EXHIBIT 10.19
FIFTH AMENDMENT TO SECOND AMENDED
AND RESTATED LOAN AGREEMENT
THIS FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AGREEMENT (the
"Agreement") is made and entered into as of this ___ day of November, 1999,
between GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation having an
office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as
lender and agent ("Lender"), and BUSINESS TELECOM, INC., a North Carolina
corporation having an office at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Borrower").
W I T N E S S E T H:
WHEREAS, Lender and Borrower are party to that certain Second Amended
and Restated Loan Agreement, dated as of September 22, 1997 (as the same has
been amended by (i) that certain First Amendment to Second Amended and Restated
Loan Agreement, dated May 6, 1998, (ii) that certain Second Amendment to Second
Amended and Restated Loan Agreement, dated June 30, 1998, (iii) that certain
Third Amendment to Second Amended and Restated Loan Agreement, dated July 15,
1999, and (iv) that certain Fourth Amendment to Second Amended and Restated Loan
Agreement, dated September 8, 1999, as so amended, the "Loan Agreement;" all
capitalized terms used herein and not otherwise expressly defined herein shall
have the respective meanings given to such terms in the Loan Agreement); and
WHEREAS, Lender and Borrower desire to amend the Loan Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and legal sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Amendments to the Loan Agreement. The Loan Agreement is hereby amended
as follows:
(1) The Loan Agreement is hereby amended by making the following
changes to Section 6.11 thereof:
(1) Section 6.11(a) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
(a) Minimum Consolidated Interest
Coverage Ratio. Borrower shall not permit
its Consolidated Interest Coverage Ratio as
of the end of any of the following Fiscal
Quarters to be less than the respective
ratio shown opposite thereto:
------------------------------ -----------------------------------------
Minimum Consolidated
Fiscal Quarter Interest Coverage Ratio
------------------------------ -----------------------------------------
Fourth Quarter 1999 n/a
------------------------------ -----------------------------------------
First Quarter 2000 n/a
------------------------------ -----------------------------------------
Second Quarter 2000 1.25 to 1.0
------------------------------ -----------------------------------------
Third Quarter 2000 1.40 to 1.0
------------------------------ -----------------------------------------
Fourth Quarter 2000 1.40 to 1.0
------------------------------ -----------------------------------------
First Quarter 2001 1.40 to 1.0
------------------------------ -----------------------------------------
Second Quarter 2001 1.40 to 1.0
------------------------------ -----------------------------------------
Third Quarter 2001 1.40 to 1.0
------------------------------ -----------------------------------------
Fourth Quarter 2001 1.40 to 1.0
------------------------------ -----------------------------------------
First Quarter 2002 2.00 to 1.0
------------------------------ -----------------------------------------
Second Quarter 2002 2.00 to 1.0
------------------------------ -----------------------------------------
(2) Section 6.11(b) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
(b) Maximum Capital Expenditures.
(i) Borrower shall not permit its Capital Expenditures for
Fiscal Year 1999 to exceed $102,500,000.
(ii) Borrower shall not permit its Capital Expenditures for
Fiscal Year 2000 to exceed (A) $110,000,000 plus (B) one hundred
percent (100%) of that portion, if any, of the permitted maximum
Capital Expenditures for Fiscal Year 1999 which were not expended
by Borrower during such year.
(iii) Borrower shall not permit its Capital Expenditures for
Fiscal Year 2001 to exceed $45,000,000.
(iv) Borrower shall not permit its Capital Expenditures for
Fiscal Year 2002 to exceed $35,000,000.
(3) Section 6.11(d) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
(d) Minimum EBITDA. Borrower shall not permit its cumulative
EBITDA for the four (4) Fiscal Quarters ending on the last day of
the Fiscal Quarters set forth below to be less than the
respective amount shown opposite thereto:
--------------------------------- ----------------------------------------
Four (4) Fiscal Quarters Ending Minimum Cumulative
on Last Day of: EBITDA
--------------------------------- ----------------------------------------
Third Quarter 1999 $350,000
--------------------------------- ----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ $ 930,668
--------------------------------- ----------------------------------------
First Quarter 2000 $3,122,757
--------------------------------- ----------------------------------------
Second Quarter 2000 $6,484,095
--------------------------------- ----------------------------------------
Third Quarter 2000 $13,353,962
--------------------------------- ----------------------------------------
Fourth Quarter 2000 $21,717,680
--------------------------------- ----------------------------------------
First Quarter 2001 $30,565,000
--------------------------------- ----------------------------------------
Second Quarter 2001 $39,115,000
--------------------------------- ----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ $48,825,000
--------------------------------- ----------------------------------------
Fourth Quarter 2001 $59,355,000
--------------------------------- ----------------------------------------
First Quarter 2002 $70,340,000
--------------------------------- ----------------------------------------
Second Quarter 2002 $81,665,000
--------------------------------- ----------------------------------------
(4) Section 6.11(f) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
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(f) Minimum Revenue. Borrower shall not permit its cumulative
Consolidated Revenue for the trailing four (4) Fiscal Quarters
ending on the last day of the Fiscal Quarters set forth below to
be less than the respective amount shown opposite thereto:
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--------------------------------- ----------------------------------------
Fiscal Quarter Minimum Revenue
--------------------------------- ----------------------------------------
Third Quarter 1999 $190,586,000
--------------------------------- ----------------------------------------
Fourth Quarter 1999 $198,850,949
--------------------------------- ----------------------------------------
First Quarter 2000 $210,869,422
--------------------------------- ----------------------------------------
Second Quarter 2000 $228,979,838
--------------------------------- ----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ $247,283,013
--------------------------------- ----------------------------------------
Fourth Quarter 2000 $267,664,778
--------------------------------- ----------------------------------------
First Quarter 2001 $292,721,334
--------------------------------- ----------------------------------------
(5) Section 6.11(g) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
(g) BofA Leverage Ratio. Borrower shall not permit its BofA
Leverage Ratio as of the last day of the Fiscal Quarters set
forth below to be less than the respective ratio shown opposite
thereto:
--------------------------------- --------------------------------------
Fiscal Quarter BofA Leverage Ratio
--------------------------------- --------------------------------------
Third Quarter 1999 n/a
--------------------------------- --------------------------------------
Fourth Quarter 1999 n/a
--------------------------------- --------------------------------------
First Quarter 2000 n/a
--------------------------------- --------------------------------------
Second Quarter 2000 10.50 to 1.0
--------------------------------- --------------------------------------
Third Quarter 2000 5.00 to 1.0
--------------------------------- --------------------------------------
Fourth Quarter 2000 4.00 to 1.0
--------------------------------- --------------------------------------
First Quarter 2001 4.00 to 1.0
--------------------------------- --------------------------------------
Second Quarter 2001 4.0 to 1.0
--------------------------------- --------------------------------------
Third Quarter 2001 4.0 to 1.0
--------------------------------- --------------------------------------
Fourth Quarter 2001 4.0 to 1.0
--------------------------------- --------------------------------------
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--------------------------------- --------------------------------------
First Quarter 2002 4.0 to 1.0
--------------------------------- --------------------------------------
Second Quarter 2002 4.0 to 1.0
--------------------------------- --------------------------------------
(b) The Loan Agreement is hereby further amended by
adding the new Section 6.21 thereto:
SECTION 6.21 Minimum Equity Infusion by March 31,
2000. Notwithstanding any other provision herein, the Borrower agrees
that the following shall have occurred no later than March 31, 2000:
(a) an Equity Issuance or an IPO with respect to which aggregate gross
proceeds are equal to or greater than $135,000,000 and the Borrower
shall have received such proceeds in a manner acceptable to the Agent;
or (b) an Equity Issuance and an IPO with respect to which the combined
aggregate gross proceeds are equal to or greater than $135,000,000 and
the Borrower shall have received such proceeds in a manner acceptable
to Agent.
2. Representations, Warranties, Covenants and Acknowledgments;
Release. To induce Lender to enter into this Agreement:
(1) Borrower does hereby represent and warrant that (i) as of
the date hereof, all of the representations and warranties made
or deemed to be made under the Loan Documents are true and
correct, except such representations and warranties which, by
their express terms, are applicable only to the Closing Date,
(ii) as of the date hereof, after giving effect to the terms
hereof, there exists no Default or Event of Default under the
Loan Agreement or any of the Loan Documents, (iii) Borrower has
the power and is duly authorized to enter into, deliver and
perform this Agreement, and (iv) this Agreement and each of the
Loan Documents is the legal, valid and binding obligation of the
Borrower enforceable against it in accordance with its terms; and
(2) Borrower does hereby reaffirm each of the agreements,
covenants, and undertakings set forth in the Loan Agreement and
each and every other Loan Document executed in connection
therewith or pursuant thereto as if Borrower were making said
agreements, covenants and undertakings on the date hereof; and
(3) Borrower does hereby acknowledge and agree that no right
of offset, defense, counterclaim, claim, causes of action or
objection in favor of Borrower against Lender exists arising out
of or with respect to (i) the Obligations, this Agreement, the
Loan Agreement or any of the other Loan
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Documents, (ii) any other documents now or heretofore evidencing,
securing or in any way relating to the foregoing or (iii) the
administration or funding of the Revolving Credit Loans or the
Capex Facility; and
(5) Borrower does hereby expressly waive, release and
relinquish any and all defenses, setoffs, claims, counterclaims,
causes of action or objections, if any, against Lender.
(6) Conditions Precedent. The effectiveness of this Agreement
is subject to the following conditions precedent:
(1) Delivery of Documents. Borrower shall have delivered to
Lender, all in form and substance acceptable to Lender in its
sole discretion, (i) executed counterpart originals of this
Agreement, (ii) an Acknowledgment and Consent of Guarantor, in
form and substance satisfactory to Lender, (iii) an
Acknowledgment and Consent of Bank of America, N.A., as agent and
lender, in form and substance satisfactory to Lender, and (iv)
such other documentation as Lender may reasonably require in
connection herewith; and
(2) Accuracy of Representations and Warranties. All of the
representations and warranties made or deemed to be made in this
Agreement and under the Loan Documents shall be true and correct
as of the date of this Agreement, except such representations and
warranties which, by their terms, are applicable to a prior
specific date or period; and
(3) Expenses. Borrower shall have paid to Lender the costs and
expenses referred to in Section 5 hereof; and
(4) Fees. Borrower shall have paid to Lender the amendment fee
described in that certain side letter, dated of even date
herewith, between Borrower and Lender, which amendment fee shall
be deemed fully earned as of the date hereof.
4. Effect of this Agreement. As expressly amended hereby, the
Loan Agreement shall be and remain in full force and effect as originally
written, and shall constitute the legal, valid, binding and enforceable
obligations of Borrower to Lender.
5. Expenses. Borrower agrees to pay on demand all reasonable
costs and expenses of Lender in connection with the preparation, execution,
delivery and enforcement of this Agreement and all other documents and any other
transactions contemplated hereby, including, without limitation, the reasonable
fees and out-of-pocket expenses of legal counsel to Lender. Borrower authorizes
Lender, as Agent, to
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charge the foregoing expenses to the Borrower's loan account by increasing the
principal amount of the Revolving Credit Loans by the amount of such expenses
owed by Borrower in connection herewith.
7. Miscellaneous. Borrower agrees to take such further action as
Lender shall reasonably request in connection herewith to evidence the
amendments herein contained to the Loan Agreement. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be
deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same instrument. This Agreement shall be binding upon
and inure to the benefit of the successors and permitted assigns of the parties
hereto. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Georgia.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be duly executed as of the date first above written.
BUSINESS TELECOM, INC.
By:____________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, AS AGENT AND LENDER
By:____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President as duly authorized
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ACKNOWLEDGMENT AND AGREEMENT
Each of the undersigned hereby acknowledges and agrees to the foregoing
Fifth Amendment to Second Amended and Restated Loan Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands
and seals this ___ day of November, 1999.
BTI TELECOM CORP.
By:_________________________________
Its:_________________________________
BUSINESS TELECOM OF VIRGINIA, INC.
By:_________________________________
Its:_________________________________
FS MULTIMEDIA, INC.
By:_________________________________
Its:_________________________________
ACKNOWLEDGMENT AND AGREEMENT
The undersigned hereby acknowledges that the foregoing Fifth Amendment
to Second Amended and Restated Loan Agreement shall not affect the
enforceability or validity of any Loan Document executed by the undersigned.
________________________________(Seal)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Date:
ACKNOWLEDGMENT AND CONSENT
The undersigned, as agent and lender, hereby acknowledges and consents
to the foregoing Fifth Amendment to Second Amendment and Restated Loan
Agreement. Notwithstanding anything to the contrary contained therein, the
undersigned, as agent and lender, hereby acknowledges and agrees that the Fifth
Amendment does not breach in any manner that certain Intercreditor Agreement,
dated September 8, 1999, among General Electric Capital Corporation, Bank of
America, N.A., Business Telecom, Inc., BTI Telecom Corp., Business Telecom of
Virginia, Inc. and FS Multimedia, Inc.
IN WITNESS WHEREOF, the undersigned has hereunto set its hand and seal
this ______ day of November, 1999.
BANK OF AMERICA, N.A., AS AGENT AND LENDER
By:_________________________________
Its:_________________________________