FIRST AMENDMENT TO SECOND AMENDED
AND RESTATED LOAN AGREEMENT
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AGREEMENT (the
"Agreement") is made and entered into as of this 6th day of May, 1998, between
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation having an office at
3379 Peachtree Road, N.E., Suite 600, Atlanta, Georgia 30326, as lender and
agent ("Lender"), and BUSINESS TELECOM, INC., a North Carolina corporation
having an office at 4300 Six Forks Road, Raleigh, North Carolina 27609
("Borrower").
WITNESSETH:
WHEREAS, Lender and Borrower are party to that certain Second Amended
and Restated Loan Agreement, dated as of September 22, 1997 (the "Loan
Agreement;" all capitalized terms used herein and not otherwise expressly
defined herein shall have the respective meanings given to such terms in the
Loan Agreement); and
WHEREAS, Lender and Borrower desire to amend the Loan Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and legal sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Amendments to the Loan Agreement. The Loan Agreement is hereby
amended as follows:
(a) Subsection (b) of Section 1.9 of the Loan Agreement is
hereby amended by deleting therefrom the number "one-quarter of one percent
(0.25%)" and inserting in lieu thereof the number "three-eighths of one percent
(0.375%)";
(b) Clause (i) of Section 8.2(b) of the Loan Agreement is
hereby amended by deleting the existing language in its entirety and inserting
in lieu thereof, the following "declare all or any portion of the Obligations to
be forthwith due and payable, including, without limitation, contingent
liabilities with respect to Letter of Credit Obligations, whereupon such
Obligations shall become and be due and payable; provided, however,
notwithstanding the foregoing but subject to the immediately following proviso,
so long as the aggregate amount of Letter of Credit Obligations do not exceed
$1,000,000, Lender shall not declare any Letter of Credit Obligations due or
payable prior to July 1, 1998; and, provided, further, that upon the occurrence
of an Event of Default specified in Sections 8.1(f), (g), (h) or (j), the
Obligations (including, without limitation, contingent liabilities with respect
to Letter of Credit Obligations) shall become immediately due and payable
without declaration, notice or demand by Agent;";
(c) Clause (ii) of Section 8.2(b) of the Loan Agreement is
hereby amended by inserting immediately at the end of such clause the following;
"provided, however, so long as the
aggregate amount of Letter of Credit Obligations do not exceed $1,000,000,
Lender shall not require the cash collateralization of any such obligations
prior to July 1, 1998."; and
(d) The definition of the term Maximum Revolving Credit Loan
set forth in Section 1.1(a) of the Loan Agreement is hereby amended by inserting
immediately before the end of the such definition "provided, however, for
purposes of determining the amount of any fee pursuant to Section 1.9(b) of the
Loan Agreement, Maximum Revolving Credit Loan shall be $60 million.".
2. Representations, Warranties, Covenants and Acknowledgments; Release.
To induce the Lender to enter into this Agreement:
(a) Borrower does hereby represent and warrant that (i) as of
the date hereof, all of the representations and warranties made or deemed to be
made under the Loan Documents are true and correct, except such representations
and warranties which, by their express terms, are applicable only to the Closing
Date, (ii) as of the date hereof, after giving effect to the terms hereof and
other than as contemplated by that certain waiver letter, dated of even date
herewith, from Lender to Borrower (the "Waiver"), there exists no Default or
Event of Default under the Loan Agreement or any of the Loan Documents, (iii)
Borrower has the power and is duly authorized to enter into, deliver and perform
this Agreement, and (iv) this Agreement and each of the Loan Documents is the
legal, valid and binding obligation of the Borrower enforceable against it in
accordance with its terms: and
(b) Borrower does hereby reaffirm each of the agreements,
covenants, and undertakings set forth in the Loan Agreement and each and every
other Loan Document executed in connection therewith or pursuant thereto as if
Borrower were making said agreements, covenants and undertakings on the date
hereof; and
(c) Borrower does hereby acknowledge and agree that no right
of offset, defense, counterclaim, claim, causes of action or objection in favor
of Borrower against Lender exists arising out of or with respect to (i) the
Obligations, this Agreement, the Loan Agreement or any of the other Loan
Documents, (ii) any other documents now or heretofore evidencing, securing or in
any way relating to the foregoing or (iii) the administration or funding of the
Revolving Credit Loans; and
(d) Borrower does hereby expressly waive, release and
relinquish any and all defenses, setoffs, counterclaims, causes of action or
objections, if any, against Lender.
3. Conditions Precedent. The effectiveness of this Agreement is subject
to the following conditions precedent:
(a) Delivery of Documents. Borrower shall have delivered to
Lender, all in form and substance acceptable to Lender in its sole discretion,
executed counterpart originals of this Agreement;
(b) Accuracy of Representations and Warranties. All of the
representations and warranties made or deemed to be made in this Agreement and
under the Loan Documents
2
shall be true and correct as of the date of this Agreement, except such
representations and warranties which, by their terms, are applicable to a prior
specific date or period; and
(c) Expenses. Borrower shall have paid to Lender the costs and
expenses referred to in Section 5 hereof.
4. Effect of this Agreement. As expressly amended hereby, the Loan
Agreement shall be and remain in full force and effect as originally written,
and shall constitute the legal, valid, binding and enforceable obligations of
Borrower to Lender.
5. Expenses. Borrower agrees to pay on demand all reasonable costs and
expenses of Lender in connection with the preparation, execution, delivery and
enforcement of this Agreement, the Waiver and all other documents and any other
transactions contemplated hereby, including, without limitation, the reasonable
fees and out-of-pocket expenses of legal counsel to Lender. Borrower authorizes
Lender, as Agent, to charge the foregoing expenses to the Borrower's loan
account by increasing the principal amount of the Revolving Credit Loans by the
amount of such expenses owed by Borrower in connection herewith.
6. Miscellaneous. Borrower agrees to take such further action as Lender
shall reasonably request in connection herewith to evidence the amendments
herein contained to the Loan Agreement. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which, when so executed and delivered, shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same instrument. This Agreement shall be binding upon and inure to the benefit
of the successors and permitted assigns of the parties hereto. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Georgia.
[Signature pages follow]
3
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be duly executed as of the date first above written.
BUSINESS TELECOM, INC.
By: _________________________________________________________
Name: Brian K. Branson
Title: Chief Financial Officer
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and Lender
By: _________________________________________________________
Name: Elaine L. Moore
Title: Senior Vice President as duly authorized
4
ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS
The undersigned each hereby acknowledge and agree to the foregoing
First Amendment to Second Amended and Restated Loan Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals this 6th day of May, 1998.
BTI TELECOM CORP.
By: _________________________________________________________
Its:
5
SECOND AMENDMENT TO SECOND AMENDED
AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(the "Agreement") is made and entered into as of this ___ day of June, 1998,
between GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation having an
office at 3379 Peachtree Road, N.E., Suite 600, Atlanta, Georgia 30326, as
lender and agent ("Lender"), and BUSINESS TELECOM, INC., a North Carolina
corporation having an office at 4300 Six Forks Road, Raleigh, North Carolina
27609 ("Borrower").
WITNESSETH:
WHEREAS, Lender and Borrower are party to that certain Second Amended
and Restated Loan Agreement, dated as of September 22, 1997 (as the same has
been amended by that certain First Amendment to Second Amended and Restated Loan
Agreement, dated May 6, 1998, as so amended, the "Loan Agreement;" all
capitalized terms used herein and not otherwise expressly defined herein shall
have the respective meanings given to such terms in the Loan Agreement); and
WHEREAS, Lender and Borrower desire to amend the Loan Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and legal sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
I. Amendments to the Loan Agreement. The Loan Agreement is hereby
amended as follows:
A. Section 1.1(a) of the Loan Agreement is amended by adding
the following defined terms thereto:
"Advances" shall mean and include the Revolving
Credit Advances and the Capex Advances.
"Borrowing Base" shall mean at any time an amount
equal to the sum at such time of: (a) up to eighty-five
percent (85%) of the aggregate amount of Eligible Accounts;
minus (b) the sum of such reserves as Agent may reasonably
deem appropriate from time to time.
"Capex Advance" shall have the meaning ascribed to
such term in Section 1.2A(1) hereof.
"Capex Advance Request" shall have the meaning
ascribed to such term in Section 1.2A(2) hereof.
6
"Capex Advance Request Date" shall mean the date on
which Borrower requests a Capex Advance; provided, however,
that Borrower may submit a Capex Advance Request at any time
during the term hereof in the event that the amount of
Borrower's Eligible Capital Expenditures equal or exceed
$1,000,000.
"Capex Advance Term" shall mean the period beginning
on the date of the execution of the Second Amendment to the
Agreement through and including the Commitment Termination
Date.
"Capex Borrowing Availability" shall mean, for the
Capex Advance Term, an amount equal to the lesser of (i)
eighty-five percent (85%) of the Eligible Capital Expenditures
during the Capex Advance Term, or (ii) the Maximum Capex Loan.
"Capex Certificate" shall mean a certificate in the
form attached to the Agreement as Exhibit A-3.
"Capex Facility" shall mean the secured capital
expenditure facility made available by Lenders to Borrower in
an amount not to exceed the Maximum Capex Loan.
"Capex Note" shall mean a note dated June __, 1998,
substantially in the form of Exhibit G-1 to the Agreement,
evidencing the Obligation of Borrower to pay the aggregate
principal amount of the Capex Advances made by Lenders to
Borrower together with all earned or accrued, but unpaid,
interest thereon, as the same may be amended, modified or
supplemented from time to time (and any promissory note or
notes that may be issued from time to time in substitution,
renewal, extension, replacement or exchange therefor, whether
payable to Lenders or different lenders, whether issued in
connection with a Person becoming a lender after the Closing
Date or otherwise).
"Eligible Accounts" shall mean, as at any date, the
aggregate amount of all Accounts at such date payable to
Borrower, excluding, in Agent's reasonable discretion, any
Account:
(1) which does not arise from the sale of
goods or the performance of services by Borrower in
the ordinary course of Borrower's business;
(2) upon which (i) Borrower's right to
receive payment is not absolute or is contingent upon
the fulfillment of any condition whatever or (ii)
Borrower is not able to bring suit or otherwise
enforce its remedies against the Account Debtor
through judicial process;
(3) against which is asserted any defense,
counterclaim or setoff;
(4) that is not a true and correct statement
of a bona fide Indebtedness incurred in the amount of
the Account for goods or services sold and accepted
by the Account Debtor obligated upon such Account;
7
(5) that is not owned by Borrower or is
subject to any right, claim, or interest of another,
other than the Lien in favor of Agent, on behalf of
Lenders;
(6) that arises from a sale to or
performance of services for an employee, Affiliate,
parent or Subsidiary of Borrower, or an entity which
has common officers or directors with Borrower;
(7) that is the obligation of an Account
Debtor that is the federal government or a political
subdivision thereof unless Agent has agreed to the
contrary in writing and Borrower has complied with
the Federal Assignment of Claims Acts of 1940, and
any amendments thereto, with respect to such
obligation;
(8) that is the obligation of an Account
Debtor located in a foreign country;
(9) that is the obligation of an Account
Debtor to whom Borrower is liable for goods sold or
services rendered by the Account Debtor to Borrower;
(10) that arises with respect to goods which
are delivered on a cash-on-delivery basis or placed
on consignment, guaranteed sale or other terms by
reason of which the payment by the Account Debtor may
be conditional;
(11) that is in default; provided, however,
that an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the Account is not paid within
sixty (60) days from its due date or ninety
(90) days from its invoice date;
(ii) if any Account Debtor
obligated on such Account suspends business,
makes a general assignment for the benefit
of creditors, or fails to pay its debts
generally as they come due; or
(iii) if any petition is filed by
or against any Account Debtor obligated upon
such Account under any bankruptcy law or any
other national, state or provincial
receivership, insolvency relief or other law
or laws for the relief of debtors;
(12) which is the obligations of an Account
Debtor that is in default (as defined in subparagraph
(11) above) on fifty percent (50%) or more of the
Accounts upon which such Account Debtor is obligated;
(13) with net credit balances over sixty
(60) days past their due date or ninety (90) days
past their invoice date;
8
(14) which arises from any bill-and-hold or
other sale of goods which remain in Borrower's
possession or under Borrower's control;
(15) that is not otherwise reasonably
acceptable to Agent:
(16) as to which Agent's interest therein is
not a first-priority perfected security interest;
(17) to the extent the Account exceeds any
credit limit established by Agent in Agent's
reasonable discretion; or
(18) as to which any of Borrower's
representations or warranties pertaining to Accounts
are untrue in any material respect.
"Eligible Capital Expenditures" shall mean any and
all payments and accruals for fixed assets (including, without
limitation, the appraised value of currently owned fixed assets),
improvements or additions and accruals for fixed assets, improvements
or additions and associated installation costs that are related to
providing telecommunication services to customers or monitoring the
network that provides such telecommunications services and that have a
useful life of more than one year and that are required to be
capitalized under GAAP which is owned by Borrower and not subject to
any right, claim or interest of another other than a Lien in favor of
Agent, on behalf of Lenders, including leasehold improvements at
switching centers and POP (point-of-presence) sites and internal
telecommunications equipment, but excluding line access charges, leased
pagers, technician vans and replacement equipment included in the vans
and any other such expenditures not otherwise acceptable to Agent in
its reasonable discretion; provided, however, notwithstanding anything
to the contrary contained in this Agreement, no payments or accruals
with respect to that certain IRU Agreement, dated as of October 31,
1997, by and between Qwest Communications Corporation and Borrower
shall be included or deemed to constitute Eligible Capital
Expenditures, provided, further that the value of all Eligible Capital
Expenditures shall be based on (i) the most current appraisal received
by Agent, which appraisal shall have been conducted by an appraiser
acceptable to Agent in its sole discretion and shall be in a form
satisfactory to Agent related to fixed assets currently owned by
Borrower, or (ii) the invoice amount paid by Borrower for fixed assets
purchased by Borrower after March 1, 1998, which fixed assets would
otherwise qualify as Eligible Capital Expenditures hereunder; provided
that simultaneously with any Capex Advance Request related to such
fixed assets, which would otherwise qualify as Eligible Capital
Expenditures hereunder, Agent shall be provided copies of all such
invoices upon request and shall determine the value of such fixed
assets therefrom.
"Maximum Capex Loan" shall mean $30,000,000.00 at any
time on or before September 22, 2000, $25,000,000 at any time from
September 23, 2000 to September 22, 2001, and $20,000,000 at any time
from September 23, 2001 to the Commitment Termination Date.
9
"Type of Loan" shall mean, with respect to any Loan,
that such Loan is (i) the Revolving Credit Facility or (ii) the Capex
Facility, each of which shall be a "Type" of Loan.
A. Section 1.1(a) of the Loan Agreement is hereby further amended with
the following changes:
(i) The definition of "Applicable Spread" is hereby
amended by adding thereto the phrase "and the Capex Facility"
following the phrase "Revolving Credit Facility."
(ii) The definition of "Commitment Termination Date"
is hereby amended by deleting therefrom the phrase "Revolving
Credit."
(iii) The definition of "LIBOR Option" is hereby
amended by adding thereto the phrase "with respect to each
Type of Loan" after the word "mean."
(iv) The definition of "Loan Documents" is hereby
amended by deleting the phrase "Revolving Credit" therefrom.
(v) The definition of "Loans" is hereby amended by
adding thereto the phrase "and the Capex Facility" following
the phrase "Revolving Credit Facility."
(vi) The definition of "Maximum Revolving Credit
Loan" is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"Maximum Revolving Credit Loan" shall mean an amount equal to
$30,000,000.00
(vii) The definition of "Notes" is hereby deleted in
its entirety and the following is inserted in lieu thereof:
"Notes" shall mean and include the Revolving Credit
Note and the Capex Note.
(viii) The definition of "Prime Rate Option" is
hereby amended by adding thereto the phrase "with respect to
each Type of Loan" following the word "mean."
(ix) The definition of "Revolving Credit Borrowing
Availability" is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"Revolving Credit Borrowing Availability" shall mean,
at any time, the lesser at such time of (i) an amount
equal to the Maximum Revolving Credit Loan minus the
Letter of Credit Obligations then outstanding (if
any) and such reserves as Agent may reasonably deem
appropriate, and (ii) the Borrowing Base minus the
Letter of Credit Obligations then outstanding (if
any).
10
(x) The definition of "Termination Date" is hereby
amended by adding thereto the phrase ", the Capex Facility"
following the phrase "Revolving Credit Loan."
(xi) The definition of "Total Commitment" is hereby
amended by deleting the definition in its entirety and
inserting the following in lieu thereof:
"Total Commitment" shall mean the $30 million
Revolving Credit Facility and, initially, the $30
million Capex Facility, and thereafter, the Maximum
Capex Loan.
A. The Loan Agreement is hereby further amended by adding the following
Section 1.2A thereto, immediately following the end of Section 1.2(c):
1.2A Capital Expenditure Facility.
a) Upon and subject to the terms and
conditions of this Agreement, Lenders agree to make advances
(each a "Capex Advance"), from time to time, to Borrower
against Eligible Capital Expenditures in an aggregate amount
outstanding which shall not exceed the Capex Borrowing
Availability. Amounts repaid under the Capex Facility may not
thereafter be reborrowed. The Capex Facility shall be
evidenced by the Capex Note. The date and amount of each Capex
Advance and each payment of principal with respect thereto
shall be recorded on the books and records of Agent, which
books and records shall constitute evidence of the accuracy of
the information therein recorded.
a) On or promptly after each Capex Advance
Request Date, Borrower shall furnish Agent with a request for
a Capex Advance (each, a "Capex Advance Request") which (A)
has attached thereto a Capex Certificate substantially in the
form of Exhibit A-3 hereto, completed and signed by the chief
executive officer or chief financial officer of Borrower, (B)
sets forth the amount of the proposed Capex Advance and
whether it is a Prime Rate Option Advance or a LIBOR Option
Advance, and (C) furnishes such other information as may be
requested by Agent. Each such Capital Advance Request shall be
given in writing, substantially in the form of Exhibit A-3
hereto, and shall be sent by Borrower via telecopy, hand
delivery or United States mail to Agent at General Electric
Capital Corporation, 3379 Peachtree Road, NE, Suite 600,
Atlanta, Georgia 30326, Attention: Senior Vice President - BTI
Portfolio (or such other person or address as Agent may
designate to Borrower in writing), Fax No. (404) 262-9175
within ten (10) days after the Capex Advance Request Date. The
proceeds of each Capex Advance shall be used by Borrower to
repay the Revolving Credit Loan to the extent such capital
expenditures have been paid from the proceeds of any Revolving
Credit Advances and, accordingly, Borrower irrevocably
authorizes and instructs Agent to apply the proceeds of such
amounts against the outstanding balance of the Revolving
Credit Loan and, the balance, if any, shall be placed in an
account designated by Borrower, which account shall be the
subject of the lien of Agent, for the benefit of Lenders. To
the extent that Borrower has not paid for such capital
expenditures out of the Revolving Credit
11
Facility, Borrower shall furnish to Agent the information set
forth above in this paragraph (ii), each creditor's wire
transfer information and such other information as Agent may
request and Agent shall wire transfer the amounts payable to
such creditors from the proceeds of the Capex Advance and, the
balance, if any, shall be placed in an account designated by
Borrower, which account shall be the subject of the lien of
Agent, for the benefit of Lenders. Borrower agrees that in
making any Capex Advance hereunder, Agent shall be entitled to
rely upon and shall be fully protected under this Agreement in
relying upon any Capex Advance Request believed by Agent to be
genuine and in assuming that the persons executing and
delivering the same were duly authorized, unless the
responsible individual acting thereon for Agent shall have
actual knowledge to the contrary. Borrower hereby agrees that
Agent can require new appraisals related to Eligible Capital
Expenditures at any time or from time to time; provided,
however, that as long has no Default has occurred hereunder
(or an event that with notice or the passage of time or both
would constitute a Default hereunder), Agent hereby agrees
that such appraisals shall not be required any more frequently
than annually. Such appraisals shall be conducted by an
appraiser satisfactory to Agent, in its sole discretion, and
shall be in a form acceptable to Agent.
a) The aggregate principal amount of the
Capex Note is due and payable on the Commitment Termination
Date; provided, that, in the event that the Capex Advances
outstanding at any time exceed the Maximum Capex Loan,
Borrower shall immediately pay to Lenders such excess amount.
(d) The Loan Agreement is hereby further amended by making the
following changes thereto:
(i) Section 1.3(a) of the Loan Agreement is hereby
amended by deleting therefrom the phrase "Revolving Credit."
(ii) Section 1.3(b) of the Loan Agreement is hereby
amended by deleting therefrom both references to the phrase
"Revolving Credit."
(iii) Section 1.4(a) of the Loan Agreement is hereby
amended by adding thereto the phrase "and the Capex Facility"
following the phrase "Revolving Credit Loan."
(iv) Section 1.4(a) of the Loan Agreement is hereby
further amended by deleting therefrom both references to the
phrase "Revolving Credit Advances" and inserting in lieu
thereof the word "Advances."
(v) Section 1.4(a) of the Loan Agreement is hereby
further amended by adding thereto the following phrase "and
(iii) the immediate repayment of the entire outstanding
balance of the Capex Facility including all accrued and unpaid
interest, fees and expenses thereon and (iv) the termination
of
12
Borrower's right to receive and Lenders' obligation to make
Capex Advances hereunder" following the phrase "Section 1.5
hereof."
(vi) Section 1 .4(b) of the Loan Agreement is hereby
amended by adding thereto the following subsection (v)
immediately following subsection (iv) thereof:
"(v) In the event Borrower shall be required to
prepay the Revolving Credit Loan hereunder, the Borrower shall
also immediately repay the Capex Facility."
(vii) Section 1.6 of the Loan Agreement is hereby
amended by deleting therefrom the phrase "capital
expenditures."
(viii) Section 1.6 of the Loan Agreement is hereby
further amended by adding thereto the sentence "Borrower shall
use the proceeds of the Capex Facility solely to repay
Revolving Credit Advances or to pay creditors for Eligible
Capital Expenditures as provided for and in accordance with
Section 1.2A(2)" immediately following the last sentence
thereof.
(vix) Section 1.7 of the Loan Agreement is hereby
amended by adding thereto the phrase "the Capex Facility and
all Capex Advances" following the phrase "Revolving Credit
Advances" in the first line thereof.
(x) Section 1.8(a) of the Loan Agreement is hereby
amended by deleting therefrom the phrase "Revolving Credit
Loan is" and inserting in lieu thereof the words "Loans are"
in the third line thereof.
(xi) Section 1.8(a) of the Loan Agreement is hereby
further amended by adding thereto the phrase "for each Type of
Loan" following the phrase "a floating rate" in the third line
thereof.
(xii) Section 1 .8(a) of the Loan Agreement is hereby
further amended by adding thereto the phrase "for each Type of
Loan" following the phrase "a fixed rate for" in the fourth
line thereof.
(xiii) Section 1 .8(b) of the Loan Agreement is
hereby amended by deleting from the third line thereof the
phrase "Revolving Credit."
(xiv) Section 1.8(f) of the Loan Agreement is hereby
amended by adding thereto the phrase "or Capex Advance"
following the phrase "Revolving Credit Loan" in the first line
thereof.
(xv) Section 1.8(g) of the Loan Agreement is hereby
amended by deleting the phrase "the Loan" from the third line
thereof and inserting in lieu thereof the phrase "any of the
Loans."
13
(xvi) Section 1.8(h)(i)(iii) of the Loan Agreement is
hereby amended by deleting both references to the phrase
"Revolving Credit" in the second and fourth lines thereof.
(xvii) Section 1.8(h)(i)(iv) of the Loan Agreement is
hereby amended by deleting therefrom the reference to the
phrase "Revolving Credit" from the fifth line thereof.
(xviii) The Loan Agreement is hereby amended by
adding thereto the following as a new Sections 1.8A and 1.8B
immediately following Section 1.8:
1.8A Eligible Accounts. Based on the most
recent Schedule of Accounts delivered by Borrower to
Agent in accordance with the terms of the Security
Agreement and on other information available to
Agent, Agent shall reasonably determine which
Accounts shall be deemed to be "Eligible Accounts"
for purposes of determining the amounts, if any, to
be advanced to Borrower.
1.8B Borrowing Base Certificate. Borrower
shall provide to Agent monthly, no later than ten
(10) days following the end of each Fiscal Month, a
Borrowing Base Certificate related to the Revolving
Credit Loans, substantially in the form of Exhibit
A-2 hereto.
(xix) Section 1.9 of the Loan Agreement is hereby
amended by deleting therefrom the phrase "difference between
the respective daily averages of (i) the Maximum Revolving
Credit Loan and (ii) the Revolving Credit Loan plus
outstanding Letter of Credit Obligations to Borrower" and
inserting in lieu thereof the phrase "sum of (i) the Maximum
Revolving Credit Loan minus (A) the Revolving Credit Loans
then outstanding plus (B) the letter of Credit Obligations
then outstanding plus (ii) the Maximum Capex Loan minus the
Capex Advances then outstanding."
(xx) Section 1.11 of the Loan Agreement is hereby
amended by deleting therefrom the phrase "Revolving Credit
Loan" in the fifth line thereof and inserting in lieu thereof
the word "Loans."
(xxi) Section 1.13(e) of the Loan Agreement is hereby
amended by deleting therefrom the phrase "Revolving Credit
Notes" in the twenty-first line thereof and inserting in lieu
thereof the word "Notes."
(xxii) Section 1.15(a) of the Loan Agreement is
hereby amended by adding thereto the phrase ", the Capex Note"
following references to the phrase the "Revolving Credit Note"
in the second, fifth and sixth lines thereof.
(xxiii) Section 1.15(d) of the Loan Agreement is
hereby amended by deleting therefrom the phrase "Revolving
Credit" in the third line thereof.
14
(xxiv) Section 2.1(k) of the Loan Agreement is hereby
amended by adding thereto the phrase "and the Capex Facility"
following the phrase "Revolving Credit Facility" in the sixth
line thereof.
(xxv) Section 2.2(a) of the Loan Agreement is hereby
amended by adding thereto the phrase "or Capex Advance"
following the phrase "Revolving Credit Advance" in the first
line thereof.
(xxvi) Section 2.2(b) of the Loan Agreement is hereby
amended by adding thereto the phrase "Capex Advance or"
following the phrase "Revolving Credit Advance or" in the
second line thereof.
(xxvii) Section 2.2 of the Loan Agreement is hereby
amended by adding thereto the phrase "or Capex Advance"
following the phrase "Revolving Credit Advance" in the first
line of the final paragraph thereof.
(xxviii) Section 10.1(a) of the Loan Agreement is
hereby amended by deleting therefrom both references to
"Revolving Credit Notes" in the twenty-fifth and
twenty-seventh lines thereof and inserting in lieu thereof the
word "Notes."
(xxix) Section 10.1(c) of the Loan Agreement is
hereby amended by deleting therefrom the phrase "Revolving
Credit" in the fourth line thereof.
(xxx) Section 10.2 of the Loan Agreement is hereby
amended by deleting therefrom the phrase "Revolving Credit" in
the sixth line thereof.
(xxxi) Section 10.7 of the Loan Agreement is hereby
amended by deleting therefrom both references to the phrase
"Revolving Credit" in the third and ninth lines thereof.
(xxxii) Section 10.8(a)(i) of the Loan Agreement is
hereby amended by deleting therefrom both references to the
phrase "Revolving Credit" in the second line thereof.
(xxxiii) Section 10.8(b) of the Loan Agreement is
hereby amended by deleting therefrom the word "Revolving"
before the word "Lender" in the second line thereof.
(xxxiv) Section 10.8(b) of the Loan Agreement is
hereby further amended by deleting therefrom the phrase
"Revolving Credit Advance" in the second line thereof and
inserting in lieu thereof the word "Advance."
(xxxv) Section 10.8(d) of the Loan Agreement is
hereby amended by deleting therefrom the word "Revolving"
before the word "Lender" in the first and fourth lines
thereof.
15
(xxxvi) Section 10.8(d) of the Loan Agreement is
hereby further amended by deleting the phrase "Revolving
Credit Advance" in the second line thereof and inserting in
lieu thereof the word "Advance."
(xxxvii) Section 10.8(f) of the Loan Agreement is
hereby amended by deleting therefrom both references to the
phrase "Revolving Credit" in the third and sixth lines
thereof.
(xxxviii) Section 11.1(c) of the Loan Agreement is
hereby amended by deleting therefrom all four references to
the phrase "Revolving Credit" in the twenty-first,
twenty-second, twenty-fifth and twenty-sixth lines thereof.
(xxxix) Section 11.2(a) of the Loan Agreement is
hereby amended by deleting therefrom the phrase "Revolving
Credit" in the second line thereof.
(xxxx) The Loan Agreement is hereby amended by
deleting Exhibit A-2 entitled "Form of Borrowing Base
Certificate" in its entirety and inserting in lieu thereof the
Exhibit A-2 entitled "Form of Revolving Credit Borrowing Base
Certificate," as the same is attached hereto and incorporated
herein by reference.
(xxxxi) The Loan Agreement is hereby amended by
adding a new Exhibit A-3 entitled "Form of Capex Borrowing
Base Certificate" thereto, in the form attached hereto and
incorporated herein by reference.
(xxxxii) The Loan Agreement is hereby amended
by adding a new Exhibit G-1 entitled "Form of Capex Note"
thereto, in the form attached hereto and incorporated herein
by reference.
(d) The Loan Agreement is hereby further amended by making the
following changes to Section 6.11 thereof:
(i) Section 6.11(a) of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in lieu
thereof:
(a) Minimum Consolidated Interest Coverage
Ratio. Borrower shall not permit its Consolidated
Interest Coverage Ratio as of the end of any of the
following Fiscal Quarters to be less than the
respective ratio shown opposite thereto:
Minimum Consolidated
Fiscal Quarter Interest Coverage Ratio
-------------- -----------------------
Third Fiscal Quarter, 1999 and 2.0 to 1
any Fiscal Quarter thereafter
(ii) Section 6.11(b) of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in lieu
thereof:
16
(b) Maximum Capital Expenditures.
(i) Borrower shall not permit the
amount of Capital Expenditures for Fiscal
Year 1998 to exceed $109,297,000 in the
aggregate.
(ii) Borrower shall not permit the
aggregate amount of Capital Expenditures for
Fiscal Year 1999 to exceed (i) $66,572,000
plus (ii) an amount equal to one hundred
percent (100%) of that portion, if any, of
the permitted maximum Capital Expenditures
for Fiscal Year 1998 which were not expended
by Borrower in such Fiscal Year.
(iii) Borrower shall not permit the
aggregate amount of Capital Expenditures for
Fiscal Year 2000 to exceed (i) $23,195,000
plus (ii) an amount equal to one hundred
percent (100%) of that portion, if any, of
the permitted maximum Capital Expenditures
for Fiscal Year 1999 which were not expended
by Borrower in such Fiscal Year.
(iv) Borrower shall not permit the
aggregate amount of Capital Expenditures for
Fiscal Year 2001 to exceed an amount equal
to ninety percent (90%) of the difference
between EBITDA for such Fiscal Year and
Consolidated Interest Expense for such
Fiscal Year.
(v) Borrower shall not permit the
aggregate amount of Capital Expenditures for
Fiscal Year 2002 to exceed an amount equal
to ninety percent (90%) of the difference
between EBITDA for such Fiscal Year and
Consolidated Interest Expense for such
Fiscal Year.
(iii) Section 6.11(c) is hereby
deleted in its entirety.
(iv) Section 6.11(d) is hereby
deleted in its entirety and the following is
inserted in lieu thereof:
(d) Minimum EBITDA.
(i) Borrower shall not permit its
cumulative EBITDA for the trailing twelve
(12) Fiscal Months ending on the last day of
the Fiscal Months set forth below to be less
than the respective amount shown opposite
thereto:
Trailing Twelve (12) Fiscal Minimum Cumulative
Months Ending on Last Day of: EBITDA
- ----------------------------- -------------------
June, 1998 ($5,415,000)
July, 1998 ($6,560,000)
August, 1998 ($7,950,000)
September, 1998 ($8,465,000)
October, 1998 ($8,430,000)
November, 1998 ($8,015,000)
December, 1998 ($7,170,000)
January, 1999 ($6,330,000)
February, 1999 ($5,730,000)
March, 1999 ($5,000,000)
April, 1999 ($4,000,000)
May, 1999 ($3,000,000)
June, 1999 ($1,000,000)
September, 1999 $4,460,000
17
(ii) Borrower shall not permit its
cumulative EBITDA for the four (4) consecutive Fiscal
Quarters ending on the last day of any Fiscal
Quarters set forth below to be less than the
respective amount shown opposite thereto:
Four (4) Fiscal Quarters Minimum Cumulative
Ending on Last Day of: EBITDA
- ---------------------- -------------------
Fourth Fiscal Quarter 1999 $ 9,600,000
First Fiscal Quarter 2000 $14,490,000
Second Fiscal Quarter 2000 $19,265,000
Third Fiscal Quarter 2000 $24,000,000
Fourth Fiscal Quarter 2000 $28,770,000
First Fiscal Quarter 2001 $33,830,000
Second Fiscal Quarter 2001 $38,855,000
Third Fiscal Quarter 2001 $43,885,000
Fourth Fiscal Quarter 2001 $48,710,000
First Fiscal Quarter 2002 $53,500,000
Second Fiscal Quarter 2002 $58,325,000
Third Fiscal Quarter 2002 $63,165,000
Fourth Fiscal Quarter 2002 $67,960,000
I. Representations, Warranties, Covenants and Acknowledgments; Release.
To induce Lender to enter into this Agreement:
A. Borrower does hereby represent and warrant that (i) as of
the date hereof, all of the representations and warranties made or
deemed to be made under the Loan Documents are true and correct, except
such representations and warranties which, by their express terms, are
applicable only to the Closing Date, (ii) as of the date hereof, after
giving effect to the terms hereof, there exists no Default or Event of
Default under the Loan Agreement or any of the Loan Documents, (iii)
Borrower has the power and is duly authorized to enter into, deliver
and perform this Agreement, and (iv) this Agreement and each of the
Loan Documents is the legal,
18
valid and binding obligation of the Borrower enforceable against it in
accordance with its terms; and
A. Borrower does hereby reaffirm each of the agreements,
covenants, and undertakings set forth in the Loan Agreement and each and every
other Loan Document executed in connection therewith or pursuant thereto as if
Borrower were making said agreements, covenants and undertakings on the date
hereof; and
A. Borrower does hereby acknowledge and agree that no
right of offset, defense, counterclaim, claim, causes of action or objection in
favor of Borrower against Lender exists arising out of or with respect to (i)
the Obligations, this Agreement, the Loan Agreement or any of the other Loan
Documents, (ii) any other documents now or heretofore evidencing, securing or in
any way relating to the foregoing or (iii) the administration or funding of the
Revolving Credit Loans or the Capex Facility; and
A. Borrower does hereby expressly waive, release and
relinquish any and all defenses, setoffs, claims, counterclaims, causes of
action or objections, if any, against Lender.
I. Conditions Precedent. The effectiveness of this Agreement is subject
to the following conditions precedent:
A. Delivery of Documents. Borrower shall have delivered
to Lender, all in form and substance acceptable to Lender in its sole
discretion, (i) executed counterpart originals of this Agreement, (ii) executed
originals of the Third Amended and Restated Revolving Credit Note and the Capex
Note, (iii) an Acknowledgment and Consent of Guarantor, in form and substance
satisfactory to Lender, and (iv) such other documentation as Lender may
reasonably require in connection herewith, including, without limitation, (i) a
Secretary's Certificate of each of Borrower and Guarantor, (ii) an Opinion
letter, in form and substance satisfactory to Lender, from counsel to Borrower
and Guarantor, (iii) amendments to certain of the Collateral Documents, and (iv)
a Security Agreement, in form and substance satisfactory to Lender, as executed
by Business Telecom of Virginia, Inc. in favor of Lender, together with such
UCC-1 Financing Statements as may be necessary in connection therewith, which
Security Agreement shall be delivered no later than thirty (30) days following
the date of this Agreement; provided, that, any failure to deliver such Security
Agreement (and accompanying documents) within thirty (30) days of the date of
this Agreement shall be deemed an Event of Default under the Loan Agreement; and
A. Accuracy of Representations and Warranties. All of
the representations and warranties made or deemed to be made in this Agreement
and under the Loan Documents shall be true and correct as of the date of this
Agreement, except such representations and warranties which, by their terms, are
applicable to a prior specific date or period; and
A.Fee. Borrower shall have paid to Lender an amendment fee in
the amount described in the side letter attached hereto.
A. Expenses. Borrower shall have paid to Lender the
costs and expenses referred to in Section 5 hereof.
19
I. Effect of this Agreement. As expressly amended
hereby, the Loan Agreement shall be and remain in full force and effect as
originally written, and shall constitute the legal, valid, binding and
enforceable obligations of Borrower to Lender.
I. Expenses. Borrower agrees to pay on demand all
reasonable costs and expenses of Lender in connection with the preparation,
execution, delivery and enforcement of this Agreement and all other documents
and any other transactions contemplated hereby, including, without limitation,
the reasonable fees and out-of-pocket expenses of legal counsel to Lender.
Borrower authorizes Lender, as Agent, to charge the foregoing expenses to the
Borrower's loan account by increasing the principal amount of the Revolving
Credit Loans by the amount of such expenses owed by Borrower in connection
herewith.
I. Miscellaneous. Borrower agrees to take such further
action as Lender shall reasonably request in connection herewith to evidence the
amendments herein contained to the Loan Agreement. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be
deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same instrument. This Agreement shall be binding upon
and inure to the benefit of the successors and permitted assigns of the parties
hereto. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Georgia.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
20
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be duly executed as of the date first above written.
BUSINESS TELECOM, INC.
By: _________________________________________________________
Name: ________________________________________________
Title: ________________________________________________
[SIGNATURES CONTINUED ON NEXT PAGE]
21
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and Lender
By: _________________________________________________________
Elaine L. Moore
Senior Vice President as duly authorized
22
ACKNOWLEDGMENT AND AGREEMENT
The undersigned hereby acknowledges and agrees to the foregoing Second Amendment
to Second Amended and Restated Loan Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals this ___ day of June, 1998.
BTI TELECOM CORP.
By: _________________________________________________________
Its: ________________________________________________________
ACKNOWLEDGMENT AND AGREEMENT
The undersigned hereby acknowledges that the foregoing Second Amendment
to Second Amended and Restated Loan Agreement shall not affect the
enforceability or validity of any Loan Document executed by the undersigned.
_______________________________________ (Seal)
Peter T. Loftin
23
FORM OF SIDE LETTER
See Attached.
EXHIBIT A-2
FORM OF REVOLVING CREDIT BORROWING BASE CERTIFICATE
See Attached.
EXHIBIT A-3
FORM OF CAPEX BORROWING BASE CERTIFICATE
See Attached.
EXHIBIT G-1
FORM OF CAPEX NOTE
See Attached.