EXHIBIT 10.7
EXECUTION COPY
AMENDED AND RESTATED LOAN AGREEMENT
This Amended and Restated Loan Agreement (the "Agreement") is made as of
April 10, 2006 by and between Atlantic Investors, LLC, a Delaware limited
liability company ("Lender") and NaviSite, Inc. ("Borrower"), a Delaware
corporation.
WHEREAS Borrower and Lender entered into the Loan and Security Agreement,
dated as of January 29, 2003 (as amended and modified prior to the date hereof
(including pursuant to those several side letters requiring repayment of the
loans thereunder on the happening of certain events), the "2003 Agreement");
WHEREAS, Borrower, certain subsidiary guarantors party thereto, Silver
Point Finance, LLC ("Silver Point"), in its capacity as Administrative Agent to
the lenders party thereto (collectively, the "SP Lenders"), Silver Point, in its
capacity as Collateral Agent, and the SP Lenders have entered into a Credit and
Guaranty Agreement, dated as of April 10, 2006 (as the same may be amended,
modified, supplemented, restated or replaced from time to time, the "Silver
Point Credit Agreement");
WHEREAS, it is a condition precedent to the effectiveness of the Silver
Point Credit Agreement that the Borrower and Lender enter into this Agreement
and in order to consummate the transactions contemplated by the Silver Point
Credit Agreement, the Borrower has requested that the Lender agree to an
amendment and restatement of the 2003 Agreement and the Lender has agreed to
such amendment and restatement upon the terms and subject to the conditions set
forth herein;
WHEREAS, contemporaneously herewith (as a further condition to the
effectiveness of the Silver Point Credit Agreement), Lender is entering into
that certain Subordination Agreement, among the Lender, Unicorn Worldwide
Holdings Limited, Silver Point, in its capacity as administrative agent to the
SP Lenders, Borrower and certain of Borrower's subsidiaries, dated April 10,
2006 (as the same may be amended, modified, supplemented or restated from time
to time, the "Subordination Agreement"), which provides for, among other things,
the subordination of the Borrower's obligations hereunder to the Borrower's
obligations under the Silver Point Credit Agreement;
WHEREAS, in consideration of Lender's entry into the Subordination
Agreement and its agreement to amend and restate the 2003 Agreement, Borrower is
agreeing to make certain mandatory prepayments hereunder and if Borrower fails
to make such prepayments, Silver Point, one or more of the SP Lenders or any of
the respective Affiliates may, in their sole and absolute discretion make such
payments on the Borrower's behalf.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
and the terms and conditions contained herein, the parties hereto agree as
follows:
1. General Definitions. When used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" of any Person means (i) in the case of a natural person, a
member of such person's immediate family or spouse, and (ii) in the case of an
entity, any Person that, directly or indirectly, is in control of, is controlled
by, or is under common control with such entity. For purposes of the latter,
control of an entity shall mean the power, direct or indirect, (i) to vote fifty
percent (50.0%) or more of the securities having ordinary voting power for the
election of directors of such entity, or (ii) to direct or cause the direction
of the management and policies of such entity whether by contract or otherwise.
Notwithstanding anything to the contrary herein, in no event shall any Agent (as
defined in the Silver Point Credit Agreement) or any SP Lender be considered an
"Affiliate" of Borrower or any of its subsidiaries.
"Ancillary Agreements" means all agreements, instruments, and
documents, if any, including, without limitation, mortgages, pledges, powers of
attorney, consents, assignments, contracts, notices, security agreements, trust
agreements whether heretofore, concurrently, or hereafter executed by or on
behalf of the Borrower or delivered to the Lender, relating to this Agreement or
to the transactions contemplated by this Agreement.
"Atlantic New Credit Agreement" means the Loan Agreement by and
between Atlantic Investors, LLC, as lender and NaviSite, Inc., as borrower,
dated as of April 10, 2006, as the same may be amended, modified, supplemented
or restated from time to time.
"Bankruptcy Code" means Title 11 of the United States Bankruptcy Code,
11 U.S.C. Sections 101, et seq. as in effect on the Closing Date.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close.
"Capital Stock" means and includes any and all (i) shares, interests,
participations or other equivalents of or interest in (however designated)
corporate stock, including, without limitation, convertible notes and shares of
preferred or preference stock, (ii) limited liability company interests,
membership interests or other equivalent interests or participations (however
designated) in any limited liability company, and (iii) general limited
partnership or otherwise interest or participations in any partnership, joint
venture, trust or similar entity, in each case whether or not evidenced by stock
certificates or similar instruments.
"Credit Advances" shall have the meaning ascribed to such term in
Section 2(a) hereof.
"Closing Date" means the date hereof or such other date as may be
agreed upon by the parties hereto.
"Contract Rate" means an interest rate per annum equal to eight
percent (8%).
"Default Rate" means a rate equal to two percent (2.0%) per annum in
excess of the Contract Rate.
2
"Equity Securities" shall have the meaning ascribed to such term in
Section 4(b) hereof.
"Event of Default" shall mean the occurrence and continuance of any of
the events set forth in Section 13 herein.
"GAAP" means generally accepted accounting principles in the United
States of America (applied on a consistent basis both as to classification of
items and amounts).
"Loans" means all monies advanced by the Lender to the Borrower
pursuant to the terms of this Agreement.
"Mandatory Prepayments" shall have the meaning ascribed to such term
in Section 4(a)(i).
"Maximum Loan Amount" means $3,691,099.53.
"NaviSite Notes" shall mean the notes substantially in the form
attached hereto as Exhibit A.
"Obligations" means and includes all loans, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower, but not
any current or future Affiliate of Borrower, to the Lender or any Affiliate of
the Lender of every kind and description (whether or not evidenced by any note
or other instrument for the payment of money or the performance or
non-performance of any act by the Borrower in connection with this Agreement or
any Ancillary Agreement), direct or indirect, absolute or contingent, due or to
become due, contractual or tortious, liquidated or unliquidated, whether
existing by operation of law or otherwise now existing or hereafter arising
including, without limitation, all interest, charges or any other payments the
Borrower is required to make by law or otherwise arising under or as a result of
this Agreement and the Ancillary Agreements, together with all reasonable
expenses and reasonable attorneys' fees chargeable to the Borrower's account or
incurred by the Lender in connection with the Borrower's account whether
provided for herein or in any Ancillary Agreement.
"Outstanding Obligations" shall have the meaning ascribed to such term
in Section 4(a) hereof.
"Participant" shall have the meaning ascribed to such term in Section
10 hereof.
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Silver Point Revolving Commitments" shall mean the aggregate of the
commitments of the SP Lenders to make or otherwise fund any revolving loans to
Borrower pursuant to Section 2.2(a) of the Silver Point Credit Agreement.
"Term" shall mean the Closing Date through the Term Loan Maturity
Date.
3
"Term Loan Maturity Date" shall mean the earlier of (a) the date that
is 90 days after the earlier of (i) the fifth anniversary of the Closing Date
and (ii) the date on which the Obligations under, and as defined in the Silver
Point Credit Agreement shall have been paid in full and the commitments
thereunder have been terminated and (b) the date upon which the Obligations
hereunder have been paid in full and the commitments have been terminated
pursuant to Section 4 hereof.
"Transferee" shall have the meaning ascribed to such term in Section
10 hereof.
2. Credit Advances.
(a) Subject to the terms and conditions set forth herein and in the
Ancillary Agreements, the credit advances (the "Credit Advances") made by the
Lender to the Borrower hereunder shall, in the aggregate at any time
outstanding, not exceed the Maximum Loan Amount. As provided in Section 3 below,
any Credit Advances or Loans repaid by the Borrower to the Lender hereunder
prior to the Term Loan Maturity Date cannot be reborrowed.
(b) If the Borrower does not pay any interest, fees, costs or charges
to the Lender when due, the Borrower shall thereby be deemed to have requested,
and the Lender is hereby authorized at its discretion to make and charge to the
Borrower's account, a Credit Advance to the Borrower as of such date in an
amount equal to such unpaid interest, fees, costs or charges.
(c) Any sums expended by the Lender due to the Borrower's failure to
perform or comply with its obligations under this Agreement, shall be charged to
the Borrower's account as a Credit Advance and added to the Obligations.
3. Repayment of the Credit Advances.
The Borrower shall be required and the Borrower agrees to repay the
aggregate outstanding principal balance of the Credit Advances made by the
Lender to the Borrower hereunder together with any accrued and unpaid interest,
fees and charges, and all other amounts owed to the Lender under this Agreement
and the Ancillary Agreements on or before the Term Loan Maturity Date. Any
Credit Advances or Loans repaid by the Borrower to the Lender hereunder prior to
the Term Loan Maturity Date cannot be reborrowed.
4. Mandatory Prepayments.
(a) The Borrower shall prepay the aggregate amount of all accrued
Obligations then outstanding hereunder (including any principal and interest
accrued on any NaviSite Notes issued by Borrower pursuant to Section 5(c)
herein) (the "Outstanding Obligations") in full to the Lender on or before the
Term Loan Maturity Date. In addition, the Borrower will, subject to the terms of
the Subordination Agreement, prepay the Outstanding Obligations:
(i) in an amount equal to 50% of the net cash proceeds (net of
underwriting discounts and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and
expenses) in excess of
4
$10,000,000 received by the Borrower after the Closing Date from the
sale of Capital Stock by the Borrower (other than Capital Stock issued
pursuant to an employee stock of stock option compensation plan) (the
"Mandatory Prepayments"); provided, that (ii) after giving effect to
such Mandatory Prepayments (A) the sum of (x) the Borrower's cash on
hand, (y) the undrawn principal amount of the Silver Point Revolving
Commitment and (z) the undrawn and available principal amount of
commitments under the Atlantic New Credit Agreement, shall equal or
exceed $10,000,000; and (B) no Default or Event of Default under the
Silver Point Credit Agreement shall have occurred and be continuing or
shall result therefrom; and
(ii) in an amount equal to the amount, if any, provided by Silver
Point, or one or more of the SP Lenders or any of their respective
Affiliates, to Borrower at their sole and absolute discretion
expressly for such purpose.
(b) If, on or before the date that is 90 days after the Closing Date,
the Outstanding Obligations hereunder have not been fully satisfied pursuant to
Section 4(a)(i) or 4(a)(ii), the Lender shall have the right, upon providing
written notice to the Borrower pursuant to Section 17 hereof, to convert
Outstanding Obligations into shares of the Borrower's common stock (the "Equity
Securities"). The number of Equity Securities to be issued upon such conversion
shall be equal to the quotient obtained by dividing (i) the Outstanding
Obligations by (ii) $2.81, rounded to the nearest whole. No fractional shares of
the Borrower's Equity Securities will be issued upon conversion of the
Outstanding Obligations. In lieu of any fractional share to which the Lender
would otherwise be entitled, the Borrower will pay to the Lender in cash the
amount of the unconverted principal and interest balance of the Outstanding
Obligations that would otherwise be converted into such fractional share. Upon
Lender's notice to Borrower of its intent to convert the Outstanding Obligations
pursuant to this Section 4(b), Borrower shall, at its own expense, issue and
deliver to the Lender, as soon as practicable after receipt of Lender's notice
in this Section 4(b), issue and deliver to Lender, at its primary address listed
in Section 17 hereof, a certificate or certificates for the number of shares to
which the Lender is entitled upon such conversion, together with any other
securities and property to which the Lender is entitled upon such conversion
under the terms of this Agreement, including a check payable to the Lender for
any cash amounts payable as described herein. At any time, after the date that
is 90 days after the Closing Date, as long as this Agreement is in effect and
any Outstanding Obligations have not been satisfied pursuant to Section 4(a) or
this 4(b), Lender shall continue to have the conversion rights described in this
Section 4(b).
(c) Upon (i) Borrower's payment in full of the Obligations hereunder,
as contemplated by Section 4(a) hereof or (ii) Lender's conversion of the
Obligations and the principal and interest accrued on any NaviSite Notes, as
contemplated by Section 4(b) hereof, the Borrower shall be fully released by the
Lender from any further obligations under this Agreement.
5. Interest and Fees.
(a) Interest shall accrue on the unpaid principal balance of the Loans
for each day they are outstanding at the Contract Rate.
5
(b) Interest shall be (i) computed on the basis of actual days elapsed
over a 360-day year, (ii) calculated by the Lender on a periodic basis and (iii)
payable upon the occurrence of the Term Loan Maturity Date.
(c) Prior to the Term Loan Maturity Date, the Borrower may pay any or
all of the interest due in NaviSite Notes in lieu of cash by giving notice to
Lender of such election at least five (5) days prior thereto.
(d) Upon the occurrence and during the continuance of an Event of
Default, interest shall be payable at the Default Rate.
(e) Notwithstanding the foregoing, in no event shall interest exceed
the maximum rate permitted under any applicable law or regulation, and if any
provision of this Agreement or an Ancillary Agreement is in contravention of any
such law or regulation, such provision shall be deemed amended to provide for
interest at said maximum rate and any excess amount shall either be applied, at
the Lender's option, to the outstanding Loans in such order as the Lender shall
determine or refunded by the Lender to the Borrower.
(f) The Borrower shall pay principal, interest and all other amounts
payable hereunder, or under any Ancillary Agreement, without any deduction
whatsoever, including, but not limited to, any deduction for any set-off or
counterclaim.
6. Inspections. At all times during normal business hours after reasonable
notice to the Borrower, the Lender shall have the right to (a) visit and inspect
the Borrower's properties, (b) inspect, audit and make extracts from the
Borrower's books and records which are relevant to this Agreement, including,
but not limited to, management letters prepared by independent accountants, and
(c) discuss with the Borrower's principal officers, and independent accountants,
the Borrower's business, assets, liabilities, financial condition, results of
operations and business prospects. The Borrower will deliver to the Lender any
instrument necessary for the Lender to obtain records from any service bureau
maintaining records for the Borrower.
7. Financial Information. The Borrower shall provide the Lender, no later
than two (2) business days following its 10-Q and 10-K filings under the
Securities Exchange Act of 1934, as amended, with the Securities and Exchange
Commission, a copy of the Borrower's financial statements that are included in
such filings. In addition, as soon as available and within fifteen (15) days
after the end of each month, the Borrower shall provide the Lender copies of
Borrower's consolidated balance sheet as of the end of such month, and the
related consolidated statements of income, shareholders' equity and cash flows
for such month and for the portion of the fiscal year ended with the last day of
such month.
8. Representations, Warranties and Covenants. The Borrower represents,
warrants, and covenants that:
(a) The Borrower is a corporation duly organized and validly existing
under the laws of the State of Delaware and duly qualified and in good standing
in every other state or jurisdiction in which the nature of the Borrower's
business requires such qualification;
6
(b) the execution, delivery and performance of this Agreement and the
Ancillary Agreements, if any, (i) have been duly authorized, (ii) are not in
contravention of the Borrower's certificate of incorporation or by-laws; and
(iii) are within the Borrower's corporate powers;
(c) this Agreement and the Ancillary Agreements, if any, executed and
delivered by the Borrower are the Borrower's legal, valid and binding
obligations, enforceable in accordance with their terms;
(d) to the extent required under the Silver Point Credit Agreement,
the operation of the Borrower's business is and will continue to be in
compliance in all material respects with all applicable federal, state and local
laws, including, but not limited to, all applicable environmental laws and
regulations;
(e) to the extent required under the Silver Point Credit Agreement, it
will pay or discharge when due all taxes, assessments and governmental charges
or levies imposed upon it;
(f) it will not (i) create, incur, assume or suffer to exist any
indebtedness (other than in the ordinary course) ; (ii) declare, pay or make any
dividend or distribution on any shares of the common stock or preferred stock of
the Borrower or apply any of its funds, property or assets to the purchase,
redemption or other retirement of any common or preferred stock of the Borrower;
or (iii) make advances, loans or extensions of credit to any Person, provided,
however, in each the case of (i), (ii) or (iii), other than as provided herein
or in the Silver Point Credit Agreement or the Atlantic New Credit Agreement;
(g) to the extent required under the Silver Point Credit Agreement, it
shall at its own cost and expense in amounts and with carriers as is currently
in place on the date of this Agreement, it shall (i) keep all its insurable
properties and properties in which it has an interest insured against the
hazards of fire, flood, sprinkler leakage, those hazards covered by extended
coverage insurance and such other hazards, and for such amounts, as is currently
in place on the date of this Agreement; (ii) maintain public and product
liability insurance against claims for personal injury, death or property damage
suffered by others; and (iii) maintain all such worker's compensation or similar
insurance as may be required under the laws of any state or jurisdiction in
which the Borrower is engaged in business; and
(h) there is no Event of Default.
9. Expenses. Each party shall pay all of its out-of-pocket costs and
expenses, including, without limitation, reasonable fees and disbursements of
counsel, in connection with the preparation, execution and delivery of this
Agreement and the Ancillary Agreements, and in connection with the prosecution
or defense of any action, contest, dispute, suit or proceeding concerning any
matter in any way arising out of, related to or connected with this Agreement or
any Ancillary Agreement. The Borrower shall pay the Lender's customary bank
charges for all bank services performed or caused to be performed by the Lender
for the Borrower at the Borrower's request or in connection with the Borrower's
loan account with the Lender. All such charges together with all filing,
recording and search fees, taxes and interest payable by the
7
Borrower to the Lender shall be payable on demand. If any tax by any
governmental authority is or may be imposed on or as a result of any transaction
between the Borrower and the Lender, which the Lender is or may be required to
withhold or pay, the Borrower agrees to indemnify and hold the Lender harmless
in respect of such taxes and the Borrower will repay to the Lender the amount of
any such taxes which shall be charged to the Borrower's account; and until the
Borrower shall furnish the Lender with indemnity therefor (or supply the Lender
with evidence satisfactory to it that due provision for the payment thereof has
been made), the Lender may hold without interest any balance standing to the
Borrower's credit.
10. Assignment by Lender. The Lender may (a) assign any or all of the
Obligations together with any or all of the security therefor and any transferee
("Transferee") shall succeed to all of the Lender's rights and duties with
respect thereto as set forth in this Agreement and (b) from time to time sell or
otherwise grant participations in any of the Obligations and the holder of any
such participation ("Participant") shall, subject to the terms of any agreement
between the Lender and such holder, be entitled to the same benefits as the
Lender with respect to any security for the Obligations in which such holder is
a participant; provided, however, that any such party that becomes a Transferee
under (a) or Participant under (b) shall agree in writing to be bound by and
subject to the provisions of the Subordination Agreement. The Borrower agrees
that each such Transferee or Participant may, in lieu of the Lender, exercise
any and all rights of the Lender's set-off and counterclaim with respect to its
participation in the Obligations as fully as though the Borrower were directly
indebted to such holder in the amount of such participation, subject to the
provisions of the Subordination Agreement.
11. Waiver. The Borrower waives presentment and protest of any instrument
and notice thereof, notice of default and all other notices to which the
Borrower might otherwise be entitled.
12. Term of Agreement. This Agreement shall continue in full force and
effect until the expiration of the Term.
13. Events of Default. The occurrence and continuance of any of the
following shall constitute an Event of Default:
(a) failure to make payment of any of the Obligations when required
hereunder and failure to cure such payment obligation within two (2) business
days of written notice from the Lender;
(b) failure to perform under and/or committing any breach of this
Agreement or any Ancillary Agreement and failure to cure such breach within
sixty (60) business days of written notice from the Lender or any other
agreement between the Borrower and the Lender;
(c) any representation, warranty or statement made by the Borrower
hereunder, in any Ancillary Agreement, any certificate, statement or document
delivered pursuant to the terms hereof, or in connection with the transactions
contemplated by this Agreement are false or misleading in any material respect
when made;
(d) if pursuant to, or within the meaning of, the Bankruptcy Code or
any other federal or state law relating to insolvency or relief of debtors,
Borrower shall (i) commence a
8
voluntary case or proceeding, (ii) consent to the entry of an order for relief
against it in an involuntary case, (iii) make an assignment for the benefit of
its creditors or (iv) admit in writing its inability to pay its debts as they
become due;
(e) if the Borrower shall apply for, consent to or suffer to exist the
appointment of, or the taking of possession by, a receiver, custodian, assignee,
trustee, examiner or liquidator of itself or of all or a substantial part of its
property; or
(f) acceleration in the payment of any principal of or interest on any
indebtedness for money borrowed by the Borrower in excess of $1,000,000.
14. Waiver; Cumulative Remedies. Failure by the Lender to exercise any
right, remedy or option under this Agreement or any supplement hereto or any
other agreement between the Borrower and the Lender or delay by the Lender in
exercising the same, will not operate as a waiver, and no waiver by the Lender
will be effective unless it is in writing and then only to the extent
specifically stated. The Lender's rights and remedies under this Agreement will
be cumulative and not exclusive of any other right or remedy that the Lender may
have.
15. Application of Payments. The Borrower irrevocably waives the right to
direct the application of any and all payments at any time or times hereafter
received by the Lender from or on the Borrower's behalf and the Borrower hereby
irrevocably agrees that the Lender shall have the continuing exclusive right to
apply and reapply any and all payments received at any time or times hereafter
against the Borrower's Obligations hereunder in such manner as the Lender may
deem advisable notwithstanding any entry by the Lender upon any of the Lender's
books and records.
16. Subordination Agreement. This Agreement and the Lender's rights
hereunder and under each Ancillary Agreement is subject to the terms of the
Subordination Agreement. In the event of any inconsistency between this
Agreement and the Ancillary Agreements, on the one hand, and the Subordination
Agreement, on the other, the provisions of the Subordination Agreement shall
control, and no payment may be made to the Lender hereunder, and the Lender may
not request, attempt to enforce or accept the same, in contravention of the
terms of the Subordination Agreement.
17. Notices. Any notice or request hereunder may be given to the Borrower
or the Lender at the respective addresses set forth below or as may hereafter be
specified in a notice designated as a change of address under this Section 17.
Any notice or request hereunder shall be given by registered or certified mail,
return receipt requested, hand delivery, overnight mail or telecopy (confirmed
by mail). Notices and requests shall be, in the case of those by hand delivery,
deemed to have been given when delivered to any officer of the party to whom it
is addressed, in the case of those by mail or overnight mail, deemed to have
been given three (3) days after deposited in the mail or one (1) day after
deposited with the overnight mail carrier, and, in the case of a telecopy, when
confirmed.
9
Notices shall be provided as follows:
If to Lender: Atlantic Investors, LLC
c/o Xxx Xxxxxxxx
Xxxxxx Xxxxxx LLP
Times Square Tower
Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
If to the Borrower: NaviSite, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attn: Chief Financial Officer
18. Governing Law and Waiver of Jury Trial. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK. THE LENDER SHALL HAVE THE RIGHTS AND REMEDIES OF A SECURED PARTY
UNDER APPLICABLE LAW. THE BORROWER AGREES THAT ALL ACTIONS AND PROCEEDINGS
RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR
ANY OTHER OBLIGATIONS SHALL BE LITIGATED IN THE U.S. DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK OR, AT THE LENDER'S OPTION, IN ANY OTHER COURT
LOCATED IN THE STATE OF NEW YORK OR ELSEWHERE AS THE LENDER MAY SELECT AND THAT
SUCH COURT IS A CONVENIENT FORUM AND THE BORROWER SUBMITS TO THE PERSONAL
JURISDICTION OF SUCH COURT. THE BORROWER WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS THAT SERVICE OF PROCESS UPON THE BORROWER MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE BORROWER AT THE
BORROWER'S ADDRESS APPEARING ON THE LENDER'S RECORDS, AND SERVICE SO MADE SHALL
BE DEEMED COMPLETED TWO (2) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED. BOTH
PARTIES HERETO WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BETWEEN THE BORROWER AND THE LENDER AND THE BORROWER WAIVES THE RIGHT TO ASSERT
IN ANY ACTION OR PROCEEDING INSTITUTED BY THE LENDER WITH REGARD TO THIS
AGREEMENT OR ANY OF THE OBLIGATIONS ANY OFFSETS OR COUNTERCLAIMS WHICH IT MAY
HAVE.
19. Entire Understanding. This Agreement and the Ancillary Agreements
contain the entire understanding between the Borrower and the Lender and any
promises, representations, warranties or guarantees not herein contained shall
have no force and effect unless in writing and signed by an authorized officer
of the Lender and by an authorized officer of the Borrower. Neither this
Agreement, the Ancillary Agreements, nor any portion or provisions thereof may
be
10
changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged.
20. Severability. Wherever possible each provision of this Agreement or the
Ancillary Agreements shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement or the
Ancillary Agreements shall be prohibited by or invalid under applicable law such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
thereof.
21. Captions. All captions are and shall be without substantive meaning or
content of any kind whatsoever.
22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same instrument.
23. Construction. The parties acknowledge that each party and its counsel
have reviewed this Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.
11
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
NAVISITE, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
ATLANTIC INVESTORS, LLC
By Unicorn Worldwide Holdings Limited,
a Managing Member
By: /s/ X. X. XxXxxxx
------------------------------------
Name: X. X. XxXxxxx
Title: Director
12
EXHIBIT A
THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS SUBORDINATED TO THE PRIOR
PAYMENT IN FULL OF THE SENIOR DEBT (AS DEFINED IN THE SUBORDINATION AGREEMENT
HEREINAFTER REFERRED TO) PURSUANT TO, AND TO THE EXTENT PROVIDED IN, THE
SUBORDINATION AGREEMENT DATED AS OF APRIL 10, 2006, AS THE SAME MAY BE AMENDED,
MODIFIED OR RESTATED FROM TIME TO TIME (THE "SUBORDINATION AGREEMENT"), BY,
INTER ALIA, THE BORROWER, THE OTHER OBLIGORS, THE SUBORDINATED CREDITORS
(INCLUDING ATLANTIC) AND THE SENIOR AGENT (AS EACH SUCH TERM IS DEFINED IN THE
SUBORDINATION AGREEMENT).
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
PROMISSORY NOTE
______________________ [Principal Amount] __________ [Date]
For value received, NaviSite, Inc., a Delaware corporation (the "Company"),
promises to pay to Atlantic Investors, LLC (the "Holder"), the principal sum of
__________________________ Dollars ($_________). Interest shall accrue from the
date of this Note on the unpaid principal amount at a rate equal to 8% per
annum, compounded annually. This Note is subject to the following terms and
conditions.
1. MATURITY. Principal and any accrued but unpaid interest under this Note
shall be due and payable as provided in that certain Amended and Restated Loan
Agreement, dated as of April 10, 2006, between the company and Holder, as the
same may be amended, modified, supplemented or restated from time to time.
2. PAYMENT; MANDATORY PREPAYMENT. (a) All payments shall be made in lawful
money of the United States of America at such place as the Holder hereof may
from time to time designate in writing to the Company. Subject to the terms of
the Subordination Agreement, payment shall be credited first to the accrued
interest then due and payable and the remainder applied to principal.
(b) If the Company shall become obligated to make any Mandatory
Prepayments (as defined by Amended and Restated Loan Agreement between Atlantic
Investors, LLC and NaviSite, Inc., dated April 10, 2006 (the "Atlantic Existing
Credit Agreement")),
pursuant to Section 4 of the Atlantic Existing Credit Agreement, then Company
shall prepay, and Company agrees to pay, the aggregate amount of all principal
and interest accrued under this Promissory Note contemporaneously with the
Company's making of such Mandatory Prepayments.
3. TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions of this Note
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Holder may assign, pledge, or otherwise transfer this
Note without the prior written consent of the Company, and upon Holder's
surrender of the original Note for registration of transfer, duly endorsed, or
accompanied by a duly executed written instrument of transfer in form
satisfactory to the Company, the Company shall issue a new note for the same
principal amount and interest and registered in the name of, the transferee.
Interest and principal are payable only to the registered holder of this Note.
4. GOVERNING LAW. This Note and all acts and transactions pursuant hereto
and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of New York,
without giving effect to principles of conflicts of law.
5. AMENDMENTS AND WAIVERS. Any term of this Note may be amended only with
the written consent of the Company and the Holder. Any amendment or waiver
effected in accordance with this Section 5 shall be binding upon the Company,
each Holder and each transferee of any Note.
6. ACTION TO COLLECT ON NOTE. If action is instituted to collect on this
Note, the Company promises to pay all costs and expenses, including reasonable
attorney's fees, incurred in connection with such action.
COMPANY:
NAVISITE, INC.
By:
------------------------------------
Name:
----------------------------------
(print)
Title:
---------------------------------
Address: NaviSite, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
2
