EXHIBIT 10.3
EXECUTION
AMENDMENT NO. 4 AND LIMITED WAIVER
TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 4 AND LIMITED WAIVER TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT ("AMENDMENT"), dated as of April 12, 2001, 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 "Lenders" party hereto, FIRST UNION
NATIONAL BANK ("FIRST UNION"), as administrative agent for the Lenders (the
"AGENT") and CIT LENDING SERVICES CORPORATION (f/k/a NEWCOURT COMMERCIAL FINANCE
CORPORATION), 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 dated as of
February 15, 2000, as amended by Amendment No. 1 thereto dated as of March 28,
2000, Amendment No. 2 thereto dated as of July 28, 2000 and Amendment No. 3 and
Limited Waiver thereto dated as of February 23, 2001 (as so amended, the "LOAN
AGREEMENT"; undefined capitalized terms used herein shall have the meanings
assigned thereto in the Loan Agreement), pursuant to which the Lenders have
agreed to make certain "Loans" and other financial accommodations to the
Borrowers;
WHEREAS, the Borrowers have requested that Lenders (i) modify
certain financial covenants so that the Borrower may be in compliance with the
February 2001 Business Plan (as hereinafter defined) under the Loan Agreement
and (ii) make certain other amendments to the Loan Agreement, in each case in
the manner set forth herein; and
WHEREAS, the Agents and Lenders have agreed to the waivers and
amendments requested by the Borrowers and set forth below, but only on the terms
and conditions set forth in this Amendment.
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. AMENDMENTS TO THE LOAN AGREEMENT. Effective as of the date first
above written and subject to the satisfaction of the conditions set forth in
SECTION 4 below, the Loan Agreement shall be and hereby is amended as follows:
1.1 AMENDED REFERENCES TO MILESTONE PLAN. All references to
"Milestone Plan" appearing in the Loan Agreement shall be amended to be
references to "February 2001 Business Plan".
1.2 AMENDMENTS TO SECTION 1.02.
(a) SECTION 1.02 is hereby amended by deleting in their entirety the
definitions of "Access Lines," "Consolidated Debt," "Contributed Capital,"
"Excluded Subsidiary," "Fixed Charges," "Fixed Coverage Ratio," "Interest
Expense," "Milestone Plan," "Permitted Acquisition," "Prepayment Premium,"
"Principal Payments" and "Required Contribution" appearing therein.
(b) The definitions of "Affiliate", "Mortgages", "Multiemployer
Plan", "Plan", and "Qualified Intercompany Loan" set forth in SECTION 1.02 are
hereby amended to delete each reference appearing therein to "Borrower" and
"Borrowers" and substitute therefor the words "Loan Party" and "Loan Party's",
respectively.
(c) The definition of "Borrowing Base" set forth in SECTION 1.02 is
hereby amended to delete CLAUSE (II) appearing therein (other than the word
"and" appearing at the end of such clause) and re-number CLAUSE (iii) as new
CLAUSE (II).
(d) The definition of "Change of Control" set forth in SECTION 1.02
is hereby amended to delete the references to "Borrower" and "Borrowers"
contained therein and insert references to "Loan Party (other than KMC
Holdings)" and "Loan Parties" in its place.
(e) The definition of "'Consolidated' or 'consolidated'" set forth
in SECTION 1.02 is hereby amended to delete the proviso at the end thereof.
(f) The definition of "Debt" set forth in SECTION 1.02 is hereby
amended to (i) insert immediately after the words "excluding trade payables and
accrued expenses incurred in the ordinary course of business" appearing in
CLAUSE (III) thereof the parenthetical "(unless evidenced by a promissory note
or past due more than six months)", (ii) delete the reference to "any Borrower"
appearing therein and substitute therefor the words "any Loan Party" and (iii)
delete the penultimate sentence thereof.
(g) The definition of "ERISA" set forth in SECTION 1.02 is hereby
amended to insert immediately after the words "from time to time," appearing
therein the phrase "and the rules and regulations promulgated thereunder, and
any successor statutes or rules and regulations".
(h) The definition of "ERISA Affiliate" set forth in SECTION 1.02 is
hereby amended to insert immediately after the words "any corporation which is"
appearing therein the phrase ", or at any relevant time was,".
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(i) The definition of "Event of Default" is hereby amended to insert
the following sentence at the end thereof: "For purposes of SECTION 8.04 only,
'Event of Default' shall include any Default under SECTION 9.01(F)."
(j) The definition of "Excess Operating Cash Flow" set forth in
SECTION 1.02 is hereby amended to insert immediately after the words "capital
expenditures" the parenthetical "(to the extent permitted in compliance with the
Loan Agreement)".
(k) The definition of "Investment" set forth in SECTION 1.02 is
hereby amended to delete the phrase "advances to employees, officers and
directors and similar items" appearing in the parenthetical thereto and
substitute therefor the phrase "travel, hardship and relocation expenses for
employees and officers in an amount not to exceed $1,000,000 in the aggregate at
any time outstanding".
(l) The definition of "Loan Documents" set forth in SECTION 1.02 is
hereby amended to (i) insert immediately after the phrase "the Fee Letters,"
appearing therein the phrase "the Restructuring Security Documents, Warrant
Agreement, any collateral account agreement delivered pursuant to SECTION
5.04(H)," and (ii) to change the words "any Borrower" contained therein to "any
Loan Party".
(m) SECTION 1.02 is further amended by amending and restating the
definitions of "Applicable Margin," "Collateral", "EBITDA," "KMC Holdings
Guaranty," "LIBOR Interest Payment Date," "Material Adverse Effect,"
"Obligations," "Term A Loan Termination Date," and "Term B Loan Termination
Date" appearing therein as follows:
"'APPLICABLE MARGIN' shall mean with respect to each Loan
bearing interest based upon the Base Rate or LIBO Rate, the margin
determined in accordance with the criteria set forth on SCHEDULE 1.01(a)
hereto, which margin shall be calculated based upon the financial
statements provided pursuant to SECTION 5.06, with any readjustments being
effective five (5) Business Days following the Agent's receipt thereof;
PROVIDED, HOWEVER, that the Applicable Margins set forth on SCHEDULE
1.01(A) shall each be reduced by 100 basis points in the event that at any
time KMC Holdings submits to the Lenders a fully-funded business plan for
KMC Holdings and its Subsidiaries complying with the requirements of
SECTION 5.06(R) and otherwise acceptable to the Lenders, including
evidence satisfactory to the Lenders that all capital required to fully
fund such plan had been raised and contributed as a capital contribution
to the Borrowers, which reduction shall become effective on the date of
approval of such plan by the Lenders.
'COLLATERAL' shall mean, all property and interests in
property now owned or hereafter acquired by any Loan Party in or upon
which a security interest, lien or mortgage is granted or purported to be
granted to the Collateral Agent by any Loan Party, whether under this
Agreement or any of the other Loan Documents.
'EBITDA' shall mean, with respect to any Person, for any
period, an amount equal to (i) Net Income PLUS (ii) the sum of the
following, to the extent deducted in determining Net Income: (A) income,
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property and franchise or other applicable taxes, (B) interest expense,
(C) amortization, depreciation and other non-cash charges and (D) any fees
and expenses of the Lenders and Borrowers in connection with the Loan
Documents MINUS (iii) the sum of interest income plus extraordinary gains,
as determined in accordance with GAAP as calculated at the end of such
period.
"KMC HOLDINGS GUARANTY" shall mean that certain unlimited
guaranty of KMC Holdings in the form of EXHIBIT G hereto and executed and
delivered by KMC Holdings in connection with the Existing Agreement, as
amended by the General Reaffirmation and Modification Agreement made as of
February 15, 2000, Amendment No. 1 to Guaranty dated as of March 28, 2000,
Amendment No. 2 to Guaranty dated as of June 30, 2000, Amendment No. 3 to
Guaranty dated as of July 28, 2000 and as amended and restated on the
Fourth Amendment Effective Date substantially in the form of ATTACHMENT A
annexed to the Fourth Amendment.
"LIBOR INTEREST PAYMENT DATE" shall mean, with respect to a
LIBOR Loan, the last day of each Interest Period applicable to such Loan,
and, if such Interest Period has a duration of more than one month, on
each day which occurs during such Interest Period every one month from the
first day of such Interest Period.
'MATERIAL ADVERSE EFFECT' shall mean, with respect to any
Person, a material adverse effect upon the condition (financial or
otherwise), operations or properties or prospects of such Person, or upon
the ability of such Person to perform under the Loan Documents or upon the
ability of the Agents and Lenders to enforce the Obligations; PROVIDED
that, with respect to Data Holdco or any of its Subsidiaries 'Material
Adverse Effect' shall mean a material adverse effect upon the condition
(financial or otherwise), operations or properties of Data Holdco and such
Subsidiaries, taken as a whole, or upon the ability of KMC Holdings to
perform its obligations under the Loan Documents or upon the ability of
the Agents and Lenders to enforce the Obligations.
'OBLIGATIONS' shall mean all the obligations of any Loan Party
now or hereafter existing under this Agreement or any other Loan Document
to which any Loan Party is a party, whether for principal, interest, fees,
expenses, reimbursement, indemnification or otherwise, including all
obligations of any Loan Party in respect of overdrafts and other
liabilities owed to First Union National Bank and arising from treasury,
depositary and cash management services or in connection with any
automated clearing house transfers of funds, in each case together with
all extensions or renewals of any of the foregoing, including all
interest, charges, expenses, fees, attorneys' fees and disbursements, and
paralegals' fees which accrue after the commencement of any case or
proceeding in bankruptcy after the insolvency of, or for the
reorganization of any Loan Party, whether or not allowed in such
proceeding, and in each case whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or
not jointly owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or incurred, and
all or any portion of such obligations or liabilities that are paid, to
the extent all or any part of such payment is avoided or recovered
directly or indirectly from any Agent or any Lender as a preference,
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fraudulent transfer or otherwise, and all obligations of every nature of
Grantors now or hereafter existing under this Agreement.
'TERM A LOAN TERMINATION DATE' shall mean April 1, 2007.
'TERM B LOAN TERMINATION DATE' shall mean April 1, 2007."
(n) SECTION 1.02 is further amended to insert the following new
definitions therein in alphabetical order:
"'ASSET SALE' shall mean the sale by KMC Holdings or any of
its Subsidiaries to any Person of (i) substantially all of the assets of
any division or line of business of KMC Holdings or such Subsidiary, or
(ii) any other assets (whether tangible or intangible, but excluding sales
of inventory in the ordinary course of business), including pursuant to a
securitization transaction permitted pursuant to SECTION 6.13(XI) and a
sale leaseback transaction expressly permitted pursuant to SECTION 6.15.
'BASE RATE INTEREST PAYMENT DATE' shall mean, from and after
the Fourth Amendment Effective Date, with respect to a Base Rate Loan, the
first day of each calendar month, or, if such first day is not a Business
Day, the next succeeding Business Day, commencing May 1, 2001.
'BORROWING SUPPLEMENT' shall mean a questionnaire
substantially in the form of EXHIBIT V annexed hereto.
'CARRY OVER AMOUNT" shall have the meaning given to such term
in SECTION 7.01(C) hereof.
'CASH INTEREST EXPENSE' shall mean for any period, the total
interest expense (including, without limitation, interest expense
attributable to capital leases) with respect to all outstanding Debt of
Data Holdco and its Subsidiaries determined on a consolidated basis,
without duplication, for Data Holdco and its Subsidiaries in accordance
with GAAP EXCLUDING, HOWEVER, any interest expense not payable in cash
(including amortization of discount and amortization of debt issuance
costs).
'CERTIFICATE OF DESIGNATION OF THE SERIES E PREFERRED STOCK'
shall mean the Certificate of Voting Powers, Designations, Preferences and
Relative Participating, Optional or Other Special Rights and
Qualifications, Limitations and Restrictions Thereof of the Series E
Preferred Stock.
'COLLATERAL ACCOUNT' shall have the meaning given to such term
in SECTION 5.04(H) hereof.
'CORE REVENUES' shall mean the sum, without duplication, of
the amounts for such period of total revenues of the Borrowers MINUS
reciprocal compensation revenues.
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'DATA CONTRACT" shall mean, collectively, (i) any agreement
between any one or more Data Subsidiaries and Person (other than an
Affiliate of a Data Subsidiary) ('DATA CUSTOMER') (a) existing on the date
of the Fourth Amendment Effective Date or (b) relating to the provision,
operation or maintenance of telecommunications equipment, software or
networks, and (ii) any equipment purchase agreement between any Data
Subsidiary and a Data Customer relating to the purchase of multi-service,
internet protocol platform ports and/or software and/or hardware related
to the foregoing, in the case of clauses (i) and (ii) above, which
agreement (A) requires such Data Subsidiary to obtain financing by an
unaffiliated third party in order for such Subsidiary to perform any
substantive portion of its obligations under such Data Contract, (B)
relates to a discrete project described in clause (a) or (b) above and
circumscribed from the CLEC Business of the Borrowers, and (C) does not
provide for the up-front payment of any capital expenditures by the Data
Customer prior to the Data Subsidiary performing under such agreement and
PROVIDED that on or prior to the execution of any such agreement, KMC
Holdings delivers to the Agents and Lenders an officer's certificate of
the Chief Financial Officer of KMC Holdings certifying that such agreement
cannot otherwise be financed by one or more Loan Parties (without regard
to any applicable covenant restrictions on the financing contained in the
Loan Documents) and cannot be performed by a Loan Party, including a
reasonably detailed explanation of the assumptions underlying such
conclusion.
'DATA LLC' shall mean KMC Data LLC, a Delaware limited
liability company.
'DATA HOLDCO' shall have the meaning given to such term in
SECTION 5.27(A) hereof.
'DATA HOLDCO ALLOCATION AMOUNT" shall have the meaning given
to such term in SECTION 6.04(A) hereof.
'DATA HOLDCO GUARANTY' shall mean that certain unlimited
guaranty of Data Holdco in the form of ATTACHMENT N to the Fourth
Amendment, executed and delivered by Data Holdco in connection with the
Fourth Amendment on the Restructuring Effective Date.
'DATA SUBSIDIARY' shall mean KMC V, KMC VI, KMC VII, KMC
Funding, KMC VIII, KMC IX, KMC QV, KMC Funding V and Data LLC, each of
their respective Subsidiaries in existence on the Fourth Amendment
Effective Date, and each New Data Subsidiary.
'EXCESS DATA CASH FLOW' shall mean the sum, without
duplication, of the amounts for such period for Data Holdco and the Data
Subsidiaries of (i) EBITDA, PLUS or MINUS (ii) changes in working capital
for such period, as appropriate, MINUS (iii) the amounts for such period
of, without duplication, (a) to the extent incurred in compliance with the
Loan Agreement, scheduled cash repayments of any Debt of Data Holdco or
any such Data Subsidiary, (b) the amount of any fees or expenses and
reserves incurred in connection with any securitization of a Data
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Contract, including provision for current taxes based on proceeds of such
securitization payable in cash with respect to such period, (c) Cash
Interest Expense with respect to all outstanding Debt, to the extent
incurred in compliance with the Loan Agreement, of Data Holdco and the
Data Subsidiaries (d) any Data Holdco Allocation Amount to the extent
applied to pay amounts due under the Indentures or Series E Preferred
Stock pursuant to SECTION 6.04(A), and (e) capital expenditures, PLUS (iv)
any net proceeds of any related financings (including any Permitted Data
Financings (other than any securitization of any Data Contract)) with
respect to such capital expenditures.
'FEBRUARY 2001 BUSINESS PLAN' shall mean that certain Business
Plan of KMC Holdings and its Subsidiaries presented to the Agents on
February 28, 2001.
'FOURTH AMENDMENT' shall mean that certain Amendment No. 4 and
Limited Waiver to Amended and Restated Loan and Security Agreement dated
as of April 12, 2001 by and among the Borrowers, the Lenders and the
Agents.
'FOURTH AMENDMENT EFFECTIVE DATE' shall mean the Fourth
Amendment Effective Date as defined in the Fourth Amendment.
'GUARANTORS' shall mean KMC Holdings, Services I, Services II,
from and after the Restructuring Effective Date, Data Holdco, and each
Person that has executed or will execute or from time to time thereafter a
Guaranty and Security Agreement.
'GUARANTY AND SECURITY AGREEMENT' shall mean, collectively,
the Amended and Restated KMC Holdings Guaranty and Security Agreement
dated as of the Fourth Amendment Effective Date substantially in the form
of ATTACHMENT A to the Fourth Amendment, and any Guaranty and Security
Agreement executed and delivered by a Subsidiary of KMC Holdings in favor
of the Collateral Agent for the ratable benefit of itself and the Lenders,
substantially in the form of EXHIBIT U hereto.
'HOLDINGS IV" shall mean KMC Telecom IV Holdings, Inc., a
Delaware Corporation.
'HOLDINGS IV REGULATORY APPROVALS' shall have the meaning
given to such term in SECTION 5.27.
'INITIAL IRU FEE' shall have the meaning given to such term in
SECTION 6.18 hereof.
'INTERCOMPANY NOTES' shall have the meaning given to such term
in SECTION 6.13(VII) hereof.
'IRU' shall mean an indefeasible right to use specified fibers
in a fiber optic System owned or to be constructed by one or more Loan
Parties, which fibers are dark fibers to the extent part of an existing
System of a Loan Party at the time of execution of the related IRU
Agreement.
'IRU AGREEMENT' shall mean an agreement pursuant to which one
or more Loan Parties agrees to grant to a third party one or more IRUs.
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'IRU CAP EX' shall mean for any period and with respect to any
Loan Party, the aggregate capital expenditures of such Loan Party for such
period with respect to IRUs.
'IRU CONSTRUCTION COSTS' shall mean with respect to any IRU
Agreement or IRU Service Order, the aggregate cost of construction,
installation and testing of the corresponding IRU Facilities, including,
without limitation, the cost of acquisition of any rights of way,
easements or similar rights with respect to such IRU Facilities and all
other costs related to the foregoing.
'IRU FACILITIES' shall have the meaning given to such term in
SECTION 6.18 hereof.
'IRU REPORT' shall mean a written report in a form
satisfactory to Agents setting forth as of the date of such report with
respect to each executed IRU Agreement and executed IRU Service Order each
of the following: (i) the customer, (ii) location of the relevant IRU
Facilities, (iii) total IRU fees, (iv) total IRU Construction Costs with
respect to each IRU Facility, (v) the margin, (vi) maintenance costs and
(vii) such other information with respect to the foregoing as any Agent
may reasonably request from time to time.
'IRU SERVICE ORDER' shall mean any individual service orders
or similar orders for a specified route under any IRU Agreement.
'KMC FINANCING' shall mean KMC Telecom Financing, Inc., a
Delaware corporation.
'KMC FINANCIAL SERVICES' shall mean KMC Telecom Financial
Services LLC, a Delaware limited liability company.
'KMC FUNDING' shall mean KMC Funding Corporation, a Delaware
corporation.
'KMC FUNDING V' shall mean KMC Funding V LLC, a Delaware
limited liability company.
'KMC QV' shall mean KMC QV LLC, a Delaware limited liability
company.
'KMC IV' shall mean KMC Telecom IV, Inc., a Delaware
corporation.
'KMC V' shall mean KMC Telecom V, Inc., a Delaware
corporation.
'KMC VI' shall mean KMC Telecom VI, Inc., a Delaware
corporation.
'KMC VII" shall mean KMC Telecom VII, Inc., a Delaware
corporation.
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'KMC VIII" shall mean KMC Telecom VIII LLC, a Delaware limited
liability company.
'KMC IX" shall mean KMC Telecom IX LLC, a Delaware limited
liability company.
'KNT' shall mean KNT Network Technologies LLC, a Delaware
limited liability company.
'LOAN PARTY' shall mean, collectively, the Borrowers and the
Guarantors and individually, any such Borrower and any such Guarantor.
'MATERIAL AGREEMENTS' shall have the meaning given to such
term in SECTION 3.09(B).
'NET ASSET SALE PROCEEDS' shall mean, with respect to any
Asset Sale, cash payments (including any cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received from such Asset
Sale, net of any bona fide direct costs incurred in connection with such
Asset Sale, including (i) income taxes reasonably estimated to be actually
payable within two years of the date of such Asset Sale as a result of any
gain recognized in connection with such Asset Sale and (ii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest
on any Debt (other than the Loans) that is secured by a Lien on the stock
or assets in question and that is required to be repaid under the terms
thereof as a result of such Asset Sale.
'NET ASSET SALE PROCEEDS SHORTFALL' shall mean, in respect of
any Asset Sale made by any Loan Party pursuant to SECTION 6.03(A), a
positive amount (if any) equal to (i) eighty-five percent (85%) of gross
PP&E of the assets subject to such Asset Sale as reflected in the books
and records of the applicable Loan Party at the time of such sale MINUS
(ii) the amount of Net Asset Sale Proceeds from such Asset Sale actually
applied to prepay the Term Loans and reduce the Revolving Loan Commitment
Amount pursuant to SECTION 2.09(C)(III).
'NET SECURITIES PROCEEDS' shall mean the cash proceeds (net of
underwriting discounts and commissions and other costs and expenses
actually incurred associated therewith, including legal fees and expenses
actually incurred) from the issuance of any Equity Interests of KMC
Holdings.
'NEW DATA SUBSIDIARY' shall have the meaning given to such
term in SECTION 6.08 hereof.
'PERMITTED DATA FINANCINGS' shall have the meaning given to
such term in SECTION 6.13(XI) hereof.
'RESTRICTED ACCOUNT' shall have the meaning given to such term
in SECTION 8.04 hereof.
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'RESTRICTED ACCOUNT AGREEMENT' shall have the meaning given to
such term in SECTION 8.04 hereof.
'RESTRICTED SUBSIDIARY' shall have the meaning given to such
term in the Indentures and Certificate of Designation of the Series E
Preferred Stock.
'RESTRUCTURING DOCUMENTS' shall have the meaning given to such
term in SECTION 5.25 hereof.
'RESTRUCTURING EFFECTIVE DATE' shall have the meaning given to
such term in SECTION 5.25 hereof.
'RESTRUCTURING SECURITY DOCUMENTS' shall have the meaning
given to such term in SECTION 5.25 hereof.
'SERIES E PREFERRED STOCK' shall mean the Series E Redeemable,
Exchangeable, PIK Preferred Stock of KMC Holdings.
'SERVICES I' shall mean KMC I Services LLC, a Delaware limited
liability company.
'SERVICES II' shall mean KMC II Services LLC, a Delaware
limited liability company.
'WARRANT AGREEMENT' shall mean that certain Warrant Agreement
among KMC Holdings, the Collateral Agent, as warrant agent, the Agent and
Lenders in the form of ATTACHMENT K to the Fourth Amendment.
'WARRANT REGISTRATION RIGHTS AGREEMENT' shall mean that
certain Warrant Registration Rights Agreement among KMC Holdings, the
Agent and Lenders in the form of ATTACHMENT L to the Fourth Amendment."
1.3 AMENDMENT TO SECTION 1. Section 1 is further amended to insert
a new SECTION 1.05 at the end thereof as follows:
"SECTION 1.05. OTHER DEFINITIONAL PROVISIONS. Unless the
context requires otherwise (a) any definition of or reference to any
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), and (b) the words "including", "includes" and "include" shall be
deemed to be followed by the words "without limitation."
1.4 AMENDMENTS TO SECTION 2.01.
(a) The first CLAUSE (D) of SECTION 2.01 is hereby deleted in its
entirety and the following new CLAUSE (D) is substituted therefor:
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"(d) The aggregate amount of Revolving Loans that may be
borrowed from all Revolving Lenders plus the maximum amount of Letter of
Credit Obligations shall not exceed the Borrowing Base at any time."
(b) The second CLAUSE (D) of SECTION 2.01 is hereby re-lettered
as CLAUSE (E).
(c) AMENDMENTS TO SECTION 2.02. CLAUSE (A) of SECTION 2.02 is hereby
amended to (i) delete the phrases "for financing Permitted Acquisitions" and ",
and to finance Permitted Acquisitions" appearing therein and (ii) insert
immediately after the words "general corporate purposes" appearing in the fourth
line thereof, the parenthetical "(subject to any restrictions contained in the
Indentures)".
(d) AMENDMENT TO SECTION 2.03. CLAUSE (A) of SECTION 2.03 is hereby
amended to (i) insert immediately after the words "A Borrower requesting a Loan
shall deliver to each of the Agent and the Collateral Agent" appearing in the
first sentence thereof, the words "a Borrowing Supplement dated as of the date
of such request and" and (ii) insert after the words "any Approved Vendor"
appearing in CLAUSE (IV) thereof the words "listed on SCHEDULE 2.03 attached
hereto".
1.5 AMENDMENTS TO SECTION 2.05(B). SECTION 2.05(B) of the Loan
Agreement is hereby amended to (i) delete the phrase "Subject to the third
sentence of this SECTION 2.05(B)" appearing in the first sentence thereof and
(ii) delete the phrase "Subject to the next sentence, if" appearing in the
second sentence thereof and substitute therefor the word "If".
1.6 AMENDMENT TO SECTION 2.07(E). SECTION 2.07(E) of the Loan
Agreement is hereby amended by inserting the following sentence at the end
thereof:
"Calculation of all amounts payable to a Lender under this
Section 2.07 and under SECTION 2.12 shall be made as though that Lender
had funded each of its LIBOR Loans through the purchase of a LIBOR deposit
bearing interest at the LIBO Rate in an amount equal to the amount of such
LIBOR Loan and having a maturity comparable to the relevant Interest
Period, whether or not its LIBOR Loans had been funded in such manner."
1.7 AMENDMENTS TO SECTION 2.08.
(a) CLAUSE (A) of SECTION 2.08 is hereby deleted in its entirety and
the following new CLAUSE (A) is substituted therefor:
"(a) Interest on each LIBOR Loan shall be payable in arrears
on each LIBOR Interest Payment Date and if such LIBOR Loan is paid in full
other than on such LIBOR Interest Payment Date, on such other date.
Interest on each Base Rate Loan will be payable in arrears on each Base
Rate Interest Payment Date and, if such Base Rate Loan is paid in full
other than on such Base Rate Interest Payment Date, on such other date."
(b) CLAUSE (B) of SECTION 2.08 is hereby deleted in its entirety and
the following new CLAUSE (B) is substituted therefor:
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"(b) Subject to the provisions of SECTIONS 2.09 and 9.02, the
outstanding principal balance of the Term A Loans made to the Borrowers
shall be payable in seventeen consecutive quarterly installments beginning
on the Payment Date occurring on April 1, 2003 and continuing on each
Payment Date thereafter through and including the Term A Loan Termination
Date in the amounts set forth on ANNEX C hereto; PROVIDED that the
scheduled installments of principal of the Term A Loans set forth on ANNEX
C shall be reduced in connection with any optional or mandatory
prepayments of the Term A Loans in accordance with SECTION 2.09(D)(II).
Subject to the provisions of SECTIONS 2.09 and 9.02, the outstanding
principal balance of the Term B Loans made to the Borrowers shall be
payable in seventeen consecutive quarterly installments beginning on the
Payment Date occurring on April 1, 2003 and continuing on each Payment
Date thereafter through and including the Term B Loan Termination Date in
the amounts set forth on ANNEX C hereto; PROVIDED that the scheduled
installments of principal of the Term B Loans set forth on ANNEX C shall
be reduced in connection with any optional or mandatory prepayments of the
Term B Loans in accordance with SECTION 2.09(D)(II). Subject to the
provisions of SECTIONS 2.09 and 9.02, the outstanding principal balance of
the Revolving Loans made to the Borrowers shall be payable on the
Revolving Credit Commitment Termination Date."
(c) CLAUSE (C) of SECTION 2.08 is here by amended to (i) re-number
CLAUSES (1) through (9) thereof as new CLAUSES (2) through (10), (ii) delete the
words, "first", "second", "third", "fourth", "fifth" and "sixth" appearing
therein and substitute therefor the words "second", "third", "fourth", "fifth",
"sixth" and "seventh", respectively, and (iii) insert a new CLAUSE (1) thereto
as follows:
"(1) first, to pay Obligations to First Union arising from
treasury, depositary and cash management services or in connection with
any automated clearing house transfers of funds;".
(d) SECTION 2.08 is hereby further amended by inserting a new
CLAUSE (D) at the end thereof as follows:
"(d) Notwithstanding anything to the contrary contained in
this SECTION 2.08, SECTION 2.09 or any other provision of this Agreement
or the other Loan Documents, so long as at any time the outstanding
principal amount of Term B Loans exceeds $421,540,902 and/or the Revolving
Loan Commitment Amount exceeds $166,724,940 (the amount of such excess
Term B Loans and excess Revolving Loan Commitment Amount being the "EXCESS
FACILITY AMOUNTS"), any amounts received by any Agent or Lender as a
payment or prepayment of any Loans whether as a voluntary prepayment,
mandatory prepayment or otherwise (including upon the occurrence and
during the continuance of any Event of Default and including any amounts
received by Collateral Agent to be applied to the Loans and reimbursement
obligations under the Letters of Credit pursuant to SECTION 2.08(C)(8) as
a result of any realization on the Collateral, but specifically excluding
any optional prepayments of the Revolving Loans pursuant to SECTION
2.09(A)(II)) shall be applied to prepay Term B Loans and permanently
reduce the Revolving Loan Commitment Amount on a pro rata basis until the
Excess Facility Amounts have been prepaid or reduced in full, as the case
may be, before application to the Loans and remaining Revolving Loan
12
Commitment Amount pursuant to the other provisions of this Agreement. Any
reduction in the Revolving Loan Commitment Amount pursuant to this SECTION
2.08 shall be accompanied by any payments required pursuant to SECTION
2.09(D)(I)."
1.8 AMENDMENT TO SECTION 2.09. SECTION 2.09 is hereby deleted in
its entirety and the following new language is substituted therefor:
"SECTION 2.09. OPTIONAL AND MANDATORY PREPAYMENT OF LOANS;
OPTIONAL AND MANDATORY REDUCTION OF REVOLVING LOAN COMMITMENT AMOUNT.
(a) OPTIONAL PREPAYMENTS. Provided that no Event of Default
has occurred and is continuing, the Borrowers shall have the right upon
the provision of five (5) days' prior written notice to the Agent, which
notice, once given, shall be irrevocable, to prepay the Loans as follows,
all such prepayments or resulting reductions in the Revolving Loan
Commitment Amount to be applied as set forth below or as more specifically
set forth in SECTION 2.09(D), it being understood and agreed that any
reduction in the Revolving Loan Commitment Amount shall be accompanied by
any payment required pursuant to SECTION 2.09(D)(I):
(i) On any Payment Date with respect to any Base Rate Term
Loans and on the last day of the applicable Interest Period with respect
to any LIBOR Term Loans, the Borrowers may prepay the outstanding
principal of the Base Rate Term Loans in a minimum principal amount of
$1,000,000 and increments of $250,000 in excess thereof, or the
outstanding principal of the LIBOR Term Loans in a minimum principal
amount of $5,000,000 and increments of $1,000,000 in excess thereof,
together in each case with accrued interest thereon; PROVIDED, HOWEVER,
that notwithstanding anything in the foregoing to the contrary, any such
prepayments shall be applied on a pro rata basis to prepay Term A Loans
and Term B Loans and permanently reduce the Revolving Loan Commitment
Amount. The amount of principal of Term Loans so prepaid shall be applied
to the remaining principal payments of the type of Loans prepaid (i.e.,
Base Rate Term Loans or LIBOR Term Loans) in the inverse order of
maturity.
(ii) On any Payment Date with respect to any Base Rate
Revolving Loans and on the last day of the applicable Interest Period with
respect to any LIBOR Revolving Loans, the Borrowers may prepay the
outstanding principal of such Base Rate Revolving Loans and LIBOR
Revolving Loans in a minimum principal amount of $1,000,000 and increments
of $250,000 in excess thereof, together in each case with accrued interest
thereon.
(b) OPTIONAL REDUCTIONS OF REVOLVING LOAN COMMITMENT AMOUNT.
Provided that no Event of Default has occurred and is continuing, the
Borrowers shall have the right upon the provision of five (5) days' prior
written notice to the Agent, which notice, once given, shall be
irrevocable, on any Payment Date, to permanently reduce the Revolving Loan
Commitment Amount of all the Lenders; PROVIDED, HOWEVER, that
13
notwithstanding anything in the foregoing to the contrary, any such
reductions shall be accompanied by a pro rata prepayment of Term A Loans
and Term B Loans. Each such reduction shall be in a minimum principal
amount of $1,000,000 and increments of $250,000 in excess thereof.
(c) MANDATORY PREPAYMENTS AND MANDATORY REDUCTIONS OF
REVOLVING LOAN COMMITMENT AMOUNT. The Loans shall be prepaid and the
Revolving Loan Commitment Amount shall be permanently reduced in the
amounts and under the circumstances set forth below, all such prepayments
and/or reductions to be applied as set forth below or as more specifically
provided in SECTION 2.09(D), it being understood and agreed that any
reduction in the Revolving Loan Commitment Amount shall be accompanied by
any payment required pursuant to SECTION 2.09(D)(I):
(i) Upon the occurrence of any Event of Loss in excess of
$1,000,000 with respect to any item of Collateral that is not repaired or
replaced, or any Events of Loss which, in the aggregate, exceed $5,000,000
with respect to any item or items of Collateral that are not repaired or
replaced (in each case, other than an item of Collateral no longer used or
useful in the Business) such that after such repair or replacement it has
a value at least equal to its value prior to the occurrence of such Event
of Loss, the Loan Party which suffered such Event of Loss shall make a
principal prepayment within thirty (30) days of such Event of Loss in an
amount equal to the replacement value of the item of Collateral which
suffered such Event of Loss, together with accrued interest thereon with
such principal payment to be applied, on a pro rata basis, to prepay the
Term Loans and permanently reduce the Revolving Loan Commitment Amount.
(ii) In the event that any Borrower finances any
Telecommunications Equipment (exclusive of soft costs that exceed fifteen
percent (15%) of the invoiced price of the related Telecommunications
Equipment) with a financing source other than a Loan pursuant to this
Agreement, then no later than the first Business Day following the
consummation of any such financing, Borrowers shall prepay the Term Loans
and permanently reduce Revolving Loan Commitment Amount, each on a pro
rata basis by the actual or imputed principal amount of any such
financing. Nothing in this SECTION 2.09(C)(II) shall be deemed to permit
the Borrowers to incur any Debt or other obligations otherwise prohibited
by the terms of this Agreement or any other Loan Document.
(iii) No later than the first Business Day following receipt
by any Loan Party of any Net Asset Sale Proceeds in respect of any Asset
Sale made by any Loan Party pursuant to SECTION 6.03(A), the Borrowers
shall apply such Net Asset Sale Proceeds to the extent available to prepay
the Term Loans and permanently reduce the Revolving Loan Commitment
Amount, each on a pro rata basis in an amount equal to the sum of (A)
eighty-five percent (85%) of gross PP&E allocated to the assets subject to
such Asset Sale as reflected in the books and records of the applicable
Loan Party on the date of such Asset Sale, PLUS (B) the aggregate Net
Asset Sale Proceeds Shortfall in respect of all other Asset Sales made by
the Loan Parties since the Fourth Amendment Effective Date pursuant to
SECTION 6.03(A), PLUS (C) fifty percent (50%) of any Net Asset Sale
14
Proceeds from such Asset Sale remaining after payment of the amounts set
forth in clauses (A) and (B) above; PROVIDED, HOWEVER, that, if an Event
of Default or Default has occurred and is continuing at the time of an
Asset Sale made by any Loan Party, the Borrowers shall be required to
prepay the Term Loans and permanently reduce the Revolving Loan Commitment
Amount, each on a pro rata basis in a principal amount equal to one
hundred percent (100%) of the Net Asset Sale Proceeds from such Asset
Sale.
(iv) No later than the two Business Days following the date of
receipt by the Collateral Agent or any Loan Party of
insurance/condemnation proceeds that are required to be applied to prepay
the Term Loans and permanently reduce the Revolving Loan Commitment
Amount, each on a pro rata basis pursuant to the provisions of SECTION
5.04(H), the Borrowers shall prepay the Term Loans and permanently reduce
the Revolving Loan Commitment Amount each on a pro rata basis in an
aggregate amount equal to one hundred percent (100%) of such
insurance/condemnation proceeds.
(v) In the event that there shall be Excess Operating Cash
Flow for any fiscal year (commencing with the fiscal year 2001), the
Borrowers shall, no later than ninety (90) days after the end of such
fiscal year, prepay the Term Loans and permanently reduce the Revolving
Loan Commitment Amount, each on a pro rata basis in a principal amount
equal to fifty percent (50%) of the amount of such Excess Operating Cash
Flow.
(vi) No later than the two Business Days following receipt by
KMC Holdings of the Net Securities Proceeds from the issuance of any
Equity Interests of KMC Holdings after the Fourth Amendment Effective Date
in an aggregate cumulative amount for all such issuances in excess of
$200,000,000, Borrowers shall prepay the Term Loans and the Revolving Loan
Commitment Amount shall be permanently reduced, each on a pro rata basis
in an aggregate amount equal to at least fifty percent (50%) of such
excess Net Securities Proceeds.
(vii) At any time after the Fourth Amendment Effective Date
but in no event later than May 1, 2002, Borrowers shall prepay the Term
Loans and the Revolving Loan Commitment Amount shall be permanently
reduced, each on a pro rata basis in an aggregate amount equal to at least
$100,000,000 which prepayment and reductions shall result solely from the
proceeds of events expressly permitted pursuant to SECTION 6.03(A)(III),
it being understood and agreed that any amounts applied to prepay the
Loans pursuant to SECTION 2.09(C)(III) on or prior to such date shall be
included in calculating Borrowers' compliance with the requirements of
this SECTION 2.09(C)(VII).
(viii) No later than the two Business Days following receipt
by any Loan Party of any tax refunds (other than tax refunds in respect of
taxes paid by or on behalf of a Data Subsidiary) after the Fourth
Amendment Effective Date in an aggregate cumulative amount for all such
refunds in excess of $5,000,000, the Borrowers shall prepay the Term Loans
and the Revolving Loan Commitment Amount shall be permanently reduced,
15
each on a pro rata basis in an aggregate amount equal to at least one
hundred percent (100%) of any such excess.
(ix) The Revolving Loan Commitment Amount of all the Lenders
shall be reduced on each Payment Date beginning April 1, 2003 as set forth
on ANNEX C hereto.
(x) Concurrently with any prepayment of the Loans and
permanent reduction of the Revolving Loan Commitment Amount pursuant to
SECTIONS 2.09(C)(III)-(VI) AND (VIII) the Borrowers shall deliver to the
Collateral Agent a certificate of the Chief Financial Officer of KMC
Holdings demonstrating the calculation of the applicable Net Asset Sale
Proceeds, insurance/condemnation proceeds, Excess Operating Cash Flow, Net
Securities Proceeds or tax refund as the case may be, that gave rise to
such prepayment and reduction, including the derivation of gross PP&E, if
applicable. In the event that the Borrowers shall subsequently determine
that the actual amount was greater than the amount set forth in such
officer's certificate, the Borrowers shall promptly make an additional
prepayment of the Loans and the Revolving Loan Commitment Amount shall be
permanently reduced, each on a pro rata basis in an amount equal to the
amount of such excess that would have been required to be applied pursuant
to such Sections, and the Borrowers shall concurrently therewith deliver
to the Collateral Agent an officer's certificate demonstrating the
derivation of the additional amount resulting in such excess.
(d) APPLICATION OF PREPAYMENTS AND UNSCHEDULED REDUCTIONS
OF REVOLVING LOAN COMMITMENT AMOUNT.
(i) On each date that the Revolving Loan Commitment Amount is
reduced, the Borrowers shall prepay FIRST, the Revolving Loans, and
SECOND, provide to the Agent cash collateral with respect to the Letter of
Credit Obligations in such amounts such that the sum of the outstanding
principal balance of the Revolving Loans plus the Letter of Credit
Obligations does not exceed the Revolving Loan Commitment Amount of all
the Revolving Lenders after giving effect to the reduction thereof
effective on such date. Any reduction in the Revolving Loan Commitment
Amount shall be allocated to each Revolving Lender based on its Pro Rata
Share. The Letter of Credit Obligations shall be reduced on a
dollar-for-dollar basis by the cash collateral. All reductions in the
Revolving Loan Commitment Amount shall be applied to reduce the scheduled
reductions of the Revolving Loan Commitment Amount set forth on ANNEX C in
inverse order of maturity; PROVIDED HOWEVER, that any reduction of the
Revolving Loan Commitment Amount pursuant to SECTION 2.08(D) shall be
applied to reduce pro rata the then remaining scheduled reductions of the
Revolving Loan Commitment Amount set forth on ANNEX C.
(ii) All prepayments of the Term Loans shall be applied to
reduce the scheduled installments of principal of the Term A Loans or Term
B Loans, as applicable, set forth on ANNEX C that are unpaid at the time
of such prepayment in inverse order of maturity; PROVIDED, HOWEVER, that
16
any prepayment of the Term B Loans pursuant to SECTION 2.08(D) shall be
applied to reduce pro rata the scheduled installments of principal of the
Term B Loans set forth on ANNEX C that are unpaid at the time of such
prepayment."
(iii) Aggregate principal and interest payments in respect of
Term Loans and Revolving Loans shall be apportioned among all outstanding
Loans to which such payments relate, in each case proportionately to
Lenders' respective Pro Rata Shares.
1.9 AMENDMENT TO SECTION 2.12(A). PARAGRAPH 5 of SECTION 2.12(A) is
hereby amended to (i) delete each reference to "Form 1001 of the IRS" appearing
therein and substitute therefor the words "Form W-8BEN", (ii) delete each
reference to "Form 4224 of the IRS" appearing therein and substitute therefor
the words "Form W-8ECI ", and (iii) insert immediately after the words "with
respect to payments of 'portfolio interest' the parenthetical "(in which case
the certificate shall be accompanied by two original, executed copies of Form
W-8BEN or any successor form)".
1.10 AMENDMENTS TO ARTICLE III.
(a) The first sentence of Article III is hereby amended to insert
immediately prior to the colon at the end thereof the phrase ", as to each
Borrower, each Loan Party or KMC Holdings and its Subsidiaries, as the case may
be".
(b) SECTION 3.01 is hereby amended to (i) delete each reference to
"Such Borrower" or "such Borrower" appearing therein and substitute therefor a
reference to "KMC Holdings and each of its Subsidiaries" and (ii) insert at the
end of CLAUSE (A) the phrase "except in jurisdictions where the failure to be so
qualified or in good standing has not had and could not reasonably be expected
to have a Material Adverse Effect".
(c) SECTIONS 3.02, 3.08, 3.09(A), 3.09(C), 3.12, 3.13, 3.17, 3.18,
3.21, and 3.22 are hereby amended to delete each reference to "Borrower" or
"Such Borrowers" appearing therein and substitute therefor a reference to "Loan
Party" or "Loan Parties", respectively.
(d) SECTIONS 3.04 and 3.23 are hereby amended to delete the
reference to "such Borrower" appearing therein and substitute therefor a
reference to "KMC Holdings or any of its Subsidiaries".
(e) SECTIONS 3.05, 3.06, 3.07, and 3.08, are hereby deleted in their
entirety and the following new language is substituted therefor:
"SECTION 3.05. LITIGATION. Except as set forth on SCHEDULE
3.05, there are no actions, suits or proceedings at law or in equity or by
or before any Governmental Authority now pending or, to the knowledge of
such Borrower, threatened, against or affecting KMC Holdings or any of its
Subsidiaries or any property or rights of such Person as to which there is
a reasonable possibility of an adverse determination and which, if
adversely determined, would individually or in the aggregate materially
impair the right of such Person to carry on business substantially as now
17
being conducted or as presently contemplated or would result in any
Material Adverse Effect.
SECTION 3.06. TAX RETURNS. KMC Holdings and each of its
Subsidiaries has filed or caused to be filed all Federal, state and local
tax returns which are required to be filed and has paid or caused to be
paid all taxes as shown on such returns or on any assessment received by
it to the extent that such taxes have become due, except such taxes the
amount, applicability or validity of which are being contested in good
faith by appropriate proceedings and with respect to which such Person
shall have set aside on its books adequate reserves with respect to such
taxes as are required by GAAP.
SECTION 3.07. NO DEFAULTS. Neither KMC Holdings nor any of its
Subsidiaries is in default (i) with respect to any judgment, writ,
injunction, decree, rule or regulation of any Governmental Authority which
is likely to have a Material Adverse Effect, or (ii) in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in any material agreement or instrument to which such
Person is a party or by which any of its assets are bound, which is likely
to have a Material Adverse Effect."
(f) CLAUSE (B) of SECTION 3.09 is hereby deleted in its entirety and
the following new CLAUSE (B) is substituted therefor:
"(b) SCHEDULE 3.09(B) accurately and completely lists, all
material agreements to which KMC Holdings or any of its Subsidiaries is a
party, including, without limitation, all purchase agreements, IRU
Agreements, IRU Service Orders equal to or in excess of $1,000,000, Data
Contracts and related financing agreements, consulting agreements in
excess of $250,000 per annum, employment agreements in excess of $400,000
per annum, management and related agreements, and any construction
contracts, right of way or right of occupancy agreements, lease
agreements, contracts or other arrangements to which such Person is a
party (other than the Loan Documents) for which breach, nonperformance,
cancellation or failure to renew could have a Material Adverse Effect
(collectively, the "MATERIAL AGREEMENTS"). All Material Agreements are
valid, subsisting and in full force and effect and no Loan Party, or, to
the best of such Borrower's knowledge and belief, any other parties, is in
material default thereunder. Each Loan Party has given true and complete
copies of all Material Agreements to the Agent. From and after the Fourth
Amendment Effective Date, each Loan Party agrees to supplement promptly
SCHEDULE 3.09(B) with a written notice to the Agents of an accurate and
complete list of all new Material Agreements, including Data Contracts and
related financing agreements, IRU Agreements, Service Orders to which such
Loan Party is a party, it being understood and agreed that such Loan Party
shall not be required to deliver a supplement with respect to individual
IRU Service Orders for less than $1,000,000 entered into pursuant to an
IRU Agreement previously disclosed to the Agents and added to SCHEDULE
3.09(B)."
(g) SECTION 3.10 is hereby deleted in its entirety and the
following new language is substituted therefor:
18
"SECTION 3.10. COMPLIANCE WITH LAWS. Except as disclosed on
SCHEDULE 3.10, the operations of KMC Holdings and each of its Subsidiaries
comply in all material respects with all applicable federal, state or
local laws and regulations, including Environmental Laws. Except as
disclosed on SCHEDULE 3.10, to such Borrower's knowledge, none of the
operations of KMC Holdings or any of its Subsidiaries is subject to any
judicial or administrative proceeding alleging the violation of any
Environmental Laws. Except as disclosed on SCHEDULE 3.10, such Borrower
neither knows nor reasonably should know that any of the operations of KMC
Holdings or any of its Subsidiaries is the subject of federal or state
investigation evaluating whether any Remedial Action is needed to respond
to a Release. Except as disclosed on SCHEDULE 3.10, neither KMC Holdings
nor any of its Subsidiaries has filed any notice under any federal or
state law indicating past or present treatment, storage or disposal of a
hazardous waste or reporting a Release. Except as disclosed on SCHEDULE
3.10, neither KMC Holdings nor any of its Subsidiaries has any contingent
liability of which such Borrower has knowledge or reasonably should have
knowledge in connection with any Release."
(h) SECTION 3.11 is hereby amended to (i) delete each reference to
"None of such Borrower" or "none of such Borrower" appearing therein and
substitute therefor a reference to "Neither KMC Holdings nor any of its
Subsidiaries" or "neither KMC Holdings nor any of its Subsidiaries",
respectively and (ii) insert the phrase ", and no event has occurred which could
reasonably be expected to cause such Plan or trust to be qualified" at the end
of the second sentence thereof.
(i) SECTION 3.19 is hereby deleted in its entirety and the following
new language is substituted therefor:
"SECTION 3.19. CAPITALIZATION AND SUBSIDIARIES. (a) The
classes of Equity Interests, number of authorized shares, number of
outstanding shares and par values or other designations of the Equity
Interests or other equity securities or beneficial interests of KMC
Holdings and each of its Subsidiaries are correctly set forth on SCHEDULE
3.19. All the outstanding shares of Equity Interests or other equity
securities or beneficial interests of KMC Holdings and each of its
Subsidiaries are duly and validly issued, fully paid and nonassessable,
and none of such issued and outstanding shares, equity securities or
beneficial interests has been issued in violation of, or is subject to,
any preemptive or subscription rights. Except as set forth on SCHEDULE
3.19, there are no: (A) outstanding shares of Equity Interests or other
equity securities or beneficial interests or other securities convertible
into or exchangeable for shares of Equity Interests or other equity
securities or other beneficial interests KMC Holdings or any of its
Subsidiaries, (B) outstanding rights of subscription, warrants, calls,
options, contracts or other agreements of any kind, issued, made or
granted to or with any Person under which KMC Holdings or any of its
Subsidiaries may be obligated to issue, sell, purchase, retire or redeem
or otherwise acquire or dispose of any shares of Equity Interests or other
equity securities or beneficial interests of KMC Holdings or any of its
Subsidiaries, or (C) Subsidiaries of KMC Holdings. KMC Holdings
beneficially owns, directly or indirectly, all of the Equity Interests of
each Loan Party.
19
(b) On the Restructuring Effective Date, SCHEDULE 3.19 shall
be replaced by the SCHEDULE 3.19 to be delivered pursuant to SECTION 5.27
hereof. Upon creation of any New Data Subsidiary or any other change in
the capital structure of any Subsidiary of Data Holdco, the Borrowers
shall submit to the Agents for distribution to the Lenders a supplement to
SCHEDULE 3.19 setting forth the new capital structure of such Subsidiary."
(j) SECTION 3.20 is hereby deleted in its entirety and the following
new language is substituted therefor:
"SECTION 3.20 REAL PROPERTY, LEASES AND EASEMENTS. Such Loan Party
leases or owns the real property described on SCHEDULE 3.20. Set forth on
SCHEDULE 3.20 is a list of (i) all real property leased or owned by such
Loan Party (the "REAL PROPERTY") and (ii) all easements, rights of way,
rights of occupancy, licenses and similar rights with respect to real
property granted to such Loan Party not otherwise disclosed to the
Collateral Agent and the Lenders on a title report delivered to the
Collateral Agent and the Lenders pursuant to the terms hereof and the
absence of which or termination of which would have a Material Adverse
Effect (together with all other easements, rights of way, rights of
occupancy, licenses and similar rights with respect to real property
granted to such Loan Party which are so disclosed, collectively, the
"EASEMENTS"). Also set forth on SCHEDULE 3.20 is a street address of the
Real Property locations described above, including a description of such
properties' current use. Except as set forth in SCHEDULE 3.20, such Loan
Party's interests in the Real Property and the Easements are sufficient in
order for such Loan Party to conduct its business and operations as
presently conducted."
(k) SECTION 3 is further amended to insert new SECTIONS 3.25, 3.26,
3.27 and 3.28 at the end thereof as follows:
"SECTION 3.25. LABOR MATTERS. (a) There are no strikes or
other material labor disputes against any Loan Party pending or, to such
Borrower's knowledge, threatened; (b) hours worked by and payment made to
employees of such Loan Party comply with the Fair Labor Standards Act and
each other federal, state, local or foreign law applicable to such matter;
(c) all payments due from each Loan Party for employee health and welfare
insurance have been paid or accrued as a liability on the books of such
Loan Party; (d) except as set forth in SCHEDULE 3.25, each Loan Party is
not a party to or bound by any (i) collective bargaining agreement, (ii)
management agreement, (iii) consulting agreement in an amount over
$250,000 per annum or (iv) employment agreement not disclosed in the
public filings of KMC Holdings or in an amount over $500,000 per annum
(and true and complete copies of any agreements described on SCHEDULE 3.25
have been delivered to the Agent); (e) there is no organizing activity
involving any Loan Party pending or, to such Borrower's knowledge,
threatened by any labor union or group of employees; (f) there are no
representation proceedings involving any Loan Party pending or, to such
Borrower's knowledge, threatened with the National Labor Relations Board,
and no labor organization or group of employees of such Borrower has made
a pending demand for recognition; and (g) except as set forth in SCHEDULE
3.25, there are no complaints or charges against any Loan Party pending
or, to the knowledge of such Borrower, threatened to be filed with any
Governmental Authority or arbitrator based on, arising out of, in
20
connection with, or otherwise relating to the employment or termination of
employment by any Loan Party of any individual.
SECTION 3.26. RESTRICTED SUBSIDIARIES. SCHEDULE 3.26
accurately and completely identifies each Restricted Subsidiary.
SECTION 3.27 SCHEDULE 3.27 accurately and completely
identifies each of the agreements between Lucent and KMC Holdings and/or
one of more Subsidiaries of KMC Holdings.
SECTION 3.28 From and after the Restructuring Effective Date,
all certificates or instruments (excluding checks) evidencing, comprising
or representing any Collateral (including, without limitation, any
Intercompany Notes or other promissory notes payable to any Loan Party)
have been delivered to the Collateral Agent duly endorsed or accompanied
by duly executed instruments of transfer or assignment in blank."
1.11 AMENDMENT TO SECTION 4.02. SECTION 4.02 is hereby amended to
(i) insert after each reference to "such Loan" or "such Loans" appearing in
CLAUSES (A), (B), (C), (D), (E), (I), (J), (K), (M) the words "or Letter of
Credit" or "or Letters of Credit," respectively.
1.12 AMENDMENTS TO ARTICLE V.
(a) The first sentence of ARTICLE V is hereby amended to insert
immediately prior to the colon at the end thereof the phrase ", as to each
Borrower, each Loan Party or KMC Holdings and its Subsidiaries, as the case may
be".
(b) SECTIONS 5.01, 5.02, 5.03, and 5.20 are hereby amended to delete
each reference to "Borrower" or "such Borrower" appearing therein and substitute
therefor a reference to "KMC Holdings and each of its Subsidiaries", and SECTION
5.03 is hereby further amended to insert the following sentence at the end
thereof: "The Borrowers shall not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any other Loan
Document or any applicable statute, regulation or ordinance or any policy of
insurance covering the Collateral."
(c) SECTIONS 5.04 (other than SECTION 5.04(B)), 5.07, 5.08, 5.11,
5.14, 5.16 and 5.21 are hereby amended to delete each reference to "Borrower"
appearing therein and substitute therefor a reference to "Loan Party."
(d) CLAUSE (H) of SECTION 5.04 is hereby deleted in its entirety
and a new CLAUSE (H) is substituted therefor:
(h) APPLICATION OF PAYMENTS. All insurance proceeds received
by such Loan Party (other than in respect of any assets of any Data
Subsidiary) from any insurance referred in SECTION 5.04(B)(I), (B)(II),
(D)(I) and (D)(II) together with any condemnation proceeds received by
such Loan Party shall be promptly delivered directly to the Collateral
Agent for deposit in a collateral account to be held as security for the
Obligations pursuant to a collateral account agreement in form and
21
substance satisfactory to the Agents (the "COLLATERAL ACCOUNT"); PROVIDED,
HOWEVER, that so long as no Default or Event of Default has occurred and
is continuing, the Loan Parties may retain an aggregate amount of
insurance/condemnation proceeds in any fiscal year of the Loan Parties not
to exceed 0.5% of gross PP&E of the Loan Parties as reflected in the books
and records of the applicable Loan Party on the date of receipt of any
such proceeds, so long as at the time of any such casualty or
condemnation, the Borrowers shall deliver to the Collateral Agent a
certificate of the Chief Financial Officer of KMC Holdings demonstrating
the calculation of the insurance/condemnation proceeds that gave rise to
such retention, including the derivation of gross PP&E. Collateral Agent
shall hold any insurance/condemnation proceeds received pursuant to this
SECTION 5.04 in the Collateral Account and, so long as no Default or Event
of Default has occurred or is continuing, (i) to the extent any such
insurance/condemnation proceeds are the result of a casualty or
condemnation of any central office listed on SCHEDULE 5.04, so long as
such Loan Party may use such proceeds diligently to repair, restore or
replace such central office, Collateral Agent shall from time to time
disburse to such Loan Party from the Collateral Account, to the extent of
any such insurance/condemnation proceeds remaining therein in respect of
the applicable covered loss, amounts necessary to pay the cost of such
repair, restoration or replacement after the receipt by Collateral Agent
of invoices or other documentation reasonably satisfactory to Collateral
Agent relating to the amount of costs so incurred and the work performed
or, with respect to up-front payments or deposits required by contractors
or architects in connection with such repair, restoration or replacement,
work to be performed (including, if required by Collateral Agent, lien
releases and architects' certificates); PROVIDED, HOWEVER that if at any
time the Collateral Agent reasonably determines (A) that such Loan Party
is not proceeding diligently with such repair, restoration or replacement
or (B) that such repair, restoration or replacement cannot be completed
with the insurance/condemnation proceeds then held by the Collateral Agent
for such purpose, together with funds otherwise available to such Loan
Party for such purpose, or that such repair, restoration or replacement
cannot be completed within 360 days after the receipt by Collateral Agent
of such insurance/condemnation proceeds, Collateral Agent shall, and such
Loan Party hereby authorizes Collateral Agent to, apply such
insurance/condemnation proceeds to prepay the Term Loans and permanently
reduce the Revolving Loan Commitment Amount as provided in SECTION
2.09(C)(IV) and (ii) with respect to all other insurance/condemnation
proceeds received by the Collateral Agent, Collateral Agent shall from
time to time disburse to such Loan Party from the Collateral Account, to
the extent of any such insurance/condemnation proceeds remaining therein
in respect of the applicable covered loss, amounts as requested by such
Loan Party for application as determined by such Loan Party with the prior
written consent of the Agents and Requisite Lenders (which consent shall
not be unreasonably withheld). If a Default or Event of Default has
occurred or is continuing any amounts on deposit in the Collateral Account
shall be applied in the sole discretion of the Agents and Requisite
Lenders."
(e) SECTION 5.05 is hereby deleted in its entirety and the
following new language is substituted therefor:
"SECTION 5.05. OBLIGATIONS AND TAXES. KMC Holdings and each of
its Subsidiaries shall pay all of its respective indebtedness and
22
obligations promptly and in accordance with their terms and pay and
discharge promptly all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid,
might become a Lien upon such properties or any part thereof; PROVIDED,
HOWEVER, that neither KMC Holdings nor any of its Subsidiaries shall be
required to pay and discharge or to cause to be paid and discharged any
such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings
diligently pursued, and such Person shall set aside on its books such
reserves as are required by GAAP with respect to any such tax, assessment,
charge, levy or claim so contested."
(f) AMENDMENTS TO SECTION 5.06.
(1) The first sentence of SECTION 5.06 is hereby amended to delete
the reference to "Such Borrower" or "such Borrower" appearing therein and
substitute therefor a reference to "Such Loan Party" or "such Loan Party", as
applicable.
(2) CLAUSE (A) of SECTION 5.06 is hereby amended to (i) insert
immediately after the words "annual consolidated" appearing in the second line
thereof the words "financial statements for KMC Holdings" (ii) insert
immediately after the phrase "for KMC Holdings," appearing in the second line
thereof the phrase "Data Holdco and the Borrowers, in each case on a combined
basis," and (iii) delete the phrase "and combined financial statements for the
Borrowers".
(3) CLAUSE (B) of SECTION 5.06 is hereby deleted in its entirety and
the following new CLAUSE (B) is substituted therefor:
"(b) within forty-five (45) days after the end of the first
three fiscal quarters during each fiscal year consolidated unaudited
balance sheets and statements of operations for KMC Holdings and
consolidating unaudited balance sheets and statements of operations for
KMC Holdings, Data Holdco and the Borrowers, in each case on a combined
basis, including consolidated statements of stockholders' equity of KMC
Holdings and cash flows for KMC Holdings, Data Holdco and the Borrowers,
in each case on a combined basis, each of the foregoing as of the end of
each such fiscal quarter, as applicable, and for the then elapsed portion
of the fiscal year."
(4) CLAUSE (C) of SECTION 5.06 is hereby amended to (A) insert
immediately before the words "within forty-five (45) days after the end of each
month" the number "(i)", (B) insert immediately after the parenthetical "(or
within one hundred twenty (120) days after the end of each December)" appearing
therein the phrase "commencing with the month ending April 30, 2001, and solely
with respect to Data Holdco, commencing with the month ending June 30, 2001",
and (C) delete the proviso at the end thereof and substitute therefor the
following new language:
"and (ii) no later than the first Friday of each month
commencing May 4, 2001, and solely with respect to Data Holdco, commencing
23
the first such date occurring no later than ninety (90) days after the
Fourth Amendment Effective Date, in each case for the prior four calendar
week period, projected twelve calendar week cash flow analyses for KMC
Holdings, Data Holdco and the Borrowers on a consolidated basis consisting
of projected statements of cash receipts and disbursements, in each case
for the succeeding twelve calendar week period and actual statements for
the previous four calendar weeks then ended together with a comparison of
such actual statements to the projected statements for such four weeks".
(5) CLAUSE (D) of SECTION 5.06 is hereby amended to (i) insert
immediately after the words "CLAUSES (A), (B) and (C) above" the parenthetical
"(other than with respect to the financial statements delivered pursuant to
CLAUSE (II) SECTION 5.06(A))" and (ii) insert immediately after the phrase
"present fairly the financial position and result of operations of KMC
Holdings," the words "Data Holdco".
(6) CLAUSE (E) of SECTION 5.06 is hereby amended to (i) delete the
reference to "the Borrowers" appearing therein and substitute therefor a
reference to "the Loan Parties" and (ii) insert a reference to "and SCHEDULE
1.01(A)" immediately after the words "ARTICLE VII" appearing therein.
(7) CLAUSE (F) of SECTION 5.06 is hereby deleted in its entirety and
the following NEW CLAUSE (F) substituted therefor:
"(f) RESERVED."
(8) CLAUSES (G) and (H) of SECTION 5.06 are hereby amended to delete
each reference to "any Borrower" appearing therein and substitute therefor a
reference to "any Loan Party".
(9) CLAUSE (I) of SECTION 5.06 is hereby amended to (i) delete the
reference to "any Borrower" appearing therein and substitute therefor a
reference to "any Loan Party", and (ii) delete each reference to "such Borrower"
appearing therein and substitute therefor a reference to "such Loan Party".
(10) CLAUSE (L) of SECTION 5.06 is hereby amended to delete the
reference to "such Borrower" appearing therein and substitute therefor a
reference to "such Loan Party".
(11) CLAUSE (M) of SECTION 5.06 is hereby amended to (i) delete each
reference to "such Borrower" appearing therein and substitute therefor a
reference to "such Loan Party" and (ii) delete the word "and" appearing at the
end thereof.
(12) CLAUSE (N) of SECTION 5.06 is hereby amended to (i) delete the
words "such Borrower or KMC Holdings" appearing therein and substitute therefor
the words "such Loan Party" and (ii) delete the period appearing at the end
thereof and substitute a semi-colon therefor.
(13) SECTION 5.06 is further amended to insert new CLAUSES (O), (P),
(Q), (R), (S), (T) and (U) at the end thereof as follows:
24
"(o) as soon as practicable and in any event no later than May
15, 2001, in each case in form and substance satisfactory to the Agent and
Requisite Lenders:
(i) a capital expenditure budget of KMC Holdings and the
Borrowers for the fiscal year 2001 which shall include (1) actuals on a
city-by-city basis for the fiscal quarter ending March 31, 2001, (2) an
aggregate capital expenditure budget for KMC Holdings and the Borrowers
for the remainder of fiscal year 2001 divided into sales, growth and other
and (3) an estimate of city-by-city allocation of aggregate capital
expenditures for KMC Holdings and the Borrowers based on actual
expenditures for the previous five quarters;
(ii) a copy of the "City Matrix Reports"; and
(iii) the "Market Service Description," or "MSD" which sets
forth the Borrowers' plans to offer bundle pricing and service offerings;
(p) within forty-five (45) days after the end of each month
commencing with the month ending April 30, 2001, and solely with respect
to Data Holdco, as applicable, commencing the first such date occurring no
later than ninety (90) days after the Fourth Amendment Effective Date, in
each case in a form satisfactory to the Agent:
(i) a copy of each contract entered into during such month
with third parties that serves to distribute products of KMC Holdings and
its Subsidiaries or pursuant to which such third parties perform indirect
sales channel functions which at inception is estimated to generate in
excess of $5,000,000 in annual revenue to KMC Holdings;
(ii) a summary of actual resale lines for the
Borrowers on a city-by-city basis;
(iii) a detailed summary report for the Borrowers on a
city-by-city basis to include, revenue, operating EBITDA, capital
efficiency ratio, net lines added (on-switch and PRI's), DSO equivalents,
number of customers and line churn;
(iv) a headcount report for such month consisting of total
headcount for each of KMC Holdings and the Borrowers and by city and
operating function;
(v) disclosure of any litigation seeking injunctive
remedies or legal remedies in excess of $1,000,000; and
(vi) an officer's certificate of KMC Holdings setting forth
with respect to any IRU for which the IRU Cap Ex exceeds $1,000,000, (1)
an IRU Report, (2) the amount of IRU Cap Ex for each Loan Party and (3)
the aggregate unpaid IRU Construction Costs with respect to each IRU
Agreement and IRU Service Order of such Loan Party;
25
(q) within forty-five (45) days after the end of each quarter
during each fiscal year commencing with the fiscal quarter ending June 30,
2001, and solely with respect to Data Holdco, as applicable, commencing
the first such quarter occurring no later than ninety (90) days after the
Fourth Amendment Effective Date, in form satisfactory to the Agent:
(i) a capital expenditure report for such quarter consisting
of a summary in reasonable detail by city of capital expenditures approved
by the Capital Allocation Committee ("CAC") for the Borrowers on a
consolidated basis, such summary based upon categories acceptable to the
Agent and at a minimum separating expenditures into categories relating to
sales, maintenance, network upgrades and corporate, and including, without
limitation, an analysis of the payback period and internal rates of return
with respect to all capital expenditures for such quarter;
(ii) a summary of incentive compensation paid during such
quarter under the employee compensation and incentive plan; and
(iii) a reciprocal compensation and access report by
carrier;
(r) as soon as practicable and in any event no later than each
June 15 and December 15 during each fiscal year commencing June 15, 2001,
an updated business plan of KMC Holdings and its Subsidiaries for the
succeeding five-year period on a consolidated and consolidating basis with
supporting assumptions and schedules, it being understood that such
business plan and level of detail shall be in a format satisfactory to the
Agent and shall be reasonably consistent with the February 2001 Business
Plan as determined by the Agent, it being further understood that such
updated business plan will provide quarterly detail for the first two (2)
years (with the exception of each June 15 update which shall forecast
quarterly results for the next six (6) quarters commencing each July 1) of
the forecast and annual detail for the next three (3) years;
(s) promptly upon receipt by KMC Holdings or any of its
Subsidiaries, copies of all written offers to purchase, letters of intent
or expressions of interest in purchasing any assets or operations of KMC
Holdings or its Subsidiaries, solicited or unsolicited, and, promptly upon
provision thereof, copies of all information provided to interested
parties; PROVIDED that, to the extent required by any potential
purchasers, the identity of such purchaser and the terms of any such
written materials may be kept confidential so long as KMC Holdings informs
the Agent of as much information as may be possible without violating the
express terms of any such confidentiality restrictions;
(t) promptly upon execution thereof, copies of all
agreements with professionals retained to sell assets or operations; and
(u) commencing September 7, 2002 and on each subsequent date
which is sixty (60) days prior to the date on which KMC Holdings is
required to make a cash payment of interest pursuant to any Indenture or
cash dividends to the holders of the Series E Preferred Stock, an
26
officer's certificate of the Chief Financial Officer of KMC Holdings
certifying that the Borrowers shall on a combined basis have on deposit in
Collection Accounts subject to Restricted Account Agreements cash in an
amount necessary to fund the operations of the Borrowers for the
succeeding twelve-month period (without the need to raise any additional
financing or equity) based on the most recent business plan of KMC
Holdings and its Subsidiaries delivered pursuant to SECTION 5.06(R) (or
any more recent business plan of KMC Holdings delivered to the Agent and
Lenders and consistent with the February 2001 Business Plan and the
requirement of SECTION 5.06(R) as determined by the Agents).
The information to be provided to the Agents and Lenders pursuant to this
SECTION 5.06 may be delivered by electronic transmission (e-mail) to the Agents
and Lenders at the e-mail addresses for each Agent and Lender set forth on
SCHEDULE 5.06 annexed hereto, it being understood that any officer's certificate
delivered by electronic transmission pursuant to this SECTION 5.06 shall contain
a facsimile signature of the certifying officer which shall be deemed to be an
original signature of such officer for all purposes hereunder."
(g) SECTIONS 5.09 and 5.10 are hereby deleted in their entirety and
the following new language is substituted therefor:
"SECTION 5.09. ERISA. KMC Holdings and each of its
Subsidiaries shall comply in all material respects with the applicable
provisions of ERISA and furnish to the Agent, (i) as soon as possible, and
in any event within twenty (20) days after such Person or any officer of
such Person knows or has reason to know that any Reportable Event with
respect to any Plan has occurred or any Termination Event has occurred, a
statement of an officer of such Person setting forth details as to such
Reportable Event or Termination Event and the corrective action that such
Person proposes to take with respect thereto, together with a copy of the
notice of any such Reportable Event given to the PBGC, and (ii) promptly
after receipt thereof, a copy of any notice such Person may receive from
the PBGC relating to the intention of the PBGC to terminate any Plan or to
appoint a trustee to administer any such Plan.
SECTION 5.10. ACCESS TO PREMISES AND RECORDS. KMC Holdings and
each of its Subsidiaries shall permit representatives of the Agents to
have access to such Person's books and records and to the Collateral and
the premises of such Person at reasonable times upon reasonable notice and
to make such excerpts from such records as such representatives deem
necessary and to inspect the Collateral."
(h) SECTIONS 5.12, 5.13, 5.15, 5.17, and 5.18 are hereby deleted in
their entirety and the following new language is substituted therefor:
"SECTION 5.12. ENVIRONMENTAL NOTICES. If KMC Holdings or any
of its Subsidiaries shall (a) receive written notice that any violation of
any Environmental Law may have been committed or is about to be committed
by such Person, (b) receive written notice that any administrative or
judicial complaint or order has been filed or is about to be filed against
such Person alleging violations of any Environmental Law or requiring such
Person to take any action in connection with any Release of any
Contaminant into the environment, or (c) receive any written notice from a
Governmental Authority or private party alleging that such Person may be
27
liable or responsible for costs associated with a response to or cleanup
of a Release or any damages caused thereby, such Person shall provide the
Agent with a copy of such notice within five (5) Business Days of such
Person's receipt thereof.
SECTION 5.13. AMENDMENT OF ORGANIZATIONAL DOCUMENTS. KMC
Holdings on behalf of itself and each of its Subsidiaries shall provide
the Agent with copies of any amendments to the Certificate or Articles of
Incorporation or other organizational documents of KMC Holdings or any of
its Subsidiaries, certified by the secretary of such Person and of all
other relevant documentation, any such amendment to be made in accordance
with SECTION 6.22 of this Agreement to the extent applicable. Each Loan
Party shall promptly deliver to the Collateral Agent such financing
statements executed by such Loan Party, which the Collateral Agent may
request as a result of any such event."
"SECTION 5.15. ACCOUNTS PAYABLE. Each Loan Party shall pay
each of its accounts payable in accordance with its practices as of the
Closing Date, PROVIDED, HOWEVER, that such Loan Party shall not be
required to pay any account payable as long as the validity thereof shall
be contested in good faith by appropriate protest or proceedings, such
Loan Party shall have set aside adequate reserves on its books with
respect thereto in accordance with GAAP and no Lien (other than Permitted
Liens) results from the failure to pay during such good faith contest
period."
"SECTION 5.17. FISCAL YEAR. KMC Holdings and each of its
Subsidiaries (other than any Data Subsidiary) shall maintain a fiscal year
ending on December 31.
SECTION 5.18. RESERVED."
(i) SECTION 5 is further amended to insert new SECTIONS 5.22, 5.23,
5.24, 5.25, 5.26 and 5.27 at the end thereof as follows:
"SECTION 5.22. CASH OF NON-BORROWER SUBSIDIARIES. KMC Holdings
shall cause Data Holdco and each Data Subsidiary to distribute to KMC
Holdings (i) no later than eighty-nine (89) days after the end of each
fiscal year, fifty percent (50%) of all Excess Data Cash Flow and (ii) no
later than two Business Days following the consummation of any Asset Sale
by Data Holdco or any Data Subsidiary, to the extent of any resulting Net
Asset Sale Proceeds, first, (a) an amount equal to the aggregate Data
Holdco Allocation Amount required to be made as a cash dividend to KMC
Holdings pursuant to SECTION 6.04(A) during the then next succeeding
twelve (12) month period and then, (b) to the extent of any remaining Net
Asset Sale Proceeds, an amount equal to twenty-five percent (25%) of such
Net Asset Sale Proceeds. Promptly upon receipt by KMC Holdings of any cash
dividends or distributions from Data Holdco consisting of Excess Data Cash
Flow or Net Asset Sale Proceeds pursuant to CLAUSES (I) and (II)(B) of the
next preceding sentence, KMC Holdings shall contribute such amounts to the
Borrowers as a capital contribution by depositing such amounts in a
Collection Account of Borrowers subject to a Restricted Account Agreement.
28
All other amounts retained by KMC Holdings pursuant to this SECTION 5.22
shall be held in a Collection Account of KMC Holdings subject to a
Restricted Account Agreement pursuant to SECTION 8.04.
SECTION 5.23. KNT ASSETS. On or before June 15, 2001, the
Borrowers shall submit to the Agent and Lenders a proposal for the
resolution of the proposed transfer of assets comprising the Borrowers'
construction business to KNT which proposal shall be in form and substance
satisfactory to the Agents and Requisite Lenders.
SECTION 5.24. DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
Concurrently with the creation of any new Subsidiary by KMC Holdings or
any of its Subsidiaries, KMC Holdings shall designate such Subsidiary as
an "Unrestricted Subsidiary" as such term is defined in the Indentures and
Certificate of Designations for the Series E Preferred Stock.
SECTION 5.25. POST-CLOSING RELATED TRANSACTIONS. On or before
June 1, 2001, the following conditions shall have been satisfied (the
'RESTRUCTURING EFFECTIVE DATE'), it being understood that the Agents may
extend the deadline for delivery or satisfaction of any of the following
items in their sole discretion:
(a) KMC Holdings shall have (i) created a new intermediate
holding company ('DATA HOLDCO') through which the existing data business
of KMC Holdings and its Subsidiaries shall be conducted from and after the
Restructuring Effective Date and (ii) contributed the stock or membership
interests, as the case may be, of KMC V and its Subsidiaries, KMC VI and
its Subsidiaries, KMC Funding, KMC VII, KMC VIII, KMC IX, KMC QV, KMC
Funding V and Data LLC to Data Holdco;
(b) KMC Holdings shall have contributed the stock of KMC
Financing and KMC Financial Services to a Borrower (each of the documents
and instruments evidencing the contributions set forth in CLAUSES (A)(II)
and (B), collectively, the 'RESTRUCTURING DOCUMENTS');
(c) the Agent and Collateral Agent shall have received the
following items, in each case in form and substance satisfactory to the
Agent and the Collateral Agent:
(i) the Data Holdco Guaranty in the form of ATTACHMENT N
to the Fourth Amendment, duly executed by Data Holdco;
(ii) a certificate dated the Restructuring Effective Date, of
the secretary or assistant secretary of Data Holdco, certifying that
(A) the copies of the certificates of formation, operating
agreements, or equivalent charter and governing document of Data
Holdco attached thereto are true and correct and in full force and
effect as of such date, without modification or amendment and (B)
the stock or membership interests, as the case may be, of KMC V and
its Subsidiaries, KMC VI and its Subsidiaries, KMC Funding, KMC VII,
KMC VIII, KMC IX, KMC QV, KMC Funding V and Data LLC has been
29
contributed to Data Holdco and attaching true and correct copies of
the documents and instruments of contribution;
(iii) a certificate of the secretary or assistant secretary of
KMC Holdings, certifying evidence satisfactory to the Agent and the
Collateral Agent that KMC Holdings has contributed the stock of KMC
Financing and KMC Financial Services to a Borrower;
(iv) the written opinion of special counsel for KMC Holdings
and its Subsidiaries, dated the Restructuring Effective Date,
addressed to the Agent, the Collateral Agent and the Lenders
satisfactory to (and containing only such qualifications and
limitations as are satisfactory to) counsel to the Agent, with
opinion as to, among other things, (i) due organization of Data
Holdco, (ii) the enforceability of the Data Holdco Guaranty, each
Guaranty and Security Agreement to be executed by Holdings IV and
its Subsidiaries, KMC Financing and KMC Financial Services, the
Pledge Supplement of KMC Holdings, Pledge Supplement of any
applicable Borrower, the Pledge Agreement to be executed by Holdings
IV, the Pledge Agreement to be executed by KMC IV and any other
security documents executed on the Restructuring Effective Date
(collectively, the 'RESTRUCTURING SECURITY DOCUMENTS'), (iii) the
perfection of any liens granted on the Restructuring Effective Date,
(iv) no conflicts with applicable laws or contractual obligations,
and (v) the due authorization, execution and delivery of the Pledge
Supplement of KMC Holdings, the Pledge Supplement of any applicable
Borrower and the other Loan Documents and Restructuring Documents to
be delivered on the Restructuring Effective Date, which opinions
shall be substantially in the form of ATTACHMENT B-1 annexed to the
Fourth Amendment, with such changes thereto as may be acceptable to
the Agent;
(v) the written opinion of regulatory for KMC Holdings and its
Subsidiaries, dated the Restructuring Effective Date, addressed to
the Agent, the Collateral Agent and the Lenders satisfactory to (and
containing only such qualifications and limitations as are
satisfactory to) counsel to the Agent, which opinion shall be
substantially in the forms set forth in ATTACHMENT B-2 to the Fourth
Amendment hereto;
(vi) Data Holdco's Certificate or Articles of Incorporation
(or other constituent or organizational documents, as the case may
be), in each case, as amended, modified or supplemented prior to the
Restructuring Effective Date, certified to be true, correct and
complete by the Secretary of State of the state in which such Person
is organized; and
(vii) such supplement to the Schedules to the Loan Agreement
as are necessary to reflect the foregoing restructuring
transactions.
(d) the Collateral Agent shall have received the following
items in each case in form and substance satisfactory to the Agent and
Collateral Agent (Lenders hereby authorize the Agent and Collateral Agent
30
to execute any of the following documents in their respective capacities
as Agents):
(i) the Pledge Supplement duly executed by KMC Holdings with
respect to the Equity Interests of Data Holdco and Holdings IV; (ii)
the Pledge Supplement duly executed by the applicable Borrower with
respect to the Equity Interests of KMC Financing and KMC Financial
Services; (iii) the Pledge Agreement duly executed by Holdings IV
with respect to the Equity Interests of KMC IV; (iv) the Pledge
Agreement executed by KMC IV with respect to the Equity Interests of
its Subsidiaries, in each case together with, for all such Equity
Interests which are certificated, stock certificates and undated
stock powers executed in blank in form and substance satisfactory to
the Collateral Agent and for all such Equity Interests which are
limited liability company interests, pledge instructions and initial
transaction statements in form and substance satisfactory to the
Collateral Agent;
(ii) to the extent required by the Agent or Collateral Agent,
Addenda to the Collateral Assignment of Licenses duly executed by
Holdings IV and each of its Subsidiaries, and an updated Schedule I
thereto certified as being complete and correct by all the Loan
Parties, together with consents to assignment of licenses and rights
from Persons designated by the Collateral Agent duly executed by
such Persons, including agreements as to default notices, cure
rights, waiver of lien rights, conveyance of nondisturbance rights
and other terms satisfactory to the Collateral Agent;
(iii) to the extent required by the Agent or Collateral Agent,
Addenda to the Collateral Assignment of Leases duly executed by
Holdings IV and each of its Subsidiaries, and an updated Schedule I
thereto certified as being complete and correct by all the Loan
Parties, together with consents to assignment, duly executed by the
appropriate Persons, including agreements as to default notices,
cure rights, waiver of lien rights, conveyance of nondisturbance
rights and other terms satisfactory to the Collateral Agent with
respect to those leased properties specified by the Collateral
Agent, together with landlord waivers in the form of EXHIBIT D
hereto executed by the appropriate landlord with respect to those
leased properties specified by the Collateral Agent;
(iv) to the extent required by the Agent, completed
environmental questionnaires and indemnity agreement executed by
Holdings IV and each of its Subsidiaries and Phase I Environmental
Reports with respect to premises described on SCHEDULE 3.10 (if
any);
(v) Irrevocable Proxies executed by each pledgor under a
Pledge Agreement with respect to the Equity Interests pledged
thereunder; and
(vi) a Restricted Account Agreement executed and delivered by
KMC II with respect to KMC II's lockbox number 932050 maintained
with First Union;
31
(vii) evidence that KMC's Lockbox Account No. 00000000
located at American National Bank & Trust Co. of Chicago has been
closed and any and all checks and other deposits which may have
been directed to such account redirected to a Collection Account
maintained with the Agent; and
(viii) a Guaranty and Security Agreement executed by each of
Holdings IV and its Subsidiaries it being understood and agreed that
such agreement and any other Restructuring Security Document
executed and delivered by Holdings IV and its Subsidiaries may
contain such restrictions on the duration of any grant or pledge as
shall be required pursuant to applicable law and satisfactory to the
Agent and Collateral Agent;
(ix) such other evidence as may be requested by the Agent or
Collateral Agent that the Collateral Agent's security interests in
the Collateral have been properly perfected and constitute first and
prior security interests subject only to Permitted Liens, including
by (A) filing Mortgages, the Collateral Assignment of Licenses, the
Collateral Assignment of Leases, leasehold mortgages and UCC-1
financing statements (including, without limitation, fixture
filings) in certain filing and recording offices, (B) security
documents in form and substance satisfactory to the Agents with
respect to any trademarks registered with the United States Patent
and Trademark Office since the Closing Date, (C) obtaining consents
to the Collateral Assignments of Licenses and the Collateral
Assignments of Leases and (D) taking possession of stock
certificates and other instruments, in each case, as requested by
the Agent or Collateral Agent, and including amendments to any
existing Guaranty and Security Agreement, Pledge Agreement,
Contribution Agreement or other collateral document as may be
reasonably requested by the Agent or Collateral Agent to make
conforming changes thereto, including changes consistent with the
terms of the Holdings Guaranty and Data Holdco Guaranty;
(e) evidence satisfactory to the Agent that the Borrowers have
used commercially reasonable efforts to obtain an access agreement
executed and delivered by the applicable landlord with respect to KMC
III's premises located at Moraine, Ohio in form and substance satisfactory
to the Agent and Collateral Agent;
(f) KMC Holdings shall have used its best efforts to engage
The Chase Manhattan Bank (or such other financial institution as may be
acceptable to the Agent) to replace First Union as Warrant Agent under and
as defined in the Warrant Agreement;
(g) evidence (i) that the loans under the KMC IV Loan
Agreement (as defined in the Fourth Amendment) have been indefeasibly
repaid in full and all other obligations under such agreement and the
other loan documents thereunder have been completely discharged and (ii)
all liens under such Loan and Security Agreement shall have been released
and all collateral pledged thereunder delivered to the borrowers and other
obligors thereunder; and
32
(h) the Agents and Lenders shall have received such other
agreements, instruments and documents as the Agents may reasonably
require.
SECTION 5.26. POST-CLOSING UCC MATTERS. On or before August
31, 2001 and at such times thereafter as any Agent may reasonably request,
each Loan Party shall (i) execute and deliver such UCC amendments and
additional UCC-1 financing statements as the Agent or Collateral Agent may
request in order to continue to perfect the Collateral Agent's security
interest in the Collateral under revised Article 9 of the Uniform
Commercial Code as adopted by any State after the date hereof and (ii)
deliver an opinion of special counsel to the Loan Parties as to the
perfection of the security interests granted pursuant to the Loan
Documents in the Collateral under any such revised statute, as applicable,
which legal opinion shall be in form and substance reasonably satisfactory
to the Agent and Collateral Agent.
SECTION 5.27. POST-CLOSING HOLDING IV MATTERS.
(a) Within fifteen (15) Business Days after the Fourth
Amendment Effective Date, KMC Holdings shall file with the appropriate
government agencies in each of the states in which Holdings IV or any of
its Subsidiaries has a certificate of public convenience and necessity or
other authority to provide intrastate telecommunications services, an
application which shall request approval (i) of the transfer of ownership
of Holdings IV and its Subsidiaries to a Borrower, and (ii) for Holdings
IV and its Subsidiaries to grant a security interest and lien on all of
their respective assets, and for the applicable Borrower to pledge the
Equity Interests of Holdings IV, in each case to the Collateral Agent for
the benefit of the Lenders (such approvals, the 'HOLDINGS IV REGULATORY
APPROVALS').
(b) Within five (5) Business Days after the date KMC Holdings
receives all Holdings IV Regulatory Approvals, (i) KMC Holdings shall
contribute all of the Equity Interests of Holdings IV to a Borrower, (ii)
such Borrower shall execute a Pledge Supplement to its Pledge Agreement
pledging all of the Equity Interests of Holdings IV to the Collateral
Agent for the benefit of the Lenders, (iii) the Agent shall have received
the written opinion of special counsel for KMC Holdings and its
Subsidiaries, dated the date of such Pledge Supplement, addressed to the
Agent, the Collateral Agent and the Lenders satisfactory to (and
containing only such qualifications and limitations as are satisfactory
to) counsel to the Agent, with opinion as to, among other things, (a) due
organization of the applicable Borrower, (b) the enforceability of the
Pledge Supplement and the documents or instruments evidencing the
contribution set forth in clause (i) above, (c) the perfection of any
liens granted pursuant to the Pledge Supplement and related Pledge
Agreement, (d) no conflicts with applicable laws or contractual
obligations, and (e) the due authorization, execution and delivery of the
Pledge Supplement and such documents or instruments, which opinions shall
be substantially in the form of ATTACHMENT B-1 annexed to the Fourth
Amendment, with such modifications thereto as are acceptable to the Agent
and necessary to reflect the circumstances, documents and parties
described in this SECTION 5.27(B), and (iv) the written opinion of
regulatory counsel for KMC Holdings and its Subsidiaries, dated the date
33
of such Pledge Supplement, addressed to the Agent, the Collateral Agent
and the Lenders satisfactory to (and containing only such qualifications
and limitations as are satisfactory to) counsel to the Agent, which
opinion shall be substantially in the form set forth in ATTACHMENT B-2 to
the Fourth Amendment hereto with such modifications thereto as are
acceptable to the Agent and necessary to reflect the circumstances,
documents and parties described in this SECTION 5.27(B)."
1.13 AMENDMENTS TO ARTICLE VI.
(a) The first sentence of ARTICLE VI is hereby amended to insert
immediately prior to the colon at the end thereof the phrase ", as to each
Borrower, each Loan Party or KMC and its Subsidiaries, as the case may be".
1.14 AMENDMENTS TO SECTION 6.01.
(a) The first sentence of SECTION 6.01 is hereby amended to delete
the words "Such Borrower" appearing therein and substitute therefor the words
"KMC Holdings and each of its Subsidiaries".
(b) CLAUSES (II), (III) and (IV) of SECTION 6.01 are hereby deleted
in their entirety and the following new CLAUSES (II), (III) and (IV) are
substituted therefor, respectively:
"(ii) Liens securing any Purchase Debt to the extent that the
Liens cover only the subject assets subject to such Purchase Debt and
provided such Liens are incurred no later than twenty (20) days following
the purchase of the subject assets;
(iii) Liens for taxes, assessments or governmental charges or
levies on property of KMC Holdings or any of its Subsidiaries (other than
Liens imposed by or under ERISA) if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being
diligently contested in good faith and by appropriate proceedings and for
which such Person shall have set aside reserves on its books as required
by GAAP;
(iv) Liens imposed by law, such as landlord's, carrier's,
warehousemen's and mechanic's liens, which liens shall be waived in
writing to the extent waivable, and with respect to obligations not yet
due or being contested in good faith by appropriate proceedings and in
either case for which KMC Holdings and its Subsidiaries shall have set
aside adequate reserves on its books as required by GAAP;".
(c) SECTION 6.01 is further amended to delete the word "or"
appearing at the end of CLAUSE (VI) thereof and insert new CLAUSES (VIII), (IX),
(X) and (XI) thereto as follows:
"(viii) Liens in the form of IRUs arising pursuant to IRU
Agreements and IRU Service Orders permitted pursuant to SECTION 6.18;
(ix) Liens in existence as of the Fourth Amendment
Effective Date and listed on SCHEDULE 6.01;
34
(x) Liens on assets of KMC VII, KMC VIII, KMC IX, KMC QV, KMC
Funding V and Data LLC and any New Data Subsidiary created solely in
connection with Permitted Data Financings; PROVIDED that such Liens attach
only to the assets of KMC VII, KMC VIII, KMC IX, KMC QV, KMC Funding V,
Data LLC or such Data Subsidiary, as applicable, and secure only the
obligations incurred pursuant to such Permitted Data Financing; and
(xi) Liens on the capital stock of any Data Subsidiary granted
by Data Holdco to secure obligations under any Permitted Data Financing."
(d) SECTION 6.01 is further amended to insert a new paragraph
at the end thereof as follows:
"Except with respect to specific property encumbered to secure
payment of particular Debt permitted pursuant to SECTION 6.13 (including
any Permitted Data Financing) or to be sold pursuant to an executed
agreement with respect to a sale of assets or securitization otherwise
permitted under this Agreement, neither KMC Holdings nor any of its
Subsidiaries shall enter into any agreement (other than the Indentures)
prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired."
1.15 AMENDMENT TO SECTION 6.03. SECTION 6.03 is hereby deleted
in its entirety and the following new language is substituted therefor:
"SECTION 6.03. SALE OF ASSETS, CONSOLIDATION, MERGER, etc. (a)
No Loan Party (other than Data Holdco) shall, or shall permit any of its
Subsidiaries (other than the Data Subsidiaries) to, consolidate with or
merge into any other Person, or without the prior written consent of the
Requisite Lenders, sell, lease, transfer or otherwise dispose of any
Collateral or assets (including any assets comprising the Borrowers'
construction business to KNT) or sell or discount receivables, except for
(x) sales of inventory in the ordinary course of business, and (y) any
sale, lease, transfer or other disposition of Telecommunications Equipment
or other fixed assets no longer used or useful in the conduct of the
Business for the fair market value thereof not to exceed 0.5% of gross
PP&E of the Borrowers as reflected in the books and records of the
applicable Borrower on the date of any such sale, lease, transfer or other
disposition, so long as the Borrowers shall deliver to the Agent on the
date of any such sale, lease, transfer or other disposition resulting in
Net Asset Sale Proceeds in one or a series of related transactions in
excess of $500,000 an officer's certificate signed by the Chief Financial
Officer of KMC Holdings demonstrating the calculation of such Net Asset
Sale Proceeds, including the derivation of gross PP&E of the Borrowers;
PROVIDED, FURTHER that if no Default or Event of Default has then occurred
or is continuing or would result therefrom (i) any Borrower, upon
provision of thirty (30) days prior written notice to the Agent and upon
compliance with SECTION 8.02, may merge with another Borrower; (ii) any
Loan Party (other than KMC Holdings and Data Holdco) may grant IRUs
pursuant to IRU Agreements and IRU Service Orders entered into pursuant to
SECTION 6.18; and (iii) any Loan Party (other than KMC Holdings and Data
Holdco) may consummate other Asset Sales with the prior written consent of
the Agents and Requisite Lenders so long as the Net Asset Sale Proceeds
35
are applied to prepay Loans and reduce the Revolving Loan Commitment
Amount as provided in SECTION 2.09(C)(III) and any Net Asset Sale Proceeds
retained by the Loan Parties are applied in compliance with the Indentures
and the Certificate of Designation of the Series E Preferred Stock, it
being understood and agreed that in connection with any such Asset Sale
consented to by the Agents and Requisite Lenders, the Borrowers and
Lenders agree to review the financial covenant levels set forth in SECTION
7.01 and to make good faith adjustments to such levels to account for the
sale of assets subject to such Asset Sale; PROVIDED STILL FURTHER that the
Loan Parties may consummate the transactions on or before the
Restructuring Effective Date contemplated by SECTION 5.21; and
(b) KMC Holdings shall not, and shall not permit Data Holdco
or any of its Subsidiaries to, consolidate with or merge into any other
Person (other than with respect to Data Holdco and its Subsidiaries only,
Data Holdco or another Data Subsidiary so long as Data Holdco is the
surviving entity), or without the prior written consent of the Requisite
Lenders, sell, lease, transfer or otherwise dispose of any assets
including any sale or discount of receivables, except for, in the case of
the Data Subsidiaries only, (x) sales of inventory in the ordinary course
of business, and (y) any sale, lease, transfer or other disposition of
assets no longer used or useful in the conduct of the Data Business for
the fair market value thereof; provided, however, that if no Event of
Default has then occurred or is continuing or would result therefrom; (1)
the Data Subsidiaries may enter into Data Contracts and Permitted Data
Financings related thereto, in each case as expressly permitted by this
Agreement, and (2) Data Holdco and the Data Subsidiaries may make Asset
Sales, PROVIDED that (A) the consideration received therefor is not less
than one hundred percent (100%) cash (or, if less than one hundred percent
(100%) cash, then the calculation of Net Asset Sale Proceeds for purposes
of clause (C) of this SECTION 6.03(B) shall be calculated based on the
fair market value of the assets subject to such Asset Sale rather than
cash proceeds received in connection therewith) and is for the fair market
value of such assets, (B) the Data Subsidiaries promptly distribute one
hundred percent (100%) of any Net Asset Sale Proceeds thereof to Data
Holdco, and (C) Data Holdco promptly distributes such Net Asset Sale
Proceeds to KMC Holdings to the extent required by, and to be applied
pursuant to, SECTION 5.22."
1.16 AMENDMENTS TO SECTION 6.04.
(a) CLAUSE (A) of SECTION 6.04 is hereby deleted in its entirety and
the following new CLAUSE (A) is substituted therefor:
"(a) No Loan Party (other than KMC Holdings and Data Holdco)
shall purchase, redeem or otherwise acquire any interest of such Loan
Party, declare or make or pay any dividends in any fiscal year of such
Loan Party on any class or classes of stock, return capital of such Loan
Party to its shareholders, make any other distribution on or in respect of
any shares of any class of capital stock of such Loan Party or make other
payments to any shareholder of such Loan Party (including in the form of
compensation, loan, expense reimbursement or management fee); PROVIDED,
HOWEVER, that provided no Event of Default or Default has occurred and is
continuing or would result therefrom, (i) such Loan Party may make
payments of fees or compensation for services which are in the nature of
36
management, corporate overhead, operating expenses or administrative
services in each case to the extent permitted by SECTION 6.05 hereof, (ii)
such Loan Party may pay to KMC Holdings dividends in the amount necessary
to make, in each case promptly after receipt of such dividends, (A)
scheduled principal and interest payments under the Indentures, and
amounts due under SECTION 7.07 of the Indentures, and (B) required
payments of cash dividends due to the holders of the Series E Preferred
Stock; PROVIDED, HOWEVER, that at the time of the payment by such Loan
Party of any dividends to KMC Holdings pursuant to this clause (ii), KMC
Holdings shall have received a proportionate amount of cash dividends from
Data Holdco based on the allocation of overhead as among KMC Holdings
Subsidiaries as set forth in the February 2001 Business Plan (the 'DATA
HOLDCO ALLOCATION AMOUNT'), which Data Holdco Allocation Amount shall be
promptly applied to pay amounts then due as described in CLAUSES (A) or
(B), above, as applicable."
(b) SECTION 6.04 is hereby amended to insert a new CLAUSE (C) at
the end thereof as follows:
"(c) KMC Holdings shall not purchase, redeem or otherwise
acquire any interest of KMC Holdings, declare or make or pay any dividends
in any fiscal year of KMC Holdings on any class or classes of stock,
return capital of KMC Holdings to its shareholders, make any other
distribution on or in respect of any shares of any class of capital stock
of KMC Holdings or make other payments to any shareholder of KMC Holdings
(including in the form of compensation, loan, expense reimbursement or
management fee but excluding any disbursements or dividends made with the
issuance of additional shares of common or existing series of preferred
stock); PROVIDED, however, that so long as no Event of Default has
occurred and is continuing or would result therefrom, KMC Holdings may
make (i) required payments of cash dividends to the holders of the Series
E Preferred Stock and (ii) payments of management fees and employee
compensation pursuant to the management and employment agreements in
effect on the date hereof and set forth on SCHEDULE 3.09(B)."
1.17 AMENDMENT TO SECTION 6.05. SECTION 6.05 is hereby deleted in
its entirety and the following new language is substituted therefor:
"SECTION 6.05. MANAGEMENT FEES AND PERMITTED CORPORATE
OVERHEAD. No Loan Party (other than Data Holdco) shall pay or enter into
any arrangement to pay any fee or compensation, or reimburse expenses of,
an Affiliate or any other Person for services which are in the nature of
management, corporate overhead or administrative services except for (i)
usual and customary charges payable to KMC Holdings and allocated to pay
expenses incurred in the ordinary course of business which allocation is
made consistent with past practices and (ii) payments permitted pursuant
to CLAUSE (II) of SECTION 6.04(B)."
1.18 AMENDMENT TO SECTION 6.06. SECTION 6.06 is hereby deleted in
its entirety and the following new language is substituted therefor:
37
"SECTION 6.06. GUARANTEES; THIRD PARTY SALES AND LEASES. KMC
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, (i) assume any obligation or indebtedness of
another Person, (ii) make or assume any Guarantee (other than Guarantees
make by any Data Subsidiary in favor of its Subsidiaries or by any such
Subsidiary in favor of its parent Data Subsidiary), or (iii) finance any
third party sales or leases, except for (a) the Borrowers' obligations
under SECTION 2.15 and Guarantees of the Obligations, (b) Guarantees in
existence as of the Fourth Amendment Effective Date and listed on SCHEDULE
6.06 and (c) Guarantees by New Data Subsidiaries of obligations of other
Data Subsidiaries arising under Data Contracts or Permitted Data
Financings."
1.19 AMENDMENT TO SECTION 6.07. SECTION 6.07 is hereby amended to
(i) delete the reference to "Borrower" appearing therein and substitute therefor
a reference to "Loan Party" and (ii) insert the following proviso at the end
thereof:
"; PROVIDED, HOWEVER, that any Investments pursuant to clauses
(i) through (v) above shall be made through an investment account with the
Agent and subject to a control agreement in form and substance
satisfactory to the Agent."
1.20 AMENDMENT TO SECTION 6.08. SECTION 6.08 is hereby deleted in
its entirety and the following new language is substituted therefor:
"SECTION 6.08. SUBSIDIARIES. KMC Holdings shall not, and shall
not permit any of its Subsidiaries to, create or acquire any Subsidiary or
acquire all or any significant portion of the assets or Equity Interests
of another Person; PROVIDED that Data Holdco and its Subsidiaries existing
on the Restructuring Effective Date may form new Subsidiaries (each, a
'NEW DATA SUBSIDIARY') the sole purpose of which is to enter into and
perform obligations under new Data Contracts and Permitted Data
Financings, in each case as permitted pursuant to the terms of this
Agreement; PROVIDED that at the time such New Data Subsidiary is created
or acquired, no Default or Event of Default shall have occurred and be
continuing before or after giving effect to the creation or acquisition of
such Subsidiary, and KMC Holdings has or will obtain external sources of
funding (other than, for the avoidance of doubt, any Revolving Loan
Commitment Amount or other amounts required to be applied to the
Obligations pursuant to the terms of this Agreement) to finance the
acquisition and operations of such Subsidiary."
1.21 AMENDMENT TO SECTION 6.09. SECTION 6.09 is hereby deleted in
its entirety and the following new language is substituted therefor:
"SECTION 6.09. PERMITTED ACTIVITIES. (a) No Loan Party (other
than Data Holdco) shall engage in any business or activity other than the
operation of its Business in scope in accordance with the February 2001
Business Plan without the prior written consent of the Agents and
Requisite Lenders; PROVIDED that any Loan Party (other than KMC Holdings
and Data Holdco) shall be permitted to enter into and remain obligated
under IRU Agreements pursuant to SECTION 6.18. Notwithstanding anything in
the foregoing to the contrary, no Loan Party (other than Data Holdco)
shall extend its Business into any new city (other than (i) a new city
38
adjacent to an existing city and part of the same market, which entry
shall be implemented solely by an extension of an existing System from
such existing city or (ii) pursuant to an IRU Agreement) without the prior
written consent of the Agents and Requisite Lenders. KMC Holdings shall
not engage in any business, own any assets or incur any liabilities other
than (i) the performance of its obligations under the Indentures, the Data
Contracts existing on the Fourth Amendment Effective Date and the Loan
Documents and (ii) the ownership of all the capital stock of its direct
Subsidiaries.
(b) Data Holdco shall not engage in any business or activity
other than the ownership of the capital stock of the Data Subsidiaries,
the performance of its obligations under the Loan Documents and the pledge
of the capital stock of a Data Subsidiary pursuant to SECTION 6.01(XI).
The Data Subsidiaries shall not engage in any business or activity other
than (i) entering into and performing their respective obligations under
Data Contracts and Permitted Data Financings; PROVIDED that no Data
Contract or any other agreement entered into by any Data Subsidiary shall
(a) purport to restrict the conduct of business of any Loan Party or any
intercompany transfers, loans or advances other than as expressly
permitted pursuant to SECTION 6.21, (b) prohibit or encumber the ability
of such Data Subsidiary or any of its Affiliates from making any dividend
or distribution in respect of the capital stock of such Data Subsidiary or
Affiliate, except in the case of a pledge of stock of a Data Subsidiary in
connection with a Permitted Data Financing only, customary restrictions on
the payment of dividends by such Data Subsidiary in the case of a default
event under such Permitted Data Financing or (c) otherwise require any
Affiliate of such Data Subsidiary (other than any other Data Subsidiary)
to be liable in any respect or subject to recourse under such Data
Contract or agreement, except in the case of a transaction expressly
permitted pursuant to SECTION 6.11, and (ii) performing activities
incidental to the performance of its obligations under the Data Contracts
and Permitted Data Financings as expressly permitted pursuant to SECTIONS
6.01, 6.03, 6.06, 6.08 and 6.13 and providing cash support to the Loan
Parties."
1.22 AMENDMENT TO SECTION 6.10. SECTION 6.10 is hereby amended to
delete the reference to "Such Borrower" appearing therein and substitute
therefor a reference to "Such Loan Party".
1.23 AMENDMENT TO SECTION 6.11. SECTION 6.11 is hereby deleted in
its entirety and the following new language is substituted therefor:
"SECTION 6.11. TRANSACTIONS WITH AFFILIATES. Except for the
Management Agreement, the Tax Sharing Agreement, or as set forth on
SCHEDULE 6.11, no Loan Party shall, or shall permit any of its
Subsidiaries to, directly or indirectly, enter into any transaction,
including, without limitation, leases or other agreements for the purchase
or use of any goods or services, with any Affiliate, except in the
ordinary course of and pursuant to reasonable requirements of such Loan
Party's business upon fair and reasonable terms no less favorable to such
Loan Party than it would obtain in a comparable arm's length transaction
with an unaffiliated Person, PROVIDED that (i) any transaction involving
payments in excess of $10,000,000 and (ii) any transactions between a Loan
Party (other than Data Holdco) and a Data Subsidiary (other than the Tax
39
Sharing Agreement, Management Agreement, and sub-licensing arrangements
similar to those relating to Data Contracts in existence on the Fourth
Amendment Effective Date) shall be strictly prohibited without the prior
written consent of the Agents and Requisite Lenders."
1.24 AMENDMENTS TO SECTIONS 6.12 AND 6.13.
(a) The first sentence of each of SECTIONS 6.12 and 6.13 is hereby
amended to delete the words "Such Borrower shall not" and substitute therefor
the words "KMC Holdings shall not, and shall not permit any of its Subsidiaries
to,".
(b) CLAUSE (IV) of SECTION 6.13 is hereby amended to insert the
following proviso at the end thereof: "PROVIDED that such Purchase Debt is
incurred no later than twenty (20) days following the purchase of the subject
assets;".
(c) CLAUSE (VII) of SECTION 6.13 is hereby amended to insert the
following proviso at the end thereof:
"; PROVIDED that (a) from and after the Restructuring
Effective Date, such Loan Party shall have executed and delivered to KMC
Holdings a demand note (collectively, the 'INTERCOMPANY NOTES') to
evidence any such Qualified Intercompany Loan owing at any time by such
Loan Party to KMC Holdings, which Intercompany Notes shall be in form and
substance satisfactory to the Agent and Collateral Agent and shall be
pledged and delivered to the Collateral Agent pursuant to the Pledge
Agreement executed by KMC Holdings pursuant to the Existing Agreement as
additional collateral security for the Obligations; (b) such Loan Party
shall record all intercompany transactions on its books and records in a
manner satisfactory to the Collateral Agent; (c) the obligations of such
Loan Party under any such Intercompany Notes shall be subordinated to the
Obligations of such Loan Party hereunder in a manner satisfactory to the
Agent and Collateral Agent; (d) at the time any such Qualified
Intercompany Loan is incurred by such Loan Party and after giving effect
thereto, such Loan Party shall be Solvent; and (e) no Default or Event of
Default would occur and be continuing after giving effect to any such
proposed Qualified Intercompany Loan;".
(d) SECTION 6.13 is hereby amended to delete the word "and"
appearing at the end of CLAUSE (VIII) thereof and insert new CLAUSES (X) and
(XI) at the end thereof as follows:
"(x) Debt of KMC Holdings outstanding on the Fourth
Amendment Effective Date pursuant to the Indentures; or
(xi) obligations of any Data Subsidiary (a) under financing
leases or loan agreements or similar debt documents with respect to the
financing and contemplated purchase, operation or maintenance of
equipment, software, networks or any combination of the foregoing assets
in connection with any Data Contract to which such Data Subsidiary is a
party; and (b) in connection with any securitization of, or equivalent
monetization of future revenue under, a Data Contract to which such Data
Subsidiary is a party (collectively, 'PERMITTED DATA FINANCINGS')."
40
1.25 AMENDMENT TO SECTION 6.14. SECTIONS 6.14 is hereby amended by
deleting each reference therein to "Borrower" and inserting a reference to "Loan
Party" in its place.
1.26 AMENDMENT TO SECTION 6 is further amended to delete SECTIONS
6.15 and 6.17 in their entirety and substitute the following new language
therefor:
"SECTION 6.15. SALE AND LEASEBACK TRANSACTIONS. KMC Holdings
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into any arrangement with any Person providing for such
KMC Holdings or any of its Subsidiaries to lease or rent property that KMC
Holdings or any of its Subsidiaries has sold or will sell or otherwise
transfer to such Person; PROVIDED that Data Subsidiaries may enter into
such arrangements to the extent constituting Permitted Data Financings."
"SECTION 6.17. MANAGEMENT AND TAX SHARING AGREEMENTS. KMC
Holdings shall not, and shall not permit any of its Subsidiaries to, amend
the Management Agreement or the Tax Sharing Agreement in any manner that
would have a material adverse effect on the Lenders, the Loan Parties or
the transactions contemplated hereby."
(a) SECTION 6 is further amended to insert new SECTIONS 6.18, 6.19,
6.20, 6.21, 6.22 and 6.23 at the end thereof as follows:
"SECTION 6.18. IRU AGREEMENTS AND IRU SERVICES ORDERS. KMC
Holdings shall not, and shall not permit any of its Subsidiaries to, enter
into or remain obligated under any IRU Agreement or IRU Service Order or
commence construction of any facilities for the purpose of soliciting IRU
Agreements or IRU Service Orders without the prior written consent of the
Agents and Requisite Lenders; PROVIDED, HOWEVER, that so long as no
Default or Event of Default has then occurred and is continuing, any Loan
Party may enter into and remain liable with respect to IRU Agreements and
IRU Service Orders; PROVIDED that:
(i) each such IRU Agreement or IRU Service Order provides that
(a) such Loan Party shall receive a nonrefundable upfront fee (the
'INITIAL IRU FEE') equal to an amount not less than the projected
IRU Construction Costs with respect to the facilities required for
the grant of the relevant IRU subject to such IRU Agreement or IRU
Service Order (the 'IRU FACILITIES'), and (b) in the event the IRU
Construction Costs of any IRU Facilities exceeds an amount equal to
one hundred ten percent (110%) of the corresponding Initial IRU Fee,
such Loan Party shall be entitled immediately to stop all
construction, installation and testing of the corresponding IRU
Facilities (and each Borrower hereby covenants and agrees that in
the event of any such excess, such Loan Party shall immediately stop
such construction, installation and testing) and renegotiate with
the customer such IRU Agreement or IRU Service Order for the payment
to such Loan Party of additional fees sufficient to cover all IRU
Construction Costs not covered by the Initial IRU Fee; PROVIDED,
HOWEVER, that notwithstanding anything in the foregoing clause (a)
or (b) to the contrary, in the case of any IRU with a customer
having a senior debt rating of greater than BBB- as determined by
41
Standard & Poor's Ratings Group and/or Baa3 as determined by Xxxxx'x
Investors Service, Inc., (1) the Initial IRU Fee may be equal to or
greater than sixty-six percent (66%) of the projected IRU
Construction Costs with respect to the relevant IRU Facilities and
(2) any financing of such remaining amount by a Loan Party must be
paid by such customer no later than twelve months following the date
of payment of such Initial IRU Fee; PROVIDED FURTHER, HOWEVER, that
the aggregate amount of all projected IRU Construction Costs
outstanding at anytime with respect to any such IRU for which such
Loan Party has not received payment shall not at anytime exceed
$10,000,000.
(ii) such Loan Party does not commence construction of any IRU
Facilities until a definitive IRU Agreement or IRU Service Order has
been executed by the parties thereto and such Loan Party has
received the applicable Initial IRU Fee;
(iii) such Loan Party uses the Initial IRU Fee for the sole
purpose of payment of IRU Construction Costs for the corresponding
IRU Facilities before application to any other purpose;
(iv) the actual and anticipated period of construction,
installation and testing of any IRU Facilities shall not exceed
eighteen (18) months;
(v) such Loan Party delivers to the Agents a complete copy of
such IRU Agreement and any IRU Service Order involving IRU
Construction Costs in excess of $1,000,000 promptly upon execution
thereof together with an IRU Report with respect to such IRU
Agreement and any IRU Service Order outstanding thereunder;
(vi) such Loan Party deposits all payments, including, without
limitation, any IRU Fee, received by such Loan Party under any IRU
Agreement or IRU Service Order into a Collection Account subject to
a Restricted Account Agreement promptly upon receipt thereof;
(vii) each such IRU Agreement or IRU Service Order shall have
been negotiated on an arms length basis; and
(viii) all construction, installation and testing under any
IRU Agreement or IRU Service Order is performed either directly by a
Loan Party or, if subcontracted to a third party, on an arms length
basis.
SECTION 6.19. AMENDMENTS TO MATERIAL AGREEMENTS. No Loan Party
shall, or shall permit any of its Subsidiaries to, terminate, amend,
modify or supplement or waive any of its rights under, any Material
Agreement (other than any agreement listed on SCHEDULE 3.27) to which it
is a party in any manner that would be inconsistent with the provisions of
SECTION 6.18 or adverse to the interests of such Loan Party, any Agent or
Lender, or on the ability of such Loan Party to perform its obligations
hereunder, or to the transactions contemplated hereby, in each case
without the prior written consent of the Agent and Requisite Lenders. Each
Loan Party shall promptly deliver to the Agents a copy of any amendment,
42
modification or supplement to any IRU Agreement or any IRU Service Order
in excess of $1,000,000.
SECTION 6.20. CANCELLATION OF INDEBTEDNESS. No Loan Party
shall cancel any claim or debt owing to it, except for reasonable
consideration negotiated on an arm's-length basis and in the ordinary
course of its business consistent with past practices.
SECTION 6.21. IMPAIRMENT OF INTERCOMPANY TRANSFERS. KMC
Holdings shall not, nor shall it permit any of its Subsidiaries to,
directly or indirectly enter into or become bound by any agreement,
instrument, indenture or other obligation (other than the Indentures, the
Series E Preferred Stock, this Agreement and the other Loan Documents)
which could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to (i) the payment of any dividends or
the making of any other distributions on any of such Subsidiary's capital
stock owned by KMC Holdings or any other Subsidiary of KMC Holdings,
except, in the case of a pledge of stock of a Data Subsidiary in
connection with a Permitted Data Financing only, customary restrictions on
the payment of dividends by such Data Subsidiary in the case of a default
event under such Permitted Data Financing, (ii) the repayment or
prepayment of any Debt owed by such Subsidiary to KMC Holdings or any
other Subsidiary of KMC Holdings, (iii) make loans or advances to KMC
Holdings or any other Subsidiary of KMC Holdings, except for customary
restrictions imposed on the ability of a Data Subsidiary to make such
loans or advances in connection with a Permitted Data Financing, or (iv)
transfer any of its property or assets to KMC Holdings or any other
Subsidiary of KMC Holdings, except for customary restrictions imposed on a
Data Subsidiary on transfer of assets subject to a Lien pursuant to a
Permitted Data Financing.
SECTION 6.22. AMENDMENT TO ORGANIZATION DOCUMENTS. No Loan
Party shall, or shall permit any of its Subsidiaries (other than Data
Subsidiaries) to amend, supplement or otherwise modify its Certificate or
Articles of Incorporation or other organizational documents without the
prior written consent of the Agents and Requisite Lenders; PROVIDED,
HOWEVER, that KMC Holdings may amend its Certificate of Incorporation to
provide for the issuance of a new series of preferred stock; PROVIDED that
(i) no dividends or other distributions of any kind (other than the
issuance of additional shares of such preferred stock) shall be required
to be paid to the holders thereof until not less than six months after the
Term A Loan Termination Date, and (ii) any restrictions imposed on KMC
Holdings and its Subsidiaries shall be no more burdensome to KMC Holdings
and its Subsidiaries or their ability to perform the Obligations than the
provisions of the Series E Preferred Stock as set forth in the Certificate
of Designations for the Series E Preferred Stock as in effect on the
Fourth Amendment Effective Date.
SECTION 6.23 PERMITTED USE OF COLLATERAL. The Loan Parties
shall not use any Collateral for any purpose other than as contemplated by
the February 2001 Business Plan."
1.27 AMENDMENT TO SECTION 7.01. SECTION 7.01 is hereby deleted in
its entirety and the following new language is substituted therefor:
43
"(a) MINIMUM CORE REVENUES. As of the last day of each fiscal
quarter occurring on and after the Fourth Amendment Effective Date, the
Borrowers shall on a combined basis have Core Revenues for such quarter of
not less than the following:
FISCAL QUARTER ENDING MINIMUM CORE
REVENUES
March 31, 2001 $37,324,000
June 30, 2001 $39,276,000
September 30, 2001 $45,222,000
December 31, 2001 $51,578,000
March 31, 2002 $55,408,000
June 30, 2002 $63,871,000
September 30, 2002 $69,066,000
December 31, 2002 $74,462,000
March 31, 2003 $80,563,000
June 30, 2003 $87,362,000
September 30, 2003 $94,350,000
December 31, 2003 $101,563,000
March 31, 2004 $108,689,000
June 30, 2004 $115,839,000
September 30, 2004 $123,181,000
December 31, 2004 $130,719,000
March 31, 2005 $138,238,000
June 30, 2005 $145,665,000
September 30, 2005 $153,270,000
December 31, 2005 $161,059,000
March 31, 2006 $168,851,000
June 30, 2006 $176,630,000
September 30, 2006 $184,562,000
December 31, 2006 $192,647,000
March 31, 2007 $200,862,000
(b) MINIMUM EBITDA. As of the last day of each fiscal quarter
occurring on and after the Fourth Amendment Effective Date, the Borrowers
shall not permit EBITDA for all of the Borrowers on a combined basis for
44
the two fiscal quarters then ending to be less than the following:
FISCAL QUARTER ENDING MINIMUM EBITDA
March 31, 2001 ($57,589,000)
June 30, 2001 ($52,407,000)
September 30, 2001 ($33,972,000)
December 31, 2001 ($25,589,000)
March 31, 2002 ($20,687,000)
June 30, 2002 ($13,900,000)
September 30, 2002 ($3,136,000)
December 31, 2002 $8,340,000
March 31, 2003 $18,003,000
June 30, 2003 $27,334,000
September 30, 2003 $37,999,000
December 31, 2003 $48,006,000
March 31, 2004 $56,432,000
June 30, 2004 $64,727,000
September 30, 2004 $74,797,000
December 31, 2004 $85,175,000
March 31, 2005 $91,593,000
June 30, 2005 $97,885,000
September 30, 2005 $108,300,000
December 31, 2005 $118,986,000
March 31, 2006 $124,581,000
June 30, 2006 $129,900,000
September 30, 2006 $140,279,000
December 31, 2006 $150,876,000
March 31, 2007 $154,619,000
(c) MAXIMUM CAPITAL EXPENDITURES. As of the last day of each
fiscal quarter occurring on and after the Fourth Amendment Effective Date,
the Borrowers shall not permit capital expenditures (other than IRU Cap
45
Ex) on a combined basis to exceed the following:
FISCAL QUARTER ENDING MAXIMUM CAPITAL
EXPENDITURES
March 31, 2001 $27,980,000
June 30, 2001 $32,033,000
September 30, 2001 $30,209,000
December 31, 2001 $29,779,000
March 31, 2002 $23,655,000
June 30, 2002 $25,439,000
September 30, 2002 $27,355,000
December 31, 2002 $29,414,000
March 31, 2003 $18,242,000
June 30, 2003 $19,551,000
September 30, 2003 $20,954,000
December 31, 2003 $22,458,000
March 31, 2004 $18,639,000
June 30, 2004 $19,753,000
September 30, 2004 $20,931,000
December 31, 2004 $22,178,000
March 31, 2005 $19,861,000
June 30, 2005 $20,799,000
September 30, 2005 $21,780,000
December 31, 2005 $22,804,000
March 31, 2006 $17,279,000
June 30, 2006 $17,850,000
September 30, 2006 $18,439,000
December 31, 2006 $19,045,000
March 31, 2007 $19,670,000
; PROVIDED that to the extent that capital expenditures permitted for any
fiscal quarter on a cumulative basis exceed actual capital expenditures
for such fiscal quarter, the excess shall be permitted to be carried over
46
to the immediately succeeding fiscal quarter; PROVIDED that in no event
shall the aggregate amount of capital expenditures permitted to be so
carried forward from any one fiscal year to the next succeeding fiscal
year exceed $20,000,000 (the 'CARRY OVER AMOUNT'); PROVIDED, HOWEVER, all
amounts used for capital expenditures in any fiscal quarter shall be
deemed to count first against any amounts carried over to such fiscal
quarter and then against any remaining amount permitted for any such
fiscal quarter; PROVIDED FURTHER, that, notwithstanding anything in the
foregoing to the contrary, the Borrowers shall be permitted to exceed the
capital expenditure amounts set forth above for any fiscal quarter by and
amount of not more than (i) $4,000,000 for the fiscal quarter ending June
30, 2001, (ii) $8,000,000 for the fiscal quarter ending September 30,
2001, (iii) $12,000,000 for the fiscal quarter ending December 31, 2001,
(iv) $16,000,000 for the fiscal quarter ending March 31, 2002, (v)
$20,000,000 for the fiscal quarter ending June 30, 2002, (vi) $24,000,000
for the fiscal quarter ending September 30, 2002 and (vii) $25,000,000 for
the fiscal quarter ending December 31, 2002, so long as the aggregate
amount of all such excess amounts shall not at anytime exceed
$25,000,000."
1.28 AMENDMENT TO SECTION 7.02. SECTION 7.02 is hereby deleted in
its entirety and the following new language is substituted therefor:
"SECTION 7.02. [Reserved.]".
1.29 AMENDMENTS TO SECTION 8.04. SECTION 8.04 is hereby amended
and restated in its entirety as follows:
"SECTION 8.04 COLLECTION OF ACCOUNTS AND RESTRICTED ACCOUNT
ARRANGEMENTS. Such Loan Party hereby represents and warrants that each
depository account, including each collection, concentration and
disbursement account (collectively, the "COLLECTION ACCOUNTS") now
maintained by such Loan Party at any bank ("COLLECTION AGENT") for the
collection of checks and cash constituting proceeds of Accounts and sales
of other personal property which are part of the Collateral is identified
on SCHEDULE 8.04 attached hereto and made a part hereof. With respect to
each Collection Account, such Loan Party shall, no later than the
Restructuring Effective Date, deliver (to the extent not previously
delivered pursuant to the Existing Agreement) to the Collateral Agent, a
"RESTRICTED ACCOUNT AGREEMENT" substantially in the form of EXHIBIT N
attached hereto and made a part hereof, duly executed and delivered by
such Loan Party and the applicable Collection Agent, authorizing and
directing such Collection Agent, upon receipt of written notice from the
Collateral Agent that an Event of Default has occurred and is continuing,
to deposit all checks and cash received into a restricted account (a
"RESTRICTED ACCOUNT") and remit all amounts deposited in such Restricted
Account to the Collateral Agent's account specified in such Restricted
Account Agreement until such time as the Collection Agent receives written
notice from the Collateral Agent rescinding such instruction. Such Loan
Party shall, following the occurrence and during the continuance of an
Event of Default and any subsequent request by the Collateral Agent
therefor, take such further action as the Collateral Agent may reasonably
deem desirable to effect the transfer of exclusive ownership and control
of the Restricted Accounts and all Collection Accounts to the Collateral
Agent. Until all of the Obligations have been indefeasibly paid in full,
such Loan Party agrees not to enter into any agreement or execute and
47
deliver any direction which would modify, impair or adversely affect the
rights and benefits of the Collateral Agent under any Restricted Account
Agreement. Such Loan Party shall not open, establish or maintain any
Collection Account (other than those identified on SCHEDULE 8.04 hereto)
with any bank or other financial institution other than a Lender and
without first having delivered to the Collateral Agent a duly executed and
delivered Restricted Account Agreement with respect to such Collection
Account. SCHEDULE 8.04 sets forth a true, complete and correct list of all
Collection Accounts and disbursement accounts of each Loan Party. Such
Loan Party shall notify the Collateral Agent in writing not less than five
(5) days prior to the date it shall open or establish any Collection
Account or disbursement account other than an account described on
SCHEDULE 8.04 hereto."
1.30 AMENDMENTS TO SECTION 9.01.
(a) CLAUSE (A) of SECTION 9.01 is hereby amended to (i) delete the
reference to "Borrower" appearing therein and substitute therefor a reference to
"Loan Party" and (ii) delete the phrase "and five (5) Business Day shall have
elapsed" appearing therein.
(b) CLAUSE (B) of SECTION 9.01 is hereby deleted in its entirety and
the following new CLAUSE (B) is substituted therefor:
"(b) Any Loan Party shall fail to observe or perform any other
covenant, condition or agreement to be observed or performed by such Loan
Party in any of the Loan Documents, and such Loan Party fails to cure such
breach within ten (10) Business Days after written notice thereof unless
the breach relates to a covenant contained in SECTIONS 5.04, 5.22, or
ARTICLE VI or Article VII, in which case no notice or grace period shall
apply, or unless the breach relates to SECTION 5.06 (other than SECTIONS
5.06(A), (B), (E), or (U)), in which case an Event of Default shall occur
on the thirtieth day following the breach without any notice requirement,
unless the breach shall have been cured before such date; or".
(c) CLAUSE (D) of SECTION 9.01 is hereby deleted in its entirety and
the following new CLAUSE (D) is substituted therefor:
"(d) KMC Holdings or any of its Subsidiaries (other than a
Data Subsidiary) shall fail to make any payment due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) on any
other Debt, in excess of $250,000, including, in each case Guarantees
thereof, and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt or Guarantee, as applicable; or any other default or event under any
agreement or instrument relating to any Debt in excess of $250,000 with
respect to KMC Holdings or any of its Subsidiaries (other than any Data
Subsidiary) including, in each case, Guarantees thereof, or any other
event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument if the effect of such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such Debt in excess of $250,000 with respect to KMC Holdings
or any such Subsidiary, including, in each case, Guarantees thereof, or
48
the effect of such default is to permit the holders of such Debt to
require cash collateral therefor; or any such indebtedness in excess of
$250,000 with respect to KMC Holdings or such Subsidiary, including, in
each case, Guarantees thereof, shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof; or".
(d) CLAUSE (L) of SECTION 9.01 is hereby deleted in its entirety and
the following new CLAUSE (L) is substituted therefor:
"(l) (i) any Borrower shall default under any Lucent Purchase
Agreement or Additional Purchase Agreement, which default shall not have
been cured or waived within the applicable grace period thereunder or any
remedies have been exercised with respect thereto; (ii) any amendment,
modification, breach or other event shall occur under the Professional
Services Agreement identified on SCHEDULE 3.27 hereto which results in or
could reasonably be expected to give rise to a right to terminate such
agreement; (iii) Lucent's role as primary maintenance and operations
servicer of the Systems and network of the Borrowers is terminated for any
reason other than as a result of the Borrowers' having engaged a
replacement servicer satisfactory to the Agent and Requisite Lenders and
pursuant to documentation satisfactory to the Agent; or (iv) any event
occurs which results in an adverse change in the provision of material
services under the Professional Services Agreement or the General
Agreement identified on SCHEDULE 3.27 hereto; or".
(e) CLAUSE (R) of SECTION 9.01 is hereby amended to insert the
following new language at the end thereof:
"or in any other document or instrument delivered by KMC
Holdings to Agent or Lender pursuant to this Agreement and for which such
failure under such other document or instrument could reasonably be
expected to have a Material Adverse Effect".
(f) CLAUSE (S) of SECTION 9.01 is hereby deleted in its entirety and
the following new CLAUSE (S) is substituted therefor:
"(s) KMC Holdings or any of its Subsidiaries (other than a
Data Subsidiary) shall fail to observe or perform any covenant, condition
or agreement to be observed or performed by such Person in any Material
Agreement (other than a Loan Document, any agreement listed on SCHEDULE
3.27 or an agreement referred to in SECTION 9.01(d)), such Person fails to
cure such breach within ten (10) Business Days after written notice
thereof, and such failure is reasonably likely to result in a Material
Adverse Effect; or".
(g) SECTION 9.01 is further amended to delete each reference to
"Borrower" appearing in SECTIONS 9.01(C), (G), (H), (I), (K) and (M) and
inserting a reference to "Loan Party" in its place.
(h) SECTION 9.01 is further amended to delete each reference to "Any
Borrower or KMC Holdings", "any Borrower or KMC Holdings", "such Borrower or KMC
49
Holdings" and "any Borrower or KMC Holdings" appearing in SECTIONS 9.01(E), (F)
and (P) and substitute therefor a reference to "KMC Holdings or any of its
Subsidiaries (other than any Data Subsidiary)".
(i) SECTION 9.01 is further amended to insert new CLAUSES (T)
and (U) at the end thereof as follows:
"(t) Assets of any Loan Party with a fair market value of
$250,000 or more shall be attached, seized, levied upon or subjected to a
writ or distress warrant, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors of any Loan
Party and such condition continues for thirty (30) days or more.
(u) Any event shall occur with respect to any Data Subsidiary
(including under any Material Agreement or Debt of a Data Subsidiary and
any event described in SECTIONS 9.01(E), (F) or (G) with respect to any
Data Subsidiary) that (i) gives rise to any judgment in excess of $250,000
individually or $500,000 in the aggregate or any injunction against any
Loan Party or (ii) otherwise causes a material adverse effect on the
business, properties, operations, assets, condition (financial or
otherwise) of any Loan Party or impairs the ability of any Loan Party to
perform its obligations under the Loan Documents or the ability of any
Agent or Lender to enforce the Obligations."
1.31 AMENDMENT TO SECTION 9.02. CLAUSE (B) of SECTION 9.02 is hereby
deleted in its entirety and the following new CLAUSE (B) is substituted
therefor:
"(b) by notice to the Borrowers, declare the Obligations to be
immediately due and payable, whereupon all the Obligations shall be
immediately due and payable, and the Agent shall have the right to demand
cash collateral for the Letter of Credit Obligations in an amount equal to
one hundred five percent (105%) of such obligations, without further
notice of any kind, PROVIDED, HOWEVER, that if an Event of Default
described in SECTIONS 9.01(E) or (F) shall exist or occur, all of the
Obligations shall automatically, without declaration or notice of any
kind, be immediately due and payable and the Commitment shall be
automatically terminated."
1.32 AMENDMENT TO SECTION 9.09. SECTION 9.09 is hereby amended to
delete each reference therein to "Borrower" and insert a reference to "Loan
Party" in its place.
1.33 AMENDMENT TO SECTION 11.06. SECTION 11.06 is hereby amended to
delete the first proviso appearing therein in its entirety and substitute the
following proviso therefor:
"; PROVIDED that Borrowers shall not have any obligation to
any Indemnitee hereunder with respect to any Indemnified Matters caused by
or resulting solely from the willful misconduct or gross negligence of
such Indemnitee as determined by a final judgment of a court of competent
jurisdiction".
1.34 AMENDMENT TO SECTION 11.07. SECTION 11.07 is hereby deleted in
its entirety and the following new language is substituted therefor:
50
"SECTION 11.07. SURVIVAL OF REPRESENTATIONS AND WARRANTIES,
ETC. All warranties and representations made by any Loan Party in any Loan
Document shall survive the execution and delivery of this Agreement and
the other Loan Documents and the making and repayment of the Obligations.
The obligations of each Borrower in SECTIONS 2.07(E), 2.10(I) and 2.12,
the provisions of SECTIONS 10.01, 10.02, 10.05, 10.10(B) and 11.03, the
obligations of each Borrower in SECTIONS 11.04 and 11.05, the
indemnification obligations of each Borrower in SECTION 11.06, to the
extent the second sentence of SECTION 11.13 is applicable, all covenants
of each Borrower, and the confidentiality obligations of each Borrower in
SECTION 11.16 survive the repayment of the Obligations."
1.35 AMENDMENT TO SCHEDULE 1.01(A). SCHEDULE 1.01(A) is hereby
deleted in its entirety and the following new SCHEDULE 1.01(A) in the form
attached hereto as ATTACHMENT C is substituted therefor.
1.36 AMENDMENT TO SCHEDULES. The Schedules are further amended by
inserting the following new Schedules in sequential order: SCHEDULE 2.03 in the
form attached hereto as ATTACHMENT D, SCHEDULE 3.25 in the form of ATTACHMENT E
annexed hereto, SCHEDULE 3.26 in the form of ATTACHMENT F annexed hereto,
SCHEDULE 3.27 in the form of ATTACHMENT G annexed hereto and SCHEDULE 5.06 in
the form of ATTACHMENT O hereto.
1.37 AMENDMENT TO ANNEX B. ANNEX B of the Loan Agreement is hereby
deleted in its entirety and the following new ANNEX B in the form attached
hereto as ATTACHMENT H is substituted therefor.
1.38 AMENDMENT TO ANNEX C. ANNEX C of the Loan Agreement is hereby
deleted in its entirety and the following new ANNEX C in the form attached
hereto as ATTACHMENT I is substituted therefor.
1.39 AMENDMENT TO EXHIBIT F. EXHIBIT F of the Loan Agreement is
hereby deleted in its entirety and the following new EXHIBIT F in the form of
ATTACHMENT P is substituted therefor.
2. LIMITED WAIVERS TO LOAN AGREEMENT.
(a) The Borrowers have requested that the Lenders waive certain
Defaults and Events of Default that have occurred and are continuing under
SECTION 9.01(B) of the Loan Agreement and, as a material inducement to the
Agents and Lenders to enter into this Amendment, agree to make additional
extensions of credit to the Borrowers under the Loan Agreement after the date
hereof and waive such Defaults and Events of Default pursuant to this XXXXXXX 0,
XXX Xxxxxxxx and the Borrowers have agreed that KMC Holdings and certain of its
Subsidiaries shall grant additional Liens on and security interests in
substantially all of their assets as set forth SECTIONS 1.12(I) and 4 hereof.
(b) On the basis of the representations and warranties contained in
this Amendment, and subject to the terms and conditions of this Amendment, the
Agents and Requisite Lenders hereby agree to waive any Default or Event of
51
Default which may have occurred under SECTION 9.01(B) of the Loan Agreement
solely as a result of the Borrowers' failure to be in compliance with the
covenants set forth in SECTION 7.01(B) of the Loan Agreement for the fiscal
quarter ending March 31, 2001.
3. LIMITATION OF WAIVER. Without limiting the generality of the
provisions of SECTION 11.02(B) of the Loan Agreement, the waiver set forth above
shall be limited precisely as written and relates solely to noncompliance by the
Borrowers with the provisions of SECTION 7.01(B) and 9.01(B) of the Loan
Agreement in the manner and to the extent described above and nothing in this
Amendment shall be deemed to:
(a) constitute a waiver of compliance by Borrower with respect to
(i) SECTION 7.01(B) or 9.01(B) of the Loan Agreement in any other instance or
(ii) any other term, provision or condition of the Loan Agreement or any other
instrument or agreement referred to therein; or
(b) prejudice any right or remedy that the Agents or any Lender may
now have (except to the extent such right or remedy was based upon existing
defaults that will not exist after giving effect to this Amendment) or may have
in the future under or in connection with the Loan Agreement or any other
instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Loan Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
4. CONDITIONS PRECEDENT. This Amendment shall become effective as of
the date above written (the "FOURTH AMENDMENT EFFECTIVE DATE"), if, and only if,
the following conditions are satisfied:
(a) the Agent shall have received the following items, in each case
in form and substance satisfactory to the Agent and the Collateral Agent:
(1) this Amendment duly executed by the Borrowers, the Lenders
and the Agents;
(2) the KMC Holdings Guaranty, as amended and restated on the Fourth
Amendment Effective Date in the form of ATTACHMENT A annexed hereto, duly
executed by KMC Holdings;
(3) a Reaffirmation of Guaranty in the form of ATTACHMENT J annexed
hereto duly executed by KMC Holdings, Services I and Services II;
(4) a Warrant Agreement substantially in the form of ATTACHMENT K
annexed hereto duly executed by KMC Holdings, the Agent, as warrant agent and as
Agent, and each Lender;
(5) a Warrant Registration Rights Agreement substantially in the
form of ATTACHMENT L annexed hereto duly executed by KMC Holdings, the Agent and
each Lender;
(6) the written opinion of special counsel for the Borrowers and KMC
Holdings, dated the Fourth Amendment Effective Date, addressed to the Agent, the
52
Collateral Agent and the Lenders satisfactory to (and containing only such
qualifications and limitations as are satisfactory to) counsel to the Agent,
with opinion as to, among other things, (i) the enforceability of the Fourth
Amendment, the Loan Agreement as amended by the Fourth Amendment, the KMC
Holdings Guaranty and Security Agreement dated as of the Fourth Amendment
Effective Date, any other security documents executed on the Fourth Amendment
Effective Date, and the Warrant Agreement (ii) the perfection of any liens
granted on the Fourth Amendment Effective Date, (iii) no conflicts with
applicable laws or contractual obligations, and (iv) the due authorization,
execution and delivery of the Fourth Amendment and the other Loan Documents to
be delivered on the Fourth Amendment Effective Date and the Warrant Agreement,
which opinions shall be substantially in the form of ATTACHMENT M annexed
hereto;
(7) evidence that all commitments to make loans or other extensions
of credit under that certain Loan and Security Agreement dated as of June 30,
2000 among KMC Telecom IV, Inc., a Delaware corporation, KMC IV Services LLC, a
Delaware limited liability company, and KMC Telecom Leasing IV of Virginia,
Inc., a Virginia corporation, as borrowers, the financial institutions from time
to time party thereto as lenders, Lucent, as agent for the lenders, and State
Street Bank and Trust Company, as collateral agent for the lenders, as amended
or modified (the "KMC IV LOAN AGREEMENT"), have been terminated; and
(8) officer's certificates of KMC Holdings dated as of the Fourth
Amendment Effective Date, in form and substance satisfactory to the Agent,
certifying (i) that all of the Series F Senior Redeemable, Exchangeable PIK
Preferred Stock of KMC Holdings has been retired, terminated, cancelled, or
converted into Series E Preferred Stock and (ii) as to the status of KMC QV, KMC
Funding V, Data LLC, KMC VIII and KMC IX.
(b) the Collateral Agent shall have received evidence satisfactory
to the Agent and Collateral Agent that the Collateral Agent's security interests
in the Collateral have been properly perfected and constitute first and prior
security interests subject only to Permitted Liens, including by (A) filing
Mortgages, the Collateral Assignment of Licenses, the Collateral Assignment of
Leases, leasehold mortgages and UCC-1 financing statements (including, without
limitation, fixture filings) in certain filing and recording offices and (C)
taking possession of stock certificates and other instruments, in each case, as
requested by the Collateral Agent;
(c) KMC Holdings shall have contributed as a capital contribution to
the Borrowers by depositing same into an Account of the Borrowers subject to a
Restricted Account Agreement not less than $200,000,000, which proceeds shall
not be required to be applied to prepay the Loans and reduce the Revolving Loan
Commitment Amount;
(d) the Agent shall have received such additional updates to the
Schedules to the Loan Agreement as Borrowers may deliver to the Agent, which
updates shall be satisfactory to the Agent;
(e) Lucent and the Agents shall have received amendments to the
Professional Services Agreement and the General Agreement in form and substance
satisfactory to Lucent; and
53
(f) the Agents and Lenders shall have received such other documents,
agreements and instruments as the Agents may reasonably require.
5. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. In order to
induce the Lenders to enter into this Amendment and to amend the Loan Agreement
in the manner provided herein, each Borrower hereby represents and warrants, as
to each Borrower or each Loan Party, as the case may be, that after giving
effect to this Amendment:
(a) AUTHORIZATION OF AGREEMENTS; BINDING OBLIGATIONS. The execution
and delivery of this Amendment and the performance of the Loan Agreement as
amended by this Amendment (as so amended, the "AMENDED Agreement") have been
duly authorized by all necessary corporate action on the part of such Borrower
and constitute the legal, valid and binding obligations of such Borrower,
enforceable against such Borrower in accordance with their respective terms
except as may be limited by bankruptcy, insolvency reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
(b) CORPORATE POWER AND AUTHORITY. Such Borrower has all requisite
corporate power and authority to enter into this Amendment, and such Loan Party
has all requisite corporate power and authority to carry out the transactions
contemplated by, and perform its obligations under, the Loan Agreement, as
amended by this Amendment.
(c) NO CONFLICT. The execution and delivery by such Borrower of this
Amendment and the performance by such Borrower of the Amended Agreement do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to such Borrower, the Certificate or Articles of
Incorporation or Bylaws (or comparable organizational documents) of such
Borrower or any order, judgment or decree of any court or other agency or
government binding on such Borrower, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
contractual obligation of such Borrower, (iii) result in or require the creation
or imposition of any Lien upon any of the properties or assets of such Borrower
(other than Liens created under any of the Loan Documents in favor of the
Collateral Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any contractual
obligation of such Borrower.
(d) GOVERNMENT CONSENTS. The execution and delivery by such Borrower
of this Amendment and the performance by such Borrower of the Amended Agreement
do not and will not require any registration with, consent or approval of or
notice to, or other action to, with or by, any multi-national, federal,
provincial, state, municipal, local or other governmental authority or
regulatory body.
(e) ABSENCE OF DEFAULTS. As of the date hereof, and after giving
effect to this Amendment, such Borrower shall be in compliance with all the
terms and provisions set forth in the Amended Agreement on its part to be
observed or performed, and no Event of Default or Default shall have occurred
and be continuing
(f) REAFFIRMATION. Upon the effectiveness of this Amendment, such
Borrower hereby reaffirms all representations and warranties made in the Loan
54
Agreement, and to the extent the same are not amended hereby, agrees that all
such representations 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.
6. 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,"
"this 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.
7. RELEASE AND DISCHARGE OF CLAIMS AND ACTIONS. TO INDUCE THE AGENTS
AND THE LENDERS TO ENTER INTO THIS AMENDMENT, EACH BORROWER AND EACH GUARANTOR
ON BEHALF OF ITSELF AND EACH OF ITS SUBSIDIARIES AND AFFILIATES EACH HEREBY
KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY RELEASES, ACQUITS AND
FOREVER DISCHARGES THE AGENT AND EACH LENDER AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL LIABILITIES,
CLAIMS, DEMANDS, ACTIONS OR CAUSES OF ACTION OF ANY KIND (IF ANY THERE BE),
WHETHER ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE, DISPUTED OR UNDISPUTED, AT
LAW OR IN EQUITY, THAT ANY BORROWER OR ANY GUARANTOR NOW HAVE OR EVER HAD
AGAINST ANY AGENTS OR LENDER ARISING UNDER, BASED UPON OR IN CONNECTION WITH THE
LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER FROM THE
BEGINNING OF THE WORLD TO AND INCLUDING THE FOURTH AMENDMENT EFFECTIVE DATE;
PROVIDED HOWEVER THAT NOTHING IN THIS SECTION 7 SHALL BE CONSTRUED TO RELEASE OR
DISCHARGE LUCENT FROM ANY LIABILITIES, CLAIMS, DEMANDS, ACTIONS OR CAUSES OF
ACTION OF ANY KIND WHICH ANY BORROWER OR GUARANTOR NOW HAS OR EVER MAY HAVE HAD
AGAINST LUCENT UNDER EITHER THE KMC IV LOAN AGREEMENT OR IN CONNECTION WITH THE
PATHSTAR SYSTEMS IN HICKORY, NORTH CAROLINA, AND WILMINGTON, NORTH CAROLINA.
55
8. 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.
9. 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.
10. 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.
56
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/ XXXXXXXXX XXXXXXXXX
-----------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Treasurer
KMC TELECOM LEASING I LLC
By: KMC TELECOM INC., as its Sole Member
By: /S/ XXXXXXXXX XXXXXXXXX
-----------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Treasurer
KMC TELECOM LEASING II LLC
By: KMC TELECOM II, INC., as its Sole
Member
By: /S/ XXXXXXXXX XXXXXXXXX
-----------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Treasurer
S-1
KMC TELECOM LEASING III LLC
KMC III SERVICES LLC
In each case:
By: KMC TELECOM III, INC., as its Sole
Member
By: /S/ XXXXXXXXX XXXXXXXXX
-----------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Treasurer
FIRST UNION NATIONAL BANK, as the Agent
and as a Lender
By: /S/ X.X. XXXXXXX
-----------------------
Name: X.X. Xxxxxxx
Title: Senior Vice President
CIT LENDING SERVICES CORPORATION (f/k/a
NEWCOURT COMMERCIAL FINANCE CORPORATION), as
the Collateral Agent and as a Lender
By: /S/ XXXX X'XXXXXX
-----------------------
Name: Xxxx X'Xxxxxx
Title: VP
CANADIAN IMPERIAL BANK OF COMMERCE, as a
Lender
By: /S/ XXXXXXXXXX XXXXXXX
-----------------------
Name: Xxxxxxxxxx Xxxxxxx
Title: Executive Director
S-2
GENERAL ELECTRIC CAPITAL CORPORATION, as
a Lender
By: /S/ XXXXX X. XXXX
-----------------------
Name: Xxxxx X. Xxxx
Title: Manager - Operations
LUCENT TECHNOLOGIES INC., as a Lender
By: /S/ XXXX XXXX
-----------------------
Name: Xxxx Xxxx
Title: Director-NA Customer Finance
CREDIT SUISSE FIRST BOSTON, as a Lender
By: /S/ XXXXX X. XXXXXX /S/ XXXXXX XXXXXX
------------------- -----------------
Name: Xxxxx X. Xxxxxx Xxxxxx Xxxxxx
Title: Vice President Assistant Vice
President
DRESDNER BANK AG NEW YORK AND GRAND
CAYMAN BRANCHES, as a Lender
By: /S/ XXXXX XXXXXXXXX
------------------------
Name: Xxxxx Xxxxxxxxx
Title: Assistant Vice President
By: /S/ XXXXXXX X. XXXXXXXXX
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
S-3
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: /S/ XXXXXX XXXXXXXX
--------------------
Name: Xxxxxx Xxxxxxxx
Title: Sr. Vice President
UNION BANK OF CALIFORNIA, N.A., as a
Lender
By: /S/ XXXXXXX X. XXXXXXX XX
-------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice Presidenet
XXXXX XXX & FARNHAM INCORPORATED as agent
for KEYPORT LIFE INSURANCE COMPANY, as a
Lender
By: /S/ XXXXX X. GOOD
-----------------
Name: Xxxxx X. Good
Title: Sr. Vice President & Portfolio
Manager
S-4
XXXXX XXX FLOATING RATE LIMITED LIABILITY
COMPANY, as a Lender
By: /S/ XXXXX X. GOOD
------------------
Name: Xxxxx X. Good
Title: Senior Vice President
IBM CREDIT CORPORATION, as a Lender
By: /S/ XXXXXX X. XXXXXX
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Manager of Credit, Commercial &
Specialty Financing
S-5
