EXHIBIT 10.5
AMENDMENT NUMBER FIVE
TO THE GENERAL AGREEMENT AMONG
KMC TELECOM INC., KMC TELECOM II, INC., KMC TELECOM III, INC.,
KMC TELECOM IV, INC., KMC TELECOM OF VIRGINIA, INC.,
KMC TELECOM LEASING I LLC, KMC TELECOM LEASING II LLC,
KMC TELECOM LEASING III LLC, KMC TELECOM LEASING IV LLC
KMC III SERVICES LLC AND LUCENT TECHNOLOGIES INC.
This Amendment Number Five to the General Agreement (hereinafter
"AMENDMENT FIVE") is made effective as of 16 April, 2001, by and among KMC
Telecom Inc., a Delaware corporation ("KMC"), KMC Telecom II, Inc., a Delaware
corporation ("KMC II"), KMC Telecom III, Inc., a Delaware corporation ("KMC
III"), KMC Telecom IV, Inc., a Delaware corporation, KMC Telecom of Virginia,
Inc., a Virginia public service company ("KMC VIRGINIA"), KMC Telecom Leasing I
LLC, a Delaware limited liability company ("LEASING I"), KMC Telecom Leasing II
LLC, a Delaware limited liability company ("LEASING II"), KMC Telecom Leasing
III LLC, a Delaware limited liability company ("LEASING III"), KMC Telecom
Leasing IV LLC, a Delaware limited liability company, KMC III Services LLC, a
Delaware limited liability company ("SERVICES"), each with offices located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
collectively referred to as "CUSTOMER"), and Lucent Technologies Inc., a
Delaware corporation ("LUCENT"), acting through its Global Service Providers
Group, with offices located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ (hereinafter "Seller").
WHEREAS, Customer and Seller previously entered into that certain
General Agreement (Contract Number LNM970313MP), effective March 6, 1997 (as
modified and amended by Amendment Number One (Contract Number LNM970922MP),
effective as of October 15, 1997, as further modified and amended by Amendment
Number Two, effective as of December 22, 1998, as further modified and amended
by Amendment Number Three, effective as of November 15, 1999, as further
modified and amended by Amendment Number Four, effective February 15, 2000, and
as further amended, amended and restated, supplemented or otherwise modified
from time to time, the "GENERAL AGREEMENT"), setting forth the terms and
conditions pursuant to which Seller agreed to supply and Customer agreed to
procure certain of Seller's Products, Licensed Materials and Services (as such
terms are defined therein); and
WHEREAS, KMC, KMC II, KMC III, KMC Virginia, Leasing I, Leasing II,
Leasing III, Services and KMC ▇▇▇▇▇▇▇.▇▇▇, Inc. (together, the "BORROWERS") have
entered into an Amended and Restated Loan and Security Agreement dated as of
February 15, 2000 (as amended by Amendment No. 1 thereto dated March 28, 2000,
Amendment No. 2 thereto dated as of July 28, 2000 and Amendment No. 3 and
Limited Waiver thereto dated February 23, 2001, and as further amended, amended
and restated, supplemented or otherwise modified from time to time, the "KMC
LOAN AGREEMENT") among the Borrowers, the lenders party thereto (the "Lenders"),
First Union National Bank as administrative agent to the Lenders and CIT Lending
Services Corporation as collateral agent for the Lenders;
WHEREAS, the Borrowers have requested that the Lenders (i) modify
certain financial covenants so that the Borrowers may be in compliance with the
February 2001 Business Plan (as defined therein) under the KMC Loan Agreement
and (ii) make certain other amendments to the KMC Loan Agreement pursuant, in
each case, as set forth in Amendment No. 4 and Limited Waiver ("AMENDMENT NO.
4");
WHEREAS, pursuant to Section 4 of Amendment No. 4, it is a
condition precedent to the effectiveness of Amendment No. 4 that the Customer
and the Seller amend the terms of the General Agreement as set forth in this
Amendment Five;
WHEREAS, Customer and Seller desire to amend and modify the General
Agreement as set forth herein; and
WHEREAS, all terms used herein but not defined herein shall have the
meanings ascribed to them in the General Agreement;
NOW THEREFORE, in consideration of the mutual promises hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as set forth below.
1. AMENDMENTS TO THE GENERAL AGREEMENT
Effective as of the date first above written, the General Agreement shall be and
hereby is amended as follows:
a. ARTICLE 1.1. Headings and Definitions: Insert the new definitions as
set forth below in the correct alphabetical order and redesignate
the existing definitions as appropriate:
"KMC I, II AND III FACILITY" means the Amended and Restated
Loan and Security Agreement dated as of February 15, 2000 (as
amended on March 28, 2000, July 28, 2000, February 23, 2001 and as
of the date hereof and as further amended, restated, amended and
restated, supplemented or otherwise modified from time to time)
among KMC Telecom Inc., KMC Telecom II, Inc., KMC Telecom III, Inc.,
KMC Telecom of Virginia, Inc., KMC Telecom Leasing I LLC, KMC
Telecom Leasing II LLC, KMC Telecom Leasing III LLC, KMC
▇▇▇▇▇▇▇.▇▇▇, Inc. and KMC III Services LLC as Borrowers, the
financial institutions signatories thereto as lenders, First Union
National Bank as administrative agent and Newcourt Commercial
Finance Corporation as collateral agent;
"PROFESSIONAL SERVICES AGREEMENT" means the Professional
Services Agreement No. LNS970602JC dated as of September 4, 1997 (as
amended by Amendment Number 1 dated as of October 1, 1998, by
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Amendment Number 2 and by Amendment Number 3 dated as of the date
hereof and as amended, amended and restated, supplemented or
otherwise modified from time to time).
"SUBORDINATED DEBT DOCUMENTS" means (i) that certain Indenture
dated as of January 29, 1998 between KMC Telecom Holdings, Inc., as
Issuer, and The Chase Manhattan Bank, as Trustee, relating to KMC
Telecom Holdings, Inc.'s 12 1/2 percent Senior Discount Notes due
2008, together with the First Supplemental Indenture relating
thereto dated as of May 24, 1999 and (ii) that certain Indenture
dated as of May 24, 1999 between KMC Telecom Holdings, Inc., as
Issuer, and The Chase Manhattan Bank, as Trustee, relating to KMC
Telecom Holdings, Inc.'s 13 1/2 percent Senior Notes due 2009."
b. ARTICLE 1.5. Orders: Amend Article 1.5 of the General Agreement by
deleting the last sentence thereof in its entirety and substituting
in lieu thereof the following:
"Seller reserves the right to place any order on hold, delay
shipment, and/or reject any order upon the occurrence and/or during
the continuation of any of the following events: (i) Customer shall
be in default of its payment obligations under this Agreement or
under the Professional Services Agreement, except in circumstances
where Customer is contesting in good faith the payment of any amount
otherwise owing to Lucent hereunder or thereunder, to the extent of
such disputed amount; (ii) Customer shall not have in place, or it
shall be unlikely that Customer shall have in place, when payment
for any such order(s) is due to Seller, a financing commitment
having available credit equal to the amount of such order(s); (iii)
Seller shall have provided to Customer a notice of a material breach
(other than any breach in respect of any payment obligation referred
to in (i) above) under this Agreement which remains incurred after
any applicable cure period; or (iv) a 'Default' or 'Event of
Default' in respect of any payment obligation or as a result of any
proceeding under any bankruptcy, reorganization, arrangement of
debts, insolvency or receivership law filed by or against Customer
or KMC Holdings or 'Borrower' or 'Issuer', as applicable, shall have
occurred and be continuing under the KMC I, II, and III Facility or
any Subordinated Debt Document; PROVIDED that, in each of case (ii),
(iii) and (iv) above, Seller will not place any order on hold, delay
shipment and/or reject any order if Seller receives from Customer
adequate assurance of payment for such order when due to Seller. For
purposes of this Article 1.5, 'adequate assurance' shall be
determined by Seller in the sole and absolute reasonable discretion
of Seller."
c. ARTICLE 1.12. Purchase Money Security Interest: Amend Article 1.12
of the General Agreement as follows:
i. insert after the phrase "prepared by Seller" in the fourth
line, the phrase "in any state or local jurisdiction as Seller
shall deem necessary";
ii. delete the phrase "UCC-1 financing statements, and the
necessary UCC-3 termination statements" in the fourth line and
replace with the phrase "the necessary UCC-3 or UCC-2
termination statements (as applicable)"; and
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iii. insert after the second sentence "Notwithstanding the
foregoing obligation, Customer hereby irrevocably appoints
Seller as its attorney-in-fact for purposes of executing and
filing such financing statements and such other documents
prepared by Seller or its designated agent and take such other
actions as Seller shall deem necessary or desirable for the
purposes of perfecting and preserving Seller's security
interests hereunder from time to time."
d. ARTICLE 1.19. Title, Restrictions and Confidentiality: Amend Article
1.19 of the General Agreement by deleting the phrase "(ii) a
competent court or arbitration under Article 1.41 has" in the last
sentence and replacing it with the phase "(ii) following completion
of dispute resolution pursuant to Article 1.41 the parties have, or
a competent court otherwise has".
e. ARTICLE 1.39. Termination for Breach: Amend Article 1.39 of the
General Agreement as follows:
i. redesignate the existing paragraph as subsection "(a)";
ii. in each place where the phrase "forty-five (45)" appears
replace with the phrase "thirty (30)"; and
iii. insert after the last sentence the following phrase and new
subsection (b):
"Notwithstanding any other provision of this Agreement,
this Agreement shall terminate at Seller's option upon the
delivery by Seller to Customer of a notice of termination if a
'Default' or 'Event of Default' in respect of any payment
obligation or as a result of any proceeding under any
bankruptcy, reorganization, arrangement of debts, insolvency
or receivership law filed by or against Customer or KMC
Holdings or 'Borrower' or 'Issuer,' as applicable, shall have
occurred and be continuing under the KMC I, II, and III
Facility or any Subordinated Debt Document.
(b) Termination of this Agreement in accordance with
clause 1.39 or otherwise shall automatically accelerate the
due date of all outstanding invoices or other amounts owing so
that they become immediately due and payable on the effective
date of such termination.".
f. ARTICLE 1.41. Arbitration; No Work Stoppage: Amend Article 1.41 of
the General Agreement by deleting Article 1.41 in its entirety and
replacing it with the following new Article 1.41 as follows:
"1.41 DISPUTE RESOLUTION:
If a dispute arises out of or relates to this Agreement, or
its breach, the parties hereto agree to resolve the dispute within
twenty (20) days, or such longer period as mutually agreed between
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the parties, through good faith confidential discussions between
senior executives of each party. If the parties fail to resolve a
dispute after such discussion, then the parties may initiate formal
proceedings at law or in equity.".
2. ENTIRE AGREEMENT
Except as specifically modified, amended or supplemented herein, all terms
and conditions of the General Agreement shall remain in full force and effect.
The terms and conditions contained in this Amendment Five and those
non-conflicting terms and conditions of the General Agreement supersede all
prior oral and written understandings among the parties and shall constitute the
entire agreement among the parties with respect to the subject matter herein.
This Amendment Number Five shall not be modified or amended except by a writing
signed by an authorized representative of each of the parties.
3. COUNTERPARTS; EFFECTIVENESS
(a) This Amendment Five may be executed by the parties hereto via
telecopier or facsimile transmission in any number of 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 instrument.
(b) This Amendment Five shall be effective upon (i) receipt of a legal
opinion of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to Customer, in a form satisfactory
to Seller, (ii) payment of all documented out-of-pocket third party expenses
(including, in each case, all reasonable 'attorneys and paralegals' fees and
related expenses and costs) incurred by Seller, including without limitation,
(x) the legal fees of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel to Seller, and
(y) the consulting fees of ▇▇▇▇▇-▇▇▇▇▇▇, LLC, advisor to Seller, and, in each
case of (x) and (y), expenses incidental thereto, and (iii) receipt by Seller of
this Amendment Five duly authorized, executed and delivered by the parties
hereto.
4. REPRESENTATIONS AND WARRANTIES
The Customer hereby represents and warrants to Seller as follows:
(a) this Amendment Five has been duly authorized by all necessary
corporate action on its part, has been duly executed and delivered by its duly
authorized officer or officers, and constitutes its valid and binding agreement,
enforceable against it in accordance with its terms;
(b) the representations and warranties contained in the General Agreement,
as amended hereby, are true and correct on and as of the date hereof as though
made on and as of the date hereof, except to the extent that such
representations and warranties expressly relate to a specified date, in which
case such representations and warranties are hereby reaffirmed as true and
correct when made;
(c) no default has occurred or is continuing under the General Agreement
on the date hereof; and
(d) Customer is in full compliance with all covenants and agreements
contained in the General Agreement.
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5. REFERENCE TO GENERAL AGREEMENT
Upon the effectiveness of this Amendment Five, on and after the date
hereof, each reference in the General Agreement to "this General Agreement,"
"this Agreement," "hereunder," "hereof," "herein" or words of like import shall
mean and be a reference to the General Agreement as amended hereby, and each
reference to the General Agreement in any other document, instrument or
agreement shall mean and be a reference to the General Agreement as modified
hereby.
6. GOVERNING LAW
THIS AMENDMENT FIVE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE OTHER REMAINING TERMS OF THE GENERAL AGREEMENT AND THE LAW OF THE STATE OF
NEW YORK (INCLUDING FOR SUCH PURPOSES SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAWS OF THE STATE OF NEW YORK). IF ANY PROVISION OF THIS AMENDMENT
FIVE IS CONTRARY TO APPLICABLE LAW, SUCH PROVISION SHALL BE DEEMED INEFFECTIVE
WITHOUT INVALIDATING THE REMAINING PROVISIONS HEREOF.
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IN WITNESS WHEREOF, the parties have caused this Amendment Number Five to
be executed by their duly authorized representatives as of this 16 day of April,
2001.
KMC TELECOM INC. KMC TELECOM LEASING I LLC
By: KMC Telecom Inc., as Sole Member
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------- ----------------------------------
Name: Name:
Title: Title:
KMC TELECOM II, INC. KMC TELECOM LEASING II LLC
By: KMC Telecom II, Inc., as Sole
Member
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------- ----------------------------------
Name: Name:
Title: Title:
KMC TELECOM III, INC. KMC TELECOM LEASING III LLC
By: KMC Telecom III, Inc., as Sole
Member
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------- ----------------------------------
Name: Name:
Title: Title:
KMC TELECOM IV, INC. KMC TELECOM LEASING IV LLC
By: KMC Telecom IV, Inc., as Sole
Member
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------- ----------------------------------
Name: Name:
Title: Title:
S-1
KMC TELECOM OF VIRGINIA, INC. KMC III SERVICES LLC
By: KMC Telecom III, Inc., as Sole
Member
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------- ----------------------------------
Name: Name:
Title: Title:
LUCENT TECHNOLOGIES INC.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Area Vice President
S-2