first Dividend Payment Date) or the last preceding Dividend Payment Date (in case of any other date) to the date as of which such determination is to be made, based on a 360-day year, and (ii) as of any Dividend Payment Date after the first Dividend Payment Date, such amount shall be calculated on the basis of such rate per annum based on a 360-day year of twelve 30-day months. Whenever the Company shall declare or pay any dividend on any Series A Preferred Stock, the holders of each share of Series A Preferred Stock shall be entitled to receive such dividend on a per share basis. (b) If a Change of Control occurs prior to June 30, 2005 (the time and date such Change of Control occurs being the "Change of Control Date"), an amount equal to the Special Dividend shall be added to the Liquidation Preference of each share of the Series A Preferred PAGE 5 Stock as of the Change of Control Date and thereafter remain a part thereof. The Special Dividend shall be added to the Liquidation Preference without regard to whether or not the Company has made or intends to make a Change of Control Offer or Purchase Offer. (c) In addition to all dividends provided for above, whenever the Company shall declare or pay any dividend in cash on any Common Stock, the holders of Series A Preferred Stock shall be entitled to receive such dividend on an as converted basis. Dividends payable pursuant to this Section 6(c) shall not reduce any dividends otherwise payable pursuant to Section 6(a) or 6(b). 7. Payment of Dividend; Mechanics of Payment; Dividend Rights Preserved. (a) Subject to Sections 6 and 11, dividends on any share of Series A Preferred Stock that are payable, and are punctually paid or duly provided for, on any Dividend Payment Date shall be paid in cash to the person in whose name such share of Series A Preferred Stock (or one or more predecessor shares of Series A Preferred Stock) is registered at the close of business on the next preceding March 15, June 15, September 15 and December 15 (each, a "Dividend Record Date"). (b) Except as required by instruments governing the Preferred Stock Mandatorily Redeemable 2009 of the Company in accordance with their terms on the date hereof, unless full cumulative dividends on all outstanding shares of Series A Preferred Stock for all past Dividend Periods shall have been declared and paid, or declared and a sufficient sum for the payment thereof set apart, then: (i) no dividend (other than (A) with respect to Junior Shares, a dividend payable solely in Junior Shares, (B) with respect to Parity Shares, a dividend payable solely in Junior Shares or Parity Shares or (C) with respect to Parity Shares, a partial dividend paid pro rata on such Parity Shares and the shares of Series A Preferred Stock) shall be declared or paid upon, or any sum set apart for the payment of dividends upon, any Junior Shares or Parity Shares, respectively; (ii) no other distribution shall be declared or made upon, or any sum set apart for the payment of any distribution upon, any Junior Shares or Parity Shares; (iii) no Junior Shares or Parity Shares or any warrants, rights, calls or options (other than any cashless exercises of options or buybacks of options or restricted stock from present or former employees, directors or consultants) exercisable for or convertible into any Parity Share or Junior Share shall be purchased, redeemed or otherwise acquired (other than in exchange for or conversion of other Junior Shares or Parity Shares, respectively) by the Company or any of its subsidiaries; (iv) no monies shall be paid into or set apart or made available for a sinking or other like fund for the purchase, redemption or other acquisition of any Junior Shares or Parity Shares or any warrants, rights, calls or options exercisable for or convertible into any Parity Shares or Junior Shares by the Company or any of its subsidiaries (other than any cashless exercises of options or option buybacks); and PAGE 6 (v) other than in accordance with Section 13 or 14 of this Certificate of Designation, no Series A Preferred Stock shall be purchased, redeemed or otherwise acquired by the Company or any of its subsidiaries and no monies shall be paid into, or set apart or made available for a sinking or other like fund for any such purpose, unless all outstanding shares of Series A Preferred Stock shall be purchased, redeemed or otherwise acquired by the Company. Except as provided in Sections 6, 12 or 13, holders of Series A Preferred Stock will not be entitled to any dividends, whether payable in cash, property or stock, in excess of the full cumulative dividends as herein described. (c) The Company will notify the Registrar and make a public announcement no later than the close of business on the tenth Business Day prior to the Record Date for each dividend as to whether it will pay such dividend. (d) Subject to the foregoing provisions of this Section 7, each share of Series A Preferred Stock delivered under this Certificate of Designation upon registration of transfer of or in exchange for or in lieu of any other share of Series A Preferred Stock shall carry the rights to dividends accumulated and unpaid, and to accrue, that were carried by such other shares of Series A Preferred Stock. (e) The holder of record of a share of Series A Preferred Stock at the close of business on a Dividend Record Date with respect to the payment of dividends on the shares of Series A Preferred Stock will be entitled to receive such dividends with respect to such share of Series A Preferred Stock on the corresponding Dividend Payment Date, notwithstanding the conversion of such share after such Dividend Record Date and prior to such Dividend Payment Date. 8. Voting Rights. (a) The holders of record of shares of Series A Preferred Stock shall not be entitled to any voting rights except as hereinafter provided in this Section 8 or as otherwise provided by law. (b) The holders of record of shares of Series A Preferred Stock shall be entitled to vote on all matters that the holders of the Company's Common Stock are entitled to vote upon. (c) In addition to the voting rights set forth above, the approval of the holders of at least the Applicable Percentage of the then Outstanding shares of Series A Preferred Stock voting or consenting, as the case may be, as one separate class, will be required for the Company to: (i) amend the Certificate of Incorporation, this Certificate of Designation or the By-Laws so as to (A) affect adversely the rights, preferences (including, without limitation, liquidation preferences, conversion price, dividend rate and Optional Redemption provisions), privileges or voting rights of holders of any shares of Series A Preferred Stock, or (B) increase or decrease the number of authorized shares of Series A Preferred Stock, or (C) alter the relative rights, preferences (including, without limitation, PAGE 7 liquidation preferences, conversion price, dividend rate and Optional Redemption provisions), privileges or voting rights as among holders of the shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock or Series A-3 Preferred Stock; (ii) in a single transaction or series of related transactions, consolidate or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets to, any person or adopt a plan of liquidation or dissolution; (iii) enter into, or permit any of its subsidiaries to enter into, any agreement or transaction that would impose material restrictions on the Company's ability to honor the exercise of any rights of the holders of the Series A Preferred Stock or on the ability of a holder of shares of Series A Preferred Stock to exercise full rights of ownership thereof; (iv) other than as contemplated by Section 12(d)(vi) and Section 12(d)(vii) or as otherwise required by instruments governing securities of the Company in existence on the date of the Purchase Agreement in accordance with their terms on such date, authorize, create, modify the terms of, increase the authorized amount of or issue any shares of any class or series of equity of the Company that would be deemed to be Parity Shares or Senior Shares with respect to rights relating to (a) payments of dividends or distributions, (b) rights to redemption, or (c) distribution of assets upon liquidation, dissolution or winding-up, other than issuances of shares of Series A-3 Preferred Stock upon the conversion of shares of Series A-1 Preferred Stock or Series A-2 Preferred Stock in accordance with Section 12(i); or (v) commence or effect any tender or exchange offer for all or any portion of the Common Stock or permit any subsidiary to do so. As used in this Section 8(c), the "Applicable Percentage" shall mean (A) in the case of clauses (i) and (iii), 75%; (B) in the case of clause (ii) in the case of a transaction that constitutes a "Qualifying Transaction", a majority, and in the case of a transaction that does not constitute a Qualifying Transaction, 69%; (C) in the case of clause (iv) with respect to Senior Shares, 75%, and with respect to Parity Shares, 69%; and (D) in the case of clause (v), a majority. As used herein, a "Qualifying Transaction" shall mean a transaction in which the Company consolidates or merges with or into, or sells, assigns, transfers, leases, conveys or otherwise disposes of all or substantially all of its assets to, a person (i) if the Company is the surviving or continuing person and the Series A Preferred Stock shall remain outstanding without any amendment that would adversely affect the preferences, rights or powers of the Series A Preferred Stock, or (ii) if the Company is not the surviving or continuing person, (a) the entity formed by such consolidation or merger or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (in any such case, the "resulting entity") is a corporation or limited liability company organized and existing under the laws of Bermuda, the United States or any State thereof or the District of Columbia; and (b) the shares of Series A Preferred Stock are converted into or exchanged for and become shares of such resulting entity, having in respect of such resulting entity the same (or more favorable) powers, preferences and relative, participating, optional or other special rights that the shares of Series A Preferred Stock had immediately prior to such transaction; and, in either case, the Company shall have delivered PAGE 8 to the Registrar an Officers' Certificate and an opinion of counsel, reasonably satisfactory in form and content, each stating that such consolidation, merger, conveyance or transfer complies with this Section 8 and that all conditions precedent herein provided for relating to such transaction have been complied with. In addition to, and not in lieu of, any approval otherwise required pursuant to Section 8(c)(i), the approval of the holders of a majority of the outstanding shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock or Series A-3 Preferred Stock, as the case may be, shall be required for the Company to amend the Certificate of Incorporation, this Certificate of Designation or the By-laws so as to affect adversely the rights, preferences (including, without limitation, liquidation preferences, conversion price, dividend rate and Optional Redemption provisions), privileges or voting rights of the holders of Series A-1 Preferred Stock, Series A-2 Preferred Stock or Series A-3 Preferred Stock, respectively. (d) (i) For so long as the members of the HMTF Group in the aggregate own any combination of shares of Common Stock and Series A-2 Preferred Stock representing an amount of Common Stock (on an as-converted basis) that, taken together, equals at least 4,107,143 shares of Common Stock (as adjusted for any stock dividends, splits and combinations and similar events affecting the Common Stock from time to time), the holders of the Series A-2 Preferred Stock, voting as a single class by a plurality of the votes cast, shall be entitled to elect, at any annual meeting of stockholders or special meeting held in place thereof, or at a special meeting of the holders of the Series A-2 Preferred Stock called as hereinafter provided, one director, or if greater, such number (rounded up to the next whole number) equal to 10% of the then authorized number of members of the Company's Board of Directors, to serve on the Board of Directors. At any time after voting power to elect such director(s) shall have become vested and be continuing in the holders of the Series A-2 Preferred Stock pursuant to this paragraph, or if a vacancy shall exist in the office of a director elected by the holders of the Series A-2 Preferred Stock at a time when the holders of the Series A-2 Preferred Stock are entitled to elect a director pursuant to this paragraph, a proper officer of the Company may, and upon the written request of the holders of record of at least twenty-five percent (25%) of the Series A-2 Preferred Stock then outstanding addressed to the Secretary of the Company shall, call a special meeting of the holders of the Series A-2 Preferred Stock for the sole purpose of electing the director that such holders are entitled to elect. If such meeting shall not be called by a proper officer of the Company within twenty (20) days after personal service of said written request upon the Secretary of the Company, or within twenty (20) days after mailing the same within the United States by certified mail, addressed to the Secretary of the Company at its principal executive offices, then the holders of at least twenty-five percent (25%) of the Series A-2 Preferred Stock then outstanding may designate in writing one of their number to call such meeting at the expense of the Company, and such meeting may be called by the person so designated upon the notice required for the annual meeting of stockholders of the Company and shall be held at the place for holding the annual meetings of stockholders. As used herein, "HMTF Group" means Hicks, Muse, Tate & Furst Incorporated, a Texas corporation, and its Affiliates and their respective officers, directors, partners, members, stockholders and employees (and members of their respective families and trusts for the primary benefit of such family members) and HM4 ICG Qualified Fund, LLC; HM4 ICG Private Fund, LLC; HM PG-IV ICG, LLC; HM 4-SBS ICG Coinvestors, LLC; HM4-EQ ICG Coinvestors, LLC and HMTF Bridge ICG, LLC; and their respective Affiliates. The action permitted or required to be taken by the holders of the Series A- PAGE 9 2 Preferred Stock pursuant to this Section 8(d)(i) may be taken (1) at any annual or special meeting of stockholders or at a special meeting of the holders of the Series A-2 Preferred Stock, or (2) without a meeting, without prior notice, and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the Series A-2 Preferred Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares held by the holders of the Series A-2 Preferred Stock entitled to vote thereon were present and voted and shall be delivered to the Company by delivery to its address listed in Section 8.2 of the Purchase Agreement. (ii) For so long as the members of the Liberty Group in the aggregate own any combination of shares of Common Stock and Series A-1 Preferred Stock representing an amount of Common Stock (on an as-converted basis) that, taken together, equals 2,687,571 shares of Common Stock (as adjusted for any stock dividends, splits and combinations and similar events affecting the Common Stock from time to time), the holders of the Series A-1 Preferred Stock, voting as a single class by a plurality of the votes cast or by written consent of a majority in interest of the holders of the Series A-1 Preferred Stock, shall be entitled to elect one director, or if greater, such number (rounded up to the next whole number) equal to 10% of the then authorized number of members of the Company's Board of Directors, to serve on the Board of Directors, at any annual meeting of stockholders or special meeting held in place thereof, or at a special meeting of the holders of the Series A-1 Preferred Stock called as hereinafter provided. At any time after voting power to elect such director(s) shall have become vested and be continuing in the holders of the Series A-1 Preferred Stock pursuant to this paragraph, or if a vacancy shall exist in the office of a director elected by the holders of the Series A-1 Preferred Stock at a time when the holders of the Series A-1 Preferred Stock are entitled to elect a director pursuant to this paragraph, a proper officer of the Company may, and upon the written request of the holders of record of at least twenty-five percent (25%) of the Series A-1 Preferred Stock then outstanding addressed to the Secretary of the Company shall, call a special meeting of the holders of the Series A-1 Preferred Stock for the sole purpose of electing the director that such holders are entitled to elect. If such meeting shall not be called by a proper officer of the Company within twenty (20) days after personal service of said written request upon the Secretary of the Company, or within twenty (20) days after mailing the same within the United States by certified mail, addressed to the Secretary of the Company at its principal executive offices, then the holders of at least twenty-five percent (25%) of the Series A-1 Preferred Stock then outstanding may designate in writing one of their number to call such meeting at the expense of the Company, and such meeting may be called by the person so designated upon the notice required for the annual meeting of stockholders of the Company and shall be held at the place for holding the annual meetings of stockholders. As used herein, (i) "Liberty Group" means Liberty and its Affiliates, and (ii) "Liberty" means Liberty Media Corporation, a Delaware corporation, provided that if substantially all of the assets of Liberty Media Corporation are at any time thereafter contributed to Liberty Media Group LLC, a Delaware limited liability company, then from and after such contribution, Liberty shall mean Liberty Media Group LLC. The action permitted or required to be taken by the holders of the Series A-1 Preferred Stock pursuant to this Section 8(d)(ii) may be taken (1) at any annual or special meeting of stockholders or at a special meeting of the holders of the Series A-1 Preferred Stock, or (2) without a meeting, without prior PAGE 10 notice, and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the Series A-1 Preferred Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares held by the holders of the Series A-1 Preferred Stock entitled to vote thereon were present and voted and shall be delivered to the Company by delivery to its address listed in Section 8.2 of the Purchase Agreement. (iii) For so long as the members of the Liberty Group own any combination of shares of Common Stock and Series A-1 Preferred Stock representing an amount of Common Stock (on an as-converted basis) that, taken together, equals 8,928,571 shares of Common Stock (as adjusted for any stock dividends, splits and combinations and similar events affecting the Common Stock from time to time), the holders of the Series A-1 Preferred Stock, voting as a single class by plurality of the votes cast or by written consent of a majority in interest of the holders of the Series A-1 Preferred Stock, shall be entitled to elect one additional director, or if greater, such number (rounded up to the next whole number) of additional directors equal to 10% of the then authorized number of members of the Company's Board of Directors, to serve on the Board of Directors, at any annual meeting of stockholders or special meeting held in place thereof, or at a special meeting of the holders of the Series A-1 Preferred Stock called as hereinafter provided. At any time after voting power to elect such director(s) shall have become vested and be continuing in the holders of the Series A-1 Preferred Stock pursuant to this paragraph, or if a vacancy shall exist in the office of a director elected by the holders of the Series A-1 Preferred Stock at a time when the holders of the Series A-1 Preferred Stock are entitled to elect a director pursuant to this paragraph, a proper officer of the Company may, and upon the written request of the holders of record of at least twenty-five percent (25%) of the Series A-1 Preferred Stock then outstanding addressed to the Secretary of the Company shall, call a special meeting of the holders of the Series A-1 Preferred Stock for the sole purpose of electing the director that such holders are entitled to elect. If such meeting shall not be called by a proper officer of the Company within twenty (20) days after personal service of said written request upon the Secretary of the Company, or within twenty (20) days after mailing the same within the United States by certified mail, addressed to the Secretary of the Company at its principal executive offices, then the holders of at least twenty-five percent (25%) of the Series A-1 Preferred Stock then outstanding may designate in writing one of their number to call such meeting at the expense of the Company, and such meeting may be called by the person so designated upon the notice required for the annual meeting of stockholders of the Company and shall be held at the place for holding the annual meetings of stockholders. The action permitted or required to be taken by the holders of the Series A-1 Preferred Stock pursuant to this Section 8(d)(iii) may be taken (1) at any annual or special meeting of stockholders or at a special meeting of the holders of the Series A-1 Preferred Stock, or (2) without a meeting, without prior notice, and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the Series A-1 Preferred Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares held by the holders of the Series A-1 Preferred Stock entitled to vote thereon were present and voted and shall be delivered to the Company by delivery to its address listed in Section 8.2 of the Purchase Agreement. PAGE 11 (e) In exercising the voting rights set forth in Section 8(b), each share of Series A Preferred Stock shall be entitled to vote on an as-converted basis with the holders of the Company's Common Stock. Except as set forth in the preceding sentence and in Section 8(d), each share of Series A Preferred Stock entitled to vote shall have one vote per share, provided, however, that if the Company issues any other series of preferred stock which has the right to vote with the Series A Preferred Stock as a single class on any matter not specified in this Section 8, then the Series A Preferred Stock shall have with respect to such matters one vote per $10,000 of the aggregate liquidation preference of all shares of Series A Preferred Stock; and provided further that without the unanimous consent of the holders of the Series A Preferred Stock, the Company shall not issue any other series of preferred stock which has the right to vote with the Series A Preferred Stock as a single class on any matter not specified in this Section 8, unless such other series of preferred stock shall have with respect to such matters one vote per $10,000 of the aggregate liquidation preference of all shares of such other series of preferred stock and such issuance is otherwise permitted hereunder. Except as otherwise required by applicable law or as set forth herein, the shares of Series A Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers and the consent of the holders thereof shall not be required for the taking of any corporate action. 9. Ranking; Liquidation. (a) The shares of Series A Preferred Stock will, with respect to dividend rights and rights on liquidation, winding-up and dissolution, rank (i) senior to all shares of Common Stock (whether issued in one or more classes) and to each other class of capital stock or series of Preferred Stock of the Company (other than the Preferred Stock Mandatorily Redeemable 2009 of the Company) the terms of which do not expressly provide that it ranks senior to or on a parity with the shares of Series A Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Company (collectively referred to, together with all shares of Common Stock (whether issued in one or more classes) of the Company, as "Junior Shares"); (ii) on a parity with the Preferred Stock Mandatorily Redeemable 2009 of the Company and with each other class of capital stock or series of Preferred Stock of the Company issued by the Company in compliance with Section 8, the terms of which expressly provide that such class or series will rank on a parity with the shares of Series A Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Company (collectively referred to as "Parity Shares"); and (iii) junior to each class of capital stock or series of Preferred Stock of the Company issued by the Company in compliance with Section 8, the terms of which expressly provide that such class or series will rank senior to the shares of Series A Preferred Stock as to dividend rights and rights upon liquidation, winding-up and dissolution of the Company (collectively referred to as "Senior Shares"). The Series A-2 Preferred Stock and Series A-3 Preferred Stock shall be deemed to be Parity Shares with respect to the Series A-1 Preferred Stock; the Series A-1 Preferred Stock and Series A-3 Preferred Stock shall be deemed to be Parity Shares with respect to the Series A-2 Preferred Stock; and the Series A-1 Preferred Stock and Series A-2 Preferred Stock shall be deemed to be Parity Shares with respect to the Series A-3 Preferred Stock. (b) No dividend whatsoever shall be declared or paid upon, or any sum set apart for the payment of dividends upon, any outstanding shares of Series A Preferred Stock with respect to any dividend period unless all dividends for all preceding dividend periods have been PAGE 12 declared and paid, or declared and a sufficient sum set apart for the payment of such dividends, upon all outstanding Senior Shares. (c) In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of the shares of Series A Preferred Stock then Outstanding shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of shares of Common Stock or Junior Shares by reason of their ownership thereof, an amount equal to the greater of (i) the then effective Liquidation Preference of their shares of Series A Preferred Stock, plus an amount equal to all dividends accrued and unpaid thereon from the last Dividend Payment Date to the date fixed for liquidation, dissolution or winding-up or (ii) the amount such holders would receive if such holders converted their shares of Series A Preferred Stock into Common Stock immediately prior to such liquidation, dissolution or winding up. If upon the occurrence of such event the assets of the Company shall be insufficient to permit the payment to such holders of the full preferential amount and all liquidating payments on all shares of Series A Preferred Stock and any Parity Shares, the entire assets of the Company legally available for distribution shall be distributed among the holders of the shares of Series A Preferred Stock and the holders of all Parity Shares ratably in accordance with the respective amounts that would be payable on such shares of Series A Preferred Stock and any such Parity Shares if all amounts payable thereon were paid in full. After payment of the full preferential amount (and, if applicable, an amount equal to a pro rata dividend to the holders of Outstanding shares of Series A Preferred Stock), such holders shall not be entitled to any additional distribution of assets of the Company. 10. Redemption. (a) The shares of Series A Preferred Stock may be redeemed by the Company at any time commencing on or after June 30, 2005, in whole or from time to time in part, at the election of the Company (an "Optional Redemption"), at a redemption price (the "Redemption Price") payable in cash equal to 100% of the then effective Liquidation Preference (after giving effect to the Special Dividend, if applicable), plus accrued and unpaid dividends thereon from the last Dividend Payment Date to the date of redemption (the "Optional Redemption Date"). (b) Shares of Series A Preferred Stock (if not earlier redeemed or converted) shall be mandatorily redeemed by the Company on June 30, 2015 (the "Mandatory Redemption Date"); provided, however, that if such date is not a Business Day, then the Mandatory Redemption Date shall be the next Business Day, at a Redemption Price per share in cash equal to the then effective Liquidation Preference (after giving effect to the Special Dividend, if applicable), plus accrued and unpaid dividends thereon from the last Dividend Payment Date to the Mandatory Redemption Date. (c) In the event of a redemption of fewer than all the shares of Series A Preferred Stock, the shares of Series A Preferred Stock will be chosen for redemption by the Registrar from the Outstanding shares of Series A Preferred Stock not previously called for redemption, pro rata or by lot or by such other method as the Registrar shall deem fair and appropriate; provided, that the Company may redeem (an "Odd-lot Redemption") all shares held by holders of fewer than 100 shares of Series A Preferred Stock (or by holders that would hold fewer than 100 shares of Series A Preferred Stock following such redemption) prior to its redemption of PAGE 13 other shares of Series A Preferred Stock; provided, further, that the Company may not redeem a portion of any share without redeeming the entire share. Notwithstanding the foregoing, the Company may not effect an Odd-lot Redemption with respect to any shares of Series A Preferred Stock held by the members of the Liberty Group or the HMTF Group. If fewer than all the shares of Series A Preferred Stock represented by any share certificate are so to be redeemed, (i) the Company shall issue a new certificate for the shares not redeemed and (ii) if any shares represented thereby are converted before termination of the conversion right with respect to such shares, such converted shares shall be deemed (so far as may be) to be the shares represented by such share certificate that was selected for redemption. Shares of Series A Preferred Stock that have been converted during a selection of shares of Series A Preferred Stock to be redeemed shall be treated by the Registrar as outstanding for the purpose of such selection but not for the purpose of the payment of the Redemption Price. (d) In the event the Company elects to effect an Optional Redemption, the Company shall (i) make a public announcement of the redemption and (ii) give a redemption notice (the "Redemption Notice") to the holders not fewer than 30 days nor more than 60 days before the redemption date (the "Redemption Date"). Whenever a Redemption Notice is required to be delivered to the holders, such notice shall provide the information set forth below and be given by first class mail, postage prepaid to each holder of shares of Series A Preferred Stock to be redeemed, at such holder's address appearing in the Series A Preferred Share Register. All Redemption Notices shall identify the shares of Series A Preferred Stock to be redeemed (including CUSIP number) and shall state: (i) the Redemption Date; (ii) the applicable Redemption Price; (iii) if fewer than all the outstanding shares of Series A Preferred Stock are to be redeemed, the identification (and, in the case of partial redemption, the certificate number, the total number of shares represented thereby and the number of such shares being redeemed on the Redemption Date) of the particular shares of Series A Preferred Stock to be redeemed; (iv) that on the Redemption Date the Redemption Price, together with all accrued and unpaid dividends from the last Dividend Payment Date to the Redemption Date, will become due and payable upon each such share of Series A Preferred Stock to be redeemed and that dividends thereon will cease to accrue on and after said date; (v) the conversion price, the date on which the right to convert shares of Series A Preferred Stock to be redeemed will terminate and the place or places where such shares of Series A Preferred Stock may be surrendered for conversion; and (vi) the place or places where such shares of Series A Preferred Stock are to be surrendered for payment of the Redemption Price and the other amounts which are then payable. The Redemption Notice shall be given by the Company or, at the Company's request, by the Registrar in the name and at the expense of the Company; provided that if the PAGE 14 Company so requests, it shall provide the Registrar adequate time, as reasonably determined by the Registrar, to deliver such notices in a timely fashion. (e) Prior to any Redemption Date, the Company shall deposit with the Registrar or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust) an amount of consideration sufficient to pay the Redemption Price of all the shares of Series A Preferred Stock that are to be redeemed on that date plus all accrued and unpaid dividends thereon from the last Dividend Payment Date to the Redemption Date. If any share of Series A Preferred Stock called for redemption is converted, any consideration deposited with the Registrar or with any Paying Agent or so segregated and held in trust for the redemption of such share of Series A Preferred Stock shall be paid or delivered to the Company upon Company Order or, if then held by the Company, shall be discharged from such trust. (f) Notice of redemption having been given as aforesaid, the shares of Series A Preferred Stock so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified plus all accrued and unpaid dividends thereon from the last Dividend Payment Date to the Redemption Date, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued but unpaid dividends) dividends on such shares of Series A Preferred Stock shall cease to accrue and such shares shall cease to be convertible into shares of Common Stock. Upon surrender of any such shares of Series A Preferred Stock for redemption in accordance with said notice, such shares of Series A Preferred Stock shall be redeemed by the Company at the applicable Redemption Price, together with all accrued and unpaid dividends thereon from the last Dividend Payment Date to the Redemption Date. If any share of Series A Preferred Stock called for redemption shall not be so paid upon surrender thereof for redemption, the Redemption Price thereof, and all accrued and unpaid dividends thereon from the last Dividend Payment Date to the Redemption Date, shall, until paid, bear interest from the Redemption Date at the dividend rate payable on the shares of Series A Preferred Stock and such shares shall remain convertible. (g) Any certificate that represents more than one share of Series A Preferred Stock and is to be redeemed only in part shall be surrendered at any office or agency of the Company designated for that purpose (with, if the Company or the Registrar so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by, the holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Registrar shall countersign and deliver to the holder of such share of Series A Preferred Stock without service charge, a new Series A Preferred Stock certificate or certificates, representing any number of shares of Series A Preferred Stock as requested by such holder, in aggregate amount equal to and in exchange for the number of shares not redeemed and represented by the Series A Preferred Stock certificate so surrendered. (h) If a share of Series A Preferred Stock is redeemed subsequent to a Dividend Record Date with respect to any Dividend Payment Date and on or prior to such Dividend Payment Date, then the accrued dividends payable on such Dividend Payment Date will be paid to the person in whose name such share of Series A Preferred Stock is registered at the close of business on such Dividend Record Date. PAGE 15 (i) Any redemption pursuant to this Section 10 shall be made only to the extent the Company has sufficient funds legally available therefor; provided that if the shares of Series A Preferred Stock are not redeemed on the Mandatory Redemption Date because sufficient funds are not available, the Company shall have a continuing obligation to redeem such shares as and when sufficient funds become available. 11. Method of Payments. The Company may make any dividend payments in cash with respect to any dividend period beginning after June 30, 2005. Any dividends not paid in cash on a current basis on the applicable Dividend Payment Date with respect to all periods after June 30, 2005, and all dividends with respect to periods prior to June 30, 2005, shall not be paid in cash but rather shall constitute Accumulated Dividends. No payment may be made in respect of Accumulated Dividends as dividends. Rather, Accumulated Dividends shall be added to the Liquidation Preference. Dividends may not be paid by delivery of shares of Series A Preferred Stock. 12. Conversion. (a) Subject to and upon compliance with the provisions of this Certificate of Designation, at the option of the holder thereof, any share of Series A Preferred Stock (including without limitation any share of Series A-3 Preferred Stock issued upon automatic conversion of a share of Series A-1 Preferred Stock or Series A-2 Preferred Stock pursuant to Section 12(i)) may be converted at any time into a number of fully paid and nonassessable shares of Common Stock (calculated as to each conversion to the nearest 1/100 of a share) equal to (i) the then effective Liquidation Preference thereof plus accrued and unpaid dividends to the date of conversion divided by (ii) the Conversion Price in effect at the time of conversion. Such conversion right shall expire at the close of business on the Business Day next preceding the Mandatory Redemption Date. In case a share of Series A Preferred Stock is called for redemption, such conversion right in respect of the share so called shall expire at the close of business on the Business Day next preceding the Redemption Date, unless the Company defaults in making the payment due upon redemption. The Conversion Price shall initially be $28.00 per share of Common Stock. The Conversion Price shall be adjusted in certain instances as provided in Section 12(d) and Section 12(e). (b) In order to exercise the conversion privilege, the holder of any share of Series A Preferred Stock to be converted shall surrender the certificate for such share, duly endorsed or assigned to the Company or in blank, at any office or agency of the Company maintained for that purpose, accompanied by written notice to the Company at such office or agency that the holder elects to convert such share or, if fewer than all the shares of Series A Preferred Stock represented by a single share certificate are to be converted, the number of shares represented thereby to be converted. Shares of Series A Preferred Stock shall be deemed to have been converted immediately prior to the close of business on the day of surrender of such shares for conversion in accordance with the foregoing provisions, and at such time the rights of the holders of such PAGE 16 shares as holders shall cease, and the person or persons entitled to receive the shares of Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock at such time. As promptly as practicable on or after the conversion date, the Company shall issue and shall deliver at such office or agency a certificate or certificates for the number of full shares of Common Stock issuable upon conversion. In the case of any conversion of fewer than all the shares of Series A Preferred Stock evidenced by a certificate, upon such conversion the Company shall execute and the Registrar shall countersign and deliver to the holder thereof, at the expense of the Company, a new certificate or certificates representing the number of unconverted shares of Series A Preferred Stock. (c) No fractional shares of Common Stock shall be issued upon the conversion of a share of Series A Preferred Stock. If more than one share of Series A Preferred Stock shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series A Preferred Stock so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion of any share of Series A Preferred Stock, the Company shall round down to the nearest whole share if such fraction is an amount less than 0.5 and round up to the nearest whole share if such fraction is an amount equal to or greater than 0.5 and shall issue the appropriate number of full shares of Common Stock which shall be issuable upon conversion in accordance with the foregoing. (d) The Conversion Price shall be adjusted from time to time by the Company as follows: (i) If the Company shall hereafter pay a dividend or make a distribution to all holders of the outstanding shares of Common Stock in shares of Common Stock, the Conversion Price in effect at the opening of business on the date following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date (as defined in Section 12(d)(vi)) fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day following the Common Stock Record Date. If any dividend or distribution of the type described in this Section 12(d)(i) is declared but not so paid or made, the Conversion Price shall again be adjusted to the Conversion Price which would then be in effect if such dividend or distribution had not been declared. (ii) (a) In case the Company shall issue or sell any Common Stock, or securities convertible into or exercisable or exchangeable for shares of Common Stock (other than Common Stock, or securities convertible into or exercisable or exchangeable for shares of Common Stock, issued (A) pursuant to the Company's existing or future stock option plans or pursuant to any other existing or future Common Stock-related director or employee compensation plan or arrangement of the Company approved by the PAGE 17 Board of Directors (provided that, with respect to any stock option or other right granted after April 7, 2000, the per share exercise price of such option or right is equal to or greater than the per share Closing Price of the Common Stock on the date of the grant thereof), (B) as consideration for the acquisition of a business or of assets (provided that the fair market value of such business or assets, as determined by the Board of Directors in good faith, is equal to or greater than the aggregate Current Market Price of the Common Stock to be issued as consideration for such acquisition, in each case determined at the time the Company enters into a binding agreement with respect to such acquisition), (C) pursuant to warrants outstanding on the date hereof, (D) upon the conversion of any shares of Series A Preferred Stock pursuant to Section 12(a), (E) upon the automatic conversion of shares of Series A-1 Preferred Stock or Series A-2 Preferred Stock pursuant to Section 12(i) or (F) upon exercise or conversion of any security the issuance of which caused an adjustment under the provisions hereof or the issuance of which did not require adjustments hereunder), for a consideration per share (or, in the case of convertible or exchangeable securities having a conversion or exchange price per share of Common Stock) less than the Current Market Price of the Common Stock on the date of such issuance the Conversion Price in effect immediately prior to such issuance or sale shall be reduced effective as of immediately following such issuance or sale by multiplying such Conversion Price by a fraction, (1) the numerator of which shall be the sum of (x) the number of shares of Common Stock outstanding immediately prior to such issuance or sale and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Company for the total number of additional shares of Common Stock so issued or sold (or issuable on conversion, exercise or exchange) would purchase at the Current Market Price in effect immediately prior to such issuance or sale and (2) the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to such issuance or sale and the number of additional shares of Common Stock to be issued or sold (or, in the case of convertible or exchangeable securities, issuable on conversion, exercise or exchange); (b) If the Company shall offer or issue rights or warrants to all holders of its outstanding shares of Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price (as defined in Section 12(d)(viii)) on the Common Stock Record Date fixed for the determination of shareholders entitled to receive such rights or warrants, the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect at the opening of business on the date after such Common Stock Record Date by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock subject to such rights or warrants would purchase at such Current Market Price and of which the denominator shall be the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date plus the total number of additional shares of Common Stock subject to such rights or warrants for subscription or purchase. Such adjustment shall become effective immediately after the opening of business on the day following the Common Stock Record Date fixed for determination of shareholders entitled to purchase or receive such rights or warrants. To the extent that shares of Common Stock are not delivered pursuant PAGE 18 to such rights or warrants, upon the expiration or termination of such rights or warrants the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such date fixed for the determination of shareholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Current Market Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account (x) any consideration received for such rights or warrants, with the value of such consideration and the amount of such exercise or subscription price, if other than cash, to be determined by the Board of Directors and (y) the amount of any exercise price or subscription price required to be paid upon exercise of such warrants or rights. (iii) If the outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, if the outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (iv) If the Company shall, by dividend or otherwise, distribute to all holders of its shares of Common Stock any class of capital stock of the Company (other than any dividends or distributions to which Section 12(d)(i) applies) or evidences of its indebtedness, cash or other assets (including securities, but excluding any rights or warrants of a type referred to in Section 12(d)(ii)(b) and Spinoff Securities and dividends and distributions paid exclusively in cash and excluding any capital stock, evidences of indebtedness, cash or assets distributed upon a merger or consolidation to which Section 12(e) applies) (the foregoing hereinafter in this Section 12(d)(iv) called the "Distributed Securities"), then, in each such case, the Conversion Price shall be reduced so that the same shall be equal to the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the Common Stock Record Date (as defined in Section 12(d)(viii) with respect to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in Section 12(d)(viii)) on such date less the fair market value (as determined by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) on such date of the portion of the Distributed Securities so distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day following the Common Stock Record Date; provided, however, that, in the event the then fair market value (as so determined) of the portion of the Distributed Securities so distributed applicable to one share of Common PAGE 19 Stock is equal to or greater than the Current Market Price on the Common Stock Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of shares of Series A Preferred Stock shall have the right to receive upon conversion of a share of Series A Preferred Stock(or any portion thereof) the amount of Distributed Securities such holder would have received had such holder converted such share of Series A Preferred Stock(or portion thereof) immediately prior to such Common Stock Record Date. If such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such dividend or distribution had not been declared. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 12(d)(iv) by reference to the actual or when issued trading market for any securities constituting all or part of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to Section 12(d)(vi) to the extent possible. Rights or warrants distributed by the Company to all holders of shares of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("Dilution Trigger Event"): (A) are deemed to be transferred with such shares of Common Stock; (B) are not exercisable; and (C) are also issued in respect of future issuances of shares of Common Stock, shall be deemed not to have been distributed for purposes of this Section 12(d)(iv) (and no adjustment to the Conversion Price under this Section 12(d)(iv) shall be required) until the occurrence of the earliest Dilution Trigger Event, whereupon such rights or warrants shall be deemed to have been distributed and an appropriate adjustment to the Conversion Price under this Section 12(d)(iv) shall be made. If any such rights or warrants, including any such existing rights or warrants distributed prior to the first issuance of shares of Series A Preferred Stock, are subject to subsequent events, upon the occurrence of each of which such rights or warrants shall become exercisable to purchase securities, evidences of indebtedness or other assets, then the occurrence of each such event shall be deemed to be such date of issuance and record date with respect to new rights or warrants (and a termination or expiration of the existing rights or warrants, without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Dilution Trigger Event with respect thereto, that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Price under this Section 12(d)(iv) was made, (1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Dilution Trigger Event, as the case may be, as though it were a cash distribution to which this Section 12(d)(iv) were applicable, equal to the per share redemption or repurchase price received by a holder or holders of shares of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of shares of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Price shall be readjusted as if such rights and warrants had not been issued. Notwithstanding any other provision of this Section 12(d)(iv) to the contrary, rights, warrants, evidences of indebtedness, other securities, cash or other assets (including, PAGE 20 without limitation, any rights distributed pursuant to any shareholder rights plan) shall be deemed not to have been distributed for purposes of this Section 12(d)(iv) if the Company makes proper provision so that each holder of shares of Series A Preferred Stock on the date fixed for determination of shareholders entitled to receive such distribution shall receive upon such distribution, the amount and kind of such distributions that such holder would have been entitled to receive if such holder had, immediately prior to such determination date, converted such share of Series A Preferred Stock into a share of Common Stock. For purposes of this Section 12(d)(iv) and Sections 12(d)(i) and (ii), any dividend or distribution to which this Section 12(d)(iv) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 12(d)(ii) applies (or both), shall be deemed instead to be (A) a dividend or distribution of the evidences of indebtedness, assets, shares of capital stock, rights or warrants other than such shares of Common Stock or rights or warrants to which Section 12(d)(ii) applies (and any Conversion Price reduction required by this Section 12(d)(iv) with respect to such dividend or distribution shall then be made) immediately followed by (B) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Conversion Price reduction required by Sections 12(d)(i) or 12(d)(ii) with respect to such dividend or distribution shall then be made), except that (1) the Common Stock Record Date of such dividend or distribution shall be substituted as "the date fixed for the determination of stockholders entitled to receive such dividend or other distribution", "the Common Stock Record Date fixed for such determination" and "the Common Stock Record Date" within the meaning of Section 12(d)(i) and as "the date fixed for the determination of shareholders entitled to receive such rights or warrants", "the Common Stock Record Date fixed for the determination of the share holders entitled to receive such rights or warrants" and "such Common Stock Record Date" for purposes of Section 12(d)(ii), and (2) any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" for the purposes of Section 12(d)(i). (v) If a tender offer made by the Company or any of its subsidiaries for all or any portion of the Common Stock expires and such tender offer (as amended upon the expiration thereof) requires the payment to shareholders (based on the acceptance (up to any maximum specified in the terms of the tender offer) of Purchased Shares) of an aggregate consideration having a fair market value (as determined by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) that, combined together with the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) as of the expiration of such tender offer, of consideration payable in respect of any other tender offers by the Company or any of its subsidiaries for all or any portion of the shares of Common Stock expiring within the 12 months preceding the expiration of such tender offer and in respect of which no adjustment pursuant to this Section 12(d)(v) has been made, exceeds 5% of the net income of the Company reported for the 12 month period ending with the fiscal quarter next preceding such payment (the "12 Month Net Income") (determined as of the last time (the "Expiration Time") tenders could have been made pursuant to such tender offer (as it may be amended)), then, and in each such case, immediately prior to the opening of business on the day after the date of the Expiration PAGE 21 Time, the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the date of the Expiration Time by a fraction of which the numerator shall be the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time multiplied by the Current Market Price of a share of Common Stock on the trading day next succeeding the Expiration Time and the denominator shall be the sum of (x) the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders based on the acceptance (up to any maximum specified in the terms of the tender offer) of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares") and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Current Market Price of the shares of Common Stock on the trading day next succeeding the Expiration Time, such reduction (if any) to become effective immediately prior to the opening of business on the day following the Expiration Time. If the Company is obligated to purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such tender offer had not been made. If the application of this Section 12(d)(v) to any tender offer would result in an increase in the Conversion Price, no adjustment shall be made for such tender offer under this Section 12(d)(v). (vi) If the Company effects a Spinoff, the Company shall make appropriate provision so that the holders of Series A Preferred Stock have the right to exchange their shares of Series A Preferred Stock on the effective date of the Spinoff for (a) shares of Exchange Preferred Stock of the Company and (b) shares of Mirror Preferred Stock of the issuer of the Spinoff Securities. The sum of the initial liquidation preference of the shares of Exchange Preferred Stock and Mirror Preferred Stock delivered in exchange for a share of Series A Preferred Stock will equal the Liquidation Preference of, plus accrued and unpaid dividends on, a share of Series A Preferred Stock on the effective date of the Spinoff. The Mirror Preferred Stock will have an aggregate initial liquidation preference equal to the product of the aggregate Liquidation Preference of, plus accrued and unpaid dividends on, the shares of Series A Preferred Stock exchanged therefor and the quotient of (x) the product of the number (or fraction) of Spinoff Securities that would have been receivable upon such Spinoff by a holder of the number of shares of Common Stock issuable upon conversion of a share of Series A Preferred Stock immediately prior to the record date for the Spinoff and the average of the daily Closing Prices of the Spinoff Securities for the period of ten consecutive trading days commencing on the tenth trading day following the effective date of the Spinoff, divided by (y) the sum of the amount determined pursuant to clause (x), plus the fair value of the shares of Common Stock and other securities or property (other than Spinoff Securities) that would have been receivable by a holder of a share of Series A Preferred Stock upon conversion thereof immediately prior to the record date for the Spinoff (such fair value to be determined in the case of Common Stock or other securities with a Closing Price in the same manner as provided in clause (x) and otherwise by the Board of Directors in the exercise of its judgment). The shares of Exchange Preferred Stock will have an aggregate initial PAGE 22 liquidation preference equal to the difference between the aggregate Liquidation Preference of plus accrued and unpaid dividends on the shares of Series A Preferred Stock exchanged therefor and the aggregate initial liquidation preference of the Mirror Preferred Stock. From and after the effective date of such Spinoff, the holders of any shares of Series A Preferred Stock that have not been exchanged for Mirror Preferred Stock and Exchange Preferred Stock as provided above shall have no conversion rights under these provisions with respect to such Spinoff Securities. (vii) If the Company or a subsidiary of the Company (the applicable of the foregoing being the "Offeror") makes an Exchange Offer, the Offeror shall concurrently therewith make an equivalent offer to the holders of Series A Preferred Stock pursuant to which such holders may tender Series A Preferred Stock, based upon the number of shares of Common Stock into which such tendered shares of Series A Preferred Stock are then convertible (and in lieu of tendering outstanding shares of Common Stock), together with any other consideration that may be required to be tendered pursuant to the Exchange Offer, and receive in exchange therefor, in lieu of Exchange Securities (and other property, if applicable), Mirror Preferred Stock with an aggregate liquidation preference equal to the aggregate Liquidation Preference of plus accrued and unpaid dividends on the shares of Series A Preferred Stock exchanged therefor. Whether or not a holder of Series A Preferred Stock elects to accept the offer and tender Series A Preferred Stock, no adjustment to the Conversion Price will be made in connection with the Exchange Offer. If an Exchange Offer is made as discussed above, the Offeror shall, concurrently with the distribution of the offering circular or prospectus and related documents to holders of Common Stock, provide each holder of Series A Preferred Stock with a notice setting forth the offer described herein and describing the Exchange Offer, the Exchange Securities and the Mirror Preferred Stock. Such notice shall be accompanied by the offering circular, prospectus or similar document provided to holders of Common Stock in respect of the Exchange Offer and a copy of the certificate of designations (or similar document) proposed to be filed by the Offeror in order to establish the Mirror Preferred Stock. No failure to mail the notice contemplated herein or any defect therein or in the mailing thereof shall affect the validity of the applicable Exchange Offer. (viii) For purposes of this Section 12(d), the following terms shall have the meaning indicated: "Closing Price" with respect to any securities on any day means the closing sale price as of 4:00 p.m. Eastern Time on such day or any earlier final closing on such day or, if no such sale takes place on such day, the average of the reported high and low bid prices on such day, in each case on the Nasdaq National Market, or the New York Stock Exchange, as applicable, or, if such security is not listed or admitted to trading on such national market or exchange, on the national stock exchange or Commission recognized trading market in the United States on which such security is quoted or listed or admitted to trading, or, if not quoted or listed or admitted to trading on any national stock exchange or Commission recognized trading market in the United States, the average of the high and low bid prices of such security on the over-the-counter market on the day in question as reported by the National Quotation Bureau Incorporated or a similar generally accepted reporting service in the United States, or, if PAGE 23 not so available, in such manner as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors for that purpose, or a price determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors. "Common Stock Record Date" means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of shareholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise). "Current Market Price" means the average of the daily Closing Prices per share of Common Stock for the 10 consecutive trading days immediately prior to the date in question; provided, however, that (A) if the "ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 12(d)(i), (ii), (iii), (iv), (v) or (vi) occurs during such 10 consecutive trading days, the Closing Price for each trading day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other event, (B) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 12(d)(i), (ii), (iii), (iv),(v) or (vi) occurs on or after the "ex" date for the issuance or distribution requiring such computation and prior to the day in question, the Closing Price for each trading day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event and (C) if the "ex" date for the issuance or distribution requiring such computation is prior to the day in question, after taking into account any adjustment required pursuant to clause (A) or (B) of this proviso, the Closing Price for each trading day on or after such "ex" date shall be adjusted by adding thereto the amount of any cash and the fair market value (as determined by the Board of Directors in a manner consistent with any good faith determination of such value for purposes of Section 12(d)(iv), whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) of the evidences of indebtedness, shares of capital stock or assets being distributed applicable to one share of Common Stock as of the close of business on the day before such "ex" date. For purposes of any computation under Section 12(d)(v), the Current Market Price on any date shall be deemed to be the average of the daily Closing Prices per share of Common Stock for such day and the next two succeeding trading days; provided, however, that, if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 12(d)(i), (ii), (iii), (iv), (v) or (vi) occurs on or after the Expiration Time for the tender or exchange offer requiring such computation and prior to the day in question, the Closing Price for each trading day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event. For purposes of this paragraph, the term "ex" date (1) when used with respect to any issuance or distribution, means the first date on which the shares of Common Stock trade regular way on the relevant exchange or in the relevant market from which the Closing Price was obtained without the right to receive such issuance or PAGE 24 distribution, (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the shares of Common Stock trade regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective and (3) when used with respect to any tender or exchange offer means the first date on which the shares of Common Stock trade regular way on such exchange or in such market after the Expiration Time of such offer. Notwithstanding the foregoing, whenever successive adjustments to the Conversion Price are called for pursuant to this Section 12(d), such adjustments shall be made to the Current Market Price as may be necessary or appropriate to effectuate the intent of this Section 12(d) and to avoid unjust or inequitable results, as determined in good faith by the Board of Directors. "Exchange Offer" means an issuer tender offer (within the meaning of Rule 13e-4(a)(2) of the rules and regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, as such Rule is in effect on the date hereof), including, without limitation, one that is effected through the distribution of rights or warrants, made to holders of Common Stock (or to holders of other stock of the Company receivable by a holder of Series A Preferred Stock upon conversion thereof), to issue stock of the Company or of a subsidiary of the Company and/or other property to a tendering stockholder in exchange for shares of Common Stock (or such other stock) validly tendered pursuant to such issuer tender offer. "Exchange Preferred Stock" means a series of convertible preferred stock of the Company, having terms, conditions, designations, dividend rights, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof that are identical, or as nearly so as is practicable in the judgment of the Company's Board of Directors, to those of the Series A Preferred Stock for which such Exchange Preferred Stock is exchanged, except that (a) the liquidation preference will be determined as provided in Section 12(d)(vi), (b) the running of any time periods pursuant to the terms of the Series A Preferred Stock shall be tacked to the corresponding time periods in the Exchange Preferred Stock and (c) the Exchange Preferred Stock will not be convertible into, and the holders will have no conversion rights thereunder with respect to the Spinoff Securities. "Exchange Securities" means stock of the Company or of a subsidiary of the Company that is issued in exchange for shares of Common Stock (or other stock of the Company receivable by a holder of Series A Preferred Stock upon conversion thereof) pursuant to an Exchange Offer. "Fair Market Value" means the amount which a willing buyer would pay a willing seller in an arm's-length transaction. "Mirror Preferred Stock" means convertible preferred stock issued by (a) in the case of a Spinoff, the issuer of the applicable Spinoff Securities, and (b) in the case of an Exchange Offer, the issuer of the applicable Exchange Securities, and having terms, conditions, designations, dividend rights, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof that are identical, or as nearly so as practicable in the judgment of the Company's Board of Directors, to those of the Series A Preferred Stock for which such Mirror PAGE 25 Preferred Stock is exchanged, except that (i) the liquidation preference will be determined as provided in Sections 12(d)(vi) or 12(d)(vii), as applicable, (ii) the running of any time periods pursuant to the terms of the Series A Preferred Stock shall be tacked to the corresponding time periods in the Mirror Preferred Stock, and (iii) the Mirror Preferred Stock shall be convertible into the kind and amount of Spinoff Securities or Exchange Securities, as applicable, and other securities and property that the holder of Series A Preferred Stock in respect of which such Mirror Preferred Stock is issued pursuant to the terms hereof would have received (x) in the case of a Spinoff, in such Spinoff had such Series A Preferred Stock been converted immediately prior to the record date for such Spinoff and (y) in the case of an Exchange Offer, upon consummation thereof had such Series A Preferred Stock that such holder elects to tender been converted and the shares of Common Stock received upon such conversion been tendered in full pursuant to such Exchange Offer prior to the expiration thereof and the same percentage of such tendered shares had been accepted for exchange as the percentage of validly tendered shares of Common Stock were accepted for exchange pursuant to such Exchange Offer, as the case may be. "Spinoff" means the distribution in a transaction that is generally not taxable to the recipients under the Internal Revenue Code of 1986 (as amended or any equivalent successor statute) of stock of a subsidiary of the Company as a dividend to all holders of Common Stock. "Spinoff Securities" means stock of a subsidiary of the Company that is distributed to holders of Common Stock in a Spinoff. (ix) No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this Section 12(d)(ix) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 12 shall be made by the Company and shall be made to the nearest cent. No adjustment need be made for a change in the par value or no par value of the Common Stock. (x) Whenever the Conversion Price is adjusted as herein provided, the Company shall promptly file with the Registrar an Officer's Certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Price to each holder of shares of Series A Preferred Stock at such holder's last address appearing on the register of holders maintained for that purpose within 20 days of the effective date of such adjustment. Failure to deliver such notice shall not affect the legality or validity of any such adjustment. (xi) In any case in which this Section 12(d) provides that an adjustment shall become effective immediately after a Common Stock Record Date for an event, the Company may defer until the occurrence of such event issuing to the holder of any share of Series A Preferred Stock converted after such Common Stock Record Date and before PAGE 26 the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such conversion before giving effect to such adjustment. (xii) For purposes of this Section 12(d), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company or by any of its Subsidiaries. The Company shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company or by any of its Subsidiaries. (xiii) In the event that a holder of Series A Preferred Stock would be entitled to receive upon conversion thereof any Redeemable Capital Stock and the Company redeems, exchanges or otherwise acquires all of the outstanding shares or other units of such Redeemable Capital Stock (such event being a "Redemption Event"), then, from and after the effective date of such Redemption Event, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to receive upon conversion of such shares, in lieu of shares or units of such Redeemable Capital Stock, the kind and amount of shares of stock and other securities and property receivable upon the Redemption Event by a holder of the number of shares or units of such Redeemable Capital Stock into which such shares of Series A Preferred Stock could have been converted immediately prior to the effective date of such Redemption Event (assuming, to the extent applicable, that such holder failed to exercise any rights of election with respect thereto and received per share or unit of such Redeemable Capital Stock the kind and amount of stock and other securities and property received per share or unit by a plurality of the non-electing shares or units of such Redeemable Capital Stock), and (from and after the effective date of such Redemption Event) the holders of the Series A Preferred Stock shall have no other conversion rights under these provisions with respect to such Redeemable Capital Stock. For purposes of this Section 12(d)(xiii) "Redeemable Capital Stock" means a class or series of capital stock of the Company that provides by its terms a right in favor of the Company to call, redeem, exchange or otherwise acquire all of the outstanding shares or units of such class or series. (e) In case of any consolidation of the Company with, or merger of the Company into, any other Person, or in case of any merger of another Person into the Company (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company), or in case of any sale, conveyance or transfer of all or substantially all the assets of the Company, the holder of each share of Series A Preferred Stock shall have the right thereafter, during the period such share of Series A Preferred Stock shall be convertible as specified in Section 12(a), to convert such share of Series A Preferred Stock into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance or transfer by a holder of the number of shares of Common Stock of the Company into which such share of Series A Preferred Stock might have been converted immediately prior to such consolidation, merger, conveyance or transfer, assuming such holder of shares of Common Stock of the Company failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, conveyance or transfer (provided that, if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, conveyance or PAGE 27 transfer is not the same for each share of Common Stock of the Company in respect of which such rights of election shall not have been exercised ("nonelecting share"), then for the purpose of this Section 12 the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance or transfer by each nonelecting share shall be deemed to be the kind and amount so receivable per share by a plurality of the nonelecting shares). Such securities shall provide for adjustments which, for events subsequent to the effective date of the triggering event, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 12. The above provisions of this Section 12 shall similarly apply to successive consolidations, mergers, conveyances or transfers. (f) In case: (i) the Company shall declare a dividend (or any other distribution) on its Common Stock payable otherwise than in cash out of its earned surplus; or (ii) the Company shall authorize the granting to all holders of its shares of Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights; or (iii) of any reclassification of the Common Stock (other than a subdivision or combination of the Company's outstanding shares of Common Stock), or of any consolidation or merger to which the Company is a party and for which approval of any shareholders of the Company is required, or the sale, conveyance or transfer of all or substantially all the assets of the Company; or (iv) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company; or (v) the Company shall take any other action referred to in this Section 12; then the Company shall cause to be filed with the Registrar and at each office or agency maintained for the purpose of conversion of shares of Series A Preferred Stock, and shall cause to be mailed to all holders at their last addresses as they shall appear in the shares of Series A Preferred Stock Register, at least 20 Business Days (or 10 Business Days in any case specified in clause (i) or (ii) above) prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such dividend, distribution, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become effective, and the date as of which it is expected that holders of shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up. Failure to give the notice required by this Section 12(f) or any defect therein shall not affect the legality or validity of any dividend, distribution, right, warrant, reclassification, PAGE 28 consolidation, merger, sale, transfer, dissolution, liquidation or winding-up, or the vote upon any such action. (g) The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued shares of Common Stock, for the purpose of effecting the conversion of shares of Series A Preferred Stock, the full number of shares of Common Stock then issuable upon the conversion of all outstanding shares of Series A Preferred Stock. (h) The Company will pay any and all taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of shares of Series A Preferred Stock pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that of the holder of the share of Series A Preferred Stock or shares of Series A Preferred Stock to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid or is not payable. (i) (i) Each share of (A) Series A-1 Preferred Stock transferred to any person other than a member of the Liberty Group and (B) Series A-2 Preferred Stock transferred to any person other than a member of the HMTF Group shall be deemed to be automatically converted into a share of Series A-3 Preferred Stock with the same Liquidation Preference and otherwise of the same tenor (except as provided herein) as then in effect with respect to the share of the Series A-1 Preferred Stock or Series A-2 Preferred Stock transferred, such conversion to be effected in accordance with this Section 12(i) and to be effective as of the effective time of such transfer. (ii) Upon any transfer of a share of Series A-1 Preferred Stock or Series A-2 Preferred Stock triggering an automatic conversion into a share of Series A-3 Preferred Stock pursuant to Section 12(i)(i), the transferor shall surrender the certificate or certificates representing the share or shares transferred (the "Converting Shares") at any office or agency of the Company designated for that purpose together with written notice stating the number of shares that are to be transferred to a person other than a member of the Liberty Group (in the case of shares of Series A-1 Preferred Stock) or a member of the HMTF Group (in the case of Series A-2 Preferred Stock) and that are thus to be converted into an equal number of shares of Series A-3 Preferred Stock (the "Converted Shares"). Such notice shall also state the name or names (with addresses) of the transferee and denominations in which the certificate or certificates for Converted Shares are to be issued and shall include instructions for the delivery thereof. Promptly after such surrender and the receipt of such written notice, the Company will issue and deliver in accordance with the transferor's instructions the certificate or certificates evidencing the Converted Shares issuable upon such conversion, and the Company will deliver to the transferor a certificate (which shall contain such legends as were set forth on the surrendered certificate or certificates) representing any shares which were represented by the certificate or certificates that were delivered to the Company in connection with such conversion, but which were not transferred. Upon issuance of shares in accordance with this Section 12(i)(ii), such Converted Shares shall be duly authorized, validly issued, fully paid and non-assessable and entitled to the benefits of this Certificate of PAGE 29 Designation. The Company shall take all such actions as may be necessary to assure that all such shares of Series A-3 Preferred Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Series A-3 Preferred Stock may be listed (except for official notice of issuance which will be immediately transmitted by the Company upon issuance). (iii) As used in this Section 12(i), the term "transfer" and derivatives thereof refers to any sale, gift or other transfer, voluntary or involuntary (except for transfers, pledges and security interests in connection with bona fide financing or hedging transactions). A conversion of Series A-1 Preferred Stock or Series A-2 Preferred Stock into Common Stock pursuant to Section 12(a) hereof shall not constitute a transfer for purposes of this Section 12(i). (j) Without the unanimous consent of the holders of the Series A Preferred Stock, the Company shall not in any manner subdivide (by stock split, stock dividend or otherwise) or combine (by reverse stock split or otherwise) the outstanding shares of the Series A-1 Preferred Stock, Series A-2 Preferred Stock or Series A-3 Preferred Stock unless the outstanding shares of each other series of Series A Preferred Stock shall be subdivided or combined, as the case may be, to the same extent, share and share alike, and appropriate provision shall be made for the protection of the conversion rights hereunder. 13. Change of Control. (a) Upon the occurrence of a Change of Control, the Company shall have the right, but not the obligation, to offer (the "Change of Control Offer") to repurchase all, but not less than all, of the shares of Series A Preferred Stock at a purchase price per share in cash equal to 101% of the Liquidation Preference of each share of Series A Preferred Stock repurchased (after giving effect to the Special Dividend, if applicable), plus an amount equal to 101% of all dividends accrued and unpaid thereon to the date fixed for repurchase (the "Change of Control Purchase Amount"). Within 20 days following the Change of Control Date, the Company shall mail a notice to each holder of shares of Series A Preferred Stock (with a copy to the Registrar) describing the transaction or transactions that constitute the Change of Control and, if the Company so elects, offering to repurchase shares of Series A Preferred Stock on a date specified in such notice (the "Change of Control Purchase Date"), which date shall be no earlier than 90 days and no later than 120 days from the date such notice is mailed, pursuant to the procedures required by Section 10 and described in such notice. The failure of the Company to make such Change of Control Offer within such 20-day period shall constitute an irrevocable waiver of the Company's right to make such Change of Control Offer solely with the respect to the relevant Change of Control and shall result in the dividend rate on the Series A Preferred Stock referred to in Section 6 hereof being increased to 16% effective as of the Change of Control Date. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws and regulations are applicable in connection with the repurchase of the Series A Preferred Stock as a result of a Change of Control. PAGE 30 (b) On the Change of Control Purchase Date, the Company shall, to the extent lawful: (i) accept for payment all shares of Series A Preferred Stock properly tendered pursuant to the Change of Control Offer; (ii) deposit with the paying agent an amount equal to the Change of Control Purchase Amount in respect of all shares of Series A Preferred Stock so tendered; and (iii) deliver or cause to be delivered to the Registrar all certificates for shares of Series A Preferred Stock so accepted together with an officer's certificate stating the aggregate number of shares being purchased by the Company. (c) The paying agent shall promptly mail to each holder of shares of Series A Preferred Stock so tendered the Change of Control Purchase Amount for such shares of Series A Preferred Stock, and the Registrar shall promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new certificate for any shares of Series A Preferred Stock not tendered that are represented by the surrendered certificate. The Company shall notify each holder of Series A Preferred Stock the results of the Change of Control Offer on or as soon as practicable after the Change of Control Purchase Date. (d) The provisions of this paragraph that permit the Company to make a Change of Control Offer shall be applicable regardless of whether any other provisions of this certificate are applicable. Except as set forth in this paragraph, no holder of shares of Series A Preferred Stock shall have any right to require the Company to repurchase or redeem the shares of Series A Preferred Stock in the event of a takeover, recapitalization or other similar transaction. 14. Purchase Offer. (a) If the Company shall elect not to make, or shall fail to make, the Change of Control Offer following the occurrence of a Change of Control pursuant to Section 13 hereof within the 20-day period specified therein, then in addition to the redemption rights that the Company may exercise pursuant to Section 10 hereof after June 30, 2005, the Company shall also have the right (but not the obligation), (i) at any time and from time to time prior to June 30, 2005, to offer (the "Purchase Offer") to repurchase all, but not less than all, of the outstanding shares of Series A Preferred Stock at a purchase price per share in cash equal to 101% of the Liquidation Preference of each share of Series A Preferred Stock repurchased (after giving effect to the Special Dividend, if any), plus an amount equal to 101% of all dividends accrued and unpaid thereon from the last Dividend Payment Date to the date fixed for repurchase (the "Purchase Payment") and (ii) at any time and from time to time following June 30, 2005, to make a Purchase Offer to repurchase all, but not less than all, of the outstanding shares of Series A Preferred Stock at a purchase price per share in cash equal to 100% of the Liquidation Preference of each share of Series A Preferred Stock repurchased (after giving effect to the Special Dividend, if any), plus an amount equal to 100% of all dividends accrued and unpaid thereon from the last Dividend Payment Date to the date fixed for repurchase (the "Par Purchase Payment"). If the Company elects to make a Purchase Offer, the Company shall mail a notice to PAGE 31 each holder of shares of Series A Preferred Stock (with a copy to the Registrar) offering to repurchase shares of Series A Preferred Stock on a date specified in such notice (the "Purchase Payment Date"), which date shall be no earlier than 90 days and no later than 120 days from the date such notice is mailed, pursuant to the procedures required by Section 6 and described in such notice. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws and regulations are applicable in connection with the repurchase of the Series A Preferred Stock hereunder. (b) On the Purchase Payment Date, the Company shall, to the extent lawful: (i) accept for payment all shares of Series A Preferred Stock properly tendered pursuant to the Purchase Offer; (ii) deposit with the paying agent an amount equal to the Purchase Payment or the Par Purchase Payment, as applicable, in respect of all shares of Series A Preferred Stock so tendered; and (iii) deliver or cause to be delivered to the Registrar all certificates for shares of Series A Preferred Stock so accepted together with an officer's certificate stating the aggregate number of shares being purchased by the Company. (c) The paying agent shall promptly mail or transmit by wire transfer to each holder of shares of Series A Preferred Stock so tendered the Purchase Payment or the Par Purchase Payment, as applicable, for such shares of Series A Preferred Stock, and the Registrar shall promptly authenticate and mail (or cause to be transferred by book entry) to each such holder a new certificate for any shares of Series A Preferred Stock not tendered that are represented by the surrendered certificate. The Company shall notify the holders of Series A Preferred Stock the results of the Purchase Offer on or as soon as practicable after the Purchase Payment Date. (d) If a holder of shares of Series A Preferred Stock elects not to, or otherwise fails to, properly tender shares of Series A Preferred Stock into the Purchase Offer, then with respect to each share of Series A Preferred Stock that such holder fails to tender, any dividends applicable to periods following the expiration of the Purchase Offer with respect to each such share shall be computed at a rate of eight percent (8%) per annum. 15. Special Covenant. Without the vote or consent of the holders of a majority of the then Outstanding shares of Series A Preferred Stock, the Company shall not make, or permit any of its subsidiaries to make, any material capital expenditures, acquisitions or divestitures outside the ordinary course of business unless such expenditures, acquisitions or divestitures were otherwise approved by the Board of Directors (including the affirmative vote of at least one director elected by either the holders of the Series A-1 Preferred Stock or the holders of the Series A-2 Preferred Stock). 16. SEC Reports; Reports by Company. PAGE 32 So long as any shares of Series A Preferred Stock are outstanding, the Company shall file with the SEC and, within 15 days after it files them with the SEC, with the Registrar and, if requested, furnish to each holder of shares of Series A Preferred Stock all annual and quarterly reports and the information, documents, and other reports that the Company is required to file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC Reports"). In the event the Company is not required or shall cease to be required to file SEC Reports, pursuant to the Exchange Act, the Company will nevertheless file such reports with the SEC (unless the SEC will not accept such a filing). Whether or not required by the Exchange Act to file SEC Reports with the SEC, so long as any shares of Series A Preferred Stock are Outstanding, the Company will furnish or cause to be furnished reports equivalent to the SEC Reports to the holders of shares of Series A Preferred Stock. 17. Definitions. For purposes of this Certificate of Designation, the following terms shall have the meaning set forth below: "Accumulated Dividends" has the meaning set forth in Section 6. "Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing; provided that neither AT&T Corp. ("AT&T") nor any subsidiary of AT&T which is not included in AT&T's Liberty Media Group (as defined in AT&T's Certificate of Incorporation) will be deemed to be an Affiliate of Liberty. "Board of Directors" has the meaning set forth in the Recitals. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The City of New York are authorized or obligated by law or executive order to be closed. "By-laws" has the meaning set forth in the Recitals. "Capital Stock" means, with respect to any person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting and/or non-voting) of such person's capital stock, whether outstanding on the Closing Date or issued after the Closing Date, and any and all rights (other than any evidence of indebtedness) or warrants exercisable or exchangeable for or convertible into such capital stock. "Certificate of Incorporation" has the meaning set forth in the recitals. "Change of Control" means the occurrence of any of the following events: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 and 13d-5 under the PAGE 33 Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total Voting Capital Stock of the Company or (b) the Company consolidates with, or merges with or into, another person or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any person, or any person consolidates with, or merges with or into the Company, in any such event pursuant to a transaction in which the holders of the outstanding Voting Capital Stock of the Company immediately prior to such transaction hold less than 50% of the outstanding Voting Capital Stock of the surviving or transferee company or its parent company immediately after such transaction or immediately after such transaction any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total Voting Capital Stock of the surviving or transferee company or its parent company or (c) during any consecutive two-year period, individuals who at the beginning of such period constituted the Board of Directors (together with any new directors whose election by the Board of Directors or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved and together with any directors elected pursuant to Sections 8(d)(i), (ii) and (iii)) cease for any reason to constitute a majority of the Board of Directors then in office or (d) any transaction subject to Rule 13e-3 under the Exchange Act if following such Rule 13e-3 transaction a person or group (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) owns more than 50% of the total Voting Capital Stock of the Company. Notwithstanding the foregoing, any form of business combination between the Company and Teligent, Inc. within the 24 month period following the Closing Date shall not be deemed to be a Change of Control, unless after the date hereof and prior to such business combination, there shall have occurred a "Teligent Change of Control." For the purposes hereof, a Teligent Change of Control shall have the same meaning as a Change of Control, substituting Teligent, Inc. for the Company in such definition; provided, however, that a Teligent Change of Control shall not occur with respect to any event or circumstance that involves an acquiror, 25% or more of the Voting Capital Stock of which is beneficially owned by any member of the HMTF Group or Liberty. "Change of Control Date" has the meaning set forth in Section 6(b). "Closing Date" means the Closing Date under the Purchase Agreement. "Closing Price" has the meaning set forth in Section 12(d)(viii). "Common Stock Record Date" has the meaning set forth in Section 12(d)(viii). "Common Stock" means the common stock of the Company, par value $.01 per share and capital stock of any other class or series into which the Common Stock may hereafter be changed. PAGE 34 "Company" has the meaning set forth in the Recitals and includes any successor to the Company hereunder. "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary. "Conversion Agent" has the meaning set forth in Section 5(a). "Conversion Price" means the price at which shares of Common Stock shall be delivered upon conversion. "Current Market Price" has the meaning set forth in Section 12(d)(viii). "Dilution Trigger Event" has the meaning set forth in Section 12(d)(iv). "Distributed Securities" has the meaning set forth in Section 12(d)(iv). "Dividend Payment Date" shall mean the last day of March, June, September and December of each year, commencing June 30, 2000, or the next succeeding Business Day if any such day is not a Business Day. "Dividend Period" shall mean the period from and including the Closing Date to but excluding the first Dividend Payment Date and thereafter each quarterly period from and including a Dividend Payment Date to but excluding the next Dividend Payment Date. "Dividend Record Date" has the meaning set forth in Section 7(a). "Exchange Offer" has the meaning set forth in Section 12(d)(vi). "Exchange Preferred Stock" has the meaning set forth in Section 12(d)(viii). "Exchange Securities" has the meaning set forth in Section 12(d)(viii). "Expiration Time" has the meaning set forth in Section 12(d)(v). "Fair Market Value" has the meaning set forth in Section 12(d)(viii). "Junior Shares" has the meaning set forth in Section 9(a). "Liquidation Preference" means an amount initially equal to $10,000 per share of Series A Preferred Stock, subject to increase in accordance with Section 6, Section 7 and Section 11 hereof, including, without limitation, by the addition of Accumulated Dividends and, if applicable, the Special Dividend. "Mandatory Redemption Date" has the meaning set forth in Section 10(b); provided, however, that if such date shall not be a Business Day, then such date shall be the next Business Day. PAGE 35 "Mirror Preferred Stock" has the meaning set forth in Section 12(d)(viii). "Nonelecting Share" has the meaning set forth in Section 12(e). "Odd-lot Redemption" has the meaning set forth in Section 10(c). "Officers' Certificate" means a certificate of the Company signed in the name of the Company by its Chairman of the Board, its President or a Vice President and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary. "Optional Redemption" has the meaning set forth in Section 10(a). "Optional Redemption Date" has the meaning set forth in Section 10(a). "Outstanding" means when used with respect to shares of Series A Preferred Stock, as of the date of determination, all shares of Series A Preferred Stock theretofore delivered under this Certificate of Designation, except (a) shares of Series A Preferred Stock theretofore converted into shares of Common Stock in accordance with Section 12 and shares of Series A Preferred Stock theretofore canceled by the Registrar or delivered to the Registrar for cancellation; (b) shares of Series A Preferred Stock for whose payment or redemption money in the necessary amount has been theretofore deposited with the Registrar or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the holders of such shares of Series A Preferred Stock; provided that, if such shares of Series A Preferred Stock are to be redeemed, notice of such redemption has been duly given pursuant to this Certificate of Designation or provision therefor satisfactory to the Registrar has been made; and (c) shares of Series A Preferred Stock in exchange for or in lieu of which other shares of Series A Preferred Stock have been delivered pursuant to this Certificate of Designation; provided, however, that, in determining whether the holders of the shares of Series A Preferred Stock have given any request, demand, authorization, direction, notice, consent or waiver or taken any other action hereunder, shares of Series A Preferred Stock owned by the Company or any other obligor upon the shares of Series A Preferred Stock or any subsidiary of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Registrar shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only shares of Series A Preferred Stock which the Registrar has actual knowledge of being so owned shall be so disregarded. "Parity Shares" has the meaning set forth in Section 9(a). "Paying Agent" has the meaning set forth in Section 5(a). "Person" means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature. "Preferred Stock" means, with respect to any person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) PAGE 36 of such person's preferred or preference stock, whether now outstanding or issued after the date hereof, including all series and classes of such preferred or preference stock. "Purchase Agreement" means the Preferred Stock and Warrant Purchase Agreement dated as of February 27, 2000, among the Company and the Purchasers named therein, as it may be amended from time to time. "Purchased Shares" has the meaning set forth in Section 12(d)(v). "Redemption Date" has the meaning set forth in Section 10(d). "Redemption Notice" has the meaning set forth in Section 10(d). "Redemption Price" has the meaning set forth in Section 10(a). "Registrar" has the meaning set forth in Section 3. "Registration Rights Agreement" means the Registration Rights Agreement dated as of April 7, 2000, among the Company and the Purchasers. "Restricted Shares Legend" has the meaning set forth in Section 4(a). "SEC" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the adoption of this Certificate of Designation such commission is not existing and performing the duties now assigned to it, then the body performing such duties at such time. "SEC Reports" has the meaning set forth in Section 16. "Securities Act" has the meaning set forth in Section 4(a). "Senior Shares" has the meaning set forth in Section 9(a). "Series A Preferred Stock" has the meaning set forth in Section 1. "Series A-1 Preferred Stock" has the meaning set forth in Section 1. "Series A-2 Preferred Stock" has the meaning set forth in Section 1. "Series A-3 Preferred Stock" has the meaning set forth in Section 1. "Special Dividend" means, with respect to each share of Series A Preferred Stock, the difference between (i) $14,859.47 (as such number shall be appropriately adjusted for stock splits, stock dividends or similar events affecting the Series A Preferred Stock) and (ii) the amount of the actual Liquidation Preference of such share immediately prior to the Change of Control Date. "Voting Capital Stock" means with respect to any Person, securities of any class or classes of Capital Stock in such Person ordinarily entitling the holders thereof (whether at all PAGE 37 times or at the times that such class of Capital Stock has voting power by reason of the happening of any contingency) to vote in the election of members of the board of directors or comparable governing body of such Person. 18. No Reissuances. Subject to Section 12(i), any share of Series A Preferred Stock that is purchased, redeemed or otherwise acquired by the Company or any subsidiary shall be cancelled and restored to the status of authorized but unissued Preferred Stock but shall not be reissued as Series A Preferred Stock. IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be duly executed by H. Don Teague, Executive Vice President of the Company, this 7th day of April, 2000. ICG COMMUNICATIONS, INC. By: /s/ Don Teague Name: H. Don Teague Title: Executive Vice President A-1 EXHIBIT A FACE OF SECURITY THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND, UNLESS SO REGISTERED, THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. Number of Shares Number: ____ ____ Shares 8% SERIES [A-1, A-2 or A-3] CONVERTIBLE PREFERRED STOCK DUE 2015 OF ICG COMMUNICATIONS, INC. ICG COMMUNICATIONS, INC., a company organized under the laws of Delaware (the "Company"), hereby certifies that {HOLDER} (the "Holder") is the registered owner of fully paid and non-assessable preference securities of the Company designated the 8% Series [A-1, A-2 or A-3] Convertible Preferred Stock due 2015, par value U.S.$0.01 and initial liquidation preference U.S. $10,000 per share (the "Preferred Stock"). The shares of Preferred Stock are transferable on the books and records of the Registrar, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Stock represented hereby are issued and shall in all respects be subject to the provisions of the Certificate of Designation of the Company dated April 7, 2000, as the same may be amended from time to time in accordance with its terms (the "Preferred Stock Certificate of Designation"). Capitalized terms used herein but not defined shall have the meaning given them in the Preferred Stock Certificate of Designation. The Company will provide a copy of the Preferred Stock Certificate of Designation to a Holder without charge upon written request to the Company at its principal place of business. [THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE SHALL BE AUTOMATICALLY CONVERTED INTO SHARES OF THE COMPANY'S 8% SERIES A-3 CONVERTIBLE PREFERRED STOCK UPON CERTAIN A-2 TRANSFERS OF SUCH SHARES AS PROVIDED IN SECTION 12(i) OF THE COMPANY'S PREFERRED STOCK CERTIFICATE OF DESIGNATION.]* Reference is hereby made to select provisions of the Preferred Stock set forth on the reverse hereof, and to the Preferred Stock Certificate of Designation, which select provisions and the Preferred Stock Certificate of Designation shall for all purposes have the same effect as if set forth at this place. Upon receipt of this certificate, the Holder is bound by the Preferred Stock Certificate of Designation and is entitled to the benefits thereunder. Unless the Transfer Agent's valid counter-signature appears hereon, the shares of Preferred Stock evidenced hereby shall not be entitled to any benefit under the Preferred Stock Certificate of Designation or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has executed this certificate as of the date set forth below. ICG COMMUNICATIONS, INC. By: Name: Title: {Seal} By: Name: Title: Dated: * include for Series A-1 Preferred Stock and Series A-2 Preferred Stock R-1 REVERSE OF SECURITY ICG COMMUNICATIONS, INC. 8% Series [A-1, A-2 or A-3] Convertible Preferred Stock due 2015 Dividends on each share of Preferred Stock shall be payable at a rate per annum set forth on the face hereof or as provided in the Preferred Stock Certificate of Designation. Subject to the limitations set forth in Section 11 of the Preferred Stock Certificate of Designation, dividends may be paid, at the option of the Company, in cash. The shares of Preferred Stock shall be redeemable as provided in the Preferred Stock Certificate of Designation. The shares of Preferred Stock shall be convertible into the Company's Common Stock in the manner and according to the terms set forth in the Preferred Stock Certification of Designation. The Company shall furnish to any Holder upon request and without charge, a copy of the voting rights, preferences, limitations and special rights of the shares of each class or series authorized to be issued by the Company so far as they have been fixed and determined and the authority of the Board of Directors to fix and determine the designations, voting rights, preferences, limitations and special rights of the class or series of shares of the Company. ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Preferred Stock evidenced hereby to: (Insert assignee's social security or tax identification number) (Insert address and zip code of assignee) and irrevocably appoints: agent to transfer the shares of Preferred Stock evidenced hereby on the books of the Transfer Agent and Registrar. The agent may substitute another to act for him or her. Date: Signature: (Sign exactly as your name appears on the other side of this Convertible Preferred Stock Certificate) Signature Guarantee:* R-2 *Signature must be guaranteed by an "eligible guarantor institution" (i.e., a bank, stockbroker, savings and loan association or credit union) meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934. N-1 NOTICE OF CONVERSION (To be Executed by the Registered Holder in order to Convert the Preferred Stock) The undersigned hereby irrevocably elects to convert (the "Conversion") _________ shares of 8% Series [A-1, A-2 or A-3] Convertible Preferred Stock due 2015 (the "Preferred Stock"), represented by stock certificate No(s). ______________ (the "Preferred Stock Certificates") into shares of common stock, par value U.S. $.01 per share ("Common Stock"), of ICG Communications, Inc. (the "Company") according to the conditions of the Certificate of Designation establishing the terms of the Preferred Stock (the "Preferred Stock Certificate of Designation"), as of the date written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates. No fee will be charged to the holder for any conversion, except for transfer taxes, if any. A copy of each Preferred Stock Certificate is attached hereto (or evidence of loss, theft or destruction thereof).* The undersigned represents and warrants that all offers and sales by the undersigned of the shares of Common Stock issuable to the undersigned upon conversion of the Preferred Stock shall be made pursuant to registration of the Common Stock under the Securities Act of 1933 (the "Act"), or pursuant to an exemption from registration under the Act. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in or pursuant to the Preferred Stock Certificate of Designation. Date of Conversion: Applicable Conversion Price: Number of shares of Preferred Stock to be Converted: Number of shares of Common Stock to be Issued: Signature: Name: Address: Fax No.: *The Company is not required to issue shares of Common Stock until the original Preferred Stock Certificate(s) (or evidence of loss, theft or destruction thereof) to be converted are received by the Company or its Transfer Agent. The Company shall issue and deliver shares of Common Stock to an overnight courier not later than three business days following receipt of the original Preferred Stock Certificate(s) to be converted. **Address where shares of Common Stock and any other payments or certificates shall be sent by the Company. EX-10.5 6 FORM OF COMMON STOCK WARRANT PAGE 1 EXHIBIT 10.5 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. Name COMMON STOCK WARRANT Void after April 10, 2005 Warrant No. Certificate April 10, 2000 This certifies that, for value received, Name or its permitted assigns is entitled, subject to the terms and conditions set forth herein (including the exercise conditions of Section 2), to purchase from ICG Communications, Inc., a Delaware corporation, up to No fully paid and nonassessable shares (the "Shares") of Common Stock (as defined herein) at the exercise price of $34.00 per share (the "Exercise Price"). The Exercise Price and number of Shares is subject to adjustment as provided in this Warrant. The term "Warrant" as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein. Section 1. Definitions. As used in this Warrant, the following terms, unless the context otherwise requires, have the following meanings: (a) "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in the City of New York are authorized or obligated by law or executive order to be closed. (b) "Capital Stock" or "capital stock" means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting and/or non-voting) of such Person's capital stock, whether outstanding on the date of the Warrant or issued after the date of the Warrant, and any and all rights (other than any evidence of indebtedness) or warrants exercisable or exchangeable for or convertible into such capital stock. (c) "Certificate of Designation" means the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights, Qualifications, Limitations and Restrictions thereof relating to the Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3 Preferred Stock. PAGE 2 (d) "Common Stock" means shares of the Company's common stock, par value $0.01 per share, and capital stock of any other class or series into which the Common Stock may hereafter be changed. (e) "Company" means ICG Communications, Inc. and any Person that shall succeed to or assume the obligations of the Company under this Warrant. (f) "Person" means any individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or agency or political subdivision thereof, or other entity. (g) "Series A Preferred Stock" means the Series A-1 Preferred Stock, the Series A-2 Preferred Stock and the Series A-3 Preferred Stock. (h) Series A-1 Preferred Stock" means the 8% Series A-1 Convertible Preferred Stock due 2015, initial liquidation preference $10,000 per share, par value $0.01 per share, of the Company. (i) "Series A-2 Preferred Stock" means the 8% Series A-2 Convertible Preferred Stock due 2015, initial liquidation preference $10,000 per share, par value $0.01 per share, of the Company. (j) "Series A-3 Preferred Stock" means the 8% Series A-3 Convertible Preferred Stock due 2015, initial liquidation preference $10,000 per share, par value $0.01 per share, of the Company. (k) "Warrantholder", "holder of Warrant", "holder", or similar terms refers to the holder of this Warrant. Section 2. Exercise Provisions. (a) Exercisability. The holder of this Warrant may exercise it in whole or in part to the extent then exercisable by surrender of this Warrant, with the form of subscription at the end of this Warrant duly executed by the holder, to the Company at its principal office (or to the office of the Warrant Agent as contemplated in Section 6(b), if applicable), accompanied by payment, in lawful money of the United States, of the amount obtained by multiplying the Exercise Price (as adjusted from time to time pursuant to the terms of this Warrant) by the number of shares of Common Stock designated in such completed subscription form. This Warrant shall be deemed to have been exercised immediately prior to the close of business on the day of surrender of such Warrant, and the person or persons entitled to receive shares of Common Stock issuable upon exercise of this Warrant shall be treated for all purposes as the record holder or holders of such shares of Common Stock at such time. (b) Payment of Exercise Price. Payment shall be made by check payable to the Company. PAGE 3 (c) Net Issue Exercise. Notwithstanding any provisions herein to the contrary, if the fair market value (as defined below) of one share of Common Stock is greater than the Exercise Price (on the date of exercise of this Warrant), in lieu of exercising this Warrant in exchange for cash, the holder may elect to exercise all or a portion of this Warrant by canceling all or a portion of this Warrant and receiving in exchange therefor shares of Common Stock (as determined below) equal to the value of this Warrant, or the portion thereof being canceled, by surrender of this Warrant at the principal office of the Company (or the office of the Warrant Agent contemplated by Section 6(b), if applicable) together with a duly executed form of subscription, in which event the Company shall issue to the holder a number of shares of Common Stock computed using the following formula: X=Y(A-B) A Where X = the number of shares of Common Stock to be issued to the holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, under the portion of the Warrant being exercised (on the date of exercise) A = the fair market value of one share of the Common Stock (on the date of exercise) B = the Exercise Price (as adjusted to the date of exercise) For purposes of the above calculation, "fair market value" of one share of Common Stock shall be determined by the Company's Board of Directors in good faith; provided, however, where a public market exists for the Common Stock at the time of such exercise, the "fair market value", per share shall be equal to the average for the five (5) trading days prior to the date of such exercise of the average of the closing bid and asked prices of the Common Stock quoted in the Over-The-Counter Market Summary or the last reported sale price of the Common Stock quoted on the Nasdaq National Market System or the principal exchange on which the Common Stock is then listed, whichever is applicable, as published in The Wall Street Journal. (d) Restrictions on Exercise. This Warrant is exercisable at any time and from time to time from the date hereof, provided this Warrant has not terminated pursuant to Section 10. PAGE 4 Section 3. Delivery of Stock Certificates. As soon as possible after full or partial exercise of this Warrant in accordance with the terms hereof and in any event within ten (10) days after such exercise, the Company, at its expense, will cause to be issued in the name of and delivered to the holder of this Warrant, a certificate or certificates for the number of fully paid and nonassessable shares of Common Stock to which that holder shall be entitled upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will also execute and deliver a new Warrant of like tenor exercisable for the number of Shares for which this Warrant may then be exercised. No fractional shares or scrip representing fractional shares will be issued upon exercise of this Warrant. If upon any exercise of this Warrant a fraction of a share would otherwise be issuable, the Company will, in lieu of issuing such fraction of a share, round down to the nearest whole share if such fraction is an amount less than 0.5 and round up to the nearest whole share if such fraction is an amount equal to or greater than 0.5 and shall issue the appropriate number of full shares of Common Stock that shall be issuable upon exercise of this Warrant. Section 4. Adjustment Provisions. The Exercise Price shall be adjusted from time to time by the Company as follows: (a) If the Company shall hereafter pay a dividend or make a distribution to all holders of the outstanding shares of Common Stock in shares of Common Stock, the Exercise Price in effect at the opening of business on the date following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Exercise Price by a fraction the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date (as defined in Section 4(f)) fixed for such determination and the denominator of which shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day following the Common Stock Record Date. If any dividend or distribution of the type described in this Section 4(a) is declared but not so paid or made, the Exercise Price shall again be adjusted to the Exercise Price which would then be in effect if such dividend or distribution had not been declared. (b) (i) In case the Company shall issue or sell any Common Stock, or securities convertible into or exercisable or exchangeable for shares of Common Stock (other than Common Stock, or securities convertible into or exercisable or exchangeable for shares of Common Stock, issued (A) pursuant to the Company's existing or future stock option plans or pursuant to any other existing or future Common Stock-related director or employee compensation plan or arrangement of the Company approved by the Board of Directors (provided that, with respect to any stock option or other right granted after April 7, 2000, the per share exercise price of such option or right is equal to or greater than the per share Closing Price of the Common Stock on the date of the grant thereof), (B) as consideration for the acquisition of a business or of assets (provided that PAGE 5 the fair market value of such business or assets, as determined by the Board of Directors in good faith, is equal to or greater than the aggregate Current Market Price of the Common Stock to be issued as consideration for such acquisition, in each case determined at the time the Company enters into a binding agreement with respect to such acquisition), (C) pursuant to warrants outstanding on the date hereof, (D) upon the conversion of any shares of Series A Preferred Stock pursuant to Section 12(a) of the Certificate of Designation, (E) upon the automatic conversion of shares of Series A-1 Preferred Stock or Series A-2 Preferred Stock pursuant to Section 12(i) of the Certificate of Designation, or (F) upon exercise or conversion of any security the issuance of which caused an adjustment under the provisions hereof or the issuance of which did not require adjustments hereunder), for a consideration per share (or, in the case of convertible or exchangeable securities having a conversion or exercise price per share of Common Stock) less than the Current Market Price of the Common Stock on the date of such issuance, the Exercise Price in effect immediately prior to such issuance or sale shall be reduced effective as of immediately following such issuance or sale by multiplying such Exercise Price by a fraction, (1) the numerator of which shall be the sum of (x) the number of shares of Common Stock outstanding immediately prior to such issuance or sale and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Company for the total number of additional shares of Common Stock so issued or sold (or issuable on conversion, exercise or exchange) would purchase at the Current Market Price in effect immediately prior to such issuance or sale and (2) the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to such issuance or sale and the number of additional shares of Common Stock to be issued or sold (or, in the case of convertible or exchangeable securities, issuable on conversion, exercise or exchange). (ii) If the Company shall offer or issue rights or warrants to all holders of its outstanding shares of Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price (as defined in Section 4(f)) on the Common Stock Record Date fixed for the determination of shareholders entitled to receive such rights or warrants, the Exercise Price shall be adjusted so that the same shall equal the price determined by multiplying the Exercise Price in effect at the opening of business on the date after such Common Stock Record Date by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock subject to such rights or warrants would purchase at such Current Market Price and of which the denominator shall be the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date plus the total number of additional shares of Common Stock subject to such rights or warrants for subscription or purchase. Such adjustment shall become effective immediately after the opening of business on the day following the Common Stock Record Date fixed for determination of shareholders entitled to purchase or receive such rights or warrants. To the extent that shares of Common Stock are not delivered pursuant to such rights or warrants, upon the expiration or termination of such rights or warrants the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made PAGE 6 on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such date fixed for the determination of shareholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Current Market Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account (x) any consideration received for such rights or warrants, with the value of such consideration and the amount of such exercise or subscription price, if other than cash, to be determined by the Board of Directors and (y) the amount of any exercise price or subscription price required to be paid upon exercise of such warrants or rights. (c) If the outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Exercise Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, if the outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Exercise Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (d) (i) If the Company shall, by dividend or otherwise, distribute to all holders of its shares of Common Stock any class of capital stock of the Company (other than any dividends or distributions to which Section 4(a) applies) or evidences of its indebtedness, cash or other assets (including securities, but excluding any rights or warrants of a type referred to in Section 4(b)(ii) and dividends and distributions paid exclusively in cash and excluding any capital stock, evidences of indebtedness, cash or assets distributed upon a merger or consolidation to which Section 4(k) applies) (the foregoing hereinafter in this Section 4(d) called the "Distributed Securities"), then, in each such case, the Exercise Price shall be reduced so that the same shall be equal to the price determined by multiplying the Exercise Price in effect immediately prior to the close of business on the Common Stock Record Date (as defined in Section 4(f)) with respect to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in Section 4(f)) on such date less the fair market value (as determined by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) on such date of the portion of the Distributed Securities so distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day following the Common Stock Record Date; provided, however, that, in the event the then fair market value (as so determined) of the portion of the Distributed Securities so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the Common Stock Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that a Warrantholder shall have the right to receive upon exercise of this Warrant (or any PAGE 7 portion thereof) the amount of Distributed Securities such holder would have received had such holder exercised this Warrant (or portion thereof) immediately prior to such Common Stock Record Date. If such dividend or distribution is not so paid or made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such dividend or distribution had not been declared. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 4(d) by reference to the actual or when issued trading market for any securities constituting all or part of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to Section 4(f)) to the extent possible. (ii) Rights or warrants distributed by the Company to all holders of shares of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("Dilution Trigger Event"): (A) are deemed to be transferred with such shares of Common Stock; (B) are not exercisable; and (C) are also issued in respect of future issuances of shares of Common Stock, shall be deemed not to have been distributed for purposes of this Section 4(d) (and no adjustment to the Exercise Price under this Section 4(d) shall be required) until the occurrence of the earliest Dilution Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment to the Exercise Price under this Section 4(d) shall be made. If any such rights or warrants, including any such existing rights or warrants distributed prior to the first issuance of the Warrants, are subject to subsequent events, upon the occurrence of each of which such rights or warrants shall become exercisable to purchase securities, evidences of indebtedness or other assets, then the occurrence of each such event shall be deemed to be such date of issuance and record date with respect to new rights or warrants (and a termination or expiration of the existing rights or warrants, without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Dilution Trigger Event with respect thereto, that was counted for purposes of calculating a distribution amount for which an adjustment to the Exercise Price under this Section 4(d) was made, (1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Exercise Price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Dilution Trigger Event, as the case may be, as though it were a cash distribution to which this Section 4(d) were applicable, equal to the per share redemption or repurchase price received by a holder or holders of shares of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of shares of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Exercise Price shall be readjusted as if such rights and warrants had not been issued. (iii) Notwithstanding any other provision of this Section 4(d) to the contrary, rights, warrants, evidences of indebtedness, other securities, cash or other assets (including, without limitation, any rights distributed pursuant to any shareholder rights plan) shall be deemed not to have been distributed for purposes of this Section 4(d) if the PAGE 8 Company makes proper provision so that a Warrantholder who exercises this Warrant (or any portion thereof) after the date fixed for determination of shareholders entitled to receive such distribution shall be entitled to receive upon such exercise, in addition to the shares of Common Stock issuable upon such exercise, the amount and kind of such distributions that such Warrantholder would have been entitled to receive if such holder had immediately prior to such determination date, exercised this Warrant. (iv) For purposes of this Section 4(d) and Sections 4(a) and 4(b), any dividend or distribution to which this Section 4(d) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock to which 4(b) applies (or both), shall be deemed instead to be (A) a dividend or distribution of the evidences of indebtedness, assets, shares of capital stock, rights or warrants other than such shares of Common Stock or rights or warrants to which Section 4(b) applies (and any Exercise Price reduction required by this Section 4(d) with respect to such dividend or distribution shall then be made) immediately followed by (B) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Exercise Price reduction required by Sections 4(a) or 4(b) with respect to such dividend or distribution shall then be made), except that (1) the Common Stock Record Date of such dividend or distribution shall be substituted as "the date fixed for the determination of shareholders entitled to receive such dividend or other distribution", "the Common Stock Record Date fixed for such determination" and "the Common Stock Record Date" within the meaning of Section 4(a) and as "the date fixed for the determination of shareholders entitled to receive such rights or warrants", "the Common Stock Record Date fixed for the determination of the shareholders entitled to receive such rights or warrants" and "such Common Stock Record Date" for purposes of Section 4(b), and (2) any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" for the purposes of Section 4(a). (e) If a tender offer made by the Company or any of its subsidiaries for all or any portion of the Common Stock expires and such tender offer (as amended upon the expiration thereof) requires the payment to shareholders (based on the acceptance (up to any maximum specified in the terms of the tender offer) of Purchased Shares) of an aggregate consideration having a fair market value (as determined by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) that, combined together with the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) as of the expiration of such tender offer, of consideration payable in respect of any other tender offers by the Company or any of its subsidiaries for all or any portion of the shares of Common Stock expiring within the 12 months preceding the expiration of such tender offer and in respect of which no adjustment pursuant to this Section 4(e) has been made, exceeds 5% of the net income of the Company reported for the 12 month period ending with the fiscal quarter next preceding such payment (the "12 Month Net Income") (determined as of the last time (the "Expiration Time") tenders could have been made pursuant to such tender offer (as it may be amended)), then, and in each such case, immediately prior to the opening of business on the day after the date of the Expiration Time, the Exercise Price shall be adjusted so that the same shall equal the price determined by multiplying the Exercise Price in PAGE 9 effect immediately prior to the close of business on the date of the Expiration Time by a fraction of which the numerator shall be the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time multiplied by the Current Market Price of a share of Common Stock on the trading day next succeeding the Expiration Time and the denominator shall be the sum of (x) the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders based on the acceptance (up to any maximum specified in the terms of the tender offer) of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares") and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Current Market Price of the shares of Common Stock on the trading day next succeeding the Expiration Time, such reduction (if any) to become effective immediately prior to the opening of business on the day following the Expiration Time. If the Company is obligated to purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such tender offer had not been made. If the application of this Section 4(e) to any tender offer would result in an increase in the Exercise Price, no adjustment shall be made for such tender offer under this Section 4(e). (f) For purposes of this Section 4, the following terms shall have the meaning indicated: "Closing Price" with respect to any securities on any day means the closing sale price as of 4:00 p.m. Eastern Time on such day or any earlier final closing on such day or, if no such sale takes place on such day, the average of the reported high and low bid prices on such day, in each case on the Nasdaq National Market, or the New York Stock Exchange, as applicable, or, if such security is not listed or admitted to trading on such national market or exchange, on the national stock exchange or Commission recognized trading market in the United States on which such security is quoted or listed or admitted to trading, or, if not quoted or listed or admitted to trading on any national stock exchange or Commission recognized trading market in the United States, the average of the high and low bid prices of such security on the over-the-counter market on the day in question as reported by the National Quotation Bureau Incorporated or a similar generally accepted reporting service in the United States, or, if not so available, in such manner as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors for that purpose, or a price determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors. "Common Stock Record Date" means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of shareholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise). PAGE 10 "Current Market Price" means the average of the daily Closing Prices per share of Common Stock for the 10 consecutive trading days immediately prior to the date in question; provided, however, that (A) if the "ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Exercise Price pursuant to Section 4(a), 4(b), 4(c), 4(d) or 4(e) occurs during such 10 consecutive trading days, the Closing Price for each trading day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the Exercise Price is so required to be adjusted as a result of such other event, (B) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Exercise Price pursuant to Section 4(a), 4(b), 4(c), 4(d) or 4(e) occurs on or after the "ex" date for the issuance or distribution requiring such computation and prior to the day in question, the Closing Price for each trading day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Exercise Price is so required to be adjusted as a result of such other event and (C) if the "ex" date for the issuance or distribution requiring such computation is prior to the day in question, after taking into account any adjustment required pursuant to clause (A) or (B) of this proviso, the Closing Price for each trading day on or after such "ex" date shall be adjusted by adding thereto the amount of any cash and the fair market value (as determined by the Board of Directors in a manner consistent with any good faith determination of such value for purposes of Section 4(d), whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) of the evidences of indebtedness, shares of capital stock or assets being distributed applicable to one share of Common Stock as of the close of business on the day before such "ex" date. For purposes of any computation under Section 4(e), the Current Market Price on any date shall be deemed to be the average of the daily Closing Prices per share of Common Stock for such day and the next two succeeding trading days; provided, however, that, if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the Exercise Price pursuant to Section 4(a), 4(b), 4(c), 4(d) or 4(e) occurs on or after the Expiration Time for the tender or exchange offer requiring such computation and prior to the day in question, the Closing Price for each trading day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Exercise Price is so required to be adjusted as a result of such other event. For purposes of this paragraph, the term "ex" date (1) when used with respect to any issuance or distribution, means the first date on which the shares of Common Stock trade regular way on the relevant exchange or in the relevant market from which the Closing Price was obtained without the right to receive such issuance or distribution, (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the shares of Common Stock trade regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective and (3) when used with respect to any tender or exchange offer means the first date on which the shares of Common Stock trade regular way on such exchange or in such market after the Expiration Time of such offer. Notwithstanding the foregoing, whenever successive adjustments to the Exercise Price are called for pursuant to this Section 4, such adjustments shall be made to the Current Market Price as may be necessary or PAGE 11 appropriate to effectuate the intent of this Section 4 and to avoid unjust or inequitable results, as determined in good faith by the Board of Directors. "Fair Market Value" means the amount which a willing buyer would pay a willing seller in an arm's-length transaction. (g) No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this Section 4(g) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 4 shall be made by the Company and shall be made to the nearest cent. No adjustment need be made for a change in the par value or no par value of the Common Stock. (h) Whenever the Exercise Price is adjusted as herein provided, the Company shall promptly file with the Warrant Agent an Officer's Certificate setting forth the Exercise Price after such adjustment and the number of shares of Common Stock for which this Warrant will be exercisable after such adjustment pursuant to Section 4(l) and setting forth a brief statement of the facts requiring such adjustment. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Exercise Price setting forth the adjusted Exercise Price and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Exercise Price to each Warrantholder at such holder's last address appearing on the register of holders maintained for that purpose within 20 days of the effective date of such adjustment. Failure to deliver such notice shall not affect the legality or validity of any such adjustment. (i) In any case in which this Section 4 provides that an adjustment shall become effective immediately after a Common Stock Record Date for an event, the Company may defer until the occurrence of such event issuing to the holder of any Warrant exercised after such Common Stock Record Date and before the occurrence of such event the additional shares of Common Stock issuable upon such exercise by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such exercise before giving effect to such adjustment. (j) For purposes of this Section 4, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company or by any of its subsidiaries. The Company shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company or by any of its subsidiaries. (k) In case of any consolidation of the Company with, or merger of the Company into, any other Person, or in case of any merger of another Person into the Company (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company), or in case of any sale, conveyance or transfer of all or substantially all the assets of the Company, the Warrantholders shall have the right thereafter, during the period such Warrant shall be exercisable as specified in Section 2(d), to convert such Warrants into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance or transfer by a holder of the number of shares of Common Stock of the Company for which the Warrants might have been exercised PAGE 12 immediately prior to such consolidation, merger, conveyance or transfer, assuming such holder of shares of Common Stock of the Company failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, conveyance or transfer (provided that, if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, conveyance or transfer is not the same for each share of Common Stock of the Company in respect of which such rights of election shall not have been exercised ("nonelecting share"), then for the purpose of this Section 4(k) the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance or transfer by each nonelecting share shall be deemed to be the kind and amount so receivable per share by a plurality of the nonelecting shares). Such securities shall provide for adjustments which, for events subsequent to the effective date of the triggering event, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 4(k). The above provisions of this Section 4(k) shall similarly apply to successive consolidations, mergers, conveyances or transfers. (l) Upon each adjustment of the Exercise Price as a result of the operation of this Section 4, this Warrant shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of shares of Common Stock obtained by multiplying the number of shares covered by this Warrant immediately prior to this adjustment by the Exercise Price in effect immediately prior to such adjustment and dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price. (m) In the event that a Warrantholder would be entitled to receive upon exercise hereof any Redeemable Capital Stock and the Company redeems, exchanges or otherwise acquires all of the outstanding shares or other units of such Redeemable Capital Stock (such event being a "Redemption Event"), then, from and after the effective date of such Redemption Event, the Warrantholder shall be entitled to receive upon exercise, in lieu of shares or units of such Redeemable Capital Stock, the kind and amount of shares of stock and other securities and property receivable upon the Redemption Event by a holder of the number of shares or units of such Redeemable Capital Stock for which this Warrant could have been exercised immediately prior to the effective date of such Redemption Event (assuming, to the extent applicable, that such holder failed to exercise any rights of election with respect thereto and received per share or unit of such Redeemable Capital Stock the kind and amount of stock and other securities and property received per share or unit by a plurality of the non-electing shares or units of such Redeemable Capital Stock), and (from and after the effective date of such Redemption Event) the Warrantholder shall have no other purchase rights under this Warrant with respect to such Redeemable Capital Stock. For purposes of this Section 4(m) "Redeemable Capital Stock" means a class or series of capital stock of the Company that provides by its terms a right in favor of the Company to call, redeem, exchange or otherwise acquire all of the outstanding shares or units of such class or series. Section 5. Notice of Certain Events. In case: (a) the Company shall declare a dividend (or any other distribution) on its Common Stock payable otherwise than in cash out of its earned surplus; or PAGE 13 (b) the Company shall authorize the granting to all holders of its shares of Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights; or (c) of any reclassification of the Common Stock (other than a subdivision or combination of the Company's outstanding shares of Common Stock), or of any consolidation or merger to which the Company is a party and for which approval of any shareholders of the Company is required, or the sale, conveyance or transfer of all or substantially all the assets of the Company; (d) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company; or (e) of the taking of any other action referred to in Section 4; then the Company shall cause to be mailed to all Warrantholders at their last addresses as they shall appear on the books of the Company, at least 20 Business Days (or 10 Business Days in any case specified in clause (a) or (b) above) prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such dividend, distribution, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become effective, and the date as of which it is expected that holders of shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up. Failure to give the notice required by this Section 5 or any defect therein shall not affect the legality or validity of any dividend, distribution, right, warrant, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up, or the vote upon any such action. Section 6. Transfer of Warrants. (a) Warrant Register. The Company shall maintain a register (the "Warrant Register") containing the names, addresses and facsimile numbers of the holder(s). Any holder of this Warrant or any portion thereof may change its address as shown on the Warrant Register by written notice to the Company requesting such a change. Until this Warrant is transferred on the Warrant Register, the Company may treat the holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary. (b) Warrant Agent. The Company may, by written notice to the holder, appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 6(a) above, issuing any other securities then issuable upon the exercise of this Warrant, exchanging this Warrant, replacing PAGE 14 this Warrant or any or all of the foregoing. Thereafter, any such registration, issuance or replacement, as the case may be, shall be made at the office of such agent. (c) Transferability and Negotiability of Warrant. Title to this Warrant may be transferred by endorsement (by the holder executing the Assignment Form attached hereto) and delivery in the same manner as negotiable instruments transferable by endorsement and delivery. (d) Exchange of Warrant Upon a Transfer. On surrender of this Warrant for exchange, properly endorsed on the Assignment Form and subject to the provisions of this Warrant with respect to compliance with the Securities Act, the Company at its expense shall issue to or on the order of the holder a new warrant or warrants of like tenor, in the name of the holder or as the holders (on payment by the holder of any applicable transfer taxes) may direct, exercisable for the number of Shares issuable upon the exercise hereof. Section 7. Registration Rights. If the holder of this Warrant is a party to, or an assignee of rights under, that certain Registration Rights Agreement, dated April 7, 2000 (the "Registration Rights Agreement"), such holder shall be entitled to include any shares of Common Stock or other securities received upon exercise of the Warrant with such holder's Registrable Securities (as such term is defined in the Registration Rights Agreement), on the terms and conditions as set forth in the Registration Rights Agreement. Section 8. Amendment and Waivers. No amendment, modification or termination of this Warrant shall be binding unless executed in writing by the Company and the Warrantholder intending to be bound thereby. Section 9. Waivers and Extensions. Any provision of this Warrant may be amended, waived or modified only if such amendment, waiver or modification is in writing, is signed by the party intending to be bound, and specifically refers to this Warrant. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts. PAGE 15 Section 10. Termination. The right to exercise this Warrant shall expire and shall be void at 5:00 p.m., New York City time on April 10, 2005. Section 11. Reservation of Stock. The Company covenants that it will at all times reserve and keep available, solely for issuance upon exercise of this Warrant, all shares of Common Stock or other securities from time to time issuable upon exercise of this Warrant and, subject to any existing contractual limitations, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock or other securities issuable upon exercise of this Warrant. The Company further covenants that all shares that may be issued upon the exercise of rights represented by this Warrant and payment of the Exercise Price, as set forth herein, will be fully paid and non-assessable and free from all taxes, liens and charges in respect of the issue thereof. The Company also agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon exercise of this Warrant. Section 12. Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of loss, theft, or destruction, on delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. Section 13. No Rights as Stockholder. Except as provided in Section 2 or Section 4, no holder of this Warrant, as such, shall be entitled to vote or receive dividends or be considered a stockholder of the Company for any purpose, nor shall anything in this Warrant be construed to confer on any holder of this Warrant as such, any rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meeting of stockholders, to receive dividends or subscription rights or otherwise. Section 14. Miscellaneous Provisions. (a) Governing Law. This Warrant shall be governed by, interpreted under, and construed in accordance with the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. (b) Notices. PAGE 16 All notices, demands, requests, consents, approvals or other communications (collectively, "Notices") required or permitted to be given hereunder or which are given with respect to this Warrant shall be in writing and shall be personally served, delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, to such address as such party shall have specified most recently by written notice. Notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile. Notice otherwise sent as provided herein shall be deemed given on the next business day following delivery of such notice to a reputable air courier service. (c) Binding Effect. The provisions of this Warrant shall be binding upon the Company and its successors and assigns. (d) Remedies. In the event of a breach of this Warrant, the holder shall be entitled to injunctive relief and specific performance of its rights under this Warrant, in addition to all of its rights granted by law, including, without limitation, recovery of damages. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach of this Warrant by the Company and hereby waives any defense in any action for injunctive relief or specific performance that a remedy at law would be adequate. (e) Headings. Titles and headings of sections of this Warrant are for convenience only and shall not affect the construction of any provision of this Warrant. IN WITNESS WHEREOF, the Company has executed this Warrant as of the date set forth above. ICG COMMUNICATIONS, INC. By: /s/ H. Don Teague Name: H. Don Teague Title: Executive Vice President SUBSCRIPTION FORM (To be signed only upon exercise of Warrant) To: ICG Communications, Inc. Attention: Secretary 1. The undersigned, the holder of the attached Warrant, hereby irrevocably elects to [exercise the purchase right represented by that Warrant for, and to purchase under that Warrant, ___________1 shares of Common Stock and herewith tenders any necessary payment of the purchase price in such number of shares in full.] [to exercise [all][a portion] of the purchase right represented by that Warrant by canceling the Warrant with respect to ___________ shares of Common Stock in exchange for a number of shares of Common Stock equal to the value [as determined pursuant to the Warrant] as the [portion of the] Warrant [being canceled]. 2. In exercising the Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock or other securities to be issued upon exercise thereof are being acquired solely for the account of the undersigned and not as a nominee for any other party, and that the undersigned will not sell, offer for sale, pledge, hypothecate or otherwise dispose of any shares of Common Stock, except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any applicable state securities laws. 3. Please issue a certificate(s) representing said shares of Common Stock in the name of the undersigned or in the name of the transferee specified below. 4. Please issue a new Warrant for the unexercised portion in the name of the undersigned or in the name of the permitted transferee specified below. 5. Please deliver any certificate(s) or Warrant to the following address. Name:___________________________ Address:_________________________ Attention:________________________ Dated: By: _______________________________ Name Footnote: Insert here the number of shares called for on the face of the Warrant (or, in the case of partial exercise, the portion as to which the Warrant is being exercised), without making any adjustment for additional shares of Common Stock or any other securities or property which, under the adjustment provisions of the Warrant, may be deliverable upon exercise. ASSIGNMENT FORM FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the assignee named below all of the rights of the undersigned under this Warrant, with respect to the number of shares of Common Stock set forth below: No. of Shares of Name and Address of Assignee Common Stock and does hereby irrevocably constitute and appoint _______________________ attorney-in-fact to register such transfer onto the books of ICG Communications, Inc. maintained for the purpose, with full power of substitution in the premises. Date: Print Name: Signature: Witness: NOTICE: The signature on this assignment must correspond with the name as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatsoever. EX-10.6 7 CREDIT AGREEMENT EXHIBIT 10.6 CREDIT AGREEMENT dated as of December 28, 1999 among HMTF Bridge Partners, L.P. and HM/Europe Coinvestors, C.V., as Initial Borrowers, and any Future Borrowers from time to time parties hereto, The Lenders and the Issuing Bank Parties Hereto, and The Chase Manhattan Bank, as Administrative Agent, Chase Securities Inc., as Co-Lead Arranger and Co-Book Manager, Bank of America, N.A., as Syndication Agent, and Banc of America Securities LLC, as Co-Lead Arranger and Co-Book Manager U.S. $1,780,000,000 TERM LOAN FACILITY
ARTICLE 1 Definitions. . . . . . . . . . . . . . . 1 SECTION 1.1 . . . . . . . . . . . . . . . . . . . Defined Terms 1 SECTION 1.2 . . . . . . . . . . . . . . . . . . . Terms Generally 12 SECTION 1.3 . . . . . . . . . . . . . . . . . . . Accounting Terms; GAAP 13 ARTICLE 2 Term Loans . . . . . . . . . . . . . . . 13 SECTION 2.1 . . . . . . . . . . . . . . . . . . . Term Loans 13 SECTION 2.2 . . . . . . . . . . . . . . . . . . . Procedure for Term Loan Borrowing 13 SECTION 2.3 . . . . . . . . . . . . . . . . . . . Letters of Credit 14 SECTION 2.4 . . . . . . . . . . . . . . . . . . . Repayment of Loans; Evidence of Debt; etc 17 SECTION 2.5 . . . . . . . . . . . . . . . . . . . Termination and Reduction of Commitments 18 SECTION 2.6 . . . . . . . . . . . . . . . . . . . Prepayments 18 SECTION 2.7 . . . . . . . . . . . . . . . . . . . Conversion and Continuation Options 20 SECTION 2.8 . . . . . . . . . . . . . . . . . . . Minimum Amounts and Maximum Number of Tranches 20 SECTION 2.9 . . . . . . . . . . . . . . . . . . . Interest 20 SECTION 2.10 . . . . . . . . . . . . . . . . . . . Fees 21 SECTION 2.11 . . . . . . . . . . . . . . . . . . . Inability to Determine Interest Rate 22 SECTION 2.12 . . . . . . . . . . . . . . . . . . . Pro Rata Treatment and Payments. 22 SECTION 2.13 . . . . . . . . . . . . . . . . . . . Requirements of Law. 23 SECTION 2.14 . . . . . . . . . . . . . . . . . . . Taxes 24 SECTION 2.15 . . . . . . . . . . . . . . . . . . . Indemnity 26 SECTION 2.16 . . . . . . . . . . . . . . . . . . . Change of Lending Office 27 SECTION 2.17 . . . . . . . . . . . . . . . . . . . Replacement of Lenders 27 SECTION 2.18 . . . . . . . . . . . . . . . . . . . Nature of Obligations 28 SECTION 2.19 . . . . . . . . . . . . . . . . . . . Increase of Commitments 28 ARTICLE 3 Representations and Warranties . . . . . 29 SECTION 3.1 . . . . . . . . . . . . . . . . . . . Organization; Powers 29 SECTION 3.2 . . . . . . . . . . . . . . . . . . . Authorization; Enforceability 30 SECTION 3.3 . . . . . . . . . . . . . . . . . . . Governmental Approvals; No Conflicts 30 SECTION 3.4 . . . . . . . . . . . . . . . . . . . Compliance with Laws and Agreements 30 SECTION 3.5 . . . . . . . . . . . . . . . . . . . Investment and Holding Company Status 30 SECTION 3.6 . . . . . . . . . . . . . . . . . . . Material Adverse Effect 30 SECTION 3.7 . . . . . . . . . . . . . . . . . . . No Material Litigation 30 SECTION 3.8 . . . . . . . . . . . . . . . . . . . Disclosure 30 SECTION 3.9 . . . . . . . . . . . . . . . . . . . Investments 31 ARTICLE 4 Conditions Precedent . . . . . . . . . . 31 SECTION 4.1 . . . . . . . . . . . . . . . . . . . Conditions to Initial Funding 31 SECTION 4.2 . . . . . . . . . . . . . . . . . . . Additional Conditions for Each Credit Event 32 ARTICLE 5 Covenants. . . . . . . . . . . . . . . . 34 SECTION 5.1 . . . . . . . . . . . . . . . . . . . Notices of Material Events 34 SECTION 5.2 . . . . . . . . . . . . . . . . . . . Existence; Conduct of Business 34 SECTION 5.3 . . . . . . . . . . . . . . . . . . . Payment of Obligations 34 SECTION 5.4 . . . . . . . . . . . . . . . . . . . Compliance with Laws 34 SECTION 5.5 . . . . . . . . . . . . . . . . . . . Use of Proceeds 34 SECTION 5.6 . . . . . . . . . . . . . . . . . . . Additional Collateral 35 SECTION 5.7 . . . . . . . . . . . . . . . . . . . Financial Reporting 35 SECTION 5.8 . . . . . . . . . . . . . . . . . . . Additional Guarantors 36 SECTION 5.9 . . . . . . . . . . . . . . . . . . . Management and Advisory Agreements 36 SECTION 5.10 . . . . . . . . . . . . . . . . . . . Covenant to Pay 36 SECTION 5.11 . . . . . . . . . . . . . . . . . . . Margin Securities 36 ARTICLE 6 Negative Covenants . . . . . . . . . . . 36 SECTION 6.1 . . . . . . . . . . . . . . . . . . . Indebtedness 36 SECTION 6.2 . . . . . . . . . . . . . . . . . . . Liens 37 SECTION 6.3 . . . . . . . . . . . . . . . . . . . Fundamental Changes 37 SECTION 6.4 . . . . . . . . . . . . . . . . . . . Restricted Payments 37 SECTION 6.5 . . . . . . . . . . . . . . . . . . . Sale of Assets 37 ARTICLE 7 Events of Default. . . . . . . . . 38 ARTICLE 8 The Administrative Agent . . . . . . . . 41 SECTION 8.1 . . . . . . . . . . . . . . . . . . . Generally 41 SECTION 8.2 . . . . . . . . . . . . . . . . . . . Joint and Several Creditorship 43 ARTICLE 9 Miscellaneous. . . . . . . . . . . . . . 43 SECTION 9.1 . . . . . . . . . . . . . . . . . . . Notices 43 SECTION 9.2 . . . . . . . . . . . . . . . . . . . Waivers; Amendments 43 SECTION 9.3 . . . . . . . . . . . . . . . . . . . Expenses; Indemnity; Damage Waiver 44 SECTION 9.4 . . . . . . . . . . . . . . . . . . . Successors and Assigns 45 SECTION 9.5 . . . . . . . . . . . . . . . . . . . Survival 47 SECTION 9.6 . . . . . . . . . . . . . . . . . . . Counterparts; Integration; Effectiveness 48 SECTION 9.7 . . . . . . . . . . . . . . . . . . . Severability 48 SECTION 9.8 . . . . . . . . . . . . . . . . . . . Right of Setoff 48 SECTION 9.9 . . . . . . . . . . . . . . . . . . . GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS 48 SECTION 9.10 . . . . . . . . . . . . . . . . . . . WAIVER OF JURY TRIAL 49 SECTION 9.11 . . . . . . . . . . . . . . . . . . . Headings 49 SECTION 9.12 . . . . . . . . . . . . . . . . . . . Confidentiality 49 SECTION 9.13 . . . . . . . . . . . . . . . . . . . Syndication 50 SECTION 9.14 . . . . . . . . . . . . . . . . . . . Certainty of Funds 50 INDEX OF EXHIBITS Exhibit A . . . . . . . . . . . . . . . . . . . . . Assignment and Acceptance Exhibit B . . . . . . . . . . . . . . . . . . . . . Legal Opinion of Weil, Gotshal & Manges LLP Exhibit C . . . . . . . . . . . . . . . . . . . . . Legal Opinion of Nauta Dutilh Exhibit D . . . . . . . . . . . . . . . . . . . . . Legal Opinion of Walkers Exhibit E . . . . . . . . . . . . . . . . . . . . . Closing Certificate Exhibit F . . . . . . . . . . . . . . . . . . . . . Affiliate Guarantee Exhibit G . . . . . . . . . . . . . . . . . . . . . Investment Guarantee Exhibit H . . . . . . . . . . . . . . . . . . . . . Note Exhibit I . . . . . . . . . . . . . . . . . . . . . Pledge Agreement Exhibit J . . . . . . . . . . . . . . . . . . . . . Letter Agreement Exhibit K . . . . . . . . . . . . . . . . . . . . . Joinder Agreement Exhibit L . . . . . . . . . . . . . . . . . . . . . Principal Agreement INDEX OF SCHEDULES Schedule 2.1. . . . . . . . . . . . . . . . . . . . Lender's Commitments
CREDIT AGREEMENT, dated as of December 28, 1999, among HMTF Bridge Partners, L.P., a Delaware limited partnership, and HM/Europe Coinvestors, C.V., a limited partnership organized under the laws of the Kingdom of the Netherlands (collectively, the "Initial Borrowers"), any Future Borrowers from time to time parties hereto, the Lenders from time to time parties hereto, the Issuing Bank referred to below, The Chase Manhattan Bank, as Administrative Agent, and Bank of America, N.A., as Syndication Agent. The parties hereto agree as follows: ARTICLE 1 Definitions SECTION 1.1 Defined Terms. As used in this Agreement, the following terms have the meanings specified below: "ABR Loans" means Term Loans the rate of interest applicable to which is based upon the Alternate Base Rate. "Additional Lenders" has the meaning set forth in Section 9.13. "Administrative Agent" means The Chase Manhattan Bank, in its capacity as administrative agent for the Lenders hereunder. "Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "Affiliate Guarantees" means the collective reference to each guarantee agreement executed and delivered by an Affiliate Guarantor, substantially in the form of Exhibit F, as the same may be amended, supplemented or otherwise modified from time to time. "Affiliate Guarantors" means the collective reference to (a) each Affiliate of Hicks Muse or Olympus that holds carried interests in any New Portfolio Company (except to the extent that a carried interest is attributable to an investment by a Specified Fund in such New Portfolio Company) and (b) HM & Co. and each other Affiliate of Hicks Muse or Olympus that receives fee income (whether in the form of management fees, transaction fees, investment banking fees, advisory fees or otherwise) from or in respect of any New Fund, any New Portfolio Company or any Investment Party (except to the extent that such fee income is attributable to an investment by a Specified Fund in such New Portfolio Company, with any allocation of such fee income attributable to a Specified Fund and a New Fund being made in a manner equitable to the Lenders hereunder), in each case whether now existing or subsequently formed. "Agreement" means this Credit Agreement, as amended, supplemented or otherwise modified from time to time. "Alternate Base Rate" means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and PAGE 2 (c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively. "Applicable Margin" means, for any day and for each Type of Term Loan, based on the then Available Qualified Subscription Amount, the rate per annum set forth below:
Available Qualified Level. . . Subscription Amount ABR Loans Eurodollar Loans Level I. . $0 - $625,000,000 1.50% 2.50% Level II. 625,000,001 - $1,250,000,000 1.00% 2.00% Level III 1,250,000,001 - $1,875,000,000 .50% 1.50% Level IV. Greater than $1,875,000,001 0% 1.00%
; provided that for the first 45 days following the Closing Date the Applicable Margin shall be determined by reference to Level I of the above grid and provided further that Level I of the above grid shall apply at all times while an Event of Default shall have occurred and be continuing. "Assessment Rate" means, for any day, the annual assessment rate in effect on such day that is payable by a member of the Bank Insurance Fund classified as "well-capitalized" and within supervisory subgroup "B" (or a comparable successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance Corporation for insurance by such Corporation of time deposits made in dollars at the offices of such member in the United States; provided that if, as a result of any change in any law, rule or regulation, it is no longer possible to determine the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall be determined in good faith by the Administrative Agent to be representative of the cost of such insurance to the Lenders. "Assignee" has the meaning set forth in Section 9.4(b). "Assignment and Acceptance" means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.4), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent. "Available Commitment" means, as to any Lender at any time, an amount equal to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's Credit Exposure. "Available Excess Investment Commitment Amount" means, as to any Lender at any time, an amount equal to the excess, if any, of (a) such Lender's Investment Commitment Amount over (b) such Lender's Credit Exposure. PAGE 3 "Available Qualified Subscription Amount" means the Qualified Subscription Amount less the aggregate Qualified Subscription Amounts utilized to make any and all investments by the New Fund. "Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate. "Board" means the Board of Governors of the Federal Reserve System of the United States. "Borrowers" means the Initial Borrowers and any Future Borrower. "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or Dallas, Texas are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term Business Day shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market. "Capital Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. "Capital Stock" means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including any limited liability company interests in a limited liability company, any limited or general partnership interests in a partnership, and any and all warrants, rights or options to purchase any of the foregoing. "Change in Control" means any of the following events: (a) Hicks Muse, Olympus, or any of their respective principals or Affiliates cease to own of record and beneficially a majority of the economic interests in any Borrower and the power, directly or indirectly, to vote or direct the voting of Capital Stock having a majority of the power to direct the management and policies of any Borrower, (b) Hicks Muse, Olympus, or their respective principals or Affiliates cease to Control each Guarantor, (c) Hicks Muse, its principals or Affiliates cease to own of record and beneficially a majority of the economic interests in Olympus and the power, directly or indirectly, to vote or direct the voting of Capital Stock having a majority of the power to direct the management and policies of Olympus, or (d) Hicks Muse, its principals or Affiliates cease to Control Olympus. "Chase" means The Chase Manhattan Bank. "Closing Date" means December 28, 1999. "Co-Investor" means a Direct Co-Investor or an Indirect Co-Investor, as the case may be. PAGE 4 "Co-Investment" means a Direct Co-Investment or an Indirect Co-Investment, as the case may be. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Commitment" means, as to any Lender, the commitment of such Lender to make Term Loans and to participate in Letters of Credit hereunder, in an amount so that such Lender's Credit Exposure does not exceed such Lender's commitment hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.5 or 6.1(e), (b) reduced or increased from time to time as the result of an Assignment and Acceptance or (c) increased pursuant to Section 2.19. The initial amount of each Lender's Commitment is set forth on Schedule 2.1, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable. "Control" means the possession of the power, directly or indirectly, to vote more than 50% of the Capital Stock having ordinary voting power for the election of directors (or persons performing similar functions) of a Person. "Controlling" and "Controlled" have meanings correlative thereto. "Credit Exposure" means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Term Loans and its LC Exposure at such time. "Default" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. "Direct Co-Investment" means an investment in any Borrower in connection with such Borrower's Investment in a New Portfolio Company in an amount not less than 2.98% of such Borrower's total Investment in such New Portfolio Company. "Direct Co-Investor" means the principals of Hicks Muse or Olympus, their families and employees of Hicks Muse and Olympus who make a Direct Co-Investment in any Borrower with respect to such Borrower's investment in a New Portfolio Company. "Directly Owned Investment Party" means any Person in which any Borrower and, if the Co-Investment is made as an Indirect Co-Investment, any Indirect Co-Investor, directly makes an Investment, and which Person directly or indirectly makes the same Investment in the New Portfolio Company. "Document Party" has the meaning set forth in Section 9.12. "dollars" or "$" refers to lawful money of the United States. "EquityCo" means HM/Europe Equity Investors, C.V., a limited partnership organized under the laws of the Kingdom of the Netherlands. "Eurodollar Base Rate" means with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate at which Chase is offered dollar deposits at or about 10:00 A.M., New York, New York time, two Business Days prior to PAGE 5 the beginning of such Interest Period in the interbank eurodollar market where the eurodollar and foreign currency and exchange operations in respect of its Eurodollar Loans are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to the amount of its Eurodollar Loan to be outstanding during such Interest Period. "Eurodollar Loans" means Term Loans the rate of interest applicable to which is based upon the Eurodollar Rate. "Eurodollar Rate" with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day (rounded upward to the nearest 1/100th of 1%) equal to (a) the Eurodollar Base Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate. "Eurodollar Tranche" the collective reference to Eurodollar Loans the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Eurodollar Loans shall originally have been made on the same day). "Event of Default" has the meaning assigned to such term in Article 7. "Federal Funds Effective Rate" means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. "Fees" means the fees payable pursuant to Section 2.10. "Funding Fee" has the meaning assigned to such term in Section 2.10(a). "Future Borrower" means any Person that becomes a borrower hereunder pursuant to any Joinder Agreement. "GAAP" means generally accepted accounting principles in the United States from time to time. "Governmental Authority" means the government of the United States, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Guarantee" of or by any Person (the "guarantor") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "primary obligor") in any manner, PAGE 6 whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. "Guarantor" shall mean any Affiliate Guarantor or Investment Guarantor. "Hicks Muse" means HMTF Operating, L.P., a Texas limited partnership (formerly known as Hicks, Muse, Tate & Furst Incorporated). "HM & Co." means Hicks, Muse & Co. Partners, L.P., a Texas limited partnership. "Increase Effective Date" has the meaning set forth in Section 2.19. "Increase Response Date" has the meaning set forth in Section 2.19. "Increase Request" has the meaning set forth in Section 2.19. "Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. "Indirect Co-Investment" means an investment with any Borrower in connection with such Borrower's Investment in a New Portfolio Company in an amount not less than 2.98% of such total Investment in such New Portfolio Company. "Indirect Co-Investor" means (a) EquityCo or (b) any other Person formed for the purpose of making an Indirect Co-Investment with any Borrower in a New Portfolio Company, PAGE 7 in any case, which is owned by the principals of Hicks Muse or Olympus, or the families and employees of Hicks Muse or Olympus. "Initial Borrowers" means HMTF Bridge Partners, L.P., a Delaware limited partnership, and HM/Europe Coinvestors, C.V., a limited partnership organized under the laws of the Kingdom of the Netherlands. "Interest Payment Date" means (a) as to any ABR Loan, the date which is the three month anniversary of the Closing Date and each date which is the three month anniversary of the prior Interest Payment Date to occur while such ABR Loan is outstanding, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day which is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Term Loan, the date of any repayment or prepayment made in respect thereof. "Interest Period" means, as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three, six, or to the extent available to all Lenders, nine or twelve months thereafter, as selected by any Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three, six, or to the extent available to all Lenders, nine or twelve months thereafter, as selected by any Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (iii) no Borrower may select an Interest Period that would extend beyond the Maturity Date. "Investment" means the collective reference to any direct or indirect investment in a New Portfolio Company by a Borrower. Investments shall not include debt securities or borrowings of an Investment Party that, in the judgment of the Borrower, would customarily be issued or borrowed in a bridge financing to an offering or private placement in anticipation of or to a registered public offering or in a private placement under Rule 144A of the Securities Act of 1933, as amended. "Investment Commitment Amount" means the amount on the date giving rise to this calculation, as calculated by the Borrowers and the Administrative Agent, rounded upward to the nearest $500,000.00, that represents (i) the Term Loans, (ii) the LC Exposure and (iii) all interest and fees previously accrued or which will be payable pursuant to Sections 2.9, 2.10(a) and 2.10(c) through the Maturity Date assuming no pre-payments pursuant to Section 2.6 prior to the Maturity Date (using for future periods not covered by existing Interest Periods, the Eurodollar PAGE 8 Rate available on the date of any determination for a three (3) month Interest Period and using the current Applicable Margin). The Investment Commitment Amount of any Lender at any time shall be its Loan Percentage of the total Investment Commitment Amount. "Investment Guarantee" means the collective reference to each Investment Guarantee Agreement executed and delivered by an Investment Guarantor, substantially in the form of Exhibit G, as the same may be amended, supplemented or otherwise modified from time to time. "Investment Guarantor" shall mean any Indirect Co-Investor. "Investment Party" means any Person in which any Borrower directly or indirectly makes an Investment, which Person directly or indirectly makes the same Investment in a New Portfolio Company. "Investment Term Loan" has the meaning set forth in Section 2.10(a) hereof. "Investor" means any Person which has executed a Subscription Agreement (that has become effective pursuant to its terms) and the signature page to the limited partnership agreement of New Fund and has thereby become obligated to make capital contributions to New Fund in exchange for limited partnership interests therein, subject only to such customary conditions as are reasonably acceptable to the Administrative Agent. "Issuing Bank" means The Chase Manhattan Bank, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.3(i). "Joinder Agreement" means an agreement substantially in the form of Exhibit K, as the same may be amended, supplemented or otherwise modified from time to time. "LC Disbursement" means a payment made by the Issuing Bank pursuant to a Letter of Credit. "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn amount of any outstanding Letter of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of any Borrower at such time. The LC Exposure of any Lender at any time shall be its Loan Percentage of the total LC Exposure at such time. "Lenders" means the Persons listed on Schedule 2.1 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance. "Letter Agreement" means the Letter Agreement dated as of the date hereof between Hicks Muse, Olympus and the Administrative Agent on behalf of the Lenders, substantially in the form of Exhibit J, as the same may be amended, supplemented or otherwise modified from time to time. "Letter of Credit" means a letter of credit issued pursuant to Section 2.3, a bank guaranty or similar instrument treated as a letter of credit for bank regulatory purposes, in a form PAGE 9 reasonably acceptable to the Administrative Agent and the Issuing Bank, to support the Borrowers' agreement to make an Investment. "Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. "Loan Documents" means the collective reference to this Agreement, the Affiliate Guarantees, the Investment Guarantees, the Pledge Agreement, the Letter Agreement, the Principal Agreement, the Joinder Agreements and the Notes. "Loan Parties" means the collective reference to the Initial Borrowers, any Future Borrowers, the Guarantors, Hicks Muse, Olympus and any other Person party to a Loan Document. "Loan Percentage" means, with respect to any Lender, the percentage of the total Commitments represented by such Lender's Commitment, and, if the Commitments have terminated, the aggregate outstanding principal amount of the Term Loans represented by such Lender's Term Loans. "Material Adverse Effect" means a material adverse effect on (a) the ability of any Loan Party to perform any of its obligations under any Loan Document or (b) the rights of or benefits available to the Lenders under any Loan Document. "Maturity Date" means the date which is 364 days after the Closing Date. "New Fund" or "New Funds" means (a) any investment fund or funds formed after the date hereof and sponsored, advised or managed by Hicks Muse, Olympus or any of their respective Affiliates and (b) any other Person which may acquire an Investment in an Investment Party or a New Portfolio Company or any part thereof. "New Portfolio Company" means a Person, having as some or all of its shareholders, partners or members, as the case may be, directly or indirectly, any of the Borrowers, and, if applicable, one or more Indirect Co-Investors. "Non-Consenting Lender" has the meaning specified in Section 2.17. "Non-Excluded Taxes" has the meaning set forth in Section 2.14(a). "Non-Funding Lender" has the meaning set forth in Section 2.12(c). "Non-U.S. Lender" has the meaning set forth in Section 2.14(b). "Note" has the meaning set forth in Section 2.4(e). PAGE 10 "Obligations" means the collective reference to the unpaid principal of and interest on the Term Loans, the LC Disbursements and all other obligations and liabilities of the Borrowers to the Administrative Agent and the Lenders (including, without limitation, interest accruing at the then applicable rate provided in this Agreement after the maturity of the Term Loans and Letters of Credit, LC Disbursements and interest accruing at the then applicable rate provided in this Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any of the Borrowers whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by the Borrowers pursuant to the terms of this Agreement). "Olympus" means Olympus Real Estate Corporation, a Delaware corporation. "Participant" has the meaning set forth in Section 9.4(e). "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity of whatever nature. "Pledge Agreement" means the Pledge Agreement executed and delivered by the Pledgors, substantially in the form of Exhibit I, as the same may be amended, supplemented or otherwise modified from time to time. "Pledged Interests" shall have the meaning set forth in the Pledge Agreement. "Pledgors" shall mean (i) on the Closing Date, the Initial Borrowers and EquityCo, and (ii) thereafter, any Future Borrower and any Indirect Co-Investor. "Principal Agreement" means the Principal Agreement executed and delivered by each principal of Hicks Muse and Olympus, substantially in the form of Exhibit L, as the same may be amended, supplemented or otherwise modified from time to time. "Prime Rate" means the rate of interest per annum publicly announced from time to time by Chase as its prime rate in effect at its principal office in New York, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to a customer. "Qualified Investors" means those Investors reasonably acceptable to the Administrative Agent. Any Investor shall be subject to exclusion for: (i) default under or breach of (A) its respective Subscription Agreement or (B) the limited partnership agreement of New Fund; (ii) bankruptcy or other insolvency event or proceeding with respect to such Investor; (iii) appointment of a receiver with respect to such Investor; (iv) repudiation by such Investor of its obligation to make capital contributions to New Fund pursuant to its Subscription Agreement PAGE 11 and the limited partnership agreement of New Fund; and (v) any material adverse change which affects the ability of such Investor to fulfill its obligations under the limited partnership agreement of New Fund or its Subscription Agreement. "Qualified Subscription Amount" means the aggregate dollar amount of all subscriptions to New Fund by all Qualified Investors as to which the Borrowers have delivered to the Administrative Agent a fully executed copy of one or more Subscription Agreements (including all supporting documentation including, but not limited to, the executed signature page to the limited partnership agreement of New Fund). "Register" has the meaning set forth in Section 9.4(c). "Related Parties" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents, partners and advisors of such Person and such Person's Affiliates. "Requested Amount" has the meaning set forth in Section 2.19. "Required Lenders" at any time, Lenders holding more than 50% of (a) the Commitments or (b) if the Commitments have been terminated, the sum of (i) aggregate unpaid principal amount of the Term Loans and (ii) outstanding LC Exposure. "Requirement of Law" as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Responsible Officer" means the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary or any officer having responsibilities similar to any of the foregoing. "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of Capital Stock of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of Capital Stock of such Person or any option, warrant or other right to acquire any such shares of Capital Stock of such Person. "Specified Fund" means Hicks, Muse, Tate & Furst Equity Fund II, L.P., Hicks, Muse, Tate & Furst Equity Fund III, L.P., Hicks, Muse, Tate & Furst Equity Fund IV, L.P., Hicks, Muse, Tate & Furst Private Equity Fund IV, L.P., Hicks, Muse, Tate & Furst Europe Fund, L.P., Hicks, Muse, Tate & Furst Europe Private Fund, L.P., Hicks, Muse, Tate & Furst Latin America Fund, L.P. and Hicks, Muse, Tate & Furst Latin America Private Fund, L.P. "Statutory Reserve Rate" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental PAGE 12 reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject (a) with respect to the Base CD Rate, for new negotiable nonpersonal time deposits in dollars of over $100,000 with maturities approximately equal to three months and (b) with respect to the Eurodollar Rate, for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "Subscription Agreement" shall mean the Subscription Agreement in the form customarily used by Hicks Muse or Olympus (and then by any New Fund) pursuant to which a Person agrees to acquire limited partnership interests in New Fund in accordance with the terms thereof, which such Subscription Agreement obligates such Person to sign the limited partnership agreement of New Fund. "Term Loans" has the meaning set forth in Section 2.1. "Three-Month Secondary CD Rate" means, for any day, the secondary market rate for three-month certificates of deposit reported as being in effect on such day (or, if such day is not a Business Day, the next preceding Business Day) by the Board through the public information telephone line of the Federal Reserve Bank of New York (which rate will, under the current practices of the Board, be published in Federal Reserve Statistical Release H.15(519) during the week following such day) or, if such rate is not so reported on such day or such next preceding Business Day, the average of the secondary market quotations for three-month certificates of deposit of major money center banks in New York City received at approximately 12:00 noon, New York City time, on such day (or, if such day is not a Business Day, on the next preceding Business Day) by the Administrative Agent from three negotiable certificate of deposit dealers of recognized standing selected by it. "Ticking Fee" has the meaning set forth in Section 2.10(b). "Transactions" means the execution, delivery and performance by the Loan Parties of the Loan Documents, the borrowing of Term Loans, the issuance of Letters of Credit and the use of the proceeds thereof, the grant of the Liens under the Loan Documents and the making of each Investment. "Type" as to any Term Loans, its nature as an ABR Loan or a Eurodollar Loan. "United States" means the United States of America. SECTION 1.2 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any PAGE 13 agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. SECTION 1.3 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time. ARTICLE 2 Term Loans SECTION 2.1 Term Loans. Subject to the terms and conditions hereof, each Lender severally agrees to make one or more term loans (each, a "Term Loan") to the Borrowers on the Closing Date and on any Business Day thereafter prior to the Maturity Date in an aggregate principal amount not to exceed such Lender's Available Commitment. The initial amount of each Lender's Commitment is set forth on Schedule 2.1, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable. The Term Loans may from time to time be (a) Eurodollar Loans or (b) ABR Loans, as determined by the applicable Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.7. Each Term Loan shall be made as part of a borrowing consisting of Term Loans made by the Lenders ratably in accordance with their respective Commitments. Amounts repaid or prepaid on account of the Term Loans may not be reborrowed. The Term Loans shall be made only if the total Investment Commitment Amounts shall not exceed the total Commitments. SECTION 2.2 Procedure for Term Loan Borrowing. Any Borrower shall give the Administrative Agent irrevocable notice (including telephonic notice confirmed in writing) (which notice must be received by the Administrative Agent (a) in the case of Eurodollar Loans, not later than 11:00 a.m., New York, New York time, three Business Days prior to the date of the anticipated borrowing and (b) in the case of ABR Loans, not later than 12:00 noon, New York, New York time, one Business Day prior to the date of the anticipated borrowing) requesting that the Lenders make the Term Loans on such borrowing date and specifying the amount to be borrowed; provided that a notice of an ABR Loan to finance the reimbursement of an LC Disbursement as required by Section 2.3(e) shall be deemed given one Business Day prior to the date of such drawing. The Term Loans made on the Closing Date shall initially be ABR Loans. Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender thereof. Not later than 11:00 a.m., New York, New York time, on the relevant borrowing date, each Lender shall make available to the Administrative Agent at its office specified in Section 9.1 an PAGE 14 amount in immediately available funds equal to the Term Loan to be made by such Lender. The Administrative Agent shall credit the account of the applicable Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Lenders in immediately available funds; provided that ABR Loans made to fund the reimbursement of an LC Disbursement as provided in Section 2.3(e) shall be remitted by the Administrative Agent to the Issuing Bank. SECTION 2.3 Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, any Borrower may request the issuance of a Letter of Credit, for the account of such Borrower on the Closing Date and on any Business Day thereafter not later than 5 Business Days prior to the Maturity Date. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by such Borrower to, or entered into by such Borrower with, the Issuing Bank relating to such Letter of Credit, the terms and conditions of this Agreement shall control. (b) Notice of Issuance; Certain Conditions. To request the issuance of a Letter of Credit, a Borrower shall deliver to the Issuing Bank and the Administrative Agent (at least three Business Days in advance of the requested date of issuance, unless otherwise agreed to with the Issuing Bank), a notice requesting the issuance of such Letter of Credit, the date of issuance, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare such Letter of Credit, accompanied by a duly completed and executed letter of credit application in the Issuing Bank's standard form for such Letter of Credit. A Letter of Credit, shall be issued only if (and upon issuance, the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, (i) the LC Exposure shall not exceed $250,000,000, (ii) no Letter of Credit shall have a face amount in excess of $100,000,000, and (iii) the total Investment Commitment Amounts shall not exceed the total Commitments. (c) Expiration Date. Each Letter of Credit shall expire not later than five Business Days prior to the Maturity Date. (d) Participations. By the issuance of a Letter of Credit and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender's Loan Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender's Loan Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrowers on the date due as provided in Section 2.3(e), or of any reimbursement payment required to be refunded to the Borrowers for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of each Letter of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. PAGE 15 (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than (a) 12:00 noon, New York, New York time, on the date that such LC Disbursement is made, if the applicable Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York, New York time, one Business Day prior to such date or (b) if such notice has not been received by the applicable Borrower prior to such time on such date, then not later than 12:00 noon, New York, New York time, two Business Days immediately following the day that the Borrowers receive such notice; provided that, if an Event of Default set forth in Article 7(g) shall not have occurred and be continuing, the Borrowers shall be deemed to have requested in accordance with Section 2.2 that such payment be financed with an ABR Loan in an equivalent amount and, to the extent so financed, the Borrowers' obligation to make such payment shall be discharged and replaced by the resulting ABR Loan. If the Borrowers fail to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrowers in respect thereof and such Lender's Loan Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to Administrative Agent its Loan Percentage of the payment then due from the Borrowers, in the same manner as provided in Section 2.2 with respect to Term Loans made by such Lender (and Section 2.2 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrowers pursuant to this Section 2.3(e), the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this Section 2.3(e) to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interest may appear. Any payment made by a Lender pursuant to this Section 2.3(e) to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Loans as contemplated above) shall not constitute a Term Loan and shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement. (f) Obligations Absolute. The Borrowers' obligation to reimburse LC Disbursements as provided in Section 2.3(e) shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of: (i) any lack of validity or enforceability of a Letter of Credit or this Agreement, or any term or provision therein; (ii) any amendment or waiver of or any consent to departure from all or any of the provisions of a Letter of Credit or this Agreement; (iii) the existence of any claim, setoff, defense or other right that any Borrower, or any other Person may at any time have against the beneficiary under a Letter of Credit, the Issuing Bank, the Administrative Agent or any Lender or any other Person, whether in connection with this Agreement or any other related or unrelated agreement or transaction; PAGE 16 (iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; and (v) any other act or omission to act or delay of any kind of the Issuing Bank, the Lenders, the Administrative Agent or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might but for the provisions of this Section, constitute a legal or equitable discharge of any Borrower's obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of a Letter of Credit or any payment or failure to make any payment thereunder, including any of the circumstances specified in clauses (i) through (v) above, as well as any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to a Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by each of the Borrowers to the extent permitted by applicable law) suffered by any Borrower that are caused by the Issuing Bank's failure to exercise the agreed standard of care (as set forth below) in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that the Issuing Bank shall have exercised the agreed standard of care in the absence of gross negligence or willful misconduct on the part of the Issuing Bank. Without limiting the generality of the foregoing, it is understood that the Issuing Bank may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit, without responsibility for further investigation, and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit; provided that the Issuing Bank shall have the right, in its reasonable discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit. (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under each Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the applicable Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement. (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrowers reimburses such LC Disbursement, at the rate per annum then applicable to ABR Loans; PAGE 17 provided, that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant to Section 2.3(e), then Section 2.9(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to Section 2.3(e) to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment. (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by written agreement among the Borrowers, the Administrative Agent, and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the applicable Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.10. From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to any Letter of Credit to be issued thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to any Letter of Credit issued by it prior to such replacement. SECTION 2.4 Repayment of Loans; Evidence of Debt; etc. (a) The Borrowers hereby unconditionally promise to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of the Term Loans of such Lender on the Maturity Date (or such earlier date on which the Term Loans shall become due and payable pursuant to Article 7). (b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of each Borrower to such Lender resulting from the Term Loans of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. (c) The Administrative Agent shall maintain the Register pursuant to Section 9.4(c), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Term Loan made hereunder, including each Term Loan evidenced by a Note, the applicable Borrower and Type thereof and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the respective Borrowers to each Lender hereunder and (iii) both the amount of any sum received by the Administrative Agent hereunder from the various Borrowers and each Lender's share thereof. (d) The entries made in the Register and the accounts of each Lender maintained pursuant to Section 2.4(b) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrowers therein recorded, absent manifest error; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrowers to repay (with applicable interest) the Term Loans made to the Borrowers by such Lender in accordance with the terms of this Agreement. PAGE 18 (e) Each Borrower hereby agrees that, upon the request to the Administrative Agent by any Lender, such Borrower will execute and deliver to such Lender a promissory note of such Borrower evidencing the Term Loans of such Lender, substantially in the form of Exhibit H, with appropriate insertions as to date and principal amount (a "Note"). SECTION 2.5 Termination and Reduction of Commitments. (a) Unless previously terminated by the Borrowers in accordance with this Agreement, the Commitments shall terminate on the Maturity Date. (b) The Borrowers may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $1,000,000 and (ii) the Borrowers shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Term Loans in accordance with Section 2.6, the sum of the Credit Exposures would exceed the total Commitments. (c) The Borrowers shall notify the Administrative Agent of any election to terminate or reduce the Commitments under Section 2.5(b) at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by a Borrower pursuant to this Section 2.5(c) shall be irrevocable; provided that a notice of termination of the Commitments delivered by a Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by such Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments. SECTION 2.6 Prepayments. (a) The Borrowers may at any time and from time to time prepay the Term Loans, in whole or in part, without premium or penalty, upon irrevocable notice (including telephonic notice confirmed in writing) delivered to the Administrative Agent at least three Business Days prior thereto in the case of Eurodollar Loans and at least one Business Day prior thereto in the case of ABR Loans, which notice shall specify the date and amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each; provided that, if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrowers shall also pay any amounts owing pursuant to Section 2.15. Upon receipt of any such notice, the Administrative Agent shall promptly notify each Lender thereof. If any such notice is given, the amount specified in such notice, together with accrued interest thereon, shall be due and payable on the date specified therein; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.5, then such notice of prepayment may be revoked if such notice is revoked in accordance with Section 2.5. (b) If any Capital Stock shall be issued by, or any capital contribution shall be made to, any Borrower, any Indirect Co-Investor or any Investment Party (other than with respect to an PAGE 19 Investment in a New Portfolio Company and other than with respect to any Co-Investment) or if any Borrower, any Indirect Co-Investor or any Investment Party (other than a New Portfolio Company and other than ratably with respect to any Co-Investment) receives any Restricted Payment, 100% of the net cash proceeds thereof received by such Borrower or Indirect Co-Investor shall be applied toward the prepayment in full of the Term Loans, second, to repay all LC Disbursements and third, to cash collateralize any outstanding Letter of Credit on terms reasonably satisfactory to the Administrative Agent. All prepayments made by a Borrower or an Indirect Co-Investor in accordance with this Section 2.6(b) shall result in a pro rata reduction of the Commitments. (c) Upon any sale, assignment, conveyance, transfer or other disposition (in whole or in part) of any outstanding interest in a Borrower or in an Indirect Co-Investor (other than any sale, assignment, conveyance, transfer or other disposition by a Co-Investor to any other Co-Investor) or any outstanding interest of a Borrower or any Indirect Co-Investor in any Investment Party or a New Portfolio Company, 100% of the net cash proceeds (taking into account any necessary escrows) thereof received by such Borrower or such Indirect Co-Investor (less the ratable interest of any Co-Investors) shall be applied on the date thereof first toward the prepayment in full of the Term Loans, together with accrued interest thereon, second, to repay all LC Disbursements and third, to cash collateralize any outstanding Letter of Credit on terms reasonably satisfactory to the Administrative Agent; provided, however, if Borrower or any Investment Party shall sell, transfer or otherwise dispose of "margin stock" as such term is defined in Regulation U of the Board, the net proceeds from such sale shall be held by the Borrower or such Investment Party, as the case may be, in cash or marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government maturing on or within one year from the date of such sale until the Maturity Date; provided, further, that in the event that an interest in a Borrower or an Indirect Co-Investor, or the interest of a Borrower or Indirect Co-Investor in any Investment Party or New Portfolio Company which shall not constitute "margin stock" shall be sold for more than the cost of the Investments held by such Borrower, Indirect Co-Investor, Investment Party or New Portfolio Company (including, without limitation, any interest and fees relating thereto), the amount of net cash proceeds in excess of such cost shall be held in a cash collateral account in the name and under the sole dominion and control of the Administrative Agent as security for the Obligations. All prepayments made by a Borrower in accordance with this Section 2.6(c) shall result in a pro rata reduction of the Commitments. (d) The application of any prepayment pursuant to paragraphs (b) or (c) of this Section 2.6 shall be made first to ABR Loans and second to Eurodollar Loans. Amounts prepaid on account of the Term Loans may not be reborrowed. (e) Notwithstanding anything to the contrary contained herein, in the event that a Borrower would incur costs pursuant to Section 2.15 as a result of any payment due as a result of any prepayment to be made pursuant to this Section 2.6, such Borrower, at its option, may deposit the amount of such payment with the Administrative Agent, for the benefit of the Lenders who would have received such payment, in a cash collateral account until the end of the applicable Interest Period at which time such payment shall be made. Each Borrower hereby grants to the Administrative Agent, for the benefit of such Lenders, a security interest in all amounts in which such Borrower has any right, title or interest which are from time to time on PAGE 20 deposit in such cash collateral account and expressly waives all rights (which rights the Borrowers hereby acknowledge and agree are vested exclusively in the Administrative Agent) to exercise dominion or control over any such amounts. SECTION 2.7 Conversion and Continuation Options. (a) Any Borrower may elect from time to time to convert its Eurodollar Loans to ABR Loans by giving the Administrative Agent at least one Business Day's prior irrevocable notice of such election, provided that if such conversion of Eurodollar Loans is made other than on the last day of an Interest Period with respect thereto, then such Borrower shall pay the Lenders any amounts due pursuant to Section 2.15. Any Borrower may elect from time to time to convert its ABR Loans to Eurodollar Loans by giving the Administrative Agent at least three Business Days' prior irrevocable notice of such election (which notice shall specify the length of the initial Interest Period therefor), provided that no ABR Loan may be converted into a Eurodollar Loan when (i) any Event of Default has occurred and is continuing and (ii) the Administrative Agent or the Required Lenders have determined in its or their reasonable discretion not to permit such conversions. Upon receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof. (b) Any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the giving of irrevocable notice by the applicable Borrower to the Administrative Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans, provided that no Eurodollar Loan may be continued as such when any Event of Default has occurred and is continuing and the Administrative Agent has or the Required Lenders have determined in its or their reasonable discretion not to permit such continuations, and provided, further, that if any Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof. SECTION 2.8 Minimum Amounts and Maximum Number of Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional prepayments of Eurodollar Loans hereunder and all selections of Interest Periods hereunder shall be in minimum amounts of $5,000,000 and incremental amounts of $500,000 in excess thereof and shall be made pursuant to such elections so that, after giving effect thereto no more than ten Eurodollar Tranches shall be outstanding at any one time. SECTION 2.9 Interest. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin. (b) Each ABR Loan shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin. (c) If all or a portion of (i) any principal of any Term Loan, (ii) any interest payable thereon or (iii) any Fees or any other amount payable hereunder (including LC Disbursements) PAGE 21 shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), the principal of the Term Loans and any such overdue interest, Fees or other amount shall bear interest at a rate per annum which is (x) in the case of principal, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section 2.9 plus 2% or (y) in the case of any such overdue interest, Fees or other amount, the rate in effect at such time pursuant to paragraph (b) of this Section 2.9 plus 2%, in each case from the date of such non-payment until such overdue principal, interest, Fees or other amount is paid in full (before as well as after receipt of a judgment). (d) Interest shall be payable in arrears on each Interest Payment Date and the Maturity Date, provided that interest accruing pursuant to paragraph (c) of this Section 2.9 shall be payable from time to time on demand. (e) Whenever it is calculated on the basis of the Prime Rate, interest shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed; and, otherwise, interest shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the applicable Borrower and the Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Term Loan resulting from a change in the Alternate Base Rate shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the applicable Borrower and the Lenders of the effective date and the amount of each such change in interest rate. (f) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrowers and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of any Borrower, deliver to such Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate in respect of its Eurodollar Loan. SECTION 2.10 Fees. (a) The Borrowers agree to pay to the Administrative Agent, for the account of each Lender, a funding fee (the "Funding Fee") equal to (i) 1.0% of each Term Loan made to fund an Investment (and not for the payment of interest and fees) (each borrowing of such a Term Loan, an "Investment Term Loan"), payable on the date of the funding of each such Investment Term Loan, plus (ii) 0.5% of the outstanding amount of each Investment Term Loan on the seven month anniversary of the funding of such Investment Term Loan, plus (iii) 0.5% of the outstanding amount of each Investment Term Loan on the nine month anniversary of the funding of such Investment Term Loan and (iv) 1.0% of the outstanding amount of each Investment Term Loan on the eleven month anniversary of the funding of such Investment Term Loan. Each Funding Fee in respect of an Investment Term Loan shall be payable on the borrowing date of such Investment Term Loan and on the seven, nine and eleven month anniversaries of the borrowing date of such Investment Term Loan. (b) The Borrowers agree to pay to the Administrative Agent, for the account of each Lender, a ticking fee (the "Ticking Fee") in the amount of 0.5% per annum on the average daily amount of the Available Excess Investment Commitment Amount, which shall be paid by the Borrowers to the Administrative Agent on June 30, 2000 and the Maturity Date (or if this PAGE 22 Agreement is terminated prior to the Maturity Date, the date this Agreement is terminated), respectively. (c) Each Borrower shall pay to the Administrative Agent, for the account of the Issuing Bank and the Lenders, a letter of credit commission with respect to each Letter of Credit issued for its account, in an amount equal to the Applicable Margin with respect to Eurodollar Loans on the average daily face amount of such Letter of Credit, payable quarterly in arrears on each Interest Payment Date and on the Maturity Date. A portion of such letter of credit commission equal to 0.125% of the average daily face amount of the Letters of Credit shall be payable to the Issuing Bank for its own account, and the remaining portion of such letter of credit commission shall be payable to the Issuing Bank and the Lenders to be shared ratably among them in accordance with their respective Loan Percentages. (d) For purposes of calculating the fees payable by the Borrowers under this Section 2.10, all prepayments or repayments of the Term Loans shall be treated as being paid in the order such Term Loans were made from and after the Closing Date irrespective of the Borrower thereof. SECTION 2.11 Inability to Determine Interest Rate. If prior to the first day of any Interest Period (or during any Interest Period): (a) the Administrative Agent shall have determined (which determination, in the absence of manifest error, shall be conclusive and binding upon the Borrowers) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or (b) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their Term Loans during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to each Borrower and the Lenders as soon as practicable thereafter. If such notice is given (i) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as ABR Loans, (ii) any Term Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (iii) any outstanding Eurodollar Loans shall be converted to ABR Loans on the last day of the Interest Period applicable thereto. Until such notice has been withdrawn by the Administrative Agent (which the Administrative Agent agrees to do when the circumstances that prompted the delivery of such notice no longer exist), no further Eurodollar Loans shall be made or continued as such, nor shall any Borrower have the right to convert ABR Loans to Eurodollar Loans. SECTION 2.12 Pro Rata Treatment and Payments. (a) Each payment (including each prepayment) by a Borrower on account of principal of and interest on, and fees with respect to, the Term Loans and the Letters of Credit shall be made pro rata according to the respective outstanding principal amounts of the Term Loans then held by the Lenders or Issuing Bank, as the case may be. PAGE 23 (b) All payments (including prepayments) to be made by a Borrower hereunder, whether on account of principal, interest or otherwise, shall be made without setoff or counterclaim and shall be made prior to 12:00 Noon, New York, New York time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Administrative Agent's office specified in Section 9.1, in dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day (except, in the case of Eurodollar Loans, as otherwise provided in clause (i) of the definition of "Interest Period"). In the case of any extension of any payment of principal pursuant to the preceding sentence, interest thereon shall be payable at the then applicable rate during such extension. (c) Notwithstanding that a Lender (a "Non-Funding Lender") has (x) failed to make a Term Loan required to be made by it hereunder, and the Administrative Agent has determined that such Lender is not likely to make such Term Loan or (y) given notice to any Borrower or the Administrative Agent that it will not make, or that it has disaffirmed or repudiated any obligation to make, any Term Loans, in each case, by reason of the provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 or otherwise, any payment made on account of the principal of the Term Loans outstanding shall be made pro rata according to the respective outstanding principal amounts of such Term Loans; and any payment made on account of interest on the Term Loans shall be made pro rata according to the respective amounts of accrued and unpaid interest and/or fees due and payable on such Term Loans with respect to which such payment is being made. The Borrowers agree to give the Administrative Agent such assistance in making any determination pursuant to this paragraph as the Administrative Agent may reasonably request. Any such determination by the Administrative Agent shall be conclusive and binding on the Lenders. SECTION 2.13 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender or the Issuing Bank with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Lender or the Issuing Bank to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender or Issuing Bank in respect thereof (except Non-Excluded Taxes covered by Section 2.14, the establishment of a tax based on the net income of such Lender or Issuing Bank and changes in the rate of tax on the net income of such Lender or Issuing Bank); (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate hereunder or on any Issuing Lender with respect to any Letter of Credit; or PAGE 24 (iii) shall impose on such Lender or Issuing Bank any other condition; and the result of any of the foregoing is to increase the cost to such Lender or Issuing Bank, by an amount which such Lender or Issuing Bank deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or to increase the cost to such Lender or Issuing Bank of participating in, issuing or maintaining Letters of Credit, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the applicable Borrower shall promptly pay such Lender or the Issuing Bank, as the case may be, upon its demand, any additional amounts necessary to compensate such Lender or Issuing Bank for such increased cost or reduced amount receivable. If a Borrower notifies the Administrative Agent within five Business Days after any Lender notifies such Borrower of any increased cost pursuant to the foregoing provisions of this Section 2.13(a), such Borrower may covert all Eurodollar Loans of such Lender then outstanding into ABR Loans in accordance with Section 2.7 and shall, additionally, reimburse such Lender for any cost in accordance with Section 2.15. (b) If any Lender or the Issuing Bank shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or Issuing Bank or any corporation controlling such Lender or Issuing Bank with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender's, such Issuing Bank's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Lender, such Issuing Bank or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Lender or Issuing Bank to be material, then from time to time, after submission by such Lender or Issuing Bank to the Borrowers through the Administrative Agent of a written request therefor, the Borrowers shall pay to such Lender or Issuing Bank such additional amount or amounts as will compensate such Lender or Issuing Bank for such reduction. (c) A certificate as to any additional amounts payable pursuant to this Section 2.13 showing in reasonable detail the calculation thereof and certifying that it is generally charging such costs to other similarly situated borrowers under similar credit facilities submitted by any Lender or Issuing Bank to the Borrowers through the Administrative Agent shall be conclusive in the absence of manifest error, provided that the determination of such amounts shall be made in good faith in a manner generally consistent with such Lender's or Issuing Bank's standard practices. The obligations of the Borrowers pursuant to this Section 2.13 shall survive the termination of this Agreement and the payment of the Term Loans and all other amounts payable hereunder for a period of nine months thereafter. If any Lender becomes entitled to claim any additional amounts pursuant to this Section 2.13, it shall promptly (and in any event no later than 90 days after such Lender becomes entitled to make such claim) notify the Borrowers through the Administrative Agent of the event by reason of which it has become so entitled. SECTION 2.14 Taxes. (a) All payments made by the Borrowers under this Agreement, except as provided in this Section 2.14, shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter PAGE 25 imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent or any Lender as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder, the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that the Borrowers shall not be required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such Lender's failure to comply with the requirements of this Section, (ii) that are United States withholding taxes imposed on amounts payable to such Lender at the time the Lender becomes a party to this Agreement, or (iii) that are United States withholding taxes imposed as a result of an event occurring after the date the Lender becomes a Lender other than a change in law (including any income tax treaty) or regulation or the introduction of any law or regulation or a change in interpretation or administration of any law. Whenever any Non-Excluded Taxes are payable by a Borrower, as promptly as possible thereafter such Borrower paying such Non-Excluded Taxes shall send to the Administrative Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by such Borrower showing payment thereof. If the Borrowers fail to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Borrowers shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure. The agreements in this Section 2.14 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder for a period of nine months thereafter. (b) Each Lender (or Transferee) that is not a person described in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the Borrowers and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a Form W-8BEN, or any subsequent versions thereof or successors thereto and an annual certificate representing, under penalty of perjury, that such Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of any Borrower and is not a controlled foreign corporation related to the Borrowers (within the meaning of Section 864(d)(4) of the Code), properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrowers under this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S. PAGE 26 Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation). In addition, each Non-U.S. Lender shall deliver such forms on or before the expiration or obsolescence and promptly upon the invalidity of any form previously delivered by such Non-U.S. Lender and after the occurrence of any event requiring a change in the most recently provided form and, if necessary, obtain any extensions of time reasonably requested by any Borrower or the Administrative Agent for filing and completing such forms. Each Non-U.S. Lender agrees, to the extent legally entitled to do so, upon reasonable request by any Borrower, to provide to such Borrower (for the benefit of the Borrowers and the Administrative Agent) such other forms as may be reasonably required in order to establish the legal entitlement of such Lender to an exemption from withholding with respect to payments of interest under this Agreement or the other Loan Documents, provided that in determining the reasonableness of such a request, such Lender shall be entitled to consider the cost of complying with such request (to the extent unreimbursed by the Borrowers) that would be imposed on such Lender. Each Non-U.S. Lender shall promptly notify the Borrowers at any time it determines that it is no longer in a position to provide any previously delivered certificate to any Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this Section 2.14(b), a Non-U.S. Lender shall not be required to deliver any form pursuant to this Section 2.14(b) that such Non-U.S. Lender is not legally able to deliver. (c) If the Administrative Agent or any Lender receives a refund in respect of Non-Excluded Taxes paid by any Borrower, which in the good faith judgment of such Lender is allocable to such payment, it shall promptly pay such refund, together with any other amounts paid by the Borrowers in connection with such refunded Non-Excluded Taxes, to the Borrowers, net of all out-of-pocket expenses of such Lender incurred in obtaining such refund, provided, however, that each Borrower agrees to promptly return such refund to the Administrative Agent or the applicable Lender, as the case may be, if it receives notice from the Administrative Agent or applicable Lender that such Administrative Agent or Lender is required to repay such refund. SECTION 2.15 Indemnity. Each Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss (excluding loss of profit) or expense which such Lender may sustain or incur as a consequence of (a) default by any Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after such Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by any Borrower in making any prepayment after such Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, any margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A PAGE 27 certificate as to any amounts payable pursuant to this Section 2.15, showing in reasonable detail the calculation thereof, submitted to the Borrowers by any Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder for a period of nine months thereafter. SECTION 2.16 Change of Lending Office. Each Lender agrees that if it makes any demand for payment under Section 2.14(a), or if any adoption or change of the type described in Section 2.13 shall occur with respect to it, it will use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, as determined in its reasonable discretion) to designate a different lending office if the making of such a designation would reduce or obviate the need for the Borrowers to make payments under Section 2.14(a), or would eliminate or reduce the effect of any adoption or change described in Section 2.13. SECTION 2.17 Replacement of Lenders. If, at any time (a) the Borrowers become obligated to pay additional amounts described in Sections 2.13 or 2.14 as a result of any conditions described in such Sections, (b) any Lender becomes insolvent and its assets become subject to a receiver, liquidator, trustee, custodian or other Person having similar powers, (c) any Lender becomes a "Nonconsenting Lender" (as defined below in this Section 2.17) or (d) any Lender becomes a Non-Funding Lender, then the Borrowers may, on ten Business Days' prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall) assign pursuant to Section 9.4(b) all of its rights and obligations under this Agreement to a Lender or other entity selected by the Borrowers and reasonably acceptable to the Administrative Agent for a purchase price equal to the outstanding principal amount of such Lender's Loans and all accrued interest and fees and other amounts payable hereunder; provided that (i) the Borrowers shall have no right to replace the Administrative Agent, (ii) neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender or other such entity, (iii) in the event of replacement of a Nonconsenting Lender or a Lender to which the Borrowers become obligated to pay additional amounts pursuant to clause (a) of this Section, in order for the Borrowers to be entitled to replace such a Lender, such replacement must take place no later than 180 days after (A) the date the Nonconsenting Lender shall have notified the Borrowers and the Administrative Agent of its failure to agree to any requested consent, waiver or amendment or (B) the Lender shall have demanded payment of additional amounts under one of the Sections described in clause (a) of this Section, as the case may be and (iv) in no event shall the Lender hereby replaced be required to pay or surrender to such replacement Lender or other entity any of the fees received by such Lender hereby replaced pursuant to this Agreement. In the case of a replacement of a Lender to which the Borrower becomes obligated to pay additional amounts pursuant to clause (a) of this Section, the Borrower shall pay such additional amounts to such Lender prior to such Lender being replaced and the payment of such additional amounts shall be a condition to the replacement of such Lender. In the event that (x) the Borrower or the Administrative Agent has requested the Lenders to consent to a departure or waiver of any provisions of the Loan Documents or to agree to any amendment thereto, (y) the consent, waiver or amendment in question requires the consent of all Lenders and (z) the Required Lenders have agreed to such consent, waiver or amendment, then any such Lender who does not agree to such consent, waiver or amendment shall be deemed a "Nonconsenting Lender". The Borrower's PAGE 28 right to replace a Non-Funding Lender pursuant to this Section 2.17 is, and shall be, in addition to, and not in lieu of, all other rights and remedies available to the Borrower against such Non-Funding Lender under this Agreement, at law, in equity, or by statute. SECTION 2.18 Nature of Obligations. (a) The Borrowers shall be jointly and severally liable for the payment and performance of all obligations and covenants required by this Agreement to be performed by any of them, and each Borrower shall be bound by any notices (including, without limitation, notices of borrowings and notices of conversion or continuation), consents or other actions furnished or taken by any other Borrower hereunder. At the request of the Administrative Agent or the Required Lenders, each Borrower shall confirm in writing any action taken or proposed to be taken by such Borrower hereunder, provided that the failure of any Borrower to furnish such confirmation shall not affect such Borrower's obligations under the preceding sentence or any other provision of this Agreement. Each Borrower hereby agrees that it shall be jointly and severally liable for all Obligations and that such liability shall be absolute and unconditional irrespective of: (i) any lack of validity or enforceability of any provision of this Agreement, any other Loan Document or any other agreement or instrument relating to this Agreement or any other Loan Document, or avoidance or subordination of any of the Obligations; (ii) any change in the time, manner or place of payment of, or in any other term of, or any increase in the amount of, all or any of the Obligations, or any other amendment or waiver of any term of, or any consent to departure from any requirement of, the Agreement or any of the other Loan Documents; (iii) any exchange, release or non-perfection of any Lien on any collateral for, or any release or amendment or waiver of any term of any consent to departure from any requirement of any other guaranty of, all or any of the Obligations; (iv) the absence of any attempt to collect any of the Obligations, from any Borrower or from any Loan Party or any other guarantor or any other action to enforce the same or the election of any remedy by the Lender; (v) any waiver, consent, extensions, forbearance or granting of any indulgence by the Lenders with respect to any provision of this Agreement or any Loan Document; or (vi) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a borrower or a guarantor. (b) Notwithstanding anything to the contrary contained herein, in the event of a sale of all or substantially all of the Capital Stock or assets of or by any Borrower (directly or indirectly) to a New Fund and the application of the proceeds thereof in accordance with this Agreement and the other Loan Documents, such Borrower shall be released of its obligations under this Agreement and the other Loan Documents. PAGE 29 SECTION 2.19 Increase of Commitments. (a) The Borrower shall have the right with the consent of the Administrative Agent and the Syndication Agent, to request in writing, from time to time (but not more than twice), that the aggregate amount of the Commitments then in effect be increased effective upon a specific date (the "Increase Effective Date") set forth in such request (the "Increase Request") upon the same terms and conditions as set forth herein, provided that no such increase shall be permitted if, after giving effect thereto the total aggregate Commitments would exceed $2,500,000,000. Any such increase shall be in incremental aggregate amounts of not less than the lesser of (i) $10,000,000 or (ii) $2,500,000,000 minus the amount of the total aggregate Commitments then in effect (the "Requested Amount") and shall increase permanently the amount of the total aggregate Commitments then in effect (subject to the Borrower's right to terminate or reduce the amount of the Commitments pursuant to Section 2.5). (b) If on the date (the "Increase Response Date") specified in any Increase Request any Lenders or any new lenders selected by the Borrower with the consent of the Administrative Agent and the Syndication Agent (such consent not to be unreasonably withheld) elect in their sole discretion, to increase their Commitments (each an "Increasing Lender") by an aggregate amount equal to the Requested Amount, then, subject to the provisions of this Section 2.19, on the Increase Effective Date therefor, the Commitments of such Increasing Lenders, and correspondingly, the total aggregate Commitments, shall be increased accordingly. (c) Each increase in the Commitment of an Increasing Lender (including any new lender) shall be evidenced by a written instrument executed by such Increasing Lender, the Borrower and the Administrative Agent, and shall take effect on the related Increase Effective Date. (d) Upon the request to the Administrative Agent by any Increasing Lender, the Borrower shall deliver to each such Increasing Lender, in exchange for the Note held by such Increasing Lender, a new Note, in the principal amount of such Increasing Lender's Commitment after giving effect to the adjustments made pursuant to this Section 2.19. (e) If any Lender or group of Lenders shall have elected to increase their Commitments as provided in this Section 2.19, then as of the related Increase Effective Date (i) the Commitments of each Increasing Lender shall take effect and (ii) the Commitments of the Lenders which are not Increasing Lenders shall remain constant. ARTICLE 3 Representations and Warranties Each Borrower represents and warrants to the Lenders, on the Closing Date and on the date of each borrowing by such Borrower hereunder, that: SECTION 3.1 Organization; Powers. Such Borrower is duly formed, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in PAGE 30 a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. SECTION 3.2 Authorization; Enforceability. The Transactions are within the Borrower's powers and have been duly authorized by all necessary corporate, partnership, limited liability company or other actions. The Loan Documents have been duly executed and delivered on behalf of each Loan Party thereto and constitute a legal, valid and binding obligation of each such Loan Party, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. SECTION 3.3 Governmental Approvals; No Conflicts. The Transactions (a) do not require any material consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the organizational or formation documents of any Loan Party or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, material agreement or other material instrument binding upon any Loan Party or its assets, or give rise to a right thereunder to require any payment to be made by any Loan Party, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party, other than pursuant to the Loan Documents. SECTION 3.4 Compliance with Laws and Agreements. Each Loan Party is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. SECTION 3.5 Investment and Holding Company Status. No Borrower is (a) an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935. SECTION 3.6 Material Adverse Effect. There has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect. SECTION 3.7 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of such Borrower, threatened by or against any Loan Party or any Investment Party or against any of their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby, or (b) which, if adversely determined, could reasonably be expected to have a Material Adverse Effect. SECTION 3.8 Disclosure. No information, financial statement, report, certificate or other document prepared or furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with this Agreement or any other Loan Document (but PAGE 31 excluding all projections and pro forma financial statements which shall have been prepared in good faith and based upon reasonable assumptions) contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements herein or therein not misleading. SECTION 3.9 Investments. On and after the date of the making of each Investment, each applicable Investment Party and New Portfolio Company in which such Investment is made will be duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, will have all requisite power and authority to carry out its business as then conducted and proposed to be conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, will be qualified to do business in, and in good standing in every jurisdiction where such qualification is required. The making of each Investment (i) will be within the power of the applicable Borrower, and each Investment Party and will be duly authorized by all necessary appropriate action on the part of each such Borrower and Investment Party, (ii) will not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as will have been obtained or made and be in full force and effect, (iii) will not violate any applicable law or regulation, in any material respect, or any organizational document of any applicable Borrower, Investment Party or New Portfolio Company or any order of any Governmental Authority, (iv) will not violate or result in a default under any material indenture, agreement or other instrument binding upon the applicable Borrower, Investment Party or New Portfolio Company or its assets, or give rise to a right thereunder to require any payment to be made by the applicable Borrower, Investment Party or New Portfolio Company (other than payments made simultaneously with such Investment), (v) will not result in the creation or imposition of any Lien on any asset of the applicable Borrower, Investment Party or New Portfolio Company except Liens under the Pledge Agreement and Liens on the acquired assets to secure Indebtedness owed to third party lenders incurred in connection with the making of an Investment in the assets acquired thereby, and (vi) will be consistent with investments made by, or permitted under, any Specified Fund (other than with respect to geographic region). ARTICLE 4 Conditions Precedent SECTION 4.1 Conditions to Initial Funding. The obligations of the Lenders to make the Term Loans and of the Issuing Bank to issue any Letter of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.2): (a) Loan Documents. The Administrative Agent (or its counsel) shall have received (i) this Agreement, duly executed and delivered by each Initial Borrower, (ii) an Affiliate Guarantee, duly executed and delivered by each Affiliate Guarantor in existence on the Closing Date, (iii) an Investment Guarantee duly executed and delivered by each Investment Guarantor in existence on the Closing Date; (iv) the Pledge Agreement, duly executed and delivered by each Initial Borrower and EquityCo, together with all documents required to be delivered thereunder, all certificates representing the Pledged Interests listed on Schedule I thereto and stock powers PAGE 32 endorsed in blank, (v) the Letter Agreement, duly executed and delivered by each party thereto, and (vi) the Principal Agreement, duly executed and delivered by each party thereto. (b) Closing Certificate. The Administrative Agent shall have received, with a counterpart for each Lender, a certificate of each Loan Party, dated the Closing Date, substantially in the form of Exhibit E, with appropriate insertions and attachments. (c) Legal Opinion. The Administrative Agent shall have received the executed legal opinion of (i) Weil, Gotshal & Manges LLP, counsel to the Loan Parties, substantially in the form of Exhibit B, (ii) Nauta Dutilh, counsel to HM/Europe Coinvestors, C.V. and EquityCo, substantially in the form of Exhibit C, and (iii) Walkers, counsel to TOH/Europe Cayman Ltd, substantially in the form of Exhibit D. (d) Approvals. All governmental and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the Transactions shall have been obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on any Initial Borrower's ability to perform its obligations under the Loan Documents. (e) Fees. The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the date hereof. (f) Filings. Any documents (including, without limitation, financing statements) required to be filed, registered or recorded in order to create, for the benefit of the Administrative Agent and the Lenders, a perfected, first priority security interest shall have been properly prepared for filing, registration or recording in each office in each jurisdiction in which such filings, registrations and recordations are required to perfect such first priority security interests created by the Pledge Agreement, and the Administrative Agent shall be satisfied that such recordings and filings will be completed promptly after the date hereof. SECTION 4.2 Additional Conditions for Each Credit Event. The obligation of each Lender to make Term Loans on the occasion of any borrowing (other than a Loan made pursuant to Section 2.3(e) and Term Loans made for the payment of interest and Fees), and of the Issuing Bank to issue any Letter of Credit, is subject to the satisfaction of the following conditions: (a) Joinder Agreement. In the event the Term Loans are to be drawn by a Future Borrower not a party to this Agreement, the Administrative Agent shall have received from such Future Borrower a Joinder Agreement signed by the appropriate Future Borrower together with such other documentation required thereunder. (b) Guarantee. The Administrative Agent shall have received, if applicable, an Investment Guarantee or an Affiliate Guarantee signed by the appropriate Investment Guarantor or Affiliate Guarantor. (c) Pledge Agreement. The Administrative Agent shall have received (i) from the Borrower a Pledge Supplement (as defined in the Pledge Agreement) to the Pledge Agreement PAGE 33 signed by the Borrower and the Indirect Co-Investor, if applicable, or (ii) in the case of any Future Borrower not a party to a Pledge Agreement, a Pledge Agreement signed by such Future Borrower and the Indirect Co-Investor, if applicable. (d) Representations and Warranties. The representations and warranties of the Loan Parties set forth in this Agreement and the Loan Documents shall be true and correct in all material respects on and as of the date of such borrowing or the date of issuance of such Letter of Credit, as applicable, except to the extent they relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date. (e) No Default. At the time of and immediately after giving effect to such borrowing or the issuance of such Letter of Credit, as applicable, no Default or Event of Default shall have occurred and be continuing. (f) Certificate. With respect to each Term Loan the proceeds of which will be used to fund an Investment, the Administrative Agent (which shall forward the same to the Lenders and Issuing Bank) shall have received a certificate of the applicable Borrower setting forth in reasonable detail, and to such Borrower's knowledge, information with respect to the following items: (i) a description of such Investment; (ii) the total cost of such Investment; (iii) the amount, maturity, source and collateral security for all debt, equity and other financing for such Investment and the acquisition by or of the applicable New Portfolio Company of such Investment; and (iv) the name, form of organization and jurisdiction of organization of such Borrower and, if applicable, the appropriate Indirect Co-Investor, the applicable New Portfolio Company and any Investment Party and the respective direct ownership interests of such Borrower, the Indirect Co-Investor, each Investment Party and the New Portfolio Company and their respective subsidiaries. In addition, the Administrative Agent (which shall forward the same to the Lenders) shall receive from the Borrower: (i) a copy of all purchase documents relating to the acquisition of the applicable New Portfolio Company and (ii) such other information reasonably requested by the Lenders regarding the applicable New Portfolio Company, the Indirect Co-Investor, and the Investment Parties (in each case, if any). (g) Co-Investment. The amount of the borrowing shall not equal more than 97.02% of the Investment in a Directly Owned Investment Party or New Portfolio Company, as the case may be, and in each case the Co-Investors shall have made the Co-Investment in an amount not less than 2.98% of such Investment. (h) Legal Opinion. The Administrative Agent shall have received an executed legal opinion from the Loan Parties' outside counsel and local counsel, as to all matters reasonably requested by Administrative Agent including, without limitation, (a) Regulation U and (b) perfection of the Administrative Agent's security interest in the Investment pledged by the Pledgors of Pledged Interests. (i) Investment. Each Investment shall be reasonably expected by the Loan Parties to be suitable for purchase by New Fund (the determination of which will include a determination that the Investment is consistent with past investments by any Specified Fund). Each borrowing and the issuance of any Letter of Credit shall be deemed to constitute a representation and PAGE 34 warranty by each Borrower on the date thereof as to the matters specified in paragraphs (c) and (d) of this Section. ARTICLE 5 Covenants Until the principal of and interest on each Term Loan and all other amounts payable hereunder shall have been paid in full and the Commitments are terminated and any Letter of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, each Borrower hereby covenants and agrees with the Lenders that (with references to "the Borrower" being deemed to be references to "such Borrower"): SECTION 5.1 Notices of Material Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following: (a) the occurrence of any Default or Event of Default; (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any Loan Party or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect; and (c) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. Each notice delivered under this Section shall be accompanied by a statement of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. SECTION 5.2 Existence; Conduct of Business. The Borrower will do or cause to be done all things necessary to preserve, renew and keep in full force and effect (a) its legal existence and (b) the rights, licenses, permits, privileges and franchises material to the conduct of its business other than those in the case of clause (b) above, the failure of which to maintain, could reasonably be expected to have a Material Adverse Effect. SECTION 5.3 Payment of Obligations. The Borrower will pay its material obligations, including material tax liabilities, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect. SECTION 5.4 Compliance with Laws. The Borrower will comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. PAGE 35 SECTION 5.5 Use of Proceeds. The proceeds of the Term Loans will be used only to finance the Investments in New Portfolio Companies and the payment of interest, fees and expenses due hereunder and Letters of Credit shall be used only in connection with the consummation of the proposed Investments; provided that (i) Term Loans may not be borrowed and Letters of Credit may not be issued for the purpose of making any Investment if the aggregate Investment Commitment Amount (after giving effect to such Term Loan or Letter of Credit, as the case may be), would exceed the aggregate Commitments, (ii) no part of the proceeds of any Term Loan and no Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations U and X and (iii) the amount of Term Loans borrowed and the aggregate face amount of Letters of Credit issued shall not exceed (x) $500,000,000 in the aggregate, in the case of any Investment in real estate, and (y) $175,000,000 individually or $375,000,000 in the aggregate, in the case of Investments in New Portfolio Companies domiciled in Mexico, Central America or South America. SECTION 5.6 Additional Collateral. (a) With respect to any investment by a Borrower and an Indirect Co-Investor, if any, in a Directly Owned Investment Party or a New Portfolio Company, as the case may be, the applicable Borrower and Indirect Co-Investor, if any, shall execute and deliver to the Administrative Agent, for the benefit of the Lenders, such Pledge Agreements or Pledge Supplements to the Pledge Agreement or such other documents as the Administrative Agent shall deem necessary or advisable to grant to the Administrative Agent, for the benefit of the Lenders, a Lien on the Capital Stock issued by the Directly Owned Investment Party or, to the extent there is no Directly Owned Investment Party, the Capital Stock of the New Portfolio Company, or in the case of an Investment in Indebtedness, a Lien on such Indebtedness. (b) In all cases, the appropriate Pledgor shall, as soon as practicable but in any event not more than five Business Days after any borrowing, (i) deliver to the Administrative Agent the stock certificates, notes or other evidence of ownership representing the Investment in such New Portfolio Company or such Directly Owned Investment Party, as applicable, together with undated stock or transfer powers, executed, endorsed and delivered in blank, for any stock certificates or notes representing such Investment, by a Responsible Officer of such Pledgor, and (ii) take all actions necessary or advisable to cause such Lien to be duly perfected in accordance with all applicable Requirements of Law, including, without limitation, the filing of financing statements in such jurisdictions as may be required by the Pledge Agreement or by law or as may be requested by the Administrative Agent and (iii) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions, including legal opinions of local counsel, relating to the matters described in this Section 5.6, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. SECTION 5.7 Financial Reporting. Each Borrower will provide to the Administrative Agent, for distribution to the Lenders, (a) each of the financial statements and related certificates and other business and financial information regularly distributed to the lenders pursuant to any credit agreement for a New Portfolio Company as well as such additional information as the Lenders may reasonably request hereunder, and (b) within 45 days after the expiration of the applicable quarter, quarterly unconsolidated financial statements for each PAGE 36 Borrower for the periods ending as of such quarter, commencing with the quarter ended December 31, 1999. SECTION 5.8 Additional Guarantors. Within ten Business Days after the formation of any Affiliate Guarantor or Investment Guarantor on the date any entity becomes an Affiliate Guarantor or Investment Guarantor within the definition of Affiliate Guarantor set forth in Section 1.1 hereof, the Borrower shall cause each such Affiliate Guarantor or Investment Guarantor, as applicable, to execute and deliver to the Administrative Agent, as appropriate, an Affiliate Guarantee substantially in the form of Exhibit F attached hereto or an Investment Guarantee substantially in the form of Exhibit G attached hereto. SECTION 5.9 Management and Advisory Agreements. Upon the request of the Administrative Agent, the Borrower shall provide to the Administrative Agent a copy of each management and advisory agreement in respect of the New Fund or an Investment in a New Portfolio Company, if any. SECTION 5.10 Covenant to Pay. Each Borrower covenants in favor of the Administrative Agent, with the agreement of the Lenders and the Issuing Bank, to pay the Obligations to the Administrative Agent as joint and several creditor thereof when and to the extent due from such Borrower under the terms of and subject always to any express limits set out in this Agreement, to such bank account as the Administrative Agent may direct, except that each Borrower may also, subject to the terms of this Agreement until otherwise notified in writing by the Administrative Agent, pay the Obligations directly to the Administrative Agent for itself or to the relevant Lender or Issuing Bank, as the case may be, and each such payment will constitute a pro rata discharge of the covenant to pay in favor of the Administrative Agent set forth herein. SECTION 5.11 Margin Securities. All Investments in "margin stock", as such term is defined in Regulation U of the Board, shall be made through one or more Investment Parties. ARTICLE 6 Negative Covenants Until the principal of and interest on each Term Loan and all other amounts payable hereunder shall have been paid in full and the Commitments are terminated and any Letter of Credit shall have expired or terminated and all LC disbursements shall have been reimbursed, each Borrower hereby covenants and agrees with the Lenders that (with references to "the Borrower" being deemed to be references to "such Borrower"): SECTION 6.1 Indebtedness. The Borrower will not, and will not permit any Indirect Co-Investor (if applicable) or Investment Party to, create, incur, assume or permit to exist any Indebtedness, except (a) Indebtedness created hereunder and under the other Loan Documents, (b) nonconsensual obligations imposed by operation of law, (c) indemnification obligations arising under the Borrower's constituent documents, (d) administrative expenses and taxes, and (e) Indebtedness arising out of any Guarantee or similar agreement entered into by any PAGE 37 Borrower, Indirect Co-Investor or Investment Party in support of the obligation of a New Portfolio Company or its Subsidiaries; provided, however, (i) the remaining Commitment after giving effect to such Guarantee, shall be sufficient to make payments of interest and fees previously accrued or which will be payable hereunder through the Maturity Date (using for future periods not covered by existing Interest Periods, the Eurodollar Rate available on the date of any determination for a three (3) month Interest Period and using the then current Applicable Margin, (ii) the Commitments shall be deemed to be utilized in an amount equal to the full amount of such Indebtedness during the time such Indebtedness remains outstanding, (iii) such Guarantees shall not exceed $250 million in the aggregate at any one time outstanding, and (iv) promptly after entering into a permitted Guarantee, give the Administrative Agent written notice thereof. SECTION 6.2 Liens. The Borrower will not, and will not permit any Indirect Co-Investor (if applicable) or any Investment Party to, create, incur, assume or permit to exist any Lien (other than Liens created pursuant to the Pledge Agreement) on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof other than (a) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower in accordance with GAAP, (b) Liens in favor of banking institutions arising as a matter of law and encumbering the deposits (including the right of setoff) held by such banking institutions in the ordinary course of business and which are within the general parameters customary in the banking industry, and (c) attachment and judgment Liens not constituting an Event of Default; provided, however, that this Section 6.2 shall not apply to any "margin stock" as such term is defined in Regulation U of the Board, if such margin stock represents more than 25% of the value of the assets of the Borrower as such value is required to be computed by Regulation U of the Board. SECTION 6.3 Fundamental Changes. (a) The Borrower will not, and will not permit any Indirect Co-Investor (if applicable) or any Investment Party to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve; provided that any Borrower, Indirect Co-Investor or Investment Party may (i) merge into or consolidate with any other Borrower, Indirect Co-Investor or Investment Party, or (ii) liquidate or dissolve if, in connection thereunder, all of its assets are transferred to another Borrower, Indirect Co-Investor or Investment Party, or if such transfer is done in accordance with Section 6.5. (b) The Borrower will not engage in any business other than a business consistent with its current operations and activities on the date of execution of this Agreement. SECTION 6.4 Restricted Payments. The Borrower will not, and will not permit any Investment Party to, make any Restricted Payments (except that the Investment Parties may make Restricted Payments to the Borrower (and the Indirect Co-Investor, if any) to repay Term Loans and other amounts due hereunder and the Borrower may make Restricted Payments to a Co-Investor in respect of any Co-Investment amount in connection with a sale of assets permitted under Sections 2.6(b) or 6.5 or with the proceeds funded by a Co-Investor in connection with transfer among the Co-Investors). PAGE 38 SECTION 6.5 Sale of Assets. The Borrower shall not and will not permit any Indirect Co-Investor or Investment Party to sell, transfer or otherwise dispose of any of its respective property other than for cash (yielding net proceeds) representing at least such Person's cost of such property (including, without limitation, any interest and fees relating thereto), the net proceeds (less the ratable interest of any Co-Investors and any necessary escrows) of which (to the extent attributable to the Investment) are distributed to the Borrowers to repay the Term Loans; provided, however, the Borrower or any Investment Party may sell, transfer or otherwise dispose of "margin stock" as such term is defined in Regulation U of the Board so long as the net proceeds from such sale shall be held by the Borrower or such Investment Party, as the case may be, in cash or marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government maturing on or within one year from the date of such sale until the Maturity Date; provided further, that in the event that any such property which shall not constitute "margin stock" is sold for more than the cost thereof (including, without limitation, any interest and fees relating thereto), the amount of net cash proceed in excess of such cost shall be held in a cash collateral account in the name and under the sole dominion and control of the Administrative Agent as security for the Obligations. ARTICLE 7 Events of Default If any of the following events ("Events of Default") shall occur: (a) any Borrower shall fail to pay any principal of any Term Loan or LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; (b) any Borrower shall fail to pay any interest on any Term Loan or LC Disbursement or to pay any Fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under or in connection with this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five days; (c) any representation or warranty made or deemed made by or on behalf of any Loan Party in or in connection with any Loan Document or any amendment or modification thereof, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof, shall prove to have been incorrect in any material respect when made or deemed made; (d) any Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.2(a) or Article 6 or any Guarantor shall fail to observe or perform any covenant, condition or agreement contained in Section 10(a)(i) or (d) of its Affiliate Guarantee or Investment Guarantee, as applicable; (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b), (c), (d) or (g) of this Article), and such failure shall continue unremedied for a period of 30 days; PAGE 39 (f) any Loan Party, Investment Party, or any New Portfolio Company shall (i) default in making any payment of any principal of or interest on any Indebtedness (including any Guarantee, but excluding the Term Loans, LC Disbursements and Guarantees pursuant to the Affiliate Guarantees and Investment Guarantees) beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee) to become payable; provided that a default, event or condition described in clause (i) or (ii) of this paragraph (f) shall not at any time constitute an Event of Default under this Agreement unless, at such time, one or more defaults, events or conditions (without duplication as to the same item of Indebtedness) of the type described in clauses (i) and (ii) of this paragraph (f) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $500,000 in the case of any Borrower or $10,000,000 in the case of any New Portfolio Company, Investment Party or any other Loan Party; or (g) (i) any Loan Party, Investment Party, or any New Portfolio Company shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Loan Party, Investment Party or any New Portfolio Company shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Loan Party, Investment Party or any New Portfolio Company, any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Loan Party, Investment Party or any New Portfolio Company any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Loan Party shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Loan Party, Investment Party or any New Portfolio Company shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (h) one or more judgments or decrees shall be entered against any Loan Party, Investment Party or New Portfolio Company involving in the aggregate a liability (not paid or fully covered by insurance as to which the relevant insurance company has not denied coverage) of $500,000 or more in the case of any Borrower and $10,000,000 or more in the case of any PAGE 40 New Portfolio Company, Investment Party or any other Loan Party, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or (i) any Loan Document shall, at any time, cease to be in full force and effect (unless released by the Administrative Agent at the direction of the Required Lenders or as otherwise permitted under this Agreement or the other Loan Documents) or shall be declared null and void, or the validity or enforceability thereof shall be contested by any Loan Party; or (j) any Person constituting a "Guarantor" shall not be a party to an Affiliate Guarantee or an Investment Guarantee, as applicable, within ten Business Days after such Person has been organized or formed; (k) a Change in Control shall occur; or (l) any Investment Party shall fail to distribute any payment made to it on account of any Investment (net of reasonable expenses and reasonably required escrows). then, and in every such event (other than an event with respect to any Borrower described in clause (g) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrowers, declare the Term Loans and LC Disbursements then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable) and the Commitments to be terminated, and thereupon the principal of the Term Loans and LC Disbursements so declared to be due and payable, together with accrued interest thereon and all other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Borrower; and in case of any event with respect to any Borrower described in clause (g) of this Article, the principal of the Term Loans and LC Disbursements then outstanding, together with accrued interest thereon and all other obligations of the Borrowers accrued hereunder, shall automatically become due and payable and the Commitments shall be automatically terminated, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Borrower; and at any time thereafter during the continuance of such event, the Administrative Agent may exercise all of its rights and remedies under the Pledge Agreement in accordance with all applicable laws. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Borrowers shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Each Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Bank, a security interest in such cash collateral to secure all obligations of such Borrower in respect of such Letters of Credit under this Agreement and the other Loan Documents. The Borrowers shall execute and deliver to the Administrative Agent, for the account of the Issuing Bank, such further documents and instruments as the Administrative Agent may request to evidence the creation and perfection of such security interest in such cash collateral account. Amounts held in PAGE 41 such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrowers hereunder and under any Notes. After all such Letters of Credit shall have expired or been fully drawn upon, all obligations under the Letters of Credit shall have been satisfied and all other obligations of the Borrowers hereunder and under any Notes shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to Borrowers. ARTICLE 8 The Administrative Agent SECTION 8.1 Generally. Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with any Loan Party or any Affiliate thereof as if it were not the Administrative Agent hereunder. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing by the Required Lenders, and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Affiliates that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article 4 or PAGE 42 elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for any Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the Borrowers. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint a successor, which successor shall be approved by the Borrowers (which approval shall not be unreasonably withheld or delayed). If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank reasonably acceptable to the Borrowers. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. Any fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the Administrative Agent's resignation hereunder, the provisions of this Article and Section 9.3 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not PAGE 43 taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder. SECTION 8.2 Joint and Several Creditorship. The Administrative Agent shall be the joint and several creditor together with each Lender and the Issuing Bank of each and every Obligation of any Borrower towards such Bank under this Agreement or any Loan Document so that accordingly the Administrative Agent in its individual capacity will have its own independent right to demand performance by the relevant Borrower of those Obligations, and such Obligations will be discharged by and to the extent of any discharge thereof either to the Administrative Agent in its capacity referred to above or to the Administrative Agent for itself or to the relevant Bank, as the case may be. In case of a resignation of the Administrative Agent pursuant to Section 8.1, the rights of the Administrative Agent hereunder shall be assigned by the retiring Administrative Agent to the successor Administrative Agent by an assignment not constituting a novation of debt. ARTICLE 9 Miscellaneous SECTION 9.1 Notices. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand, when delivered, (b) in the case of delivery by mail, three days after being deposited in the mails, postage prepaid, or (c) in the case of delivery by facsimile transmission, when sent and receipt has been confirmed, addressed as follows: (a) if to any Borrower, to it c/o Hicks, Muse Tate & Furst Incorporated, 200 Crescent Court, Suite 1600, Dallas, Texas 75201, Attention: Lawrence D. Stuart, Jr., (Telecopy No. 214-740-7313), with a copy to each other Borrower); (b) if to the Administrative Agent, to The Chase Manhattan Bank, Loan and Agency Services, One Chase Manhattan Plaza, New York, New York 10081, Attention: Janet Belden (Telecopy No. 212-552-5658), with a copy to The Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention: Neil Boylan (Telecopy No. 212-972-0009); and (c) if to any Lender, to it at its address (or telecopy number) set forth in an administrative questionnaire delivered to the Administrative Agent and as otherwise notified in writing to the Borrowers. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. SECTION 9.2 Waivers; Amendments. (a) No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any PAGE 44 abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Term Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time. (b) Neither any Loan Document nor any provision thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Required Lenders and each affected Loan Party; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the amount of, or extend any scheduled date for payment of, any principal or interest in respect of the Term Loans, any LC Disbursements or any Letter of Credit fees, without the written consent of each Lender directly affected thereby, (iii) change any of the provisions of this Section or the definition of "Required Lenders" without the written consent of each Lender, (iv) release any Loan Party from its obligations under the Loan Documents without the written consent of each Lender (except upon payment in full in cash of the Obligations or, with respect to a given Borrower or Indirect Co-Investor, upon a sale of the Directly Owned Investment Party or New Portfolio Company in a transaction permitted hereunder and repayment in full of such Borrower's Term Loans) or (v) release all or substantially all of the collateral (except as expressly provided in the Loan Documents) under the Affiliate Guarantees or Investment Guarantees and the Pledge Agreement (provided that a partial release of collateral thereunder shall require the consent of the Required Lenders); provided, further, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent. SECTION 9.3 Expenses; Indemnity; Damage Waiver. (a) The Borrowers shall pay or cause to be paid (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the administration of this Agreement or any amendments, modifications or waivers of the provisions hereof and (ii) all reasonable out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including in connection with any workout, restructuring or negotiations in respect thereof, the reasonable fees and disbursements of counsel to the Administrative Agent and after the occurrence and during the continuance of an Event of Default a single counsel to the Lenders collectively. (b) Each Borrower shall indemnify the Administrative Agent and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an "Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (other than non-Non-Excluded Taxes), including the PAGE 45 reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations under the Loan Documents or the consummation of the Transactions or any other transactions contemplated by the Loan Documents, (ii) any Term Loan or the use of the proceeds therefrom, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or, in the case of any indemnified liabilities arising out of this Agreement or the other Loan Documents, from the material breach by any such Indemnitee of this Agreement or the other Loan Documents, as the case may be; provided that, for purpose of clarity, no provision of this paragraph (b) shall be deemed to negate Section 9.3(a)(ii) to the extent that it provides that after the occurrence and during the continuance of an Event of Default, the Lenders shall be reimbursed for a single counsel. (c) To the extent that the Borrowers fail to pay any amount required to be paid by it to the Administrative Agent, each Lender severally agrees to pay to the Administrative Agent such Lender's Loan Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent in its capacity as such. (d) To the extent permitted by applicable law, the Borrowers shall not assert, and each Borrower hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Term Loan or the use of the proceeds thereof. (e) The agreements in this Section 9.3 shall survive repayment of the Loans and all other amounts payable hereunder. SECTION 9.4 Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by such Borrower without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. PAGE 46 (b) Any Lender may assign to one or more assignees a portion of its rights and obligations under this Agreement (an "Assignee"); provided that (i) each of the Lenders party to this Agreement on the Closing Date may not assign more than 49% of its Commitments, Term Loans and LC Exposure without the consent of the Borrowers, (ii) except in the case of an assignment to a Lender or an Affiliate of a Lender, each of the Borrowers (such consent not to be unreasonably withheld) and the Administrative Agent (the consent of the Administrative Agent may be withheld in its sole discretion) must give their prior written consent to such assignment, (iii) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender's Commitment, Term Loans and LC Exposure, the amount of the Term Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrowers and the Administrative Agent otherwise consent, (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $4,000 (provided, however, if the Borrowers request the replacement of any Lender pursuant to Section 2.17 hereof, the Borrowers shall pay such processing and recordation fee, which shall be funded with the proceeds of the Term Loans), and (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire; provided further that any consent of the Borrowers otherwise required under this paragraph shall not be required if an Event of Default under clause (g) of Article 7 has occurred and is continuing. Upon acceptance and recording pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.3). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section. Notwithstanding anything to the contrary provided herein, in the event of any proposed assignment by a Lender pursuant to this Section 9.4(b), such assignment shall be offered to the Lenders pro rata based on their respective Loan Percentages. (c) The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices in New York, New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Term Loans whether or not evidenced by a Note owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. Any assignment of any Loan whether or not evidenced by a Note shall be effective only upon appropriate entries with respect thereto being made in the Register (and each Note shall expressly so provide). Any assignment or transfer of all or part of PAGE 47 a Loan evidenced by a Note shall be registered on the Register only upon surrender for registration of assignment or transfer of the Note evidencing such Loan, accompanied by a duly executed Assignment and Acceptance, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the designated Assignee and the old Notes shall be returned by the Administrative Agent to appropriate Borrower marked "cancelled". (d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee's completed administrative questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. (e) Any Lender may, without the consent of the Borrowers but with the consent of the Administrative Agent (the consent of the Administrative Agent may be withheld in its sole discretion) sell participations to one or more banks or other entities (a "Participant") in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its Commitment and the Term Loans owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.2(b) that affects such Participant. Subject to paragraph (f) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that, in the case of Section 2.14, such Participant shall have complied with the requirements of said Section and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such Section than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. Notwithstanding anything to the contrary provided herein, in the event of any proposed participation by a Lender pursuant to this Section 9.4(e), such participation shall be offered to the Lenders pro rata based on their respective Loan Percentages. (f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any such pledge or assignment to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment to a Federal Reserve Bank; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto. PAGE 48 SECTION 9.5 Survival. All covenants, agreements, representations and warranties made by the Borrowers herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Term Loans, regardless of any investigation made by any such other party or on its behalf. SECTION 9.6 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts and by facsimile (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and any separate agreements with respect to Fees constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. SECTION 9.7 Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. SECTION 9.8 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of any Borrower against any of and all the obligations of the Borrowers now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. SECTION 9.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. (b) Each Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring PAGE 49 any action or proceeding relating to this Agreement against any Borrower or any of its properties in the courts of any jurisdiction. (c) The Borrowers hereby irrevocably and unconditionally waive, to the fullest extent they may legally and effectively do so, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. SECTION 9.11 Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. SECTION 9.12 Confidentiality. Each Lender agrees to keep information obtained by it pursuant hereto and the other Loan Documents identified as confidential in writing at the time of delivery confidential in accordance with such Lender's customary practices and agrees that it will only use such information in connection with the transactions contemplated by this Agreement and not disclose any of such information other than (a) to such Lender's employees, representatives, directors, attorneys, auditors, agents or affiliates who are advised of the confidential nature of such information, (b) to the extent such information presently is or hereafter becomes available to such Lender on a non-confidential basis from any source or such information that is in the public domain at the time of disclosure, (c) to the extent disclosure is required by law (including applicable securities laws), regulation, subpoena or judicial order or process (provided that notice of such requirement or order shall be promptly furnished to the Borrowers unless such notice is legally prohibited) or requested or required by bank, securities or investment company regulations or auditors or any administrative body or commission to whose jurisdiction such Lender may be subject, (d) to actual or prospective Assignees or Participants who agree to be bound by the provisions of this Section 9.12, (e) to the extent required in connection with any litigation between any Loan Party and any Lender with respect to the Term PAGE 50 Loans or this Agreement and the other Loan Documents or (f) with the Borrowers' prior written consent. The agreements in this Section 9.12 shall survive repayment of the Term Loans and all other amounts payable hereunder. Each of the parties hereto (each, a "Document Party") agrees to keep confidential this Agreement and the other Loan Documents and the transactions contemplated hereby and thereby; provided that nothing herein shall prevent any Document Party from disclosing such information (a) to any other Document Party or any Affiliate of any Document Party, or any officer, director, employee, agent, or advisor of any Document Party or Affiliate of any Document Party, (b) to any other Person if reasonably incidental to the administration of the credit facility provided herein, (c) as required by any law, rule, or regulation, (d) upon the order of any court or administrative agency, (e) upon the request or demand of any regulatory agency or authority, (f) to any New Portfolio Company (or prospective New Portfolio Company) or any officer, director, employee, agent, or advisor of any Document Party or Affiliate of such New Portfolio Company in connection with a proposed Investment by any Borrower in such New Portfolio Company, (g) in connection with any litigation to which such Document Party or any of its Affiliates may be a party, or (h) to the extent necessary in connection with the exercise of any remedy under this Agreement or any other Loan Document. SECTION 9.13 Syndication. The Borrowers agree that the Administrative Agent has the right to syndicate the Commitments and the Term Loans at any time or from time to time to a group of financial institutions (the "Additional Lenders") identified by the Administrative Agent in consultation with the Borrowers, if the Administrative Agent and its affiliates determine to syndicate the Commitments and the Term Loans. The Borrowers agree to actively assist the Administrative Agent and its affiliates in completing a syndication satisfactory to the Administrative Agent and the Borrowers, including (a) using commercially reasonable efforts to ensure that the syndication efforts benefit materially from the Borrower's lending and equity relationships, (b) direct contact between the Borrowers and any Additional Lenders, (c) furnishing, or, as the Administrative Agent may request, assisting in the preparation of, information, projections and marketing materials to be used in connection with the syndication and (d) the hosting, with the Administrative Agent and its affiliates, of one or more meetings of any Additional Lenders. The Administrative Agent and its affiliates would manage all aspects of the syndication, in consultation with the Borrowers, including decisions as to the selection of institutions to be approached and when they will be approached, when their commitments will be accepted, which institutions will participate, the allocations of the commitments among any Additional Lenders and the amount and distribution of fees among any Additional Lenders. The Borrowers acknowledge that the information the Borrowers may be asked to furnish to the Administrative Agent and its affiliates and to any Additional Lenders may include sensitive competitive information, and the Administrative Agent and its affiliates agree to take appropriate and customary confidentiality precautions with respect thereto. Notwithstanding anything to the contrary contained herein, in the event of a syndication (i) no Lender shall be permitted to syndicate more than 49% of the Commitments, Term Loans and LC Disbursements held by it on the Closing Date without the prior written consent of the Borrowers and (ii) any syndication shall be offered to the Lenders pro rata (to the extent desired by any Lenders) based on their respective Loan Percentages. SECTION 9.14 Certainty of Funds. At the request of any Borrower, the Administrative Agent on behalf of the Lenders shall provide such documentation as may be reasonably agreed between such Borrower and the Administrative Agent to evidence the PAGE 51 availability of the unused Commitment to make Investments by any Borrower or a proposed Future Borrower. [The remainder of this page is intentionally left blank.] S-1 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. Initial Borrowers: HM/Europe Coinvestors, C.V. By: TOH/Europe Cayman Ltd., its general partner By: /s/ Michael D. Salim Name: Michael D. Salim Title: Principal HMTF Bridge Partners, L.P. By: HMTF Bridge Partners, LLC its general partner By: /s/ Michael D. Salim Name: Michael D. Salim Title: Principal S-2 THE CHASE MANHATTAN BANK as Administrative Agent, Issuing Bank, and a Lender By: /s/ Deborah Davey Name: Deborah Davey Title: Vice President S-3 BANK OF AMERICA, N.A. as Syndication Agent and a Lender By: /s/ Curtis D. Leuker Name: Curtis D. Leuker Title: Vice President S-4 BANKERS TRUST COMPANY as a Lender By: /s/ William Archer Name: William Archer Title: Managing Director S-5 CREDIT SUISSE FIRST BOSTON as a Lender By: /s/ Robert Hetu and Chris T. Horgan Name: Robert HHetu and Chris T. Horgan Title: Vice President/ Vice President S-6 MORGAN STANLEY SENIOR FUNDING, INC. as a Lender By: /s/ Cameron Fleming Name: Cameron Fleming Title: Vice President S-7 MERRILL LYNCH CAPITAL CORPORATION as a Lender By: /s/ Christopher Birosak Name: Christopher Birosak Title: Vice President S-8 MFBL FUNDING, INC. as a Lender By: /s/ Michael Hart Name: Michael Hart Title: Principal S-9 SCHEDULE 2.1 Lenders' Commitments Lender. . . . . . . . . . . . . . . Commitment The Chase Manhattan Bank. . . . . . $ 400,000,000 Bank of America, N.A. . . . . . . . $ 400,000,000 Bankers Trust Company . . . . . . . $ 200,000,000 Credit Suisse First Boston. . . . . $ 200,000,000 Morgan Stanley Senior Funding, Inc. $ 200,000,000 Merrill Lynch Capital Corporation . $ 180,000,000 MFBL Funding, Inc.. . . . . . . . . $ 200,000,000 Total Commitments. . . . . $1,780,000,000 -----END PRIVACY-ENHANCED MESSAGE-----