EXHIBIT F TO SCHEDULE 13D/A
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY (this "GUARANTY"), dated as of
December 27, 2002, is executed by each of the undersigned (each such entity and
each entity which hereafter executes and delivers a Subsidiary Joinder in
substantially the form of Attachment 1 hereto to be referred to herein as a
"SUBSIDIARY GUARANTOR"), in favor of (i) VANTAGEPOINT VENTURE PARTNERS III (Q),
L.P., as administrative agent for itself and the other Guarantors which are or
may become parties to the Reimbursement Agreement ("AGENT") and (ii) each of the
Guarantors.
RECITALS
A. Reference is made to that certain Revolving Credit and Term
Loan Agreement, dated as of December 13, 2002 (as amended and in effect from
time to time, the "CREDIT AGREEMENT"), by and between Fleet National Bank
("LENDER") and XXX.xxx, Inc. ("BORROWER").
B. It is a condition precedent to the extension of credit by
Xxxxxx under the Credit Agreement that the Guarantors party to the Reimbursement
Agreement enter into guaranties (as amended and in effect from time to time, the
"CREDIT GUARANTIES" and each a "CREDIT GUARANTY") to guaranty certain of the
obligations of Borrower to Lender under the Credit Agreement.
C. In order to induce Guarantors to enter into the Credit
Guaranty: (i) Borrower has agreed to enter into a Reimbursement Agreement, dated
as of the date hereof (as amended and in effect from time to time, the
"REIMBURSEMENT AGREEMENT") with the Guarantors and Agent, (ii) Borrower's
subsidiaries party hereto have agreed to enter into this Guaranty to guaranty
Borrower's obligations to Agent and Guarantors under the Reimbursement Agreement
and (iii) Borrower and Subsidiary Guarantors have agreed to enter into a
Security Agreement, dated as of the date hereof, to secure their respective
obligations under the Reimbursement Agreement and this Guaranty.
D. Each of the undersigned Subsidiary Guarantors is a subsidiary
of Borrower and expects to derive substantial direct and indirect benefit from
the transactions contemplated by the Credit Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, each Subsidiary Guarantor, each Guarantor and Agent hereby
agree as follows:
1. DEFINITIONS AND INTERPRETATION.
(a) Definition. When used in this Guaranty, the following terms
shall have the following respective meanings:
"ADJUSTED MAXIMUM GUARANTY AMOUNT" shall mean, with respect to any
Subsidiary Guarantor, the maximum liability of such Subsidiary Guarantor under
this Guaranty, limited to the extent provided in Section 2(d) hereof (except
that, for purposes of calculating the Adjusted Maximum Guaranty Amount of a
Subsidiary Guarantor only, any assets or liabilities of such Subsidiary
Guarantor arising under Section 8 hereof shall be ignored).
"AGENT" shall have the meaning given to that term in the introductory
paragraph hereof.
"AGGREGATE GUARANTY PAYMENTS" shall mean, with respect to any
Subsidiary Guarantor at any time, the aggregate net amount of all payments made
by such Subsidiary Guarantor under this Guaranty (including, without limitation,
under Section 8 hereof) at or prior to such time.
"BORROWER" shall have the meaning given to that term in Recital A
hereof.
"CLOSING DATE" shall mean the date of this Guaranty.
"CREDIT AGREEMENT" shall have the meaning given to that term in Recital
A hereof.
"DISALLOWED POST-COMMENCEMENT INTEREST AND EXPENSES" shall mean
interest computed at the rate provided in the Reimbursement Agreement and claims
for reimbursement, costs, expenses or indemnities under the terms of any of the
Operative Documents accruing or claimed at any time after the commencement of
any Insolvency Proceeding, if the claim for such interest, reimbursement, costs,
expenses or indemnities is not allowable, allowed or enforceable against
Borrower in such Insolvency Proceeding.
"EXEMPT SUBSIDIARY GUARANTOR" shall mean DSLnet Communications Puerto
Rico, Inc. and DSLnet Communications VA, Inc.
"FAIR SHARE" shall mean, with respect to any Subsidiary Guarantor at
any time, an amount equal to (i) a fraction, the numerator of which is the
Adjusted Maximum Guaranty Amount of such Subsidiary Guarantor and the
denominator of which is the aggregate Adjusted Maximum Guaranty Amounts of all
Subsidiary Guarantors, multiplied by (ii) the aggregate amount paid by all
Funding Subsidiary Guarantors under this Guaranty at or prior to such time.
"FAIR SHARE SHORTFALL" shall mean, with respect to any Subsidiary
Guarantor at any time, the amount, if any, by which the Fair Share of such
Subsidiary Guarantor at such time exceeds the Aggregate Guaranty Payments of
such Subsidiary Guarantor at such time.
"FUNDING SUBSIDIARY GUARANTOR" shall have the meaning given to that
term in Section 8 hereof.
"GUARANTEED OBLIGATIONS" shall mean the Obligations.
"INSOLVENCY PROCEEDING" shall mean any case or proceeding under the
United States Bankruptcy Code or any other similar law, rule or regulation of
the United States or any jurisdiction or any other action or proceeding for the
reorganization, liquidation, appointment of a receiver, rearrangement of debts,
marshalling of assets or similar action relating to Borrower or any Subsidiary
Guarantor, their respective creditors or any substantial part of their
respective assets, whether or not any such case, proceeding or action is
voluntary or involuntary.
"OPERATIVE DOCUMENTS" shall have the meaning given to that term in the
Reimbursement Agreement.
"PERSON" shall mean and include an individual, a partnership, a
corporation, a business trust, a joint stock company, a limited liability
company, an unincorporated association or other entity and any domestic
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or foreign national, state or local government, any political subdivision
thereof, and any department, agency, authority or bureau of any of the
foregoing.
"SOLVENT" shall mean, with respect to any Person on any date, that on
such date (a) the present fair saleable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, and (b) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature.
"SUBORDINATED OBLIGATIONS" shall have the meaning given to that term in
Section 6 hereof.
"SUBSIDIARY GUARANTOR" shall have the meaning given to that term in the
introductory paragraph hereof.
"SUBSIDIARY JOINDER" shall mean an agreement substantially in the form
of Attachment 1 hereto.
Unless otherwise defined herein, all other capitalized terms used
herein and defined in the Reimbursement Agreement shall have the respective
meanings given to those terms in the Reimbursement Agreement.
(b) Other Interpretive Provisions. The rules of construction set
forth in the Reimbursement Agreement shall, to the extent not inconsistent with
the terms of this Guaranty, apply to this Guaranty and are hereby incorporated
by reference. Each Subsidiary Guarantor acknowledges receipt of copies of the
Reimbursement Agreement and the other Operative Documents.
2. GUARANTY.
(a) Payment Guaranty. Each Subsidiary Guarantor (jointly and
severally with the other Subsidiary Guarantors) unconditionally guarantees and
promises to pay and perform as and when due, whether at stated maturity, upon
acceleration or otherwise, any and all of the Guaranteed Obligations. If any
Insolvency Proceeding relating to Borrower is commenced, each Subsidiary
Guarantor (jointly and severally with the other Subsidiary Guarantors) further
unconditionally guarantees and promises to pay and perform, upon the demand of
Agent, at the direction of Required Guarantors, any and all of the Guaranteed
Obligations (including any and all Disallowed Post-Commencement Interest and
Expenses) in accordance with the terms of the Operative Documents, whether or
not such obligations are then due and payable by Borrower and whether or not
such obligations are modified, reduced or discharged in such Insolvency
Proceeding. This Guaranty is a guaranty of payment and not of collection.
(b) Continuing Guaranty. This Guaranty is an irrevocable
continuing guaranty of the Guaranteed Obligations which shall continue in effect
until all obligations of Lender to extend credit to Borrower have terminated and
all of the Guaranteed Obligations have been fully, finally and indefensibly paid
or until the Credit Guaranties are terminated. If any payment on any Guaranteed
Obligation is set aside, avoided or rescinded or otherwise recovered from Agent,
such recovered payment shall constitute a Guaranteed Obligation hereunder and,
if this Guaranty was previously released or terminated, it automatically shall
be fully reinstated, as if such payment was never made.
(c) Independent Obligation. The liability of each Subsidiary
Guarantor hereunder is independent of the Guaranteed Obligations and of the
obligations of each other Subsidiary Guarantor hereunder, and a separate action
or actions may be brought and prosecuted against each Subsidiary Guarantor
irrespective of whether action is brought against Borrower, any other Subsidiary
Guarantor or any other guarantor of the
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Guaranteed Obligations or whether Borrower, any other Subsidiary Guarantor or
any other guarantor of the Guaranteed Obligations is joined in any such action
or actions.
(d) Fraudulent Transfer Limitation. If, in any action to enforce
this Guaranty, any court of competent jurisdiction determines that enforcement
against any Subsidiary Guarantor for the full amount of the Guaranteed
Obligations is not lawful under or would be subject to avoidance under Section
548 of the United States Bankruptcy Code or any applicable provision of any
comparable law of any state or other jurisdiction, the liability of such
Subsidiary Guarantor under this Guaranty shall be limited to the maximum amount
lawful and not subject to such avoidance.
(e) Termination. Notwithstanding any termination of this Guaranty
in accordance with Section 6 hereof, this Guaranty shall continue to be in full
force and effect and applicable to any Guaranteed Obligations arising thereafter
which arise because prior payments of Guaranteed Obligations are rescinded or
otherwise required to be surrendered by Agent after receipt.
3. REPRESENTATIONS AND WARRANTIES. Each Subsidiary Guarantor makes the
following representations and warranties to Agent and Guarantors:
(a) Due Incorporation, Qualification, etc. Such Subsidiary
Guarantor and its Subsidiaries (i) are duly organized, validly existing and in
good standing under the laws of their state of incorporation or formation; (ii)
have the power and authority to own, lease and operate their properties and
carry on their business as now conducted; and (iii) are duly qualified, licensed
to do business and in good standing as foreign corporations in each jurisdiction
where the failure to be so qualified or licensed could reasonably be expected to
have a Material Adverse Effect.
(b) Authority. The execution, delivery and performance by such
Subsidiary Guarantor of each Operative Document to be executed by such
Subsidiary Guarantor and the consummation of the transactions contemplated
thereby (i) are within the power of such Subsidiary Guarantor and (ii) have been
duly authorized by all necessary actions on the part of such Subsidiary
Guarantor.
(c) Enforceability. Each Operative Document executed, or to be
executed, by such Subsidiary Guarantor has been, or will be, duly executed and
delivered by such Subsidiary Guarantor and constitutes, or will constitute, a
legal, valid and binding obligation of such Subsidiary Guarantor, enforceable
against such Subsidiary Guarantor in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general application relating
to or affecting the enforcement of creditors' rights generally and general
principles of equity.
(d) Non-Contravention. The execution and delivery by such
Subsidiary Guarantor of the Operative Documents executed by such Subsidiary
Guarantor and the performance and consummation of the transactions contemplated
thereby do not and will not (i) violate the certificate of incorporation or
bylaws or comparable formation documents of such Subsidiary Guarantor or any
material judgment, order, writ, decree, statute, rule or regulation applicable
to such Subsidiary Guarantor; (ii) violate any provision of, or result in the
breach or the acceleration of, or entitle any other Person to accelerate
(whether after the giving of notice or lapse of time or both), any material
mortgage, indenture, agreement, instrument or contract to which such Subsidiary
Guarantor is a party or by which it is bound; or (iii) result in the creation or
imposition of any Lien upon any property, asset or revenue of such Subsidiary
Guarantor (other than any Lien arising under the Operative Documents) or the
suspension, revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, authorization or approval applicable to such Subsidiary
Guarantor, its business or operations, or any of its assets or properties.
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(e) Approvals. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority or other
Person (including, without limitation, the shareholders of any Person) is
required in connection with the execution and delivery of the Operative
Documents executed by such Subsidiary Guarantor and the performance and
consummation of the transactions contemplated thereby.
(f) No Violation or Default. Neither such Subsidiary Guarantor nor
such Subsidiary Guarantor's Subsidiaries is in violation of or in default with
respect to (i) its certificate of incorporation or bylaws or comparable
formation documents or any material judgment, order, writ, decree, statute, rule
or regulation applicable to such Person; (ii) any material mortgage, indenture,
agreement, instrument or contract to which such Person is a party or by which it
is bound (nor is there any waiver in effect which, if not in effect, would
result in such a violation or default), where, in each case, such violation or
default, individually, or together with all such violations or defaults, could
reasonably be expected to have a Material Adverse Effect. No default under this
Guaranty has occurred and is continuing.
(g) Litigation. No actions (including, without limitation,
derivative actions), suits, proceedings or investigations are pending or, to the
knowledge of such Subsidiary Guarantor, threatened against such Subsidiary
Guarantor or such Subsidiary Guarantor's Subsidiaries at law or in equity in any
court or before any other governmental authority which if adversely determined
(i) would (alone or in the aggregate) have a Material Adverse Effect or (ii)
seeks to enjoin, either directly or indirectly, the execution, delivery or
performance by such Subsidiary Guarantor of the Operative Documents or the
transactions contemplated thereby.
(h) Other Regulations. Neither such Subsidiary Guarantor nor its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or to any federal or
state statute or regulation limiting its ability to incur Indebtedness.
(i) Governmental Charges. Each of such Subsidiary Guarantor and
its Subsidiaries has filed or caused to be filed all tax returns which are
required to be filed by it. Such Subsidiary Guarantor and such Subsidiary
Guarantor's Subsidiaries have paid, or made adequate reserves (determined in
accordance with GAAP) for the payment of, all taxes and other levies,
assessments, fees, claims or other charges imposed by any governmental authority
which have or may have become due pursuant to said returns, except such taxes,
levies, assessments, fees, claims or other charges, if any, which are being
contested in good faith and as to which adequate reserves (determined in
accordance with GAAP) have been provided or which could not reasonably be
expected to have a Material Adverse Effect if unpaid.
(j) Subsidiaries, etc. Except as set forth in the Disclosure
Schedule attached hereto (setting forth the jurisdiction of incorporation or
formation, capital structure and percentage ownership of each shareholder), such
Subsidiary Guarantor has no Subsidiaries, is not a partner in any partnership, a
member of any limited liability company or a joint venturer in any joint
venture.
(k) Solvency, Etc. Such Subsidiary Guarantor (other than an Exempt
Subsidiary Guarantor) is Solvent and, after the execution and delivery of the
Operative Documents and the consummation of the transactions contemplated
thereby, such Subsidiary Guarantor (other than an Exempt Subsidiary Guarantor)
will be Solvent.
4. COVENANTS. Until all obligations of Lender to extend credit to Borrower
have terminated and all of the Guaranteed Obligations have been fully, finally
and indefensibly paid, each Subsidiary Guarantor shall comply with the following
covenants:
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(a) Financial Statements, Reports, Etc(i) . Such Subsidiary
Guarantor shall furnish to Agent such financial statements, certificates,
opinions, statements, documents and information relating to the operations or
condition (financial or otherwise) of such Subsidiary Guarantor or its
Subsidiaries, and compliance by Borrower and such Subsidiary Guarantor with the
terms of the Operative Documents as Agent may from time to time reasonably
request.
(b) Inspections. Such Subsidiary Guarantor and its Subsidiaries
shall permit any Person designated by Agent, upon reasonable prior notice and
during normal business hours, to visit and inspect any of the properties and
offices of such Subsidiary Guarantor and its Subsidiaries, to examine the books
and records of such Subsidiary Guarantor and its Subsidiaries and make copies
thereof and to discuss the affairs, finances and accounts of such Subsidiary
Guarantor and its Subsidiaries with, and to be advised as to the same by, their
officers, auditors and accountants, all at such times and intervals as Agent may
reasonably request.
(c) Insurance. Such Subsidiary Guarantor and its Subsidiaries
shall maintain the insurance required to be maintained under the Reimbursement
Agreement.
(d) Governmental Charges. To the extent failure to do so could
reasonably be expected to have a Material Adverse Effect, such Subsidiary
Guarantor and its Subsidiaries shall promptly pay and discharge all taxes and
other charges imposed by any government authority upon such Subsidiary Guarantor
or its Subsidiaries or their property as and when they become due.
(e) General Business Operations. To the extent failure to do so
could reasonably be expected to have a Material Adverse Effect, such Subsidiary
Guarantor and its Subsidiaries shall (i) maintain its corporate existence and
all rights, privileges and franchises necessary for the conduct of its business
and (ii) comply with any material judgment, order, writ, decree, statute, rule
or regulation applicable to such Person and any material mortgage, indenture,
agreement, instrument or contract to which such Person is a party or by which it
is bound.
5. AUTHORIZATIONS, WAIVERS, ETC.
(a) Authorizations. Each Subsidiary Guarantor authorizes Agent and
Guarantors, in their discretion, without prior notice to such Subsidiary
Guarantor, irrespective of any change in the financial condition of Borrower,
such Subsidiary Guarantor, any other Subsidiary Guarantor or any other guarantor
of the Guaranteed Obligations since the date hereof, and without affecting or
impairing in any way the liability of such Subsidiary Guarantor hereunder, from
time to time to:
(i) Create new Guaranteed Obligations and renew,
compromise, extend, accelerate or otherwise change the time for payment or
performance of, or otherwise amend or modify the Operative Documents or change
the terms of the Guaranteed Obligations or any part thereof, including increase
or decrease of the rate of interest thereon; and
(ii) Assign the Guaranteed Obligations, this Guaranty or
the other Operative Documents in whole or in part to the extent provided in the
Reimbursement Agreement and the other Operative Documents.
(b) Authorizations. Each Subsidiary Guarantor authorizes Agent, in
its discretion, without prior notice to such Subsidiary Guarantor, irrespective
of any change in the financial condition of Borrower, such Subsidiary Guarantor,
any other Subsidiary Guarantor or any other guarantor of the Guaranteed
Obligations since the date hereof, and without affecting or impairing in any way
the liability of such Subsidiary Guarantor hereunder, from time to time to:
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(i) Take and hold security for the payment or performance
of the Guaranteed Obligations and exchange, enforce, waive or release any such
security; apply such security and direct the order or manner of sale thereof;
and purchase such security at public or private sale;
(ii) Otherwise exercise any right or remedy they may have
against Borrower, such Subsidiary Guarantor, any other Subsidiary Guarantor, any
other guarantor of the Guaranteed Obligations or any security, including,
without limitation, the right to foreclose upon any such security by judicial or
nonjudicial sale; and
(iii) Settle, compromise with, release or substitute any
one or more makers, endorsers or guarantors of the Guaranteed Obligations.
(c) Waivers. To the extent permitted by applicable law, each
Subsidiary Guarantor hereby waives:
(i) Any right to require Agent and Guarantors to (A)
proceed against Borrower, any other Subsidiary Guarantor or any other guarantor
of the Guaranteed Obligations, (B) proceed against or exhaust any security
received from Borrower, such Subsidiary Guarantor, any other Subsidiary
Guarantor or any other guarantor of the Guaranteed Obligations or otherwise
marshal the assets of Borrower, such Subsidiary Guarantor, any other Subsidiary
Guarantor or any other guarantor of the Guaranteed Obligations or (C) pursue any
other remedy in Agent's or Guarantors' power whatsoever;
(ii) Any defense arising by reason of the application by
Xxxxxxxx of the proceeds of any borrowing;
(iii) Any defense resulting from the absence, impairment or
loss of any right of reimbursement, subrogation, contribution or other right or
remedy of Subsidiary Guarantor against Borrower, any other Subsidiary Guarantor,
any other guarantor of the Guaranteed Obligations or any security, whether
resulting from an election by Agent to foreclose upon security by nonjudicial
sale, or otherwise;
(iv) Any setoff or counterclaim of Borrower or any defense
which results from any disability or other defense of Borrower or the cessation
or stay of enforcement from any cause whatsoever of the liability of Borrower
(including, without limitation, the lack of validity or enforceability of any of
the Operative Documents);
(v) Any defense based upon any law, rule or regulation
which provides that the obligation of a surety must not be greater or more
burdensome than the obligation of the principal;
(vi) Until all obligations of Lender to extend credit to
Borrower have terminated and all of the Guaranteed Obligations have been fully,
finally and indefensibly paid, any right of subrogation, reimbursement,
indemnification or contribution and other similar right to enforce any remedy
which Agent or any Guarantor or any other Person now has or may hereafter have
against Borrower on account of the Guaranteed Obligations, and any benefit of,
and any right to participate in, any security now or hereafter received by Agent
or any Guarantor or any other Person on account of the Guaranteed Obligations;
(vii) All presentments, demands for performance, notices of
nonperformance, notices delivered under the Operative Documents, protests,
notice of dishonor, and notices of acceptance of this Guaranty and of the
existence, creation or incurring of new or additional Guaranteed Obligations and
notices of any public or private foreclosure sale;
(viii) The benefit of any statute of limitations to the
extent permitted by law;
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(ix) Any appraisement, valuation, stay, extension,
moratorium redemption or similar law or similar rights for marshalling;
(x) Any right to be informed by Agent or any Guarantor of
the financial condition of Borrower, any other Subsidiary Guarantor or any other
circumstances bearing upon the risk of nonpayment or nonperformance of the
Guaranteed Obligations;
(xi) Until all obligations of Lender to extend credit to
Borrower have terminated and all of the Guaranteed Obligations have been fully,
finally and indefensibly paid, any right to revoke this Guaranty;
(xii) Any defense arising from an election for the
application of Section 1111(b)(2) of the United States Bankruptcy Code which
applies to the Guaranteed Obligations;
(xiii) Any defense based upon any borrowing or grant of a
security interest under Section 364 of the United States Bankruptcy Code; and
(xiv) Any right it may have to a fair value hearing to
determine the size of a deficiency judgment following any foreclosure on any
security for the Guaranteed Obligations.
Without limiting the scope of any of the foregoing provisions of this Section 5,
to the extent permitted by applicable law, each Subsidiary Guarantor hereby
further waives (A) all rights and defenses arising out of an election of
remedies by Agent, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a Guaranteed Obligation, has destroyed
such Subsidiary Guarantor's rights of subrogation and reimbursement against
Borrower by the operation of Section 580d of the Code of Civil Procedure or
otherwise, (B) all rights and defenses such Subsidiary Guarantor may have by
reason of protection afforded to Borrower with respect to the Guaranteed
Obligations pursuant to the antideficiency or other laws of California limiting
or discharging the Guaranteed Obligations, including, without limitation,
Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure, and
(C) all other rights and defenses available to such Subsidiary Guarantor by
reason of Sections 2787 to 2855, inclusive, Section 2899 or Section 3433 of the
California Civil Code or Section 3605 of the California Commercial Code.
(d) Financial Condition of Borrower, Etc. Each Subsidiary
Guarantor is fully aware of the financial condition and affairs of Borrower.
Each Subsidiary Guarantor has executed this Guaranty without reliance upon any
representation, warranty, statement or information concerning Borrower furnished
to such Subsidiary Guarantor by Agent or any Guarantor and has, independently
and without reliance on Agent or any Guarantor and based on such documents and
information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of Borrower and of other circumstances affecting
the risk of nonpayment or nonperformance of the Guaranteed Obligations. Each
Subsidiary Guarantor is in a position to obtain, and assumes full responsibility
for obtaining, any additional information about the financial condition and
affairs of Borrower and of other circumstances affecting the risk of nonpayment
or nonperformance of the Guaranteed Obligations and will, independently and
without reliance upon Agent or any Guarantor, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action in connection with this
Guaranty.
6. SUBORDINATION. Each Subsidiary Guarantor hereby subordinates any and
all debts, liabilities and obligations owed to such Subsidiary Guarantor by
Borrower or any Subsidiary of Borrower (the "Subordinated Obligations") to the
Guaranteed Obligations as provided in this Section 6.
(a) Prohibited Payments, Etc. Except during the existence of an
Event of Default or any default by any Subsidiary Guarantor hereunder, each
Subsidiary Guarantor and its Subsidiaries may receive regularly
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scheduled payments from Borrower on account of Subordinated Obligations. During
the existence of any Event of Default or any default by any Subsidiary Guarantor
hereunder (including the commencement and continuation of any Insolvency
Proceeding relating to Borrower), however, unless Agent otherwise requests, such
Subsidiary Guarantor shall not, nor shall it permit any of its Subsidiaries to,
demand, accept or take any action to collect any payment on account of the
Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligation. In any Insolvency
Proceeding relating to Borrower, each Subsidiary Guarantor agrees that Agent and
Guarantors shall be entitled to receive payment of all Guaranteed Obligations
(including any and all Disallowed Post-Commencement Interest and Expenses)
before such Subsidiary Guarantor or any of its Subsidiaries receives payment of
any Subordinated Obligations.
(c) Turn-Over. During the existence of any Event of Default
(including the commencement and continuation of any Insolvency Proceeding
relating to Borrower), each Subsidiary Guarantor and its Subsidiaries shall, if
Agent so requests, collect, enforce and receive payments on account of the
Subordinated Obligations as trustee for Agent and deliver such payments to Agent
on account of the Guaranteed Obligations (including any and all Disallowed
Post-Commencement Interest and Expenses), together with any necessary
endorsements or other instruments of transfer, but without reducing or affecting
in any manner the liability of such Subsidiary Guarantor under the other
provisions of this Guaranty.
(d) Agent Authorization. During the existence of any Event of
Default or any default by a Subsidiary Guarantor hereunder (including the
commencement and continuation of any Insolvency Proceeding relating to
Borrower), Agent is authorized and empowered (but without any obligation to so
do), in its discretion, (i) in the name of each Subsidiary Guarantor and its
Subsidiaries, 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 Disallowed Post-Commencement
Interest and Expenses), and (ii) to require each Subsidiary 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 Agent for
application to the Guaranteed Obligations (including any and all Disallowed
Post-Commencement Interest and Expenses).
7. GENERAL XXXXXX; SETOFF.
(a) Pledge. In addition to all liens upon and rights of setoff
against the property of any Subsidiary Guarantor given to Agent or any Guarantor
by law or separate agreement to secure the liabilities of any Subsidiary
Guarantor hereunder, to the extent permitted by law, each Subsidiary Guarantor
hereby grants to Agent for the benefit of the Guarantors and itself, as security
for such Subsidiary Guarantor's obligations hereunder, a security interest in
all monies, securities and other property of such Subsidiary Guarantor now or
hereafter in the possession of Agent or any Guarantor; and Agent shall have all
rights and remedies of a secured party with respect to such property.
(b) Setoff. In addition to any rights and remedies of Agent or
Guarantors provided by law, Agent shall have the right, without prior notice to
any Subsidiary Guarantor, any such notice being expressly waived by each
Subsidiary Guarantor to the extent permitted by applicable law, during the
existence of an Event of Default, to set-off and apply against the Guaranteed
Obligations then due and payable any amount owing from Agent or any Guarantor to
such Subsidiary Guarantor.
(c) Nonwaiver. No security interest or right of setoff shall be
deemed to have been waived by any act or conduct on the part of Agent or by any
failure to exercise such right of setoff or to enforce such
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security interest, or by any delay in so doing; and every right of setoff and
security interest shall continue in full force and effect until such right of
setoff or security interest is specifically waived or released by an instrument
in writing executed by Agent.
8. CONTRIBUTION AMONG SUBSIDIARY GUARANTORS. The Subsidiary Guarantors
desire to allocate among themselves, in a fair and equitable manner, their
rights of contribution from each other when any payment is made by any
Subsidiary Guarantor under this Guaranty. Accordingly, if any payment is made by
any Subsidiary Guarantor under this Guaranty (a "Funding Subsidiary Guarantor"')
that exceeds its Fair Share, the Funding Subsidiary Guarantor shall be entitled
to a contribution from each other Subsidiary Guarantor in the amount of such
other Subsidiary Guarantor's Fair Share Shortfall, so that all such
contributions shall cause each Subsidiary Guarantor's Aggregate Guaranty
Payments to equal its Fair Share. The amounts payable as contributions hereunder
shall be determined by the Funding Subsidiary Guarantor as of the date on which
the related payment or distribution is made by the Funding Subsidiary Guarantor,
and such determination shall be binding on the other Subsidiary Guarantors
absent manifest error. The allocation and right of contribution among the
Subsidiary Guarantors set forth in this Section 8 shall not be construed to
limit in any way the liability of any Subsidiary Guarantor under this Guaranty
or the amount of the Guaranteed Obligations.
9. MISCELLANEOUS.
(a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon any
Subsidiary Guarantor or Agent under this Guaranty or the other Operative
Documents to which a Subsidiary Guarantor is a party shall be in writing and
fixed, mailed or delivered, if to a Subsidiary Guarantor or Agent, at its
respective facsimile number or address set forth below or in the respective
Subsidiary Joinder for such Subsidiary Guarantor (or to such other facsimile
number or address for any party as indicated in any notice given by that party
to the other parties). All such notices and communications shall be effective
(i) when sent by overnight service of recognized standing, on the second
Business Day following the deposit with such service; (ii) when mailed, first
class postage prepaid and addressed as aforesaid through the United States
Postal Service, upon receipt; (iii) when delivered by hand, upon delivery; and
(iv) when faxed, upon confirmation of receipt.
Subsidiary
Guarantor: DSLnet Communications Puerto Rico, Inc.
DSLnet Communications VA, Inc.
Tycho Networks, Inc.
Vector Networks, Inc.
c/o XXX.xxx, Inc.
000 Xxxx Xxxxx Xxxxx
0xx Xxxxx
Xxx Xxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
Telephone: 000-000-0000
Agent VANTAGEPOINT VENTURE PARTNERS III (Q), L.P., as Agent
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
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(b) Payments. Each Subsidiary Guarantor shall make all payments
required hereunder to Agent, or its order, at Agent's office located at the
address set forth in Section 9(a) hereof, or at such other office as Agent may
designate, on demand, in U.S. dollars. If any amounts required to be paid by a
Subsidiary Guarantor under this Guaranty are not paid when due, such Subsidiary
Guarantor shall pay interest on the aggregate, outstanding balance of such
amounts from the date due until those amounts are paid in full at a per annum
rate equal to ten percent (10%).
(c) Expenses . Each Subsidiary Guarantor shall pay on demand (i)
all reasonable fees and expenses, including reasonable attorneys' fees and
expenses, incurred by Agent and Guarantors in connection with the preparation,
execution and delivery of, and the exercise of its duties under, this Guaranty
and the preparation, execution and delivery of amendments and waivers hereunder
and (ii) all reasonable fees and expenses, including reasonable attorneys' fees
and expenses, incurred by Agent and Guarantors in connection with the
enforcement or attempted enforcement of this Guaranty or any of the Guaranteed
Obligations or in preserving any of Agent's and Guarantors' rights and remedies
(including, without limitation, all such fees and expenses incurred in
connection with any "workout" or restructuring affecting the Operative Documents
or the Guaranteed Obligations or any bankruptcy or similar proceeding involving
Subsidiary Guarantor, any other Subsidiary Guarantor, Borrower or any of their
Affiliates).
(d) Waivers, Amendments. This Guaranty may not be amended or
modified, nor may any of its terms be waived, except by written instruments
signed by each Subsidiary Guarantor and Required Guarantors. Each waiver or
consent under any provision hereof shall be effective only in the specific
instances for the purpose for which given. No failure or delay on Agent's or any
Guarantors' part in exercising any right hereunder shall operate as a waiver
thereof or of any other right nor shall any single or partial exercise of any
such right preclude any other further exercise thereof or of any other right.
(e) Assignment. This Guaranty shall be binding upon and inure to
the benefit of Agent, each Guarantor and the Subsidiary Guarantors and their
respective successors and assigns; provided, however, that no Subsidiary
Guarantor may assign or transfer any of its rights and obligations under this
Guaranty without the prior written consent of Required Guarantors, and,
provided, further, that Agent may sell, assign and delegate their respective
rights and obligations hereunder only as permitted by the Reimbursement
Agreement. All references in this Guaranty to any Person shall be deemed to
include all permitted successors and assigns of such Person.
(f) Cumulative Rights, etc. The rights, powers and remedies of
Agent and Guarantors under this Guaranty shall be in addition to all rights,
powers and remedies given to Agent and Guarantors by virtue of any applicable
law, rule or regulation of any governmental authority, the Reimbursement
Agreement, any other Operative Document or any other agreement, all of which
rights, powers, and remedies shall be cumulative and may be exercised
successively or concurrently without impairing Agent's and Guarantors' rights
hereunder. Each Subsidiary Guarantor waives any right to require Agent or
Guarantors to proceed against any Person or to exhaust any Collateral or to
pursue any remedy in Agent's or Guarantors' power.
(g) Payments Free of Taxes, Etc. All payments made by each
Subsidiary Guarantor under this Guaranty shall be made by each Subsidiary
Guarantor free and clear of and without deduction for any and all present and
future taxes, levies, charges, deductions and withholdings. In addition, each
Subsidiary Guarantor shall pay upon demand any stamp or other taxes, levies or
charges of any jurisdiction with respect to the execution, delivery,
registration, performance and enforcement of this Guaranty. If any taxes,
levies, charges or other amounts are required to be withheld from any amounts
payable to Agent, hereunder, the amounts so payable to Agent shall be increased
to the extent necessary to yield to Agent (after payment of all such amounts)
any such amounts payable hereunder in the amounts, specified in this Guaranty.
Upon reasonable request by Agent, each Subsidiary Guarantor shall furnish
evidence satisfactory to Agent that all
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requisite authorizations and approvals by, and notices to and filings with,
governmental authorities and regulatory bodies have been obtained and made and
that all requisite taxes, levies and charges have been paid.
(h) Partial Invalidity. If at any time any provision of this
Guaranty is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Guaranty nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
(i) Joint and Several Obligation. The obligations of the
Subsidiary Guarantors under this Guaranty are joint and several obligations of
each Subsidiary Guarantor and may be freely enforced against each Subsidiary
Guarantor, for the full amount of the Guaranteed Obligations, without regard to
whether enforcement is sought or available against any other Subsidiary
Guarantor.
(j) Governing Law. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA (WITHOUT REFERENCE TO ITS CHOICE OF
LAWS PROVISIONS).
(k) Jury Trial. EACH SUBSIDIARY GUARANTOR, AGENT AND EACH
GUARANTOR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY.
(l) Limitation of Liability. NO CLAIM MAY BE MADE BY ANY
SUBSIDIARY GUARANTOR AGAINST AGENT OR ANY GUARANTOR OR THE MEMBERS, AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES OR ATTORNEYS OF AGENT OR ANY GUARANTOR FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
(WHETHER BASED UPON ANY BREACH OF CONTRACT, TORT, BREACH OF STATUTORY DUTY OR
ANY OTHER THEORY OF LIABILITY) ARISING OUT OF OR RELATED TO THE TRANSACTIONS
CONTEMPLATED BY THIS GUARANTY, OR ANY ACT, OMISSION OR EVENT OCCURRING IN
CONNECTION THEREWITH AND EACH GUARANTOR HEREBY WAIVES, RELEASES AND AGREES NOT
TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT NOW ACCRUED AND
WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
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EXHIBIT F TO SCHEDULE 13D/A
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this Guaranty
to be executed as of the day and year first above written.
DSLNET COMMUNICATIONS PUERTO RICO, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------------
Title: President
-----------------------------------
DSLNET COMMUNICATIONS VA, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------------
Title: President
-----------------------------------
TYCHO NETWORKS, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------------
Title: President
-----------------------------------
VECTOR INTERNET SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------------
Title: President
-----------------------------------
Signature Page to Subsidiary Guaranty
EXHIBIT F TO SCHEDULE 13D/A
DISCLOSURE SCHEDULE
None.
EXHIBIT F TO SCHEDULE 13D/A
ATTACHMENT 1
SUBSIDIARY JOINDER
THIS SUBSIDIARY JOINDER (this "Agreement"), dated as of __________,
____, is executed by [NEW SUBSIDIARY], a ___________ [corporation] [partnership]
[etc.] ("New Subsidiary"), in favor of VANTAGEPOINT VENTURE PARTNERS III (Q),
L.P. as administrative agent for itself and the other Guarantors which are or
may become parties to the Reimbursement Agreement (the "Agent").
RECITALS
A. Reference is made to that certain Revolving Credit and Term
Loan Agreement, dated as of ________, 2002 (the "CREDIT AGREEMENT"), by and
between Fleet National Bank ("LENDER") and XXX.xxx, Inc. ("BORROWER").
B. Each Guarantor has entered into a Guaranty, dated as of
________, 2002 (the "CREDIT GUARANTY"), to guaranty certain of the obligations
of Borrower under the Credit Agreement.
C. In order to induce Guarantors to enter into the Credit
Guaranty, (i) Borrower entered into a Reimbursement Agreement, dated as of
________, 2002 (the "REIMBURSEMENT AGREEMENT") with Agent and Guarantors, (ii)
certain of Borrower's subsidiaries ("SUBSIDIARY GUARANTORS") entered into a
Subsidiary Guaranty, dated as of __________, 2002 (the "GUARANTY"), to guaranty
Borrower's obligations to Agent and Guarantors under the Reimbursement Agreement
and (iii) Borrower and Subsidiary Guarantors entered into a Security Agreement,
dated as of _______, 2002 (the "SECURITY AGREEMENT"), to secure their respective
obligations under the Reimbursement Agreement and the Guaranty.
D. New Subsidiary is a [new] Subsidiary of Borrower and expects
to derive substantial direct and indirect benefit from the transactions
contemplated by the Reimbursement Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, New Subsidiary hereby agrees with Agent and each Guarantor, as
follows:
1. DEFINITIONS AND INTERPRETATION. Unless otherwise
defined herein, all capitalized terms used herein and defined in the Guaranty
shall have the respective meanings given to those terms in the Guaranty. New
Subsidiary acknowledges receipt of copies of the Guaranty, the Security
Agreement, the Credit Agreement and the other Operative Documents.
2. REPRESENTATIONS AND WARRANTIES. On and as of the date
of this Agreement (the "Effective Date") and for the benefit of Agent, New
Subsidiary hereby makes each of the representations and warranties made by each
Subsidiary Guarantor in the Guaranty.
3. AGREEMENT TO BE BOUND. New Subsidiary agrees that, on
and as of the Effective Date, it shall become a Subsidiary Guarantor under the
Guaranty and a Grantor (as such term is defined in the Security Agreement) under
the Security Agreement and shall be bound by all the provisions of the Guaranty
and the Security Agreement to the same extent as if New Subsidiary had executed
the Guaranty and the Security Agreement on the Closing Date.
4. WAIVER. Without limiting the generality of the
waivers in the Guaranty, New Subsidiary specifically agrees to be bound by the
Guaranty and the Security Agreement and waives any right to notice of acceptance
of its execution of this Agreement and of its agreement to be bound by the
Guaranty and the Security Agreement.
5. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of California.
[Remainder of page intentionally left blank]
-2-
EXHIBIT F TO SCHEDULE 13D/A
IN WITNESS WHEREOF, New Subsidiary has caused this Agreement to be
executed by its duly authorized officer.
[NEW SUBSIDIARY]
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Address:
[---------------------------------]
[---------------------------------]
[---------------------------------]
Attn:
------------------------------
Telephone:
-------------------------
Facsimile:
-------------------------