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EXHIBIT 10.6
$1,200,000 Committed Amount
$400,000 Uncommitted Amount
CREDIT AGREEMENT
between
AXISTEL COMMUNICATIONS, INC.,
NOVO NETWORKS OPERATING CORP.,
NOVO GLOBAL SERVICES, INC.,
NOVO NETWORKS INTERNATIONAL SERVICES, INC.,
E.VOLVE TECHNOLOGY GROUP, INC.
as Borrowers,
NOVO NETWORKS (UK) LTD.
WEB2DIAL COMMUNICATIONS, INC.
SERVICIOS PROFESIONALES J.R.J.S., S.A. DE C.V.
NOVO NETWORKS METRO SERVICES, INC.
NOVO NETWORKS MEDIA SERVICES, INC.
NOVO NETWORKS METRO SERVICES (VIRGINIA), INC.
E.VOLVE TECHNOLOGY GROUP DE MEXICO, S.A. DE C.V.
as Guarantors,
and
NOVO NETWORKS, INC.
as Lender
Dated as of August __, 2001
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TABLE OF CONTENTS
Page
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Section 1. Definitions and Principles of Construction............................................. 2
1.1 Defined Terms.......................................................................... 2
1.2 Principles of Construction............................................................. 7
Section 2. Xxxxxx and Terms of Credit............................................................. 7
2.1 The Loans.............................................................................. 7
2.2 Notice of Borrowing.................................................................... 8
2.3 Amount of Borrowings................................................................... 8
2.4 Disbursement of Funds.................................................................. 8
2.5 Evidence of Obligations; Note.......................................................... 8
2.6 Interest............................................................................... 9
2.7 Voluntary Termination of Unutilized Commitment......................................... 9
2.8 Nature of Obligations.................................................................. 9
Section 3. Scheduled Repayment; Prepayments; Net Payments......................................... 9
3.1 Scheduled Repayment.................................................................... 9
3.2 Voluntary Prepayments.................................................................. 9
3.3 Mandatory Prepayments; Commitment Termination.......................................... 9
3.4 Method and Place of Payment............................................................ 10
3.5 Net Payments........................................................................... 10
Section 4. Conditions Precedent................................................................... 11
4.1 Conditions Precedent to the Initial Borrowing.......................................... 11
4.2 Conditions Precedent to All Loans Other than the Initial Borrowing..................... 12
Section 5. Representations, Warranties and Agreements............................................. 13
5.1 Legal Status........................................................................... 13
5.2 Power and Authority.................................................................... 13
5.3 No Violation........................................................................... 14
5.4 Governmental Approvals................................................................. 14
5.5 Liens.................................................................................. 14
5.6 Litigation............................................................................. 14
5.7 Material Adverse Change................................................................ 14
5.8 Accounts............................................................................... 14
5.9 Patents, Licenses, Franchises and Formulas............................................. 14
5.10 Use of Proceeds........................................................................ 15
5.11 Employee Benefit Plans................................................................. 15
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5.12 Labor Relations........................................................................ 15
5.13 Subsidiaries........................................................................... 15
5.14 True and Complete Disclosure........................................................... 15
5.15 Investment Company Act................................................................. 15
5.16 Insurance.............................................................................. 16
Section 6. Affirmative Covenants.................................................................. 16
6.1 Information Covenants.................................................................. 16
6.2 Books and Records...................................................................... 17
6.3 Maintenance of Properties and Insurance................................................ 17
6.4 Maintenance of Existence; Corporate Franchises......................................... 17
6.5 Compliance with Law.................................................................... 17
6.6 ERISA.................................................................................. 17
6.7 Performance of Obligations............................................................. 17
6.8 Taxes.................................................................................. 18
6.9 Use of Proceeds........................................................................ 18
6.10 Cash Concentration Requirements........................................................ 18
6.11 Compliance with the Budget............................................................. 18
6.12 Further Assurances..................................................................... 18
Section 7. Negative Covenants..................................................................... 18
7.1 Liens.................................................................................. 19
7.2 Dividends.............................................................................. 19
7.3 Indebtedness........................................................................... 19
7.4 Capital Expenditures................................................................... 19
7.5 Advances, Investments and Loans........................................................ 19
7.6 Consolidations, Mergers, Purchases, Sales of Assets, etc............................... 19
7.7 Limitations on Modifications of Certain Agreements..................................... 19
7.8 ERISA.................................................................................. 20
7.9 Nature of Business..................................................................... 20
7.10 Chapter 11 Claims...................................................................... 20
7.11 Use of Funds in Existing Accounts...................................................... 20
Section 8. Events of Default...................................................................... 20
8.1 Payments............................................................................... 20
8.2 Representations........................................................................ 20
8.3 Notice of Event of Default; Negative Covenants......................................... 20
8.4 Covenants.............................................................................. 20
8.5 Dismissal; Conversion.................................................................. 21
8.6 Lifting of the Automatic Stay.......................................................... 21
8.7 Credit Documents....................................................................... 21
8.8 The Orders............................................................................. 21
8.9 Chapter 11 Plan........................................................................ 21
8.10 Judgments.............................................................................. 21
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8.11 Change of Control...................................................................... 21
Section 9. Guaranty of Obligations................................................................ 22
9.1 Guaranty............................................................................... 22
9.2 No Impairment of Guaranty.............................................................. 23
9.3 Waiver of Subrogation.................................................................. 23
9.4 Borrowing Agency Provisions............................................................ 23
Section 10. Miscellaneous.......................................................................... 24
10.1 Payment of Expenses, etc............................................................... 24
10.2 Right of Setoff........................................................................ 25
10.3 Notices................................................................................ 25
10.4 Benefit of Agreement................................................................... 25
10.5 Assignment of the Loans, etc........................................................... 25
10.6 No Waiver; Remedies Cumulative......................................................... 26
10.7 Calculations; Computations............................................................. 26
10.8 Governing Law; Submission to Jurisdiction; Venue....................................... 26
10.9 Usury.................................................................................. 26
10.10 Counterparts........................................................................... 27
10.11 Headings Descriptive................................................................... 27
10.12 Amendment or Waiver.................................................................... 27
10.13 Entire Agreement....................................................................... 27
10.14 Survival............................................................................... 27
10.15 Waiver of Trial by Jury................................................................ 27
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CREDIT & GUARANTY AGREEMENT
CREDIT & GUARANTY AGREEMENT, dated as of August ___, 2001 among AXISTEL
COMMUNICATIONS, INC., a corporation organized and existing under the laws of
Delaware and a debtor and debtor-in-possession ("AxisTel"), NOVO NETWORKS GLOBAL
SERVICES, INC., a corporation organized and existing under the laws of Delaware
and a debtor and debtor-in-possession ("NNGS"), NOVO NETWORKS INTERNATIONAL
SERVICES, INC., a corporation organized and existing under the laws of Delaware
and a debtor and debtor-in-possession ("NNIS"), and E.VOLVE TECHNOLOGY GROUP,
INC., a corporation organized and existing under the laws of Nevada and a debtor
and debtor-in-possession ("e.Volve"), NOVO NETWORKS OPERATING CORP., a
corporation organized and existing under the laws of Delaware and a debtor and
debtor-in-possession ("NNOC" and collectively with AxisTel, NNGS, NNIS and
e.Volve, the "Borrowers"), NOVO NETWORKS (UK) LTD., a corporation organized and
existing under the laws of the United Kingdom ("NNL"), WEB2DIAL COMMUNICATIONS,
INC., a corporation organized and existing under the laws of Delaware
("Web2Dial"), SERVICIOS PROFESIONALES J.R.J.S., S.A. DE C.V., a corporation
organized and existing under the laws of Mexico ("Servicios"), NOVO NETWORKS
METRO SERVICES, INC., a corporation organized and existing under the laws of
Delaware ("NNMS"), NOVO NETWORKS MEDIA SERVICES, INC., a corporation organized
and existing under the laws of Delaware ("NNMedia"), NOVO NETWORKS METRO
SERVICES (VIRGINIA), INC., a corporation organized and existing under the laws
of Virginia ("NNMSV"), and E.VOLVE TECHNOLOGY GROUP DE MEXICO, S.A. DE C.V., a
corporation organized and existing under the laws of Mexico ("EGM" and
collectively with NNL, Web2Dial, Servicios, NNMS, NNMedia and NNMSV, the
"Guarantors"), and NOVO NETWORKS, INC., a corporation organized and existing
under the laws of Delaware (the "Lender").
WITNESSETH:
WHEREAS, on July 30, 2001 (the "Filing Date"), each of the Borrowers
filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code
with the Bankruptcy Court (as hereinafter defined) thereby commencing its
chapter 11 Case (the "Cases") and has continued in the possession of its assets
and in the management of its business pursuant to Sections 1107 and 1108 of the
Bankruptcy Code;
WHEREAS, the Borrowers have requested authorization from the Bankruptcy
Court to obtain post-petition financing pursuant to Section 364 of the
Bankruptcy Code; and
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lender is willing to make available to the Borrowers the credit facility
provided for herein, the due and punctual payment of which is to be guaranteed
by the Guarantors;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
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Section 1. Definitions and Principles of Construction.
1.1 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 Loan" shall have the meaning set forth in Section 2.1.
"Agreement" shall mean this Credit & Guaranty Agreement, as modified,
supplemented or amended from time to time.
"Amended Budget" shall have the meaning set forth in Section 4.2(a).
"Bankruptcy Code" shall mean title 11 of the United States Code, 11
U.S.C.ss.ss.101, et seq., as amended from time to time.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
the District of Delaware or any other court having jurisdiction over the Cases
from time to time.
"Borrowers" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of a Loan pursuant hereto.
"Borrowing Date" shall mean a date occurring on or after the Effective
Date on which a Borrowing hereunder occurs.
"Budget" shall have the meaning set forth in Section 4.1(i).
"Business Day" shall mean for all purposes, any day except Saturday,
Sunday and any day which shall be in Dallas, Texas a legal holiday or a day on
which banking institutions are authorized or required by Law or other government
action to close in any such city.
"Cases" shall have the meaning set forth in the Recitals.
"Carve-Out" shall have the meaning provided in the Orders.
"Cash Receipts" shall mean all cash (including, without limitation,
cash received in respect of checks, drafts, bank credits and other similar
instruments, and receivables) received by any of the Borrowers from any source.
"Change of Control" shall mean the Borrowers shall cease to own,
directly or indirectly, 100% of the issued and outstanding capital stock of each
of the Guarantors.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
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"Collateral" shall mean the "Collateral" under the Security and Pledge
Agreement.
"Commitment" shall mean $1,200,000, and if requested by the Borrower
and approved by the Lender in its sole and absolute discretion as set forth in
Section 2.1 hereof, up to an additional $400,000 to be applied pursuant to the
Amended Budget as therein specified.
"Consummation Date" shall mean the date of the substantial consummation
(as defined in Section 1101 of the Bankruptcy Code and which for purposes of
this Agreement shall be no later than the Effective Date) of a Reorganization
Plan of any of the Borrowers that is confirmed pursuant to an order of the
Bankruptcy Court.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, 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 (x) for the
purchase or payment of any such primary obligation or (y) 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,
securities or services primarily for the purpose of assuring the holder 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 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 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.
"Credit Documents" shall mean and include (i) this Agreement, (ii) the
Note, (iii) the Security and Pledge Agreement, and (iv) all other documents and
instruments executed and delivered by the Borrowers or the Guarantors in
connection with any of the foregoing.
"Credit Parties" shall mean the Borrowers and the Guarantors.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Designated Borrower" shall mean Novo Networks Operating Corp., a
Delaware corporation.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Effective Date" shall mean the date on which this Agreement is
executed and delivered by the Borrowers, the Guarantors and the Lender.
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"Employment Benefits Plan" shall mean any "employee benefit plan" as
defined in Section 3(3) of ERISA subject to Title I of ERISA or any "plan"
subject to Section 4975 of the Code.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default" shall have the meaning set forth in Section 8.
"Existing Accounts" shall have the meaning set forth in Section 5.8.
"Final Order" shall have the meaning set forth in Section 4.2(b).
"Filing Date" shall have the meaning set forth in the Recitals.
"GAAP" shall mean generally accepted accounting principles in the
United States, from time to time, consistently applied during a relevant period.
"Governmental Approval" shall mean any authorization, approval,
consent, license, concession, ruling, permit, tariff, rate, certification,
order, validation, exemption, waiver or variance of or from any Governmental
Authority, or any registration, filing or recording with, or any notification
to, any Governmental Authority.
"Governmental Authority" shall mean any administrative department,
agency, commission, bureau, board, regulatory authority, instrumentality,
corporation or other governmental body, entity, judicial or administrative body
or court (including, without limitation, banking and taxing authorities), of, or
owned or controlled by the United States, any state thereof or any other
jurisdiction or any political subdivision of any of the foregoing.
"Guarantors" shall have the meaning provided in the first paragraph of
this Agreement.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person (x) evidenced by any notes, bonds, debentures or similar instruments made
or issued by such Person, (y) for borrowed money or (z) for the deferred
purchase price of property or services, (ii) the face amount of all letters of
credit issued for the account of such Person and all drafts drawn thereunder,
(iii) all liabilities secured by any Lien on any property owned by such Person,
whether or not such liabilities have been assumed by such Person, (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations and liabilities of such Person arising under
or pursuant to any interest rate `swap', `cap', `collar' or other interest rate
protection arrangement, and (vi) all Contingent Obligations of such Person.
"Initial Borrowing" shall mean the initial Borrowing hereunder.
"Initial Borrowing Date" shall mean the date on which the Initial
Borrowing occurs.
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"Interest Margin" shall mean 3.0% per annum.
"Interim Order" shall have the meaning set forth in Section 4.1(b).
"Law" shall mean any constitution, treaty, convention, statute, law,
code, act, ordinance, decree, order, injunction, rule, regulation, resolution,
guideline, interpretation, direction, policy, restriction, request (whether or
not in any such case having the force of law), or judicial, administrative or
arbitral decision.
"Lender" shall have the meaning provided in the first paragraph of this
Agreement, and shall include any Person to whom the Lender assigns all or any
portion of its interest as Lender in respect of any Loan.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under any
recording or notice statute, and any lease having substantially the same effect
as any of the foregoing).
"Loan" shall have the meaning set forth in Section 2.1.
"Material Adverse Effect" shall mean any material adverse effect (other
than an orderly liquidation of the Debtors approved by the Lender and other than
those which customarily occur as a result of events leading up to and following
the commencement of a case under chapter 11 of the Bankruptcy Code and the
commencement of the Cases) on (i) the condition (financial or otherwise),
business, operations, assets, revenues, properties or prospects of any Credit
Party, or any material impairment of the value of any Credit Party or the
ability of any Credit Party to conduct its business as conducted on the date
hereof, or (ii) the ability of any Credit Party to perform any of its respective
obligations under the Credit Documents, or (iii) the validity or enforceability
of any of the Credit Documents or the rights or remedies of the Lender
thereunder.
"Maturity Date" shall mean November 30, 2001, unless extended by
written agreement of the Lender and each Credit Party.
"Net Proceeds" shall mean, in respect of any sale of assets outside the
ordinary course of the Borrowers' business, the proceeds of such sale after the
payment of or reservation for expenses that are directly related to (or the need
for which arises as a result of) the transaction of sale, including, but not
limited to, related severance costs, taxes payable, brokerage commissions,
professional expenses, other similar costs that are directly related to the sale
and the amount secured by valid and perfected Liens, if any, that are senior to
the Liens on such assets held by the Lender.
"Note" shall have the meaning set forth in Section 2.5(a).
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"Notice of Borrowing" shall have the meaning set forth in Section 2.2.
"Orders" shall mean the Interim Order and the Final Order.
"Obligations" shall mean all amounts owing to the Lender pursuant to
the terms of this Agreement or any other Credit Document (including, without
limitation, principal, interest, fees, expenses and indemnities).
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Liens" shall have the meaning set forth in Section 7.1.
"Person" shall mean any individual, partnership, limited partnership,
joint venture, firm, corporation, limited liability company, association, trust
or other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrowers or a Subsidiary of the Borrowers, and each such
plan for the five year period immediately following the latest date on which the
Borrowers, or a Subsidiary of the Borrowers maintained, contributed to or had an
obligation to contribute to such plan.
"Prepayment Date" shall mean the thirty-seventh day following the entry
of the Interim Order by the Bankruptcy Court if the Final Order has not been
entered by the Bankruptcy Court prior to the expiration of such thirty (30) day
period.
"Prime Rate" shall mean the rate which The Chase Manhattan Bank
announces from time to time as its prime lending rate, the Prime Rate to change
when and as such prime lending rate changes.
"Reorganization Plan" shall mean a chapter 11 plan in any of the Cases.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Responsible Officer" shall mean, in the case of each Borrower, its
chief executive officer.
"Restricted Account" shall have the meaning set forth in Section
6.10(b).
"Security and Pledge Agreement" shall have the meaning set forth in
Section 4.1(g).
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"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Superpriority Claim" shall mean a claim against any Borrower in any of
the Cases which is an administrative expense claim having priority over any or
all administrative expenses of the kind specified in Sections 503(b) or 507(b)
of the Bankruptcy Code.
"Taxes" shall have the meaning set forth in Section 3.5.
"Termination Date" shall mean the earlier to occur of (i) the
Prepayment Date, (ii) the Maturity Date, (iii) the Consummation Date, (iv) the
date of consummation of a sale of all or substantially all of the capital stock
or assets of any Borrower or Guarantor, as the case may be, unless such sale has
been approved in writing by the Lender in advance and (v) the date on which the
maturity of the Loans shall be accelerated as a result of the occurrence of an
Event of Default and the Commitment shall be terminated in accordance with the
terms hereof.
"Unfunded Current Liability" of any Plan shall mean the amount, if any,
by which the value of the accumulated plan benefits under the Plan determined on
a plan termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).
"United States" and "U.S." shall each mean the United States of
America.
"Unutilized Commitment" shall mean, at any time, the Commitment of the
Lender at such time less the aggregate principal amount of all Loans theretofore
made by the Lender hereunder.
1.2 Principles of Construction. All references to sections,
schedules and exhibits are to sections, schedules and exhibits in or to this
Agreement unless otherwise specified. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement.
Section 2. Amount and Terms of Credit.
2.1 The Loans. Subject to and upon the terms and conditions set
forth herein, the Lender agrees, at any time and from time to time prior to the
Termination Date, to make loans (each, a "Loan"; and together with all other
Loans hereunder, the "Loans") to the
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Borrowers, which Loans shall not exceed, in aggregate principal amount, the
Commitment and shall be available to the Borrower as follows: (i) up to
$1,200,000 in Loans from the date hereof to the Termination Date, and (ii) if
requested by the Borrower in writing and approved in writing by the Lender in
its sole and absolute discretion, up to an aggregate of $400,000 in Loans under
the Amended Budget (each an "Additional Loan," and collectively, the "Additional
Loans"). The Loans are available only on the terms and subject to the conditions
specified hereunder, and once repaid, in full or in part, may not be reborrowed
by the Borrowers in whole or in part.
2.2 Notice of Borrowing. Whenever the Borrowers desire to make a
Borrowing hereunder, they shall give the Lender not less than one Business Day
prior notice thereof; provided that such notice shall be deemed to have been
given on a certain day only if given before 12:00 noon (Dallas, Texas time) on
such day. Each such notice (each, a "Notice of Borrowing") shall be irrevocable
and shall be given by the Borrowers in the form of Exhibit A, appropriately
completed to specify: (a) the principal amount of the Loan to be made pursuant
to such Borrowing; and (b) the date of such Borrowing (which shall be a Business
Day).
2.3 Amount of Borrowings.
(a) The principal amount of each Borrowing pursuant hereto shall
be in an amount not less than $10,000, and in integral multiples of $1,000 in
excess thereof.
(b) The principal amount of each Borrowing pursuant hereto shall
not exceed the Unutilized Commitment.
2.4 Disbursement of Funds. Subject to the terms and subject to the
conditions hereof, no later than 12:00 Noon (Dallas, Texas time) on each
Borrowing Date, the Lender shall make available the amount of the requested
Loans to the Borrower by deposit to [identify account], or to such other account
as the Borrowers shall have requested pursuant to a written notice to the Lender
not later than one Business Day prior to the relevant Borrowing Date.
2.5 Evidence of Obligations; Note.
(a) The Borrowers' obligation to pay the principal of, and
interest on, the Loans shall be evidenced by a promissory note duly executed and
delivered by the Borrowers substantially in the form of Exhibit B, with blanks
appropriately completed in conformity herewith (the "Note"). The Note issued to
the Lender shall (i) be dated the Initial Borrowing Date, (ii) be payable to the
order of the Lender, (iii) be in a stated principal amount equal to $1,600,000,
(iv) be repaid to the extent of the aggregate principal amount of the Borrowings
hereunder; (v) provide for repayment of principal as provided in Section 3.1,
(vi) bear interest as provided in Section 2.6 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(b) The Lender will note on its internal records the amount of the
indebtedness of the Borrowers to the Lender as a result of the Loans, including
the amounts of principal, interest and other amounts payable and paid to the
Lender from time to time under this Agreement and the Note. Such internal
records shall constitute prima facie evidence of the
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existence and amounts of the Loans and other Obligations therein noted;
provided, however, that the failure of the Lender to make such notations, or any
error therein, shall not in any manner affect the obligations of the Borrowers
to repay or pay the Loans in accordance with the terms of this Agreement.
2.6 Interest.
(a) The Borrowers, jointly and severally, agree to pay interest as
set forth in clause (c) below in respect of the unpaid principal amount of each
Loan from the date the proceeds thereof are made available to the Borrowers
until the maturity thereof (whether by acceleration or otherwise), at a rate per
annum which shall be equal to the sum of (i) the Prime Rate in effect from time
to time, plus (ii) the Interest Margin.
(b) Overdue principal and, to the extent permitted by Xxx, overdue
interest in respect of each Loan and any other overdue amount payable by the
Borrowers hereunder or under any other Credit Document shall bear interest at a
rate per annum equal to the sum of (i) the Prime Rate in effect from time to
time, plus (ii) 5%.
(c) Accrued (and theretofore unpaid) interest shall be payable in
respect of each Loan on (i) the Termination Date, (ii) to the extent set forth
in Section 3.3, on any prepayment, and (iii) at any time on demand after the
Termination Date.
2.7 Voluntary Termination of Unutilized Commitment. The Borrowers
shall have the right upon the delivery of written notice to the Lender to
terminate the Unutilized Commitment in whole or in part.
2.8 Nature of Obligations. Notwithstanding anything herein to the
contrary, each of the Obligations of the Borrower hereunder and under the other
Credit Documents are joint and several, and each Borrower hereby acknowledges
and agrees to each of such joint and several obligations.
Section 3. Scheduled Repayment; Prepayments; Net Payments.
3.1 Scheduled Repayment. On the Termination Date, all outstanding
principal of the Loans, together with all accrued and unpaid interest thereon,
shall be paid in cash and the Commitment shall be terminated without the need of
any further action or writing.
3.2 Voluntary Prepayments. The Borrowers shall have the right to
prepay the Loans, without premium or penalty, in whole or in part, at any time
and from time to time.
3.3 Mandatory Prepayments; Commitment Termination.
(a) On the date of receipt of any Net Proceeds from the sale of
any assets of any of the Borrowers, the Borrowers shall pay to the Lender an
amount equal to such Net Proceeds, which amount shall be applied to the
Obligations as follows: (A) first, to the payment of accrued
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and unpaid interest on the Loans, and (B) second, to the prepayment of the
principal amount of the Loans.
(b) If on the last day of any month, commencing on August 31,
2001, the aggregate cash of the Borrowers as of such date (net of float),
whether held in the Existing Accounts or in the Restricted Account, as the case
may be, shall exceed the amount of aggregate cash of the Borrowers contemplated
in the Budget or the Amended Budget, as the case may be, for such month, the
Borrowers shall pay to the Lender an amount equal to 100% of the excess thereof,
unless the Borrowers provide a certificate to the Lender certifying that the
excess amount is the result of early collection of receivables or deferred
expenses contemplated in the Budget or the Amended Budget, as the case may be,
in which case, the prepayment shall be in an amount equal 100% of the excess
over the amount contemplated by the Budget or the Amended Budget, as the case
may be, if any. Such prepayment amount shall be applied to the Obligations as
follows: (A) first, to the payment of accrued and unpaid interest on the Loans,
and (B) second, to the prepayment of the principal amount of the Loans.
3.4 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or the Note shall be made to
the Lender not later than 12:00 Noon (Dallas, Texas time) on the date when due
and shall be made in Dollars in immediately available funds at such place as the
Lender shall from time to time specify in writing to the Borrowers. Whenever any
payment to be made hereunder or under the Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall continue to accrue and be payable on the date of such payment.
3.5 Net Payments. All payments made by the Borrowers hereunder or
under the Note will be made without setoff, counterclaim or other defense of any
kind. All such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income or
profits of the Lender pursuant to the laws of the jurisdiction in which it is
organized or the jurisdiction in which the principal office or applicable
lending office of the Lender is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect thereto (all
such non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as "Taxes"). If any Taxes are so levied
or imposed, the Borrowers agree to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under the Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrowers agree to reimburse the Lender, upon the
written request of the Lender, for taxes imposed on or measured by the net
income or profits of the Lender pursuant to the laws of the jurisdiction in
which the principal office or applicable lending office of the Lender is located
or under the laws of any political subdivision or taxing authority of any such
jurisdiction in which the principal
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office or applicable lending office of the Lender is located and for any
withholding of income or similar taxes as the Lender shall determine are payable
by, or withheld from, the Lender in respect of such amounts so paid to or on
behalf of the Lender pursuant to the preceding sentence and in respect of any
amounts paid to or on behalf of the Lender pursuant to this sentence. The
Borrowers will furnish to the Lender within 45 days after the date the payment
of any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrowers. The Borrowers, jointly and severally,
agree to indemnify and hold harmless the Lender, and to reimburse the Lender
upon its written request, for the amount of any Taxes so levied or imposed and
paid by the Lender.
Section 4. Conditions Precedent.
4.1 Conditions Precedent to the Initial Borrowing. The obligation
of the Lender to make the initial Loan hereunder is subject, at the time of such
Initial Borrowing, to the satisfaction of the following conditions:
(a) Execution of Agreement; Note. The Effective Date shall have
occurred and there shall have been delivered to the Lender the appropriate Note
duly executed by the Borrowers in the amount, with the maturity and as otherwise
provided herein.
(b) Interim Order. An interim order in the form of Exhibit C
hereto, as may be modified only with the approval of the Lender, (the "Interim
Order") shall have been entered by the Bankruptcy Court (which Interim Order
shall have been entered no later than 10 Business Days after the commencement of
the Cases), shall remain in full force and effect, and shall not have been
stayed, reversed, amended, or modified in any respect; and, if the Interim Order
is the subject of a pending appeal in any respect, neither the making of such
Loans nor the performance by the Borrowers of any of their obligations hereunder
or under the Credit Documents or under any other instrument or agreement
referred to herein shall be the subject of a presently effective stay pending
appeal.
(c) First Day Orders. All of the "first day orders" entered by the
Bankruptcy Court at or around the commencement of the Cases shall be
satisfactory in form and substance to the Lender.
(d) No Default; Representations and Warranties. At the time of
such Borrowing and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in any other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Borrowing (except for
representations or warranties made expressly as of a given date, which shall
continue to be true and correct in all material respects as of such given date).
(e) Notice of Borrowing. The Lender shall have received a Notice
of Borrowing with respect to the Loans to be made on the Initial Borrowing Date,
which Notice of Borrowing shall be given in accordance with the requirements of
Section 2.2 hereof and shall not exceed the amount of the Initial Borrowing.
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(f) Proceedings. All corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated in
this Agreement and the other Credit Documents shall be satisfactory in form and
substance to the Lender, and the Lender shall have received all information and
certified copies of all documents and papers and Governmental Approvals, if any,
which the Lender reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate, or
Governmental Authorities, as the case may be.
(g) Security and Pledge Agreement. The Borrowers shall have duly
authorized, executed and delivered a Security and Pledge Agreement substantially
in the form of Exhibit D (as modified, supplemented or amended from time to
time, the "Security and Pledge Agreement").
(h) Opinion of Borrowers' Counsel. The Lender shall have received
from counsel to the Borrowers an opinion addressed to the Lender and dated the
Initial Borrowing Date covering the matters set forth in Exhibit E and such
additional matters incident to the transactions contemplated herein as the
Lender may reasonably request.
(i) Budget. The Lender shall have received from the Borrowers a
budget substantially in the form of Exhibit F and in any event satisfactory in
form and substance to the Lender (the "Budget"). The Budget shall set forth in
reasonable detail (i) the Borrowers' anticipated Cash Receipts and disbursements
for the period through the Maturity Date and (ii) the anticipated uses of the
Commitment.
(j) Litigation. No litigation, action, suit, investigation, claim
or proceeding shall be pending or threatened with respect to this Agreement or
any other Credit Document, the transactions contemplated hereby or thereby.
(k) No Material Adverse Change. No material adverse change shall
have occurred since July 30, 2001 in the condition (financial or otherwise),
business, operations, assets, revenues, properties or prospects of any of the
Credit Parties, and the Lender shall not have become aware of any facts or
circumstances not previously known by it which the Lender shall reasonably
determine has, or could reasonably be expected to have, a Material Adverse
Effect.
4.2 Conditions Precedent to All Loans Other than the Initial
Borrowing. The obligation of the Lender to make Loans hereunder other than the
Initial Borrowing is subject, at the time of such Loans, to the satisfaction of
the conditions specified in (c) through (e) below, and with respect to any
Additional Loans, the Lender may make such Additional Loans subject to the
satisfaction of the conditions specified in (a) through (e) below:
(a) Amended Budget. No later than one Business Day prior to the
proposed Borrowing Date for any such Additional Loan, the Lender shall have
received from the Borrowers a modified or amended Budget, satisfactory in form
and substance to the Lender in its sole and absolute discretion (the "Amended
Budget"), setting forth the use of proceeds for such Additional Loans.
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(b) Final Order. No later than thirty-seven (37) days after the
date of entry of the Interim Order, an order in form and substance satisfactory
to the Lender in its sole and absolute discretion authorizing Additional Loans
in accordance with this Agreement (the "Final Order") shall have been entered by
the Bankruptcy Court, which order shall be in full force and effect, and shall
not have been stayed, reversed, amended, or modified in any respect; and, if the
Final Order is the subject of a pending appeal in any respect, neither the
making of such Loans nor the performance by the Borrowers of any of their
obligations hereunder or under the Credit Documents or under any other
instrument or agreement referred to herein shall be the subject of a presently
effective stay pending appeal.
(c) No Default; Representations and Warranties. At the time of the
Borrowing and also after giving effect thereto, (i) there shall exist no Default
or Event of Default and (ii) all representations and warranties contained herein
and in the other Credit Documents shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Borrowing (except for representations or
warranties made expressly as of a given date, which shall continue to be true
and correct in all material respects as of such given date).
(d) No Material Adverse Change. No material adverse change shall
have occurred since the immediate preceding Borrowing Date, in the condition
(financial or otherwise), business, operations, assets, revenues, properties or
prospects of any of the Credit Parties, and the Lender shall not have become
aware of any facts or circumstances not previously known by it, which the Lender
shall reasonably determine has, or could reasonably be expected to have, a
Material Adverse Effect.
(e) Notice of Borrowing. The Lender shall have received a Notice
of Borrowing with respect to the Additional Loans to be made on such Borrowing
Date, which Notice of Borrowing shall be given in accordance with the
requirements of Section 2.2 hereof.
The request by any Borrower for, and the acceptance by any Borrower of,
each extension of credit hereunder shall be deemed to be a representation and
warranty by each Borrower that the conditions specified in this Section 4.2 have
been satisfied or waived at that time.
Section 5. Representations, Warranties and Agreements.
In order to induce the Lender to enter into this Agreement and to make
the Loans, each Borrower, jointly and severally, hereby makes the following
representations, warranties and agreements as of the date hereof, each of which
shall survive the execution and delivery of this Agreement and the Note and the
making of the Loans.
5.1 Legal Status. Each of the Borrowers is a duly organized and
validly existing corporation in good standing under the laws of the jurisdiction
of its incorporation. Each of the Borrowers has the power and authority to own
its property and assets, transact the business in which it is engaged, do all
things necessary or appropriate in respect of the business in which it is
engaged, and consummate the transactions contemplated by the Credit Documents.
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5.2 Power and Authority. Each of the Borrowers has the power and
authority to execute, deliver and perform the terms and provisions of each of
the Credit Documents to which it is party and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of each such
Credit Document. Each of the Borrowers has duly executed and delivered this
Agreement, and this Agreement constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws relating to or limiting creditors' rights
generally or by general equity principles. Each of the Borrowers has duly
executed and delivered each of the Credit Documents to which it is party, and
each such Credit Document, constitutes, its legal, valid and binding obligation
enforceable in accordance with its terms.
5.3 No Violation. Neither the execution, delivery or performance
by any Borrower of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, nor the use of the proceeds of the
Loans as contemplated herein, will contravene any material provision of any Law.
5.4 Governmental Approvals. No Governmental Approval (except as
have been obtained or made and are in full force and effect), is required to
authorize, or is required in connection with (i) the execution, delivery and
performance by any Borrower of any Credit Document to which it is a party or
(ii) the legality, validity, binding effect or enforceability against any
Borrower of any such Credit Document.
5.5 Liens. Except as permitted by Section 7.1, there are no Liens
of any nature whatsoever on any assets of any of the Borrowers. No Borrower is
party to any contract, agreement, lease or instrument the performance of which,
either unconditionally or upon the happening of an event, will result in or
require the creation of a Lien on any asset of any Borrower or otherwise result
in a violation of this Agreement other than the Liens granted to the Lender
pursuant to the Credit Documents.
5.6 Litigation. There is no litigation, action, suit,
investigation, claim or proceeding pending or threatened with respect to (i)
this Agreement or any other Credit Document or (ii) the transactions
contemplated hereby or thereby.
5.7 Material Adverse Change. Nothing has occurred, or has been
disclosed to the Lender by any of the Borrowers since the Filing Date, which
would indicate that a Material Adverse Change has occurred.
5.8 Accounts. Other than the accounts listed on Schedule 5.8
hereto (the "Existing Accounts"), the Borrowers have no other bank accounts or
similar arrangements with any Person.
5.9 Patents, Licenses, Franchises and Formulas.
(a) Each Borrower owns all the patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises and formulas, or
rights with respect to the
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foregoing, and has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its respective business,
without any known conflict with the rights of others which, or the failure to
obtain which, as the case may be, could result in a Material Adverse Effect.
(b) Without limiting the foregoing, the Borrowers own all of the
right, title and interest in the Collateral described in the Security and Pledge
Agreement, without any conflict with the rights of any other Person and has not
assigned, licensed, transferred, conveyed, pledged, hypothecated or granted a
security interest in such Collateral to any Person other than the Lender, except
for Permitted Liens. All of the Collateral described therein has been to the
extent indicated in the Security and Pledge Agreement, registered (or
registration has been applied for) in the name of the Borrowers with the
appropriate Governmental Authority. To the knowledge of the Borrowers, no Person
is infringing upon the rights of the Borrowers in or to any of the Collateral
described therein.
5.10 Use of Proceeds. The net proceeds of the Loans will be used by
the Borrowers to pay bona fide working capital, business, professional and
reorganization expenses incurred by the Borrowers in the ordinary course of
business in accordance with the Budget or the Amended Budget, as the case may
be.
5.11 Employee Benefit Plans. The Borrowers have never maintained or
contributed to (or had an obligation to contribute to) any Employment Benefits
Plan.
5.12 Labor Relations. None of the Borrowers nor any of their
respective Subsidiaries is engaged in any unfair labor practice that could be
expected to have a Material Adverse Effect.
5.13 Subsidiaries. Other than as set forth on Schedule 5.14 hereto,
the Borrowers do not have any Subsidiaries or own any proprietary interest in
any Person. The Borrowers own all of the issued and outstanding shares of
capital stock of the Guarantors free and clear of all Liens, other than
Permitted Liens and the Liens created pursuant to the Credit Documents.
5.14 True and Complete Disclosure. All factual information (taken
as a whole) heretofore or contemporaneously furnished by or on behalf of any
Borrower or any of their respective Subsidiaries (including, without limitation,
information in the Credit Documents), for purposes of or in connection with this
Agreement or any transaction contemplated herein or in any Credit Document is,
and all other such factual information (taken as a whole) hereafter furnished by
or on behalf of any Borrower or any of their respective Subsidiaries to the
Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not materially incomplete by
omitting to state any fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided.
5.15 Investment Company Act. No Borrower is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
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5.16 Insurance. All policies of insurance of any kind or nature
owned by or issued to the Borrowers, including, without limitation, policies of
life, fire, theft, product liability, public liability, property damage, other
casualty, employee fidelity, workers' compensation, employee health and welfare,
title, property and liability insurance, are in full force and effect and are of
a nature and provide such coverage (including self insurance) as is customarily
carried by companies of the size and character of the Borrowers.
Section 6. Affirmative Covenants.
Except as otherwise agreed to by the Lender in writing, from and after
the date hereof and until the Loans and the Note, together with interest and all
other Obligations incurred hereunder and thereunder, are paid in full:
6.1 Information Covenants.
(a) Notice of Default or Litigation, etc. Each Credit Party will
promptly, but in no event later than three Business Days after an officer of
such Credit Party obtains knowledge thereof, furnish, or cause to be furnished,
to the Lender notice of (i) the occurrence of any event which constitutes a
Default or Event of Default, (ii) a Reportable Event or Unfunded Current
Liability, (iii) any litigation or governmental proceeding pending or threatened
against any of the Credit Parties which, if determined adversely, materially
impairs the rights of the Lender under any of the Credit Documents or has or may
reasonably be expected to have a Material Adverse Effect or (iv) any other event
which could have a Material Adverse Effect.
(b) Periodic Reports. The Designated Borrower shall provide to the
Lender the following reports in such reasonable detail as the Lender may from
time to time require:
(i) no later than the third Business Day of each
week, (x) a statement of cash flow for the immediately preceding week,
setting forth in comparative form the actual figures for such week and
for the relevant portion of the current fiscal year then ended and the
Budget or Amended Budget, as the case may be, figures for such periods,
and (y) a 13-week rolling cash flow projection, together with a
description of the assumptions used in the preparation of such
projections;
(ii) within 25 days after the end of each month,
a balance sheet as at the end of such month and the related statements
of income, cash flows and changes in stockholders' equity for such
month;
(iii) within 45 days after the end of each
quarterly fiscal period in each fiscal year (other than the last
quarterly fiscal period of each such fiscal year), a balance sheet as
at the end of such quarter and the related statements of income, cash
flows and changes in shareholders' equity for such quarter and (and in
the case of the second and third quarters) for the portion of the
current fiscal year ending with such quarter;
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(iv) within 90 days of the end of each fiscal
year, a balance sheet as at the end of such year and the related
statements of income, cash flows and changes in stockholders' equity
for such year; and
(v) such other information or documents
(financial or otherwise) as the Lender may reasonably request from time
to time including, without limitation, information relative to the
withdrawal and application of funds from the Existing Accounts and
Restricted Account (if applicable) and compliance by the Borrowers with
the Budget or the Amended Budget, as the case may be.
6.2 Books and Records. Each Credit Party will keep proper books of
record and account in which full, true and correct entries, in conformity with
applicable Law and in conformity with GAAP, will be made of all business
dealings and transactions in relation to its financial activities. In
particular, each Borrower shall maintain proper books of record and account of
Borrowings and the use by such Borrower of the proceeds of any Borrowing. Each
Credit Party will, and will cause each of its respective agents and
representatives to meet with officers and designated representatives or agents
of the Lender at all reasonable times and to such reasonable extent as the
Lender may request, to discuss the affairs, finances and accounts of the Credit
Parties, and be advised as to the same by, the officers, representatives and
agents of the Credit Parties.
6.3 Maintenance of Properties and Insurance. Each Credit Party
will keep all of its non-financial properties and assets in good and working
order and condition and insured with financially sound and reputable insurance
companies in such amounts and against such risks (including, without limitation,
insurance with respect to environmental hazards) as is generally maintained in
accordance with good business practices by businesses similarly situated and
furnish to the Lender, upon written request, full information as to the
insurance carried.
6.4 Maintenance of Existence; Corporate Franchises. Each Credit
Party will do or cause to be done, all things necessary to (i) preserve and
maintain its existence and good standing in the jurisdiction of its
incorporation, (ii) qualify and remain qualified in each jurisdiction in which
such qualification is required and in which failure to do so would result in a
Material Adverse Effect, and (iii) keep in full force and effect its existence
and its material rights, franchises, licenses and patents.
6.5 Compliance with Law. Each Credit Party will comply with all
applicable Laws of, and all applicable restrictions imposed by, all Governmental
Authorities, domestic or foreign, in respect of the conduct of its business and
the ownership of its property, except where the failure to so comply could not
reasonably be expected to result in a Material Adverse Effect.
6.6 ERISA. Each Plan maintained by a Credit Party (and each
related trust, insurance contract or fund) shall be in substantial compliance
with its terms and with all applicable laws, including without limitation ERISA
and the Code.
6.7 Performance of Obligations. Each Credit Party will perform all
of its obligations under (i) each Credit Document to which it is a party, and
(ii) the terms of each other
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agreement, mortgage, indenture, security agreement, and other debt instrument by
which it is bound, except where failure to so perform could not reasonably be
expected to result in a Material Adverse Effect.
6.8 Taxes. Subject to any limitation imposed by the Bankruptcy
Code, each Credit Party will pay and discharge or cause to be paid and
discharged all applicable post-petition taxes (including stamp taxes),
assessments and governmental charges or levies imposed upon it or upon its
income or profits or upon any of its property, real, personal or mixed or upon
any part thereof, when due.
6.9 Use of Proceeds. The Borrowers will use the proceeds of the
Loans as contemplated in Section 5.10 hereof. As required pursuant to
Section 6.2 hereof, each Borrower shall maintain proper books of record and
account as to the use by it of any of the proceeds of a Borrowing.
6.10 Cash Concentration Requirements.
(a) The Borrowers shall maintain and deposit all Cash Receipts in
one or more of the Existing Accounts designated on Schedule 5.8.
(b) Upon request of the Lender, Borrowers shall (i) create a
centralized account (the "Restricted Account") into which all Cash Receipts of
the Borrowers shall be deposited on a daily basis, (ii) instruct all account
debtors of the Borrowers to make payment in respect of all accounts receivable
owing to the Borrowers directly to the Restricted Account, and (iii) instruct
all of the Responsible Officers of the Borrowers to make daily deposits of all
Cash Receipts of the Borrowers in the Restricted Account. Upon request of the
Lender, the Borrowers shall provide to the Lender any bank statements or other
information for the Restricted Account.
(c) Except as provided in this Section 6.10, the Borrowers may not
establish any other bank account or similar arrangement with any Person without
the prior written consent of the Lender.
6.11 Compliance with the Budget. Each of the Borrowers will conduct
its business in accordance with the Budget or the Amended Budget, as the case
may be.
6.12 Further Assurances. Each Credit Party will, at its own
expense, (i) make, execute, endorse, acknowledge, file and/or deliver to the
Lender from time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments relating to,
and (ii) take or cause to be taken such further actions and steps relating to,
(x) the Collateral, and/or (y) the other agreements, covenants and transactions
provided for or contemplated herein or in the other Credit Documents, in any
such case, as the Lender may reasonably require.
Section 7. Negative Covenants.
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Except as otherwise agreed to by the Lender in writing, from and after
the date hereof and until the Loan and the Note, together with interest and all
other Obligations incurred hereunder and thereunder, are paid in full:
7.1 Liens. The Credit Parties will not agree to create, incur,
assume or suffer to exist any Lien upon or with respect to any property or
assets (real, personal or mixed, tangible or intangible) of such Person, whether
now owned or hereafter acquired, except for Liens set forth in Schedule 7.1
hereto (collectively, the "Permitted Liens") and the Liens created pursuant to
the Credit Documents.
7.2 Dividends. The Credit Parties will not declare or pay any
dividends, or return any capital, to their respective shareholders or authorize
or make any other distribution, payment or delivery of property or cash to their
respective shareholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for any consideration, any shares of any class
of their respective capital stock or interest of any of their respective
shareholders, in each case now or hereafter outstanding (or any options or
warrants issued by the Credit Parties with respect to their respective capital
stock) or set aside any funds for any of the foregoing purposes.
7.3 Indebtedness. The Credit Parties will not contract, create,
incur, assume or suffer to exist any Indebtedness for borrowed money in addition
to indebtedness under the Agreement other than extensions of credit in the
ordinary course of business.
7.4 Capital Expenditures. The Credit Parties will not make any new
expenditure for fixed or capital assets (including, without limitation,
expenditures for new maintenance and repairs which should be capitalized in
accordance with GAAP and including new capitalized lease obligations) in excess
of $10,000 in the aggregate.
7.5 Advances, Investments and Loans. The Credit Parties will not,
directly or indirectly, lend money or credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any other Person or otherwise
form, organize or operate any Subsidiaries, or purchase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract, except
that a Credit Party may acquire and hold receivables owing to it, if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary commercial practice.
7.6 Consolidations, Mergers, Purchases, Sales of Assets, etc. The
Credit Parties will not wind up, liquidate or dissolve their respective affairs
or enter into any transaction of consolidation or merger with or into any other
Person, sell, convey, assign, transfer, lease or otherwise dispose of (or agree
to do any of the foregoing at any future time), directly or indirectly, all or
any material part of their property or assets.
7.7 Limitations on Modifications of Certain Agreements. The Credit
Parties will not (i) amend, modify or change, or permit the amendment,
modification or change of, any
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provision of their respective articles of association, bylaws or other
organizational documents, (ii) amend, modify or change, or permit the amendment,
modification or change of, any provision of any agreement entered into by any
Credit Party, with respect to its capital stock, or (iii) enter into any new
agreement with respect to their respective capital stock.
7.8 ERISA. The Credit Parties will not, and will not permit any of
their respective Subsidiaries to, maintain or contribute to (or have an
obligation to contribute to) any Employment Benefits Plan.
7.9 Nature of Business. The Credit Parties will not modify or
alter in any material respect the nature and type of their business as conducted
as of the Filing Date or the manner in which such business is conducted, except
as otherwise required by the Bankruptcy Code or an orderly liquidation of the
Borrowers' assets with the prior written consent of the Lender.
7.10 Chapter 11 Claims. The Borrowers will not incur, create,
assume, suffer to exist or permit any other Superpriority Claim which is pari
passu with or senior to the claims of the Lender against the Borrowers
hereunder, except for the Carve-Out.
7.11 Use of Funds in Existing Accounts. The Borrowers will not
withdraw or otherwise utilize any funds held in the Existing Accounts or the
Restricted Account (if applicable) for any purpose other than to pay bona fide
working capital, business, professional and reorganization expenses incurred by
the Borrowers in the ordinary course of business in accordance with the Budget
or the Amended Budget, as the case may be.
Section 8. Events of Default.
Upon the occurrence of any of the following specified events (each an
"Event of Default"):
8.1 Payments. Any of the Borrowers shall default in the payment
when due of any principal of any Loan or the Note, or default in the payment
when due of interest on any Loan or the Note or any other amounts owing
hereunder or under the Note; or
8.2 Representations. Any representation, warranty or statement
made by any of the Credit Parties in any Credit Document or in any certificate
delivered pursuant to any Credit Document shall prove to be untrue in any
material respect on the date as of which made or at any time thereafter in which
any of the Obligations remains outstanding; or
8.3 Notice of Event of Default; Negative Covenants. Any of the
Borrowers shall default in the due performance or observance by it of any
covenant, condition or agreement contained in Sections 6.1(a) and 7.
8.4 Covenants. Except as provided in Sections 8.1, 8.2 and 8.3,
any of the Borrowers shall default in the due performance or observance by it of
any other term, covenant
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or agreement contained in this Agreement or any other Credit Document and such
default shall continue unremedied for more than ten (10) days after notice of
the same by the Lender; or
8.5 Dismissal; Conversion. Any of the Cases shall be dismissed or
converted to a case under Chapter 7 of the Bankruptcy Code; a trustee under
Chapter 7 or Chapter 11 of the Bankruptcy Code, a responsible officer or an
examiner under Section 1106(b) of the Bankruptcy Code shall be appointed in any
of the Cases and the order appointing such trustee, responsible officer or
examiner shall not be reversed or vacated within 30 days after the entry
thereof; or an application shall be filed by any Borrower for the approval of
any other Superpriority Claim (other than the Carve-Out) in any of the Cases
which is pari passu with or senior to the claims of the Lender against any
Borrower hereunder, or there shall arise or be granted any such pari passu or
senior Superpriority Claim; or
8.6 Lifting of the Automatic Stay. The Bankruptcy Court shall
enter an order or orders granting relief from the automatic stay applicable
under Section 362 of the Bankruptcy Code to the holder or holders of any
security interest to permit foreclosure (or the granting of a deed in lieu of
foreclosure or the like) on any assets of any of the Borrowers which have a
value in excess of $50,000 in the aggregate; or
8.7 Credit Documents. Any Credit Document shall cease to be in
full force and effect or shall cease to grant to the Lender the Liens, rights,
powers and privileges purported to be created thereby, or any Credit Party shall
so assert in any pleading filed in any court or otherwise default in the due
performance of any term, covenant or agreement on its part to be performed or
observed pursuant thereto; or
8.8 The Orders. An order shall be entered reversing, amending,
supplementing, staying for a period in excess of 10 days, vacating or otherwise
modifying the Interim Order or the Final Order without the prior written consent
of the Lender; or
8.9 Chapter 11 Plan. The Debtors shall file any chapter 11 plan,
or support any filed chapter 11 plan, which is not supported by the Lender or
which does not repay all Obligations to the Lender in full in cash on or before
the Termination Date; or
8.10 Judgments. One or more judgments, awards or decrees by any
court, arbitrator or Governmental Authority as to any post-petition obligation
shall be entered on or after the Initial Borrowing Date against any Credit Party
involving in the aggregate a liability (not paid or fully covered by insurance)
in excess of $50,000 and the enforcement thereof shall not be stayed; there
shall be rendered against Credit Party a non-monetary judgment with respect to a
post-petition event which causes or would reasonably be expected to cause a
Material Adverse Effect; or
8.11 Change of Control. A Change of Control shall occur;
then, and in every such event and at any time thereafter during the
continuance of such event, and without further order of or application to the
Bankruptcy Court, the Lender may by notice to the Borrowers (with a copy to
counsel for the Official Creditors' Committee
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appointed in the Cases and to the United States Trustee for the District of
Delaware), take one or more of the following actions, at the same or different
times provided, that with respect to the enforcement of Liens or other remedies
with respect to the Collateral under clause (iii) below, the Lender shall
provide the Borrowers (with a copy to counsel for the Official Creditors'
Committee in the Cases and to the United States Trustee for the District of
Delaware) with three (3) Business Days' written notice prior to taking the
action contemplated thereby: (i) terminate forthwith the Commitment; (ii)
declare the Loans then outstanding to be forthwith due and payable, whereupon
the principal of the Loans together with accrued interest thereon and all other
liabilities of the Borrowers accrued hereunder and under any other Credit
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrowers, anything contained herein or in any other Credit
Document to the contrary notwithstanding; and (iii) exercise any and all
remedies under the Credit Documents and under applicable law available to the
Lender. After notice of an Event of Default has been given to the Borrowers by
the Lender (except during any applicable grace period set forth in Section 8.4),
the Borrowers shall be prohibited from incurring any Loans or using any cash
collateral of the Lender without the Lender's prior written consent.
Section 9. Guaranty of Obligations.
9.1 Guaranty.
(a) Each Guarantor hereby, jointly and severally,
unconditionally and irrevocably guarantees the due and punctual payment and
performance of the Obligations. Each Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and it will remain bound upon this guaranty
notwithstanding any extension or renewal of any of the Obligations.
(b) Each Guarantor waives presentation to, demand for
payment from and protest to any Borrower or other Guarantor, and also waives
notice of protest for nonpayment. The obligations of the Guarantors hereunder
shall not be affected by (i) the failure of the Lender to assert any claim or
demand or to enforce any right or remedy against any Borrower or other Guarantor
under the provisions of this Agreement or any other Credit Document or
otherwise; (ii) any extension or renewal of any provision hereof or thereof;
(iii) any rescission, waiver, compromise, acceleration, amendment or
modification of any of the terms or provisions of any of the Credit Documents;
(iv) the release, exchange, waiver or foreclosure of any security held by the
Lender for the Obligations or any of them; (v) the failure of the Lender to
exercise any right or remedy against any Borrower or other Guarantor; or (vi)
the release or substitution of any Borrower or other Guarantor.
(c) Each Guarantor further agrees that this guaranty
constitutes a guaranty of performance and of payment when due and not just of
collection, and waives any right to require that any resort be had by the Lender
to any security held for payment of the Obligations or to any balance of any
deposit, account or credit on the books of the Lender in favor of any other
Credit Party, or to any other Person.
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(d) Each Guarantor hereby waives any defense that it
might have based on a failure to remain informed of the financial condition of
the other Credit Parties and any circumstances affecting the ability of the
other Credit Parties to perform under this Agreement.
(e) Each Guarantor's guaranty shall not be affected by
the genuineness, validity, regularity or enforceability of the Obligations or
any other instrument evidencing any Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor or by any other
circumstance relating to the Obligations which might otherwise constitute a
defense to this Guaranty. The Lender does not make any representation or
warranty in respect to any such circumstances or shall have any duty or
responsibility whatsoever to any Credit Party in respect of the management and
maintenance of the Obligations.
(f) Subject to the provisions of the Security and Pledge
Agreement, upon the Obligations becoming due and payable (by acceleration or
otherwise), the Lender shall be entitled to immediate payment of such
Obligations by any Borrower or Guarantor upon written demand by the Lender,
without further application to or order of the Bankruptcy Court.
9.2 No Impairment of Guaranty. The obligations of the
Guarantors hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations. Without limiting the generality of the foregoing, the obligations
of the Guarantors hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Lender to assert any claim or demand or to
enforce any remedy under this Agreement or any other agreement, by any waiver or
modification of any provision thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantors or would otherwise
operate as a discharge of the Guarantors as a matter of law, unless and until
the Obligations are paid in full.
9.3 Waiver of Subrogation. Each Guarantor expressly
waives any and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution or any other claim which such Guarantor may now or hereafter have
against any Credit Party or other Person directly or contingently liable for the
Obligations hereunder, or against or with respect to any Credit Party's property
(including, without limitation, any property which is Collateral for the
Obligations) arising from the existence or performance of this Agreement.
9.4 Borrowing Agency Provisions.
(a) Each Borrower hereby irrevocably designates the
Designated Borrower to be its attorney and agent and in such capacity to borrow,
sign and endorse notes, and execute and deliver all instruments, documents,
writings and further assurances now and hereafter required hereunder, on behalf
of such Borrower, and hereby authorizes the Lender to pay over or credit all
loan proceeds hereunder in accordance with the request of the Designated
Borrower.
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(b) The handling of this credit facility as a
co-borrowing facility with the Designated Borrower as borrowing agent in the
manner set forth in this Agreement is solely as an accommodation to the Credit
Parties and at their request. The Lender shall not incur liability to any Credit
Party as a result thereof. To induce the Lender to do so and in consideration
thereof, each Credit Party hereby indemnifies the Lender and holds the Lender
harmless from and against any and all liabilities, expenses, losses, damages and
claims of damage asserted against the Lender by any Person arising from or
incurred by reason of the handling of the financial arrangements of the Credit
Parties as provided herein, reliance by the Lender on any request or instruction
from the Designated Borrower or any other action taken by the Lender with
respect to this Section 9.4 except due to willful misconduct or gross (not mere)
negligence by the indemnified party.
(c) All Obligations shall be joint and several, and each
Credit Party shall make payment upon the maturity of the Obligations by
acceleration or otherwise, and such obligation and liability on the part of each
Credit Party shall in no way be affected by any extensions, renewals and
forbearance granted by the Lender to any Credit Party, failure of the Lender to
give any Credit Party notice of Borrowing or any other notice, any failure by
the Lender to pursue or preserve its rights against any Credit Party, the
release by the Lender of any Collateral now or thereafter acquired from any
Credit Party, and such agreement by each Credit Party to pay upon any notice
issued pursuant thereto is unconditional and unaffected by prior recourse by the
Lender to the other Credit Parties or any Collateral for such Credit Party's
Obligations or the lack thereof.
Section 10. Miscellaneous.
10.1 Payment of Expenses, etc. Each Borrower hereby agrees to:
(a) pay all reasonable out-of-pocket costs and expenses as
determined by the Bankruptcy Court (i) of the Lender (including, without
limitation, the reasonable fees and disbursements of White & Case LLP) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto and thereto,
and (ii) of the Lender in connection with the enforcement of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein (including, without limitation, the reasonable fees and
disbursements of counsel of White & Case LLP); provided, that the foregoing
obligations shall be included in the Obligations and become due and payable by
the Borrowers on the Termination Date;
(b) pay and hold the Lender harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save the Lender harmless from and against any and all liabilities
with respect to or resulting from any delay or omission to pay such taxes; and
(c) indemnify the Lender, its directors, officers, managers,
employees, representatives, attorneys and agents from and hold each of them
harmless against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs,
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expenses and disbursements incurred by any of them as a result of, or arising
out of, or in any way related to, or by reason of, any investigation, litigation
or other proceeding (whether or not the Lender is a party thereto) related to
the entering into and/or performance of this Agreement, any other Credit
Document or any other document or instrument entered into in connection
therewith, or the use of the proceeds of the Loans hereunder, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such liabilities, obligations, losses, etc., to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified).
10.2 Right of Setoff. In addition to any rights now or hereafter
granted under applicable Law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, the Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to Borrowers or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any Indebtedness at any time held or owing by the Lender to or for the
credit or the account of the Borrowers against and on account of the Obligations
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
the Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
10.3 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to Borrowers, to it
at: Novo Networks Operating Corp. Attention: Xxxxxx X. Xxxxxxxx, 0000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Facsimile: (000) 000-0000, with a copy
to Xxxxxxx X. Xxxxxxx, Esq., The Bayard Firm, 000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000, Telephone: (000) 000-0000, Facsimile: (000) 000-0000
and Xxxxxxx Xxxxxxxx, ESBA Capital Group, Inc., 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxxxx 00000, Facsimile: (000) 000-0000; and if to the Lender,
to Novo Networks, Inc. at: 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Facsimile: (000) 000-0000, with a copy to White &
Case LLP, 000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000-0000,
Attention: Xxxx X. Xxxxxxxxxx, Esq., Telephone: (000) 000-0000, Facsimile: (305)
358-5744; in each such case at such other address as any party shall designate
in a written notice to the other parties hereto. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier, except that notices and
communications to the Lender shall not be effective until received by the
Lender.
10.4 Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that the Borrowers may not assign or
transfer any of their rights or obligations hereunder without the prior written
consent of the Lender.
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10.5 Assignment of the Loans, etc. The Lender may at any time
transfer or assign, any of its rights hereunder or under the Note. If the Lender
transfers or assigns any portion or all of its rights hereunder or under the
Note, any reference to the Lender in this Agreement or the Note of the Lender
shall thereafter refer to the Lender to the extent of the interest assigned or
transferred.
10.6 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Lender or the holders of the Note or the Lender in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between the Borrowers and the Lender or the holders of the
Note or the Lender shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights,
powers and remedies herein or in any other Credit Document expressly provided
are cumulative and not exclusive of any rights, powers or remedies which the
Lender or the holders of the Note or the Lender would otherwise have. No notice
to or demand on the Borrowers in any case shall entitle the Borrowers to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Lender or the holders of the Note or
the Lender to any other or further action in any circumstances without notice or
demand.
10.7 Calculations; Computations.
(a) The financial statements to be furnished to the Lender
pursuant to Sections 6.1(b)(ii), (iii) and (iv) shall be made and prepared in
accordance with GAAP.
(b) All computations of interest hereunder shall be made on the
basis of a year of 365 or 366 days, as the case may be, for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest is payable.
10.8 Governing Law; Submission to Jurisdiction; Venue.
(a) This Agreement and the other Credit Documents and the rights
and obligations of the parties hereunder and thereunder shall be construed in
accordance with and be governed by the Law of the State of New York, exclusive
of its conflicts of laws principals, and/or the Bankruptcy Code, as applicable.
The Bankruptcy Court shall retain jurisdiction in the Orders to enforce and
interpret the Orders and the Credit Documents.
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the Bankruptcy Court and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
10.9 Usury. The Lender and the Borrowers each intend that the
interest (as defined under applicable Law) on all amounts evidenced by the Note
which may be charged to,
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or collected or received from, the Borrowers shall not exceed the maximum rate
permissible under applicable Law; provided, however, that nothing herein shall
be construed to limit the Lender to presently existing maximum rates of
interest, if an increased interest rate is hereafter permitted by reason of
applicable federal or state Law. Accordingly, anything herein or in the Note to
the contrary notwithstanding, should any interest (as so defined) be charged to,
or collected or received from, the Borrowers, or any other Person by the Lender
pursuant hereto or thereto in excess of the applicable maximum legal rate, then
such excess payment shall be applied to the reduction of the aggregate
outstanding principal balance of the Note and any portion of the excess payment
remaining after payment in full thereof shall be returned by the Lender to such
Person.
10.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
10.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.12 Amendment or Waiver. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Lender and the Borrowers.
10.13 Entire Agreement. This Agreement, together with the exhibits
and schedules hereto, and the other Credit Documents contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters.
10.14 Survival. All representations, warranties and indemnities of
the Credit Parties set forth herein shall survive the execution and delivery of
this Agreement and the Note and the making and repayment of the Obligations.
10.15 Waiver of Trial by Jury. THE BORROWERS, THE GUARANTORS AND THE
LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO ANY OBLIGATION UNDER THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER TO ENTER INTO THIS
AGREEMENT.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
BORROWERS:
AXISTEL COMMUNICATIONS, INC.
By:
------------------------------------------
Title:
NOVO NETWORKS GLOBAL SERVICES, INC.
By:
------------------------------------------
Title:
NOVO NETWORKS INTERNATIONAL SERVICES, INC.
By:
------------------------------------------
Title:
E.VOLVE TECHNOLOGY GROUP, INC.
By:
------------------------------------------
Title:
NOVO NETWORKS OPERATING CORP.
By:
------------------------------------------
Title:
33
GUARANTORS:
NOVO NETWORKS (UK) LTD.
By:
------------------------------------------
Title:
WEB2DIAL COMMUNICATIONS, INC.
By:
------------------------------------------
Title:
SERVICIOS PROFESIONALES J.R.J.S.,
S.A. DE C.V.
By:
------------------------------------------
Title:
NOVO NETWORKS METRO SERVICES, INC.
By:
------------------------------------------
Title:
NOVO NETWORKS MEDIA SERVICES, INC.
By:
------------------------------------------
Title:
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34
NOVO NETWORKS METRO SERVICES
(VIRGINIA), INC.
By:
------------------------------------------
Title:
E.VOLVE TECHNOLOGY GROUP DE
MEXICO, S.A. DE C.V.
By:
------------------------------------------
Title:
LENDER:
NOVO NETWORKS, INC.
By:
------------------------------------------
Title:
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EXHIBIT A
NOTICE OF BORROWING
[Date]
NOVO NETWORKS, INC., as Lender
under the Credit & Guaranty Agreement
referred to below
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Gentlemen:
The undersigned, Axistel Communications, Inc., Novo Networks
Global Services, Inc., Novo Networks International Services, Inc., E.Volve
Technology Group, Inc. and Novo Networks Operating Corp., refer to the Credit &
Guaranty Agreement, dated as of August __, 2001 (as amended from time to time,
the "Agreement," the terms defined therein being used herein as therein
defined), among the undersigned, the Guarantors party thereto, and you, as
Lender, and hereby give you notice, irrevocably, pursuant to Section 2.2 of the
Agreement, that the undersigned hereby request a Borrowing under the Agreement,
and in that connection set forth below the information relating to such
Borrowing (the "Proposed Borrowing") as required by Section 2.2 of the
Agreement:
(a) The aggregate principal amount of the Proposed
Borrowing is $_______.
(b) The Business Day of the Proposed Borrowing is
__________, 20__.
The undersigned hereby certify that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(i) the representations and warranties contained in
Section 5 of the Agreement are correct, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds thereof, as though
made on and as of such date; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the application
of the proceeds thereof.
36
EXHIBIT A
Page 2
Very truly yours,
AXISTEL COMMUNICATIONS, INC.
By:
--------------------------------------
Title:
NOVO NETWORKS GLOBAL SERVICES, INC.
By:
--------------------------------------
Title:
NOVO NETWORKS INTERNATIONAL SERVICES, INC.
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
E.VOLVE TECHNOLOGY GROUP, INC.
By:
--------------------------------------
Title:
NOVO NETWORKS OPERATING CORP.
By:
--------------------------------------
Title:
37
EXHIBIT B
NOTE
$1,600,000 New York, New York
August __, 2001
FOR VALUE RECEIVED, AXISTEL COMMUNICATIONS, INC., a
corporation organized and existing under the laws of Delaware and a debtor and
debtor-in-possession ("AxisTel"), NOVO NETWORKS GLOBAL SERVICES, INC., a
corporation organized and existing under the laws of Delaware and a debtor and
debtor-in-possession ("NNGS"), NOVO NETWORKS INTERNATIONAL SERVICES, INC., a
corporation organized and existing under the laws of Delaware and a debtor and
debtor-in-possession ("NNIS"), E.VOLVE TECHNOLOGY GROUP, INC., a corporation
organized and existing under the laws of Nevada and a debtor and
debtor-in-possession ("e.Volve"), and NOVO NETWORKS OPERATING CORP., a
corporation organized and existing under the laws of Delaware and a debtor and
debtor-in-possession ("NNOC" and collectively with AxisTel, NNGS, NNIS and
e.Volve, the "Borrowers"), hereby, jointly and severally, promise to pay to the
order of NOVO NETWORKS, INC., a corporation organized and existing under the
laws of Delaware (the "Lender"), in lawful money of the United States of America
in immediately available funds, at such place as the Lender shall specify in
writing to the Borrowers, on the Termination Date (as defined in the Agreement)
the principal sum of one million six hundred thousand United States dollars
($1,600,000) or, if less, the unpaid principal amount of all Loans (as defined
in the Agreement) made by the Lender pursuant to the Agreement.
The Borrowers, jointly and severally, promise also to pay
interest on the unpaid principal amount of each Loan in like money at such place
as the Lender shall from time to time specify in writing to the Borrowers from
the date such Loan is made until paid at the rates and at the times provided in
the Agreement.
This Note is the Note referred to in the Credit & Guaranty
Agreement, dated as of August __, 2001, among the Borrowers, the Lender and the
Guarantors party thereto (as from time to time in effect, the "Agreement") and
is entitled to the benefits thereof. This Note is guaranteed by the Guarantors
(as defined in the Agreement) pursuant to the Agreement and is secured by the
Security and Pledge Agreement (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary and mandatory prepayment, in whole
or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
38
Exhibit B
Page 2
Each Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
This Note shall be construed in accordance with and be
governed by the law of the State of New York.
AXISTEL COMMUNICATIONS, INC.
By:
----------------------------------------
Title:
NOVO NETWORKS GLOBAL SERVICES, INC.
By:
----------------------------------------
Title:
NOVO NETWORKS INTERNATIONAL SERVICES, INC.
By:
----------------------------------------
Title:
By:
----------------------------------------
Title:
E.VOLVE TECHNOLOGY GROUP, INC.
By:
----------------------------------------
Title:
NOVO NETWORKS OPERATING CORP.
By:
----------------------------------------
Title:
39
Exhibit D
Page 1
EXHIBIT D
SECURITY AND PLEDGE AGREEMENT
SECURITY AND PLEDGE AGREEMENT (the "Agreement"), dated as of August __,
2001, among AXISTEL COMMUNICATIONS, INC., a corporation organized and existing
under the laws of Delaware and a debtor and debtor-in-possession, NOVO NETWORKS
GLOBAL SERVICES, INC., a corporation organized and existing under the laws of
Delaware and a debtor and debtor-in-possession, NOVO NETWORKS INTERNATIONAL
SERVICES, INC., a corporation organized and existing under the laws of Delaware
and a debtor and debtor-in-possession, and E.VOLVE TECHNOLOGY GROUP, INC., a
corporation organized and existing under the laws of Nevada and a debtor and
debtor-in-possession, NOVO NETWORKS OPERATING CORP., a corporation organized and
existing under the laws of Delaware and a debtor and debtor-in-possession and
NOVO NETWORKS (UK) LTD., a corporation organized and existing under the laws of
the United Kingdom, WEB2DIAL COMMUNICATIONS, INC., a corporation organized and
existing under the laws of Delaware, SERVICIOS PROFESIONALES J.R.J.S., S.A. DE
C.V., a corporation organized and existing under the laws of Mexico, NOVO
NETWORKS METRO SERVICES, INC., a corporation organized and existing under the
laws of Delaware, NOVO NETWORKS MEDIA SERVICES, INC., a corporation organized
and existing under the laws of Delaware, NOVO NETWORKS METRO SERVICES
(VIRGINIA), INC., a corporation organized and existing under the laws of
Virginia, and E.VOLVE TECHNOLOGY GROUP DE MEXICO, S.A. DE C.V., a corporation
organized and existing under the laws of Mexico, (each of the foregoing herein a
"Grantor" and, jointly and severally, the "Grantors"), and NOVO NETWORKS, INC.,
a corporation organized and existing under the laws of Delaware (the "Lender").
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Lender and the Grantors are entering into a Credit and Guaranty
Agreement dated as of the date hereof (as amended, modified or supplemented from
time to time, the "Credit Agreement");
WHEREAS, unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined;
WHEREAS, it is a condition precedent to the making of Loans under the
Credit Agreement that the Grantors shall have granted a security interest,
pledge and lien on substantially all real and personal property of the
Guarantors and the proceeds thereof pursuant to Sections 364(c)(1), 364(c)(2)
and 364(c)(3) of the Bankruptcy Code;
WHEREAS, the grant of such security interest, pledge and lien has been
authorized pursuant to Sections 364(c)(1), 364(c)(2) and 364(c)(3) of the
Bankruptcy Code by the Interim Order, and, after the entry thereof, will have
been so authorized by the Final Order (collectively, the "Orders");
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Exhibit D
Page 2
WHEREAS, to supplement the Orders without in any way diminishing or
limiting the effect of the Orders or the security interest, pledge and lien
granted thereunder, the parties hereto desire to more fully set forth their
respective rights in connection with such security interest, pledge and lien;
and
WHEREAS, this Agreement has been approved by the Orders;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lender to make Loans, the Grantors hereby agree with the Lender as follows:
SECTION 1. Grant of Security and Pledge. Each of the Grantors
hereby transfers, grants, bargains, sells, conveys, hypothecates, assigns,
pledges and sets over to the Lender and hereby grants to the Lender, a perfected
pledge and security interest in all of such Grantor's right, title and interest
in and to the following (the "Collateral") which pledge and security interest
shall have the priorities set forth in the Orders and shall be subject to the
Carve-Out:
(a) all present and future accounts, accounts receivable
and other rights of each of the Grantors to payment for goods sold or leased or
for services rendered (except those evidenced by instruments or chattel paper),
whether now existing or hereafter arising and wherever arising, and whether or
not they have been earned by performance (collectively, the "Accounts");
(b) all goods and merchandise now owned or hereafter
acquired by each of the Grantors wherever located, whether in the possession of
a Grantor or of a bailee or other Person for sale, storage, transit, processing,
use or otherwise consisting of whole goods, components, supplies, materials, or
consigned, returned or repossessed goods) which are held for sale or lease or to
be furnished (or have been furnished) under any contract of service or which are
raw materials, work-in-process, finished goods or materials used or consumed in
such Grantor's business or processed by or on behalf of any Grantor
(collectively, the "Inventory");
(c) all machinery, all manufacturing, distribution,
selling, data processing and office equipment, all furniture, furnishings,
appliances, fixtures and trade fixtures, tools, tooling, molds, dies, vehicles,
vessels, aircraft and all other goods of every type and description (other than
Inventory), in each instance whether now owned or hereafter acquired by each of
the Grantors and wherever located (collectively, the "Equipment");
(d) all rights, interests, choses in action, causes of
action, claims and all other intangible property of each of the Grantors of
every kind and nature (other than Accounts, Trademarks, Patents and Copyrights),
in each instance whether now owned or hereafter acquired by such Grantor,
including, without limitation, all general intangibles, but excluding causes of
action under the Bankruptcy Code (it being understood and agreed, however, that
the proceeds of any such causes of action shall be available to repay the
Obligations); all corporate and other business records; all loans, royalties,
and other obligations receivable; all inventions, designs, trade secrets,
computer programs, software, printouts and other computer materials, goodwill,
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Exhibit D
Page 3
registrations, copyrights, licenses, franchises, customer lists, credit files,
correspondence, and advertising materials (to the extent the same are
assignable); all customer and supplier contracts, firm sale orders, rights under
license and franchise agreements (including all license agreements with any
other Person in connection with any of the Patents and Trademarks or such other
Person's names or marks, whether such Grantor is a licensor or licensee under
any such license agreement but only to the extent such license agreements are
assignable), and other contracts and contract rights; all interests in
partnerships and joint ventures; all tax refunds and tax refund claims; all
right, title and interest under leases, subleases, licenses and concessions and
other agreements to the extent assignable relating to real or personal property;
all payments due or made to each of the Grantors in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of any property
by any Person or Governmental Authority; all deposit accounts (general or
special) with any bank or other financial institution; all credits with and
other claims against carriers and shippers; all rights to indemnification; all
reversionary interests in pension and profit sharing plans and reversionary,
beneficial and residual interest in trusts; all proceeds of insurance of which
each of the Grantors is beneficiary; and all letters of credit, guaranties,
liens, security interest and other security held by or granted to each of the
Grantors; and all other intangible property, whether or not similar to the
foregoing (collectively, the "General Intangibles");
(e) all chattel paper, all instruments, all notes and
debt instruments and all payments thereunder and instruments and other property
from time to time delivered in respect thereof or in exchange therefor, and all
bills of lading, warehouse receipts and other documents of title and documents,
in each instance whether now owned or hereafter acquired by each of the
Grantors;
(f) all property or interests in property now or
hereafter acquired by each of the Grantors which may be owned or hereafter may
come into the possession, custody or control of the Lender in any way or for any
purpose (whether for safekeeping, deposit, custody, pledge, transmission,
collection or otherwise), and all rights and interests of each of the Grantors,
now existing or hereafter arising and however and wherever arising, in respect
of any and all (i) notes, drafts, letters of credits, stocks, bonds, and debt
and equity securities, whether or not certificated, and warrants, options, puts
and calls and other rights to acquire or otherwise relating to the same; (ii)
money (including all cash and cash equivalents held in the Existing Accounts or
the Restricted Account, as the case may be (as defined and referred to in the
Credit Agreement)); (iii) proceeds of loans, including, without limitation,
Loans made under the Credit Agreement; and (iv) insurance proceeds and books and
records relating to any of the property covered by this Agreement; together, in
each instance, with all accessions and additions thereto, substitutions
therefor, and replacements, proceeds and products thereof;
(g) all trademarks, trade names, trade styles, service
marks, prints and labels on which said trademarks, trade names, trade styles and
service marks have appeared or appear, designs and general intangibles of like
nature, now existing or hereafter adopted or acquired, and all registrations and
recordings thereof, including, without limitation, applications, registrations
and recordings in the United States Patent and Trademark Office or in any
similar office or
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Exhibit D
Page 4
agency of the United States, any State thereof, or any other country or
political subdivision thereof (except for "intent to use" applications for
trademark or service mark registrations filed pursuant to Section 1(b) of the
Xxxxxx Act, unless and until an Amendment to Allege Use or a Statement of Use
under Sections 1(c) and 1(d) of said Act has been filed), all whether now owned
or hereafter acquired by each of the Grantors, including, but not limited to,
those described in Schedule 3 annexed hereto and made a part hereof, and all
reissues, extensions or renewals thereof and all licenses thereof (together, in
each case, with the goodwill of the business connected with the use of, and
symbolized by each such trademark, service mark, trade name and trade dress, all
of the foregoing being herein referred to as the "Trademarks");
(h) all letters patent of the United States or any other
country, and all registrations and recordings thereof, including, without
limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or any political subdivision
thereof, all whether now owned or hereafter acquired by each of the Grantors,
including, but not limited to, those described in Schedule 4 annexed hereto and
made a part hereof, and (ii) all reissues, continuations, continuations-in-part
or extensions thereof and all licenses thereof (all of the foregoing being
herein referred to as the "Patents");
(i) all copyrights of the United States, or any other
country, and all registrations and recordings thereof, including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States, any
State thereof, or any other country or political subdivision thereof, all
whether now owned or hereafter acquired by each of the Grantors, including, but
not limited to, those described in Schedule 5 hereto and all renewals and
extensions thereof and all licenses thereof (all of the foregoing being herein
referred to as the "Copyrights");
(j) all books, records, ledger cards and other property
at any time evidencing or relating to the Accounts, Equipment, General
Intangibles, Trademarks, Patents or Copyrights;
(k) (i) all the shares of capital stock owned by each
Grantor, as applicable, listed on Schedule 6 hereto of the Guarantors and all
shares of capital stock of any Guarantor obtained in the future by such Grantor
and the certificates representing or evidencing all such shares (the "Pledged
Shares"); (ii) all other property which may be delivered to and held by the
Lender in respect of the Pledged Shares pursuant to the terms hereof; (iii)
subject to Section 9 below, all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed, in respect of,
in exchange for or upon the conversion of the securities referred to in clauses
(i) and (ii) above; and (iv) subject to Section 9 below, all rights and
privileges of each Grantor, as applicable, with respect to the securities and
other property referred to in clauses (i), (ii) and (iii) (the items referred to
in clauses (i) through (iv) being collectively called the "Pledged Collateral");
(l) all other personal property of each of the Grantors,
whether tangible or intangible, and whether now owned or hereafter acquired; and
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Exhibit D
Page 5
(m) all proceeds and products of any of the foregoing, in
any form, including, without limitation, any claims against third parties for
loss or damage to or destruction of any or all of the foregoing and to the
extent not otherwise included, all (i) payments under insurance (whether or not
the Lender is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral and (ii) cash.
SECTION 2. Security for Obligations. This Agreement and the
Collateral secure the payment of the Obligations.
SECTION 3. Delivery of Pledged Collateral; Other Action. Upon
written request by the Lender (and without further order of the Bankruptcy
Court), all certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by the Lender pursuant hereto and
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Lender. Upon the occurrence
and during the continuance of any Event of Default, the Lender shall have the
right, at any time in its discretion and upon giving notice to the Grantors of
its intent to exercise such rights in accordance with the Credit Agreement and
the Orders, to transfer to or to register in the name of the Lender or any of
its nominees any or all of the Pledged Collateral.
SECTION 4. Representations and Warranties. Each Grantor, jointly
and severally, represents and warrants as follows:
(a) All of the Inventory and/or Equipment is located at
the places specified in Schedule 1 hereto. The chief places of business and
chief executive offices of each of the Grantors and the offices where each
Grantor keeps its records concerning any Accounts and all originals of all
chattel paper which evidence any Account are located at the places specified in
Schedule 2 hereto. All trade names under which each of the Grantors have sold
and will sell Inventory are listed on Schedule 3 hereto.
(b) Each of the Grantors owns the Collateral free and
clear of any lien, security interest, charge or encumbrance except for the
security interest created by this Agreement and except as permitted under
Section 7.1 of the Credit Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except (x) such as may have been filed in favor of
the Lender relating to this Agreement and (y) in favor of any holder of a Lien
permitted under Section 7.1 of the Credit Agreement.
(c) As of the Filing Date, no Grantor owns any material
Trademarks, Patents or Copyrights or has any material Trademarks, Patents or
Copyrights registered in, or the subject of pending applications in, the United
States Patent and Trademark Office or any similar office or agency in any other
country or any political subdivision thereof, other than those described in
Schedules 3, 4 and 5 hereto. The registrations for the Collateral disclosed on
such Schedules 3, 4
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Exhibit D
Page 6
and 5 hereto are valid and subsisting and in full force and effect. None of the
material Patents or Copyrights have been abandoned or dedicated.
(d) The Pledged Shares have been duly authorized and
validly issued and are fully paid and non-assessable.
(e) Each Borrower, as the case may be, is the legal and
beneficial owner of the Pledged Shares as described on Schedule 6 free and clear
of any lien, security interest, option or other charge or encumbrance, except
for the security interest created by this Agreement and the Orders and Liens
permitted under Section 7.1 of the Credit Agreement.
(f) Except as disclosed on Schedule 6, the Pledged Shares
described in Section 1(k) hereof constitute all of the issued and outstanding
shares of stock of each of the Guarantors and no Guarantor is under any
contractual obligation to issue any additional shares of stock or any other
securities, rights or indebtedness.
(g) Except for the Orders, no authorization, approval or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required for the grant and pledge by each of the Grantors of
the security interests granted hereby or for the execution, delivery or
performance of this Agreement by each of the Grantors.
SECTION 5. Further Assurances.
(a) Each of the Grantors agrees that from time to time,
at the expense of the Grantors, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary,
or that the Lender may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Lender to exercise and enforce any of its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing, and
without further order of the Bankruptcy Court, each of the Grantors will execute
and file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, in any jurisdiction, as may be necessary, or
as the Lender may reasonably request, in order to perfect and preserve the
security interests granted or purported to be granted hereby.
(b) Each Grantor hereby authorizes the Lender to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of such Grantor where
permitted by law.
(c) Each Grantor will furnish to the Lender from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Lender may
reasonably request in connection with any prospective sale of Collateral
pursuant to Section 15 hereof, all in reasonable detail.
SECTION 6. As to Equipment and Inventory. Each Grantor shall:
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Exhibit D
Page 7
(a) Keep the Equipment and Inventory (other than
Inventory sold in the ordinary course of business) at the places specified
therefor in Schedule 1 hereto or, upon 5 days' written notice to the Lender
prior to any transfer thereof to a different jurisdiction, at other places in
jurisdictions where all action required by Section 5 shall have been taken to
assure the continuation of the perfection of the security interest of the Lender
with respect to the Equipment and Inventory.
(b) Subject to provisions of the Credit Agreement,
maintain or cause to be maintained in good repair, working order and condition,
excepting ordinary wear and tear and damage due to casualty, all of the
Equipment, and make or cause to be made all appropriate repairs, renewals and
replacements thereof, to the extent not obsolete and consistent with past
practice of such Grantor, as quickly as practicable after the occurrence of any
loss or damage thereto which are necessary or reasonably desirable to such end,
except where the failure to do any of the foregoing would not result in a
Material Adverse Effect.
(c) Until satisfaction in full of the Obligations, at any
time when an Event of Default has occurred and is continuing after the giving of
notice to the Guarantors in accordance with the Credit Agreement and the Orders:
(i) each Grantor will perform any and all reasonable actions requested by the
Lender to enforce the Lender's security interest in the Inventory and all of the
Lender's rights hereunder, such as subleasing warehouses to the Lender or its
designee (to the extent such subleases are not prohibited), placing and
maintaining signs, appointing custodians, transferring Inventory to warehouses,
and delivering to the Lender warehouse receipts and documents of title in the
Lender's name; (ii) if any Inventory is in the possession or control of any of
the Grantors' agents, contractors or processors or any other third party, each
such Grantor will notify the Lender thereof and will notify such agents,
contractors or processors or third party of the Lender's security interest
therein and, upon request, instruct them to hold all such Inventory for the
Lender and such Grantor's account, as their interests may appear, and subject to
the Lender's instructions; (iii) the Lender shall have the right to hold all
Inventory subject to the security interest granted hereunder; and (iv) the
Lender shall have the right to take possession of the Inventory or any part
thereof and to maintain such possession on such Grantor's premises or to remove
any or all of the Inventory to such other place or places as the Lender desires
in its sole discretion. If the Lender exercises its right to take possession of
the Inventory, such Grantor, upon the Lender's demand, will assemble the
Inventory and make it available to the Lender at such Grantor's premises at
which it is located.
SECTION 7. As to Accounts.
(a) Each Grantor shall keep its chief place of business
and chief executive office and the offices where it keeps its records concerning
the Accounts, and the offices where it keeps all originals of all chattel paper
which evidence Accounts, at the location or locations therefor specified in
Section 4(a) or, upon 5 days' prior written notice to the Lender, at such other
locations in a jurisdiction where all actions required by Section 5 shall have
been taken with respect to the Accounts. Each Grantor will hold and preserve
such records and chattel paper and will permit representatives of the Lender, at
any time during normal business hours and upon
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Exhibit D
Page 8
reasonable prior written notice, to inspect and make abstracts from such records
and chattel paper in accordance with the Credit Agreement.
(b) Except as otherwise provided in this subsection (b),
each Grantor shall continue to collect in accordance with its customary
practice, at its own expense, all amounts due or to become due to such Grantor
under the Accounts and, prior to the occurrence and continuance of an Event of
Default, such Grantor shall have the right to adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account debtor
or obligor thereof, or allow any credit or discount thereon, all in accordance
with its customary practices. In connection with such collections, the Grantors
may, upon the occurrence and during the continuation of an Event of Default
after giving notice to the Grantors in accordance with the Credit Agreement and
the Orders, take (and at the direction of the Lender shall take) such action as
the Grantors or the Lender may reasonably deem necessary or advisable to enforce
collection of the Accounts; provided, that upon written notice by the Lender to
any Grantor in accordance with the Credit Agreement and the Orders, following
the occurrence and during the continuation of an Event of Default, of its
intention so to do, the Lender shall have the right to notify the account
debtors or obligors under any Accounts of the assignment of such Accounts to the
Lender and to direct such account debtors or obligors to make payment of all
amounts due or to become due to such Grantor thereunder directly to the Lender
and, upon such notification and at the expense of such Grantor, to enforce
collection of any such Accounts, and to adjust, settle or compromise the amount
or payment thereof, in the same manner and to the same extent as such Grantor
might have done. After receipt by such Grantor of the notice referred to in the
proviso to the preceding sentence, and unless and until such notice is rescinded
by the Lender by written notice to such Grantor (i) all amounts and proceeds
(including instruments) received by such Grantor in respect of the Accounts
shall be received in trust for the benefit of the Lender hereunder, shall be
segregated from other funds of the Grantors and shall be forthwith paid over to
the Lender in the same form as so received (with any necessary endorsement) to
be held as cash collateral and either (x) released to the Grantors if such Event
of Default shall have been cured or waived or (y) if such Event of Default shall
be continuing, applied as provided by Section 15, and (ii) the Grantors shall
not adjust, settle or compromise the amount or payment of any Account, or
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon.
SECTION 8. As to Trademarks. Patents and Copyrights.
(a) Each Grantor shall, either itself or through
licensees, continue to use the Trademarks as each is currently used in the
Grantor's business in order to maintain the Trademarks in full force free from
any claim of abandonment for nonuse and each such Grantor will not (and will not
permit any licensee thereof to) do any act or knowingly omit to do any act
whereby any Trademark may become invalidated, unless such failure to use a
Trademark is not reasonably likely to have a material adverse effect on the
condition (financial or otherwise), operation or properties of the Grantors
taken as a whole.
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Exhibit D
Page 9
(b) No Grantor will do any act, or omit to do any act,
whereby the Patents or Copyrights may become abandoned or dedicated and each
such Grantor shall notify the Lender immediately if it knows of any reason or
has reason to know that any application or registration may become abandoned or
dedicated, unless such abandonment or dedication is not reasonably likely to
have a material adverse effect on the condition (financial or otherwise),
operations or properties of the Grantors taken as a whole.
(c) No Grantor will, either itself or through any agent,
employee, licensee or designee, (i) file an application for the registration of
any Patent or Trademark with the United States Patent and Trademark Office or
any similar office or agency in any other country or any political subdivision
thereof or (ii) file any assignment of any patent or trademark, which such
Grantor may acquire from a third party, with the United States Patent and
Trademark Office or any similar office or agency in any other country or any
political subdivision thereof, unless such Grantor shall, within 30 days after
the date of such filing, notify the Lender thereof, and, upon request of the
Lender, execute and deliver any and all assignments, agreements, instruments,
documents and papers as the Lender may request to evidence the Lender's interest
in such Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby, and such Grantor hereby
constitutes the Lender its attorney-in-fact to execute and file all such
writings for the foregoing purposes, all lawful acts of such attorney being
hereby ratified and confirmed; such power being coupled with an interest is
irrevocable until the Obligations are paid in full.
(d) Each Grantor will take all necessary steps in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain in all material respects each
application and registration of all material Trademarks, Patents and Copyrights,
including, without limitation, filing of renewals, affidavits of use, affidavits
of incontestability and opposition, interference and cancellation proceedings.
(e) Each Grantor will, without further order of the
Bankruptcy Court, perform all acts and execute and deliver all further
instruments and documents, including, without limitation, assignments for
security in form suitable for filing with the United States Patent and Trademark
Office, and the United States Copyright Office, respectively, reasonably
requested by the Lender at any time to evidence, perfect, maintain, record and
enforce the Lender's interest in all material Trademarks, Patents and Copyrights
or otherwise in furtherance of the provisions of this Agreement, and each
Grantor hereby authorizes the Lender to execute and file one or more accurate
financing statements (and similar documents) or copies thereof or of this
Security Agreement with respect to material Patents, Trademarks and Copyrights
signed only by the Lender.
(f) Each Grantor will, upon acquiring knowledge of any
use by any Person of any term or design likely to cause confusion with any
material Trademark, promptly notify the Lender of such use, and if requested by
the Lender, shall join with the Lender, at such Grantor's
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Exhibit D
Page 10
expense, in such action as the Lender, in its reasonable discretion, may deem
advisable for the protection of the Lender's interest in and to the Trademarks.
SECTION 9. As to the Pledged Collateral; Voting Rights;
Dividends; Etc.
(a) So long as no Event of Default shall have occurred
and be continuing and no written notice thereof shall have been given by the
Lender to the Grantors in accordance with the Credit Agreement and the Orders
revoking all of the following rights:
(i) the Grantors (as applicable) shall be
entitled to exercise any and all voting and other consensual
rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of
this Agreement;
(ii) notwithstanding the provisions of Section
1(k)(iii) hereof, such Grantors shall be entitled to receive
and retain any and all dividends and other distributions paid
in respect of the Pledged Collateral; provided, that any and
all
(x) dividends paid or payable other than in cash
in respect of, and instruments and other
property received, receivable or otherwise
distributed in respect of, or in exchange
for, any Pledged Collateral,
(y) dividends and other distributions paid or
payable in cash in respect of any Pledged
Collateral in connection with a partial or
total liquidation or dissolution or in
connection with a reduction of capital,
capital surplus or paid-in-surplus, and
(z) cash paid, payable or otherwise distributed
in respect of, or in redemption of, or in
exchange for, any Pledged Shares;
shall be, and shall be forthwith delivered to the Lender, to
hold as Pledged Collateral and shall, if received by any of
the Grantors, be received in trust for the benefit of the
Lender, be segregated from the other property or funds of such
Grantor, and be forthwith delivered to the Lender as Pledged
Collateral in the same form as so received (with any necessary
endorsement); and
(iii) the Lender shall execute and deliver (or
cause to be executed and delivered) to the Grantors (as
applicable) all such proxies and other instruments as the
Grantors (as applicable) may reasonably request for the
purpose of enabling such Grantor to exercise the voting and
other rights which it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends which it is
authorized to receive and retain pursuant to paragraph (ii)
above;
(b) Upon the occurrence and during the continuance of an
Event of Default:
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Exhibit D
Page 11
(i) upon written notice from the Lender to the
Grantors (as applicable) to such effect in accordance with the
Credit Agreement and the Orders, all rights of such Grantors
(as applicable) to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise
pursuant to Section 9(a)(i) and to receive the dividends which
it would otherwise be authorized to receive and retain
pursuant to Section 9(a)(ii) shall cease, and all such rights
shall thereupon become vested in the Lender, who shall
thereupon have the sole right to exercise such voting and
other consensual rights and to receive and hold as Pledged
Collateral any such dividends; and
(ii) all dividends which are received by such
Grantors contrary to the provisions of paragraph (i) of this
Section 9(b) shall be received in trust for the benefit of the
Lender, shall be segregated from other funds of the Grantors
and shall be forthwith paid over to the Lender as Pledged
Collateral in the same form as so received (with any necessary
endorsement).
SECTION 10. Insurance. Upon the occurrence and during the
continuance of any Event of Default after giving notice to the Grantors in
accordance with the Credit Agreement and the Orders, all insurance payments in
respect of Inventory and Equipment shall be held, applied and paid to the Lender
as specified in Section 15 hereof.
SECTION 11. Transfers to Others; Liens; Additional Shares.
(a) No Grantor shall (i) sell, assign (by operation of
law or otherwise) or otherwise dispose of any of the Collateral, except for
dispositions otherwise permitted by the Credit Agreement, or (ii) create or
suffer to exist any lien, security interest or other charge or encumbrance upon
or with respect to any of the Collateral to secure any obligation of any Person
except for the security interest created by this Agreement and the Orders, or
except as otherwise permitted by the Credit Agreement.
(b) Each of the Grantors (as applicable) agrees that it
will (i) cause each of the Guarantors that are wholly-owned Subsidiaries not to
issue any stock or other securities in addition to or substitution for the
Pledged Shares issued by such Guarantor, except to the respective Grantor and
(ii) pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all such additional shares of stock or other securities of each
Guarantor of the Pledged Shares.
SECTION 12. Lender Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Lender such Grantor's attorney-in-fact (which
appointment shall be irrevocable and deemed coupled with an interest), with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Lender's discretion, upon and during the
occurrence and continuation of an Event of Default after giving notice to the
Grantors in accordance with the Credit Agreement and the Orders, to take any
action and to execute any
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Exhibit D
Page 12
instrument which the Lender may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to
the Lender pursuant to Section 10,
(b) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral,
(c) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) or (b)
above,
(d) to receive, endorse and collect all instruments made
payable to the Grantors representing any dividend or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same, and
(e) to file any claims or take any action or institute
any proceedings which the Lender may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Lender with respect to any of the Collateral.
SECTION 13. Lender May Perform. If any Grantor fails to perform
any agreement contained herein, the Lender may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Lender
incurred in connection therewith (as to which invoices have been furnished)
shall be payable by the Grantors under Section 16(b).
SECTION 14. The Lender's Duties. Except for the safe custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Lender shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral, including, without limitation,
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral, whether
or not the Lender has or is deemed to have knowledge of such matters.
SECTION 15. Remedies. If any Event of Default shall have occurred
and be continuing, subject to the provisions of the Orders and Section 8 of the
Credit Agreement, upon three (3) Business Days' notice of the occurrence of an
Event of Default to the Grantors, counsel for the Grantors, counsel for any
Official Committee that may be appointed in the Cases and the United States
Trustee for the District of Delaware:
(a) The Lender may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, and without application to or order of the Bankruptcy Court,
all the rights and remedies of a secured party on default under the Uniform
Commercial Code and also may (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of the Lender
forthwith, assemble all or part of
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Exhibit D
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the Collateral as directed by the Lender and make it available to the Lender at
a place to be designated by the Lender which is reasonably convenient to both
parties and (ii) without notice except as specified in the following sentence,
sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Lender's offices or elsewhere, for cash, on credit
or for future delivery, and at such price or prices and upon such other terms as
the Lender may deem commercially reasonable. Each Grantor agrees that, to the
extent notice of such sale shall be required by law, at least ten days' notice
to the Grantors of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Lender shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Lender may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.
(b) The Lender may instruct the Grantors not to make any
further use of the Patents, Copyrights or Trademarks or any mark similar thereto
for any purpose to the extent that such use would be inconsistent with the
exercise by the Lender of any other remedies under this Section.
(c) The Lender may license, whether general, special or
otherwise, and whether on an exclusive or nonexclusive basis, any of the
Trademarks, Patents or Copyrights throughout the world for such term or terms,
on such conditions, and in such manner, as the Lender shall in its sole
discretion determine; provided, however, that any such license shall not
conflict with any existing license or sublicense.
(d) The Lender may (without assuming any obligations or
liability thereunder), at any time, enforce (and shall have the exclusive right
to enforce) against any licensee or sublicensee all rights and remedies of the
Grantors in, to and under any one or more license agreements with respect to the
Collateral, and take or refrain from taking any action under any thereof, and
each of the Grantors hereby releases the Lender from, and agrees to hold the
Lender free and harmless from and against any claims arising out of, any action
taken or omitted to be taken with respect to any such license agreement except
claims involving gross negligence, willful misconduct or bad faith of the
Lender.
(e) In the event of any such license, assignment, sale or
other disposition of the Collateral, or any of it, each Grantor shall supply its
know-how and expertise relating to the Trademarks, Patents or Copyrights, and
its customer lists and other records relating to the Trademarks, Patents or
Copyrights to the Lender or its designee.
(f) In order to implement the assignment, sale or other
disposal of any of the Trademarks, Patents or Copyrights, the Lender may, at any
time, pursuant to the authority granted in Section 12 hereof, execute and
deliver on behalf of the Grantors, one or more instruments of assignment of the
Trademarks, Patents or Copyrights (or any application of registration thereof),
in form suitable for filing, recording or registration in any country.
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Exhibit D
Page 14
(g) Subject to the terms of the Credit Agreement, all
cash proceeds received by the Lender in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral may, in the
discretion of the Lender, be held by the Lender as collateral for, and then or
at any time thereafter applied (after payment of any amounts payable to the
Lender pursuant to Section 16 hereof) in whole or in part against, all or any
part of the Obligations in such order as the Lender shall elect. Any surplus of
such cash or cash proceeds held by the Lender and remaining after payment in
full of all the Obligations shall be paid over to the Grantors or to whomsoever
may be lawfully entitled to receive such surplus.
(h) If at any time when the Lender shall determine to
exercise its right to sell all or any part of the Pledged Collateral pursuant to
this Section 15, such Pledged Collateral or the part thereof to be sold shall
not be effectively registered under the Securities Act of 1933, as amended, and
as from time to time in effect, and the rules and regulations thereunder (the
"Securities Act"), the Lender is hereby expressly authorized to sell such
Pledged Collateral or such part thereof by private sale in such manner and under
such circumstances as the Lender may deem necessary or advisable in order that
such sale may legally be effected without such registration. Without limiting
the generality of the foregoing, in any such event the Lender, in compliance
with applicable securities laws, (i) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Collateral or such part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a restricted number of
potential purchasers to effect such sale and (iii) may restrict such sale to
purchasers as to their number, nature of business and investment intention
including without limitation to purchasers each of whom will represent and agree
to the satisfaction of the Lender that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of such
Pledged Collateral, or part thereof, it being understood that the Lender may
cause or require each Grantor, and each Grantor hereby agrees upon the written
request of the Lender, to cause (x) a legend or legends to be placed on the
certificates to be delivered to such purchasers to the effect that the Pledged
Collateral represented thereby have not been registered under the Securities Act
and setting forth or referring to restrictions on the transferability of such
securities; and (y) the issuance of stop transfer instructions to the relevant
Guarantor's transfer agent, if any, with respect to the Pledged Collateral, or,
if such Guarantor transfers its own securities, a notation in the appropriate
records of such Guarantor. In the event of any such sale, each Grantor does
hereby consent and agree that the Lender shall incur no responsibility or
liability for selling all or any part of the Pledged Collateral at a price which
the Lender may deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
public and deferred until after registration as aforesaid.
SECTION 16. Indemnity and Expenses.
(a) Each Grantor, jointly and severally, agrees to
indemnify the Lender from and against any and all claims, losses and liabilities
growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses
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Exhibit D
Page 15
or liabilities directly arising from the Lender's own gross negligence, willful
misconduct or bad faith.
(b) The Borrowers will upon demand after the Termination
Date pay to the Lender the amount of any and all reasonable out-of-pocket
expenses as determined by the Bankruptcy Court, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the Lender
may incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of the Lender hereunder or (iv) the failure by any of the
Grantors to perform or observe any of the provisions hereof.
(c) The Grantors assume all responsibility and liability
arising from the use of the Trademarks, Patents and Copyrights.
(d) Each of the Grantors agrees that the Lender does not
assume, and shall have no responsibility for, the payment of any sums due or to
become due under any agreement or contract included in the Collateral or the
performance of any obligations to be performed under or with respect to any such
agreement or contract by any of the Grantors, and except as the same may have
resulted from the gross negligence, willful misconduct or bad faith of the
Lender, each of the Grantors hereby jointly and severally agree to indemnify and
hold the Lender harmless with respect to any and all claims by any Person
relating thereto.
SECTION 17. Security Interest Absolute. Except with respect to
Permitted Liens, all rights of the Lender and security interests hereunder, and
all obligations of each of the Grantors hereunder, shall be absolute and
unconditional, irrespective of any circumstance which might constitute a defense
available to, or a discharge of, any guarantor or other obligor in respect of
the Obligations.
SECTION 18. Waiver of Claims. Except as otherwise provided in
this Agreement, EACH GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE LENDER'S
TAKING POSSESSION OR THE LENDER'S DISPOSITION OF ANY OF THE COLLATERAL,
INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH ANY GRANTOR WOULD
OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY SUCH STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Grantor hereby further waives, to the extent permitted
by law:
(i) all damages occasioned by such taking of
possession except any damages which are the direct result of
the Lender's gross negligence or willful misconduct;
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Exhibit D
Page 16
(ii) all other requirements as to the time, place
and terms of sale or other requirements with respect to the
enforcement of the Lender's rights hereunder; and
(iii) all rights of redemption, appraisement,
valuation, stay, extension of moratorium now or hereafter in
force under any applicable law in order to prevent or delay
the enforcement of this Agreement or the absolute sale of the
Collateral or any portion thereof, and each Grantor, for
itself and all who may claim under it, insofar as it or they
now or hereafter lawfully may, hereby waives the benefit of
all such laws.
SECTION 19. Discontinuance of Proceedings. In case the Lender
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Lender, then and in every such case the Grantors,
the Lender and each holder of any of the Obligations shall be restored to their
former positions and rights hereunder with respect to the Collateral subject to
the security interest created under this Agreement, and all rights, remedies and
powers of the Lender shall continue as if no such proceeding had been
instituted.
SECTION 20. Amendment or Waiver. Neither this Agreement nor any
terms hereof may be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing signed by the Lender and
the Guarantors.
SECTION 21. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing and shall be given in
accordance with the applicable provisions of the Credit Agreement.
SECTION 22. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until payment in full of the Obligations, (b) be binding
upon each of the Grantors, their successors and assigns and (c) inure, together
with the rights and remedies of the Lender hereunder, to the benefit of the each
of the Lender and its respective successors, transferees and assigns. Upon the
payment in full of the Obligations, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Grantors subject
to any existing liens, security interests or encumbrances on such Collateral.
Upon any such termination, the Lender will, at the Grantor's expense, execute
and deliver to the Grantors such documents as the Grantors shall reasonably
request to evidence such termination.
SECTION 23. Governing Law. This Agreement shall be construed in
accordance with and be governed by the laws of the State of New York, exclusive
of its conflicts of law principals, except to the extent that the validity or
perfection of the security interest hereunder, or remedies hereunder, in respect
of any particular Collateral are governed by the laws of a jurisdiction other
than the State of New York and by Federal law (including, without limitation,
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Exhibit D
Page 17
the Bankruptcy Code) to the extent the same has pre-empted the law of the State
of New York or such other jurisdiction.
SECTION 24. Headings. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
[SIGNATURE PAGES FOLLOW]
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Exhibit D
Page 18
IN WITNESS WHEREOF, each of the Grantors and the Lender have
caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
GRANTORS:
AXISTEL COMMUNICATIONS, INC.
By:
--------------------------------------
Title:
NOVO NETWORKS OPERATING CORP.
By:
--------------------------------------
Title:
NOVO GLOBAL SERVICES, INC.
By:
--------------------------------------
Title:
NOVO NETWORKS INTERNATIONAL SERVICES, INC.
By:
--------------------------------------
Title:
E. VOLVE TECHNOLOGY GROUP, INC.
By:
--------------------------------------
Title:
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Exhibit D
Page 19
NOVO NETWORKS (UK) LTD.
By:
--------------------------------------
Title:
WEB2DIAL COMMUNICATIONS, INC.
By:
--------------------------------------
Title:
SERVICIOS PROFESIONALES J.R.J.S.,
S.A. DE C.V.
By:
--------------------------------------
Title:
NOVO NETWORKS METRO SERVICES, INC.
By:
--------------------------------------
Title:
NOVO NETWORKS MEDIA SERVICES, INC.
By:
--------------------------------------
Title:
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Exhibit D
Page 20
NOVO NETWORKS METRO SERVICES
(VIRGINIA), INC.
By:
--------------------------------------
Title:
E.VOLVE TECHNOLOGY GROUP DE
MEXICO, S.A. DE C.V.
By:
--------------------------------------
Title:
LENDER:
NOVO NETWORKS, INC.
By:
--------------------------------------
Title:
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