AMENDMENT NO. 1
TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 1 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
("AMENDMENT") dated as of March 28, 2000, is among KMC TELECOM INC., a Delaware
corporation ("KMC"), KMC TELECOM II, INC., a Delaware corporation ("KMC II"),
KMC TELECOM III, INC., a Delaware corporation ("KMC III"), KMC TELECOM OF
VIRGINIA, INC., a Virginia public service company ("KMC VIRGINIA"), KMC TELECOM
LEASING I LLC, a Delaware limited liability company ("LEASING I"), KMC TELECOM
LEASING II LLC, a Delaware limited liability company ("LEASING II"), KMC TELECOM
LEASING III LLC, a Delaware limited liability company ("LEASING III"), KMC
XXXXXXX.XXX, INC., a Delaware corporation ("XXXXXXX.XXX"); KMC III SERVICES LLC,
a Delaware limited liability company ("SERVICES"; KMC, KMC II, KMC III, KMC
Virginia, Leasing I , Leasing II, Leasing III, Xxxxxxx.xxx and Services being
hereinafter collectively referred to hereinafter as the "BORROWERS"), the
financial institutions from time to time parties thereto (the "LENDERS"), FIRST
UNION NATIONAL BANK, as administrative agent for the Lenders (the "AGENT") and
NEWCOURT COMMERCIAL FINANCE CORPORATION, an affiliate of The CIT Group, Inc., as
collateral agent for the Lenders (the "COLLATERAL AGENT"; the Agent together
with the Collateral Agent being referred to as the "AGENTS").
WHEREAS, the Borrowers, the Agents and the Lenders are parties to that
certain Amended and Restated Loan and Security Agreement (the "LOAN AGREEMENT";
undefined capitalized terms used herein shall have the meanings assigned thereto
in the Loan Agreement) dated as of February 15, 2000, pursuant to which the
Lenders have agreed to make certain "Loans" and other financial accommodations
to the Borrowers; and
WHEREAS, the Borrowers have requested that the Agents and the Lenders
amend the Loan Agreement in the manner set forth herein, and the Agents and the
Lenders have agreed to such request;
NOW, THEREFORE, in consideration of the premises set forth above, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Borrowers, the Agents and the Lenders agree as
follows:
1. AMENDMENT TO THE LOAN AGREEMENT. Effective as of the date first
above written and subject to the execution of this Amendment by the parties
hereto, the Loan Agreement shall be and hereby is amended as follows:
1.1 SECTION 1.02 is hereby amended to delete the proviso contained in
the definition of "Applicable Margin" and to substitute the following therefor:
"provided, however, in the event that the Required Contribution is not
obtained on or prior to July 31, 2000, each such margin shall be increased
beginning on August 1, 2000 and continuing until such time as the Required
Contribution has been obtained, by 100 basis points."
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1.2 SECTION 1.02 is hereby further amended to delete the proviso to
the definition of "TERM B LOAN COMMITMENT AMOUNT".
1.3 SECTION 1.02 is hereby further amended to add the following new
definition in the appropriate alphabetical location:
"KMC HOLDINGS STOCK SALE" shall mean the sale to one or more Persons
of at least $100,000,000 of Equity Interests in KMC Holdings, which may include
the sale of redeemable, exchangeable preferred Equity Interests with terms and
conditions substantially as described in Exhibit A to that certain letter
agreement dated March 22, 2000 between Lucent and KMC Holdings.
1.4 SECTION 2.02(A) is hereby amended to delete clause (II) thereof.
1.5 SECTION 2.02(D) is hereby amended to delete the amount
$200,000,000 in clause (II) thereof, and to replace such amount with the amount
$241,000,000.
1.6 SECTION 2.05(B) is hereby amended to delete the penultimate
sentence thereof.
1.7 SECTION 5.18 is amended to delete the text thereof and to
substitute the following therefor:
"The Borrowers shall obtain the Required Contribution on or prior to
April 1, 2001."
1.8 SECTION 6.08(7) is hereby amended to delete the date "August 31,
2000" and to substitute therefor the date "April 1, 2001".
1.9 SECTION 7.01(A) is hereby amended to add the following sentence
thereto:
"In the calculation of such ratio, the amount of unrestricted cash
balances of the Borrowers in excess of $20,000,000 shall be subtracted from
Total Debt."
2. CONDITIONS PRECEDENT. This Amendment shall become effective as of
the date above written, if, and only if, the Agents have received on or prior to
March 30, 2000, duly executed originals of this Amendment from the Borrowers,
the Requisite Lenders and the Agents, and duly executed originals of Amendment
No. 1 to the KMC Holdings Guaranty from KMC Holdings.
3. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. The Borrowers
hereby represent and warrant as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of the Borrowers and are
enforceable against the Borrowers in accordance with their terms.
(b) Upon the effectiveness of this Amendment, the Borrowers hereby
reaffirm all representations and warranties made in the Loan Agreement, and to
the extent the same are not amended hereby, agree that all such representations
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and warranties shall be deemed to have been remade as of the date of delivery of
this Amendment, unless and to the extent that any such representation and
warranty is stated to relate solely to an earlier date, in which case such
representation and warranty shall be true and correct as of such earlier date.
(c) As of the date hereof, and after giving effect to this Amendment,
each Borrower shall be in compliance with all the terms and provisions set forth
in the Loan Agreement, as amended hereby, on its part to be observed or
performed, and no Event of Default or Default shall have occurred and be
continuing.
4. Reference to and Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 1 hereof, on and after the date
hereof, each reference in the Loan Agreement to "this Loan Agreement,"
"hereunder," "hereof," "herein" or words of like import shall mean and be a
reference to the Loan Agreement as amended hereby, and each reference to the
Loan Agreement in any other document, instrument or agreement shall mean and be
a reference to the Loan Agreement as modified hereby.
(b) The Loan Agreement, as amended hereby, and all other documents,
instruments and agreements executed and/or delivered in connection therewith,
shall remain in full force and effect, and are hereby ratified and confirmed.
(c) Except as expressly provided herein, the execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of the Agents or the Lenders, nor constitute a waiver of any
provision of the Loan Agreement or any other documents, instruments and
agreements executed and/or delivered in connection therewith.
5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE OTHER REMAINING TERMS OF THE LOAN AGREEMENT AND THE INTERNAL
LAWS (AS OPPOSED TO CONFLICT OF LAW PROVISIONS) OF THE STATE OF NEW YORK.
6. PARAGRAPH HEADINGS. The paragraph headings contained in this
Amendment are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement among the parties thereto.
7. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
THE BORROWERS:
KMC TELECOM INC.
KMC TELECOM II, INC.
KMC TELECOM III, INC.
KMC TELECOM OF VIRGINIA, INC.
KMC XXXXXXX.XXX, INC.
In each case:
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
KMC TELECOM LEASING I LLC
By: KMC TELECOM INC., as its Sole Member
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
KMC TELECOM LEASING II LLC
By: KMC TELECOM II, INC., as its Sole
Member
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
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KMC TELECOM LEASING III LLC
KMC III SERVICES LLC
In each case:
By: KMC TELECOM III, INC., as its Sole
Member
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CFO
FIRST UNION NATIONAL BANK, as the
Agent and as a Lender
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
NEWCOURT COMMERCIAL FINANCE CORPORATION
(f/k/a AT&T COMMERCIAL FINANCE
CORPORATION), an affiliate of The CIT
Group, Inc., as the Collateral Agent and
as a Lender
By:------------------------------
Name:------------------------------
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as a Lender
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
CIBC World Markets Corp., as Agent
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GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Manager-Operations
LUCENT TECHNOLOGIES INC., as a Lender
By: /s/ Xxxx Xxxx
------------------------------
Name: Xxxx Xxxx
Title: Director
BANKBOSTON, N.A., as a Lender
By:------------------------------
Name:------------------------------
Title:
CREDIT SUISSE FIRST BOSTON, as a Lender
By: /s/ Xxxx Xxxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxxx
Title: Managing Director
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
DRESDNER BANK AG NEW YORK AND GRAND
CAYMAN BRANCHES, as a Lender
By: /s/ Xxxxxxx X. Lernbert
------------------------------
Name: Xxxxxxx X. Lernbert
Title: Vice President
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Assistant Vice President
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XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as a Lender
By: /s/ T. Xxxxxx Xxxxxxx XX
------------------------------
Name: T. Xxxxxx Xxxxxxx XX
Title: Vice President
By:------------------------------
Name:------------------------------
Title:
XXXXXX XXXXXXX XXXX XXXXXX PRIME
INCOME TRUST, as a Lender
By:------------------------------
Name:------------------------------
Title:
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By:------------------------------
Name:------------------------------
Title:
KEYPORT LIFE INSURANCE COMPANY,
as a Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX XXX FLOATING RATE LIMITED LIABILITY
COMPANY, as a Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X Xxxxxxx
Title: Vice President
Xxxxx Xxx & Xxxxxxx Incorporated,
as Advisor to the Xxxxx Xxx
Floating Rate Limited Liability
Company
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REAFFIRMATION OF GUARANTY
Reference is hereby made to (i) that certain Guaranty dated as of
December 22, 1998 (as amended, restated, supplemented or otherwise modified from
time to time, the "GUARANTY") by KMC Telecom Holdings, Inc., a Delaware
corporation (the "GUARANTOR"), in favor of Newcourt Commercial Finance
Corporation, an affiliate of The CIT Group, Inc., as collateral agent for the
ratable benefit of the "Lenders" (defined below) (in such capacity, the
"COLLATERAL AGENT"), (ii) that certain Amended and Restated Loan and Security
Agreement dated as of February 15, 2000 (as amended, restated, supplemented or
otherwise modified from time to time, the "LOAN AGREEMENT") among KMC Telecom,
Inc., KMC Telecom II, Inc., KMC Telecom III, Inc., KMC Telecom of Virginia,
Inc., KMC Telecom Leasing I LLC, KMC Telecom Leasing II LLC, KMC Telecom Leasing
III LLC, KMC Xxxxxxx.xxx, KMC III Services LLC (each of the foregoing being
referred to collectively as the "BORROWERS"), the financial institutions from
time to time parties thereto (the "LENDERS"), First Union National Bank, as
administrative agent for the Lenders (the "AGENT"), and the Collateral Agent,
and (iii) that certain Amendment No.1 to Amended and Restated Loan and Security
Agreement dated as of March 28, 2000 (the "AMENDMENT") among the Borrowers, the
Lenders, the Agent and the Collateral Agent.
The Guarantor, by its signature below, without in any way establishing
a course of dealing, hereby (i) acknowledges and consents to the execution and
delivery of the Amendment by the parties thereto, (ii) agrees that the Amendment
shall not limit or diminish the obligations of the Guarantor to guarantee all of
the "Obligations" of each Borrower under and as defined in the Loan Agreement
and such other amounts as are more specifically described in the Guaranty, (iii)
reaffirms all of its obligations under the Guaranty, and (iv) agrees that the
Guaranty remains in full force and effect and is hereby ratified and confirmed.
IN WITNESS WHEREOF, this instrument has been executed and delivered as
of this 28th day of March, 2000.
KMC TELECOM HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CFO and Executive Vice President
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