Exhibit 10.1

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of March 29, 2005

 

Among

 

ITC^DELTACOM, INC.

 

as Parent

 

INTERSTATE FIBERNET, INC.

 

as Borrower

 

THE SUBSIDIARY GUARANTORS NAMED HEREIN

 

as Subsidiary Guarantors

 

THE LENDERS NAMED HEREIN

 

as Lenders

 

WELLS FARGO BANK, N.A.

 

as Administrative Agent and

 

Collateral Agent

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TABLE OF CONTENTS

 

ARTICLE I    DEFINITIONS AND ACCOUNTING TERMS

   3

SECTION 1.01.

      

Certain Defined Terms

   3

SECTION 1.02.

      

Computation of Time Periods; Other Definitional Provisions

   33

SECTION 1.03.

      

Accounting Terms

   33

ARTICLE II    AMOUNTS AND TERMS OF THE ADVANCES

   34

SECTION 2.01.

      

Restructuring

   34

SECTION 2.02.

      

Special Term B Advances

   35

SECTION 2.03.

      

Repayment of Advances; Application of Moneys by Administrative Agent

   37

SECTION 2.04.

      

Intentionally omitted

   38

SECTION 2.05.

      

Prepayments

   38

SECTION 2.06.

      

Interest

   40

SECTION 2.07.

      

Fees

   41

SECTION 2.08.

      

Conversion of Advances

   41

SECTION 2.09.

      

Increased Costs, Etc.

   42

SECTION 2.10.

      

Payments and Computations

   43

SECTION 2.11.

      

Taxes

   44

SECTION 2.12.

      

Sharing of Payments, Etc.

   47

SECTION 2.13.

      

Use of Proceeds

   48

SECTION 2.14.

      

Defaulting Lenders

   48

SECTION 2.15.

      

Evidence of Debt; Register

   49

ARTICLE III    CONDITIONS OF LENDING

   51

SECTION 3.02.

      

Conditions Precedent to the Third Amendment Effective Date

   51

SECTION 3.02.

      

Conditions Precedent to Special Term B Borrowings

   55

ARTICLE IV    REPRESENTATIONS AND WARRANTIES

   55

SECTION 4.01.

      

Representations and Warranties of the Borrower

   55

ARTICLE V    COVENANTS

   63

SECTION 5.01.

      

Affirmative Covenants

   63

SECTION 5.02.

      

Negative Covenants

   70

SECTION 5.03.

      

Reporting Requirements

   79

ARTICLE VI    EVENTS OF DEFAULT

   83

SECTION 6.01.

      

Events of Default

   83

ARTICLE VII    GUARANTY

   86

SECTION 7.01.

      

Guaranty; Limitation of Liability

   86

SECTION 7.02.

      

Guaranty Absolute

   87

SECTION 7.03.

      

Waivers and Acknowledgments

   88

SECTION 7.04.

      

Subrogation

   88

 

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SECTION 7.05.

      

Guaranty Supplements

   89

SECTION 7.06.

      

Subordination

   90

SECTION 7.07.

      

Continuing Guaranty; Assignments

   90

SECTION 7.08.

      

Release of Guarantor

   91

ARTICLE VIII    THE AGENT

   91

SECTION 8.01.

      

Authorization and Action

   91

SECTION 8.02.

      

Agents’ Reliance, Etc.

   91

SECTION 8.03.

      

Wells Fargo and Affiliates

   92

SECTION 8.04.

      

Lender Credit Decision

   92

SECTION 8.05.

      

Indemnification

   92

SECTION 8.06.

      

Successor Agents

   93

SECTION 8.07.

      

Appointment of Subagents

   94

ARTICLE IX    MISCELLANEOUS

   94

SECTION 9.01.

      

Amendments, Etc.

   94

SECTION 9.02.

      

Notices, Etc.

   95

SECTION 9.03.

      

No Waiver; Remedies

   95

SECTION 9.04.

      

Costs and Expenses

   95

SECTION 9.05.

      

Right of Set-off

   97

SECTION 9.06.

      

Binding Effect

   97

SECTION 9.07.

      

Assignments and Participations

   98

SECTION 9.08.

      

Execution in Counterparts

   100

SECTION 9.09.

      

Confidentiality

   100

SECTION 9.10.

      

Release of Collateral

   101

SECTION 9.11.

      

Jurisdiction, Etc.

   101

SECTION 9.12.

      

Governing Law

   102

SECTION 9.13.

      

Waiver of Jury Trial

   102

SECTION 9.14.

      

Waiver and Consent

   102

SECTION 9.15.

      

Release of the Agent and the Lenders

   102

SECTION 9.16.

      

Authorization for Intercreditor and Subordination Agreements

   102

 

SCHEDULES

 

Schedule I

   -   

Applicable Lending Offices

Schedule II

   -   

Subsidiary Guarantors

Schedule III

   -   

Consenting Lenders

Schedule IV

   -   

Competitors

Schedule V

   -   

Subsidiaries to be Dissolved

Schedule VI

   -   

Facilities

Schedule 2.03(a)

   -   

Tranche 1 Term B Scheduled Payments

Schedule 2.03(b)

   -   

Tranche 2 Term B Scheduled Payments

Schedule 4.01(a)(ii)

   -   

Pending Good Standing

Schedule 4.01(a)(iii)

   -   

Pending Licenses, Permits and Other Approvals

Schedule 4.01(b)

   -   

Subsidiaries

Schedule 4.01(d)

   -   

Authorizations, Approvals, Actions, Notices and Filings

 

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Schedule 4.01(f)

   -   

Disclosed Litigation

Schedule 4.01(p)

   -   

Plans, Multiemployer Plans and Welfare Plans

Schedule 4.01(r)

   -   

Open Years; Unpaid Tax Liabilities; Adjusted Tax Bases

Schedule 4.01(u)

   -   

Surviving Debt

Schedule 4.01(v)

   -   

Liens

Schedule 4.01(w)

   -   

Owned Real Property

Schedule 4.01(x)

   -   

Leased Real Property

Schedule 4.01(y)

   -   

Investments

Schedule 4.01(z)

   -   

Intellectual Property

Schedule 4.01(aa)

   -   

Material Contracts

Schedule 9.14

   -   

Waived Events of Default

 

EXHIBITS

 

Exhibit A-1

   -   

Form of Tranche 1 Term B Note

Exhibit A-2

   -   

Form of New Tranche 1 Term B Note

Exhibit A-3

   -   

Form of Tranche 2 Term B Note

Exhibit A-4

   -   

Form of New Tranche 2 Term B Note

Exhibit A-5

   -   

Form of Tranche 3 Term B Note

Exhibit A-6

   -   

Form of Tranche 4 Term B Note

Exhibit A-7

   -   

Form of Special Term B Note

Exhibit B

   -   

Form of Capital Lease Assignments

Exhibit C

   -   

Form of Assignment and Acceptance

Exhibit D

   -   

Form of Security Agreement

Exhibit E-1

   -   

Second Lien Intercreditor and Subordination Agreement

Exhibit E-2

   -   

Third Lien Intercreditor and Subordination Agreement

Exhibit F

   -   

Intentionally Omitted

Exhibit G

   -   

Form of Opinion of Counsel to the Loan Parties

Exhibit H

   -   

Intentionally Omitted

Exhibit I

   -   

Form of Guaranty Supplement

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 29, 2005 (this
“Agreement”), among ITC^DeltaCom, Inc., a Delaware corporation (the “Parent”),
Interstate FiberNet, Inc., a Delaware corporation (the “Borrower”), the
subsidiary guarantors listed on the signature page hereof, the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof (the “Lenders”), Wells Fargo Bank, N.A. (“Wells Fargo”), as
administrative agent (together with any successor administrative agent appointed
pursuant to Article VIII, the “Administrative Agent”) for the Lenders, and as
collateral agent (together with any successor collateral agent appointed
pursuant to Article VIII, the “Collateral Agent” and, together with the
Administrative Agent, the “Agents”).

 

RECITALS:

 

WHEREAS, pursuant to the Credit Agreement, dated as of April 5, 2000, as amended
(the “Original ITCD Credit Agreement”), the Lenders lent to the Borrower
$160,000,000 consisting of $100,000,000 under the Tranche 1 Term B Facility (as
hereinafter defined) and $60,000,000 under the Tranche 2 Term B Facility (as
hereinafter defined) in order to finance (a) working capital and certain capital
expenditures (including the build-out of the collocation and data services
businesses) and other general corporate purposes and (b) the purchase of
equipment, respectively;

 

WHEREAS, (a) the Borrower, ITC^DeltaCom Communications, Inc. (“Communications”;
and together with the Borrower, the “Lessees”) and NTFC Capital Corporation
(“NTFC”) are party to that certain Master Lease Agreement, dated December 29,
2000, and the schedules, annexes and security documents related thereto (as
amended through the date hereof, the “NTFC Capital Lease”), and (b)
Communications and General Electric Capital Corporation (the “GE Lessor”) are
party to that certain Master Lease Agreement, dated December 31, 2001, and the
schedules, annexes and security documents related thereto (as amended through
the date hereof, the “GECC Capital Lease”);

 

WHEREAS, the Parent, the Borrower, the Subsidiary Guarantors, the Lenders named
on the signature pages thereof, Morgan Stanley Senior Funding, Inc., as
administrative agent, and Morgan Stanley & Co., Incorporated, as collateral
agent, entered into an amendment and restatement, dated as of October 29, 2002,
of the Original ITCD Credit Agreement (the “First Amended ITCD Credit
Agreement”);

 

WHEREAS, pursuant to a letter, dated April 15, 2003, Morgan Stanley Senior
Funding, Inc. resigned as administrative agent and Morgan Stanley & Co.,
Incorporated resigned as collateral agent under the First Amended ITCD Credit
Facility, and pursuant to the Successor Agent Agreement, dated as of September
2, 2003, among Wells Fargo, Morgan Stanley Senior Funding, Inc., Morgan Stanley
& Co., Incorporated and the Lenders (the “Successor Agent Agreement”), the
Lenders appointed Wells Fargo to act as administrative agent and collateral
agent under the First Amended ITCD Credit Agreement;

 

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WHEREAS, the Parent, the Borrower, the Subsidiary Guarantors, the Second
Amendment Lenders (as hereinafter defined) from time to time party thereto and
the Agents entered into an amendment and restatement, dated as of October 6,
2003, of the First Amended ITCD Credit Agreement (the “Second Amended ITCD
Credit Agreement”);

 

WHEREAS, in connection with the Second Amended ITCD Credit Agreement, the
Parent, the Borrower, the Subsidiary Guarantors, and the banks and financial
institutions listed on the signature pages thereof as Lenders (the “Second Lien
Lenders”) and GECC (solely in its capacity as administrative and collateral
agent for the Second Lien Lenders) entered into a Credit Agreement, dated as of
October 6, 2003 (the “Original Second Lien Credit Agreement”);

 

WHEREAS, the Loan Parties (as hereinafter defined) have requested (a) the
consent of the Lenders to incur subordinated secured indebtedness pursuant to
that certain Credit Agreement, dated as of March 29, 2005, by and among the
Borrower, the lenders signatory thereto (the “Third Lien Lenders”) and WCAS, as
administrative agent and collateral agent (the “Third Lien Credit Agreement”),
(b) that the Lenders, NTFC and the GE Lessor consent to a restructuring of the
indebtedness owing by the Loan Parties under the Second Amended ITCD Credit
Agreement, the NTFC Capital Lease and the GECC Capital Lease, (c) that certain
Lenders make additional term loans available to the Borrower under the terms and
conditions described herein and (d), in connection with the foregoing, that the
Second Lien Lenders agree to amend and restate the terms of the Original Second
Lien Credit Agreement pursuant to that certain Amended and Restated Credit
Agreement, dated as of the date hereof, by and among the Parent, the Borrower,
the Subsidiary Guarantors, the Second Lien Lenders and the “Agent” under, and as
defined, therein (the “Second Lien Agent”) (the “First Amended Second Lien
Credit Agreement”);

 

WHEREAS, the parties hereto desire that (a) an amount equal to the aggregate
outstanding principal amount of the loans advanced to the Borrower by the
Lenders pursuant to the Original ITCD Credit Agreement, the First Amended ITCD
Credit Agreement and the Second Amended ITCD Credit Agreement and an amount
equal to the aggregate outstanding amount of the obligations owing by the
Lessees under the NTFC Capital Lease and Communications under the GECC Capital
Lease (which amount shall be deemed to be a Tranche 4 Term B Borrowing for all
purposes hereunder) and all interest due thereon as of the Third Amendment
Effective Date (as hereinafter defined) shall be restructured, continued,
converted and consolidated, subject to the terms and conditions contained herein
and (b) a maximum amount equal to the Special Term B Facility (as hereinafter
defined) in the form of Special Term B Advances (as hereinafter defined) be made
available to the Borrower by the Special Term B Lenders (as hereinafter
defined); and

 

WHEREAS, it is the intention of the parties that this Agreement not novate,
extinguish or replace the indebtedness governed by the Original ITCD Credit
Agreement, the First Amended ITCD Credit Agreement, the Second Amended ITCD
Credit Agreement, the NTFC Capital Lease or the GECC Capital Lease, but that,
from and after the Third Amendment Effective Date, the Second Amended ITCD
Credit Agreement and the aggregate outstanding amount of the obligations owing
by the Lessees under the NTFC Capital Lease and the GECC

 

2

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Capital Lease shall be assumed, restructured, combined and consolidated pursuant
to the terms of this Agreement;

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree that, as of the Third Amendment Effective Date,
the Second Amended ITCD Credit Agreement shall be amended and restated in its
entirety, and all of the rights, duties and obligations of the Lessees, NTFC and
GECC under each of the NTFC Capital Lease and the GECC Capital Lease shall be
set forth in their entirety as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

 

“Additional Guarantor” has the meaning specified in Section 7.05.

 

“Administrative Agent” has the meaning specified in the preamble of this
Agreement.

 

“Administrative Agent’s Account” means the account of the Administrative Agent
as the Administrative Agent shall specify in writing to the Lenders.

 

“Advance” means a Tranche 1 Term B Advance, a Tranche 2 Term B Advance, a
Tranche 3 Term B Advance, a Tranche 4 Term B Advance, a New Tranche 1 Term B
Advance, a New Tranche 2 Term B Advance or a Special Term B Advance.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term “control” (including the terms “controlling,” “controlled
by” and “under common control with”) of a Person means the possession, direct or
indirect, of the power to vote 10% or more of the Voting Interests of such
Person or to direct or cause the direction of the management and policies of
such Person, whether through the ownership of Voting Interests, by contract or
otherwise.

 

“Agents” has the meaning specified in the preamble of this Agreement.

 

“Agreement” means this Third Amended and Restated Credit Agreement, dated as of
March 29, 2005, among the Parent, the Borrower, the Lenders, the Subsidiary
Guarantors and the Administrative Agent, as amended, amended and restated,
supplemented or otherwise modified from time to time.

 

3

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“Agreement Value” means, for each Hedge Agreement, on any date of determination,
an amount determined by the Administrative Agent equal to: (a) in the case of a
Hedge Agreement documented pursuant to the Master Agreement (Multicurrency-Cross
Border) published by the International Swap and Derivatives Association, Inc.
(the “Master Agreement”), the amount, if any, that would be payable by any Loan
Party or any of its Subsidiaries to its counterparty to such Hedge Agreement, as
if (i) such Hedge Agreement was being terminated early on such date of
determination, (ii) such Loan Party or Subsidiary was the sole “Affected Party,”
and (iii) the Administrative Agent was the sole party determining such payment
amount (with the Administrative Agent making such determination pursuant to the
provisions of the form of Master Agreement); or (b) in the case of a Hedge
Agreement traded on an exchange, the mark-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan
Party or Subsidiary of a Loan Party to such Hedge Agreement determined by the
Administrative Agent based on the settlement price of such Hedge Agreement on
such date of determination; or (c) in all other cases, the mark-to-market value
of such Hedge Agreement, which will be the unrealized loss on such Hedge
Agreement to the Loan Party or Subsidiary of a Loan Party to such Hedge
Agreement determined by the Administrative Agent as the amount, if any, by which
(i) the present value of the future cash flows to be paid by such Loan Party or
Subsidiary exceeds (ii) the present value of the future cash flows to be
received by such Loan Party or Subsidiary pursuant to such Hedge Agreement;
capitalized terms used and not otherwise defined in this definition shall have
the respective meanings set forth in the above described Master Agreement.

 

“Applicable Base Rate Margin” means the Applicable Eurodollar Rate Margin then
in effect, less 1.00%.

 

“Applicable Eurodollar Rate Margin” means the applicable rates set forth below,
subject to adjustment each fiscal quarter based upon the Senior Debt Ratio as
measured on the last day of each fiscal quarter for the period of the four
consecutive fiscal quarters then ended, commencing December 31, 2004, and as
certified by the Borrower to the Agents and the Lenders in the Financial
Covenants Certificate:

 

(a) in respect of the Tranche 1 Term B Facility and the Tranche 2 Term B
Facility:

 

Senior Debt Ratio

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

   Applicable Eurodollar Rate Margin

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

³ 4.00x

   5.25%

³ 3.50x

   4.75%

³ 3.25x

   4.25%

³ 3.00x

   4.00%

³ 2.50x

   3.75%

< 2.50x

   3.50%

 

4

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and (b) in respect of the New Tranche 1 Term B Facility, the New Tranche 2 Term
B Facility, the Tranche 3 Term B Facility, the Tranche 4 Term B Facility and the
Special Term B Loan Facility:

 

Senior Debt Ratio

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

   Applicable Eurodollar Rate Margin

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

³ 4.00x

   7.75%

³ 3.50x

   7.25%

³ 3.25x

   6.75%

³ 3.00x

   6.50%

³ 2.50x

   6.25%

< 2.50x

   6.00%

 

“Applicable Lending Office” means, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of a Base Rate Advance and such Lender’s
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

 

“Appropriate Lender” means, at any time, with respect to any of the Tranche 1
Term B Facility, the Tranche 2 Term B Facility, the Tranche 3 Term B Facility,
the Tranche 4 Term B Facility, the New Tranche 1 Term B Facility, the New
Tranche 2 Term B Facility or the Special Term B Facility, a Lender that has a
Commitment or Loans outstanding with respect to such Facility at such time.

 

“Approved Fund” means, with respect to any Lender that is a fund that invests in
bank loans, any other fund that invests in bank loans and is advised or managed
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
accordance with Section 9.07 and in substantially the form of Exhibit C hereto.

 

“Assumed BTI Debt” means (a) the Debt evidenced by the Tranche 3 Term B
Advances, (b) the Debt under the Second Lien Loan Documents, (c) unsecured Debt
in the principal amount of $18,525,000 evidenced by the 10½% Senior Notes due
2007 of BTI and (d) unsecured Debt in the principal amount of $7,100,000
evidenced by the note payable by Business Telecom, Inc. to the order of P&H,
Inc.

 

“Bankruptcy Code” means title 11 of the United States Code, as amended.

 

“Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the higher of:

 

(a) the rate listed in the “Money Rates” section of The Wall Street Journal as
the “prime rate”; and

 

5

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(b) 1/2 of 1% per annum above the Federal Funds Rate.

 

“Base Rate Advance” means an Advance that bears interest as provided in Section
2.06(a)(i).

 

“Benefit Plan Exchange Offer” means any transaction in which the Parent acquires
and/or retires Equity Plan Securities in exchange for other Equity Plan
Securities.

 

“Board Designees” means individuals whose nomination for election, appointment
or election as directors of the Parent is effectuated pursuant to (a) the
Governance Agreement or (b) the Series A Certificate of Designation or the
Series B Certificate of Designation.

 

“Borrower” has the meaning specified in the preamble of this Agreement.

 

“Borrower’s Account” means the account of the Borrower as the Borrower shall
specify in writing to the Administrative Agent.

 

“Borrowing” means a Tranche 1 Term B Borrowing, a Tranche 2 Term B Borrowing, a
Tranche 3 Term B Borrowing, a Tranche 4 Term B Borrowing, a New Tranche 1 Term B
Borrowing, a New Tranche 2 Term B Borrowing or a Special Term B Borrowing.

 

“Business Day” means 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, on which dealings are carried on in the
London interbank market.

 

“BTI” means BTI Telecom Corp., a North Carolina corporation.

 

“Capital Expenditures” means, for any Person for any period, the sum of, without
duplication, (a) all expenditures made, directly or indirectly, by such Person
or any of its Subsidiaries during such period for equipment, fixed assets, real
property or improvements, or for replacements or substitutions therefor or
additions thereto, that have been or should be, in accordance with GAAP,
reflected as additions to property, plant or equipment on a Consolidated balance
sheet of such Person or have a useful life of more than one year plus (b) the
aggregate principal amount of all Debt (including Obligations under Capitalized
Leases) assumed or Incurred in connection with any such expenditures. For
purposes of this definition, the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the seller of
such equipment for the equipment being traded in at such time or the amount of
such proceeds, as the case may be.

 

6

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“Capital Lease Assignments” means those certain UCC-3 financing statements
authenticated by GE Lessor and NTFC, respectively, pursuant to which GE Lessor
and NTFC will assign to the Agents and the Second Lien Agent their respective
security interests in the assets subject to the GECC Capital Lease and the NTFC
Capital Lease, respectively.

 

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

 

“Capital Stock” means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the date
of this Agreement or issued thereafter, including, without limitation, all
Common Stock and Preferred Stock.

 

“Cash Equivalents” means any of the following, to the extent owned by the Parent
or any of its Subsidiaries free and clear of all Liens other than Liens created
under the Collateral Documents and having a maturity of not greater than 360
days from the date of issuance thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States; (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender or a member of the Federal Reserve System, issues (or the parent of which
issues) commercial paper rated as described in clause (c) below, is organized
under the laws of the United States or any State thereof and has combined
capital and surplus of at least $1 billion; (c) commercial paper in an aggregate
amount of no more than $160,000,000 per issuer outstanding at any time, issued
by any corporation organized under the laws of any State of the United States
and rated at least “P-1” (or the then equivalent grade) by Moody’s Investors
Service, Inc. or “A-1” (or the then equivalent grade) by Standard & Poor’s, a
division of The McGraw-Hill Companies, Inc.; or (d) obligations issued by any
state of the United States of America or any municipality or other political
subdivision of any such state or any public instrumentality thereof having, at
the time of acquisition, the highest rating obtainable from any of Standard &
Poor’s, a division of The McGraw-Hill Companies, Inc., Moody’s Investors
Service, Inc. or Fitch Ratings, Inc., including, without limitation, auction
rate certificates.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

 

“Change of Control” means the occurrence on any date after the Third Amendment
Effective Date of any of the following: (a) a “person” or “group” (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the
“beneficial owner” (within the meaning of Rule 13d-3 of the SEC under the
Exchange Act) of more

 

7

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than 35% of the total voting power of the Voting Stock of the Parent on a Fully
Diluted Basis and such ownership represents a greater percentage of the total
voting power of the Voting Stock of the Parent, on a Fully Diluted Basis, than
the percentage of the total voting power of the Voting Stock of the Parent, on a
Fully Diluted Basis, beneficially owned (within the meaning of Rule 13d-3 of the
SEC under the Exchange Act) by the Existing Stockholders on such date; or (b)
individuals who on the Third Amendment Effective Date constitute the board of
directors of the Parent (together with any new directors whose appointment by
the board of directors of the Parent or whose nomination by the board of
directors of the Parent for election by the Parent’s stockholders was approved
by a vote of at least a majority of the members of the board of directors then
in office who either were members of the board of directors on the Third
Amendment Effective Date or whose appointment or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the board of directors then in office; or (c) the Parent shall cease
to own 100%, directly, of the Equity Interests of the Borrower and 100%,
directly or indirectly, of the Equity Interests of the other Loan Parties. For
purposes of clause (b) of this definition, all Board Designees shall be deemed
to be members of the board of directors of the Parent whose appointment or
nomination for election was approved in the manner specified in clause (b).

 

“Chief Financial Officer” means, with respect to any Loan Party, the officer of
such Loan Party designated by such Loan Party as its chief financial officer or,
if there is no such officer designation, the officer of such Loan Party
designated by such Loan Party as its principal accounting officer.

 

“Collateral” means all “Collateral” referred to in the Collateral Documents and
all other property that is or is intended to be subject to any Lien in favor of
the Collateral Agent for the benefit of the Secured Parties.

 

“Collateral Account” has the meaning specified in the Security Agreement.

 

“Collateral Agent” has the meaning specified in the preamble of this Agreement.

 

“Collateral Documents” means the Security Agreement, the Intercreditor and
Subordination Agreements, the Mortgages, the Capital Lease Assignments and any
other agreement that creates or purports to create a Lien in favor of the
Collateral Agent for the benefit of the Secured Parties.

 

“Commitment” means a Tranche 1 Term B Commitment, a Tranche 2 Term B Commitment,
a Tranche 3 Term B Commitment, a Tranche 4 Term B Commitment, a New Tranche 1
Term B Commitment, a New Tranche 2 Term B Commitment or a Special Term B
Commitment.

 

“Common Stock” means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of such Person’s equity, other than Preferred Stock of such Person,
whether outstanding on the date of this Agreement or issued thereafter,
including, without limitation, all series and classes of such common stock.

 

8

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“Communications” has the meaning specified in the recitals of the parties to
this Agreement.

 

“Competitor” shall mean any Person identified on Schedule IV hereto (or any
Affiliate thereof) or any other Person (or any Affiliate thereof) that engages
primarily or as one of its principal activities in the business of providing
competitive local exchange telecommunications services to business customers.

 

“Confidential Information” means information that any Loan Party furnishes to
any Agent or any Lender on a confidential basis, but does not include any such
information that is or becomes generally available to the public or that is or
becomes available to such Agent or such Lender from a source other than the Loan
Parties which such Agent or such Lender do not have reason to believe is
confidential information. Notwithstanding anything to the contrary set forth in
this definition or in this Agreement “Confidential Information” shall not
include information relating to the tax structure or tax treatment of any
structure or transaction and all materials of any kind (including opinions and
other tax analyses) that are provided to the party relating to such tax
treatment and tax structure, excluding information the confidentiality of which
is reasonably necessary to comply with U.S. Federal or state securities laws, it
being the intent of the foregoing to cause any structure or transaction not to
be treated as having been offered under conditions of confidentiality for
purposes of Section 1.6011-4(b)(3) (or any successor provision) of the Treasury
Regulations promulgated under Section 6011 of the Internal Revenue Code, and
this definition shall be construed in a manner consistent with such purpose.

 

“Consenting Lenders” means the Lenders that have executed this Agreement on or
before March 31, 2005 as listed on Schedule III.

 

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

 

“Contingent Obligation” means, with respect to any Person, any Obligation or
arrangement of such Person to guarantee or intended to guarantee any Debt,
leases, dividends or other payment Obligations (“primary obligations”) of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any Obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold

 

9

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harmless the holder of such primary obligation against loss in respect thereof.
The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.

 

“Conversion,” “Convert” and “Converted” each refer to a conversion of Advances
of one Type into Advances of the other Type pursuant to Section 2.08 or 2.09.

 

“Conversion Shares” means the Common Stock or other securities issued or
issuable upon conversion of the Series A Preferred Stock.

 

“Current Assets” of any Person means all assets of such Person that would, in
accordance with GAAP, be classified as current assets of a company conducting a
business the same as or similar to that of such Person, after deducting adequate
reserves in each case in which a reserve is proper in accordance with GAAP.

 

“Current Liabilities” of any Person means (a) all Debt of such Person that by
its terms is payable on demand or matures within one year after the date of
determination (excluding any Debt renewable or extendible, at the option of such
Person, to a date more than one year from such date or arising under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date), (b) all amounts of
Funded Debt of such Person required to be paid or prepaid within one year after
such date and (c) all other items (including taxes accrued as estimated) that in
accordance with GAAP would be classified as current liabilities of such Person.

 

“Debt” of any Person means, at any time without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of such
Person for the deferred purchase price of property or services (other than trade
payables not overdue by more than 90 days incurred in the ordinary course of
such Person’s business, unless such trade payables overdue by more than 90 days
are contested in good faith by such Person), (c) all Obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (d) all
Obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Obligations of such Person as lessee under Capitalized
Leases, (f) all Obligations of such Person under acceptance, letter of credit or
similar facilities, (g) all Obligations of such Person to Redeem any Equity
Interests in such Person or in any other Person, or to Redeem options, warrants
or other rights to purchase or otherwise acquire such Equity Interests, before
the date which is six months after the Termination Date (provided, that if the
exercise of the right to Redeem such Equity Interests or options, warrants or
other rights

 

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is at the option of such Person under the terms of such Equity Interests or
otherwise, the date of such Person’s exercise, if any, of such right to Redeem
shall be the date on which such Person shall first be deemed to have an
Obligation to Redeem such Equity Interests or options, warrants or other rights
for purposes of this definition), valued in the case of Preferred Interests at
the stated liquidation preference of such Preferred Interests plus accrued and
unpaid dividends from time to time, (h) all Obligations of such Person in
respect of Hedge Agreements, valued at the Agreement Value thereof, (i) all
Contingent Obligations of such Person and (j) all indebtedness and other payment
Obligations referred to in clauses (a) through (i) above of another Person
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness or other payment Obligations. Notwithstanding clause (g) of this
definition, the Obligations referred to in such clause (g) as constituting
“Debt” shall not include Obligations of such Person to Redeem Equity Interests
in such Person (or to Redeem options, warrants or other rights to purchase or
otherwise acquire such Equity Interests) in exchange for, or out of the proceeds
of a substantially concurrent offering of, other Equity Interests (or options,
warrants or other rights to purchase or otherwise acquire such other Equity
Interests) in such Person, provided, that any Obligations of such Person to
Redeem such other Equity Interests (or to Redeem options, warrants or other
rights to purchase or acquire such other Equity Interests) shall be subject to
the provisions of such clause (g).

 

“Debt for Borrowed Money” of any Person means all items that, in accordance with
GAAP, would be classified as indebtedness on a Consolidated balance sheet of
such Person; provided, however, notwithstanding the foregoing, “Debt for
Borrowed Money” shall not include any trade payables, any Preferred Interests
(including, without limitation, with respect to the Loan Parties, the Series A
Preferred Stock and the Series B Preferred Stock) or any dividends accrued or
paid or payable with respect to Preferred Interests.

 

“Default” means any Event of Default or any event that would constitute an Event
of Default but for the requirement that notice be given or time elapse or both.

 

“Defaulted Amount” means, with respect to any Lender at any time, any amount
required to be paid by such Lender to any Agent or any other Lender hereunder or
under any other Loan Document at or prior to such time that has not been so paid
as of such time, including, without limitation, any amount required to be paid
by such Lender to (a) any other Lender pursuant to Section 2.12 to purchase any
participation in Advances owing to such other Lender and (b) any Agent pursuant
to Section 8.05 to reimburse such Agent for such Lender’s ratable share of any
amount required to be paid by the Lenders to such Agent. In the event that a
portion of a Defaulted Amount shall be deemed paid pursuant to Section 2.14(b),
the remaining portion of such Defaulted Amount shall be considered a Defaulted
Amount originally required to be paid hereunder or under any other Loan Document
on the same date as the Defaulted Amount so deemed paid in part.

 

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“Defaulting Lender” means, at any time, any Lender that, at such time, (a) owes
a Defaulted Amount or (b) shall take any action or be the subject of any action
or proceeding of a type described in Section 6.01(f).

 

“Disclosed Litigation” has the meaning specified in Section 3.02(c).

 

“Domestic Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” opposite its name on Schedule
I hereto or in the Assignment and Acceptance pursuant to which it became a
Lender, as the case may be, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Administrative Agent.

 

“EBITDA” means, for any Person for any period, the sum, determined on a
Consolidated basis, of (a) net income (or net loss) after eliminating
extraordinary and/or non-recurring items to the extent included in net income
(except as provided in this definition), (b) interest expense, (c) income tax
expense, (d) depreciation expense, (e) amortization expense, (f) the aggregate
of all non-cash charges deducted in arriving at net income in clause (a) above
that are recognized after March 1, 2005, (g) any restructuring charges that are
recognized after March 1, 2005 and (h) asset impairment charges, in each case
determined in accordance with GAAP for such period (including, without
limitation, Emerging Issues Task Force Issue 94-3 and Statement of Financial
Accounting Standards Nos. 121, 142 and 146).

 

“Eligible Assignee” means any commercial bank or financial institution
(including, without limitation, any fund that regularly invests in loans similar
to the Advances) as approved (so long as no Default has occurred and is
continuing at the time of the relevant assignment pursuant to Section 9.07) by
the Borrower (such approval not to be unreasonably withheld or delayed);
provided, however, that neither any Loan Party nor any Affiliate of a Loan Party
shall qualify as an Eligible Assignee under this definition; provided, further,
that no Competitor shall qualify as an Eligible Assignee under this definition.

 

“Environmental Action” means any action, suit, demand, demand letter, claim,
notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.

 

“Environmental Law” means any Federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or
judicial or agency interpretation, policy or guidance relating to pollution or
protection of the environment, health, safety or natural resources, including,
without limitation, those

 

12

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relating to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.

 

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

“Equity Interests” means, with respect to any Person, shares of capital stock of
(or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such Person,
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.

 

“Equity Plan Securities” means any Equity Interests awarded, granted, sold or
issued pursuant to any stock option, restricted stock, stock incentive, deferred
compensation, profit sharing, defined benefit, defined contribution or other
benefit plan of any Loan Party or any Subsidiary of any Loan Party.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

 

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a
member of the controlled group of any Loan Party, or under common control with
any Loan Party, within the meaning of Section 414 of the Internal Revenue Code.

 

“ERISA Event” means (a) (i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day
notice requirement with respect to such event has been waived by the PBGC or
(ii) the requirements of Section 4043(b) of ERISA apply with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA), excluding, however, a “standard termination” as
defined in Section 4041(a)(2) of ERISA; (d) the cessation of operations at a
facility of any Loan Party or any ERISA Affiliate in the circumstances described
in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions for imposition of

 

13

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a lien under Section 302(f) of ERISA shall have been met with respect to any
Plan; (g) the adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA; or (h) the institution
by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section 4042 of
ERISA that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.

 

“Eurocurrency Liabilities” has the meaning specified in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.

 

“Eurodollar Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Eurodollar Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.

 

“Eurodollar Rate” means, for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing, an interest rate per annum equal
to the rate per annum obtained by dividing (a) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits
in U.S. dollars at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period for a period equal to such Interest Period
(provided, that, if for any reason such rate is not available, the term
“Eurodollar Rate” shall mean, for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates) by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period.

 

“Eurodollar Rate Advance” means an Advance that bears interest as provided in
Section 2.06(a)(ii).

 

“Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing means the reserve percentage
applicable two Business Days before the first day of such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities
that includes deposits by reference to which the interest

 

14

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rate on Eurodollar Rate Advances is determined) having a term equal to such
Interest Period.

 

“Events of Default” has the meaning specified in Section 6.01.

 

“Excess Cash Flow” means, for any period,

 

(a) the sum of:

 

(i) Consolidated net income (or loss) of the Parent and its Subsidiaries for
such period plus

 

(ii) the aggregate amount of all non-cash charges deducted in arriving at such
Consolidated net income (or loss) plus

 

(iii) if there was a net increase in Consolidated Current Liabilities of the
Parent and its Subsidiaries during such period, the amount of such net increase
plus

 

(iv) if there was a net decrease in Consolidated Current Assets (excluding cash
and Cash Equivalents) of the Parent and its Subsidiaries during such period, the
amount of such net decrease less

 

(b) the sum of (without duplication):

 

(i) the aggregate amount of all non-cash credits included in arriving at such
Consolidated net income (or loss) plus

 

(ii) if there was a net decrease in Consolidated Current Liabilities of the
Parent and its Subsidiaries during such period, the amount of such net decrease
plus

 

(iii) if there was a net increase in Consolidated Current Assets (excluding cash
and Cash Equivalents) of the Parent and its Subsidiaries during such period, the
amount of such net increase plus

 

(iv) Capital Expenditures of the Parent and its Subsidiaries during such period,
provided, however, that such Capital Expenditures are made in the
telecommunications industry or ancillary or related industry and in accordance
with this Agreement plus

 

(v) all payments made pursuant to Sections 2.03(a) and (b) and 2.05(a) plus

 

(vi) all payments of principal on account of Assumed BTI Debt.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

15

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“Existing Stockholders” means the WCAS Securityholders and their Affiliates. For
purposes of this definition, “Affiliate” means, as applied to any Person, any
other Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, such Person. For purposes of this definition,
“control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

 

“Extraordinary Receipt” means any cash received by or paid to or for the account
of any Person not in the ordinary course of business, including, without
limitation, tax refunds, pension plan reversions, proceeds of insurance (other
than proceeds of business interruption insurance to the extent such proceeds
constitute compensation for lost earnings), condemnation awards (and payments in
lieu thereof), indemnity payments, and any purchase price adjustment received in
connection with any purchase agreement; provided, however, that an Extraordinary
Receipt shall not include cash receipts, awards or payments received from
proceeds of insurance, condemnation awards (or payments in lieu thereof) or
indemnity payments to the extent that such proceeds, awards or payments (a) are
in respect of loss or damage to fixed assets, real property or equipment and are
applied to replace or repair such fixed assets, real property or equipment in
respect of which such proceeds, awards or payments were received in accordance
with the terms of the Loan Documents (or to reimburse such Person for
expenditures previously incurred on account of such replacement or repair),
provided, that such proceeds, awards or payments (i) are immediately deposited
into an account held by the Collateral Agent on behalf of the Lenders, and (ii)
are applied within nine months after the occurrence of such damage or loss,
provided, that the Borrower shall have delivered documentation reasonably
satisfactory to the Administrative Agent evidencing the cost and proposed use of
any equipment repaired or replaced pursuant thereto, or (b) are received by any
Person in respect of any third party claim against such Person and applied to
pay (or to reimburse such Person for its prior payment of) such claim and the
costs and expenses of such Person with respect thereto, or (c) are received by
any Person by way of reimbursement or indemnification of such Person for costs
and expenses incurred by such Person.

 

“Facility” means the Tranche 1 Term B Facility, the Tranche 2 Term B Facility,
the Tranche 3 Term B Facility, the Tranche 4 Term B Facility, the New Tranche 1
Term B Facility, the New Tranche 2 Term B Facility or the Special Term B
Facility, as applicable, and “Facilities” means, collectively, the Tranche 1
Term B Facility, the Tranche 2 Term B Facility, the Tranche 3 Term B Facility,
the Tranche 4 Term B Facility, the New Tranche 1 Term B Facility, the New
Tranche 2 Term B Facility and the Special Term B Facility.

 

“FCC” means the Federal Communications Commission, or any governmental agency
succeeding to the functions thereof.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on

 

16

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overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

“Financial Covenants Certificate” means the certificate delivered by the
Borrower and certified by the Chief Financial Officer of the Borrower and
containing the information specified in the definition of “Applicable Eurodollar
Rate Margin” and Sections 5.03(b)(ii) and (iii) and 5.03(c)(ii) and (iii), as
applicable, and demonstrating compliance with the applicable covenants.

 

“First Amended ITCD Credit Agreement” has the meaning specified in the recitals
of parties to this Agreement.

 

“First Amended Second Lien Credit Agreement” has the meaning specified in the
recitals of the parties to this Agreement.

 

“Fiscal Year” means a Fiscal Year of the Parent and its Consolidated
Subsidiaries ending on December 31 in any calendar year.

 

“Fully Diluted Basis” means, as of any date of determination, the sum of (a) the
number of shares of Voting Stock outstanding as of such date of determination
plus (b) the number of shares of Voting Stock issuable upon the exercise,
conversion or exchange of all then-outstanding warrants, options, convertible
Capital Stock or indebtedness, exchangeable Capital Stock or indebtedness, or
other rights exercisable for or convertible or exchangeable into, directly or
indirectly, shares of Voting Stock, whether at the time of issue or upon the
passage of time or upon the occurrence of some future event, and whether or not
in the money as of such date of determination.

 

“Funded Debt” of any Person means Debt of such Person that by its terms matures
more than one year after the date of its creation or matures within one year
from such date but is renewable or extendible, at the option of such Person, to
a date more than one year after such date or arises under a revolving credit or
similar agreement that obligates the lender or lenders to extend credit during a
period of more than one year after such date, including, without limitation, all
amounts of Funded Debt of such Person required to be paid or prepaid within one
year after the date of its creation.

 

“GAAP” has the meaning specified in Section 1.03.

 

“GECC” means General Electric Capital Corporation solely in its capacity as a
Lender under this Agreement or as a Lender or Administrative Agent and
Collateral Agent as provided and defined in the First Amended Second Lien Credit
Agreement.

 

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“GECC Capital Lease” has the meaning specified in the recitals of the parties to
this Agreement.

 

“GE Lessor” has the meaning specified in the recitals of the parties to this
Agreement.

 

“Governance Agreement” means the Governance Agreement, dated as of October 6,
2003, as amended, among the Parent, WCAS Capital Partners III, L.P., WCAS, WCAS
Information Partners, L.P. and certain individual investors and trusts listed on
the signature pages thereto, as amended by the Amendment No. 1 to Governance
Agreement, dated as of March 29, 2005.

 

“Guaranteed Obligations” has the meaning specified in Section 7.01(a).

 

“Guaranties” means the Parent Guaranty and the Subsidiary Guaranties.

 

“Guarantors” means the Parent and the Subsidiary Guarantors.

 

“Guaranty Supplement” has the meaning specified in Section 7.05.

 

“Hazardous Materials” means (a) petroleum or petroleum products, by-products or
breakdown products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas and (b) any other chemicals, materials
or substances designated, classified or regulated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.

 

“Hedge Agreements” means interest rate swap, cap or collar agreements, interest
rate future or option contracts, currency swap agreements, currency future or
option contracts and other hedging agreements.

 

“Hedge Bank” means any Lender or an Affiliate of a Lender in its capacity as a
party to a Secured Hedge Agreement.

 

“Incur” means, with respect to any Debt, to incur, create, issue, assume,
guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Debt.

 

“Indemnified Party” has the meaning specified in Section 9.04(b).

 

“Insufficiency” means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

 

“Intercreditor and Subordination Agreements” means the Second Lien Intercreditor
and Subordination Agreement and the Third Lien Intercreditor and Subordination
Agreement.

 

18

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“Interest Coverage Ratio” means, at any date of determination the ratio of (a)
Consolidated EBITDA of the Parent and its Subsidiaries to (b) the cumulative
cash interest paid in respect of all Debt for Borrowed Money, in each case, of
or by the Parent and its Subsidiaries (1) for the calendar quarters ending on
June 30, 2005 through December 31, 2005, in each case, during the period
commencing March 1, 2005 and terminating on the last day of the applicable
calendar quarter; and (2) for the calendar quarter ending March 31, 2006 and
thereafter, during the four calendar quarters ending on such date.

 

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the
same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period, select; provided,
however, that:

 

(a) the Borrower may not select any Interest Period with respect to any
Eurodollar Rate Advance under a Facility that ends after any principal repayment
installment date for such Facility unless, after giving effect to such
selection, the aggregate principal amount of Base Rate Advances and of
Eurodollar Rate Advances having Interest Periods that end on or prior to such
principal repayment installment date for such Facility shall be at least equal
to the aggregate principal amount of Advances under such Facility due and
payable on or prior to such date;

 

(b) Interest Periods commencing on the same date for Eurodollar Rate Advances
comprising part of the same Borrowing shall be of the same duration;

 

(c) whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, however, that,
if such extension would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day; and

 

(d) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar month.

 

19

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“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

 

“Inventory” means all Inventory referred to in Section 1(b) of the Security
Agreement.

 

“Investment” in any Person means any loan or advance to such Person, any
purchase or other acquisition of any Equity Interests or Debt or the assets
comprising a division or business unit or a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation and any arrangement pursuant to
which the investor Incurs Debt of the types referred to in clause (i) or (j) of
the definition of “Debt” in respect of such Person.

 

“Lenders” has the meaning set forth in the preamble to this Agreement and
includes each Person that shall become a Lender hereunder pursuant to Section
9.07 for so long as such Lender or Person, as the case may be, shall be a party
to this Agreement.

 

“Lessees” has the meaning specified in the recitals of the parties to this
Agreement.

 

“Lien” means any lien, security interest or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.

 

“Loan Documents” means (a) for purposes of this Agreement and the Notes and any
amendment, supplement or modification hereof or thereof, (i) this Agreement,
(ii) the Notes and (iii) the Collateral Documents and (b) for purposes of the
Collateral Documents and for all other purposes other than for purposes of this
Agreement and the Notes, (i) this Agreement, (ii) the Notes, (iii) the
Collateral Documents and (iv) each Secured Hedge Agreement.

 

“Loan Parties” means the Borrower and the Guarantors.

 

“Margin Stock” has the meaning specified in Regulation U.

 

“Material Adverse Change” means any material adverse change in the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Parent and its Subsidiaries, taken as a whole.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Loan Parties and the Subsidiaries of the Loan Parties, taken as
a whole, (b) the rights and remedies of the Agents or any Lender under any Loan
Document or (c) the ability of any Loan Party to perform its Obligations under
any Loan Document to which it is or is to be a party.

 

20

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“Material Contract” means, with respect to any Person, each contract to which
such Person is a party involving aggregate consideration payable to or by such
Person of $10,000,000 or more in any year or otherwise material to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of such Person. With respect to the Loan Parties, the Merger Agreement
shall be deemed to be a Material Contract.

 

“Merger Agreement” means the Agreement and Plan of Merger, dated as of July 2,
2003, as amended, among BTI, the parties identified on the signature pages
thereto as the “WCAS Securityholders,” the Parent and 8DBC1 Corp.

 

“Merger Agreement Common Stock” means (a) the Common Stock of the Parent issued
or issuable pursuant to the Merger Agreement, (b) the Series B Conversion Shares
and (c) the Series B Warrant Shares.

 

“Mortgage Policies” has the meaning specified in Section 5.01(n)(i)(B).

 

“Mortgages” has the meaning specified in Section 5.01(n)(i).

 

“Multiemployer Plan” means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.

 

“Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or
any ERISA Affiliate and at least one Person other than the Loan Parties and the
ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party
or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA
in the event such plan has been or were to be terminated.

 

“Net Cash Proceeds” means, with respect to any sale, lease, transfer or other
disposition of any asset by any Person (excluding Equity Interests), or any
Extraordinary Receipt received by or paid to or for the account of any Person,
the aggregate amount of cash received from time to time (whether as initial
consideration or through payment or disposition of deferred consideration) by or
on behalf of such Person in connection with such transaction after deducting
therefrom only (without duplication) (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees and expenses, finder’s
fees and other similar fees and commissions and out-of-pocket costs and
expenses, and (b) the amount of taxes payable in connection with or as a result
of such transaction, in each case to the extent, but only to the extent, that
the amounts so deducted are, at the time of receipt of such cash, actually paid
to a Person that is not an Affiliate of such Person and are properly
attributable to such transaction or to the asset that is the subject thereof;
provided, however, that in the case of taxes that are deductible under clause
(b) above but for the fact that, at the time of receipt of such cash, such taxes
have not been actually paid or are not then payable, such Loan Party or such
Subsidiary may deduct an amount (the “Reserved Amount”) equal to the amount
reserved in

 

21

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accordance with GAAP for such Loan Party’s or such Subsidiary’s reasonable
estimate of such taxes, other than taxes for which such Loan Party or such
Subsidiary is indemnified; provided, further, however, that, at the time such
taxes are paid, an amount equal to the amount, if any, by which the Reserved
Amount for such taxes exceeds the amount of such taxes actually paid shall
constitute “Net Cash Proceeds” of the type for which such taxes were reserved
for all purposes hereunder; provided, further, still, that Net Cash Proceeds
from Extraordinary Receipts shall not include up to $500,000 of cash proceeds in
the aggregate received in connection with one or more such receipts to the
extent such cash proceeds are applied to replace the asset in respect of which
such cash proceeds were received or are otherwise invested in such Person’s
business, so long as application is made within nine months after the occurrence
of such receipt.

 

“New Tranche 1 Term B Advance” means the Tranche 1 Term B Advance held by a
Consenting Lender from and after the Third Amendment Effective Date.

 

“New Tranche 1 Term B Borrowing” means the Tranche 1 Term B Borrowing made by a
Consenting Lender as of the Third Amendment Effective Date.

 

“New Tranche 1 Term B Commitment” means, with respect to any New Tranche 1 Term
B Lender at any time, the amount set forth for such Lender on the Register
maintained by the Administrative Agent pursuant to Section 2.15(b) as such
Lender’s “New Tranche 1 Term B Commitment.”

 

“New Tranche 1 Term B Facility” means, at any time, the aggregate amount of New
Tranche 1 Term B Advances outstanding at such time.

 

“New Tranche 1 Term B Lender” means any Lender that has a New Tranche 1 Term B
Commitment.

 

“New Tranche 1 Term B Note” means an amended and restated promissory note of the
Borrower payable to the order of any New Tranche 1 Term B Lender, in
substantially the form of Exhibit A-2 hereto, evidencing the indebtedness of the
Borrower to such Lender resulting from the New Tranche 1 Term B Advance made by
such Lender, as amended.

 

“New Tranche 2 Term B Advance” means the Tranche 2 Term B Advance held by a
Consenting Lender as of the Third Amendment Effective Date.

 

“New Tranche 2 Term B Borrowing” means the Tranche 2 Term B Borrowing made by a
Consenting Lender as of the Third Amendment Effective Date.

 

“New Tranche 2 Term B Commitment” means, with respect to any New Tranche 2 Term
B Lender at any time, the amount set forth for such Lender on the Register
maintained by the Administrative Agent pursuant to Section 2.15(b) as such
Lender’s “New Tranche 2 Term B Commitment.”

 

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“New Tranche 2 Term B Facility” means, at any time, the aggregate amount of New
Tranche 2 Term B Advances outstanding at such time.

 

“New Tranche 2 Term B Lender” means any Lender that has a New Tranche 2 Term B
Commitment.

 

“New Tranche 2 Term B Note” means an amended and restated promissory note of the
Borrower payable to the order of any New Tranche 2 Term B Lender, in
substantially the form of Exhibit A-4 hereto, evidencing the indebtedness of the
Borrower to such Lender resulting from the New Tranche 2 Term B Advance made by
such Lender, as amended.

 

“New Warrants” means warrants issued pursuant to the New Warrant Documents.

 

“New Warrant Documents” means (a) that certain Warrant Agreement, dated as of
March 29, 2005, between the Parent and Mellon Investor Services LLC, as warrant
agent, as amended, amended and restated, supplemented or otherwise modified from
time to time, (b) the Amendment No. 1 to Governance Agreement, dated as of March
29, 2005, by and among the Parent, WCAS Capital Partners III, L.P., WCAS, WCAS
Information Partners, L.P. and certain individual investors and trusts listed on
the signature pages thereto and (c) each other agreement, certificate, document
or instrument delivered in connection with clauses (a) and (b) above.

 

“Note” means a Tranche 1 Term B Note, a Tranche 2 Term B Note, a Tranche 3 Term
B Note, a Tranche 4 Term B Note, a New Tranche 1 Term B Note, a New Tranche 2
Term B Note or a Special Term B Note.

 

“Notice of Borrowing” has the meaning specified in Section 2.02(b).

 

“NPL” means the National Priorities List under CERCLA.

 

“NTFC” has the meaning specified in the recitals of the parties to this
Agreement.

 

“NTFC Capital Lease” has the meaning specified in the recitals of the parties to
this Agreement.

 

“Obligation” means, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 6.01(f).
Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal,
interest, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by such Loan Party under any Loan
Document, including Post-Petition

 

23

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Interest, and (b) the obligation of such Loan Party to reimburse any amount in
respect of any of the foregoing that any Lender, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.

 

“Open Year” has the meaning specified in Section 4.01(r)(iii).

 

“Ordinary Course Obligations” means obligations (exclusive of obligations for
the payment of borrowed money) under letters of credit, surety bonds, pledges,
deposits or other arrangements made to secure the performance of tenders, bids,
leases, statutory or regulatory obligations, bankers’ acceptances, surety and
appeal bonds, government contracts, performance and return-of-money bonds and
other obligations of a similar nature incurred in the ordinary course of
business.

 

“Original ITCD Credit Agreement” has the meaning specified in the recitals of
parties to this Agreement.

 

“Original Second Lien Credit Agreement” has the meaning specified in the
recitals of the parties to this Agreement.

 

“Other Taxes” has the meaning specified in Section 2.11(b).

 

“Parent” has the meaning specified in the preamble of this Agreement.

 

“Parent Guaranty” means the guaranty of the Parent set forth in Article VII.

 

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

 

“Permitted Deferred Taxes” has the meaning specified in that certain Limited
Waiver to Second Amended and Restated Credit Agreement, dated as of February 28,
2005, by and among the Agent, the Lenders specified on the signature pages
thereto and the Loan Parties.

 

“Permitted Encumbrances” has the meaning specified in the Mortgages.

 

“Permitted Liens” means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced:
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 5.01(b); (b) Liens imposed by law,
such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens
and other similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 30 days; (c) pledges
or deposits to secure obligations under workers’ compensation laws or similar
legislation or to secure public or statutory obligations; and (d) Permitted
Encumbrances.

 

“Permitted Parent Debt” has the meaning specified in Section 5.02(b)(v).

 

24

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“Person” means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.

 

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

 

“Plan of Reorganization” means the Plan of Reorganization of the Parent under
chapter 11 of the Bankruptcy Code in In re ITC^DeltaCom, Inc. (Case No. 02-11848
(MFW)).

 

“Pledged Debt” has the meaning specified in the Security Agreement.

 

“Pledged Shares” has the meaning specified in the Security Agreement.

 

“Post-Petition Interest” means any and all interest and expenses that accrue
after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of any one or more of the Loan Parties
(or would accrue but for the operation of applicable bankruptcy or insolvency
laws) whether or not such interest is allowed or allowable as a claim in any
such proceeding.

 

“Pre-Amendment Information” means all of the written information provided by or
on behalf of the Borrower to the Lenders prior to the Third Amendment Effective
Date.

 

“Preferred Interests” means, with respect to any Person, Equity Interests issued
by such Person that are entitled to a preference or priority over any other
Equity Interests issued by such Person upon any distribution of such Person’s
property and assets, whether by dividend or upon liquidation.

 

“Preferred Stock” means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s preferred or preference equity, whether
outstanding on the date of this Agreement or issued thereafter, including,
without limitation, all series and classes of such preferred or preference
stock.

 

“Pro Rata Percentage” has the meaning specified in Section 2.03(g).

 

“PUC” means any state regulatory agency or body that exercises jurisdiction over
the rates or services or the ownership, construction or operation of any network
facility or long distance telecommunications systems or over Persons who own,
construct or operate a network facility or long distance telecommunications
systems, in each case by reason of the nature or type of the business subject to
regulation and not pursuant to laws and regulations of general applicability to
Persons conducting business in such state.

 

“Redeem” means to purchase, redeem or otherwise retire or acquire for value,
provided, however, that, notwithstanding the foregoing, “Redeem” shall not
include (a)

 

25

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the acquisition and/or retirement by the Parent of Equity Interests of the
Parent which are surrendered to the Parent as indemnification payments pursuant
to the Merger Agreement, (b) the acquisition and/or retirement by the Parent of
Common Stock or other Equity Interests of the Parent tendered by the holder of
an Equity Plan Security in payment of an exercise or purchase price specified in
such Equity Plan Security or (c) a Benefit Plan Exchange Offer.

 

“Register” has the meaning specified in Section 2.15(b).

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

 

“Reorganization Common Stock” means the Common Stock of the Parent issued or
issuable under or in connection with the Plan of Reorganization, including,
without limitation, the Conversion Shares and the Warrant Shares.

 

“Reorganization Securities” means (a) the Reorganization Common Stock, (b) the
Series A Preferred Stock and (c) the Warrants.

 

“Replaced Lender” has the meaning specified in Section 2.11(g).

 

“Replacement Effective Date” has the meaning specified in Section 2.11(g).

 

“Replacement Lender” has the meaning specified in Section 2.11(g).

 

“Required Lenders” means, at any time, Lenders owed or holding at least a
majority of the aggregate principal amount of the Advances outstanding at such
time; provided, however, that if any Lender shall be a Defaulting Lender at such
time, there shall be excluded from the determination of Required Lenders at such
time (A) the aggregate principal amount of the Advances owing to such Lender (in
its capacity as a Lender) and outstanding at such time and (B) the aggregate
unused Commitments of such Lender at such time.

 

“Responsible Officer” means any officer of any Loan Party or any of its
Subsidiaries.

 

“Restricted Payment” has the meaning specified in Section 5.02(g).

 

“SEC” means the United States Securities and Exchange Commission.

 

“Second Amended ITCD Credit Agreement” has the meaning specified in the recitals
of the parties to this Agreement.

 

“Second Amendment Lenders” means the lenders signatory to the Second Amended
ITCD Credit Agreement.

 

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“Second Lien Agent” has the meaning specified in the recitals of the parties to
this Agreement.

 

“Second Lien Intercreditor and Subordination Agreement” means the Intercreditor
and Subordination Agreement, dated as of October 6, 2003, among the Agents, the
Lenders, the Second Lien Agent, the Second Lien Lenders and the Loan Parties, as
amended by that certain Consent and First Amendment to Intercreditor and
Subordination Agreement, dated as of the date hereof, and as may be further
amended, amended and restated and/or modified from time to time.

 

“Second Lien Lenders” has the meaning specified in the recitals of the parties
to this Agreement.

 

“Second Lien Loan Documents” means the “Loan Documents” as defined in the First
Amended Second Lien Credit Agreement.

 

“Secured Hedge Agreement” means any Hedge Agreement required or permitted under
Article V that is entered into by and between the Borrower and any Hedge Bank.

 

“Secured Obligations” has the meaning specified in the Security Agreement.

 

“Secured Parties” means the Agents, the Lenders and the Hedge Banks.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Security Agreement” has the meaning specified in Section 3.01(b)(ii).

 

“Senior Debt” means, for any period, all Debt of the Loan Parties and their
respective Subsidiaries incurred under this Agreement and secured by a first
priority Lien on real or personal property of the Loan Parties and their
respective Subsidiaries.

 

“Senior Debt Ratio” means, in respect of any specified period, the ratio of (a)
Senior Debt for such period to (b) Consolidated EBITDA of the Parent and its
Subsidiaries for such period.

 

“Series A Certificate of Designation” means the Parent’s Certificate of
Designation of the Powers, Preferences and Relative, Participating, Optional and
other Special Rights of 8% Series A Convertible Redeemable Preferred Stock and
Qualifications, Limitations and Restrictions thereof, as in effect from time to
time.

 

“Series A PIK Dividends” means the shares of Series A Preferred Stock paid or
payable as dividends on outstanding shares of Series A Preferred Stock.

 

“Series A Preferred Stock” means the shares of preferred stock of the Parent
designated as the 8% Series A Convertible Redeemable Preferred Stock and issued
pursuant to the Series A Certificate of Designation, including, without
limitation, Series A PIK Dividends.

 

27

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“Series B Certificate of Designation” means the Parent’s Certificate of
Designation of the Powers, Preferences and Relative, Participating, Optional and
other Special Rights of 8% Series B Convertible Redeemable Preferred Stock and
Qualifications, Limitations and Restrictions thereof, as in effect from time to
time.

 

“Series B PIK Dividends” means the shares of Series B Preferred Stock paid or
payable as dividends on outstanding shares of Series B Preferred Stock.

 

“Series B Preferred Stock” means the shares of preferred stock of the Parent
designated as the 8% Series B Convertible Redeemable Preferred Stock and issued
pursuant to the Series B Certificate of Designation, including, without
limitation, Series B PIK Dividends.

 

“Single Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or
any ERISA Affiliate and no Person other than the Loan Parties and the ERISA
Affiliates or (b) was so maintained and in respect of which any Loan Party or
any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.

 

“Special Term B Advance” means any advance made from time to time in accordance
with Section 2.02 by each Special Term B Lender, according to such Lender’s
Special Term B Commitment, on or after the date hereof.

 

“Special Term B Borrowing” means a borrowing consisting of simultaneous Special
Term B Advances of the same Type made by the Special Term B Lenders.

 

“Special Term B Commitment” means, with respect to any Special Term B Lender at
any time, the amount set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 2.15(b) as such Lender’s “Special Term
B Commitment”.

 

“Special Term B Facility” means, at any time, the aggregate amount of the
Special Term B Lenders’ Special Term B Commitment or the Special Term B Advances
outstanding at such time; provided, that the aggregate amount of the Special
Term B Facility shall not exceed the amount set forth on Schedule VI.

 

“Special Term B Lender” means any Lender that has a Special Term B Commitment.

 

“Special Term B Note” means a promissory note of the Borrower payable to the
order of any Special Term B Lender, in substantially the form of Exhibit A-7
hereto, evidencing the indebtedness of the Borrower to such Lender resulting
from any Special Term B Advance made by such Lender, as amended.

 

“Subordinated Debt” means Debt that, by the terms of any agreement or instrument
pursuant to which such Debt is Incurred, is expressly made subordinate in

 

28

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right of payment and priority to the Debt under the Loan Documents and the Debt
under the Second Lien Loan Documents.

 

“Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of (a) the issued and outstanding capital stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person’s other Subsidiaries.

 

“Subsidiary Guarantors” means the Subsidiaries of the Parent listed on Schedule
II hereto and each other Subsidiary of the Parent that shall be required to
execute and deliver a guaranty pursuant to Section 5.01(j).

 

“Subsidiary Guaranty” means the guaranty of the Subsidiary Guarantors set forth
in Article VII.

 

“Successor Agent Agreement” has the meaning specified in the recitals of parties
to this Agreement.

 

“Surviving Debt” means Debt of each Loan Party and its Subsidiaries outstanding
as of the Third Amendment Effective Date.

 

“Tax Agreement” means the Tax Indemnification Agreement, dated as of August 26,
1997, between ITC Holding Company, Inc. and the Parent.

 

“Tax Certificate” has the meaning specified in Section 5.03(k).

 

“Taxes” has the meaning specified in Section 2.11(a).

 

“Termination Date” means the earlier of (a) the date on which the Administrative
Agent, by notice to the Borrower, declares the Notes, all interest thereon and
all other amounts payable under this Agreement and the other Loan Documents to
be forthwith due and payable pursuant to Section 6.01 and (b) June 30, 2006.

 

“Third Amendment Effective Date” means the first date on which the conditions
set forth in Section 3.02 shall have been satisfied.

 

“Third Lien Credit Agreement” has the meaning specified in the recitals of the
parties to this Agreement.

 

“Third Lien Intercreditor and Subordination Agreement” means the Intercreditor
and Subordination Agreement, dated as of the date hereof, among each of

 

29

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the Agents on its behalf and on behalf of the Lenders, the Second Lien Agents,
the Second Lien Lenders, the Agents as provided and defined in the Third Lien
Credit Agreement, the Third Lien Lenders, and the Loan Parties, as the same may
be amended, amended and restated and/or modified from time to time.

 

“Third Lien Lenders” has the meaning specified in the recitals of the parties to
this Agreement.

 

“Third Lien Loan Documents” means the “Loan Documents” as defined in the Third
Lien Credit Agreement.

 

“Total Leverage Ratio” means, at any date of determination, the ratio of (x)
Consolidated debt to (y) Consolidated EBITDA, in each case, of or by the Parent
and its Subsidiaries during the twelve-month period ending on the last date of
the most recently ended calendar month. For purposes of computing Total Leverage
Ratio only, the term “debt” as used in clause (x) above means, without
duplication, the aggregate of all Debt of the type described in clauses (a),
(b), (c), (d), (e) and (h) of the definition of “Debt” and Contingent
Obligations of the Parent and its Subsidiaries in respect of the foregoing.

 

“Tranche 1 Term B Advance” means the single advance that was made by each
Tranche 1 Term B Lender, according to such Lender’s Tranche 1 Term B Commitment,
upon the closing of the Original ITCD Credit Agreement.

 

“Tranche 1 Term B Borrowing” means a borrowing consisting of simultaneous
Tranche 1 Term B Advances of the same Type made by the Tranche 1 Term B Lenders.

 

“Tranche 1 Term B Commitment” means, with respect to any Tranche 1 Term B Lender
at any time, the amount set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 2.15(b) as such Lender’s “Tranche 1
Term B Commitment.”

 

“Tranche 1 Term B Facility” means, at any time, the aggregate amount of the
Tranche 1 Term B Lenders’ Tranche 1 Term B Commitments or Tranche 1 Term B
Advances outstanding at such time.

 

“Tranche 1 Term B Lender” means any Lender that has a Tranche 1 Term B
Commitment.

 

“Tranche 1 Term B Note” means an amended and restated promissory note of the
Borrower payable to the order of any Tranche 1 Term B Lender, in substantially
the form of Exhibit A-1 hereto, evidencing the indebtedness of the Borrower to
such Lender resulting from the Tranche 1 Term B Advance made by such Lender, as
amended.

 

“Tranche 2 Term B Advance” means the single advance that was made by each
Tranche 2 Term B Lender, according to such Lender’s Tranche 2 Term B Commitment,
upon the closing of the Original ITCD Credit Agreement.

 

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“Tranche 2 Term B Borrowing” means a borrowing consisting of simultaneous
Tranche 2 Term B Advances of the same Type made by the Tranche 2 Term B Lenders.

 

“Tranche 2 Term B Commitment” means, with respect to any Tranche 2 Term B Lender
at any time, the amount set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 2.15(b) as such Lender’s “Tranche 2
Term B Commitment.”

 

“Tranche 2 Term B Facility” means, at any time, the aggregate amount of the
Tranche 2 Term B Lenders’ Tranche 2 Term B Commitments or Tranche 2 Term B
Advances outstanding at such time.

 

“Tranche 2 Term B Lender” means any Lender that has a Tranche 2 Term B
Commitment.

 

“Tranche 2 Term B Note” means an amended and restated promissory note of the
Borrower payable to the order of any Tranche 2 Term B Lender, in substantially
the form of Exhibit A-3 hereto, evidencing the indebtedness of the Borrower to
such Lender resulting from the Tranche 2 Term B Advance made by such Lender, as
amended.

 

“Tranche 3 Term B Advance” means the single advance that was made or deemed made
by each Tranche 3 Term B Lender, according to such Lender’s Tranche 3 Term B
Commitment, upon the closing of the Second Amended ITCD Credit Agreement.

 

“Tranche 3 Term B Borrowing” means a borrowing consisting of simultaneous
Tranche 3 Term B Advances of the same Type made by the Tranche 3 Term B Lenders.

 

“Tranche 3 Term B Commitment” means, with respect to any Tranche 3 Term B Lender
at any time, the amount set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 2.15(b) as such Lender’s “Tranche 3
Term B Commitment.”

 

“Tranche 3 Term B Facility” means, at any time, the aggregate amount of the
Tranche 3 Term B Lenders’ Tranche 3 Term B Commitments or the Tranche 3 Term B
Borrowings at such time.

 

“Tranche 3 Term B Lender” means any Lender that has a Tranche 3 Term B
Commitment.

 

“Tranche 3 Term B Note” means an amended and restated promissory note of the
Borrower payable to the order of any Tranche 3 Term B Lender, in substantially
the form of Exhibit A-5 hereto, evidencing the indebtedness of the Borrower to
such Lender resulting from the Tranche 3 Term B Advance made by such Lender.

 

“Tranche 4 Term B Advance” means the single advance that was made or deemed made
by each Tranche 4 Term B Lender, upon the consolidation of the obligations under
the GECC Capital Lease and the NTFC Capital Lease into and under

 

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this Agreement, according to such Lender’s Tranche 4 Term B Commitment, upon the
closing of Third Amendment Effective Date.

 

“Tranche 4 Term B Borrowing” means a borrowing consisting of simultaneous
Tranche 4 Term B Advances of the same Type made by the Tranche 4 Term B Lenders.

 

“Tranche 4 Term B Commitment” means, with respect to any Tranche 4 Term B Lender
at any time, the amount set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 2.15(b) as such Lender’s “Tranche 4
Term B Commitment.”

 

“Tranche 4 Term B Facility” means, at any time, the aggregate amount of the
Tranche 4 Term B Lenders’ Tranche 4 Term B Commitments or the Trance 4 Term B
Advances outstanding at such time.

 

“Tranche 4 Term B Lender” means any Lender that has a Tranche 4 Term B
Commitment.

 

“Tranche 4 Term B Note” means a promissory note of the Borrower payable to the
order of any Tranche 4 Term B Lender, in substantially the form of Exhibit A-6
hereto, evidencing the indebtedness of the Borrower to such Lender resulting
from the Tranche 4 Term B Advance made by such Lender, as amended.

 

“Transactions” means the transactions contemplated by the Loan Documents.

 

“Type” refers to the distinction between Advances bearing interest at the Base
Rate and Advances bearing interest at the Eurodollar Rate.

 

“Unencumbered Parcel” means any parcel of real property owned by any Loan Party
or its Subsidiaries that was not previously pledged as Collateral to secure the
Obligations of the Loan Parties under the Original Second Lien Credit Agreement,
the First Amended ITCD Credit Agreement or the Second Amended ITCD Credit
Agreement.

 

“Voting Interests” means shares of capital stock issued by a corporation, or
equivalent Equity Interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.

 

“Voting Stock” means, with respect to any Person, Capital Stock of any class or
kind ordinarily having the power to vote for the election of directors, managers
or other voting members of the governing body of such Person. For purposes of
this definition, Common Stock of the Parent shall constitute Voting Stock of the
Parent and the Series A Preferred Stock and the Series B Preferred Stock shall
not constitute Voting Stock of the Parent.

 

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“Warrant Shares” means the Common Stock or other securities issued or issuable
upon exercise of the Warrants.

 

“Warrants” means the Common Stock purchase warrants issued by the Parent on the
date of the initial issuance of the Series A Preferred Stock and any warrants
issued in exchange or substitution therefor or upon exercise thereof in
accordance with the warrant agreement pursuant to which such Common Stock
purchase warrants were issued.

 

“WCAS” means Welsh, Carson, Anderson & Stowe VIII, L.P.

 

“WCAS Securityholders” means, collectively, (a) WCAS Capital Partners III, L.P.,
(b) WCAS, (c) WCAS Information Partners, L.P., (d) each of the individual
investors and trusts that executed the Governance Agreement as “WCAS
Securityholders,” (e) the Affiliates of any of the Persons referred to in
clauses (a), (b), (c) and (d) above, (f) the related Persons of any of the
Persons referred to in clauses (a), (b), (c) and (d) above and (g) the WCAS
Securityholder Permitted Transferees. For purposes of this definition,
“Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

 

“WCAS Securityholder Permitted Transferees” means the individuals who are the
heirs, executors, administrators, testamentary trustees, legatees,
beneficiaries, spouses or lineal descendants of any of the WCAS Securityholders
who are natural Persons.

 

“Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA, that
is maintained for employees of any Loan Party or in respect of which any Loan
Party could have liability.

 

“Wells Fargo” has the meaning specified in the preamble of this Agreement.

 

“Withdrawal Liability” has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.

 

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In
this Agreement and the other Loan Documents 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 Loan Documents 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 its terms.

 

SECTION 1.03. Accounting Terms. (a) All accounting terms not specifically
defined herein, unless otherwise specified herein, shall be construed in
accordance with generally

 

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accepted accounting principles in the United States of America as in effect from
time to time (“GAAP”) and consistent with those applied in the preparation of
the financial statements of the Parent and its Subsidiaries.

 

(b) For purposes of the computations of Consolidated EBITDA with respect to the
Financial Condition Covenants set forth in Section 5.02(q), Consolidated EBITDA
for the Parent and its Subsidiaries shall be calculated as follows:

 

  (i) for the computation of the Senior Debt Ratio in Section 5.02(q)(ii) and
the Total Leverage Ratio in Section 5.02(q)(iii), Consolidated EBITDA shall be
equal to: (A) for each calendar quarter commencing the calendar quarter ending
June 30, 2005 through and including the calendar quarter ending December 31,
2005, the cumulative Consolidated EBITDA, in each case, for the period
commencing March 1, 2005 and terminating on the last day of the applicable
calendar quarter measured for such Financial Condition Covenant annualized (that
is, multiplied by a fraction, the numerator of which is 12 and the denominator
is the number of months elapsed from March 1, 2005 through the last day of the
applicable calendar quarter); and (B) the calendar quarter ending March 31,
2006, the cumulative Consolidated EBITDA for the trailing four calendar
quarters; and

 

  (ii) for the computation of the Interest Coverage Ratio in Section 5.02(q)(iv)
and the Minimum Consolidated EBITDA in Section 5.02(q)(vi), Consolidated EBITDA
shall be equal to (A) for each calendar quarter commencing the calendar quarter
ending June 30, 2005 through and including the calendar quarter ending December
31, 2005, the cumulative Consolidated EBITDA, in each case, for the period
commencing March 1, 2005, and terminating on the last day of the applicable
calendar quarter then ending; and (B) the calendar quarter ending March 31,
2006, the cumulative Consolidated EBITDA for the trailing four calendar
quarters.

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE ADVANCES

 

SECTION 2.01. Restructuring. (a) Subject to the terms and conditions hereof,
including without limitation, Section 3.01, the parties hereto agree to, and
hereby, restructure, continue, and consolidate the loans made pursuant to the
Second Amended ITCD Credit Agreement, and the obligations of the Lessees under
the GECC Capital Lease and the NTFC Capital Lease, and assume all of the
obligations therein. Notwithstanding anything to the contrary contained in this
Agreement, the parties understand and agree that, as a result of the
restructuring, continuation and consolidation contemplated hereby, the Tranche 1
Term B Facility, the New Tranche 1 Term B Facility, the Tranche 2 Term B
Facility, the New Tranche 2 Term B Facility, the Tranche 3 Term B Facility and
the Tranche 4 Term B Facility are fully funded and no additional funding of the
Tranche 1 Term B Facility, the New Tranche 1 Term B

 

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Facility, the Tranche 2 Term B Facility, the New Tranche 2 Term B Facility, the
Tranche 3 Term B Facility or the Tranche 4 Term B Facility shall be made
hereunder.

 

(b) Upon the occurrence of the Third Amendment Effective Date, the Tranche 1
Term B Advances of the Consenting Lenders and the Tranche 2 Term B Advances of
the Consenting Lenders shall, in each case, be converted into, and constitute
New Tranche 1 Term B Advances and New Tranche 2 Term B Advances, respectively,
and shall be entitled to all of the applicable rights and benefits to such
Facilities hereunder. Upon the occurrence of the Third Amendment Effective Date,
the obligations of the Lessees under the NTFC Capital Lease and the obligations
of Communications under the GECC Capital Lease shall be restructured, continued
and consolidated as the Tranche 4 Term B Facility, and all of the rights, duties
and obligations of each party thereto under each of the NTFC Capital Lease and
the GECC Capital Lease shall henceforth be governed solely by the terms of this
Agreement and the other Loan Documents. As of the Third Amendment Effective
Date, the principal amount outstanding of the Tranche 1 Term B Facility, the New
Tranche 1 Term B Facility, the Tranche 2 Term B Facility, the New Tranche 2 Term
B Facility, the Tranche 3 Term B Facility, and the Tranche 4 Term B Facility are
as set forth on Schedule VI hereto, in each case excluding accrued and unpaid
interest. These amounts represent valid and binding claims enforceable against
the Loan Parties in accordance with the terms of the Loan Documents.

 

SECTION 2.02. Special Term B Advances.

 

(a) Each Special Term B Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each a “Special Term B Advance”) to the
Borrower from time to time as the Borrower may request in accordance with
Section 2.02(b), in an aggregate amount not to exceed such Special Term B
Lender’s Special Term B Commitment at such time. Amounts borrowed under this
Section 2.02(a) and repaid or prepaid may not be reborrowed.

 

(b) Each Special Term B Borrowing shall be made on notice, given not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Special Term B Borrowing in the case of a Special Term B Borrowing
consisting of Eurodollar Rate Advances, or the first Business Day prior to the
date of the proposed Special Term B Borrowing in the case of a Special Term B
Borrowing consisting of Base Rate Advances, by the Borrower to the
Administrative Agent, which shall give to each Appropriate Lender prompt notice
thereof by telex or telecopier. Each such notice of a Special Term B Borrowing
(a “Notice of Borrowing”) shall (i) be delivered no earlier than five (5)
Business Days prior to the next immediate due date of a scheduled amortization
payment as set forth in Sections 2.03(a) and (b) and (ii) request an amount not
greater than the aggregate amounts immediately due and payable on the such
scheduled payment date. Each such notice shall be by telephone, confirmed
promptly in writing, or telex or telecopier, in substantially the form of
Exhibit B hereto, specifying therein the requested (i) date of such Special Term
B Borrowing, (ii) aggregate amount of such Special Term B Borrowing and (iii) in
the case of a Special Term B Borrowing consisting of Eurodollar Rate Advances,
initial Interest Period for each such Advance. Each Special Term B Lender shall,
before 11:00 A.M. (New York City time) on the date of such Special Term B
Borrowing, make available for the account of its Applicable

 

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Lending Office to the Administrative Agent at the Administrative Agent’s
Account, in same day funds, such Special Term B Lender’s ratable portion of such
Special Term B Borrowing in accordance with the respective Special Term B
Commitments of such Special Term B Lender and the other Special Term B Lenders.
After the Administrative Agent’s receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower by crediting the Borrower’s
Account.

 

(c) Anything in subsection (b) above to the contrary notwithstanding, (i) the
Borrower may not select Eurodollar Rate Advances for any Special Term B
Borrowing if the aggregate amount of such Special Term B Borrowing is less than
$1,000,000 or if the obligation of the Special Term B Lenders to make Eurodollar
Rate Advances shall then be suspended pursuant to Section 2.08 or 2.09 and (ii)
the Advances may not be outstanding as part of more than 5 separate Special Term
B Borrowings.

 

(d) Each Notice of Borrowing shall be irrevocable and binding on the Borrower.
In the case of any Special Term B Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Special Term B Lender against any loss, cost or expense incurred
by such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Special Term B Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (including loss of any interest that, but for such failure, such
Special Term B Lender would have earned with respect to such principal amount,
reduced, if such Special Term B Lender is able to redeposit or reinvest such
principal amount, by interest earned by such Special Term B Lender as a result
of such redeposit or reinvestment), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Special
Term B Lender to fund the Special Term B Advance to be made by such Special Term
B Lender as part of such Special Term B Borrowing when such Special Term B
Advance, as a result of such failure, is not made on such date.

 

(e) Unless the Administrative Agent shall have received notice from a Special
Term B Lender prior to the date of any Special Term B Borrowing that such
Special Term B Lender will not make available to the Administrative Agent such
Special Term B Lender’s ratable portion of such Special Term B Borrowing, the
Administrative Agent may assume that such Special Term B Lender has made such
portion available to the Administrative Agent on the date of such Special Term B
Borrowing in accordance with subsection (a) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Special Term B Lender shall not have so made such ratable portion available to
the Administrative Agent, such Lender and the Borrower severally agree to repay
or pay to the Administrative Agent forthwith on demand such corresponding amount
and to pay interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.07 to Advances comprising such Special
Term B Borrowing and (ii) in the case of such Special Term B Lender, the Federal
Funds Rate. If such Special Term B Lender shall pay to the Administrative Agent
such corresponding amount, such amount so paid shall

 

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constitute such Special Term B Lender’s Special Term B Advance as part of such
Special Term B Borrowing for all purposes.

 

(f) The failure of any Special Term B Lender to make the Special Term B Advance
to be made by it as part of any Special Term B Borrowing shall not relieve any
other Special Term B Lender of its obligation, if any, hereunder to make its
Special Term B Advance on the date of such Special Term B Borrowing, but no
Special Term B Lender shall be responsible for the failure of any other Special
Term B Lender to make the Special Term B Advance to be made by such other
Special Term B Lender on the date of any Special Term B Borrowing.

 

SECTION 2.03. Repayment of Advances.

 

(a) Tranche 1 Term B Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Tranche 1 Term B Lenders the aggregate
outstanding principal amount of the Tranche 1 Term B Advances on the dates and
in the amounts indicated on Schedule 2.03(a) (which amounts shall be reduced as
a result of the application of prepayments in accordance with Section 2.05);
provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the Tranche 1 Term B Advances outstanding on such date.

 

(b) Tranche 2 Term B Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Tranche 2 Term B Lenders the aggregate
outstanding principal amount of the Tranche 2 Term B Advances on the dates and
in the amounts indicated on Schedule 2.03(b) (which amounts shall be reduced as
a result of the application of prepayments in accordance with Section 2.05);
provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the Tranche 2 Term B Advances outstanding on such date.

 

(c) Tranche 3 Term B Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Tranche 3 Term B Lenders the aggregate
outstanding principal amount of the Tranche 3 Term B Advances on the Termination
Date.

 

(d) Tranche 4 Term B Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Tranche 4 Term B Lenders the aggregate
outstanding principal amount of the Tranche 4 Term B Advances on the Termination
Date.

 

(e) Special Term B Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Special Term B Lenders the aggregate
outstanding principal amount of the Special Term B Advances on the Termination
Date.

 

(f) Additional Provisions. Without limitation of any remedies set forth in this
Agreement, in the event that the Borrower shall fail to repay, in full, all
scheduled principal amounts for each of the Tranche 1 Term B Facility or the
Tranche 2 Term B Facility on any scheduled payment date pursuant to Section
2.03(a) or (b), the total amount of any principal payments made by the Borrower
on or after such date and prior to the Termination Date shall be

 

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applied ratably (i) to each of the Tranche 1 Term B Facility or the Tranche 2
Term B Facility, and (ii) to each Lender under each such Facility based upon the
outstanding principal amount of Advances payable to such Lenders thereunder and
to the installments thereof on a pro rata basis.

 

(g) Application of Payments. All payments (or proceeds) received by the
Administrative Agent under the Loan Documents shall, promptly upon receipt, be
applied as follows:

 

(i) First: to the fees, costs and expenses payable to the Agents under the Loan
Documents (including, without limitation, reasonable and documented attorneys’
fees and expenses);

 

(ii) Second: to any fees and expenses incurred by the Lenders and reimbursable
under the Loan Documents;

 

(iii) Third: to all amounts of interest then due and owing on the Advances,
until the same shall be paid in full;

 

(iv) Fourth: ratably to all amounts of principal then due and owing on the
Obligations constituting Tranche 1 Term B Advances, New Tranche 1 Term B
Advances, Tranche 2 Term B Advances, New Tranche 2 Term B Advances, Tranche 3
Term B Advances and Special Term B Advances, until the same shall be paid in
full;

 

(v) Fifth: to all amounts of principal then due and owing in respect of the
Tranche 4 Term B Advances, until the same shall be paid in full. Notwithstanding
the foregoing, it is understood and agreed that all such payments of interest on
and principal of Advances shall, in the event that any such payment in respect
of such interest on or principal of the Advances of any Facility shall be
insufficient to pay in full the amounts of such interest or principal, as the
case may be, so due and unpaid, be made pro rata to the Lenders holding
Obligations of the applicable Facility, with each such Lender receiving an
amount equal to the product of the amount of such payment of interest or
principal multiplied by a fraction, the numerator of which equals the portion of
the Secured Debt of such Facility held by such Lender, and the denominator of
which equals the total outstanding amount of the Secured Debt of such Facility
(such Lender’s “Pro Rata Percentage”) with respect to such Facility.

 

SECTION 2.04. Intentionally omitted.

 

SECTION 2.05. Prepayments. (a) Optional. The Borrower may, upon at least one
Business Day’s notice in the case of Base Rate Advances and three Business Days’
notice in the case of Eurodollar Rate Advances, in each case to the
Administrative Agent stating the proposed date and aggregate principal amount of
the prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
aggregate

 

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principal amount prepaid; provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount of $500,000 or an integral multiple of
$500,000 in excess thereof and (y) if any prepayment of a Eurodollar Rate
Advance is made on a date other than the last day of an Interest Period for such
Advance, the Borrower shall also pay any amounts owing pursuant to Section
9.04(c). Each such prepayment of any Advances shall be applied ratably (i) to
each Facility and (ii) to each Lender thereunder and to the installments of the
Tranche 1 Term B Facility and the Tranche 2 Term B Facility.

 

(b) Mandatory. (i) Intentionally omitted.

 

(ii) The Borrower shall, within two Business Days after the date of receipt of
the Net Cash Proceeds by any Loan Party from (A) the sale, lease, transfer or
other disposition of any assets of any Loan Party or any Subsidiary of a Loan
Party (other than leases in the ordinary course of business or any sale, lease,
transfer or other disposition of assets pursuant to clause (i), (ii), (v)(B),
(vi) or (vii) of Section 5.02(e)) prepay an aggregate principal amount of the
Advances equal to such Net Cash Proceeds in excess, so long as no Default or
Event of Default has occurred and is continuing, of $30,000,000; provided, that
no portion of the Net Cash Proceeds retained by the Loan Parties pursuant to
this subsection (ii) shall be used by any Loan Party in connection with any
merger with any Person or acquisition of assets of any Person (other than assets
acquired in the ordinary course of the Loan Parties’ business); and (B) any
Extraordinary Receipt received by, or paid to, or for the account of, any Loan
Party or any Subsidiary of a Loan Party and not otherwise included in clause (A)
above, prepay an aggregate principal amount of the Advances in any amount equal
to the amount of such Net Cash Proceeds.

 

(iii) The Borrower shall, within two Business Days after the date of receipt,
prepay an aggregate principal amount of the Advances in an amount equal to 100%
of the proceeds received on account of Debt incurred by any Loan Party other
than Debt incurred pursuant to the Loan Documents or the Third Lien Loan
Documents or any offering of any Equity Interests of the Parent or any other
Loan Party except for Equity Interests consisting of any (A) Common Stock of the
Parent, the proceeds of the issuance and sale of which are applied to refinance
the Series A Preferred Stock or Series B Preferred Stock at not more than 100%
of liquidation value plus accrued dividends, (B) Equity Plan Securities, (C) New
Warrants or (D) Reorganization Securities.

 

(iv) All prepayments under this subsection (b) shall be made together with
accrued interest to the date of such prepayment on the principal amount prepaid
and shall be applied (A)(x) in the case of prepayments under clauses (i),
(ii)(B), (iii) or (iv), each Facility and (y) in the case of prepayments under
clause (ii)(A) to each Facility (other than the Tranche 4 Term B Facility) until
such Facilities are paid in full and upon payment in full of the Facilities
other than the Tranche 4 Term B Facility, to the Tranche 4 Term B Facility and
(B) to each Lender under each such relevant Facility based upon the outstanding
principal

 

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amount of Advances payable to such Lenders thereunder and to the installments of
the Tranche 1 Term B Facility and the Tranche 2 Term B Facility on a pro rata
basis.

 

SECTION 2.06. Interest. (a) Scheduled Interest. The Borrower shall pay interest
on the unpaid principal amount of each Advance owing to each Lender from the
date of such Advance until such principal amount shall be paid in full, at the
following rates per annum:

 

(i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in
effect from time to time and (B) the Applicable Base Rate Margin in effect from
time to time, payable in cash in arrears quarterly on the last day of each
March, June, September and December during such periods and on the date such
Base Rate Advance shall be Converted or paid in full;

 

(ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such
Interest Period for such Advance plus (B) the Applicable Eurodollar Rate Margin
in effect on the first day of such Interest Period, payable in arrears on the
last day of such Interest Period and, if such Interest Period has a duration of
more than three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period and on the date
such Eurodollar Rate Advance shall be Converted or paid in full.

 

(b) Default Interest. Upon the occurrence and during the continuance of a
Default, the Borrower shall pay interest on (i) the unpaid principal amount of
each Advance owing to each Lender, payable in arrears on the dates referred to
in clause (a)(i) or (a)(ii) above and on demand, at a rate per annum equal at
all times to 2% per annum above the rate per annum required to be paid on such
Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest
extent permitted by law, the amount of any interest, fee or other amount payable
under the Loan Documents that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid, in
the case of interest, on the Type of Advance on which such interest has accrued
pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on Base Rate
Advances pursuant to clause (a)(i) above.

 

(c) Notice of Interest Period and Interest Rate. Promptly after receipt of a
notice of Conversion pursuant to Section 2.08 or a notice of selection of an
Interest Period pursuant to the terms of the definition of “Interest Period,”
the Administrative Agent shall give notice to the Borrower and each Lender of
the applicable Interest Period and the applicable interest rate determined by
the Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.

 

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SECTION 2.07. Fees. (a) Commencing on the Third Amendment Effective Date and
until the Termination Date, the Borrower shall pay to the Administrative Agent
all fees, including, without limitation, administration and transition fees, in
the amounts set forth in Schedule VI to the Successor Agent Agreement, plus a
fee in the amount of $50,000.

 

(b) Upon the occurrence of the Third Amendment Effective Date, the Borrower
shall pay to the Administrative Agent for the account of the Consenting Lenders
a fee in the amount equal to 0.25% of each of the New Tranche 1 Term B Advances,
the New Tranche 2 Term B Advances, the Tranche 3 Term B Advances and the Tranche
4 Term B Advances.

 

(c) Upon the occurrence of the Third Amendment Effective Date, the Borrower
agrees to pay the Special Term B Lenders a fee in the amount of $150,000.

 

SECTION 2.08. Conversion of Advances. (a) Optional. The Borrower may on any
Business Day, upon notice given to the Administrative Agent not later than 11:00
A.M. (New York City time) on the third Business Day prior to the date of the
proposed Conversion and subject to the provisions of Section 2.09, Convert all
or any portion of the Advances of one Type comprising the same Borrowing into
Advances of the other Type; provided, however, that any Conversion of Eurodollar
Rate Advances into Base Rate Advances shall be made only on the last day of an
Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate
Advances into Eurodollar Rate Advances shall be in an amount not less than
$10,000,000 and integral multiples of $10,000,000 in excess thereof, no
Conversion of any Advances shall result in more than five separate Borrowings
and each Conversion of Advances comprising part of the same Borrowing under any
Facility shall be made ratably (i) to each Facility and (ii) to each Lender
under each such Facility based upon the respective Commitments of the Lenders
thereunder and to the installments thereof on a pro rata basis. Each such notice
of Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.

 

(b) Mandatory. (i) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $10,000,000, such Advances shall
automatically Convert into Base Rate Advances.

 

(ii) If the Borrower shall fail to select the duration of any Interest Period
for any Eurodollar Rate Advances in accordance with the provisions contained in
the definition of “Interest Period” in Section 1.01, the Administrative Agent
will forthwith so notify the Borrower and the Lenders, whereupon each such
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance.

 

(iii) Upon the occurrence and during the continuance of any Default, (x) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (y) the

 

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obligation of the Lenders to make, or to Convert Advances into Eurodollar Rate
Advances shall be suspended.

 

SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i) the introduction
of or any change (other than any change by way of imposition or increase of
reserve requirements included in the Eurodollar Rate Reserve Percentage) in or
in the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of funding or maintaining Eurodollar Rate Advances
(excluding, for purposes of this Section 2.09, any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.11 shall govern)
and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender is organized or has its Applicable Lending Office or
any political subdivision thereof), then the Borrower shall from time to time,
upon demand by such Lender (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost;
provided, however, that a Lender claiming additional amounts under this Section
2.09(a) agrees to use reasonable efforts (consistent with internal policy and
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such a designation would avoid the need for, or reduce
the amount of, such increased cost that may thereafter accrue and would not, in
the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender. A certificate as to the amount of such increased cost, submitted to the
Borrower by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.

 

(b) If, due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender or any
corporation controlling such Lender as a result of or based upon the existence
of such Lender’s commitment to lend hereunder and other commitments of such
type, then, upon demand by such Lender or such corporation (with a copy of such
demand to the Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender’s commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower by such Lender shall be conclusive and binding for all
purposes, absent manifest error.

 

(c) If, with respect to any Eurodollar Rate Advances under any Facility, Lenders
owed at least a majority of the then aggregate unpaid principal amount thereof
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Lenders of
making, funding or maintaining their Eurodollar Rate Advances for such Interest
Period, the Administrative Agent shall forthwith so notify the Borrower and the
Appropriate Lenders, whereupon (i) each such Eurodollar Rate Advance under such
Facility will automatically, on the last day of the then existing Interest
Period therefor,

 

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Convert into a Base Rate Advance and (ii) the obligation of the Appropriate
Lenders to Convert Advances into Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower that such Lenders have
determined that the circumstances causing such suspension no longer exist.

 

(d) Notwithstanding any other provision of this Agreement, if the introduction
of or any change in or in the interpretation of any law or regulation shall make
it unlawful, or any central bank or other governmental authority shall assert
that it is unlawful, for any Lender or its Eurodollar Lending Office to perform
its obligations hereunder to make Eurodollar Rate Advances or to continue to
fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Administrative Agent,
(i) each Eurodollar Rate Advance under each Facility under which such Lender has
a Commitment will automatically, upon such demand, Convert into a Base Rate
Advance and (ii) the obligation of the Appropriate Lenders to Convert Advances
into Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall notify the Borrower that such Lender has determined that the circumstances
causing such suspension no longer exist; provided, however, that, before making
any such demand, such Lender agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation would
allow such Lender or its Eurodollar Lending Office to continue to fund or
maintain Eurodollar Rate Advances and would not, in the judgment of such
Lenders, be otherwise disadvantageous to such Lender.

 

SECTION 2.10. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes, irrespective of any right of counterclaim
or set-off (except as otherwise provided in Section 2.14), not later than 11:00
A.M. (New York City time) on the day when due in U.S. dollars to the
Administrative Agent at the Administrative Agent’s Account in same day funds,
with payments being received by the Administrative Agent after such time being
deemed to have been received on the next succeeding Business Day. The
Administrative Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by the Borrower is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender, to such Lenders for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of
such respective Obligations then payable to such Lenders and (ii) if such
payment by the Borrower is in respect of any Obligation then payable hereunder
to one Lender, to such Lender for the account of its Applicable Lending Office,
in each case to be applied in accordance with the terms of this Agreement. Upon
its acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 9.07(e), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.

 

(b) The Borrower hereby authorizes each Lender, if and to the extent payment
owed to such Lender is not made when due hereunder or, in the case of a Lender,
under the Note

 

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held by such Lender, to charge from time to time against any or all of the
Borrower’s accounts with such Lender any amount so due.

 

(c) All computations of interest based on the Base Rate and fees shall be made
by the Administrative Agent on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the Eurodollar Rate and
of fees shall be made by the Administrative Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or commission hereunder shall be conclusive and binding for
all purposes, absent manifest error.

 

(d) Whenever any payment hereunder or under the Notes shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.

 

(e) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to any Lender hereunder that the
Borrower will not make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each such Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent the Borrower shall not
have so made such payment in full to the Administrative Agent, each such Lender
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at the Federal Funds Rate.

 

(f) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender’s proportionate share of the principal amount of all
outstanding Advances, in repayment or prepayment of such of the outstanding
Advances or other Obligations owed to such Lender, and for application to such
principal installments, as the Administrative Agent shall direct.

 

SECTION 2.11. Taxes. (a) Any and all payments by or for the account of any Loan
Party hereunder, or in respect of the Notes or any other Loan Document, shall be
made, in accordance with Section 2.10, free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and each Agent, taxes that are imposed on its

 

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overall net income by the United States and taxes that are imposed on its
overall net income (and franchise taxes imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender or such Agent, as the
case may be, is organized or any political subdivision thereof and, in the case
of each Lender, taxes that are imposed on its overall net income (and franchise
taxes imposed in lieu thereof) by the state or foreign jurisdiction of such
Lender’s Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as “Taxes”). If a Loan Party shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note or other Loan Documents to any Lender or any Agent, (i) the sum payable by
such Loan Party shall be increased as may be necessary so that after such Loan
Party and the Administrative Agent have made all required deductions (including
deductions applicable to additional sums payable under this Section 2.11) such
Lender or such Agent, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Loan Party shall
make all such deductions and (iii) such Loan Party shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.

 

(b) In addition, each Loan Party shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or other Loan Documents or
from the execution, delivery or registration of, performance under, or otherwise
with respect to, this Agreement, the Notes or any other Loan Document
(hereinafter referred to as “Other Taxes”).

 

(c) Each Loan Party shall indemnify each Lender and each Agent for and hold them
harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed by any jurisdiction on amounts payable under
this Section 2.11, imposed on or paid by such Lender or such Agent (as the case
may be) and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or such Agent (as the case may
be) makes written demand therefor.

 

(d) Within 30 days after the date of any payment of Taxes, the relevant Loan
Party shall furnish to the Administrative Agent, at its address referred to in
Section 9.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes or other Loan
Documents by or on behalf of such Loan Party through an account or branch
outside the United States or by or on behalf of such Loan Party by a payor that
is not a United States person, if such Loan Party determines that no Taxes are
payable in respect thereof, such Loan Party shall furnish, or shall cause such
payor to furnish, to the Administrative Agent, at such address, an opinion of
counsel acceptable to the Administrative Agent stating that such payment is
exempt from Taxes. For purposes of subsections (d) and (e) of this Section 2.11,
the terms “United States” and “United States person” shall have the meanings
specified in Section 7701 of the Internal Revenue Code.

 

(e) Each Lender organized under the laws of a jurisdiction outside the United
States shall, on or prior to the date of its execution and delivery of this
Agreement in the case of

 

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each Initial Lender, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter as requested in writing by the relevant
Loan Party (but only so long thereafter as such Lender remains lawfully able to
do so), provide each of the Administrative Agent and each Loan Party with two
original Internal Revenue Service forms W-8ECI or W-8 or W-8BEN (and, if
applicable to the exemption claimed by a Lender that delivers a form W-8 or
W-8BEN, a certificate representing that such Lender is not a “bank” for purposes
of Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder,
within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code, of the
Loan Party and is not a controlled foreign corporation related to the Loan
Party, within the meaning of Section 864(d)(4) of the Internal Revenue Code), as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from or entitled to a reduced
rate of United States withholding tax on payments pursuant to this Agreement or
the Notes (or, in the case of a Lender providing a form W-8 or W-8BEN,
certifying that such Lender is a foreign corporation, partnership, estate or
trust). If the forms provided by a Lender at the time such Lender first becomes
a party to this Agreement indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender becomes a party to this Agreement, the
Lender assignor was entitled to payments under subsection (a) of this Section
2.11 in respect of United States withholding tax with respect to interest paid
at such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender assignee on such date. If any form or document referred to
in this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on the
date hereof by Internal Revenue Service form W-8, W-8BEN or W-8ECI (or the
related certificate described above), that the Lender reasonably considers to be
confidential, the Lender shall give notice thereof to the Loan Party and shall
not be obligated to include in such form or document such confidential
information.

 

(f) For any period with respect to which a Lender has failed to provide the
relevant Loan Party with the appropriate form described in subsection (e) above
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e) above), such Lender shall not be entitled
to indemnification under subsection (a) or (c) of this Section 2.11 with respect
to Taxes imposed by reason of such failure; provided, however, that should a
Lender become subject to Taxes because of its failure to deliver a form required
hereunder, the relevant Loan Party shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.

 

(g) The Loan Party may replace any Lender that has requested additional amounts
under this Section 2.11, by written notice to such Lender and the Administrative
Agent and identifying one or more persons each of which shall be reasonably
acceptable to the

 

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Administrative Agent (each, a “Replacement Lender”, and collectively, the
“Replacement Lenders”) to replace such Lender (the “Replaced Lender”); provided,
that (i) the notice from such Loan Party to the Replaced Lender and the
Administrative Agent provided for herein above shall specify an effective date
for such replacement (the “Replacement Effective Date”), which shall be at least
five (5) Business Days after such notice is given and (ii) as of the relevant
Replacement Effective Date, each Replacement Lender shall enter into an
Assignment and Acceptance with the Replaced Lender pursuant to Section 9.07(a)
(but shall not be required to pay the processing fee otherwise payable to the
Administrative Agent pursuant to Section 9.07(a)), pursuant to which such
Replacement Lenders collectively shall acquire, in such proportion among them as
they may agree with such Loan Party and the Administrative Agent, all (but not
less than all) of the Commitments and outstanding Advances of the Replaced
Lender, and, in connection therewith, shall pay to the Replaced Lender, as the
purchase price in respect thereof, an amount equal to the sum as of the
Replacement Effective Date, without duplication, of (x) the unpaid principal
amount of, and all accrued but unpaid interest on, all outstanding Advances of
the Replaced Lender and (y) the Replaced Lender’s ratable share of all accrued
but unpaid fees owing to the Replaced Lender hereunder.

 

SECTION 2.12. Sharing of Payments, Etc. If any Lender shall obtain at any time
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise, other than as a result of an assignment pursuant to
Section 9.07) (a) on account of Obligations due and payable to such Lender
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the Notes at such
time) of payments on account of the Obligations due and payable to all Lenders
hereunder and under the Notes at such time obtained by all the Lenders at such
time or (b) on account of Obligations owing (but not due and payable) to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender at such time to (ii) the aggregate amount of the Obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by all of the
Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such interests or participating interests in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other
Lender shall be rescinded and such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such Lender’s ratable share
(according to the proportion of (i) the purchase price paid to such Lender to
(ii) the aggregate purchase price paid to all Lenders) of such recovery together
with an amount equal to such Lender’s ratable share (according to the proportion
of (i) the amount of such other Lender’s required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered; provided, further, that, so long as the Obligations under the Loan
Documents shall not have been accelerated, any excess payment received by an
Appropriate Lender shall be shared on a pro rata basis only with other
Appropriate Lenders. The Borrower agrees that any Lender so purchasing an
interest or

 

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participating interest from another Lender pursuant to this Section 2.12 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such interest or participating
interest, as the case may be, as fully as if such Lender were the direct
creditor of the Borrower in the amount of such interest or participating
interest, as the case may be.

 

SECTION 2.13. Intentionally omitted.

 

SECTION 2.14. Defaulting Lenders. (a) Intentionally omitted.

 

(b) In the event that, at any one time, (i) any Lender shall be a Defaulting
Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to any Agent or
any of the other Lenders and (iii) the Borrower shall make any payment hereunder
or under any other Loan Document to the Administrative Agent for the account of
such Defaulting Lender, then the Administrative Agent may, on its behalf or on
behalf of such other Agents or such other Lenders and to the fullest extent
permitted by applicable law, apply at such time the amount so paid by the
Borrower to or for the account of such Defaulting Lender to the payment of each
such Defaulted Amount to the extent required to pay such Defaulted Amount. In
the event that the Administrative Agent shall so apply any such amount to the
payment of any such Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this Agreement and the
other Loan Documents payment, to such extent, of such Defaulted Amount on such
date. Any such amount so applied by the Administrative Agent shall be retained
by the Administrative Agent or distributed by the Administrative Agent to such
other Agents or such other Lenders, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the Administrative
Agent, such other Agents and such other Lenders and, if the amount of such
payment made by the Borrower shall at such time be insufficient to pay all
Defaulted Amounts owing at such time to the Administrative Agent, such other
Agents and such other Lenders, in the following order of priority:

 

(i) first, to the Administrative Agent for any Defaulted Amounts then owing to
the Administrative Agent hereunder; and

 

(ii) second, to any other Lenders for any Defaulted Amounts then owing to such
other Lenders, ratably in accordance with such respective Defaulted Amounts then
owing to such other Lenders.

 

Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.14.

 

(c) In the event that, at any one time, (i) any Lender shall be a Defaulting
Lender, (ii) such Defaulting Lender shall not owe a Defaulted Amount and (iii)
the Borrower, any Agent or any other Lender shall be required to pay or
distribute any amount hereunder or under any other Loan Document to or for the
account of such Defaulting Lender, then the Borrower or such Agent or such other
Lender shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in

 

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escrow or the Administrative Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds held
by the Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in a segregated account with the
Administrative Agent, in the name and under the control of the Administrative
Agent, but subject to the provisions of this subsection (c). The terms
applicable to such account, including the rate of interest payable with respect
to the credit balance of such account from time to time, shall be the
Administrative Agent’s standard terms applicable to escrow accounts maintained
with it. Any interest credited to such account from time to time shall be held
by the Administrative Agent in escrow under, and applied by the Administrative
Agent from time to time in accordance with the provisions of, this subsection
(c). The Administrative Agent shall, to the fullest extent permitted by
applicable law, apply all funds so held in escrow from time to time to the
extent necessary to make any Advances required to be made by such Defaulting
Lender and to pay any amount payable by such Defaulting Lender hereunder and
under the other Loan Documents to the Administrative Agent or any other Lender,
as and when such Advances or amounts are required to be made or paid and, if the
amount so held in escrow shall at any time be insufficient to make and pay all
such Advances and amounts required to be made or paid at such time, in the
following order of priority:

 

(i) first, to the Administrative Agent for any amounts then due and payable by
such Defaulting Lender to the Administrative Agent hereunder;

 

(ii) second, to any other Lenders for any amount then due and payable by such
Defaulting Lender to such other Lenders hereunder, ratably in accordance with
such respective amounts then due and payable to such other Lenders; and

 

(iii) third, to the Borrower for any Advance then required to be made by such
Defaulting Lender pursuant to a Commitment of such Defaulting Lender.

 

In the event that any Lender that is a Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the Administrative Agent in
escrow at such time with respect to such Lender shall be distributed by the
Administrative Agent to such Lender and applied by such Lender to the
Obligations owing to such Lender at such time under this Agreement and the other
Loan Documents ratably in accordance with the respective amounts of such
Obligations outstanding at such time.

 

(d) The rights and remedies against a Defaulting Lender under this Section 2.14
are in addition to other rights and remedies that the Borrower may have against
such Defaulting Lender and that any Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.

 

SECTION 2.15. Evidence of Debt; Register. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder. The Borrower agrees
that upon notice by any Lender to the Borrower (with a copy of such notice to
the Administrative Agent) to the effect that a promissory note or other

 

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evidence of indebtedness is required or appropriate in order for such Lender to
evidence (whether for purposes of pledge, enforcement or otherwise) the Advances
owing to, or to be made by, such Lender, the Borrower shall promptly execute and
deliver to such Lender, with a copy to the Administrative Agent, a Tranche 1
Term B Note, a New Tranche 1 Term B Note, a Tranche 2 Term B Note, a New Tranche
2 Term B Note, a Tranche 3 Term B Note, a Tranche 4 Term B Note and a Special
Term B Note, as applicable, in substantially the form of Exhibits A-1, A-2, A-3,
A-4, A-5, A-6 and A-7 hereto, respectively, payable to the order of such Lender
in a principal amount equal to the Tranche 1 Term B Advances, the New Tranche 1
Term B Advances, the Tranche 2 Term B Advances, the New Tranche 2 Term B
Advances, the Tranche 3 Term B Advances, the Tranche 4 Term B Advances and the
Special Term B Advances, respectively, payable to such Lender. The Lenders
hereby agree that any promissory notes evidencing the Advances issued by the
Borrower to any Lender prior to the date hereof shall be deemed null and void
and of no further force or effect for any and all purposes, and each Lender that
is a holder of any such note agrees to surrender such note to the Borrower. All
references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued hereunder.

 

(b) The Administrative Agent shall maintain at its address referred to in
Section 9.02 a register for the recordation of the names and addresses of the
Lenders and the Commitment under each Facility of each Lender from time to time
(the “Register”). The Register maintained by the Administrative Agent pursuant
to this Section shall also include a control account, and a subsidiary account
for each Lender, in which accounts (taken together) shall be recorded (i) the
date and amount of each Borrowing made hereunder, the Type of Advances
comprising such Borrowing and, if appropriate, the Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder, and (iv)
the amount of any sum received by the Administrative Agent from the Borrower
hereunder and each Lender’s share thereof.

 

(c) Entries made in good faith by the Administrative Agent in the Register
pursuant to subsection (b) above, and by each Lender in its account or accounts
pursuant to subsection (a) above, shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Administrative Agent or such Lender
to make an entry, or any finding that an entry is incorrect, in the Register or
such account or accounts shall not limit or otherwise affect the obligations of
the Borrower under this Agreement.

 

(d) The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agents and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Agent or any Lender at any reasonable time
and from time to time upon reasonable prior notice.

 

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ARTICLE III

 

CONDITIONS OF LENDING

 

SECTION 3.01. Intentionally Omitted.

 

SECTION 3.02. Conditions Precedent to the Third Amendment Effective Date. The
occurrence of the Third Amendment Effective Date is subject to the satisfaction
of the following conditions precedent:

 

(a) The Third Amendment Effective Date shall occur on or before March 29, 2005.

 

(b) The Administrative Agent shall have received the following, each dated the
Third Amendment Effective Date (unless otherwise specified), in form and
substance satisfactory to the Administrative Agent (unless otherwise specified)
and (except for the Notes) in sufficient copies for each Lender:

 

(i) The Notes payable to the order of the Lenders, to the extent requested by
any Lender pursuant to Section 2.15(a).

 

(ii) A third amended and restated security agreement in substantially the form
of Exhibit D hereto (together with each other security agreement and security
agreement supplement delivered pursuant to Section 5.01(j), in each case as
amended, the “Security Agreement”), duly executed by each Loan Party, together
with:

 

(A) certificates representing the Pledged Shares referred to therein accompanied
by undated stock powers executed in blank and instruments evidencing the Pledged
Debt indorsed in blank,

 

(B) acknowledgment copies or stamped receipt copies of proper financing
statements (or proper amendments to any financing statements filed pursuant to
the First Amended ITCD Credit Agreement or Second Amended ITCD Credit
Agreement), duly filed on or before the Third Amendment Effective Date under the
Uniform Commercial Code of all jurisdictions that the Administrative Agent may
reasonably deem necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the Security Agreement,
covering the Collateral described in the Security Agreement,

 

(C) completed requests for information, dated on or before the Third Amendment
Effective Date, listing the financing statements referred to in clause (B) above
and all other effective financing statements filed in the jurisdictions referred
to in clause (B) above that name any Loan Party as debtor, together with copies
of such other financing statements,

 

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(D) evidence of the completion of all other recordings and filings of or with
respect to the Security Agreement that the Administrative Agent may reasonably
deem necessary or desirable in order to perfect and protect the Liens created
thereby,

 

(E) copies of the Assigned Agreements referred to in the Security Agreement, and

 

(F) evidence that all other action that the Administrative Agent may deem
reasonably necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the Security Agreement has
been taken (including, without limitation, receipt of duly executed payoff
letters, UCC-3 termination statements, landlords’ and bailees’ waiver and
consent agreements and account control and cash management agreements in form
and substance satisfactory to the Administrative Agent).

 

(iii) The Capital Lease Assignments substantially in the form of Exhibit B
hereto.

 

(iv) The Intercreditor and Subordination Agreements in substantially the form of
Exhibit E hereto, duly executed by each of the parties thereto.

 

(v) Certified copies of the resolutions of the Board of Directors of each Loan
Party approving the Transactions and each Loan Document to which it is or is to
be a party, and of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if any, with respect
to the Transactions and each Loan Document to which it is or is to be a party.

 

(vi) A copy of a certificate of the Secretary of State of the jurisdiction of
incorporation of each Loan Party, dated reasonably near the date of the Third
Amendment Effective Date, certifying (A) as to a true and correct copy of the
charter of such Loan Party and each amendment thereto on file in such
Secretary’s office and (B) that (1) such amendments are the only amendments to
such Loan Party’s charter on file in such Secretary’s office, (2) to the extent
that the Secretary of State of the applicable jurisdiction of incorporation
provides such a certification, such Loan Party has paid all franchise taxes to
the date of such certificate and (C) such Loan Party is duly incorporated and in
good standing or presently subsisting under the laws of the State of the
jurisdiction of its incorporation.

 

(vii) A copy of a certificate of the Secretary of State in each jurisdiction in
which each Loan Party is qualified to do business, dated reasonably near the
date of the Third Amendment Effective Date, stating that such Loan Party is duly
qualified and in good standing as a foreign corporation in such State and has
filed all annual reports required to be filed to the date of such certificate.

 

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(viii) A certificate of each Loan Party, signed on behalf of such Loan Party by
its President or a Vice President and its Secretary or any Assistant Secretary,
dated the Third Amendment Effective Date (the statements made in which
certificate shall be true on and as of the Third Amendment Effective Date),
certifying as to (A) the absence of any amendments to the charter of such Loan
Party since the date of the Secretary of State’s certificate referred to in
Section 3.02(b)(vi), (B) a true and correct copy of the bylaws of such Loan
Party as in effect on the date on which the resolutions referred to in Section
3.02(b)(v) were adopted and on the Third Amendment Effective Date, (C) the due
incorporation and good standing or valid existence of such Loan Party as a
corporation organized under the laws of the jurisdiction of its incorporation,
and the absence of any proceeding for the dissolution or liquidation of such
Loan Party, (D) the truth of the representations and warranties contained in the
Loan Documents as though made on and as of the Third Amendment Effective Date,
(E) the absence of any event occurring and continuing, or resulting from
entering into this Agreement, that constitutes a Default and (F) the absence of
any event occurring and continuing that constitutes a Default (as defined in the
Second Amended ITCD Credit Agreement) under the Second Amended ITCD Credit
Agreement or a statement as to such Default and a reasonably detailed
description thereof.

 

(ix) A certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying the names and true signatures of the officers of such Loan Party
authorized to sign each Loan Document to which it is or is to be a party and the
other documents to be delivered hereunder and thereunder.

 

(x) Evidence of insurance naming the Collateral Agent as additional insured and
loss payee with such responsible and reputable insurance companies or
associations, and in such amounts and covering such risks, as is reasonably
satisfactory to the Lenders.

 

(xi) Favorable opinions of counsel for the Loan Parties, in substantially the
form of Exhibit G hereto and as to such other matters as any Lender through the
Administrative Agent may reasonably request.

 

(c) There shall exist no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries pending or threatened before
any court, governmental agency or arbitrator that (i) could reasonably be
expected to have a Material Adverse Effect other than the matters described on
Schedule 4.01(f) hereto (the “Disclosed Litigation”).

 

(d) All governmental and third party consents and approvals necessary in
connection with the Transactions shall have been obtained (without the
imposition of any conditions that are not reasonably acceptable to the Lenders)
and shall remain in effect (other than any consents and approvals the absence of
which, either individually or in the aggregate, would not have a Material
Adverse Effect); all applicable waiting periods in

 

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connection with the Transactions shall have expired without any action being
taken by any competent authority (other than any action which either
individually or in the aggregate with all such actions would not reasonably be
expected to have a Material Adverse Effect), and no law or regulation shall be
applicable in the reasonable judgment of the Lenders, in each case that
restrains, prevents or imposes materially adverse conditions upon the
Transactions or the rights of the Loan Parties or their Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties now
owned or hereafter acquired by any of them.

 

(e) All Pre-Amendment Information shall be true, correct and complete in all
material aspects as of the dates specified therein and no additional information
shall have come to the attention of the Loan Parties that could reasonably be
expected to have a Material Adverse Effect.

 

(f) The Borrower shall have paid (or made provision therefor in a manner
reasonably satisfactory to the Administrative Agent) (i) all accrued fees and
out-of-pocket expenses of the Consenting Lenders and the Agents and (ii) the
fees set forth in Section 2.07 (including the accrued reasonable and documented
fees and expenses of legal counsel and financial advisors, including FTI
Consulting, Inc., Goodwin Procter LLP and Weil, Gotshal & Manges LLP).

 

(g) The Lenders shall be reasonably satisfied that (i) the Parent and its
Subsidiaries will be able to meet their respective obligations under all
employee and retiree welfare plans, (ii) the employee benefit plans of the
Parent and its ERISA Affiliates are, in all material respects, funded in
accordance with the minimum statutory requirements, (iii) no “reportable event”
(as defined in ERISA, but excluding events for which reporting has been waived)
has occurred as to any such employee benefit plan and (iv) no termination of, or
withdrawal from, any such employee benefit plan has occurred or is contemplated
that could reasonably be expected to result in a material liability.

 

(h) The Second Lien Lenders shall have approved the First Amended Second Lien
Credit Agreement which shall be in form and substance reasonably acceptable to
the Consenting Lenders.

 

(i) The parties shall have executed and delivered the Third Lien Loan Documents,
in form and substance reasonably acceptable to the Consenting Lenders, and the
Third Lien Lenders shall have advanced to the Loan Parties an aggregate
principal amount of not less than $20,000,000 pursuant to the Third Lien Loan
Documents.

 

(j) Intentionally omitted.

 

(k) The Lessees shall have paid all accrued and outstanding interest under the
NTFC Capital Lease and GECC Capital Lease on or before the Third Amendment
Effective Date.

 

(l) The parties shall have executed and delivered the New Warrant Documents, in
form and substance reasonably acceptable to the Consenting Lenders, and

 

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duly executed warrants in definitive form and registered in such names as shall
be satisfactory to the Third Lien Lenders.

 

(m) The Administrative Agent shall have received drafts of the audited
Consolidated balance sheet of the Loan Parties as at December 31, 2004, and
drafts of the audited, related Consolidated statement of income and Consolidated
statement of cash flows of the Loan Parties for the Fiscal Year then ended.

 

SECTION 3.03. Conditions Precedent to Special Term B Borrowings.

 

The obligation of each Special Term B Lender to make a Special Term B Advance on
the occasion of each Special Term B Borrowing shall be subject to the further
conditions precedent that on the date of such Special Term B Borrowing (a) the
following statements shall be true (and the giving of the Notice of Borrowing
and acceptance by the Borrower of the proceeds of such Special Term B Borrowing
shall constitute a representation and warranty by the Borrower that both on the
date of such notice and on the date of such Borrowing such statements are true)
unless waived by the Special Term B Lenders:

 

(i) the representations and warranties contained in each Loan Document are true
and correct in all material respects on and as of such date, before and after
giving effect to such Special Term B Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a specific date
other than the date of such Special Term B Borrowing or issuance, in which case
as of such specific date;

 

(ii) no Default has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom; and

 

(iii) there shall have been no Material Adverse Change since December 31, 2004,
it being understood that the Defaults or Events of Default set forth on Schedule
9.14 shall not be deemed to have been a Material Adverse Change.

 

and (b) the Special Term B Lenders and the Administrative Agent shall have
received such other approvals, opinions or documents as any of them may
reasonably request.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01. Representations and Warranties of the Borrower. The Loan Parties
represent and warrant, jointly and severally, as follows as of the date hereof
and the Third Amendment Effective Date:

 

(a) Each Loan Party and each of its respective Subsidiaries (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of

 

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its incorporation, (ii) is duly qualified and in good standing as a foreign
corporation (except as set forth on Schedule 4.01(a)(ii) hereto) in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not be reasonably likely to have a Material Adverse
Effect and (iii) has all requisite corporate power and authority (including,
without limitation, all governmental licenses, permits and other approvals
(except as set forth on Schedule 4.01(a)(iii) hereto)) to own or lease and
operate its properties and to carry on its business as now conducted and as
currently proposed to be conducted, except where the failure to have such power
or authority would not be reasonably likely to have a Material Adverse Effect.
All of the outstanding Equity Interests in the Borrower have been validly
issued, are fully paid and non-assessable and are owned by the Parent free and
clear of all Liens, except those created under the Loan Documents.

 

(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all
Subsidiaries of each Loan Party as of the Third Amendment Effective Date showing
as of the date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of its Equity Interests
authorized, and the number outstanding, on the date hereof and the percentage of
each such class of its Equity Interests owned (directly or indirectly) by such
Loan Party and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at the date
hereof. All of the outstanding Equity Interests in each Loan Party’s
Subsidiaries have been validly issued, are fully paid and non-assessable and are
owned by such Loan Party or one or more of its Subsidiaries free and clear of
all Liens, except those created under the Loan Documents.

 

(c) The execution, delivery and performance by each Loan Party of each Loan
Document to which it is or is to be a party, and the consummation of the
Transactions, are within such Loan Party’s corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene such
Loan Party’s charter or bylaws, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any loan agreement, indenture, mortgage, deed of
trust, or material contract, lease or other instrument binding on or affecting
any Loan Party, any of its Subsidiaries or any of their properties or (iv)
except for the Liens created under the Loan Documents, the Second Lien Loan
Documents and the Third Lien Loan Documents, result in or require the creation
or imposition of any Lien upon or with respect to any of the properties of any
Loan Party or any of its Subsidiaries. No Loan Party or any of its Subsidiaries
is in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such contract,
loan agreement, indenture, mortgage, deed of trust, lease or other instrument,
the violation or breach of which could be reasonably likely to have a Material
Adverse Effect.

 

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(d) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body (including, without
limitation, the FCC or any applicable PUC) or any other third party is required
for (i) the due execution, delivery, recordation, filing or performance by any
Loan Party of any Loan Document to which it is or is to be a party, or for the
consummation of the Transactions, (ii) the grant or affirmation by any Loan
Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created under the Collateral Documents
(including the first priority nature thereof), or (iv) the exercise by any Agent
or any Lender of its rights under the Loan Documents or the remedies in respect
of the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d) hereto, all of which have been duly obtained, taken, given or made and
are in full force and effect except (A) as set forth in the Loan Documents or
(B) for such authorizations, approvals, actions, notices and filings which would
not have a Material Adverse Effect if not so made or obtained. All applicable
waiting periods in connection with the Transactions have expired without any
action having been taken by any competent authority restraining, preventing or
imposing materially adverse conditions upon the Transactions or the rights of
the Loan Parties or their Subsidiaries freely to transfer or otherwise dispose
of, or to create any Lien on, any properties now owned or hereafter acquired by
any of them.

 

(e) This Agreement has been, and each other Loan Document when delivered
hereunder will have been, duly executed and delivered by each Loan Party
thereto. This Agreement is, and each other Loan Document when delivered
hereunder will be, the legal, valid and binding obligation of each Loan Party
thereto, enforceable against such Loan Party in accordance with its terms.

 

(f) There is no action, suit, investigation, litigation or proceeding affecting
any Loan Party or any of its Subsidiaries, including any Environmental Action,
pending or, to any Loan Party’s knowledge, threatened before any court,
governmental agency or arbitrator that (i) would alone or when considered in
conjunction with any other actions, suits, investigation, litigation or
proceeding affecting any Loan Party, be reasonably likely to have a Material
Adverse Effect other than the Disclosed Litigation or (ii) purports to affect
the legality, validity or enforceability of any Loan Document or the
consummation of Transactions, and there has been no material adverse change in
the status, or financial effect on any Loan Party or any of its Subsidiaries, of
or as a result of the Disclosed Litigation from that described on Schedule
4.01(f) hereto.

 

(g) The (i) unaudited Consolidated balance sheet of the Loan Parties as at the
nine (9) months ended September 30, 2004 and (ii) the unaudited related
Consolidated statement of income and Consolidated statement of cash flows of the
Loan Parties for the nine (9) months then ended, duly certified by the Chief
Financial Officer of the Parent, copies of which have been furnished to the
Agents and each Consenting Lender, fairly present the Consolidated financial
condition of the Loan Parties, as the case may be, as at such date and the
Consolidated results of operations of the Parent and its Subsidiaries for the
period ended on such date, all in accordance with GAAP applied on a consistent
basis, and since December 31, 2004 there has been no Material Adverse Change.

 

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(h) Intentionally omitted.

 

(i) The Consolidated balance sheets, income statements and cash flows statements
of the Loan Parties delivered to the Lenders pursuant to Section 5.03(e) were or
will be, and the unaudited pro forma financial information about the Loan
Parties delivered to the Lenders in the ITC^DeltaCom 2005-2006 Business Plan,
dated March 9, 2005, was, prepared in good faith on the basis of the assumptions
stated therein, which assumptions were or will be fair in light of the
conditions existing at the time of delivery of such information, and represented
or will represent, at the time of delivery, the Loan Parties’ best estimate of
the future financial performance of the Loan Parties.

 

(j) No information, exhibit or report furnished by or on behalf of any Loan
Party to any Agent or any Lender in connection with the negotiation of the Loan
Documents or pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements made therein not misleading.

 

(k) The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance
have been or shall be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.

 

(l) Neither any Loan Party nor any of its Subsidiaries is an “investment
company,” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company,” as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Advances, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other Transactions, will violate any provision of such Act
or any rule, regulation or order of the SEC thereunder.

 

(m) Intentionally Omitted.

 

(n) The Collateral Documents create a valid first priority security interest in
the Collateral, securing the payment of the Secured Obligations, and at such
time as all filings delivered to the Collateral Agent on or before the Third
Amendment Effective Date have been duly filed in accordance with the provisions
of the Security Agreement, such first priority security interest will be
perfected. The Loan Parties are the legal and beneficial owners of the
Collateral free and clear of any Lien, except for the Liens and security
interests created or permitted under the Loan Documents.

 

(o) Intentionally omitted.

 

(p) (i) Set forth on Schedule 4.01(p) hereto is a complete and accurate list of
all Plans, Multiemployer Plans and Welfare Plans.

 

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(ii) No ERISA Event (i) has occurred and is outstanding or (ii) to the Loan
Parties’ knowledge, is reasonably expected to occur, in each case with respect
to any Plan.

 

(iii) Schedule B (Actuarial Information) to the most recent annual report (Form
5500 Series) for each Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Lenders, is complete and accurate and
fairly presents the funding status of such Plan, and since the date of such
Schedule B there has been no material adverse change in such funding status.

 

(iv) Neither any Loan Party nor any ERISA Affiliate has incurred or, to the Loan
Parties’ knowledge, is reasonably expected to incur any Withdrawal Liability
exceeding $1,000,000 to any Multiemployer Plan.

 

(v) Neither any Loan Party nor any ERISA Affiliate has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of ERISA,
and no such Multiemployer Plan, to the Borrower’s knowledge, is reasonably
expected to be in reorganization or to be terminated, within the meaning of
Title IV of ERISA.

 

(q) (i) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws and Environmental Permits, all past non-compliance with such Environmental
Laws and Environmental Permits has been resolved without ongoing obligations or
costs, and no circumstances exist that could (A) form the basis of an
Environmental Action against any Loan Party or any of its Subsidiaries or any of
their properties that could have a Material Adverse Effect or (B) cause any such
property to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law.

 

(ii) None of the properties currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries is listed or proposed for listing on the NPL or
on the CERCLIS or any analogous foreign, state or local list or, to the best of
its knowledge, is adjacent to any such property; there are no and or, to the
best of its knowledge, never have been any underground or aboveground storage
tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or disposed on any
property currently owned or, to the best of its knowledge, operated by any Loan
Party or any of its Subsidiaries or, to the best of its knowledge, on any
property formerly owned or operated by any Loan Party or any of its
Subsidiaries; there is no asbestos or asbestos-containing material on any
property currently owned or, to the best of its knowledge, operated by any Loan
Party or any of its Subsidiaries; and Hazardous Materials have not been
released, discharged or disposed of on any property currently or formerly owned
or operated by any Loan Party or any of its Subsidiaries except as specifically
permitted under Environmental Laws.

 

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(iii) Neither any Loan Party nor any of its Subsidiaries is undertaking, or has
completed, either individually or together with other potentially responsible
parties, any investigation or assessment or remedial or response action relating
to any actual or threatened release, discharge or disposal of Hazardous
Materials at any site, location or operation, either voluntarily or pursuant to
the order of any governmental or regulatory authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used, treated, handled
or stored at, or transported to or from, any property currently or formerly
owned or operated by any Loan Party or any of its Subsidiaries have been
disposed of in a manner not reasonably expected to result in material liability
to any Loan Party or any of its Subsidiaries.

 

(r) (i) Except as set forth in Schedule 4.01(r) hereto, neither any Loan Party
nor any of its Subsidiaries is party to any tax sharing agreement.

 

(ii) (x) all tax returns and all material statements, reports and forms
(including estimated tax or information returns) (collectively, the “Tax
Returns”) required to be filed with any taxing authority by, or with respect to,
each Loan Party and its Subsidiaries have been timely filed in accordance with
all applicable laws and, as of time of filing, each Tax Return was accurate and
complete and correctly reflected the facts regarding income, business, assets,
operations and the status of each Loan Party and its Subsidiaries; (y) each Loan
Party and its Subsidiaries has timely paid or made adequate provision for
payment of all taxes (other than the Permitted Deferred Taxes) that are shown as
due and payable on Tax Returns that have been so filed or that are otherwise
required to be paid, including without limitation, assessments, interest and
penalties (other than taxes which are being contested in good faith and for
which adequate reserves are reflected on the financial statements delivered
hereunder); and (z) each Loan Party and its Subsidiaries have made adequate
provision for all taxes payable by such Loan Party and its Subsidiaries for
which no Tax Return has yet been filed or which are otherwise due.

 

(iii) Set forth on Part I of Schedule 4.01(r) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of each Loan Party and each of
its Subsidiaries and Affiliates for which Federal income tax returns have been
filed and for which the expiration of the applicable statute of limitations for
assessment or collection has not occurred by reason of extension or otherwise
(an “Open Year”).

 

(iv) The aggregate unpaid amount, as of the date hereof, of adjustments to the
Federal income tax liability of each Loan Party and each of its Subsidiaries and
Affiliates proposed by the Internal Revenue Service with respect to Open Years
does not exceed $35,000. Set forth on Part II of Schedule 4.01(r) hereto is a
complete and accurate description, as of the date hereof, of each such item that
separately, for all such Open Years, together with applicable interest and
penalties, exceeds $100,000. To the Borrower’s knowledge, no issues have been

 

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raised by the Internal Revenue Service in respect of Open Years that, in the
aggregate, could be reasonably likely to have a Material Adverse Effect.

 

(v) Except as set forth in Schedule 4.01(r) hereto, the aggregate unpaid amount,
as of the date hereof, of adjustments to the state, local and foreign tax
liability of each Loan Party and its Subsidiaries and Affiliates proposed by all
state, local and foreign taxing authorities (other than amounts arising from
adjustments to Federal income tax returns) does not exceed $35,000. No issues
have been raised by such taxing authorities that, in the aggregate, could be
reasonably likely to have a Material Adverse Effect.

 

(s) Neither the business nor the properties of any Loan Party or any of its
Subsidiaries have been affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty (whether or not covered by
insurance) that could be reasonably likely to have a Material Adverse Effect.

 

(t) Intentionally omitted.

 

(u) Set forth on Schedule 4.01(u) hereto is a complete and accurate list of all
Surviving Debt, showing as of the date hereof the obligor and the principal
amount outstanding thereunder, the maturity date thereof and the amortization
schedule therefor.

 

(v) Set forth on Schedule 4.01(v) hereto is a complete and accurate list of all
Liens on the property or assets of any Loan Party or any of its Subsidiaries,
showing as of the date hereof the lienholder thereof, the principal amount of
the obligations secured thereby and the property or assets of such Loan Party or
such Subsidiary subject thereto.

 

(w) Set forth on Schedule 4.01(w) hereto is a complete and accurate list of all
real property owned by any Loan Party or any of its Subsidiaries, showing as of
the date hereof the street address, county or other relevant jurisdiction,
state, record owner and gross book and fair value thereof. Each Loan Party or
such Subsidiary has good, marketable and insurable fee simple title to such real
property, free and clear of all Liens, other than Liens created or permitted by
the Loan Documents.

 

(x) Set forth on Schedule 4.01(x) hereto is a complete and accurate list of all
leases of real property under which any Loan Party or any of its Subsidiaries is
the lessee, showing as of the date hereof the street address, county or other
relevant jurisdiction, state, lessor, lessee, expiration date and annual rental
cost thereof. Each such lease is the legal, valid and binding obligation of the
lessor thereof, enforceable in accordance with its terms.

 

(y) Set forth on Schedule 4.01(y) hereto is a complete and accurate list of all
Investments held by any Loan Party or any of its Subsidiaries on the date
hereof, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.

 

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(z) Set forth on Schedule 4.01(z) hereto is a complete and accurate list of all
patents, trademarks, trade names, service marks and copyrights, and all
applications therefor and licenses thereof, of each Loan Party or any of its
Subsidiaries, showing as of the date hereof the jurisdiction in which
registered, the registration number, the date of registration and the expiration
date.

 

(aa) Set forth on Schedule 4.01(aa) hereto is a complete and accurate list of
all Material Contracts of each Loan Party and its Subsidiaries involving
aggregate consideration payable to or by such Loan Party or its Subsidiaries of
$20,000,000 or more in any year. Each such Material Contract, together with each
other Material Contract, shows as of the date hereof the parties, subject matter
and term thereof. Each such Material Contract has been duly authorized, executed
and delivered by all parties thereto, has not been amended or otherwise
modified, is in full force and effect and is binding upon and enforceable
against all parties thereto in accordance with its terms, and except as set
forth on Schedule 4.01(aa) hereto, there exists no default under any Material
Contract by any party thereto.

 

(bb) The New Warrants have been duly authorized by the Parent and, when issued
and delivered in accordance with the terms of this Agreement and the New Warrant
Documents, will be validly issued and outstanding, fully paid and nonassessable,
and free and clear of any Liens, other than Liens arising under the Governance
Agreement. The shares of Common Stock issuable upon exercise or conversion of
the New Warrants will, when issued, be validly issued and outstanding, fully
paid and nonassessable, and free and clear of any Liens, other than Liens
arising under the Governance Agreement. The issuance of the New Warrants and the
New Warrant Shares will not be subject to preemptive or other similar rights.

 

(cc) The New Warrant Documents and the New Warrants constitute valid and binding
agreements of the Parent, in each case enforceable against the Parent in
accordance with their respective terms, except as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors’ rights generally and for limitations imposed by generally principles
of equity.

 

(dd) Neither the Parent nor any Person acting on its behalf has taken or will
take any action (including, without limitation, any offering of any securities
of the Parent under circumstances which would require, under the Securities Act,
the integration of such offering with the offering and sale of the New Warrants)
which might subject the offering, issuance or sale of the New Warrants to the
registration requirements of Section 5 of the Securities Act.

 

(ee) The authorized capital stock of the Parent consists of 350,000,000 shares
of Common Stock, par value $0.01 per share, and 10,000,000 shares of preferred
stock, par value $0.01 per share. As of March 17, 2005, there were outstanding
55,084,955 shares of Common Stock of the Parent, 179,311 shares of Series A
Preferred Stock and 539,078 shares of Series B Preferred Stock. As of March 17,
2005, there were outstanding under the ITC^DeltaCom, Inc. Stock Incentive Plan
(i) stock options to

 

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purchase an aggregate of 2,694,886 shares of Common Stock of the Parent, of
which stock options to purchase an aggregate of 1,927,635 shares of Common Stock
of the Parent were exercisable, and (ii) restricted stock units for 1,653,000
shares of Common Stock of the Parent, of which restricted stock units for
791,165 shares of Common Stock were vested. As of March 17, 2005, there were
outstanding, currently exercisable warrants to purchase an aggregate of
4,020,000 shares of Common Stock of the Parent. All outstanding shares of
capital stock of the Parent have been, and all shares of Common Stock of the
Parent that may be issued pursuant to the ITC^DeltaCom, Inc. Stock Incentive
Plan will be, when issued in accordance with the terms of such plan, duly
authorized and validly issued and fully paid and nonassessable. No Subsidiary of
the Parent owns any shares of capital stock of the Parent.

 

(ff) The information statement (the “Information Statement”) of Parent required
to be filed with the SEC pursuant to Regulation 14C under the Exchange Act in
connection with the issuance of the New Warrants and New Warrant Shares, and any
amendments or supplements thereto, will, when filed, comply as to form in all
material respects with the applicable requirements of the Exchange Act. At the
time the Information Statement or any amendment or supplement thereto is first
mailed to stockholders of the Parent, the Information Statement, as supplemented
or amended, if applicable, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties contained in this
Section 4.01(ff) will not apply to statements or omissions included in the
Information Statement based upon information furnished to the Parent in writing
by WCAS specifically for use therein.

 

ARTICLE V

 

COVENANTS

 

SECTION 5.01. Affirmative Covenants. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid or any
Lender shall have any Commitment hereunder, each Loan Party shall:

 

(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects, with all applicable laws, rules, regulations
and orders, such compliance to include, without limitation, compliance with
ERISA, the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970, the rules and regulations of the FCC and
each applicable PUC.

 

(b) Payment of Taxes, Etc. Subject to Section 5.01(n)(ii), pay and discharge,
and cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if unpaid,
might by law become a Lien upon its property; provided, however, that neither
the Borrower nor any of its Subsidiaries shall be required to pay or discharge
any such tax, assessment, charge, levy

 

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or claim that is being contested in good faith and by proper proceedings and as
to which appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable.

 

(c) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause each of
its Subsidiaries to obtain and renew all Environmental Permits necessary for its
operations and properties; and conduct, and cause each of its Subsidiaries to
conduct, any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, to the extent required by and in
accordance with all Environmental Laws; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.

 

(d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Parent or such Subsidiary operates.

 

(e) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its existence, legal
structure, legal name, rights (charter and statutory), permits, licenses,
approvals, privileges and franchises; provided, however, that the Parent and its
Subsidiaries may consummate any merger or consolidation permitted under Section
5.02(d) and provided, further, that neither the Parent nor any of its
Subsidiaries shall be required to preserve any right, permit, license, approval,
privilege or franchise if the Board of Directors of the Borrower or such
Subsidiary shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Parent or such Subsidiary, as the case may
be, and that the loss thereof is not disadvantageous in any material respect to
the Parent, such Subsidiary or the Lenders.

 

(f) Visitation Rights. At any reasonable time upon prior reasonable notice and
from time to time, permit any of the Agents or any of the Lenders, or any agents
or representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Parent and any
of its Subsidiaries, and to discuss the affairs, finances and accounts of the
Parent and any of its Subsidiaries with any of their officers or directors and
with their independent certified public accountants.

 

(g) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall be made of
all

 

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financial transactions and the assets and business of the Parent and each such
Subsidiary in accordance with generally accepted accounting principles in effect
from time to time.

 

(h) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.

 

(i) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise permitted under the Loan Documents with any
of their Affiliates on terms that are fair and reasonable and no less favorable
to the Parent or such Subsidiary than it would obtain in a comparable
arm’s-length transaction with a Person not an Affiliate.

 

(j) Covenant to Guarantee Obligations and Give Security. Upon (x) the request of
the Collateral Agent, (y) the formation or acquisition of any new direct or
indirect Subsidiaries by any Loan Party or (z) the acquisition of any property
acquired for a purchase price in excess of $1,000,000 in any Fiscal Year and
$5,000,000 in the aggregate over the term of this Agreement by any Loan Party,
and such property, in the judgment of the Collateral Agent, shall not already be
subject to a perfected first priority security interest in favor of the
Collateral Agent for the benefit of the Secured Parties, then the Loan Parties
shall, in each case at the Loan Parties’ expense:

 

(i) in connection with the formation or acquisition of a Subsidiary, within 45
days after such formation or acquisition (or such longer period as the
Administrative Agent may permit), cause each such Subsidiary, and cause each
direct and indirect parent of such Subsidiary (if it has not already done so),
to duly execute and deliver to the Collateral Agent a guaranty or guaranty
supplement, in form and substance satisfactory to the Collateral Agent,
guaranteeing the other Loan Parties’ obligations under the Loan Documents,

 

(ii) within 30 days after such request, formation or acquisition (or such longer
period as the Administrative Agent may permit), furnish to the Collateral Agent
a description of the real and personal properties of the Loan Parties and their
respective Subsidiaries in detail satisfactory to the Collateral Agent,

 

(iii) within 45 days after such request, formation or acquisition (or such
longer period as the Administrative Agent may permit), duly execute and deliver,
and cause each such Subsidiary and each direct and indirect parent of such
Subsidiary (if it has not already done so) to duly execute and deliver, to the
Collateral Agent mortgages, pledges, assignments, security agreement supplements
and other security agreements, as specified by and in form and substance
satisfactory to the Collateral Agent, securing payment of all the Obligations of
the applicable Loan Party, such Subsidiary or such parent, as the case may be,
under the Loan Documents and constituting Liens on all such properties,

 

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(iv) within 45 days after such request, formation or acquisition (or such longer
period as the Administrative Agent may permit), take, and cause such Subsidiary
or such parent to take, whatever action (including, without limitation, the
recording of mortgages, the filing of Uniform Commercial Code financing
statements, the giving of notices and the endorsement of notices on title
documents) may be necessary or advisable in the opinion of the Collateral Agent
to vest in the Collateral Agent (or in any representative of the Collateral
Agent designated by it) valid and subsisting Liens on the properties purported
to be subject to the mortgages, pledges, assignments, security agreement
supplements and security agreements delivered pursuant to this Section 5.01(j),
enforceable against all third parties in accordance with their terms,

 

(v) within 60 days after such request, formation or acquisition (or such longer
period as the Administrative Agent may permit), deliver to the Collateral Agent,
upon the request of the Collateral Agent in its sole discretion, a signed copy
of a favorable opinion, addressed to the Collateral Agent and the other Secured
Parties, of counsel for the Loan Parties reasonably acceptable to the Collateral
Agent as to the matters contained in clauses (i), (iii) and (iv) above, as to
such guaranties, guaranty supplements, mortgages, pledges, assignments, security
agreement supplements and security agreements being legal, valid and binding
obligations of each Loan Party thereto enforceable in accordance with their
terms, as to the matters contained in clause (iv) above, as to such recordings,
filings, notices, endorsements and other actions being sufficient to create
valid perfected Liens on such properties, and as to such other matters as the
Collateral Agent may reasonably request,

 

(vi) within 60 days after such request, formation or acquisition (or such longer
period as the Administrative Agent may permit), deliver, upon the request of the
Collateral Agent in its sole discretion, to the Collateral Agent with respect to
each parcel of real property owned by the entity that is the subject of such
request, formation or acquisition such title reports, surveys and engineering,
soils and other reports, and environmental assessment reports, as may be
prepared in the ordinary course of business by such entity, provided, however,
that to the extent that any Loan Party or any of its Subsidiaries shall have
otherwise received any of the foregoing items with respect to such real
property, such items shall, promptly after the receipt thereof, be delivered to
the Collateral Agent,

 

(vii) upon the occurrence and during the continuance of a Default, promptly
cause to be deposited any and all cash dividends paid or payable to it or any of
its Subsidiaries from any of its Subsidiaries from time to time into the
Collateral Account, and with respect to all other dividends paid or payable to
it or any of its Subsidiaries from time to time, promptly execute and deliver,
or cause such Subsidiary to promptly execute and deliver, as the case may be,
any and all further instruments and take or cause such Subsidiary to take, as
the case may be, all such other action as the Collateral Agent may deem
necessary or desirable in order to obtain and maintain from and after the time
such dividend is paid or

 

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payable a perfected, first priority lien on and security interest in such
dividends, and

 

(viii) at any time and from time to time, promptly execute and deliver any and
all further instruments and documents and take all such other action as the
Collateral Agent may deem reasonably necessary or desirable in obtaining the
full benefits of, or in perfecting and preserving the Liens of, such guaranties,
mortgages, pledges, assignments, security agreement supplements and security
agreements.

 

(k) Further Assurances. (i) Promptly upon request by any Agent, or any Lender
through the Administrative Agent, correct, and cause each of its Subsidiaries
promptly to correct, any material defect or error that may be discovered in any
Loan Document or in the execution, acknowledgment, filing or recordation
thereof, and

 

(ii) Promptly upon request by any Agent, or any Lender through the
Administrative Agent, do, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register any and all such further acts, deeds,
conveyances, pledge agreements, mortgages, deeds of trust, trust deeds,
assignments, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and other
instruments as any Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (A) carry out more effectively
the purposes of the Loan Documents, (B) to the fullest extent permitted by
applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties,
assets, rights or interests to the Liens now or hereafter intended to be covered
by any of the Collateral Documents, (C) perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder and (D) assure, convey, grant, assign,
transfer, preserve, protect and confirm more effectively unto the Secured
Parties the rights granted or now or hereafter intended to be granted to the
Secured Parties under any Loan Document or under any other instrument executed
in connection with any Loan Document to which any Loan Party or any of its
Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do
so. Notwithstanding the foregoing, no Loan Party shall be required, solely
pursuant to the provisions of this Section 5.01(k), to encumber any assets which
were not otherwise required to be encumbered on the Third Amendment Effective
Date or pursuant to Section 5.01(j).

 

(l) Compliance with Terms of Leaseholds. Make all payments and otherwise perform
all obligations in respect of all leases of real property to which the Borrower
or any of its Subsidiaries is a party, keep such leases in full force and effect
and not allow such leases to lapse or be terminated or any rights to renew such
leases to be forfeited or cancelled, notify the Administrative Agent of any
default by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and cause each of
its Subsidiaries to do so, except in each of the foregoing cases where the
failure to do so would not have a Material Adverse Effect.

 

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(m) Performance of Material Contracts. Perform and observe, and cause each of
its Subsidiaries to perform and observe, all the terms and provisions of each
Material Contract to be performed or observed by it, maintain each such Material
Contract in full force and effect until the cancellation or termination thereof
in accordance with its terms, enforce each such Material Contract in accordance
with its terms, take all such action to such end as may be from time to time
reasonably requested by the Administrative Agent (or by the Administrative Agent
at the request of the Required Lenders) and, upon request of the Administrative
Agent, make to each other party to each such Material Contract such demands and
requests for information and reports or for action as any Loan Party or any of
its Subsidiaries is entitled to make under such Material Contract, and cause
each of its Subsidiaries to do so, except in each of the foregoing cases where
the failure to do so would not have a Material Adverse Effect.

 

(n) Conditions Subsequent. (i) With respect to (A) any newly-acquired
Unencumbered Parcel with a gross book value in excess of $1,000,000, or (B) any
Unencumbered Parcel owned by any Loan Party as of the Third Amendment Effective
Date in which any such Loan Party has invested such that the gross book value of
the land and any buildings thereon after the investment is completed is greater
than $1,000,000, the Loan Parties shall deliver to the Administrative Agent,
within 30 days after the closing of any such acquisition in clause (A) above or
of any such investment in clause (B) above with respect to such property, the
following, each dated such day (unless otherwise specified) in form and
substance satisfactory to the Lenders: deeds of trust, trust deeds, mortgages,
leasehold mortgages and leasehold deeds of trust in form reasonably satisfactory
to the Administrative Agent (together with the Assignments of Leases and Rents
referred to therein and each other mortgage delivered pursuant to Section
5.01(j), in each case as amended, the “Mortgages”), duly executed by the
appropriate Loan Party, together with:

 

(A) evidence that counterparts of the Mortgages have been duly recorded in all
filing or recording offices that the Administrative Agent may reasonably deem
necessary or desirable in order to create a valid first and subsisting Lien on
the property described therein in favor of the Collateral Agent for the benefit
of the Secured Parties and that all filing and recording taxes and fees have
been paid,

 

(B) fully paid American Land Title Association Lender’s Extended Coverage title
insurance policies (the “Mortgage Policies”) in form and substance, with
endorsements and in amount reasonably acceptable to the Administrative Agent,
issued, coinsured and reinsured by title insurers acceptable to the
Administrative Agent, insuring the Mortgages to be valid first and subsisting
Liens on the property described therein, free and clear of all defects
(including, but not limited to, mechanics’ and materialmen’s Liens) and
encumbrances, excepting only Permitted Encumbrances, and providing for such
other affirmative insurance (including endorsements for future advances under
the Loan Documents and for mechanics’ and materialmen’s Liens) and such

 

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coinsurance and direct access reinsurance as the Administrative Agent may
reasonably deem necessary or desirable,

 

(C) American Land Title Association form surveys, certified to the
Administrative Agent and the issuer of the Mortgage Policies in a manner
reasonably satisfactory to the Administrative Agent by a land surveyor duly
registered and licensed in the States in which the property described in such
surveys is located and acceptable to the Administrative Agent, showing all
buildings and other improvements, any off-site improvements, the location of any
easements, parking spaces, rights of way, building set-back lines and other
dimensional regulations and the absence of encroachments, either by such
improvements or on to such property, and other defects, other than encroachments
and other defects reasonably acceptable to the Administrative Agent,

 

(D) the Assignments of Leases and Rents referred to in the Mortgages, duly
executed by the appropriate Loan Party,

 

(E) such consents and agreements of lessors and other third parties, and such
estoppel letters and other confirmations, as the Administrative Agent may
reasonably deem necessary or desirable,

 

(F) evidence of the insurance required by the terms of the Mortgages, and

 

(G) evidence that all other action that the Administrative Agent may deem
reasonably necessary or desirable in order to create valid first and subsisting
Liens on the property described in the Mortgages has been taken.

 

(ii) Within thirty (30) days of the Third Amendment Effective Date, the Borrower
shall pay, or cause to be paid, the Permitted Deferred Taxes in full.

 

(iii) BTI and Business Telecom, Inc. shall use commercially reasonable efforts
to enter into an amendment to the promissory note referred to in clause (d) of
the definition of “Assumed BTI Debt”, which amendment shall extend the maturity
date of such note from April 30, 2006 to a date which occurs on or after October
31, 2006.

 

(iv) Within (A) ten (10) days of the Third Amendment Effective Date, the Loan
Parties shall deliver to the Administrative Agent a certificate of the Secretary
of State in each of the jurisdictions and with respect to each Loan Party
described on Schedule 4.01(a)(ii) stating that each Loan Party is duly qualified
and in good standing as a foreign corporation in the jurisdictions applicable to
each Loan Party and (B) twenty (20) days of the Third Amendment Effective Date,
each Loan Party shall have obtained all governmental licenses, permits and other
approvals described as pending on Schedule 4.01(a)(iii).

 

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(v) Within thirty (30) days of the Third Amendment Effective Date, the Borrower
shall dissolve each of the Subsidiaries listed on Schedule IV or shall comply
the provisions of Section 5.01(j) as if such Subsidiary were a newly formed
Subsidiary.

 

(vi) Within thirty (30) days of the Third Amendment Effective Date, the Loan
Parties shall have entered into new or amended account control agreements, in
form and substance reasonably satisfactory to the Administrative Agent, as the
Administrative Agent may deem necessary or desirable in order to ensure the
priority and perfection of the Administrative Agent’s security interests in the
deposit, securities and other bank accounts of the Loan Parties.

 

(vii) Within thirty (30) days of the Third Amendment Effective Date, the Loan
Parties shall have entered into amendments to the Mortgages, in form and
substance reasonably acceptable to the Administrative Agent, as the
Administrative Agent may deem necessary or desirable in order to ensure the
grant of a security interest in the real property Collateral covered thereby in
order to secure the full amount of the Obligations.

 

(viii) Within ten (10) days of the Third Amendment Effective Date, the Loan
Parties shall deliver to the Administrative Agent favorable opinions, in form
and substance satisfactory to the Administrative Agent, of counsel to those
Subsidiary Guarantors organized in Alabama, North Carolina and Virginia.

 

(ix) Within three (3) Business Days of the Third Amendment Effective Date, the
Borrower shall deliver to the Administrative Agent copies of the audited
financial statements of the Loan Parties without any “going-concern” or like
qualification to the opinion set forth therein.

 

(o) Use of Proceeds of Special Term B Loans. The Borrower may use the proceeds
of the Special Term B Loans solely to make the payments set forth in Sections
2.03(a) and (b) hereunder and for no other purpose.

 

SECTION 5.02. Negative Covenants. So long as any Advance or any other Obligation
of any Loan Party under any Loan Document shall remain unpaid or any Lender
shall have any Commitment hereunder, no Loan Party shall, at any time:

 

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with
respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or sign, file or
authorize the filing or suffer to exist, or permit any of its Subsidiaries to
sign, file or authorize the filing or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names the Parent
or any of its Subsidiaries as debtor, or sign or suffer to exist, or permit any
of its Subsidiaries to sign or suffer to exist, any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign, or permit any of its Subsidiaries to assign, any accounts or other right
to receive income, except:

 

(i) Liens created under the Loan Documents, the Second Lien Loan Documents and
the Third Lien Loan Documents;

 

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(ii) Permitted Liens;

 

(iii) Liens existing on the date hereof and described on Schedule 4.01(v)
hereto;

 

(iv) Liens arising in connection with Capitalized Leases permitted under Section
5.02(b)(iii); provided, that no such Lien shall extend to or cover any
Collateral or assets other than the assets subject to such Capitalized Leases;

 

(v) Liens securing Subordinated Debt permitted under Section 5.02(b)(ii) which
are subordinated and junior in priority to the Liens securing the Loan Documents
and the Second Lien Loan Documents on terms and conditions acceptable to the
Agents and the Required Lenders and substantially similar to those set forth in
the Third Lien Intercreditor and Subordination Agreement; and

 

(vi) (A) deposits of cash, checks or Cash Equivalents to secure Ordinary Course
Obligations, (B) letters of credit issued to secure Ordinary Course Obligations
or (C) surety, appeal, performance and return-of-money bonds and bonds of a
similar nature issued to secure or in respect of Ordinary Course Obligations, in
an aggregate amount not to exceed the amount set forth in Section 5.02(b)(viii).

 

(b) Debt. Incur or permit any of its Subsidiaries to Incur any Debt other than

 

(i) Debt under the Loan Documents and the Second Lien Loan Documents;

 

(ii) (A) Subordinated Debt of the Loan Parties under the Third Lien Loan
Documents outstanding at any time in an aggregate principal amount not to exceed
$20,000,000 (exclusive of paid-in-kind interest thereon in accordance with the
Third Lien Loan Documents) and (B) Subordinated Debt of the Loan Parties
outstanding at any time in an aggregate principal amount not to exceed
$30,000,000, in each case, on terms and conditions no less favorable to the
Lenders and the Second Lien Lenders than under the Third Lien Loan Documents;
provided, that (A) the maturity of such Subordinated Debt is at least twelve
months following the final maturity date of the Facilities and 91 days following
the final maturity date under the First Amended Second Lien Credit Agreement,
(B) the Administrative Agent and the Required Lenders, and the Second Lien Agent
and the Required Lenders under the Second Lien Loan Documents, are reasonably
satisfied that the Parent and its Subsidiaries shall be in compliance with the
provisions of the Loan Documents and the Second Lien Loan Documents,
respectively, for the period from the Incurrence of such Subordinated Debt
through the final maturity date of the Facilities and the final maturity date
under the First Amended Second Lien Credit Agreement, and (C) the Required

 

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Lenders, and the Required Lenders under the Second Lien Loan Documents, have
approved the terms of the subordination relating to such Subordinated Debt, and
provided, further, that, for purposes of this clause (ii), Subordinated Debt
shall not include Debt under the Second Lien Loan Documents;

 

(iii) Capitalized Leases (other than Surviving Debt) not to exceed in the
aggregate $7,500,000;

 

(iv) the Surviving Debt;

 

(v) unsecured Debt of the Parent (“Permitted Parent Debt”) that (A) is not
subject to any guarantee by any Subsidiary of the Parent, (B) will not mature
prior to the date that is ninety-one (91) days after the Termination Date, (C)
has no scheduled amortization or payments of principal, (D) does not permit any
payments in cash of interest or other amounts in respect of the principal
thereof for at least five (5) years from the date of the issuance or incurrence
thereof, and (E) has mandatory prepayment, repurchase or redemption, covenant,
default and remedy provisions customary for senior discount notes of an issuer
that is the parent of a borrower under senior secured credit facilities, taken
as a whole; provided, any such Debt shall constitute Permitted Parent Debt only
if (i) both before and after giving effect to the issuance or incurrence
thereof, no Default or Event of Default shall have occurred and be continuing,
(ii) the chief financial officer of Parent or the Borrower shall have delivered
an officer’s certificate demonstrating pro forma compliance with the covenants
set forth in Section 5.02(q) in form and substance reasonably satisfactory to
the Administrative Agent, it being understood that any capitalized or
paid-in-kind interest or accreted principal on such Debt shall not constitute an
issuance or incurrence of Debt for purposes of this proviso;

 

(vi) Debt of the Borrower under Hedge Agreements; provided, that such agreements
(A) are designed solely to protect the Loan Parties against fluctuations in
foreign currency exchange rates or interest rates and (B) do not increase the
Debt of the obligor thereunder outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or interest rates or by reason
of fees, indemnities and compensation payable thereunder;

 

(vii) Debt Incurred in connection with the repayment or refinancing of the Debt
under the Loan Documents in full or, if the Debt under the Loan Documents is not
repaid or refinanced in full, in such other amount and on such terms and
conditions as is approved by the Required Lenders;

 

(viii) Debt in respect of Ordinary Course Obligations in an aggregate amount not
to exceed $8,000,000 at any time outstanding; and

 

(ix) Debt of the type described in clause (j) of the definition of “Debt” which
is secured by a Permitted Lien, to the extent that such Debt is Incurred in the
ordinary course of business and is not the subject of an enforcement,

 

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collection, execution, levy or foreclosure proceeding and is not duplicative of
Debt Incurred pursuant to Section 5.02(b)(viii).

 

Notwithstanding any other provision under this Section 5.02(b), (A) the maximum
amount of Debt that the Parent or a Subsidiary may Incur pursuant to this
Section 5.02(b) shall not be deemed to be exceeded with respect to any
outstanding Debt, and the Loan Parties shall not be deemed to be out of
compliance with Section 5.02(q), solely as a result of fluctuations in the
exchange rates of currencies, and (B) any Loan Party may Incur Debt owed to any
other Loan Party.

 

(c) Change in Nature of Business. Make, or permit any of its Subsidiaries to
make, any material change in the nature of its business as carried on at the
date hereof provided, that, the Parent or any of its Subsidiaries may engage in
activities that are ancillary or related to its business.

 

(d) Mergers, Etc. Merge into or consolidate with any Person or permit any Person
to merge into it, or permit any of its Subsidiaries to do so, except that:

 

(i) any Subsidiary of the Borrower may merge into or consolidate with the
Borrower or any other Subsidiary of the Borrower, provided, that, in the case of
any such merger or consolidation (x) of the Borrower, the Borrower shall be the
surviving Person and (y) in the case of a merger among Subsidiaries of the
Borrower, the Person formed by such merger or consolidation shall be a
Subsidiary of the Borrower, and if a Subsidiary Guarantor is a party thereto,
the Person formed by such merger or consolidation shall be a Subsidiary
Guarantor; and

 

(ii) in connection with any sale or other disposition permitted under Section
5.02(e) (other than clause (ii) thereof), any Subsidiary of the Borrower may
permit any other Person to merge into or consolidate with it;

 

provided, that in each case, immediately after giving effect thereto, no event
shall occur and be continuing that constitutes a Default.

 

(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose of, or
permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of,
any assets, or grant any option or other right to purchase, lease or otherwise
acquire any assets, other than Inventory to be sold in the ordinary course of
its business, except:

 

(i) sales and leases of assets, including, without limitation, fiber sales in
the ordinary course of its business consistent with prudent business practice
for companies engaged in similar businesses, for cash and fair value;

 

(ii) in a transaction authorized by Section 5.02(d) (other than clause (ii)
thereof);

 

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(iii) sales for cash and for fair value of assets related to the e^deltacom and
OSDA businesses;

 

(iv) sales of assets as consented to by the Required Lenders for cash and for
fair value;

 

(v) sales of obsolete equipment for cash and for fair value in an aggregate
amount not to exceed (A) $2,000,000 and (B) $10,000,000 to the extent the
proceeds thereof are used by any Loan Party to purchase replacement equipment
that is substantially similar in type and function to the equipment sold;

 

(vi) any sale, lease, transfer or other disposition by the Parent or any
Subsidiary of the Parent to the Borrower and its Subsidiaries that are Loan
Parties; and

 

(vii) assignments, sales or other dispositions at fair market value for cash of
accounts receivable representing amounts owed to any Loan Party by any Person
that is subject to a proceeding under the Bankruptcy Code;

 

provided, that in the case of sales of assets pursuant to clauses (iii), (iv)
and (v)(A) above, the Borrower shall, on the date of receipt by any Loan Party
or any of its Subsidiaries of the Net Cash Proceeds from such sale, prepay the
Advances pursuant to, and in the amount set forth in Section 2.05(b)(ii), as
specified therein to be applied in the order of priority set forth in Section
2.05(g). Nothing in this Section 5.02(e) shall restrict the Parent from issuing,
selling, transferring or otherwise disposing of, for or without consideration
and by dividend or otherwise, any Equity Interests in the Parent, or any option,
warrant or other right to purchase or otherwise acquire any Equity Interests in
the Parent.

 

(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person, except:

 

(i) equity Investments by the Parent and its Subsidiaries in their Subsidiaries
outstanding on the date hereof and other Investments in Loan Parties, including
Persons who become Loan Parties in a transaction permitted by Section 5.02(d);

 

(ii) loans and advances to employees in the ordinary course of the business of
the Parent and its Subsidiaries in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding;

 

(iii) Investments in Cash Equivalents;

 

(iv) Investments existing on the date hereof and described on Schedule 4.01(y)
hereto;

 

(v) extension of trade credit in the ordinary course of business; and

 

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(vi) Investments permitted pursuant to Section 5.02(d).

 

(g) Restricted Payments. Declare or pay, any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its Equity Interests now
or hereafter outstanding, return any capital to its stockholders, partners or
members (or the equivalent Persons thereof) as such, make any distribution of
assets, Equity Interests, obligations or securities to its stockholders,
partners or members (or the equivalent Persons thereof) as such (each, a
“Restricted Payment”), or permit any of its Subsidiaries to make a Restricted
Payment except (i) Restricted Payments by a Subsidiary of the Borrower or BTI to
the Borrower or BTI, respectively, and to other Subsidiaries of the Borrower and
BTI that are its parent, (ii) if no Event of Default has occurred and is
continuing, the Borrower may declare and pay dividends in cash or otherwise make
distributions in cash to the Parent, to pay (A) scheduled interest and principal
of Surviving Debt and (B) cash in lieu of issuing fractional shares of its
Capital Stock in an aggregate amount not to exceed $250,000, (iii) the
declaration or payment of dividends or distributions solely in Equity Interests
of the Parent (including Series A PIK Dividends and Series B PIK Dividends) or
(iv) the purchase, redemption, retirement, defeasance or other acquisition for
value of any of the Equity Interests of the Parent (A) in exchange for other
Equity Interests of the Parent (including in connection with a Benefit Plan
Exchange Offer), (B) upon the conversion of Preferred Interests of the Parent or
the exercise, exchange or conversion of stock options, warrants or similar
rights to acquire Equity Interests of the Parent, (C) in connection with any
purchase, redemption, retirement, defeasance or other acquisition for value of
Equity Interests of the Parent tendered by the holder of such Equity Interests
in payment of withholding or other taxes relating to the exercise, exchange or
conversion of stock options, warrants or other similar rights to acquire Equity
Interests of the Parent or (D) tendered in settlement of indemnification or
similar claims by the Parent against a holder of Equity Interests of the Parent.

 

(h) Amendments of Constitutive Documents. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws or other
constitutive documents except for any amendment that could not reasonably be
expected to have a Material Adverse Effect.

 

(i) Accounting Changes. Make or permit, or permit any of its Subsidiaries to
make or permit, any change in (i) accounting policies or reporting practices,
except as required by generally accepted accounting principles, or (ii) Fiscal
Year.

 

(j) Prepayments, Etc., of Debt. (i) Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled amortization or maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any Debt
or permit any of its Subsidiaries to do so except (x) the payment or prepayment
of any or all of the Obligations under the Loan Documents, (y) regularly
scheduled or required repayments or redemptions of Surviving Debt, and (z) the
prepayment of Debt of any Loan Party by the Parent or any Subsidiary of the
Parent, or (ii) amend, modify or change in any manner any term or condition of
any Surviving Debt or permit any of its Subsidiaries to do so, except for any
amendment, modification or change of Surviving Debt that (A) could not

 

75

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reasonably be expected to have a Material Adverse Effect, (B) would not
accelerate the scheduled amortization or final maturity date of such Surviving
Debt, (C) would not increase the applicable interest rate of such Surviving
Debt, or permit any of its Subsidiaries to do any of the foregoing, and (D) will
not contain mandatory redemption, prepayment, covenant or event of default
provisions materially more restrictive than the terms of such Surviving Debt
prior to the date of such amendment, modification or change.

 

(k) Negative Pledge. Enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its property or
assets except (i) in favor of (A) the Lenders under this Agreement, (B) the
Second Lien Agent and the Second Lien Lenders under the Second Lien Loan
Documents, or (C) the Third Lien Lenders under the Third Lien Loan Documents or
(ii) in connection with (A) any Surviving Debt (as such restriction exists on
the date hereof) or (B) any Capitalized Lease permitted under Section
5.02(b)(iii) solely to the extent that such Capitalized Lease prohibits a Lien
on the property subject thereto.

 

(l) Partnerships, Etc. Become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to do so.

 

(m) Speculative Transactions. Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity options or futures contracts or
any similar speculative transactions.

 

(n) Formation of Subsidiaries. Organize, or permit any Subsidiary to organize,
any new Subsidiary except so long as (i) there exists no Default or Event of
Default both before and after giving effect to the creation of any new wholly
owned Subsidiary and the transfer of any assets to such wholly owned Subsidiary,
(ii) immediately upon the creation of any new wholly owned Subsidiary, such
Subsidiary shall become a Subsidiary Guarantor, (iii) the applicable Loan Party
owning any portions of the stock of any such new wholly owned Subsidiary
immediately delivers all shares of stock of the new wholly owned Subsidiary to
the Collateral Agent, subject to the provisions of the Intercreditor and
Subordination Agreements, for the benefit of the Lenders, the Second Lien
Lenders and the Third Lien Lenders, together with stock powers executed in
blank, and executes and immediately delivers to the Collateral Agent pledge
agreements pledging all such stock to secure the Obligations and the Obligations
under the Second Lien Loan Documents and the Third Lien Loan Documents, in form
substantially similar to the applicable Loan Document.

 

(o) Payment Restrictions Affecting Subsidiaries. Directly or indirectly, enter
into or suffer to exist, or permit any of its Subsidiaries to enter into or
suffer to exist, any agreement or arrangement limiting the ability of any of its
Subsidiaries to declare or pay dividends or other distributions in respect of
its Equity Interests or repay or prepay any Debt owed to, make loans or advances
to, or otherwise transfer assets to or invest in, any Loan Party or a Subsidiary
of a Loan Party (whether through a covenant restricting

 

76

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dividends, loans, asset transfers or investments, a financial covenant or
otherwise), except (i) the Loan Documents, (ii) the Second Lien Loan Documents,
(iii) the Third Lien Loan Documents and (iv) any agreement or instrument
evidencing Surviving Debt (as such restriction exists on the date hereof).

 

(p) Amendment, Etc., of Material Contracts. Cancel or terminate (except in
accordance with the terms thereof) any Material Contract, or consent to or
accept any cancellation or termination thereof (except in accordance with the
terms thereof), amend or otherwise modify any such Material Contract or give any
consent, waiver or approval thereunder, waive any default under or breach of any
such Material Contract, agree in any manner to any other amendment, modification
or change of any term or condition of any such Material Contract or take any
other action in connection with any such Material Contract that would impair the
value of the interest or rights of any Loan Party thereunder or that would
impair the interest or rights of any Agent or any Lender, or permit any of its
Subsidiaries to do any of the foregoing, except, in each of the foregoing cases,
where to do so would not be reasonably likely to have a Material Adverse Effect.

 

(q) Financial Condition Covenants.

 

(i) Maximum Capital Expenditures. Make or commit to make, or allow any of its
Subsidiaries to make or commit to make, Capital Expenditures exceeding, in the
aggregate for each period set forth below:

 

Period

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

   Amount

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

4 months ended June 30, 2005

   $ 12,200,000

7 months ended September 30, 2005

   $ 22,500,000

10 months ended December 31, 2005

   $ 31,100,000

12 months ended March 31, 2006

   $ 40,500,000

12 months ended June 30, 2006

   $ 41,200,000

 

(ii) Senior Debt Ratio. Commencing on the last day of the fiscal quarter ending
June 30, 2005 and, measured on the last day of each fiscal quarter thereafter
until the Termination Date, the Senior Debt Ratio shall not exceed the
following:

 

Period

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

   Ratio

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

June 30, 2005

   3.3x

September 30, 2005

   3.5x

December 31, 2005

   3.6x

March 31, 2006 and thereafter

   3.6x

 

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(iii) Total Leverage Ratio. Commencing on the last day of the fiscal quarter
ending June 30, 2005, and measured on the last day of each fiscal quarter
thereafter until the Termination Date, the Total Leverage Ratio shall not exceed
the ratio set forth below opposite the applicable date:

 

Period

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

   Ratio

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

June 30, 2005

   5.0x

September 30, 2005

   5.3x

December 31, 2005

   5.5x

March 31, 2006 and thereafter

   5.5x

 

(iv) Interest Coverage Ratio. Commencing on the last day of the fiscal quarter
ending June 30, 2005, and measured on the last day of each fiscal quarter
thereafter until the Termination Date, the Interest Coverage Ratio shall not be
less than the ratio set forth below opposite the applicable date:

 

Period

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

   Amount

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

June 30, 2005

   1.8x

September 30, 2005

   1.8x

December 31, 2005

   1.8x

March 31, 2006 and thereafter

   1.9x

 

(v) Minimum Cash. As of the last day of each month (commencing June 30, 2005),
permit the sum of (A) cash-on-hand and (B) Cash Equivalents, in each case not
subject to a Lien (other than Liens in favor of the Collateral Agent pursuant to
the Loan Documents and Liens in favor of the Collateral Agent pursuant to the
Second Lien Loan Documents) or the use of which is otherwise restricted, to be
less than $10,000,000 from the Third Amendment Effective Date through the
Termination Date.

 

(vi) Minimum Consolidated EBITDA. Permit the Consolidated EBITDA of Parent and
its Subsidiaries for each fiscal quarter set forth below to be less than the
amount set forth opposite such date:

 

Period

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

   Amount

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

June 30, 2005 (four months ended)

   $ 20,700,000

September 30, 2005 (seven months ended)

   $ 33,700,000

December 31, 2005 (ten months ended)

   $ 46,800,000

March 31, 2006 (twelve months ended)

   $ 56,100,000

 

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SECTION 5.03. Reporting Requirements. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, the
Loan Parties shall furnish to the Agents and the Lenders:

 

(a) Default Notice. As soon as possible and in any event within two days after
the occurrence of each Default, Event of Default, or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing on the
date of such statement, a statement of the Chief Financial Officer of the
Borrower setting forth details of such Default, Event of Default, or any such
event, development or occurrence and the action that the Borrower has taken and
proposes to take with respect thereto.

 

(b) Annual Financials. As soon as available and in any event within 90 days
after the end of each Fiscal Year, a copy of an annual report on Form 10-K for
such year for the Parent and its Subsidiaries, including therein a Consolidated
balance sheet of the Parent and its Subsidiaries as of the end of such Fiscal
Year and Consolidated statement of income and a Consolidated statement of cash
flows of the Parent and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion acceptable to the Required Lenders of BDO Seidman, LLP
or other independent public accountants of recognized standing acceptable to the
Required Lenders, together with (i) a certificate of such accounting firm to the
Lenders stating that in the course of the regular audit of the business of the
Parent and its Subsidiaries, which audit was conducted by such accounting firm
in accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge that a Default has occurred and is continuing under
Section 5.02(q) in respect of such Fiscal Year, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing under Section 5.02(q)
in respect of such Fiscal Year, a statement as to the nature thereof, (ii)
beginning with the Fiscal Year ended December 31, 2005, a Financial Covenants
Certificate stating the Borrower’s calculation of the ratios set forth in
Section 5.02(q) for the last quarter of such Fiscal Year, a statement as to the
amount of proceeds from any sale of assets, including obsolete equipment,
received during such Fiscal Year, including a reasonably detailed description of
such assets, and a statement of the Borrower’s calculation of Excess Cash Flow
for such Fiscal Year, each with supporting documentation and in reasonable
detail, and (iii) a Financial Covenants Certificate stating that the
representations and warranties in each Loan Document are correct in all material
respects on and as of such date, other than any such representations or
warranties that, by their terms, refer to a specific date other than such date,
in which case as of such date and that no Default has occurred and is continuing
or, if a Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take with
respect thereto.

 

(c) Quarterly Financials. As soon as available and in any event within 45 days
after the end of each of the first three quarters of each Fiscal Year, (i)
Consolidated balance sheet of the Parent and its Subsidiaries as of the end of
such quarter and Consolidated statement of income and a Consolidated statement
of cash flows of the Parent and its Subsidiaries for the period commencing at
the end of the previous fiscal quarter and ending with the end of such fiscal
quarter and Consolidated statement of

 

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income and a Consolidated statement of cash flows of the Parent and its
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding date or period
of the preceding Fiscal Year, (ii) beginning with the fiscal quarter ended June
30, 2005, a Financial Covenants Certificate stating the Borrower’s calculation
of the ratios set forth in Section 5.02(q) for such fiscal quarter with
supporting documentation, all in reasonable detail and duly certified (subject
to normal year-end audit adjustments) by the Chief Financial Officer of the
Parent as having been prepared in accordance with GAAP (with respect to item
(i)), and (iii) a Financial Covenants Certificate stating that the
representations and warranties in each Loan Document are correct in all material
respects on and as of such date, other than any such representations or
warranties that, by their terms, refer to a specific date other than such date,
in which case as of such date and that no Default has occurred and is continuing
or, if a Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take with
respect thereto.

 

(d) Monthly Financials. As soon as available and in any event within 30 days
after the end of each month, (i) a Consolidated balance sheet of the Parent and
its Subsidiaries as of the end of such month, a Consolidated statement of income
and a Consolidated statement of cash flows of the Parent and its Subsidiaries
for the period commencing at the end of the previous month and ending with the
end of such month, and a Consolidated statement of income and a Consolidated
statement of cash flows of the Parent and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such month, setting forth in each case in comparative form the corresponding
figures for the preceding month, all in reasonable detail and duly certified by
the Chief Financial Officer of the Parent, and (ii) a condensed receivables
aging report, prepared in accordance with the Borrower’s customary practice from
time to time, for the Loan Parties for such month with respect to their major
lines of business and any significant specific accounts review necessary to
support bad debt allowances, certified by the Chief Financial Officer of the
Parent as fairly and accurately reporting the information described therein, and
(iii) a certificate of the Chief Financial Officer of the Parent setting forth
Consolidated EBITDA of the Parent and its Subsidiaries for the last twelve
months then ended.

 

(e) Forecasts and Budgets. As soon as available and in any event no later than
45 days after the end of each Fiscal Year, the following prepared by management
of the Borrower, in form satisfactory to the Administrative Agent (i) balance
sheets, income statements and cash flow statements on a monthly and annual basis
for such Fiscal Year; (ii) balance sheets, income statements and cash flow
statements on an annual basis for each Fiscal Year thereafter until the
Termination Date; and (iii) a selling, general and administrative expense budget
and a capital expenditure budget for the Loan Parties for each Fiscal Year in
form and substance reasonably satisfactory to the Administrative Agent.

 

(f) Litigation. Promptly after the commencement thereof, notice of all actions,
suits, investigations, litigation and proceedings before any court or
governmental

 

80

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department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting any Loan Party or any of its Subsidiaries of the type
described in Section 4.01(f), and promptly after the occurrence thereof, notice
of any adverse change in the status or the financial effect on any Loan Party or
any of its Subsidiaries of the Disclosed Litigation from that described on
Schedule 4.01(f) hereto.

 

(g) Securities Reports. Promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports that any Loan Party or
any of its Subsidiaries sends to its stockholders, and copies of all regular,
periodic and special reports, and all registration statements, that any Loan
Party or any of its Subsidiaries files with the SEC or any governmental
authority that may be substituted therefor, or with any national securities
exchange.

 

(h) Creditor Reports. Promptly after the furnishing thereof, copies of any
statement or report furnished to any holder of Debt securities of any Loan Party
or of any of its Subsidiaries pursuant to the terms of any indenture, loan or
credit or similar agreement and not otherwise required to be furnished to the
Lenders pursuant to any other clause of this Section 5.03.

 

(i) Agreement Notices. Promptly upon receipt thereof, copies of all notices,
requests and other documents received by any Loan Party or any of its
Subsidiaries under or pursuant to any Material Contract or material instrument,
indenture, loan or credit or similar agreement and, from time to time upon
request by the Administrative Agent, such information and reports regarding the
related documents, the Material Contracts and such instruments, indentures and
loan and credit and similar agreements as the Administrative Agent or any Lender
may reasonably request.

 

(j) Revenue Agent Reports. Within 10 days after receipt, copies of all Revenue
Agent Reports (Internal Revenue Service Form 886), or other written proposals of
the Internal Revenue Service, that propose, determine or otherwise set forth
positive adjustments to the Federal income tax liability of the affiliated group
(within the meaning of Section 1504(a)(1) of the Internal Revenue Code) of which
the Borrower is a member aggregating $2,000,000 or more.

 

(k) Tax Certificates. (x) Promptly, and in any event within 15 Business Days
after the due date (with extensions) for filing the final Federal income tax
return in respect of each taxable year, a certificate (a “Tax Certificate”),
signed by the President or the Chief Financial Officer of the Borrower, stating
that the Loan Parties have paid to the Internal Revenue Service or other taxing
authority, the full amount that the Loan Parties are required to pay in respect
of Federal income tax for such year and that the Loan Parties have received any
amounts payable to them, and have not paid amounts in respect of taxes (Federal,
state, local or foreign) in excess of the amount they are required to pay, under
the Tax Agreement in respect of such taxable year, and (y) all correspondence
between any Loan Party and the Internal Revenue Service or other taxing
authority relating to any request for, grant of and compliance with any
extensions granted with respect to the filing of any income tax returns.

 

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(l) ERISA.

 

(i) ERISA Events and ERISA Reports. (A) Promptly and in any event within 10 days
after any Loan Party or any ERISA Affiliate knows or has reason to know that any
ERISA Event has occurred, a statement of the Chief Financial Officer of the
Borrower describing such ERISA Event and the action, if any, that such Loan
Party or such ERISA Affiliate has taken and proposes to take with respect
thereto and (B) on the date any records, documents or other information must be
furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA, a copy of such records, documents and information.

 

(ii) Plan Terminations. Promptly and in any event within two Business Days after
receipt thereof by any Loan Party or any ERISA Affiliate, copies of each notice
from the PBGC stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan.

 

(iii) Plan Annual Reports. Promptly and in any event within 30 days after the
filing thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with respect to
each Plan.

 

(iv) Multiemployer Plan Notices. Promptly and in any event within five Business
Days after receipt thereof by any Loan Party or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, copies of each notice concerning (A) the
imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of ERISA, of any
such Multiemployer Plan or (C) the amount of liability incurred, or that is
reasonably expected to be incurred, by such Loan Party or any ERISA Affiliate in
connection with any event described in clause (A) or (B).

 

(m) Environmental Conditions. Promptly after the assertion or occurrence
thereof, notice of any Environmental Action against or of any noncompliance by
any Loan Party or any of its Subsidiaries with any Environmental Law or
Environmental Permit that could (i) reasonably be expected to have a Material
Adverse Effect or (ii) cause any property described in the Mortgages to be
subject to any restrictions on ownership, occupancy, use or transferability
under any Environmental Law.

 

(n) Real Property. (i) As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report supplementing Schedules 4.01(w) and
4.01(x) hereto, including an identification of all owned and leased real
property disposed of by any Loan Party or any of its Subsidiaries during such
Fiscal Year, a list and description (including the street address, county or
other relevant jurisdiction, state, record owner, book value thereof and, in the
case of leases of property, lessor, lessee, expiration date and annual rental
cost thereof) of all real property acquired or leased during such Fiscal Year
and a description of such other changes in the information included in such
Schedules as may be necessary for such Schedules to be accurate and complete and
(ii)

 

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promptly inform the Administrative Agent of any investments in any of the real
property listed on Schedule 4.01(w) hereto proposed to be made by any Loan Party
or Loan Parties such that thereafter, the value thereof shall exceed $1,000,000
individually.

 

(o) Insurance. As soon as available and in any event within 30 days after the
end of each Fiscal Year, a report summarizing the insurance coverage (specifying
type, amount and carrier) in effect for each Loan Party and its Subsidiaries and
containing such additional information as any Agent, or any Lender through the
Administrative Agent, may reasonably specify.

 

(p) Intentionally omitted.

 

(q) New Accounts. Promptly after opening an account with a bank or other
financial institution not subject to an account control agreement, notification
thereof.

 

(r) Other Information. Such other information respecting the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any Loan Party or any of its Subsidiaries as any Agent, or any Lender through
the Administrative Agent, may from time to time reasonably request.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

SECTION 6.01. Events of Default. If any of the following events (“Events of
Default”) shall occur and be continuing:

 

(a) (i) the Borrower shall fail to pay any principal of any Advance when the
same shall become due and payable or (ii) the Borrower shall fail to pay any
interest on any Advance, or any Loan Party shall fail to make any other payment
under any Loan Document, in each case under this clause (ii) within three
Business Days after the same becomes due and payable; or

 

(b) any representation or warranty made by any Loan Party (or any of its
officers) under or in connection with any Loan Document shall prove to have been
incorrect in any material respect when made; or

 

(c) any Loan Party shall fail to perform or observe any term, covenant or
agreement contained in Section 2.05(b), 2.13, 5.01(e), (f), (i), (j), (m) or
(n), 5.02 or 5.03; provided, that failure to comply with the covenant set forth
in Section 2.05(b) shall not constitute an Event of Default unless and until
such failure shall remain unremedied for three Business Days; or

 

(d) any Loan Party shall fail to perform or observe any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for 30 days after the earlier of the
date on which

 

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(i) a Responsible Officer becomes aware of such failure or (ii) written notice
thereof shall have been given to the Borrower by any Agent or any Lender; or

 

(e) any Loan Party or any of its Subsidiaries shall fail to pay any principal
of, premium or interest on or any other amount payable in respect of any Debt
that is outstanding in a principal amount (or, in the case of any Hedge
Agreement, an Agreement Value) of at least $2,000,000 either individually or in
the aggregate (but excluding Debt outstanding hereunder) of such Loan Party or
such Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise); or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt or otherwise to cause, or to permit the holder thereof to cause, such
Debt to mature; or any such Debt shall be declared to be due and payable or
required to be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or

 

(f) any Loan Party or any of its Subsidiaries shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it)
that is being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 60 days or any of the
actions sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Subsidiaries shall take
any corporate action to authorize any of the actions set forth above in this
subsection (f); or

 

(g) any judgments or orders for the payment of money (individually or in the
aggregate) in excess of $5,000,000 shall be rendered against any Loan Party or
any of its Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgments or orders or (ii) there shall be
any period of 10 consecutive days during which a stay of enforcement of any such
judgments or orders, by reason of a pending appeal or otherwise, shall not be in
effect; or

 

(h) any non-monetary judgment or order shall be rendered against any Loan Party
or any of its Subsidiaries that could be reasonably likely to have a Material
Adverse Effect, and there shall be any period of 10 consecutive days during
which a stay of

 

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enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

 

(i) any provision of any Loan Document after delivery thereof pursuant to
Section 3.01 or 5.01(j) shall for any reason cease to be valid and binding on or
enforceable against any Loan Party to it, or any such Loan Party shall so state
in writing; or

 

(j) any Collateral Document after delivery thereof pursuant to Section 3.01 or
5.01(j) shall for any reason (other than pursuant to the terms thereof) cease to
create a valid and perfected first priority lien on and security interest in the
Collateral purported to be covered thereby; or

 

(k) a Change of Control shall occur; or

 

(l) any ERISA Event shall have occurred with respect to a Plan and the sum
(determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans with
respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and the ERISA Affiliates related to such ERISA
Event) exceeds $2,000,000; or

 

(m) any Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Loan Parties and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $2,000,000 or requires payments exceeding $1,000,000 per
annum; or

 

(n) any Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $1,000,000; or

 

(o) an “Event of Default” (as defined in any Mortgage) shall have occurred and
be continuing; or

 

(p) an “Event of Default” shall have occurred and be continuing under the First
Amended Second Lien Credit Agreement or the Third Lien Credit Agreement;

 

then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be

 

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forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower under the
Bankruptcy Code, the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.

 

ARTICLE VII

 

GUARANTY

 

SECTION 7.01. Guaranty; Limitation of Liability. (a) Each Guarantor, jointly and
severally, hereby absolutely, unconditionally and irrevocably guarantees the
punctual payment when due, whether at scheduled maturity or on any date of a
required prepayment or by acceleration, demand or otherwise, of all Obligations
of each other Loan Party now or hereafter existing under or in respect of the
Loan Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premiums, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such obligations being the “Guaranteed
Obligations”), and agrees to pay any and all reasonable expenses (including,
without limitation, reasonable fees and expenses of counsel) incurred by the
Administrative Agent or any other Secured Party in enforcing any rights under
this Agreement or any other Loan Document. Without limiting the generality of
the foregoing, each Guarantor’s liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Loan Party to any Secured Party under or in respect of the Loan Documents but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving such other Loan
Party.

 

(b) Each Guarantor, and by its acceptance of this Agreement, the Administrative
Agent and each other Secured Party, hereby confirms that it is the intention of
all such Persons that this Agreement and the Obligations of each Guarantor
hereunder not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar foreign, federal or state law to the extent
applicable to this Guaranty and the Obligations of each Guarantor hereunder. To
effectuate the foregoing intention, the Administrative Agent, the other Lenders
and the Guarantors hereby irrevocably agree that the obligations of each
Guarantor under this Guaranty at any time shall be limited to the maximum amount
as will result in the Obligations of such Guarantor under this Agreement not
constituting a fraudulent transfer or conveyance.

 

(c) Each Guarantor hereby unconditionally and irrevocably agrees that in the
event any payment shall be required to be made to any Secured Party under this
Agreement or any other guaranty, such Guarantor will contribute, to the maximum
extent permitted by law, such amounts to each other Guarantor and each other
guarantor so as to maximize the aggregate amount paid to the Secured Parties
under or in respect of the Loan Documents.

 

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SECTION 7.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Lender with
respect thereto. The obligations of each Guarantor under or in respect of this
Agreement are independent of the Guaranteed Obligations or any other obligations
of any other Loan Party under or in respect of the Loan Documents, and a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce this Agreement, irrespective of whether any action is brought against
the Borrower or any other Loan Party or whether the Borrower or any other Loan
Party is joined in any such action or actions. The liability of each Guarantor
under this Agreement shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any defenses it
may now have or hereafter acquire in any way relating to, any or all of the
following:

 

(a) any lack of validity or enforceability of any Loan Document or any agreement
or instrument relating thereto;

 

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations or any other obligations of any
other Loan Party under or in respect of the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or any of
its Subsidiaries or otherwise;

 

(c) any taking, exchange, release or non-perfection of any collateral, or any
taking, release or amendment or waiver of, or consent to departure from, any
other guaranty, for all or any of the Guaranteed Obligations;

 

(d) any manner of application of Collateral or any other collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Guaranteed Obligations
or any other obligations of any Loan Party under the Loan Documents or any other
assets of any Loan Party or any of its Subsidiaries;

 

(e) any change, restructuring or termination of the corporate structure or
existence of any Loan Party or any of its Subsidiaries;

 

(f) any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party now or
hereafter known to such Secured Parties (each Guarantor waiving any duty on the
part of the Secured Parties to disclose such information);

 

(g) the failure of any other Person to execute or deliver this Agreement, any
Guaranty Supplement or any other guaranty or agreement or the release or
reduction of liability of any Guarantor or other guarantor or surety with
respect to the Guaranteed Obligations; or

 

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(h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any
Secured Party that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety.

 

This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any Secured Party
or any other Person upon the insolvency, bankruptcy or reorganization of the
Borrower or any other Loan Party or otherwise, all as though such payment had
not been made.

 

SECTION 7.03. Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Agreement and any requirement that
any Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.

 

(b) Each Guarantor hereby unconditionally and irrevocably waives any right to
revoke this Agreement and acknowledges that this Agreement is continuing in
nature and applies to all Guaranteed Obligations, whether existing now or in the
future.

 

(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense
arising by reason of any claim or defense based upon an election of remedies by
any Secured Party that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights of such Guarantor to
proceed against any of the other Loan Parties, any other guarantor or any other
Person or any collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the Obligations of such Guarantor
hereunder.

 

(d) Each Guarantor hereby unconditionally and irrevocably waives any duty on the
part of any Secured Party to disclose to such Guarantor any matter, fact or
thing relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Loan Party or any of its
Subsidiaries now or hereafter known by such Secured Party.

 

(e) Each Guarantor acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 7.02 and this Section 7.03
are knowingly made in contemplation of such benefits.

 

SECTION 7.04. Subrogation. Each Guarantor hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire
against the Borrower or any other Loan Party or any other inside guarantor that
arise from the existence, payment, performance or enforcement of such
Guarantor’s Obligations under or in respect of this Agreement or any other Loan
Document, including, without limitation, any right of subrogation,

 

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reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrower,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Agreement shall have been paid in full in cash. If any amount shall be paid to
any Guarantor in violation of the immediately preceding sentence at any time
prior to the latest of

 

(a) the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Agreement, and (b) the Termination Date, such amount
shall be received and held in trust for the benefit of the Secured Parties,
shall be segregated from other property and funds of such Guarantor and shall
forthwith be paid or delivered to the Administrative Agent in the same form as
so received (with any necessary endorsement or assignment) to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this
Agreement, whether matured or unmatured, in accordance with the terms of the
Loan Documents, or to be held as collateral for any Guaranteed Obligations or
other amounts payable under this Agreement thereafter arising. If (i) any
Guarantor shall make payment to any Secured Party of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Agreement shall have been paid in full in cash, and
(iii) the Termination Date shall have occurred, the Secured Parties will, at
such Guarantor’s request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment made by such
Guarantor pursuant to this Agreement.

 

SECTION 7.05. Guaranty Supplements. Upon the execution and delivery by any
Person of a guaranty supplement in substantially the form of Exhibit I hereto
(each, a “Guaranty Supplement”), (a) such Person shall be referred to as an
“Additional Guarantor” and shall become and be a Guarantor hereunder, and each
reference in this Agreement to a “Guarantor” shall also mean and be a reference
to such Additional Guarantor, and each reference in any other Loan Document to a
“Subsidiary Guarantor” shall also mean and be a reference to such Additional
Guarantor, and (b) each reference herein to “this Guaranty,” “hereunder,”
“hereof” or words of like import referring to this Agreement, and each reference
in any other Loan Document to the “Guaranty,” “thereunder,” “thereof” or words
of like import referring to this Agreement, shall mean and be a reference to
this Agreement as supplemented by such Guaranty Supplement.

 

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SECTION 7.06. Subordination. Each Guarantor hereby subordinates any and all
debts, liabilities and other Obligations owed to such Guarantor by each other
Loan Party (the “Subordinated Obligations”) to the Guaranteed Obligations to the
extent and in the manner hereinafter set forth in this Section 7.06:

 

(a) Prohibited Payments, Etc. Except during the continuance of a Default
(including the commencement and continuation of any proceeding under any
Bankruptcy Law relating to any other Loan Party), each Guarantor may receive
regularly scheduled payments from any other Loan Party on account of the
Subordinated Obligations. After the occurrence and during the continuance of any
Default (including the commencement and continuation of any proceeding under any
bankruptcy law relating to any other Loan Party), however, unless the Required
Lenders otherwise agree, no Guarantor shall demand, accept or take any action to
collect any payment on account of the Subordinated Obligations.

 

(b) Prior Payment of Guaranteed Obligations. In any proceeding under the
Bankruptcy Code (or similar law) relating to any other Loan Party, each
Guarantor agrees that the Secured Parties shall be entitled to receive payment
in full in cash of all Guaranteed Obligations (including Post-Petition Interest)
before such Guarantor receives payment of any Subordinated Obligations.

 

(c) Turn-Over. After the occurrence and during the continuance of any Default
(including the commencement and continuation of any proceeding under any
Bankruptcy Law relating to any other Loan Party), each Guarantor shall, if the
Administrative Agent so requests, collect, enforce and receive payments on
account of the Subordinated Obligations as trustee for the Secured Parties and
deliver such payments to the Administrative Agent on account of the Guaranteed
Obligations (including all Post-Petition Interest), together with any necessary
endorsements or other instruments of transfer, but without reducing or affecting
in any manner the liability of such Guarantor under the other provisions of this
Agreement.

 

(d) Administrative Agent Authorization. After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under the Bankruptcy Code (or similar law) relating to any other Loan
Party), the Administrative Agent is authorized and empowered (but without any
obligation to so do), in its discretion, (i) in the name of each Guarantor, to
collect and enforce, and to submit claims in respect of, Subordinated
Obligations and to apply any amounts received thereon to the Guaranteed
Obligations (including any and all Post-Petition Interest), and (ii) to require
each Guarantor (A) to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and (B) to pay any amounts received on such obligations
to the Administrative Agent for application to the Guaranteed Obligations
(including any and all Post-Petition Interest).

 

SECTION 7.07. Continuing Guaranty; Assignments. This Agreement is a continuing
guaranty and shall (a) remain in full force and effect until the latest of (i)
the payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Agreement and (ii) the Termination Date, (b) be binding upon
the Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Secured Parties and their successors, transferees and
assigns. Without limiting the generality of clause (c) of the immediately
preceding sentence, subject to Section 9.07, any Secured Party may assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement (including, without

 

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limitation, all or any portion of its Commitments, the Advances owing to it and
the Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Secured Party herein or otherwise, in each case as and to the extent provided in
Section 9.07. No Guarantor shall have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Secured Parties.

 

SECTION 7.08. Release of Guarantor. In the event that all of the capital stock
of one or more Guarantors is sold or otherwise disposed of (except to the
Borrower, BTI or any Subsidiary of the Borrower or BTI) or liquidated in
compliance with the requirements of this Agreement (or such sale or other
disposition or liquidation has been approved in writing by the Required Lenders)
and the proceeds of such sale, disposition or liquidation are applied in
accordance with the provisions of this Agreement, to the extent applicable, such
Guarantor shall be released from this Agreement and this Agreement shall, as to
each such Guarantor or Guarantors, terminate, and have no further force or
effect (it being understood and agreed that the sale of one or more persons that
own, directly or indirectly, all of the capital stock or partnership interests
of any Guarantor shall be deemed to be a sale of such Guarantor for the purposes
of this Section 7.08).

 

ARTICLE VIII

 

THE AGENT

 

SECTION 8.01. Authorization and Action. Each Lender hereby appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to such Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), no Agent shall be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such instructions
shall be binding upon all Lenders and all holders of Notes; provided, however,
that no Agent shall be required to take any action that exposes such Agent to
personal liability or that is contrary to this Agreement or applicable law. Each
Agent agrees to give to each Lender prompt notice of each notice given to it by
the Borrower pursuant to the terms of this Agreement.

 

SECTION 8.02. Agents’ Reliance, Etc. Neither any Agent nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any
other Agent, such Agent has received notice from the Administrative Agent that
it has received and accepted such Assignment and

 

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Acceptance, in each case as provided in Section 9.07; (b) may consult with legal
counsel (including counsel for any Loan Party), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations (whether written or oral) made in or in connection with the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.

 

SECTION 8.03. Wells Fargo and Affiliates. With respect to any Commitments, any
Advances made by it and any Notes issued to it, Wells Fargo shall have the same
rights and powers under the Loan Documents as any other Lender and may exercise
the same as though it were not an Agent; and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated, include Wells Fargo in its
individual capacity. Wells Fargo and its affiliates may accept deposits from,
lend money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any of its Subsidiaries and any Person that may do business with or own
securities of any Loan Party or any such Subsidiary, all as if Wells Fargo was
not an Agent and without any duty to account therefor to the Lenders.

 

SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based
on the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.

 

SECTION 8.05. Indemnification. (a) Each Lender severally agrees to indemnify
each Agent (to the extent not promptly reimbursed by the Borrower) from and
against such Lender’s ratable share (determined as provided below) of any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against such Agent in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by such Agent under the Loan Documents; provided, however, that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Agent’s gross negligence or willful misconduct as

 

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found in a final, non-appealable judgment by a court of competent jurisdiction.
Without limitation of the foregoing, each Lender agrees to reimburse each Agent
promptly upon demand for its ratable share of any costs and expenses (including,
without limitation, fees and expenses of counsel) payable by the Borrower under
Section 9.04 (other than under Section 9.04(c)), to the extent that such Agent
is not promptly reimbursed for such costs and expenses by the Borrower.

 

(b) For purposes of this Section 8.05, the Lenders’ respective ratable shares of
any amount shall be determined, at any time, according to the sum of (i) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lenders and (ii) the Commitments of the respective Lenders at
such time. The failure of any Lender to reimburse any Agent promptly upon demand
for its ratable share of any amount required to be paid by the Lenders to such
Agent as provided herein shall not relieve any other Lender of its obligation
hereunder to reimburse such Agent for its ratable share of such amount, but no
Lender shall be responsible for the failure of any other Lender to reimburse
such Agent for such other Lender’s ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender hereunder, the
agreement and obligations of each Lender contained in this Section 8.05 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.

 

SECTION 8.06. Successor Agents. Any Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring Agent’s
giving of notice of resignation or the Required Lenders’ removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a commercial bank organized under the laws of
the United States or of any State thereof and having a combined capital and
surplus of at least $250,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent and, in the case of a successor Collateral
Agent, upon the execution and filing or recording of such financing statements,
or amendments thereto, and such amendments or supplements to the Mortgages, and
such other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens
granted or purported to be granted by the Collateral Documents, such successor
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under the Loan Documents. If
within 45 days after written notice is given of the retiring Agent’s resignation
or removal under this Section 8.06 no successor Agent shall have been appointed
and shall have accepted such appointment, then on such 45th day (i) the retiring
Agent’s resignation or removal shall become effective, (ii) the retiring Agent
shall thereupon be discharged from its duties and obligations under the Loan
Documents and (iii) the Required Lenders shall thereafter perform all duties of
the retiring Agent under the Loan Documents until such time, if any, as the
Required Lenders appoint a successor Agent as provided above. After any retiring
Agent’s resignation or removal hereunder as Agent shall have become effective,
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement. It
is

 

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understood and agreed that no Competitor shall qualify or be appointed as a
successor Agent under this Section 8.06.

 

SECTION 8.07. Appointment of Subagents. Anything herein to the contrary
notwithstanding, the Collateral Agent may from time to time, when the Collateral
Agent deems it to be necessary, appoint one or more subagents or collateral
co-agents (each, a “Subagent”) with respect to all or any part of the
Collateral. In the event that the Collateral Agent so appoints any Subagent with
respect to any Collateral, (i) the Liens on such Collateral granted pursuant to
the applicable Collateral Documents shall be deemed for purposes of this
Agreement and the other Loan Documents to have been granted to such Subagent, in
addition to the Collateral Agent, for the benefit of the Secured Parties, (ii)
such Subagent shall be automatically vested, in addition to the Collateral
Agent, with all rights, powers, privileges, interests and remedies of the
Collateral Agent under the Loan Documents with respect to such Collateral, (iii)
the provisions of this Article 8 and of Section 9.04 that refer to each Agent
shall be deemed to be references to each Agent and/or each Subagent, as the
context may require, and (iv) the term “Collateral Agent”, when used herein or
in any of the applicable Collateral Documents in relation to any rights, powers,
privileges, interests and remedies of the Collateral Agent with respect to such
Collateral shall include such Subagent; provided, however, that no such Subagent
shall be authorized to take any action with respect to any such Collateral
unless and except to the extent expressly authorized in writing by the
Collateral Agent.

 

ARTICLE IX

 

MISCELLANEOUS

 

SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes or any other Loan Document, nor consent to any departure
by any Loan Party therefrom, shall in any event be effective unless the same
shall be in writing and signed (or, in the case of the Collateral Documents,
consented to) by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that (a) no amendment, waiver or consent shall, unless
in writing and signed by all of the Lenders (other than any Lender that is, at
such time, a Defaulting Lender), do any of the following at any time: (i) waive
any of the conditions specified in Section 3.01, (ii) change the number of
Lenders or the percentage of (x) the Commitments or (y) the aggregate unpaid
principal amount of the Advances that, in each case, shall be required for the
Lenders or any of them to take any action hereunder, (iii) reduce or limit the
obligations of any Guarantor under Section 7.01 or release such Guarantor or
otherwise limit such Guarantor’s liability with respect to the Obligations owing
to the Agents and the Lenders, (iv) release all or substantially all of the
Collateral in any transaction or series of related transactions or permit the
creation, incurrence, assumption or existence of any Lien on all or
substantially all of the Collateral in any transaction or series of related
transactions to secure any Obligations other than Obligations owing to the
Secured Parties under the Loan Documents, or (v) amend Section 2.10 or this
Section 9.01, and (b) no amendment, waiver or consent shall, unless in writing
and signed by the Required Lenders and each Lender (other than any Lender

 

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that is, at such time, a Defaulting Lender) that has a Commitment under any of
the Facility if such Lender is directly affected by such amendment, waiver or
consent, (i) increase the Commitments of such Lender or subject such Lender to
any additional obligations, (ii) reduce the principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender or (iii) postpone any date fixed for any payment of principal of, or
interest on, the Notes held by such Lender or any fees or other amounts payable
hereunder to such Lender; and provided, further, that no amendment, waiver or
consent shall, unless in writing and signed by an Agent in addition to the
Lenders required above to take such action, affect the rights or duties of such
Agent under this Agreement or the other Loan Documents.

 

SECTION 9.02. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered, if to
the Borrower, at its address at 1791 OG Skinner Drive, West Point, GA 81833,
Attention: Chief Financial Officer; if to any Amendment Lender, at its Domestic
Lending Office specified opposite its name on Schedule I hereto; if to any other
Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; if to the Agent, at its address
at Wells Fargo Bank, N.A., Corporate Trust Services, N9303-120, Sixth Street &
Marquette Avenue, Minneapolis, MN 55479, T: (612) 667-0337, F: (612) 667-9825,
Attention: Jeffery T. Rose; or, as to any party, at such other address as shall
be designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telegraphed, telecopied or
telexed, be effective when deposited in the mails, delivered to the telegraph
company, transmitted by telecopier or confirmed by telex answerback,
respectively, except that notices and communications to any Agent pursuant to
Article II, III or VIII shall not be effective until received by such Agent.
Manual delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of an
original executed counterpart thereof.

 

SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender or any
Agent to exercise, and no delay in exercising, any right hereunder or under any
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

 

SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay on demand (i)
all costs and expenses of each Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of the Loan
Documents (including, without limitation, (A) all due diligence, collateral
review, syndication, transportation, computer, duplication, appraisal, audit,
insurance, consultant, search, filing and recording fees and expenses and (B)
the reasonable and documented fees and expenses of counsel and financial
advisors (including FTI Consulting, Inc.) for each Agent with respect thereto,
with respect to advising such Agent as to its rights and responsibilities, or
the perfection, protection or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and with
respect to presenting claims

 

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in or otherwise participating in or monitoring any bankruptcy, insolvency or
other similar proceeding involving creditors’ rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of each Agent and
each Lender in connection with the enforcement of the Loan Documents (including,
without limitation, the negotiation of this Agreement), whether in any action,
suit or litigation, or any bankruptcy, insolvency or other similar proceeding
affecting creditors’ rights generally (including, without limitation, the
reasonable and documented fees and expenses of counsel for the Administrative
Agent and each Lender with respect thereto).

 

(b) The Borrower agrees to indemnify and hold harmless each Agent, each Lender
and each of their Affiliates and their respective officers, directors,
employees, agents and advisors (each, an “Indemnified Party”) from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable and documented fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) any claims by third parties
involving (i) the Facilities, the actual or proposed use of the proceeds of the
Advances, the Loan Documents or any of the transactions contemplated thereby, or
(ii) the actual or alleged presence of Hazardous Materials on any property of
any Loan Party or any of its Subsidiaries or any Environmental Action relating
in any way to any Loan Party or any of its Subsidiaries, except to the extent
such claim, damage, loss, liability or expense results from such Indemnified
Party’s gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 9.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated by
the Loan Documents are consummated. Each of the parties hereto also agrees not
to assert any claim against any other party hereto or any of their respective
Affiliates, or any of their respective officers, directors, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Facilities, the
actual or proposed use of the proceeds of the Advances, the Loan Documents or
any of the transactions contemplated by the Loan Documents.

 

(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender other than on
the last day of the Interest Period for such Advance, as a result of a payment
or Conversion pursuant to Section 2.05, 2.08(b)(i) or 2.09(d), acceleration of
the maturity of the Notes pursuant to Section 6.01 or for any other reason, or
if the Borrower fails to make any payment or prepayment of an Advance for which
a notice of prepayment has been given or that is otherwise required to be made,
whether pursuant to Section 2.03, 2.05 or 6.01 or otherwise, the Borrower shall,
upon demand by such Lender (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or Conversion
or such failure to pay or prepay, as the case may be, including, without
limitation, any loss (including loss of any interest that, but for such failure,
such Lender would have earned with respect to such principal amount, reduced if
such Lender is able to redeposit or reinvest such principal amount, by interest
earned by such Lender as a result of such

 

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redeposit or reinvestment), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender to
fund or maintain such Advance. For the purpose of calculating amounts payable to
any Lender under this Section 9.04(c), each Lender shall be deemed to have
actually funded its Eurodollar Rate Advance through the purchase of a
deposit-bearing interest at the Eurodollar Rate in an amount equal to the amount
of that Eurodollar Rate Advance and having a maturity comparable to the
applicable Interest Period; provided, that each Lender may fund each Eurodollar
Rate Advance in any manner it deems appropriate, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this Section
9.04(c).

 

(d) If any Loan Party fails to pay when due any costs, expenses or other amounts
payable by it under any Loan Document, including, without limitation, fees and
expenses of counsel and indemnities, such amount may be paid on behalf of such
Loan Party by the Administrative Agent or any Lender, in its sole discretion.

 

(e) Without prejudice to the survival of any other agreement of any Loan Party
hereunder or under any other Loan Document, the agreements and obligations of
the Borrower contained in Sections 2.09 and 2.11 and this Section 9.04 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents.

 

SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Agent and each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender or such
Affiliate to or for the credit or the account of any Loan Party against any and
all of the Obligations of the Borrower now or hereafter existing under the Loan
Documents, irrespective of whether such Agent or such Lender shall have made any
demand under this Agreement or such Note or Notes and although such obligations
may be unmatured. Each Agent and each Lender agrees promptly to notify the
Borrower after any such set-off and application; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Agent and each Lender and their respective
Affiliates under this Section 9.05 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Agent, such
Lender and their respective Affiliates may have.

 

SECTION 9.06. Binding Effect. This Agreement shall become effective when it has
been executed by the Borrower and each Agent, and the Administrative Agent has
been notified by the Required Lenders that each such Required Lender has
executed it, and thereafter this Agreement shall be binding upon and inure to
the benefit of the Borrower, each Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.

 

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SECTION 9.07. Assignments and Participations. (a)(i) Each Lender may assign to
one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment or Commitments, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender, an Affiliate of
any Lender or an Approved Fund of any Lender or an assignment of all of a
Lender’s rights and obligations under this Agreement, the aggregate amount of
the Commitments being assigned to such Eligible Assignee pursuant to such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $1,000,000 (or such
lesser amount as shall be approved by the Administrative Agent and, so long as
no Event of Default shall have occurred and be continuing at the time of
effectiveness of such assignment, the Borrower, such approval, in the case of
the Borrower, not to be unreasonably withheld), (ii) each such assignment shall
be to an Eligible Assignee, and (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment. No processing and recordation fee shall be
due.

 

(ii) The Borrower may replace (A) any Lender that is not a Consenting Lender (or
a successor or assignee thereof) or (B) any Lender that becomes a
“Non-Consenting Lender” (as defined below in this Section 9.07(a)(ii)), upon ten
Business Days’ prior written notice to the Administrative Agent and such Lender,
and such Lender shall be obligated to assign pursuant to Section 9.07 all of its
rights and obligations under this Agreement to a Replacement Lender for a
purchase price equal to the outstanding principal amount of the Replaced
Lender’s principal debt and all accrued interest and fees and other amounts
payable hereunder, provided that (1) neither the Administrative Agent nor any
Lender shall have any obligation to the Borrower to find a Replacement Lender
and (2) in no event shall the Replaced Lender be required to pay or surrender to
such Replacement Lender any of the fees paid to such Replaced Lender prior to
the effectiveness of such assignment. In the case of a Replacement Lender to
which the Borrower becomes obligated to pay additional amounts to such Lender
prior to such Lender being replaced and the payment of such additional amounts
shall be a condition to the replacement of such Lender. In the event that (x)
the Borrower or the Administrative Agent has requested the Lenders to consent to
a departure or waiver of any provisions of the Loan Documents or to agree to any
amendment thereto, (y) the consent, waiver or amendment in question requires the
agreement of all Lenders in accordance with the terms of Section 9.01 or all the
Lenders with respect to a certain class of the Loans and (z) the Required
Lenders have agreed to such consent, waiver or amendment, then any Lender who
does not agree to such consent, waiver or amendment shall be deemed a
“Non-Consenting Lender”.

 

(b) Upon such execution, delivery, consent, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (ii) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.09, 2.11 and 9.04
to the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its

 

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obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).

 

(c) By executing and delivering an Assignment and Acceptance, each Lender
assignor thereunder and each assignee thereunder confirm to and agree with each
other and the other parties thereto and hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon any Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to such
Agent by the terms hereof and thereof, together with such powers and discretion
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of this Agreement are required to be performed by it as a Lender, as the
case may be.

 

(d) The Administrative Agent shall maintain at its address referred to in
Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted
by it.

 

(e) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee, together with any Note or Notes subject to such
assignment and the fee payable in connection with such assignment and acceptance
pursuant to the Successor Agent Agreement, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower and each other Agent. In the case of any assignment by a
Lender, within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note or Notes a new Note to the order of
such Eligible Assignee in an amount equal to the Commitment assumed by it under
each Facility pursuant to such Assignment and Acceptance and, if any assigning
Lender has retained a Commitment hereunder under such Facility, a new Note to
the order of such assigning Lender in an amount equal to the

 

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Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of Exhibit A-1,
A-2, A-3, A-4, A-5, A-6 or A-7 hereto, as the case may be.

 

(f) Each Lender may sell participations to one or more Persons (other than any
Loan Party or any of its Affiliates or a Competitor) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such
Lender’s obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure by
any Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral.

 

(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.07, disclose to
the assignee or participant or proposed assignee or participant any information
relating to the Loan Parties furnished to such Lender by or on behalf of the
Loan Parties; provided, however, that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information received by it from
such Lender.

 

(h) Notwithstanding any other provision set forth in this Agreement, any Lender
may at any time create a security interest in all or any portion of its rights
under this Agreement (including, without limitation, the Advances owing to it
and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.

 

SECTION 9.08. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Manual
delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.

 

SECTION 9.09. Confidentiality. Neither any Agent nor any Lender shall disclose
any Confidential Information to any Person without the consent of the Borrower,
other than (a) to such Agent’s or such Lender’s Affiliates and their officers,
directors, employees,

 

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agents and advisors and to actual or prospective Eligible Assignees and
participants, and then only on a confidential basis, (b) as required by any law,
rule or regulation or judicial process, (c) as requested or required by any
state, Federal or foreign authority or examiner regulating such Lender, (d) to
any rating agency when required by it, provided, that, prior to any such
disclosure, such rating agency shall undertake to preserve the confidentiality
of any Confidential Information relating to the Loan Parties received by it from
such Lender and (e) to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty’s professional advisor, provided,
that prior to such disclosure, such contractual counterparty or professional
advisor to such contractual counterparty shall undertake to preserve the
confidentiality of any Confidential Information relating to the Loan Parties
received by it from such Agent or Lender.

 

SECTION 9.10. Release of Collateral. Upon the sale, lease, transfer or other
disposition of any item of Collateral of any Loan Party (including, without
limitation, as a result of the sale, in accordance with the terms of the Loan
Documents, of the Loan Party that owns such Collateral) in accordance with the
terms of the Loan Documents, the Collateral Agent will, at the Borrower’s
expense, execute and deliver to such Loan Party such documents as such Loan
Party may reasonably request to evidence the release of such item of Collateral
from the assignment and security interest granted under the Collateral Documents
in accordance with the terms of the Loan Documents.

 

SECTION 9.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York County, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction. Notwithstanding the foregoing, no party that is a
sovereign entity shall be deemed to have waived any immunity against
pre-judgment attachment of any of its assets or properties.

 

(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Loan Documents
to which it is a party in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

101

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

SECTION 9.12. Governing Law. This Agreement and the Notes shall be governed by,
and construed in accordance with, the laws of the State of New York.

 

SECTION 9.13. Waiver of Jury Trial. Each of the Loan Parties, the Agents and the
Lenders irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the Advances or the actions of any Agent
or any Lender in the negotiation, administration, performance or enforcement
thereof.

 

SECTION 9.14. Waiver and Consent. The Administrative Agent and the Lenders
hereby irrevocably waive any and all Defaults and Events of Default set forth in
Schedule 9.14 that may exist and be continuing as of the Third Amendment
Effective Date under and as defined in the Second Amended ITCD Credit Agreement
and any other Loan Document as provided and defined in the Second Amended ITCD
Credit Agreement and irrevocably waive any and all remedies and other rights
they may have under the Second Amended ITCD Credit Agreement, any other Loan
Document as provided and defined in the Second Amended ITCD Credit Agreement,
this Agreement or any other Loan Document or otherwise only in respect of such
Defaults and Events of Defaults.

 

SECTION 9.15. Release of the Agents and the Lenders. Effective as of the date
hereof, the Loan Parties, on behalf of themselves and their respective officers,
directors and employees (the “Releasors”) hereby release each Agent and Lender
and each such Agent and Lender’s respective direct and indirect stockholders and
other affiliates, officers, employees, directors and agents (collectively, the
“Releasees”) from any and all claims, demands, liabilities, responsibilities,
disputes, causes of action (whether at law or in equity) and obligations of
every nature whatsoever, whether liquidated or unliquidated, known or unknown,
matured or unmatured, fixed or contingent that any of the Releasors may have
against any Releasee, arising from or relating to any action or inactions of any
Releasee on or prior to the date hereof with respect to this Agreement, any
other Loan Document, the Obligations, the Collateral or any other property
securing the Obligations. For purposes of the release contained in this
paragraph, the term “Loan Party” shall also include the Borrower’s successors
and assigns, including, without limitation, any trustee, receiver or other
representative acting on behalf of the Borrower.

 

SECTION 9.16. Authorization for Intercreditor and Subordination Agreements. Each
of the Lenders party hereto authorizes and directs the Agents to execute on
their behalf the Intercreditor and Subordination Agreements.

 

102

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

[signature pages follow]

 

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

ADMINISTRATIVE AGENT

AND COLLATERAL AGENT:

 

WELLS FARGO BANK, N.A., (as successor by consolidation to Wells Fargo Bank
Minnesota, National Association) By:   /s/    JEFFERY T. ROSE             Duly
Authorized Signatory

Name:

  Jeffery T. Rose

Title:

  Corporate Trust Officer

 

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

MUZINICH CASHFLOW CBO II LTD. By:   /s/    MICHAEL LUDWIG            

Name:

  Michael Ludwig    

Title:

 

Chief Financial Officer,

Muzinich & Co., Inc. as Investment Manager

MUZINICH CASHFLOW CBO LTD. By:   /s/    MICHAEL LUDWIG            

Name:

  Michael Ludwig    

Title:

  Chief Financial Officer, as Investment Manager

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

SANKATY ADVISORS, LLC, as Collateral Manager for Brant Point II CBO 2000-1 LTD.,
as Term Lender

By:

      /s/    DIANE J. EXTER            

Name:

  Diane J. Exter    

Title:

  Managing Director         Portfolio Manager SANKATY ADVISORS, LLC, as
Collateral Manager for Avery Point CLO Limited, as Term Lender

By:

      /s/    DIANE J. EXTER            

Name:

  Diane J. Exter    

Title:

  Managing Director         Portfolio Manager SANKATY HIGH YIELD PARTNERS III,
L.P.,

By:

      /s/    DIANE J. EXTER            

Name:

  Diane J. Exter    

Title:

  Managing Director         Portfolio Manager SANKATY HIGH YIELD PARTNERS II,
L.P.

By:

      /s/    DIANE J. EXTER            

Name:

  Diane J. Exter    

Title:

  Managing Director         Portfolio Manager SANKATY HIGH ASSET PARTNERS, L.P.

By:

      /s/    DIANE J. EXTER            

Name:

  Diane J. Exter    

Title:

  Managing Director         Portfolio Manager

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

SANKATY CREDIT OPPORTUNITIES, L.P.

By:

      /s/    DIANE J. EXTER            

Name:

  Diane J. Exter    

Title:

  Managing Director         Portfolio Manager SANKATY ADVISORS, LLC, as
Collateral Manager RACE POINT II CLO, LTD., as Term Lender

By:

      /s/    DIANE J. EXTER            

Name:

  Diane J. Exter    

Title:

  Managing Director         Portfolio Manager SANKATY ADVISORS, LLC, as
Collateral Manager for PROSPECT FUNDING I, LLC, as Term Lender

By:

      /s/    DIANE J. EXTER            

Name:

  Diane J. Exter    

Title:

  Managing Director         Portfolio Manager

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

Alliance Capital Management L.P., as Manager on behalf of ALLIANCE CAPITAL
FUNDING LLC. By: Alliance Capital Management Corporation, General Partner of
Alliance Capital Management L.P.

By:

      /s/    SCOTT VAN DER BOSEL            

Name:

  Scott Van der Bosel    

Title:

  Vice President

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

BANK OF AMERICA STRATEGIC SOLUTIONS INC.

By:

      /s/    JOHN W. WOODIEL III            

Name:

  John W. Woodiel III    

Title:

  Senior Vice President

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

BANK OF AMERICA, N.A.

By:

      /s/    (illegible)            

Name:

  (illegible)    

Title:

  Associate

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

EXPORT DEVELOPMENT CANADA (f/k/a Export Development Corporation)

By:

      /s/    R. HODGES           /s/    KEVIN SKILLITER            

Name:

  R. Hodges   /Kevin Skilliter    

Title:

  Manager, Special Risks   /Loan Asset Manager

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

GAIA OFFSHORE MASTER FUND By Promethean Asset Management LLC, its Investment
Manager By:       /s/    GREGORY MOLLER            

Name:

  Gregory Moller    

Title:

  Trader

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

SUFFIELD CLO, LIMITED By: Babson Capital Management LLC as Collateral Manager
By:       /s/    MARY ANN SPENCER            

Name:

  Mary Ann Spencer    

Title:

  Managing Director TRYON CLO, LTD. 2000-I By: Babson Capital Management LLC as
Collateral Manager By:       /s/    MARY ANN SPENCER            

Name:

  Mary Ann Spencer    

Title:

  Managing Director MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By: Babson
Capital Management LLC as Investment Adviser By:       /s/    MARY ANN
SPENCER            

Name:

  Mary Ann Spencer    

Title:

  Managing Director

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

PACIFICA CDO III, LTD. By:       /s/    AN PHAM, JR.            

Name:

  An Pham, Jr.    

Title:

  Authorized Signatory

PACIFICA CDO IV, LTD.

By:       /s/    AN PHAM, JR.            

Name:

  An Pham, Jr.    

Title:

  Authorized Signatory AVL LOAN FUNDING LLC By:       /s/    DOMINIC
BLEA            

Name:

  Dominic Blea    

Title:

  As Attorney-in-Fact

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

AVENUE SPECIAL SITUATIONS FUND III, L.P. By:   Avenue Capital Partners III, LLC,
its General Partner By:   GL Partners III, LLC, its Managing Member By:      
/s/    SONIA GARDNER            

Name:

  Sonia Gardner    

Title:

  Member

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

SUNRISE PARTNERS LIMITED PARTNERSHIP By:       /s/    MICHAEL J. BEMER          
 

Name:

  Michael J. Bemer    

Title:

  Vice President        

Dawn General Partner Corp.

General Partner

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

UBS AG STAMFORD BRANCH By:       /s/    WILFRED V. SAINT            

Name:

  Wilfred V. Saint    

Title:

  Director        

Banking Products

Services, US

By:       /s/    TOBA LUMBANTOBING            

Name:

  Toba Lumbantobing    

Title:

  Associate Director        

Banking Products

Services, US

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

BEAR STEARNS INVESTMENT PRODUCTS INC. By:       /s/    RICHARD BRAM
SMITH            

Name:

  Richard Bram Smith,    

Title:

  Vice President

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

LONG LANE MASTER TRUST IV By:       /s/    ANN E. MORRIS            

Name:

  Ann E. Morris    

Title:

  Authorized Agent

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

MORGAN STANLEY SENIOR FUNDING INC. By:       /s/    EUGENE F. MARTIN            

Name:

  Eugene F. Martin    

Title:

  Vice President         Morgan Stanley Senior Funding, Inc.

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

FIELD POINT I LTD. By:   /s/    JEFFREY A. GELFAND            

Name:

  Jeffrey A. Gelfand    

Title:

  Authorized Signatory FIELD POINT II LTD. By:   /s/    JEFFREY A.
GELFAND            

Name:

  Jeffrey A. Gelfand    

Title:

  Authorized Signatory

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

GENERAL ELECTRIC CAPITAL CORPORATION By:   /s/    KARL KIEFFER            

Name:

  Karl Kieffer            

Title:

  Duly Authorized Signatory        

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

NTFC CAPITAL CORPORATION By:   /s/    MARK R. O’LEARY            

Name:

  Mark R. O’Leary                

Title:

  Vice President            

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

INTERSTATE FIBERNET INC., as Borrower By:   /s/    RICHARD E. FISH            

Name:

  Richard E. Fish                

Title:

  Chief Administrative Officer             ITC^DELTACOM, INC., as Guarantor By:
  /s/    RICHARD E. FISH            

Name:

  Richard E. Fish                

Title:

  Chief Administrative Officer             ITC^DELTACOM COMMUNICATIONS, INC., as
Guarantor By:   /s/    RICHARD E. FISH            

Name:

  Richard E. Fish                

Title:

  Chief Administrative Officer             DELTACOM INFORMATION SYSTEMS, INC.,
as Guarantor By:   /s/    RICHARD E. FISH            

Name:

  Richard E. Fish                

Title:

  Chief Administrative Officer            

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

BTI TELECOM CORP., as Guarantor By:   /s/    RICHARD E. FISH            

Name:

  Richard E. Fish                

Title:

  Chief Administrative Officer             BUSINESS TELECOM, INC., as Guarantor
By:   /s/    RICHARD E. FISH            

Name:

  Richard E. Fish                

Title:

  Chief Administrative Officer             BUSINESS TELECOM OF VIRGINIA, INC.,
as Guarantor By:   /s/    RICHARD E. FISH            

Name:

  Richard E. Fish                

Title:

  Chief Administrative Officer            

 

Signature Pages to Third

Amended and Restated Credit Agreement

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

SCHEDULE III

 

CONSENTING LENDERS

 

AVL LOAN FUNDING LLC

PACIFICA CDO III LTD

PACIFICA CDO IV LTD

ALLIANCE CAPITAL FUNDING LLC

AVENUE SPECIAL SITUATION FUND III LP

BANC OF AMERICA STRATEGIC SOLUTIONS INC

BANK OF AMERICA, NA

BEAR STEARNS & CO INC.

MASSACHUSETTS MUTUAL LIFE INS CO

SUFFIELD CLO LTD

TRYON CLO LTD

EXPORT DEVELOPMENT CANADA

GAIA OFFSHORE MASTER FUND

GENERAL ELECTRIC CAPITAL CORPORATION

LONG LANE MASTER TRUST IV

MERRILL LYNCH CREDIT PRODUCTS LLC

MORGAN STANLEY SENIOR FUNDING INC

MUZINICH CASHFLOW CBO II LTD

MUZINICH CASHFLOW CBO LTD

AVERY POINT CLO LIMITED

BRANDT POINT II CBO 2000-1 LTD

PROSPECT FUNDING LLC

RACE POINT II CLO LTD

SANKATY CREDIT OPPORTUNITIES LP

SANKATY HIGH YIELD PARTNERS II LP

SANKATY HIGH YIELD PARTNERS III LP

SANKATY HIGH YIELD ASSET PARTNERS LP

FIELD POINT I LTD

FIELD POINT II LTD

SUNRISE PARTNERS LTD PARTNERSHIP

UBS AG STAMFORD BRANCH

 

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

SCHEDULE VI

 

FACILITIES

 

Facility

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

   Amount

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

Tranche 1 Term B Facility

   $ 22,131,621.78

New Tranche 1 Term B Facility

   $ 73,118,378.27

Tranche 2 Term B Facility

   $ 14,451,280.66

New Tranche 2 Term B Facility

   $ 42,698,719.42

Tranche 3 Term B Facility

   $ 29,610,390.00

Tranche 4 Term B Facility

   $ 22,015,947.45

Special Term B Facility

   $ 3,792,715.61     

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

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

Total

   $ 207,819,053.19     

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

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

 

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

SCHEDULE 2.03(a)

 

TRANCHE 1 TERM B SCHEDULED PAYMENTS

 

Date

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

   Amount

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

March 31, 2005

   $ 58,088.25

June 30, 2005

   $ 58,088.25

September 30, 2005

   $ 726,103.08

December 31, 2005

   $ 726,103.08

March 31, 2006

   $ 726,103.08

Termination Date

   $ 19,837,136.05

 

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

SCHEDULE 2.03(b)

 

TRANCHE 2 TERM B SCHEDULED PAYMENTS

 

Date

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

   Amount

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

March 31, 2005

   $ 37,929.87

June 30, 2005

   $ 37,929.87

September 30, 2005

   $ 474,123.38

December 31, 2005

   $ 474,123.38

March 31, 2006

   $ 474,123.38

Termination Date

   $ 12,953,050.78