EXHIBIT 10.11.5

 

INTERCREDITOR AND SUBORDINATION AGREEMENT

 

THIS INTERCREDITOR AND SUBORDINATION AGREEMENT (this “Agreement”) is entered
into as of October 6, 2003, by and among the First Lien Agent, the First Lien
Lenders, the Second Lien Agent, the Second Lien Lenders and the Loan Parties
(each as defined below).

 

R E C I T A L S

 

A. The Board of Directors of ITC^DeltaCom, Inc., a Delaware corporation (the
“Parent”), has determined that it is advisable and in the best interests of the
Parent’s stockholders, and consistent with and in furtherance of the Parent’s
business strategies and goals, for the Parent to acquire indirectly all of the
outstanding shares of BTI Telecom Corp., a North Carolina corporation (“BTI”),
through the merger of 8DBC1 Corp., a North Carolina corporation and wholly owned
direct subsidiary of the Parent (“Merger Co.”), with and into BTI (the “Merger”)
upon the terms and subject to the conditions set forth in the Agreement and Plan
of Merger, dated as of July 2, 2003, among BTI, the parties identified on the
signature pages thereto as the “WCAS Securityholders,” the Parent and Merger Co.
(as amended, the “Merger Agreement”).

 

B. The Board of Directors of BTI and the Board of Directors of Merger Co. have
each determined that it is advisable and in the best interests of their
shareholders, and consistent with and in furtherance of their business
strategies and goals, for the Parent to acquire indirectly all of the
outstanding shares of BTI through the Merger upon the terms and subject to the
conditions set forth in the Merger Agreement.

 

C. Interstate FiberNet, Inc., a Delaware corporation (the “Borrower”), the
Parent, the subsidiary guarantors listed on the signature pages thereof
(together with the Parent, the “Guarantors”), Wells Fargo Bank Minnesota, N.A.,
a National Association, as Administrative Agent and Collateral Agent, and each
of the banks, financial institutions and other institutional lenders listed on
the signature pages thereof, are entering into the First Lien Loan Agreement (as
defined below) contemporaneously with the execution and delivery of this
Agreement.

 

D. The Borrower, the Guarantors, the Second Lien Lenders, General Electric
Capital Corporation, as Administrative Agent and Collateral Agent and the
lenders specified therein are entering into the Second Lien Loan Agreement (as
defined below) contemporaneously with the execution and delivery of this
Agreement.

 

E. All First Lien Debt (as defined below) is secured by (i) a continuing Lien on
substantially all of the Borrower Collateral (as defined below) and (ii) a
continuing Lien on substantially all of the Guarantor Collateral (as defined
below). All Second Lien Debt (as defined below) is secured by (i) a junior and
subordinated continuing Lien on substantially all of the Borrower Collateral and
(ii) a junior and subordinated continuing Lien on substantially all of the
Guarantor Collateral.

--------------------------------------------------------------------------------

F. The First Lien Lender Parties, the Second Lien Lender Parties and the Loan
Parties desire to enter into this Agreement to, among other things, confirm the
relative priorities of the Liens on the Collateral held by the First Lien Agent,
for the benefit of the First Lien Lenders, on the one hand, and the Second Lien
Agent, for the benefit of the Second Lien Lenders, on the other hand.

 

NOW, THEREFORE, in order to induce the First Lien Lender Parties and the Second
Lien Lender Parties to consummate the transactions contemplated by,
respectively, the First Lien Debt Documents and the Second Lien Debt Documents,
and for other good and valuable consideration, the receipt and sufficiency of
which hereby are acknowledged, the parties hereto hereby agree as follows:

 

1. Definitions and Other Definitional Provisions.

 

1.1 Definitions. The following terms shall have the following meanings in this
Agreement (including the premises and the recitals hereto):

 

“Acceptable Refinancing Debt” shall mean a replacement, substitution, refunding
or refinancing of all (but not less than all) of the then outstanding First Lien
Debt by a financing transaction that constitutes a Permitted Refinancing, a
Receivables Financing or a Replacement Financing.

 

“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from
time to time, and any successor statute and all rules and regulations
promulgated thereunder.

 

“Borrower” shall mean Interstate FiberNet, Inc. and its respective successors
and assigns, including, without limitation, any receiver, trustee or
debtor-in-possession on behalf of any such Person or on behalf of any such
successor or assign, as well as any other Person that becomes a Borrower under
the First Lien Loan Agreement and the Second Lien Loan Agreement after the date
hereof, whether by acquisition or otherwise.

 

“Borrower Collateral” shall mean all Property of the Borrower.

 

“Business Day” shall mean a day of the year on which banks are not required or
authorized by law to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advances (as defined in the First Lien Loan
Agreement and the Second Lien Loan Agreement), on which dealings are carried on
in the London interbank market.

 

“Collateral” shall mean the Borrower Collateral and the Guarantor Collateral.

 

“Distribution” shall mean, with respect to any indebtedness or obligation, (a)
any payment or distribution by any Loan Party of cash, securities or other
Property, by

 

-2-

--------------------------------------------------------------------------------

set-off or otherwise, on account of such indebtedness or obligation, (b) any
redemption, purchase or other acquisition of such indebtedness or obligation by
any Person or (c) the granting of any Lien to or for the benefit of the holders
of such indebtedness or obligation in or upon any Property of any Loan Party.

 

“Enforcement Action” shall mean any action in the nature of an exercise of
remedies, including, without limitation, any action pursuant to which a Lender
(a) takes from or for the account of any Loan Party, by set off or in any other
manner, the whole or any part of any funds which may now or hereafter be owing
by such Loan Party to such Lender, (b) notifies account debtors, or directly
collects accounts receivable or other payment rights, of any Loan Party, (c)
takes any action under the provisions of any state or federal law, including,
without limitation, the UCC, to enforce its Liens on the Collateral, (d) under
any contract or agreement, enforces, forecloses upon, takes possession of or
sells any Property of any Loan Party, including, without limitation, any
Collateral or (e) accelerates, demands payment of, or sues for payment of, any
indebtedness.

 

“Existing First Lien Loan Agreement” shall mean the Second Amended and Restated
Credit Agreement, dated as of the date hereof, by and among the Loan Parties and
the First Lien Lender Parties, as the same may be amended in accordance with the
terms hereof.

 

“First Lien Agent” shall mean (a) initially, Wells Fargo Bank Minnesota, N.A., a
National Association, acting in its capacity as administrative and collateral
agent for the First Lien Lenders, under the respective First Lien Debt Documents
and its successors and assigns in such capacity (including any similar agent or
any representative for any lender or group of lenders that at any time is a
party to any First Lien Debt Document) and (b) to the extent any Permitted
Refinancing or Receivables Financing is outstanding, the Person acting in the
capacity of collateral agent for the lenders thereunder and its successors and
assigns in such capacity, which Person shall become a party to this Agreement as
a condition to the consummation of any such Permitted Refinancing or Receivables
Financing (and any similar agent or any representative for any lender or group
of lenders that at any time is a party to any First Lien Debt Document), and (c)
to the extent any Replacement Financing is outstanding, the Person acting in the
capacity as collateral agent for the lenders thereunder and the Person acting in
the capacity as collateral agent for any other lenders secured by a Lien of the
same priority as the Lien which secures the Replacement Financing lenders, and
its successors and assigns in such capacity, which Persons shall become a party
to an agreement pursuant to which all of the lenders secured by the same
priority Liens shall acknowledge such fact as a condition to the consummation of
any such Replacement Financing (and any similar agent or any representative for
any lender or group of lenders that at any time is a party to any First Lien
Debt Document).

 

“First Lien Debt” shall mean any and all obligations, liabilities and
indebtedness of every kind, nature and description owing by any Loan Party to
any of the First Lien Lender Parties evidenced by, or arising under, the First
Lien Debt Documents, whether

 

-3-

--------------------------------------------------------------------------------

direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, including principal, interest,
charges, fees, costs, indemnities, expenses and any amounts previously paid and
avoided and recovered by the Loan Parties in connection with any Proceeding,
however evidenced, whether as principal, surety, endorser, guarantor or
otherwise, whether now existing or hereafter arising, whether arising during or
after the initial or any renewal term of the First Lien Loan Agreement or after
the commencement of any Proceeding with respect to such Loan Party. First Lien
Debt shall be considered to be outstanding whenever any loan commitment under
the First Lien Debt Documents is outstanding; provided, however, the principal
indebtedness under the First Lien Loan Agreement shall not constitute First Lien
Debt to the extent it exceeds (a) $184,400,000 minus (b) the sum of (i)
scheduled principal payments and (ii) prepayments (whether optional or
mandatory), in each case, actually made on the First Lien Debt after the date
hereof.

 

“First Lien Debt Documents” shall mean the First Lien Loan Agreement, all notes
issued thereunder, the First Lien Security Agreement, the First Lien Guaranties
and all security agreements, guaranties, pledge agreements, mortgages, leasehold
mortgages, deeds of trust, leasehold deeds of trust and other agreements,
documents and instruments now or at any time hereafter entered into or delivered
by any Loan Party or other Person pursuant thereto and to the extent otherwise
permitted pursuant to the terms hereof, evidencing (a) any amendment, amendment
and restatement, or renewal of all or any part of, the First Lien Debt or (b)
any Acceptable Refinancing Debt, in each case as the same may be amended,
modified, supplemented, extended, renewed or restated, to the extent permitted
pursuant to the terms hereof.

 

“First Lien Default” shall mean any “Default” or “Event of Default” under the
First Lien Debt Documents, and any other event or occurrence permitting the
First Lien Lender Parties to accelerate the maturity of the First Lien Debt.

 

“First Lien Default Notice” shall mean a written notice from the First Lien
Agent to the Second Lien Agent pursuant to which the Second Lien Agent is
notified of the occurrence of a First Lien Default, which notice shall identify
such First Lien Default.

 

“First Lien Guaranties” shall mean those certain guaranty agreements of each of
the Guarantors in favor of the First Lien Loan Parties as set forth in the First
Lien Loan Agreement, and any guaranty or similar agreement executed and
delivered in connection with (a) any, amendment, amendment and restatement or
renewal of all or any part of the First Lien Debt or (b) any Acceptable
Refinancing, in each case as the same may be amended, modified, supplemented,
extended, renewed or restated, to the extent permitted pursuant to the terms
hereof.

 

“First Lien Lender Parties” shall mean the First Lien Agent and First Lien
Lenders.

 

“First Lien Lenders” shall mean each of the banks, financial institutions and
other institutional lenders listed on the signature pages of the First Lien Loan
Agreement

 

-4-

--------------------------------------------------------------------------------

and their respective successors and assigns (including any other lender or group
of lenders that at any time provides Acceptable Refinancing Debt at any time and
from time to time), in their capacity as lenders thereunder.

 

“First Lien Loan Agreement” shall mean (a) the Existing First Lien Loan
Agreement and (b) any loan or credit agreement evidencing any Acceptable
Refinancing Debt with the same or other lenders, as more fully described therein
and permitted thereby, in each case as the same may be amended, modified,
supplemented, extended, renewed or restated, to the extent permitted pursuant to
the terms hereof.

 

“First Lien Security Agreement” shall mean the Amended and Restated Security
Agreement, dated as of the date hereof, by and among the Loan Parties and the
First Lien Agent, and any security agreement or similar agreement executed and
delivered in connection with any Acceptable Refinancing Debt, as the same may be
amended, modified, supplemented, extended, renewed or restated, to the extent
permitted pursuant to the terms hereof.

 

“First Lien Term Loans” shall mean the Tranche 1 Term B Advance, the Tranche 2
Term B Advance and the Tranche 3 Term B Advance, as such terms are defined in
the First Lien Loan Agreement.

 

“Guarantor Collateral” shall mean substantially all Property of the respective
Guarantors.

 

“Guarantors” shall mean the Parent, BTI, the subsidiaries of the Borrower and
the subsidiaries of BTI, as well as any other Person that becomes a Guarantor
under the First Lien Loan Agreement and the Second Lien Loan Agreement after the
date hereof, whether by acquisition or otherwise and any other Person (other
than the Borrower) liable on or in respect of any First Lien Debt or the Second
Lien Debt and their respective successors and assigns, including, without
limitation, any receiver, trustee or debtor-in-possession on behalf of any such
Person or on behalf of any such successor or assign.

 

“Lenders” shall mean the First Lien Lender Parties and the Second Lien Lender
Parties.

 

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance (including,
without limitation, easements, rights of way and the like), lien (statutory or
other), security agreement or transfer intended as security, including, without
limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease or any financing lease having
substantially the same economic effect as any of the foregoing.

 

“Loan Parties” shall mean the Borrower and the Guarantors.

 

“Permitted Refinancing” has the meaning specified in the Second Lien Loan
Agreement.

 

-5-

--------------------------------------------------------------------------------

“Person” shall mean any natural person, corporation, general or limited
partnership, limited liability company, firm, trust, association, government,
governmental agency or other entity, whether acting in an individual, fiduciary
or other capacity.

 

“Proceeding” shall mean any voluntary or involuntary insolvency, bankruptcy,
receivership, custodianship, liquidation, dissolution, reorganization,
assignment for the benefit of creditors, appointment of a custodian, receiver,
trustee or other officer with similar powers or any other proceeding for the
liquidation, dissolution or other winding up of a Person.

 

“Property” shall mean, with respect to any Person, all assets and properties of
any kind whatsoever, real or personal, tangible or intangible, or mixed, in each
case of such Person, whether now owned or existing or hereafter acquired or
arising and wheresoever located.

 

“Purchasing Second Lien Lenders” has the meaning ascribed to such term in
Section 2.3(a).

 

“Receivables Financing” has the meaning specified in the Second Lien Loan
Agreement.

 

“Replacement Financing” has the meaning specified in the Second Lien Loan
Agreement.

 

“Second Lien Agent” shall mean General Electric Capital Corporation, acting in
its capacity as administrative and collateral agent for the Second Lien Lenders
under the respective Second Lien Debt Documents and its successors and assigns
in such capacity (including any similar agent or any representative for any
lender or group of lenders that at any time is a party to any Second Lien Debt
Document).

 

“Second Lien Debt” shall mean any and all obligations, liabilities and
indebtedness of every kind, nature and description owing by any Loan Party to
any of the Second Lien Lender Parties evidenced by or arising under the Second
Lien Debt Documents, whether direct or indirect, absolute or contingent, joint
or several, due or not due, primary or secondary, liquidated or unliquidated,
including principal, interest, charges, fees, costs, indemnities and expenses,
however evidenced, whether as principal, surety, endorser, guarantor or
otherwise, whether now existing or hereafter arising, whether arising during or
after the initial or any renewal term of the Second Lien Loan Agreement or after
the commencement of any Proceeding with respect to such Loan Party.

 

“Second Lien Debt Documents” shall mean the Second Lien Loan Agreement, all
notes issued thereunder, the Second Lien Guaranties and all security agreements,
guaranties, pledge agreements, mortgages, deeds of trust and other agreements,
documents and instruments now or at any time hereafter entered into or delivered
by any Loan Party or other Person pursuant thereto, or evidencing any
replacement, increase, amendment, amendment and restatement, substitution,
refunding, renewal or refinancing

 

-6-

--------------------------------------------------------------------------------

of or for all or any part of, the Second Lien Debt, in each case as the same may
be amended, modified, supplemented, extended, renewed or restated and otherwise
in effect from time to time, to the extent permitted pursuant to the terms
hereof.

 

“Second Lien Financial Covenant Default” shall mean any “Event of Default” under
the Second Lien Loan Agreement resulting from the failure of the Loan Parties to
comply with any provision of Section 5.02(q) thereof.

 

“Second Lien Guaranties” shall mean those certain guaranty agreements of each of
the Guarantors in favor of the Second Lien Lender Parties as set forth in the
Second Lien Loan Agreement, and any guaranty or similar agreement executed and
delivered in connection with any replacement, increase, amendment, amendment and
restatement, substitution, refunding, renewal or refinancing of or for all or
any part of the Second Lien Debt, in each case as the same may be amended,
modified, supplemented, extended, renewed or restated and otherwise in effect
from time to time, to the extent permitted pursuant to the terms hereof.

 

“Second Lien Lender Parties” shall mean the Second Lien Agent and the Second
Lien Lenders.

 

“Second Lien Lenders” shall mean each of the banks, financial institutions and
other institutional lenders listed on the signature pages of the Second Lien
Loan Agreement and their respective successors and assigns (including any other
lender or group of lenders that at any time succeeds to or replaces,
substitutes, refunds, renews or refinances all or any part of the Second Lien
Debt at any time and from time to time), in their capacity as lenders
thereunder.

 

“Second Lien Loan Agreement” shall mean the Credit Agreement, dated as of the
date hereof, by and among the Loan Parties, and the Second Lien Lender Parties
and any loan or credit agreement evidencing any replacement, increase,
amendment, amendment and restatement, substitution, refunding, renewal or
refinancing of or for all or any part of the Second Lien Debt, with the same or
other lenders, as more fully described therein and permitted thereby in each
case as the same may be amended, modified, supplemented, extended, renewed or
restated and otherwise in effect from time to time, to the extent permitted
pursuant to the terms hereof.

 

“Second Lien Negative Covenant Default” shall mean any “Event of Default” under
the Second Lien Loan Agreement resulting from the failure of the Loan Parties to
comply with any provision of Section 5.02 thereof, excluding Sections 5.02 (e),
(g) and (k) thereof.

 

“Second Lien Other Payment Default” shall mean any “Event of Default” under the
Second Lien Debt Documents resulting from the failure of any Loan Party to pay,
on a timely basis, any interest, fees or other payment obligations under the
Second Lien Loan Documents, other than (a) any default in payment of Second Lien
Debt due on account of acceleration thereof, and (b) any Second Lien Payment
Default.

 

-7-

--------------------------------------------------------------------------------

“Second Lien Payment Default” shall mean any “Event of Default” under the Second
Lien Debt Documents resulting from the failure of any Loan Party to pay, on a
timely basis, any scheduled amortization payment or payment of principal upon
maturity under the Second Lien Loan Documents, other than any default in payment
of Second Lien Debt due on account of acceleration thereof.

 

“Second Lien Restricted Covenant Default” shall mean any “Event of Default”
under the Second Lien Loan Agreement resulting from the failure of the Loan
Parties to comply with any provision of Section 5.02(e), (g) or (k) thereof.

 

“Second Lien Security Agreement” shall mean that certain Security Agreement,
dated as of the date hereof, by and among the Loan Parties and the Second Lien
Agent, and any security agreement or similar agreement executed and delivered in
connection with any replacement, increase, amendment, amendment and restatement,
substitution, refunding, renewal or refinancing of or for all or any part of the
Second Lien Debt, as the same may be amended, modified, supplemented, extended,
renewed or restated and otherwise in effect from time to time, to the extent
permitted pursuant to the terms hereof.

 

“UCC” shall mean the Uniform Commercial Code, as in effect from time to time in
any applicable jurisdiction.

 

1.2 Computation of Time Periods; Other Definitional Provisions. In this
Agreement in the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including” and the words “to”
and “until” each mean “to but excluding”. References in the this Agreement to
any agreement or contract “as amended” shall mean and be a reference to such
agreement or contract as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof. All references to any term in the plural shall include the singular and
all references to any term in the singular shall include the plural.

 

2. Priorities; Remedies.

 

2.1 Liquidation, Dissolution, Bankruptcy. In the event of any Proceeding
involving any Loan Party:

 

(a) This Agreement shall be applicable both before and after the institution of
any Proceeding involving the Borrower or any other Loan Party, including,
without limitation, the filing of any petition by or against the Borrower or any
other Loan Party under the Bankruptcy Code and all converted or succeeding cases
in respect thereof, and all references herein to the Borrower or any Loan Party
shall be deemed to apply to the trustee for the Borrower or such Loan Party and
the Borrower or such Loan Party as debtor-in-possession. The relative rights of
the First Lien Lender Parties and Second Lien Lender Parties in or to any
distributions from or in respect of any Collateral or proceeds of any Collateral
shall continue after the institution of any Proceeding involving the Borrower or
any other Loan Party, including, without limitation, the filing of any petition
by or against the Borrower or any other Loan Party under the Bankruptcy Code and
all converted or succeeding cases in respect thereof, on the same basis as prior
to the date of such institution, subject to any court order approving the
financing of, or use of cash collateral by, the Borrower or any Loan Party as
debtor-in-possession.

 

-8-

--------------------------------------------------------------------------------

(b) Each Second Lien Lender Party agrees not to seek to challenge, to avoid, to
subordinate or to contest or directly or indirectly to support any other Person
in challenging, avoiding or contesting in any judicial or other proceeding,
including, without limitation, any Proceeding, the priority, validity, extent,
perfection or enforceability of any Lien held by any First Lien Lender Party in
all or any part of the Collateral. Each First Lien Lender Party agrees not to
seek to challenge, to avoid, to subordinate to any indebtedness (other than the
First Lien Debt), or to contest or directly or indirectly to support any other
Person in challenging, avoiding or contesting in any judicial or other
proceeding, including, without limitation, any Proceeding, the priority relative
to any indebtedness other than First Lien Debt, validity, extent, perfection or
enforceability of any Lien held by any Second Lien Lender Party in all or any
part of the Collateral.

 

(c) Each Second Lien Lender Party agrees that any First Lien Lender Party may
consent to the use of cash collateral under Section 363 of the Bankruptcy Code
or provide financing to the Loan Parties under Section 364 of the Bankruptcy
Code on such terms and conditions and in such amounts as such First Lien Lender
Party may decide, and that the Second Lien Lender Parties shall not raise any
objections to such financing or use of cash collateral. Each Second Lien Lender
Party agrees that all such financing shall constitute First Lien Debt hereunder,
and, in connection therewith, each Loan Party may grant to any such First Lien
Lender Party Liens upon all of the Property of such Loan Party, which Liens (i)
shall secure payment of all or any portion of the First Lien Debt (whether such
First Lien Debt arose prior to the commencement of any Proceeding or at any time
thereafter) and all other financing provided by any First Lien Lender Party
during the Proceeding and (ii) shall be superior in priority to the Liens, if
any, in favor of the Second Lien Lender Parties on the Property of the Loan
Parties. Each Second Lien Lender Party agrees that it shall not object to or
oppose a sale or other disposition of any Property securing all of any part of
the First Lien Debt free and clear of Liens or other claims of each Second Lien
Lender Party under Section 363 of the Bankruptcy Code or any other provision of
the Bankruptcy Code if the First Lien Lender Parties have consented to such sale
or disposition; provided, that, subject to the other terms and provisions of
this Agreement, the Lien of each Second Lien Lender Party on the proceeds
thereof shall continue to attach to such proceeds pursuant to the Second Lien
Debt Documents and the Second Lien Lender Parties shall have the right to
purchase the First Lien Debt pursuant to Section 2.3. Notwithstanding anything
contained in this Agreement to the contrary, the Second Lien Lender Parties may
file a proof of claim in any such Proceeding.

 

(d) The First Lien Debt shall continue to be treated as First Lien Debt and the
provisions of this Agreement shall continue to govern the relative rights and
priorities of the First Lien Lender Parties and the Second Lien Lender Parties
even if all or part of the First Lien Debt or the Liens securing the First Lien
Debt are subordinated, set aside, avoided, invalidated or disallowed in
connection with any such Proceeding, and this Agreement shall be reinstated if
at any time any payment of any of the First Lien Debt is rescinded or must
otherwise be returned by any holder of First Lien Debt or any representative of
such holder.

 

-9-

--------------------------------------------------------------------------------

2.2 Second Lien Debt Standstill Provisions.

 

(a) Notwithstanding any rights or remedies available to the Second Lien Lender
Parties under any of the Second Lien Debt Documents, applicable law or
otherwise, prior to the time when the First Lien Lender Parties shall have
received payment in full of all First Lien Debt, none of the Second Lien Lender
Parties shall directly or indirectly take any Enforcement Action with respect to
the Second Lien Debt; provided, however, upon the occurrence of (i) an Event of
Default (as such term is defined in the Second Lien Loan Agreement) constituting
a Second Lien Other Payment Default, a Second Lien Financial Covenant Default or
a Second Lien Negative Covenant Default, and for so long as such Event of
Default is continuing, subject at all times to the provisions of this Agreement,
commencing two hundred and seventy (270) days after the receipt by the First
Lien Agent of a copy of the declaration from the Second Lien Agent of such
Second Lien Other Payment Default, Second Lien Financial Covenant Default or
Second Lien Negative Covenant Default, as the case may be, or (ii) an Event of
Default constituting a Second Lien Restricted Covenant Default, and for so long
as such Event of Default is continuing, subject at all times to the provisions
of this Agreement, commencing ninety (90) days after the receipt by the First
Lien Agent of a copy of the declaration from the Second Lien Agent of such
Second Lien Restricted Covenant Default or (iii) an Event of Default
constituting a Second Lien Payment Default, and for so long as such Event of
Default is continuing, immediately (unless the Existing First Lien Loan
Documents are still in effect, in which case, commencing two hundred and seventy
(270) days after the receipt by the First Lien Agent of a copy of the
declaration from the Second Lien Agent of such Second Lien Payment Default) (in
the case of each of clauses (i), (ii) and (iii), unless the Loan Party which is
the subject of such Enforcement Action is subject to a Proceeding by reason of
which the making of such declaration is stayed, in which case, commencing on the
date of the commencement of such Proceeding), the Second Lien Agent may take
Enforcement Action, but only (x) so long as the First Lien Agent is not pursuing
in good faith any Enforcement Action, or attempting to vacate any stay of
enforcement of its Liens on all or a material portion of the Collateral, and (y)
if the Second Lien Agent shall have given the First Lien Agent five (5) Business
Days’ prior written notice of the Second Lien Agent’s intention to take any such
Enforcement Action, which notice shall include a description in reasonable
detail of the Enforcement Actions that the Second Lien Agent proposes to take.
Such notice period of five (5) Business Days may run concurrently with any of
the declarations referred to in clauses (i), (ii) or (iii) of the immediately
preceding sentence to the extent that the Second Lien Agent has delivered such
declarations in accordance with Section 9. This Section 2.2(a) shall not be
construed to limit or impair in any way the right of (A) The Second Lien Agent
or Second Lien Lenders to accelerate the Second Lien Debt or demand payment
thereof upon the acceleration of the First Lien Debt or upon the commencement of
a Proceeding by or against any Loan Party, (B) the Second Lien Agent to join
(but not control in any way) any Enforcement Action initiated by the First Lien
Agent, so long as such action by the Second Lien Agent does not unreasonably
delay or interfere with the exercise by the First Lien Agent and the other First
Lien Lender Parties of their respective rights as provided in this Agreement, or
(C) the Second Lien Agent to receive any remaining proceeds of the Collateral
after payment in full of all First Lien Debt.

 

(b) Except as provided in clause (A) of the last sentence of Section 2.2(a), (i)
the Second Lien Agent shall not actively pursue any Enforcement Action commenced
by it in

 

-10-

--------------------------------------------------------------------------------

accordance with Section 2.2(a) if and when the First Lien Agent thereafter
commences any Enforcement Action, and (ii) in such event, the Second Lien Agent
shall take only such reasonable action required, if any, to preserve the
pendency of its Enforcement Action in a manner consistent with, and in
reasonable cooperation with, the Enforcement Action commenced by the First Lien
Agent.

 

(c) If the Borrower fails to deliver to the Second Lien Agent title insurance
commitments in respect of the seven real properties of the Loan Parties that are
encumbered in favor of the First Lien Agent within 60 days after the date
hereof, such failure shall constitute an Event of Default under the Second Lien
Loan Documents. If such an Event of Default shall occur, the Second Lien Lender
shall have the right, notwithstanding the foregoing provisions of this Section
2.2, to exercise Enforcement Actions in respect of such Event of Default under
the Second Lien Loan Documents; provided that (1) the Second Lien Agent has
provided notice in writing to the First Lien Agent and the Borrower of the
Borrower’s failure to provide or deliver such title insurance commitments not
later than the 45th day (or the next succeeding Business Day) after the date
hereof and (2) the First Lien Agent has not exercised any rights or remedies, or
commenced any Enforcement Action in respect of the First Lien Debt (in which
case Sections 2.2(a) and (b) will remain applicable). Upon the occurrence of
such Event of Default under the Second Lien Loan Documents, the First Lien Agent
shall have the right to declare an Event of Default under the First Lien Loan
Agreement and Sections 2.2(a) and (b) above shall become applicable. This
Section 2.2(c) shall be of no further force and effect once the Second Lien
Agent has received delivery of commitments evidencing the applicable title
insurance policies.

 

2.3 Second Lien Lenders’ Purchase Option.

 

(a) In the event that (i) the Second Lien Agent receives a Release Notice under
Section 2.5, or (ii) a Proceeding is commenced by or against any Loan Party and
the First Lien Lender Parties consent to use of cash collateral or agree to
provide post-petition financing to the Loan Parties, for a period of ten (10)
Business Days following the Second Lien Agent’s receipt of such Release Notice
or the Second Lien Agent’s receipt of written notice from the First Lien Agent
of the filing of a motion to approve such use of cash collateral or provision of
such financing, any or all of the Second Lien Lenders shall have the option upon
written notice from the Second Lien Agent to the First Lien Agent to purchase
(and the First Lien Lenders hereby agree to sell) at par value as more fully set
forth in Section 2.3(c) all (but not less than all) of the First Lien Debt from
the First Lien Lenders. Such written notice from the Second Lien Agent to the
First Lien Agent shall indicate which Second Lien Lender or Second Lien Lenders
will purchase the First Lien Debt (the “Purchasing Second Lien Lenders”) and
shall be irrevocable. In the event that the Second Lien Agent shall deliver to
the First Lien Agent such irrevocable notice of the intention of one or more
Second Lien Lenders to exercise such option, the First Lien Agent shall not
commence any foreclosure or other action to sell or otherwise realize upon the
Collateral, or the First Lien Agent shall postpone the hearing on any motion to
approve such use of cash collateral or provision of financing, as applicable,
for a period of up to ten (10) Business Days, as specified in Section 2.3(b).

 

(b) On the date specified by the Second Lien Agent in the notice delivered to

 

-11-

--------------------------------------------------------------------------------

the First Lien Agent pursuant to Section 2.3(a) (which date shall not be less
than five (5) Business Days, nor more than ten (10) Business Days, after the
receipt by the First Lien Agent of such notice), the First Lien Lender Parties
shall sell to the Purchasing Second Lien Lenders, and the Purchasing Second Lien
Lenders shall purchase from the First Lien Lender Parties, all First Lien Debt.

 

(c) Upon the date of a purchase and sale subject to this Section 2.3, (1) the
Purchasing Second Lien Lenders shall (i) pay to the First Lien Agent as the
purchase price therefor the full amount of all the First Lien Debt then
outstanding and unpaid (including principal, interest, fees and expenses,
including reasonable attorneys’ fees and expenses, all of which shall be deemed
Obligations of the Loan Parties with respect to the First Lien Debt) and (ii)
furnish cash collateral to the First Lien Agent in an amount equal to 105% of
the aggregate undrawn face amount of any issued and outstanding letters of
credit issued by any First Lien Lender Party (or letters of credit that the
First Lien Agent has arranged to be issued by third parties) for the account of
the Borrower or any other Loan Party and, in any event, use reasonable efforts
to replace all such letters of credit with letters of credit issued by or for
the account of the Purchasing Second Lien Lenders within thirty (30) days after
the date specified by the Second Lien Collateral Agent in the notice referred to
in Section 2.3(b), provided, that as each such letter of credit issued by a
First Lien Lender Party or such third party for the account of the Borrower or
any other Loan Party is so replaced, all cash collateral held by the First Lien
Agent with respect to such letter of credit shall be refunded to the Purchasing
Second Lien Lender Parties on the date of such replacement; and (2) the Borrower
shall reimburse the First Lien Lender Parties by paying to the First Lien Agent
for the account of the First Lien Lender Parties on demand after the date of
such purchase and sale an amount equal to any actual cost or expense (including
reasonable attorneys’ fees and expenses) incurred through the date of such
purchase and sale, in accordance with the terms of the First Lien Debt Documents
in connection with any commissions, fees, costs or expenses related to any
issued and outstanding letters of credit as described above and any checks or
other payments provisionally credited to the First Lien Debt, and/or as to which
the First Lien Lender Parties have not yet received final payment. To the extent
that such amounts under clause (2) of this Section 2.3(c) remain unpaid after 10
Business Days following the closing of such purchase and sale, the Purchasing
Second Lien Lenders agree to reimburse the First Lien Agent, on behalf of the
First Lien Lender Parties, for such unpaid amounts in cash pursuant to the
direction of the First Lien Agent. Such purchase price and cash collateral shall
be remitted by wire transfer in federal funds to such bank account of the First
Lien Agent as the First Lien Agent may designate in writing to the Second Lien
Agent for such purpose. Interest on First Lien Debt shall be calculated to, but
shall exclude, the Business Day on which such purchase and sale shall occur if
the amounts so paid by the Purchasing Second Lien Lenders to the bank account
designated by the First Lien Agent are received in such bank account prior to
1:00 p.m., New York City time.

 

(d) Any purchase and sale subject to this Section 2.3 shall be expressly made
without representation or warranty of any kind by any of the First Lien Lender
Parties as to the First Lien Debt or otherwise and without recourse to any of
the First Lien Lender Parties, except that each First Lien Lender Party shall
represent and warrant: (i) the amount of the First Lien Debt being purchased
from such First Lien Lender Party; (ii) that such First Lien Lender Party owns
such First Lien Debt free and clear of any Liens; and (iii) that such First Lien
Lender Party has the right to assign such First Lien Debt to the Purchasing
Second Lien Lenders and that such assignment is duly authorized.

 

-12-

--------------------------------------------------------------------------------

(e) Nothing in this Agreement shall limit any rights that the Second Lien Loan
Parties may have to purchase any of the Collateral under Section 363(k) of the
Bankruptcy Code or to file a proof of claim in any Proceeding.

 

2.4 Incorrect Payments. If any proceeds of the Collateral are received by the
Second Lien Agent or any Second Lien Lender that would properly be payable to
the First Lien Agent or the First Lien Lenders under this Agreement, such
proceeds shall not be commingled with any of the assets of the Second Lien Agent
or such Second Lien Lender, shall be held in trust by the Second Lien Agent or
such Second Lien Lender for the benefit of the First Lien Lender Parties and
shall be promptly paid over to the First Lien Agent for application (in
accordance with this Agreement and the First Lien Debt Documents) to the payment
of the First Lien Debt then remaining unpaid.

 

2.5 Subordination of Liens and Security Interests; Agreement to Release Liens.

 

(a) Until the First Lien Debt has been paid in full in cash and all lending
commitments under the First Lien Debt Documents have terminated, notwithstanding
the date, manner or order of grant, attachment or perfection of the Liens on all
or any part of the Collateral granted to the First Lien Agent, the Second Lien
Agent or the Second Lien Lenders, and notwithstanding the provisions of the UCC
or any other applicable law or decision, or the terms or provisions of the First
Lien Debt Documents or Second Lien Debt Documents, or any other circumstance
whatsoever, regardless of when or how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, all Liens of the Second Lien Lender
Parties on the Collateral shall be and hereby are subordinated for all purposes
and in all respects to the Liens of the First Lien Agent and the First Lien
Lenders on the Collateral. In the event the First Lien Agent releases or agrees
to release any of its Liens on all or any part of the Collateral in connection
with (i) any sale of assets permitted or consented to by the First Lien Agent
and the First Lien Lenders under and in accordance with the First Lien Loan
Agreement and subject to the receipt of any consent by the Second Lien Lenders
to the extent required by this Agreement, or (ii) any disposition to a third
party pursuant to any Enforcement Action or otherwise following the occurrence
of a First Lien Default, the First Lien Agent agrees to notify the Second Lien
Agent in writing thereof with such notice describing the portion of the
Collateral to be released and sold or disposed of in reasonable detail
(including, if available, the anticipated sale price) and further stating which
Collateral, if any, will be sold free and clear of the Liens of the First Lien
Agent, the Second Lien Agent and the Second Lien Lenders (the “Release Notice”).
Subject to Section 2.3, the Second Lien Agent and each Second Lien Lender,
jointly and severally, acknowledge, confirm and agree that upon the First Lien
Agent giving such a Release Notice to the Second Lien Agent, the Second Lien
Agent shall promptly release or otherwise terminate its Liens on the applicable
Collateral to the extent such Collateral is to be released, sold or otherwise
disposed of either by (x) the First Lien Agent or its agents, or (y) the
Borrower or other Loan Party in accordance with the terms of the First Lien Debt
Documents and the Second Lien Debt Documents; provided, that the proceeds of
such release, sale or other disposition are used to repay the First Lien Debt or
so much thereof that remains outstanding and

 

-13-

--------------------------------------------------------------------------------

the balance, if any, are used to prepay the Second Lien Debt (except to the
extent the Loan Parties may retain such proceeds pursuant to the First Lien Debt
Documents or the Second Lien Loan Documents). The Second Lien Agent shall
deliver such release documents as the First Lien Agent may reasonably require in
connection with any release of the Collateral pursuant to this Section 2.5(a).
After the First Lien Agent has applied the proceeds of such release, sale or
other disposition to the First Lien Debt, to the extent that the First Lien
Lenders shall have received payment in full of all First Lien Debt and to the
extent not otherwise prohibited by applicable law, the First Lien Agent shall
promptly deliver any excess proceeds from such release, sale or other
disposition to the Second Lien Agent for application to the Second Lien Debt;
provided, further, that if the closing of such release, sale or other
disposition is not consummated, the First Lien Agent promptly shall return all
release documents to the Second Lien Agent. The effectiveness of any such
release by the Second Lien Agent shall be subject to the release, sale or other
disposition of the Collateral described in the Release Notice on the terms set
forth therein or on substantially similar terms and shall lapse in the event
such release, sale or other disposition does not occur within twenty (20) days
after the closing date specified in the Release Notice. In the event that the
First Lien Agent requests the Second Lien Agent to execute and deliver any
formal release or termination of the Lien of the Second Lien Agent upon such
Collateral, each Second Lien Lender agrees to execute forthwith such formal
release or termination as may be reasonably required. In any sale or other
disposition of the Collateral by the First Lien Agent following the occurrence
of a First Lien Default, the First Lien Agent shall conduct such sale or other
disposition in a commercially reasonable manner.

 

(b) In the event that the Second Lien Agent receives a Release Notice, and the
Second Lien Agent or any of the Second Lien Lenders so wish, any of the Second
Lien Lender Parties may, in lieu of releasing their Liens as set forth in
Section 2.5(a), exercise their purchase option pursuant to Section 2.3.

 

2.6 Application of Proceeds from Sale or other Disposition of the Collateral. In
the event of any sale, transfer or other disposition (including a casualty loss
or taking through eminent domain) of the Collateral, or any prepayment of all or
any portion of the Obligations of the Loan Parties under the First Lien Debt
Documents or the Second Lien Debt Documents, the proceeds resulting therefrom
(including, without limitation, insurance proceeds) shall be applied, first, in
accordance with the terms of the First Lien Debt Documents until such time as
the First Lien Debt is paid in full in cash and the First Lien Debt Documents
have been terminated and, thereafter, shall be applied in accordance with the
terms of the Second Lien Debt Documents. Until the First Lien Debt has been paid
in full in cash and the First Lien Debt Documents have been terminated, each
Second Lien Lender Party agrees that the First Lien Agent, acting in a
commercially reasonable manner, shall have the sole and exclusive right, subject
to the First Lien Debt Documents, to adjust settlement with respect to any
insurance coverage for any Collateral, the proceeds of which will be applied
solely in accordance with the terms of the First Lien Debt Documents. To the
extent any such settlement will be applied to satisfy Second Lien Debt as
required by this Agreement, the First Lien Agent will consult with the Second
Lien Agent with respect to such settlement.

 

-14-

--------------------------------------------------------------------------------

2.7 Sale, Transfer or other Disposition of Second Lien Debt.

 

(a) The Second Lien Lenders shall not sell, assign, pledge, dispose of or
otherwise transfer all or any portion of the Second Lien Debt or any Second Lien
Debt Document unless, prior to the consummation of any such sale, assignment,
pledge, disposition or transfer, the purchaser, assignee, pledgee, recipient or
transferee thereof (other than an existing Second Lien Lender) shall execute and
deliver to the Second Lien Agent the form of Assignment and Acceptance (as
defined in the Second Lien Loan Agreement) evidencing the joinder to this
Agreement.

 

(b) Notwithstanding the failure of any such purchaser, assignee, pledgee,
recipient or transferee to execute or deliver such joinder agreement, the
subordination effected this Agreement shall survive any sale, assignment,
pledge, disposition or other transfer of all or any portion of the Second Lien
Debt, and the terms of this Agreement shall be binding upon the successors and
assigns of the Second Lien Lender Parties, as provided in Section 10.

 

(c) The First Lien Lenders shall not sell, assign, pledge, dispose of or
otherwise transfer all or any portion of the First Lien Debt or any First Lien
Debt Document unless, prior to the consummation of any such sale assignment,
pledge, disposition or transfer, the purchaser, assignee, pledgee, recipient or
transferee thereof (other than an existing First Lien Lender) shall execute and
deliver to the First Lien Agent the form of Assignment and Acceptance (as
defined in the First Lien Loan Agreement) evidencing the joinder to this
Agreement.

 

(d) Notwithstanding the failure of any such purchaser, assignee, pledgee,
recipient or transferee to execute or deliver such joinder agreement, the
intercreditor arrangements effected by this Agreement shall survive any sale,
assignment, pledge, disposition or other transfer of all or any portion of the
First Lien Debt, and the terms of this Agreement shall be binding upon the
successors and assigns of the First Lien Lender Parties, as provided in Section
10.

 

2.8 Waiver of Compliance with Certain Covenants. Subject to the other terms and
conditions in this Agreement, the Second Lien Lender Parties agree to waive
compliance with, modify or amend any covenant or other term or provision under
the Second Lien Loan Documents to the same extent and in the same manner as the
First Lien Lenders may agree from time to time to waive compliance with, modify
or amend the comparable covenant, term, or provision under the First Lien Loan
Documents; provided, that the covenants, terms and provisions of Sections
2.05(b)(ii), 5.02(a), 5.02(e), 5.02(g), 5.02(k), 5.02(q)(iii) and 5.02(q)(iv),
and the rights protected under Section 9.01, of the Second Lien Loan Agreement
shall be excluded from the operation of this Section 2.8. Any waiver,
modification or amendment of a covenant, term or provision under the Second Lien
Loan Documents contemplated by this Section 2.8 shall be effective as of the
time and date of the waiver, modification or amendment of the comparable,
covenant, term or provision under the First Lien Documents without the necessity
of any action on the part of the Second Lien Lender Parties; provided, that the
Second Lien Lender Parties agree to execute and deliver any documentation in
confirmation of any such waiver, modification or amendment as the Loan Parties
on the First Lien Agent may reasonably request from time to time.
Notwithstanding anything to the contrary set forth herein, any waiver,
modification or amendment of a covenant, term or provision under the Second Lien
Loan

 

-15-

--------------------------------------------------------------------------------

Documents contemplated by this Section 2.8 shall terminate upon the payment in
full in cash of the First Lien Debt and the termination of all lending
commitments under the First Lien Debt Documents, unless the continued
effectiveness thereof is otherwise confirmed in writing by the Second Lien
Lenders prior to such date.

 

2.9. Agreement to Give Notices. The First Lien Agent and the Second Lien Agent
each agree to send to the other, concurrently with each such notice being sent
by it to a Loan Party, a copy of each written notice of an “Event of Default”
under the First Lien Loan Documents and the Second Lien Loan Documents,
respectively, and a copy of each written notice of intention by the First Lien
Lenders or the Second Lien Lenders, as the case may be, to exercise enforcement
rights and remedies; provided, that any failure by the First Lien Agent or the
Second Lien Agent to give notice in accordance with this Section 2.9 shall not
affect the relative priorities of the Lenders’ respective Liens as provided
herein, or the validity or effectiveness of any such notice as against any Loan
Party, or result in any liability to, or create a basis for any cause of action
against, any Lender.

 

3. Agent for Purposes of Perfection. The First Lien Agent and the Second Lien
Agent each hereby appoints the other as agent for the purpose of perfecting the
appointing agent’s Liens on any of the Collateral in the possession of such
other agent, and, with respect to any deposit, securities or other accounts of
BTI (or its subsidiaries) pursuant to which the Second Lien Agent has entered
into dominion and control agreements with the financial institutions in which
such accounts are located and which have not consented to the assignment of such
dominion and control agreement to the First Lien Agent in which case,
notwithstanding anything else herein to the contrary, the Second Lien Agent
shall serve as the Subagent (as defined in the Existing First Lien Loan
Agreement) of the first Lien Agent in accordance with, and subject to, the
rights and obligations set forth in Section 8.07 of the Existing First Lien Loan
Agreement; provided, that the possessing agent shall not have any duty or
liability to protect or preserve any rights pertaining to any of such Collateral
and, except for gross negligence or willful misconduct as determined pursuant to
a final non-appealable order of a court of competent jurisdiction, the
non-possessing agent hereby waives and releases the possessing agent from all
claims and liabilities arising pursuant to the possessing agent’s role as
possessing agent with respect to such Collateral, so long as the possessing
agent shall use the same degree of care with respect thereto as the possessing
agent uses for similar property pledged to the possessing agent as collateral
for indebtedness of others to the possessing agent. Upon, and in connection
with, the First Lien Lender Parties receiving indefeasible payment in full of
all First Lien Debt, the First Lien Agent shall assign and deliver to the Second
Lien Agent (a) the remainder of such Collateral, if any, in its possession and
(b) each agreement respecting any Collateral to which First Lien Agent is a
party, including, without limitation, all rights under account control
agreements, landlord’s, bailee’s or similar waivers and consents.

 

4. Modifications.

 

4.1 Modifications to First Lien Debt Documents. The First Lien Lender Parties
may at any time and from time to time without the consent of or notice to the
Second Lien Lenders, without incurring liability to the Second Lien Lenders and
without impairing or releasing the obligations of the Second Lien Lenders under
this Agreement, change the manner

 

16

--------------------------------------------------------------------------------

or place of payment or extend the time of payment of or renew or alter any of
the terms of the First Lien Debt, or amend in any manner any First Lien Debt
Document; provided, that without the consent of the Second Lien Lenders, the
First Lien Lender Parties shall not amend the First Lien Debt Documents to (a)
increase the principal amount thereof above the maximum principal amount
described in the definition of First Lien Debt, (b) increase the interest rate
margins or calculations of the interest rates (including default interest rates
specified thereunder on the date hereof) relating to the First Lien Debt in an
amount greater than 2% over such interest rates in effect on the date hereof
(provided, however, the comparable interest rate margins or calculations of the
interest rates (excluding default interest rates specified thereunder)
applicable with respect to the Second Lien Debt shall, without further action on
the part of any party, be increased at the same time in a like amount), (c)
change the dates on which scheduled payments of principal are due, or change the
amount of such payments, such that the maturity of the First Lien Debt is after
June 30, 2006, or (d) amend, modify or waive the limitations in Section 5.02(a)
of the First Lien Loan Agreement.

 

4.2 Modifications to Second Lien Debt Documents. Until the First Lien Debt has
been paid in full in cash and all lending commitments under the First Lien Debt
Documents have terminated, and notwithstanding anything to the contrary
contained in the Second Lien Debt Documents, the Second Lien Lender Parties
shall not, without the prior written consent of the Required Lenders under the
First Lien Loan Agreement, agree to any amendment, modification or supplement to
the Second Lien Debt Documents that would (a) directly or indirectly result in
an increase in the interest rates or fees in respect of the Second Lien Debt,
(b) shorten the maturity or weighted average life to maturity of the Second Lien
Debt, (c) increase the amount of the Second Lien Debt, or (d) add to, or make
more restrictive, the covenants, events of default or other material provisions
of the Second Lien Loan Documents; provided, that, if, after the date hereof,
the First Lien Agent or the First Lien Lender Parties are granted Liens on
additional items of Property of any Loan Party, or obtain additional guarantees
of the First Lien Debt from any other Person, or if new borrowers become parties
to the First Lien Debt Documents, the Loan Parties shall provide written notice
of such occurrence to the Second Lien Agent and the similar grant of Liens in
favor of the Second Lien Lenders in such additional items of Property, the
execution and delivery by such other Person of a similar guaranty of the Second
Lien Debt, or the execution and delivery by such new borrowers of the Second
Lien Debt Documents, as applicable, shall be effected; provided, further, that,
(i) the form and substance of all agreements, documents and instruments executed
and/or delivered by such Loan Party, other Person, or new borrowers, as the case
may be, in connection therewith are in each case reasonably acceptable to the
First Lien Agent (which, if such agreements, documents and instruments are in
substantially similar form to (x) correlative documents executed and delivered
on the date hereof or (y) correlative documents executed and/or delivered by
such Loan Party, Person or new borrowers in favor of the First Lien Agent
following the date hereof, shall be deemed to be reasonably acceptable) and (ii)
each of such agreements, documents and instruments contains an express
acknowledgment that it constitutes a Second Lien Debt Document for all purposes
of this Agreement.

 

-17-

--------------------------------------------------------------------------------

5. Waiver of Certain Rights by Second Lien Lenders.

 

5.1 Marshaling. Each Second Lien Lender hereby waives any rights it may have
under applicable law to assert the doctrine of marshaling or otherwise to
require the First Lien Agent or the other First Lien Lender Party to marshal any
Property of any Loan Party for the benefit of the Second Lien Lenders.

 

5.2 Rights Relating to the First Lien Agent’s Actions with respect to the
Collateral. Each Second Lien Lender hereby waives, to the extent permitted by
applicable law, any rights which it may have to enjoin or otherwise obtain a
judicial or administrative order preventing the First Lien Agent or the other
First Lien Lender Party from taking, or refraining from taking, any action with
respect to all or any part of the Collateral, except for any such action that is
subject to the consent of the Second Lien Lenders pursuant to this Agreement or
would otherwise constitute a breach of this Agreement. Without limiting the
foregoing, each Second Lien Lender Party hereby agrees (a) that it has no right
to direct or object to the manner in which the First Lien Lender Parties apply
the proceeds of the Collateral resulting from the exercise by the First Lien
Lender Parties of rights and remedies under the First Lien Debt Documents with
respect to the First Lien Debt, provided, that such application is consistent
with the First Lien Debt Documents and Section 2.6 and such proceeds are in fact
applied in accordance therewith, and (b) that other than as set forth in Section
3 and any other written agreements pursuant to which the First Lien Agent has an
obligation to so act, the First Lien Agent has not assumed any obligation to act
as the agent for the Second Lien Lenders with respect to the Collateral.
Notwithstanding the foregoing, nothing in this Agreement is intended or shall be
deemed (i) to prohibit the Second Lien Lender Parties from seeking contractual
remedies against any First Lien Lender Party if such First Lien Lender Party
breaches its obligations under this Agreement or any other written agreement
between such parties or (ii) to restrict the rights of the Second Lien Lender
Parties to seek judicial relief if a foreclosure of the Collateral by the First
Lien Agent does not comply with the requirements of Section 9-610 of the UCC
regarding commercial reasonableness.

 

6. Representations and Warranties.

 

6.1 Representations and Warranties of Each First Lien Lender Party. Each First
Lien Lender Party hereby represents and warrants to each Second Lien Lender
Party that as of the date hereof: (a) such First Lien Lender Party is a Person
duly formed and validly existing under the laws of the jurisdiction of its
organization; (b) such First Lien Lender Party has the power and authority to
enter into, execute, deliver and carry out the terms of this Agreement, all of
which have been duly authorized by all proper and necessary action by or on
behalf of such First Lien Lender Party; (c) the execution of this Agreement by
such First Lien Lender Party will not violate or conflict with the
organizational documents of such First Lien Lender Party, any material agreement
binding upon such First Lien Lender Party or any law, regulation or order, or
require any consent or approval which has not been obtained; (d) this Agreement
is the legal, valid and binding obligation of such First Lien Lender Party,
enforceable against such First Lien Lender Party in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by equitable principles; and (e) such First
Lien

 

-18-

--------------------------------------------------------------------------------

Lender Party is the sole owner, beneficially and of record, of the principal
amount of the First Lien Debt that is equal to the Commitment (as such term is
defined in the First Lien Loan Agreement) of such First Lien Lender Party.

 

6.2 Representations and Warranties of Each Second Lien Lender Party. Each Second
Lien Lender Party hereby represents and warrants to each First Lien Lender Party
that as of the date hereof: (a) such Second Lien Lender Party is a Person duly
formed and validly existing under the laws of the jurisdiction of its
organization; (b) such Second Lien Lender Party has the power and authority to
enter into, execute, deliver and carry out the terms of this Agreement, all of
which have been duly authorized by all proper and necessary action by or on
behalf of such Second Lien Lender Party; (c) the execution of this Agreement by
such Second Lien Lender Party will not violate or conflict with the
organizational documents of such Second Lien Lender Party, any material
agreement binding upon such Second Lien Lender Party or any law, regulation or
order, or require any consent or approval which has not been obtained; (d) this
Agreement is the legal, valid and binding obligation of such Second Lien Lender
Party, enforceable against such Second Lien Lender Party in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by equitable principles; and (e) such Second
Lien Lender Party is the sole owner, beneficially and of record, of the
principal amount of the Second Lien Debt that is equal to the Commitment (as
such term is defined in the Second Lien Loan Agreement) of such Second Lien
Lender Party.

 

7. Modification. Any modification or waiver of any provision of this Agreement,
or any consent to any departure by any party from the terms hereof, shall not be
effective in any event unless the same is in writing and signed by the Required
Lenders under the First Lien Credit Agreement and the Required Lenders under the
Second Lien Credit Agreement, and then such modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
given. Any notice to or demand on any party hereto in any event not specifically
required hereunder shall not entitle the party receiving such notice or demand
to any other or further notice or demand in the same, similar or other
circumstances unless specifically required hereunder.

 

8. Further Assurances. Each party to this Agreement promptly will execute and
deliver such further instruments and agreements and do such further acts and
things as may be reasonably requested in writing by any other party hereto that
may be necessary or desirable in order to effect fully the purposes of this
Agreement. The First Lien Agent and the Second Lien Agent each agree to use
reasonable efforts to give the other notice of any additional UCC filing,
mortgage, deed of trust, security agreement, intellectual property security
agreement, or any similar document or instrument executed and/or delivered by a
Loan Party to it, to give the other reasonable opportunity to take a similar
action.

 

9. Notices. Unless otherwise specifically provided herein, any notice delivered
under this Agreement shall be in writing addressed to the respective party as
set forth below and may be personally served, telecopied or sent by overnight
courier service or certified or registered United States mail and shall be
effective upon actual delivery, as follows: (a) if delivered in person, when
delivered; (b) if delivered by telecopy, on the date of transmission if

 

-19-

--------------------------------------------------------------------------------

transmitted on a Business Day before 4:00 p.m. (New York time) or, if not, on
the next succeeding Business Day; (c) if delivered by overnight courier, when
delivered; or (d) if by certified or registered United States mail, upon
delivery as evidenced by a receipt indicating the same. Notices shall be
addressed as follows:

 

If to the First Lien Agent

   

or any First Lien Lender

 

WELLS FARGO BANK MINNESOTA, N.A.

   

Corporate Trust Services

   

N9303-120

   

Sixth Street & Marquette Avenue

   

Minneapolis, MN 55479

   

Attn:

 

Nicholas D. Tally/Jeffery T. Rose

   

Fax:

 

(612) 667-9825

With copies (which shall

   

not constitute notice) to:

 

TORYS LLP

   

237 Park Avenue

   

New York, New York 10017

   

Attn:

 

Emanuel C. Grillo, Esq.

   

Fax:

 

212-682-0200

If to any

   

Second Lien Lender Party

 

c/o GENERAL ELECTRIC

   

CAPITAL CORPORATION

   

2325 Lakeview Parkway, Suite 700

   

Alpharetta, Georgia 30004

   

Attention: ITC^DELTACOM Account Manager

   

Fax:

 

(678) 624-7903

With copies (which shall

   

not constitute notice) to:

 

SMITH, GAMBRELL & RUSSELL, LLP

   

1230 Peachtree Street, N.E.

   

Atlanta, Georgia 30309-3592

   

Attn:

 

John R. Schneider

   

Fax:

 

(404) 815-3509

If to any Loan Party

 

ITC^DELTACOM, INC.

   

1791 OG Skinner Drive

   

West Point, Georgia 81833

   

Attn:

 

Doug Shumate, Chief Financial Officer

   

Fax:

 

(706) 385-8801

 

-20-

--------------------------------------------------------------------------------

With copies (which shall

   

not constitute notice) to:

 

HOGAN & HARTSON L.L.P.

   

8300 Greensboro Drive

   

McLean, Virginia 22102

   

Attn:

 

Richard J. Parrino, Esq.

   

Fax:

 

703-610-6200

 

or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this Section 9.

 

10. Successors and Assigns. This Agreement shall inure to the benefit of, and
shall be binding upon, the respective permitted successors and assigns of the
First Lien Lender Parties, the Second Lien Lender Parties and the Loan Parties.
To the extent permitted under the First Lien Debt Documents, the First Lien
Lender Parties may, from time to time, without notice to the Second Lien Lender
Parties, assign or transfer any or all of the First Lien Debt or any interest
therein to any Person (provided that, any such assignment or transfer is
conditioned upon receipt by the First Lien Agent of the prior written
acknowledgment of such Person agreeing to be bound by the terms and provisions
of this Agreement to the same extent as if a signatory hereto) and,
notwithstanding any such assignment or transfer, or any subsequent assignment or
transfer, the First Lien Debt shall, subject to the terms hereof, be and remain
First Lien Debt for purposes of this Agreement, and every assignee or transferee
of any of the First Lien Debt or of any interest therein shall, to the extent of
the interest of such assignee or transferee in the First Lien Debt, be entitled
to rely upon the lien subordination provided under this Agreement and shall be
entitled to enforce all of the terms and provisions hereof to the same extent as
if such assignee or transferee were initially a party hereto.

 

11. Relative Rights. This Agreement shall define the relative rights to the
Collateral of the First Lien Lender Parties (which shall be paid first from
proceeds of the Collateral) and the Second Lien Lender Parties (which shall be
paid after the First Lien Debt from proceeds of the Collateral) but shall not be
deemed to subordinate the right of the Second Lien Lenders to receive payment to
the right of the First Lien Lenders to receive payment. Nothing in this
Agreement shall (a) impair, as among the Loan Parties and the First Lien Lender
Parties and as among the Loan Parties and the Second Lien Lender Parties, the
obligations of the respective Loan Parties with respect to the payment of the
First Lien Debt and the Second Lien Debt in accordance with their respective
terms or (b) affect the relative rights of the First Lien Lender Parties or the
Second Lien Lender Parties with respect to any other creditors of the Loan
Parties.

 

12. Conflict. In the event of any conflict between any term, covenant or
condition of this Agreement and any term, covenant or condition of any of the
First Lien Debt Documents or the Second Lien Debt Documents, the provisions of
this Agreement shall control and govern.

 

13. Headings. The paragraph headings used in this Agreement are for convenience
only and shall not affect the interpretation of any of the provisions hereof.

 

-21-

--------------------------------------------------------------------------------

14. Counterparts. This Agreement 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.

 

15. Severability. In the event that any provision of this Agreement is deemed to
be invalid, illegal or unenforceable by reason of the operation of any law or by
reason of the interpretation placed thereon by any court or governmental
authority, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby, and the
affected provision shall be modified to the minimum extent permitted by law so
as most fully to achieve the intention of this Agreement.

 

16. Continuation of Lien Subordination; Termination of Agreement. This Agreement
shall remain in full force and effect until the indefeasible payment in full in
cash of the First Lien Debt and the termination of all lending commitments under
the First Lien Debt Documents, after which this Agreement shall terminate
without further action on the part of the parties hereto.

 

17. Applicable Law. This Agreement shall be governed by and shall be construed
and enforced in accordance with the laws of the State of New York (excluding the
laws applicable to conflicts or choice of law).

 

18. CONSENT TO JURISDICTION. EACH PARTY HERETO HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW
YORK, STATE OF NEW YORK AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE LITIGATED IN SUCH COURTS.
EACH PARTY TO THIS AGREEMENT EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION
OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH
PARTY TO THIS AGREEMENT HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON IT IN THE MANNER
PROVIDED IN SECTION 9.

 

19. WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT WAIVES ITS RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE FIRST LIEN DEBT DOCUMENTS OR ANY OF THE SECOND LIEN DEBT
DOCUMENTS. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT IT HAS RELIED ON
THIS WAIVER IN ENTERING INTO THIS AGREEMENT, THE FIRST LIEN DEBT DOCUMENTS AND
THE SECOND LIEN DEBT DOCUMENTS, AND THAT IT WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. EACH PARTY TO THIS AGREEMENT WARRANTS AND
REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO REVIEW THIS JURY WAIVER WITH LEGAL
COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS AS
PROVIDED HEREIN.

 

-22-

--------------------------------------------------------------------------------

20. Obligations Unconditional.

 

(a) All rights, interests, agreements and obligations of each party hereunder
shall remain in full force and effect irrespective of: (i) any lack of validity
or enforceability of any First Lien Debt Document or any Second Lien Debt
Document; (ii) any change in the time, manner, order or place of payment of, or
in any other term in respect of, all or any of the First Lien Debt or the Second
Lien Debt, or any other amendment or waiver of or any consent to departure from
any First Lien Debt Document or any Second Lien Debt Document in accordance with
the terms hereof; or (iii) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, any party to this
Agreement, any First Lien Debt Document or any Second Lien Debt Document other
than the payment in full of the First Lien Debt.

 

(b) This Agreement shall continue to be effective or shall be reinstated, as the
case may be, if at any time any payment of any of the First Lien Debt is
rescinded or must otherwise be returned by the First Lien Agent upon the
insolvency, bankruptcy or reorganization of a Loan Party or otherwise, all as
though such payment had not been made.

 

21. Waiver. Except to the extent expressly provided herein, each of the Second
Lien Lender Parties and each of the Loan Parties hereby waives (a) promptness
and diligence, (b) notice of any actions taken by the First Lien Agent, a First
Lien Lender Party or any other Person under any First Lien Debt Document or any
other agreement, document or instrument relating thereto, (c) all other notices,
demands and protests, and all other formalities of every kind in connection with
the enforcement of all or any part of the First Lien Debt or of the obligations
of the Second Lien Lender Parties hereunder and (d) any requirement that the
First Lien Agent protect, secure, perfect or insure any Lien on any property
subject thereto or exhaust any right to take any action against any Loan Party
or any other Person or any Collateral.

 

22. Specific Performance. Each of the First Lien Lender Parties and the Second
Lien Lender Parties is hereby authorized to demand specific performance of this
Agreement at any time when any Second Lien Lender Party or any First Lien Lender
Party, respectively, shall have failed to comply with any of the provisions of
this Agreement, and each Lender hereby irrevocably waives any defense based on
the adequacy of a remedy at law which might be asserted as a bar to such remedy
of specific performance.

 

23. Intended Scope of Agreements. Notwithstanding anything to the contrary set
forth herein, the provisions of this Agreement applicable to the Second Lien
Agent or any Second Lien Lender are intended to, and shall be applicable by or
against, such Person solely in their respective capacities as a Second Lien
Agent or Second Lien Lender, as the case may be, and only with respect to the
Second Lien Debt held by such Person and the rights and obligations of such
Person under the Second Lien Debt Documents. In furtherance of the foregoing,
the parties to this Agreement acknowledge and agree that neither (i) General
Electric Capital Corporation, Banc of America Strategic Solutions, Inc. or
Export Development Canada, in their capacities as First Lien Lenders and holders
of First Lien Debt, nor (ii) General Electric Capital Corporation, in its
capacity as a lessor under the GECC Capital Lease (as defined in the Existing
First Lien Loan Agreement) or any obligations owing to General Electric Capital
Corporation thereunder, are subject to treatment as Second Lien Lenders or
Second Lien Debt hereunder.

 

-23-

--------------------------------------------------------------------------------

[remainder of page intentionally left blank; signature pages follow]

 

 

-24-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the First Lien Lender Parties, the First Lien
Lenders, the Loan Parties and the Second Lien Lender Parties have caused this
Agreement to be executed as of the date first above written.

 

WELLS FARGO BANK MINNESOTA, N.A.,

as the First Lien Agent

By:

 

    /s/ Jeffery Rose

--------------------------------------------------------------------------------

    Duly Authorized Signatory     Name:   Jeffery Rose     Title:   Corporate
Trust Officer

 

-25-

--------------------------------------------------------------------------------

PW WILLOW FUND, L.L.C., as First Lien Lender

By Bond Street Capital LLC

By:

 

  /s/ Sam S. Kim

--------------------------------------------------------------------------------

   

Name:

 

Sam S. Kim

   

Title:

 

Managing Member

Bond Street Capital, L.L.C.

 

-26-

--------------------------------------------------------------------------------

ELC (CAYMAN) LTD. 2000-1, as First Lien Lender

By David L. Babson & Company Inc.,

as Collateral Manager

By:

 

/s/ Clifford M. Noreen

--------------------------------------------------------------------------------

   

Name:

 

Clifford M. Noreen

   

Title:

 

Managing Director

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, as First Lien Lender

By David L. Babson & Company Inc.,

as Investment Advisor

By:

 

/s/ Clifford M. Noreen

--------------------------------------------------------------------------------

   

Name:

 

Clifford M. Noreen

   

Title:

 

Managing Director

SUFFIELD CLO, LIMITED, as First Lien Lender

By David L. Babson & Company Inc.,

as Collateral Manager

By:

 

/s/ Clifford M. Noreen

--------------------------------------------------------------------------------

   

Name:

 

Clifford M. Noreen

   

Title:

 

Managing Director

TRYON CLO LTD. 2000-1, as First Lien Lender

By David L. Babson & Company Inc.,

as Collateral Manager

By:

 

/s/ Clifford M. Noreen

--------------------------------------------------------------------------------

   

Name:

 

Clifford M. Noreen

   

Title:

 

Managing Director

 

-27-

--------------------------------------------------------------------------------

GOLDENTREE HIGH YIELD MASTER FUND, LTD., as First Lien Lender By Goldentree
Asset Management, L.P. By:  

  /s/ Steven Shapiro

--------------------------------------------------------------------------------

    Name:   Steven Shapiro     Title:   Portfolio Manager GOLDENTREE HIGH YIELD
MASTER FUND II, LTD., as First Lien Lender By Goldentree Asset Management, L.P.
By:  

  /s/ Steven Shapiro

--------------------------------------------------------------------------------

    Name:   Steven Shapiro     Title:   Portfolio Manager GOLDENTREE HIGH YIELD
OPPORTUNITIES I, L.P., as First Lien Lender By Goldentree Asset Management, L.P.
By:  

  /s/ Steven Shapiro

--------------------------------------------------------------------------------

    Name:   Steven Shapiro     Title:   Portfolio Manager GOLDENTREE HIGH YIELD
OPPORTUNITIES II, L.P., as First Lien Lender By Goldentree Asset Management,
L.P. By:  

  /s/ Steven Shapiro

--------------------------------------------------------------------------------

    Name:   Steven Shapiro     Title:   Portfolio Manager DB STRUCTURED PRODUCTS
INC., as First Lien Lender By Goldentree Asset Management, L.P. By:  

  /s/ Steven Shapiro

--------------------------------------------------------------------------------

    Name:   Steven Shapiro     Title:   Portfolio Manager

 

-28-

--------------------------------------------------------------------------------

GOLDENTREE LOAN OPPORTUNITIES I, LIMITED, as First Lien Lender By Goldentree
Asset Management, L.P. By:  

  /s/ Steven Shapiro

--------------------------------------------------------------------------------

    Name:   Steven Shapiro     Title:   Portfolio Manager SAFETY NATIONAL
CASUALTY CORPORATION, as First Lien Lender By Goldentree Asset Management, L.P.
By:  

  /s/ Steven Shapiro

--------------------------------------------------------------------------------

    Name:   Steven Shapiro     Title:   Portfolio Manager ALPHA U.S. SUBFUND II,
LLC, as First Lien Lender By Goldentree Asset Management, L.P. By:  

  /s/ Steven Shapiro

--------------------------------------------------------------------------------

    Name:   Steven Shapiro     Title:   Portfolio Manager

 

-29-

--------------------------------------------------------------------------------

SANKATY ADVISORS, LLC, as Collateral Manager for Brant Point II CBO 2000-1 LTD.,
as First Lien Lender By:  

  /s/ Diane J. Exter

--------------------------------------------------------------------------------

    Name:   Diane J. Exter     Title:  

Managing Director

Portfolio Manager

SANKATY ADVISORS, LLC, as Collateral Manager for Great Point CLO 1999-1 LTD, as
First Lien Lender By:  

  /s/ Diane J. Exter

--------------------------------------------------------------------------------

    Name:   Diane J. Exter     Title:  

Managing Director

Portfolio Manager

SANKATY HIGH YIELD PARTNERS III, L.P., as First Lien Lender By:  

  /s/ Diane J. Exter

--------------------------------------------------------------------------------

    Name:   Diane J. Exter     Title:  

Managing Director

Portfolio Manager

SANKATY HIGH YIELD PARTNERS II, L.P., as First Lien Lender By:  

  /s/ Diane J. Exter

--------------------------------------------------------------------------------

    Name:   Diane J. Exter     Title:  

Managing Director

Portfolio Manager

SANKATY HIGH YIELD ASSET PARTNERS, L.P., as First Lien Lender By:  

  /s/ Diane J. Exter

--------------------------------------------------------------------------------

    Name:   Diane J. Exter     Title:  

Managing Director

Portfolio Manager

 

-30-

--------------------------------------------------------------------------------

SANKATY CREDIT OPPORTUNITIES, L.P., as First Lien Lender By:  

  /s/ Diane J. Exter

--------------------------------------------------------------------------------

    Name:   Diane J. Exter     Title:  

Managing Director

Portfolio Manager

Sankaty Advisors, LLC as Collateral Manager for Race Point II CLO, Limited, as
First Lien Lender By:  

  /s/ Diane J. Exter

--------------------------------------------------------------------------------

    Name:   Diane J. Exter     Title:  

Managing Director

Portfolio Manager

 

-31-

--------------------------------------------------------------------------------

PACIFICA PARTNERS I, LP, as First Lien Lender

By:

 

  /s/ Sean Walker

--------------------------------------------------------------------------------

   

Name:

 

Sean Walker

   

Title:

 

Senior Vice President

 

-32-

--------------------------------------------------------------------------------

ALLIANCE CAPITAL FUNDING, as First Lien Lender By:  

  /s/ Robert Bayer

--------------------------------------------------------------------------------

    Name:   Robert Bayer     Title:   Vice President

 

-33-

--------------------------------------------------------------------------------

WEBSTER BANK, as First Lien Lender By:  

  /s/ Elisabeth V. Piker

--------------------------------------------------------------------------------

    Name:   Elisabeth V. Piker     Title:   Vice President

 

-34-

--------------------------------------------------------------------------------

WESTPAC BANKING CORPORATION, as First Lien Lender

By:

 

  /s/ Mark John

--------------------------------------------------------------------------------

   

Name:

 

Mark John

   

Title:

 

Head of Credit

Europe & Americas

 

-35-

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., as First Lien Lender By:  

  /s/ Laura T. Sweet

--------------------------------------------------------------------------------

    Name:   Laura T. Sweet     Title:   Assistant Vice President

 

-36-

--------------------------------------------------------------------------------

EXCEL BANK MINNESOTA, as First Lien Lender By:  

  /s/ Natalie [Last Name Illegible]

--------------------------------------------------------------------------------

    Name:   Natalie [Last Name Illegible]     Title:   Vice President

 

-37-

--------------------------------------------------------------------------------

LONG LANE MASTER TRUST IV, By Fleet National Bank As Trust Administrator as
First Lien Lender By:  

  /s/ Michael J. Sullivan

--------------------------------------------------------------------------------

    Name:   Michael J. Sullivan     Title:   Director

 

-38-

--------------------------------------------------------------------------------

R2 TOP HAT, LTD., as First Lien Lender By Amalgamated Gadget, L.P., its
Investment Manager By Scepter Holdings, Inc., its General Partner By:  

  /s/ Geoffrey Raynor

--------------------------------------------------------------------------------

    Name:   Geoffrey Raynor     Title:   President

 

-39-

--------------------------------------------------------------------------------

MUZINICH CASHFLOW CBO II LTD., as First Lien Lender By:  

  /s/ Michael Ludwig

--------------------------------------------------------------------------------

    Name:   Michael Ludwig     Title:   CFO, Muzinich & Co., Inc. MUZINICH
CASHFLOW CBO, LTD., as First Lien Lender By:  

  /s/ Michael Ludwig

--------------------------------------------------------------------------------

    Name:   Michael Ludwig     Title:   CFO, Muzinich & Co., Inc.

 

-40-

--------------------------------------------------------------------------------

SANDLER ASSOCIATES, as First Lien Lender By:  

  /s/ Douglas E. Schimmel

--------------------------------------------------------------------------------

    Name:   Douglas E. Schimmel     Title:   Managing Director SANDLER
ASSOCIATES II, as First Lien Lender By:  

  /s/ Douglas E. Schimmel

--------------------------------------------------------------------------------

    Name:   Douglas E. Schimmel     Title:   Managing Director SANDLER
COMMUNICATION OFFSHORE, as First Lien Lender By:  

  /s/ Steven [Last Name Illegible]

--------------------------------------------------------------------------------

    Name:   Steven [Last Name Illegible]     Title:   Director

 

-41-

--------------------------------------------------------------------------------

GENERAL ELECTRIC CAPITAL CORPORATION,

as First Lien Lender

By:  

  /s/ Todd B. Foust

--------------------------------------------------------------------------------

    Name:   Todd B. Foust     Title:   Duly Authorized Signatory

 

-42-

--------------------------------------------------------------------------------

BANC OF AMERICA STRATEGIC SOLUTIONS, INC., as First Lien Lender By:  

  /s/ John W. [Last Name Illigible] III

--------------------------------------------------------------------------------

    Name:     Title:

 

-43-

--------------------------------------------------------------------------------

EXPORT DEVELOPMENT CANADA (f/k/a/
Export Development Corporation), as First Lien Lender By:  

  /s/ Kevin Skilliter

--------------------------------------------------------------------------------

    Name:   Kevin Skilliter     Title:   Loan Asset Manager By:  

  /s/ Lynda Bernst

--------------------------------------------------------------------------------

    Name:   Lynda Bernst     Title:   IT Portfolio Manager

 

-44-

--------------------------------------------------------------------------------

GENERAL ELECTRIC CAPITAL CORPORATION,

as Second Lien Agent and Second Lien Lender

By:  

  /s/ Todd B. Foust

--------------------------------------------------------------------------------

    Name:   Todd B. Foust     Title:   Duly Authorized Signatory BANC OF AMERICA
STRATEGIC SOLUTIONS, INC., as Second Lien Lender By:  

  /s/ John W. [Last Name Illigible] III

--------------------------------------------------------------------------------

    Name:         Title:     EXPORT DEVELOPMENT CANADA (f/k/a/
Export Development Corporation), as Second Lien Lender By:  

  /s/ Kevin Skilliter

--------------------------------------------------------------------------------

    Name:   Kevin Skilliter     Title:   Loan Asset Manager By:  

  /s/ Lynda Bernst

--------------------------------------------------------------------------------

    Name:   Lynda Bernst     Title:   IT Portfolio Manager

 

-45-

--------------------------------------------------------------------------------

INTERSTATE FIBERNET, INC., as Borrower By:  

  /s/ Douglas A. Shumate

--------------------------------------------------------------------------------

    Name:   Douglas A. Shumate     Title:   Senior Vice President/Chief
Financial Officer ITC^DELTACOM, INC., as Guarantor By:  

  /s/ Douglas A. Shumate

--------------------------------------------------------------------------------

    Name:   Douglas A. Shumate     Title:   Senior Vice President/Chief
Financial Officer ITC^DELTACOM COMMUNICATIONS, INC., as Guarantor By:  

  /s/ Douglas A. Shumate

--------------------------------------------------------------------------------

    Name:   Douglas A. Shumate     Title:   Senior Vice President/Chief
Financial Officer DELTACOM INFORMATION SYSTEMS, INC., as Guarantor By:  

  /s/ Douglas A. Shumate

--------------------------------------------------------------------------------

    Name:   Douglas A. Shumate     Title:   Senior Vice President/Chief
Financial Officer

 

-46-

--------------------------------------------------------------------------------

BTI TELECOM CORP., as Guarantor By:  

  /s/ Douglas A. Shumate

--------------------------------------------------------------------------------

    Name:   Douglas A. Shumate     Title:   Senior Vice President/Chief
Financial Officer BUSINESS TELECOM, INC., as Guarantor By:  

  /s/ Douglas A. Shumate

--------------------------------------------------------------------------------

    Name:   Douglas A. Shumate     Title:   Senior Vice President/Chief
Financial Officer BUSINESS TELECOM OF VIRGINIA, INC., as Guarantor By:  

  /s/ Douglas A. Shumate

--------------------------------------------------------------------------------

    Name:   Douglas A. Shumate     Title:   Senior Vice President/Chief
Financial Officer

 

-47-