AMENDMENT NO. 1
TO
WARRANT AGREEMENT
AMENDMENT NO. 1 TO WARRANT AGREEMENT (this "Amendment"), dated as of
March 29, 2005, is made between ITC^DeltaCom, Inc., a Delaware corporation (the
"Company"), and Mellon Investors Services LLC, as Warrant Agent (the "Warrant
Agent").
W I T N E S S E T H :
WHEREAS, the Company wishes to enter into a Credit Agreement, dated as
of [the date hereof], with the borrower and the subsidiary guarantors named
therein and the other parties thereto (the "Third Lien Credit Agreement"),
pursuant to which certain Welsh, Carson, Xxxxxxxx & Xxxxx funds and related
persons will lend $20,000,000 to the Company;
WHEREAS, in connection with the execution and delivery of the Third
Lien Credit Agreement, the Company proposes to issue and deliver to Welsh,
Carson, Xxxxxxxx & Xxxxx funds and related persons pursuant to a Warrant
Agreement, dated as of the date hereof, between the Company and Mellon Investor
Services LLC, as Warrant Agent, 20,000,000 warrants (the "March 2005 Warrants")
to purchase an equal number of shares of the Common Stock, par value $.01 per
share, of the Company (the "Common Stock") at an initial exercise price of $0.60
per share;
WHEREAS, Sections 7(a) and 7(b) of the Warrant Agreement, dated as of
October 6, 2003, between the Company and the Warrant Agent (the "Agreement")
provide for an adjustment of the Exercise Price (as defined in the Agreement,
the "Exercise Price") of the Warrants (as defined in the Agreement, the
"Warrants") if the Company issues, or is deemed to have issued, any shares of
the Common Stock for no consideration or for a consideration per share less than
the Exercise Price in effect on the date of issuance or sale (or deemed issuance
or sale) of such Common Stock; and
WHEREAS, to facilitate the issuance of the March 2005 Warrants and the
shares of Common Stock or other securities issuable from time to time upon
exercise or conversion of the March 2005 Warrants (collectively, the "March 2005
Warrant Shares"), the Company wishes to amend Section 7(c) of the Agreement so
that none of the issuance, sale, grant, exercise, conversion, exchange,
reclassification, redemption or other retirement of the March 2005 Warrants or
the 2005 Warrant Shares will result in an adjustment of the Exercise Price of
the Warrants; and
WHEREAS, as required pursuant to Section 12(a) of the Agreement,
Holders of more than a majority of the outstanding Warrants outstanding on the
date hereof have consented in writing to this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Definitions. All capitalized terms that we used but not defined in
this Amendment (including the preamble and recitals hereof) shall have the
meanings given to such terms in the Agreement.
2. Amendments.
(a) This Amendment amends clause 7(c)(x) of the Agreement by deleting
the word "or" at the end thereof.
(b) This Amendment amends clause 7(c)(xi) of the Agreement by deleting
the punctuation xxxx at the end thereof and substituting "; or" therefor.
(c) This Amendment amends Section 7(c) of the Agreement by adding at
the end of such Section 7(c) a new clause 7(c)(xii), which shall read in its
entirety as follows:
(xii) the March 2005 Warrants or any shares of Common Stock
or other securities issuable or payable upon exercise or conversion of
the March 2005 Warrants.
(d) This Amendment amends Section 15 of the Agreement by adding to
such Section 15, in the appropriate alphabetical order, the following
definition, which shall read in its entirety as follows:
"March 2005 Warrants" means the warrants to purchase Common
Stock issued by the Company pursuant to the Warrant Agreement, dated
as of March 29, 2005, between the Company and Mellon Investor Services
LLC, as Warrant Agent, as amended from time to time (so long as no
amendment to such Warrant Agreement shall increase the number of
warrants issuable pursuant thereto); provided that such warrants have
the same exercise expiration date and (subject to adjustment pursuant
to antidilution provisions of such Warrant Agreement) the same
exercise price as the Warrants issued pursuant to such Warrant
Agreement on March 29, 2005.
3. Counterparts; Facsimile Delivery. This Amendment may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures on all such counterparts were upon the same
instrument. This Amendment, to the extent signed and delivered by means of a
facsimile machine, shall be treated in all manner and respects as an original
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto, each other party hereto shall re-execute original forms
thereof and deliver them to all other parties. No party hereto shall raise the
use of a facsimile machine to deliver a signature or the fact that any signature
or instrument was transmitted or communicated through the use of a facsimile
machine as a defense to the formation or enforceability of a contract, and each
such party forever waives any such defense.
4. Governing Law. This Amendment shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be construed
in accordance with the internal laws of the State of New York, without giving
effect to principles of
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conflict of laws to the extent the application of the laws of another
jurisdiction would be required thereby.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date set forth in the first paragraph hereof.
COMPANY:
ITC^DELTACOM, INC.
By:
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Name: J. Xxxxxx Xxxxxx
Title: Senior Vice President-
Legal and Regulatory
WARRANT AGENT:
MELLON INVESTOR SERVICES LLC
By:
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Name:
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Title:
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