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");"
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 person for election to the Company's
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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 of Directors (each
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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,
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that the right to designate an Additional 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.
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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.
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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: 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
Number of
Purchasers Series of Preferred Number of Purchase Price
Preferred 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