AMENDMENT NO. 4
TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT ("AMENDMENT") dated
as of December 31, 1999, is among KMC TELECOM INC., a Delaware corporation
("KMC"), KMC TELECOM II, INC., a Delaware corporation ("KMC II"), 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, KMC II,
KMC Virginia, Leasing I and Leasing II being hereinafter collectively referred
to hereinafter as the "BORROWERS"), the financial institutions from time to time
parties thereto (the "LENDERS"), FIRST UNION NATIONAL BANK, as administrative
agent for the Lenders (the "AGENT") and NEWCOURT COMMERCIAL FINANCE CORPORATION
(f/k/a AT&T COMMERCIAL FINANCE CORPORATION), an affiliate of The CIT Group,
Inc., as collateral agent for the Lenders (the "COLLATERAL AGENT"; the Agent
together with the Collateral Agent being referred to as the "AGENTS").
WHEREAS, the Borrowers, the Agents and the Lenders are parties to
that certain Loan and Security Agreement (the "LOAN AGREEMENT"; undefined
capitalized terms used herein shall have the meanings assigned thereto in the
Loan Agreement) dated as of December 22, 1998, as amended by Amendment No.1
thereto dated as of March 3, 1999, Amendment No. 2 thereto dated as of August
13, 1999, and Waiver and Amendment No. 3 thereto dated as of October 29, 1999,
pursuant to which the Lenders have agreed to make certain "Loans" and other
financial accommodations to the Borrowers; and
WHEREAS, the Borrowers have requested that the Agents and the
Lenders amend the Loan Agreement in the manner set forth herein, and the Agents
and the Lenders have agreed to such request;
NOW, THEREFORE, in consideration of the premises set forth above,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Borrowers, the Agents and the Lenders agree
as follows:
1. AMENDMENT TO THE LOAN AGREEMENT. Effective as of the date first
above written and subject to the execution of this Amendment by the parties
hereto, the Loan Agreement shall be and hereby is amended as follows:
1.1 SECTION 7.01(b) is hereby amended to add the following proviso
thereto: ---------------
"PROVIDED, HOWEVER, that as of the last day of each fiscal quarter
occurring on or after December 31, 1999, the Borrowers shall on a combined basis
have revenues at least equal to the amount set forth below for such date:
FISCAL QUARTER ENDING MINIMUM REVENUES
December 31, 1999 $18,000,000
March 31, 2000 $23,821,000
June 30, 2000 $31,338,000
September 30, 2000 $37,803,000
December 31, 2000 $44,482,000
March 31, 2001 $54,678,000"
1.2 SECTION 7.01(c)(i) is hereby amended to delete the proviso
thereto and to substitute the following proviso therefor:
"PROVIDED, HOWEVER, that as of the last day of each fiscal quarter
occurring on or after December 31, 1999 through and including December 31, 2000,
the Borrowers shall not permit the EBITDA losses for all the Borrowers on a
combined basis for the two fiscal quarters then ending to exceed the amount set
forth below for such date:
FISCAL QUARTER ENDING EBITDA LOSSES
December 31, 1999 ($50,400,000)
March 31, 2000 ($38,700,000)
June 30, 2000 ($25,001,000)
September 30, 2000 ($13,823,000)
December 31, 2000 ($4,157,000)"
1.3 SECTION 7.01(c)(ii) shall be deleted in its entirety and
replaced with the following new SECTION 7.01(c)(ii):
"As of the last day of the fiscal quarter ending March 31, 2001, the
Borrowers shall not permit EBITDA for all the Borrowers on a combined basis for
the two fiscal quarters then ending to be less than $1,688,000."
2. CONDITIONS PRECEDENT. This Amendment shall become effective as of
the date above written, if, and only if, the Agents have received duly executed
originals of this Amendment from the Borrowers, the Requisite Lenders and the
Agents on or prior to January __, 2000.
3. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. The Borrowers
hereby represent and warrant as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of the Borrowers and are
enforceable against the Borrowers in accordance with their terms.
(b) Upon the effectiveness of this Amendment, the Borrowers hereby
reaffirm all representations and warranties made in the Loan Agreement, and to
the extent the same are not amended hereby, agree that all such representations
and warranties shall be deemed to have been remade as of the date of delivery of
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this Amendment, unless and to the extent that any such representation and
warranty is stated to relate solely to an earlier date, in which case such
representation and warranty shall be true and correct as of such earlier date.
(c) As of the date hereof, and after giving effect to this
Amendment, each Borrower shall be in compliance with all the terms and
provisions set forth in the Loan Agreement, as amended hereby, on its part to be
observed or performed, and no Event of Default or Default shall have occurred
and be continuing.
4. REFERENCE TO AND EFFECT ON THE LOAN AGREEMENT.
(a) Upon the effectiveness of Section 1 hereof, on and after the
date hereof, each reference in the Loan Agreement to "this Loan Agreement,"
"hereunder," "hereof," "herein" or words of like import shall mean and be a
reference to the Loan Agreement as amended hereby, and each reference to the
Loan Agreement in any other document, instrument or agreement shall mean and be
a reference to the Loan Agreement as modified hereby.
(b) The Loan Agreement, as amended hereby, and all other documents,
instruments and agreements executed and/or delivered in connection therewith,
shall remain in full force and effect, and are hereby ratified and confirmed.
(c) Except as expressly provided herein, the execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of the Agents or the Lenders, nor constitute a waiver of any
provision of the Loan Agreement or any other documents, instruments and
agreements executed and/or delivered in connection therewith.
5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE OTHER REMAINING TERMS OF THE LOAN AGREEMENT AND THE
INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAW PROVISIONS) OF THE STATE OF NEW
YORK.
6. PARAGRAPH HEADINGS. The paragraph headings contained in this
Amendment are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement among the parties thereto.
7. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
THE BORROWERS: KMC TELECOM INC.
KMC TELECOM II, INC.
KMC TELECOM OF VIRGINIA, INC.
In each case:
By: /s/
-----------------------
Name: Xxxxx X. Xxxxxxxx
Title: CFO
KMC TELECOM LEASING I LLC
By: KMC TELECOM INC., as its Sole Member
By: /s/
-----------------------
Name: Xxxxx X. Xxxxxxxx
Title: CFO
KMC TELECOM LEASING I LLC
By: KMC TELECOM II, INC., as its Sole Member
By: /s/
-----------------------
Name: Xxxxx X. Xxxxxxxx
Title: CFO
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FIRST UNION NATIONAL BANK, as the
Agent and as a Lender
By: /s/
-------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Senior Vice President
NEWCOURT COMMERCIAL FINANCE CORPORATION
(f/k/a AT&T COMMERCIAL FINANCE
CORPORATION), an affiliate of The CIT
Group, Inc., as the Collateral Agent and
as a Lender
By: /s/
-------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
CANADIAN IMPERIAL BANK OF
COMMERCE, as a Lender
By: /s/
-------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Director, CIBC World
Markets Corp. As Agent
GENERAL ELECTRIC CAPITAL
CORPORATION, as a Lender
By: /s/
-------------------------
Name: Xxxx X. Xxxxx
Title: Manager-Operations
BANKBOSTON, N.A., as a Lender
By: /s/
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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CREDIT SUISSE FIRST BOSTON, as a
Lender
By: /s/
--------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
By: /s/
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
DRESDNER BANK AG NEW YORK AND
GRAND CAYMAN BRANCHES, as a Lender
By: /s/
--------------------------
Name: Xxxx X. Fleseler
Title: Senior Vice President
By: /s/
--------------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Assistant Vice President
XXXXXX XXXXXXX SENIOR FUNDING,
INC., as a Lender
By: /s/
--------------------------
Name: T. Xxxxxx Xxxxxxx XX
Title: Vice President
By:
--------------------------
Name:
Title:
XXXXXX XXXXXXX XXXX XXXXXX
PRIME INCOME TRUST, as a Lender
By: /s/
--------------------------
Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
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XXXXX XXXX XX XXXXXXXXXX, N.A., as a
Lender
By: /s/
--------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
KEYPORT LIFE INSURANCE COMPANY,
as a Lender
By: /s/
--------------------------
Name: Xxxxx X. Good
Title: Vice President & Portfolio Manager
XXXXX XXX FLOATING RATE LIMITED
LIABILITY COMPANY, as a Lender
By: /s/
--------------------------
Name: Xxxxx X. Good
Title: Vice President
Xxxxx Xxx & Xxxxxxx Incorporated,
Advisor to the Xxxxx Xxx Floating Rate
Limited Liability Company
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REAFFIRMATION OF GUARANTY
Reference is hereby made to (i) that certain Guaranty dated as of
December 22, 1998 (as amended, restated, supplemented or otherwise modified from
time to time, the "GUARANTY") by KMC Telecom Holdings, Inc., a Delaware
corporation (the "GUARANTOR"), in favor of Newcourt Commercial Finance
Corporation (formerly known as AT&T Commercial Finance Corporation), an
affiliate of The CIT Group, Inc., as collateral agent for the ratable benefit of
the "Lenders" (defined below) (in such capacity, the "COLLATERAL AGENT"), (ii)
that certain Loan and Security Agreement dated as of December 22, 1998 (as
amended, restated, supplemented or otherwise modified from time to time, the
"LOAN AGREEMENT") among KMC Telecom, Inc., KMC Telecom II, Inc., KMC Telecom of
Virginia, Inc., KMC Telecom Leasing I LLC, KMC Telecom Leasing II LLC (each of
the foregoing being referred to collectively as the "BORROWERS"), the financial
institutions from time to time parties thereto (the "Lenders"), First Union
National Bank, as administrative agent for the Lenders (the "Agent"), and the
Collateral Agent, and (iii) that certain Amendment No. 4 to Loan and Security
Agreement dated as of December 31, 1999 (the "AMENDMENT") among the Borrowers,
the Lenders, the Agent and the Collateral Agent.
The Guarantor, by its signature below, without in any way
establishing a course of dealing, hereby (i) acknowledges and consents to the
execution and delivery of the Amendment by the parties thereto, (ii) agrees that
the Amendment shall not limit or diminish the obligations of the Guarantor to
guarantee all of the "Obligations" of each Borrower under and as defined in the
Loan Agreement and such other amounts as are more specifically described in the
Guaranty, (iii) reaffirms all of its obligations under the Guaranty, and (iv)
agrees that the Guaranty remains in full force and effect and is hereby ratified
and confirmed.
IN WITNESS WHEREOF, this instrument has been executed and delivered
as of this 31st day of December, 1999.
KMC TELECOM HOLDINGS, INC.
By: /s/
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: CFO, Executive Vice President and
Secretary
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