EXHIBIT 3
REIMBURSEMENT AGREEMENT
This REIMBURSEMENT AGREEMENT, dated as of December 27, 2002 (this
"AGREEMENT"), is entered into by and between XXX.XXX, INC., a Delaware
corporation ("OBLIGOR"), the guarantors identified on the signature pages hereof
(collectively, the "GUARANTORS" and each a "GUARANTOR") and VANTAGEPOINT VENTURE
PARTNERS III (Q), L.P., a Delaware limited partnership as the administrative
agent for the Guarantors ("AGENT").
RECITALS
A. Obligor has requested that the Guarantors cause to be issued, and
subject to the terms and condition of this Agreement, the Guarantors
have agreed to be issued, Guaranties (collectively, as amended and in
effect from time to time, the "GUARANTIES" and each a "GUARANTY") in
an aggregate amount up to Six Million Seven Hundred Thirty Thousand
Dollars ($6,730,000) to support certain obligations of Obligor, under
a Revolving Credit and Term Loan Agreement, dated as of December 13,
2002 (as amended and in effect from time to time, the "CREDIT
AGREEMENT"), between Obligor and Fleet National Bank ("BANK").
B. In order to induce Guarantors to issue the Guaranties, Obligor has
agreed to enter into this Agreement.
C. The obligations under this Agreement are secured by a Security
Agreement, dated the date hereof, executed by Obligor and certain of
its Subsidiaries in favor of Agent for itself and the benefit of the
Guarantors (as amended and in effect from time to time, the "SECURITY
AGREEMENT"). The obligations under this Agreement have been guarantied
by certain of the Subsidiaries of Obligor (each a "SUBSIDIARY
GUARANTOR") pursuant to a Subsidiary Guaranty, dated as of the date
hereof (as amended and in effect from time to time, the "SUBSIDIARY
GUARANTY")
D. Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings set forth in Section 6 hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Obligor hereby agrees with Guarantors and Agent as follows:
1. REIMBURSEMENT. (a) If Guarantors shall at any time or from time to
time be required to make any payment (i) under the Guaranties for any Drawn
Amounts, or (ii) in payment of a Guaranty Expense Amount, then Agent, at the
direction of Required Guarantors (provided, that if the Columbia Entities desire
to take an enforcement action that Required Guarantors have not consented to,
the Agent shall take such enforcement action as the Columbia Entities direct the
Agent to take, provided further, that Agent shall not take such enforcement
action until the earlier of (A) the 120th day after receipt by Agent of written
notice of such enforcement action from the Columbia Entities or (B) such time as
the Required Guarantors have provided their consent to such enforcement
actions), may give Obligor written notice of any such payments and Obligor shall
reimburse Agent within two (2) business days of receipt of such written notice
an amount equal to such Drawn Amounts and/or Guaranty Expense Amount, as
applicable.
(b) Obligor's Obligations hereunder are absolute, unconditional and
irrevocable and shall not be reduced by any set-off or any event or occurrence
including any action or inaction by Agent or Guarantors or any other party or by
any unenforceability of the Credit Agreement. Any Obligations not paid when due
shall bear interest a rate per annum of 10%.
(c) All payments by Obligor shall be made to Agent for the account of all
of the Guarantors and shall be made in immediately available funds, no later
than 1:00 p.m. (California time) on the date specified herein. Any payment
received by Agent later than 1:00 p.m. (California time), shall be deemed to
have been received on the following business day and any applicable interest
shall continue to accrue until such following business day.
(d) Except as otherwise provided in this Agreement, aggregate payments
made pursuant to this Section 1 shall be apportioned ratably among the
Guarantors and payments of Guaranty Expense Amounts (other than fees or expenses
that are for Agent's separate account) shall be apportioned ratably among the
Guarantors. All payments shall be remitted to Agent and all such payments and
all proceeds of Collateral received by Agent, shall be applied as follows:
(i) FIRST, to pay any Guaranty Expense Amounts then due to Agent
under the Operative Documents, until paid in full;
(ii) SECOND, to pay any Guaranty Expense Amount then due to the
Guarantors under the Operative Documents, on a ratable basis, until paid in
full;
(iii) THIRD, to pay any interest due in respect of Drawn Amounts to
the Guarantors under this Agreement, on a ratable basis, until paid in full; and
(iv) FOURTH, to pay any Drawn Amounts then due to the Guarantors
under this Agreement, on a ratable basis, until paid in full.
Except as otherwise provided in this Agreement, rights, interests and
obligations of each Guarantor under this Agreement and related Operative
Documents, including security interests in the Collateral under the Security
Agreement, shall be shared by each Guarantor in the ratio of (a) the aggregate
Drawn Amount paid by such Guarantor to Bank pursuant to such Guarantor's
Guaranty to (b) the aggregate Drawn Amounts paid by all Guarantors to Bank
pursuant to such Guarantors' Guaranties; and if no Drawn Amounts have been paid
to Bank, then the ratio of (y) a Guarantor's Guaranty Commitment to (z) the
aggregate Guaranty Commitments of all Guarantors. Any reference in this
Agreement to an allocation between or sharing by Guarantors of any right,
interest or obligation "ratably," "proportionally" or in similar terms shall
refer to this ratio.
2. REPRESENTATIONS AND WARRANTIES OF OBLIGOR. Obligor represents and
warrants to Agent and Guarantors that:
(a) DUE INCORPORATION, QUALIFICATION, ETC. Obligor (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation; (ii) has the corporate power and authority to
own, lease and operate its properties and carry on its business as now
conducted; and (iii) is duly qualified, licensed to do business and in good
standing as a foreign corporation in each jurisdiction where the failure to be
so qualified or licensed could reasonably be expected to have a material adverse
effect on the business, financial condition or results of operations of Obligor.
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(b) AUTHORITY. The execution, delivery and performance by Obligor of
this Agreement and the other Operative Documents to which it is a party and the
consummation of the transactions contemplated hereby (i) are within the
corporate power and authority of Obligor and (ii) have been duly authorized by
all necessary corporate actions on the part of Obligor.
(c) ENFORCEABILITY. This Agreement and the other Operative Documents
to which Obligor is a party has been duly executed and delivered by Obligor and
constitutes, or will constitute, a legal, valid and binding obligation of
Obligor, enforceable against Obligor in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general application relating
to or affecting the enforcement of creditors' rights generally and general
principles of equity.
(d) NON-CONTRAVENTION. The execution and delivery by Obligor of this
Agreement and the other Operative Documents and the performance and consummation
of the transactions contemplated hereby do not and will not (i) violate the
articles or certificate of incorporation or bylaws of Obligor or any material
judgment, order, writ, decree, statute, rule or regulation applicable to
Obligor; (ii) violate any provision of, or result in the breach or the
acceleration of, or entitle any other person to accelerate (whether after the
giving of notice or lapse of time or both), any material mortgage, indenture,
agreement, instrument or contract to which Obligor is a party or by which it is
bound; or (iii) result in the creation or imposition of any lien upon any
property, asset or revenue of Obligor (other than those in favor of Agent) or
the suspension, revocation, impairment, forfeiture, or nonrenewal of any
material permit, license, authorization or approval applicable to Obligor, its
business or operations, or any of its assets or properties.
(e) APPROVALS. Other than those already obtained, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any governmental authority or other person (including, without limitation,
the shareholders of Obligor) is required in connection with the execution and
delivery of this Agreement and the other Operative Documents and the performance
and consummation of the transactions contemplated hereby and thereby.
3. DELIVERIES. Simultaneously with the execution and delivery of this
Agreement, the following shall occur:
(a) Obligor and each Subsidiary Guarantor shall have executed and
delivered to Agent the Security Agreement in the form attached hereto as Exhibit
A;
(b) Each Subsidiary Guarantor shall have executed and delivered to
Agent the Subsidiary Guaranty in the form attached hereto as Exhibit B;
(c) Obligor shall have delivered to each Guarantor or their designee
(other than the Additonal Guarantors) a warrant in the form attached hereto as
Exhibit C (collectively, the "WARRANTS") to purchase that number of shares of
Obligor's common stock as set forth on SCHEDULE 3;
(d) Obligor and each Subsidiary Guarantor shall have executed and
delivered each financing statement, instrument, agreement and other document as
Agent shall have reasonably requested to perfect its security interest and the
priority thereof;
(e) Obligor shall have delivered to Agent an opinion of its counsel in
form and substance reasonably satisfactory to Agent;
(f) Obligor shall have delivered to Agent an amendment to Obligor's
Stockholders Agreement, dated as of December 24, 2001, duly executed by the
requisite number of investors party thereto,
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pursuant to which each Guarantor or their representative designee receiving a
warrant from Obligor in connection with the transactions described herein shall
receive the same registration rights granted to other investors party to such
registration rights agreement with respect to the shares of common stock
issuable upon exercise or conversion of the warrant referenced in subsection (c)
of this Section 3; and
(g) Except for the Additional Guarantors, each Guarantor, or an
affiliate or designee of such Guarantor, shall have executed and delivered to
Lender a Guaranty in the maximum principal amount set forth opposite such
Guarantor's name on SCHEDULE 2 hereto.
To the extent any of the foregoing shall not have occurred upon the
execution and delivery of this Agreement, Obligor agrees (as a covenant and not
merely as a condition) to promptly accomplish the same.
4. COVENANTS OF OBLIGOR.
(a) Obligor agrees:
(i) To timely perform all of its obligations to Bank under the
Credit Agreement;
(ii) To give Agent prompt notice of any default in the observance
of each Obligor's obligations under the Credit Agreement and to use its
commercially reasonable best efforts to cure any such default within the time
periods permitted;
(iii) Unless the Required Guarantors provides their prior written
consent, not to make any initial borrowing or otherwise utilize credit under the
Credit Agreement until such time as the unrestricted cash (determined in
accordance with GAAP and excluding Excluded Cash) shown on Obligor's balance
sheet is less than $2,000,000;
(iv) Not to amend or otherwise modify the Credit Agreement
without the prior written consent of Agent, and not to enter into any loan or
credit agreement or other credit arrangements with Bank, or any other lender,
outside the Operative Documents;
(v) To immediately notify Agent if the unrestricted cash
(determined in accordance with GAAP and excluding Excluded Cash) shown on
Obligor's balance sheet equals or exceeds $11,000,000;
(vi) If the unrestricted cash (determined in accordance with GAAP
and excluding Excluded Cash) shown on Obligor's balance sheet equals or exceeds
$11,000,000, then Obligor shall do either of the following at Agent's request:
(1) repay outstanding loans under the Credit Agreement in
increments of $1,000,000 for each such increment in excess of $10,000,000
(excluding any Excluded Cash) (provided that if there is less than $1,000,000 of
outstanding loans due under the Credit Agreement, then Obligor shall repay such
lesser amount to the extent that Obligor retains unrestricted cash balances in
an amount equal to $10,000,000 (excluding any Excluded Cash) after giving effect
to such repayment), and if requested by Agent, permanently reduce the
outstanding commitment under the Credit Agreement in an amount equal to such
repayment amount; or
(2) cause each Guarantor's guarantee requirement under the
Credit Agreement to be eliminated ratably in an aggregate amount equal to the
amount of outstanding loans that would otherwise be required to be repaid
pursuant to Section 4(a)(vi)(1) hereof.
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(vii) Obligor will cause each of its Subsidiaries (other than a
Regulated Subsidiary and DSLnet Communications Delaware, Inc.) hereafter formed
or acquired, to execute and deliver to Agent a Subsidiary Joinder in the form of
ATTACHMENT 1 to the Guaranty, to cause such Subsidiary to become a Subsidiary
Guarantor under the Subsidiary Guaranty and a Grantor under the Security
Agreement. Obligor and such Subsidiary shall fully cooperate with Agent and
perform all additional acts requested by Agent to effect the purposes of this
SECTION 4(a)(vii), including without limitation, execution and delivery of
agreements, instruments, UCC financing statements, documents, and certificates
all in form and substance satisfactory to Agent.
(b) Obligor agrees, at all times after Obligor has received notice of
a demand by Bank for payment under the Guaranty and until such demand has been
rescinded by Bank, that without the prior written consent of Agent:
(i) INDEBTEDNESS. Neither Obligor nor any of its Subsidiaries
shall create, incur, assume or permit to exist any Indebtedness except Permitted
Indebtedness.
(ii) LIENS. Neither Obligor nor any of its Subsidiaries shall
create, incur, assume or permit to exist any Lien on or with respect to any of
its assets or property of any character, whether now owned or hereafter
acquired, except for Permitted Liens.
(iii) ASSET DISPOSITIONS. Neither Obligor nor any of its
Subsidiaries shall sell, lease, transfer, license or otherwise dispose of
(collectively, a "TRANSFER") any of its assets or property, whether now owned or
hereafter acquired, except (i) Transfers in the ordinary course of its business
(A) consisting of the sale of inventory, (B) consisting of sales of excess,
worn-out or obsolete equipment, and (C) consisting of cash payments in a manner
that is not prohibited by the terms of this Agreement or the other Operative
Documents; and (ii) Transfers by Obligor to any Subsidiary which is a Subsidiary
Guarantor and Transfers by any Subsidiary to Obligor or another Subsidiary which
is a Subsidiary Guarantor.
(iv) MERGERS, ACQUISITIONS, ETC. Neither Obligor nor any of its
Subsidiaries shall consolidate with or merge into any other Person or permit any
other Person to merge into it, or acquire all or substantially all of the assets
or capital stock of any other Person, except that any Subsidiary may merge with
and into Obligor or another Subsidiary which is a Subsidiary Guarantor.
(v) INVESTMENTS. Neither Obligor nor any of its Subsidiaries
shall make any Investment except for Permitted Investments. Neither Obligor nor
any of its Subsidiaries shall create, acquire or permit to exist any Subsidiary
which is not a Subsidiary Guarantor other than a Regulated Subsidiary or DSLnet
Communications Delaware, Inc. Notwithstanding the foregoing, neither Obligor nor
any of its Subsidiaries shall make any Investment in a Regulated Subsidiary to
the extent that such Investment exceeds amounts necessary for such Regulated
Subsidiary to make payments to its vendors, public utility commissions or the
Federal Communications Commission and any other governmental authorities in the
ordinary course of business.
(vi) DIVIDENDS, REDEMPTIONS, ETC. Neither Obligor nor any of its
Subsidiaries shall (i) pay any dividends or make any distributions on its equity
securities; (ii) purchase, redeem, retire, defease or otherwise acquire for
value any of its equity securities, other than equity securities in an aggregate
amount not to exceed $250,000 purchased from terminated employees, consultants
or directors pursuant to employee stock purchase plans, employee restricted
stock agreements or similar agreements; (iii) return any capital to any holder
of its equity securities; (iv) make any distribution of assets, Equity
Securities, obligations or securities to any holder of its Equity Securities; or
(v) set apart any sum for any such purpose; PROVIDED,
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HOWEVER, that any Subsidiary may pay cash dividends to Obligor or any Subsidiary
which is a Subsidiary Guarantor.
(vii) INDEBTEDNESS PAYMENTS. Neither Obligor nor any of its
Subsidiaries shall (i) prepay, redeem, purchase, defease or otherwise satisfy in
any manner prior to the scheduled repayment thereof any Indebtedness for
borrowed money (other than amounts due under the Credit Agreement or this
Agreement) or lease obligations, (ii) amend, modify or otherwise change the
terms of any Indebtedness (other than the Obligations) or lease obligations so
as to accelerate the scheduled repayment thereof or (iii) repay any notes to
officers, directors or shareholders.
(viii) AFFILIATE TRANSACTIONS. Except for this Agreement and the
other Operative Documents, neither Obligor nor any of its Subsidiaries shall
enter into any contractual obligation with any Affiliate or engage in any other
transaction with any Affiliate (other than transactions pursuant to existing
agreements between Obligor and holders of its Preferred Stock and transactions
which are not material in amount) except upon terms at least as favorable to
Obligor or such Subsidiary as an arms-length transaction with unaffiliated
Persons.
(ix) NOTICE OF DEFAULTS. Promptly upon the occurrence thereof,
provide written notice to Agent of the occurrence of any Event of Default
hereunder.
(c) Notwithstanding anything contained in this Agreement or any of the
Operative Documents within ninety (90) days of the date of this Agreement,
Obligor shall cause the dissolution of DSLnet Communications Delaware, Inc.,
provided that the assets or properties, or proceeds of such assets or properties
of such Subsidiary are transferred to Obligor.
(d) If The Lafayette Investment Fund, L.P., Xxxxxxx River Partnership
X, Xxxxxxx River Partnership X-A, Xxxxxxx River Friends X-B, LLC, or Xxxxxxx
River Friends X-C, LLC (collectively, the "ADDITIONAL GUARANTORS" and each an
"ADDITIONAL GUARANTOR") enter into a Guaranty on or before January 31, 2003,
with Bank to guaranty Obligor's obligations under the Credit Agreement, then
each Additional Guarantor, on the date of execution of its Guaranty, shall be
issued a warrant to purchase Obligor's common stock in the form attached hereto
as Exhibit C. Each Additional Guarantor that is entitled to receive a warrant
pursuant to this provision, shall receive the right to purchase that number of
shares equal to its ratable share of Ten Million (10,000,000) shares of
Obligor's common stock as set forth on SCHEDULE 3 hereto. To the extent that any
Excess Warrant Shares have not been issued as of January 31, 2003, then no later
than February 4, 2003, the Obligor shall issue an additional warrant to each
Guarantor (other than the Additional Guarantors that have not entered into a
Guaranty pursuant to this Section 4(d)) in the form of Exhibit C to purchase
such Guarantor's ratable share of the Excess Warrant Shares. The term "Excess
Warrant Shares" shall mean Ten Million (10,000,000) shares MINUS the aggregate
number of shares of common stock issuable upon exercise or conversion of all
Warrants issued in connection with this Agreement, including any warrants issued
pursuant to this Section 4(d). Each of the Additional Guarantors agree to use
their best efforts to enter into a Guaranty on or before January 31, 2003, in
the maximum principal amount set forth opposite such Additional Guarantor's name
on SCHEDULE 2 hereto.
5. DEFAULT AND REMEDIES. Obligor shall be deemed in default under this
Agreement upon the occurrence and during the continuance of any of the following
events (each, an "EVENT OF DEFAULT"):
(a) Obligor shall default with respect to any payment obligation
hereunder and such default shall continue uncured for a period of five (5)
business days; or
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(b) Any representation or warranty made by Obligor in this Agreement
or in the Credit Agreement, or as an inducement to any of the Guarantors to
cause such Guarantor's Guaranty to be issued, shall be false, incorrect,
incomplete or misleading in any material respect when made or furnished; or
(c) Obligor or any of its Subsidiaries shall fail to observe or
perform any other covenant, obligation, condition or agreement contained in this
Agreement or the other Operative Documents (other than those specified in
Sections 5(a)) and (i) such failure shall continue for fifteen (15) days, or
(ii) if such failure is not curable within such fifteen (15) day period, but is
reasonably capable of cure within thirty (30) days, either (A) such failure
shall continue for thirty (30) days or (B) Obligor or any such Subsidiary shall
not have commenced a cure in a manner reasonably satisfactory to Agent within
the initial fifteen (15) day period; or
(d) Obligor or any of its Subsidiaries shall default in the observance
or performance of any other agreement, term or condition contained in any bond,
debenture, note or other evidence of Indebtedness, and the effect of such
failure or default is to cause, or permit the holder or holders of such
Indebtedness thereof to cause, Indebtedness in an aggregate amount for all such
collective defaults of One Million Dollars ($1,000,000) or more to become due
prior to its stated date of maturity; or
(e) Obligor shall (i) apply for or consent to the appointment of a
receiver, trustee, liquidator or custodian of itself or of all or a substantial
part of its property, (ii) be unable, or admit in writing its inability, to pay
its debts generally as they mature, (iii) make a general assignment for the
benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v)
become insolvent (as such term may be defined or interpreted under any
applicable statute), (vi) commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or consent to any such relief or to the appointment of or taking possession of
its property by any official in an involuntary case or other proceeding
commenced against it, or (vii) take any action for the purpose of effecting any
of the foregoing; or
(f) Proceedings for the appointment of a receiver, trustee, liquidator
or custodian of any Obligor or of all or a substantial part of its property, or
an involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to any Obligor or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be dismissed or
discharged within sixty (60) days of commencement.
(g) A final judgment or order for the payment of money in excess of
One Hundred Dollars ($100,000) shall be rendered against Obligor or any of its
Subsidiaries and the same shall remain undischarged for a period of ten (10)
days after it is due during which execution shall not be effectively stayed, or
any judgment, writ, assessment, warrant of attachment, or execution or similar
process shall be issued or levied against a substantial part of the property of
Obligor or any of its Subsidiaries and such judgment, writ, or similar process
shall not be released, stayed, vacated or otherwise dismissed within fifteen
(15) days after issue or levy.
Upon the occurrence and during the continuance of any such Event of
Default, Agent shall have all of the rights set forth under this Agreement, the
other Operative Documents and under applicable law. Upon the occurrence and
during the continuance of any Event of Default under this Agreement at which
time no demand has been made under the Guaranties, Agent shall have the right,
at the direction of the Required Guarantors (provided, that if the Columbia
Entities desire to take an enforcement action that Required Guarantors have not
consented to, the Agent shall take such enforcement action as the Columbia
Entities direct the Agent to take, provided further, that Agent shall not take
such enforcement action until the earlier of (A) the 120th day after receipt by
Agent of written notice of such enforcement action from the Columbia Entities or
(B) such time as the Required Guarantors have provided their consent to such
enforcement
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actions), by written notice to Obligor, to require Obligor to post cash
collateral in an amount equal to the maximum amount which may be demanded under
the Guaranty, in which case Obligor shall execute all such documentation as
Agent may reasonably request to perfect Agent's security interest in such cash
collateral.
6. DEFINITIONS. As used in this Agreement, the following capitalized
terms have the following meanings
(a) "Additional Guarantors" has the meaning given in Section 4(d)
hereof.
(b) "Affiliate," with respect to any Person, means (i) any director or
officer of such Person, (ii) any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such Person, and
(iii) any Person beneficially owning or holding 5% or more of any class of
voting securities of such Person or any corporation of which such Person
beneficially owns or holds, in the aggregate, 5% or more of any class of voting
securities The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. The term "Affiliate," when used herein without reference to any
Person, shall mean an Affiliate of Obligor.
(c) "Claim" has the meaning given to such term in the Security
Agreement.
(d) "Collateral" has the meaning given to such term in the Security
Agreement.
(e) "Columbia Entities" means Columbia Capital Equity Partners II
(QP), LP, Columbia Capital Equity Partners II (Cayman), LP, Columbia Capital
Equity Partners II LP, Columbia Capital Investors, LLC, Columbia Capital Equity
Partners III (QP), LP, Columbia Capital Equity Partners III (Cayman), LP,
Columbia Capital Equity Partners III (AI), LP and Columbia Capital Investors
III, LLC.
(f) "Drawn Amount" means any amount required to be paid by a Guarantor
under such Guarantor's Guaranty upon a request for payment by Bank.
(g) "Equity Securities" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, partnership interests or other equity
interests in and of such Person (regardless of how designated and whether or not
voting or non-voting) and (b) all warrants, options and other rights to acquire
any of the foregoing.
(h) "Event of Default" has the meaning given in Section 5 hereof.
(i) "Excess Warrant Shares" has the meaning given in Section 4(d)
hereof.
(j) "Excluded Cash" means the aggregate amount of cash proceeds of any
issuance of Obligor's securities since the date of this Agreement MINUS the
aggregate amount of all cash used since the date of this Agreement to fund any
mergers or acquisitions, or to acquire any assets or securities of any other
Person (other than (i) pursuant to agreements existing as of the date of this
Agreement or (ii) in the ordinary course of business), provided that Excluded
Cash shall never be less than zero.
(k) "GAAP" shall mean generally accepted accounting principles as in
effect in the United States of America from time to time.
(l) "Guaranty Commitment" means with respect to each Guarantor, the
amount set forth on SCHEDULE 2 hereto as the maximum principal amount of such
Guarantor's Guaranty.
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(m) "Guaranty Expense Amount" means any costs or expenses (other than
Drawn Amounts) payable by Agent or Guarantors or their affiliates in connection
with the Guaranties whether under the Credit Agreement or otherwise, including
without limitation, fees for the issuance or enforcement or collection of the
Guaranties, and reasonable attorneys fees and costs (including the fees of
attorneys employed by Guarantors), incurred by Agent or Guarantors in connection
with the demand related to a payment under any of the Guaranties or in
connection with the enforcement, collection of, or attempted collection or
enforcement of any of the obligations of Obligor which are not performed as and
when required by this Agreement.
(n) "Indebtedness" shall mean and include the aggregate amount of,
without duplication (i) all obligations for borrowed money, (ii) all obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii) all
obligations to pay the deferred purchase price of property or services (other
than accounts payable and accrued expenses incurred in the ordinary course of
business determined in accordance with GAAP), (iv) all obligations with respect
to capital leases, (v) all obligations created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person, (vi) all reimbursement and other payment obligations, contingent or
otherwise, in respect of letters of credit and similar surety instruments; and
(vii) all guaranty obligations with respect to the types of Indebtedness listed
in clauses (i) through (vi) above.
(o) "Investment" of any Person shall mean any loan or advance of funds
by such Person to any other Person (other than advances to employees of such
Person for moving and travel expense, drawing accounts and similar expenditures
in the ordinary course of business), any purchase or other acquisition of any
Equity Securities or Indebtedness of any other Person, any capital contribution
by such Person to or any other investment by such Person in any other Person
(including, without limitation, any Indebtedness incurred by such Person of the
type described in clauses (i) and (ii) of the definition of "Indebtedness" on
behalf of any other Person); PROVIDED, HOWEVER, that Investments shall not
include accounts receivable or other indebtedness owed by customers of such
Person which are current assets and arose from sales or non-exclusive licensing
in the ordinary course of such Person's business.
(p) "Lien" shall mean, with respect to any property, any security
interest, mortgage, pledge, lien, claim, charge or other encumbrance in, of, or
on such property or the income therefrom, including, without limitation, the
interest of a vendor or lessor under a conditional sale agreement, capital lease
or other title retention agreement, or any agreement to provide any of the
foregoing, and the filing of any financing statement or similar instrument under
the Uniform Commercial Code or comparable law of any jurisdiction.
(q) "Material Adverse Effect" shall mean a material adverse effect on
(a) the business, assets, operations, prospects or financial or other condition
of Obligor; (b) the ability of Obligor to pay or perform the Obligations in
accordance with the terms of this Agreement and the other Operative Documents
and to avoid an Event of Default, or an event which, with the giving of notice
or the passage of time or both, would constitute an Event of Default, under any
Operative Document; or (c) the rights and remedies of Agent and the Guarantors
under this Agreement, the other Operative Documents or any related document,
instrument or agreement.
(r) "Obligations" shall mean and include all loans, advances, debts,
liabilities and obligations, arising in connection with this Reimbursement
Agreement or the other Operative Documents and the issuance of, maintenance of
or payment by Guarantors under their respective Guaranties, owed by Obligor to
Guarantors of every kind and description (whether or not evidenced by any note
or instrument and whether or not for the payment of money), now existing or
hereafter arising, including, all interest, fees, charges, expenses, attorneys'
fees and costs and accountants' fees and costs chargeable to and payable by each
Obligor hereunder, in each case, whether direct or indirect, absolute or
contingent, due or to become due, and whether or not arising after the
commencement of a proceeding under Title 11 of the United States Code (11 U.S.C.
-9-
Section 101 et seq.), as amended from time to time (including post-petition
interest) and whether or not allowed or allowable as a claim in any such
proceeding.
(s) "Operative Documents" shall mean this Agreement, the Security
Agreement, the Subsidiary Guaranty and all other agreements or documents
executed in connection therewith.
(t) "Permitted Indebtedness" shall mean (a) Indebtedness of Obligor or
any of its Subsidiaries (i) in favor of Bank arising under the Credit Agreement
and (ii) in favor of Agent and Guarantors arising under this Agreement or any
other Operative Document; (b) Indebtedness existing on the date hereof and
disclosed on SCHEDULE 1 hereto; and (c) Indebtedness secured by a Lien that is
otherwise permitted pursuant to subsections (vi), (vii) or (viii) of the
definition of "Permitted Lien."
(u) "Permitted Investments" shall mean and include: (a) Deposits
accounts with commercial banks organized under the laws of the United States or
a state thereof to the extent Agent has a perfected security interest therein
and such deposits are fully insured by the Federal Deposit Insurance
Corporation; (b) Investments in marketable obligations issued or fully
guaranteed by the United States and maturing not more than one (1) year from the
date of issuance; (c) Investments in open market commercial paper rated at least
"Al " or "PI " or higher by a national credit rating agency and maturing not
more than 270 days from the creation thereof; (d) Investments pursuant to or
arising under currency agreements or interest rate agreements entered into in
connection with bona fide hedging arrangements.
(v) "Permitted Liens" shall mean and include: (i) Liens for taxes or
other governmental charges not at the time delinquent or thereafter payable
without penalty or being contested in good faith, provided provision is made to
the reasonable satisfaction of Agent for the eventual payment thereof if
subsequently found payable; (ii) Liens of carriers, warehousemen, mechanics,
materialmen, vendors, and landlords incurred in the ordinary course of business
for sums not overdue or being contested in good faith, provided provision is
made to the reasonable satisfaction of Agent for the eventual payment thereof if
subsequently found payable; (iii) deposits under workers' compensation,
unemployment insurance and social security laws or to secure the performance of
bids, tenders, contracts (other than for the repayment of borrowed money) or
leases, or to secure statutory obligations of surety or appeal bonds or to
secure indemnity, performance or other similar bonds in the ordinary course of
business; (iv) easements, reservations, rights of way, restrictions, minor
defects or irregularities in title and other similar charges or encumbrances
affecting real property in a manner not materially or adversely affecting the
value or use of such property; (v) Liens in favor of Agent (vi) Liens securing
obligations under a capital lease if such lease is permitted under this
Agreement and such Liens do not extend to property other than the property
leased under such capital lease; (vii) Liens upon any equipment or other assets
acquired or held by Obligor or any of its Subsidiaries to secure the purchase
price of such equipment or other assets or indebtedness incurred solely for the
purpose of financing the acquisition of such equipment or other assets, so long
as such Lien extends only to the equipment or other assets financed, and any
accessions, replacements, substitutions and proceeds (including insurance
proceeds) thereof or thereto and (viii) Liens on assets acquired from Network
Access Solutions Corporation or its affiliates, or IP Communications, Inc. or
its affiliates, provided that such Liens are limited to such assets so acquired.
(w) "Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or other
entity or a governmental authority.
(x) "Regulated Subsidiary" shall mean any Subsidiary for which
federal, state, provincial, local or other governmental approval would be
required for such Subsidiary to grant a security interest in its
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assets, issue any evidence of indebtedness or assume any obligation or liability
as guarantor with respect to any obligation or liability of any other Person.
(y) "Required Guarantors" shall mean, as of any date, Guarantors that
have paid to Bank more than fifty percent (50%) of the aggregate Drawn Amounts,
and if no Drawn Amounts are outstanding, the Guarantors whose aggregate Guaranty
Commitment constitutes more than fifty percent (50%) of the aggregate Guaranty
Commitments of all Guarantors; PROVIDED that "ninety percent (90%)" shall be
substituted in place of the above-referenced percentages in the following
circumstances: (A) appointment of a successor Agent under Section 7(i), (B)
executing and delivering a release under Section 7(k) of Liens on Collateral in
the aggregate valued in excess of $1,000,000, and (C) the consent required
pursuant to Section 4(a)(iii) and (D) notwithstanding any provision in this
Agreement or the Operative Documents, engaging in any action or transaction,
including without limitation amendment or modification of this Agreement or the
Operative Documents that (i) materially adversely affects the rights of any
Guarantor in a manner different than any other Guarantor, or (ii) could
reasonably be expected to prejudice or otherwise treat inequitably the interests
of any Guarantor in relation to the rights of any other Guarantor, which actions
or transactions shall require the approval of that percentage of Guarantors
referenced in this proviso.
(z) "Subsidiary" shall mean (a) any corporation of which more than 50%
of the issued and outstanding equity securities having ordinary voting power to
elect a majority of the Board of Directors of such corporation is at the time
directly or indirectly owned or controlled by Obligor, (b) any partnership,
joint venture, or other association of which more than 50% of the equity
interest having the power to vote, direct or control the management of such
partnership, joint venture or other association is at the time directly or
indirectly owned and controlled by Obligor, (c) any other entity included in the
financial statements of Obligor on a consolidated basis.
(aa)"Warrants" has the meaning given to such term in Section 3(c)
hereof.
7. AGENT.
(a) APPOINTMENT AND AUTHORIZATION OF AGENT. Each Guarantor hereby
designates and appoints VantagePoint Venture Partners III (Q), L. P. as its
representative under this Agreement and the other Operative Documents and each
Guarantor hereby irrevocably authorizes Agent, or any successor Agent to take
such action on its behalf under the provisions of this Agreement and each other
Operative Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other
Operative Document, together with such powers as are reasonably incidental
thereto. Agent agrees to act as representative of the Guarantors on the express
conditions contained in this Section 7 and as set forth in the Operative
Documents. The provisions of this Section 7 are solely for the benefit of Agent,
and the Guarantors, and Obligor shall have no rights as a third party
beneficiary of any of the provisions contained herein. Any provision to the
contrary contained elsewhere in this Agreement or in any other Operative
Document notwithstanding, Agent shall not have any duties or responsibilities,
except those expressly set forth herein or therein, nor shall Agent have or be
deemed to have any fiduciary relationship with any Guarantor, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Operative Document or otherwise exist
against Agent; it being expressly understood and agreed that the use of the word
"Agent" is for convenience only, that Agent is merely the representative of the
Guarantors, and only has the contractual duties set forth herein and in the
Operative Documents. Except as expressly otherwise provided in this Agreement,
Agent shall in good faith and in the best interests of the Guarantors have and
may use its sole discretion with respect to exercising or refraining from
exercising any discretionary rights or taking or refraining from taking any
actions that Agent expressly is entitled to take or assert under or pursuant to
this Agreement and the other Operative Documents. Without limiting the
generality of the foregoing, or of any other provision of the Operative
Documents that
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provides rights or powers to Agent, Guarantors agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral and
related matters, (b) execute or file any and all financing or similar statements
or notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect to the Operative
Documents, (c) exclusively receive, apply, and distribute any payments received
from Obligor or proceeds of Collateral as provided in the Operative Documents,
(d) perform, exercise, and enforce any and all other rights and remedies of the
Guarantors with respect to Obligor, the Obligations, the Collateral or otherwise
related to any of same as provided in the Operative Documents, and (e) incur and
pay such Guaranty Expense Amounts as Agent reasonably may deem necessary or
appropriate for the performance and fulfillment of its functions and powers
pursuant to the Operative Documents.
(b) DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement or any other Operative Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct,
but Agent covenants to monitor and supervise in a reasonable manner the conduct
of such agents or attorneys-in-fact in furtherance of Agent's duties hereunder.
(c) LIABILITY OF AGENT. Neither the Agent nor any of its partners,
members, managers, officers or employees nor any other Person assisting them in
their duties nor any agent or employee thereof ("AGENT-RELATED PERSON"), shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Operative Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Guarantors for
any recital, statement, representation or warranty made by Obligor or any
Subsidiary or Affiliate of Obligor, or any officer or director thereof,
contained in this Agreement or in any other Operative Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Operative Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Operative Document, or for any
failure of Obligor or any other party to any Operative Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Guarantor to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Operative Document.
(d) RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Obligor or
counsel to any Guarantor), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Operative Document unless Agent shall first
receive such advice or concurrence of the Guarantors as it deems appropriate and
until such instructions are received, Agent shall act, or refrain from acting,
as it deems advisable. If Agent so requests, it shall first be indemnified to
its reasonable satisfaction by Guarantors against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Operative Document in
accordance with a request or consent of the Guarantors and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Guarantors.
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(e) NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed
to have knowledge or notice of the occurrence of any default or Event of
Default, except with respect to Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Guarantor or
Obligor referring to this Agreement, describing such default or Event of
Default, and stating that such notice is a "notice of default." Agent promptly
will notify the Guarantors of its receipt of any such notice or of any Event of
Default or incipient Event of Default of which Agent has actual knowledge. If
any Guarantor obtains actual knowledge of any Event of Default, such Guarantor
promptly shall notify the other Guarantors and Agent of such Event of Default or
incipient Event of Default. Subject to SECTION 7(d), Agent shall take such
action with respect to such default or Event of Default as may be requested by
the Required Guarantors; PROVIDED, HOWEVER, that unless and until Agent has
received any such request, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such default or
Event of Default as it reasonably shall deem advisable.
(f) CREDIT DECISION. Each Guarantor acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Obligor
and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Guarantor. Each
Guarantor represents to Agent that it has, independently and without reliance
upon any Agent-Related Person and based on public filings of the Obligor and
such other documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of Obligor and any
other Person (other than the Guarantors) party to an Operative Document, and all
applicable laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Obligor. Each
Guarantor also represents that it will, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Operative Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of Obligor and any other
Person (other than the Guarantors) party to an Operative Document. Except for
notices, reports, and other documents expressly herein required to be furnished
to the Guarantors by Agent, Agent shall not have any duty or responsibility to
provide any Guarantor with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of Obligor and any other Person party to an Operative Document
that may come into the possession of any of the Agent-Related Persons.
(g) COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Guaranty Expense Amounts to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Operative Documents, including court costs,
reasonable attorneys fees and expenses, costs of collection by outside
collection agencies and auctioneer fees and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not Obligor are
obligated to reimburse Agent or Guarantors for such expenses pursuant to this
Agreement or otherwise. Agent is authorized and directed to deduct and retain
sufficient amounts from any payments or proceeds of Collateral received by Agent
to reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Guarantors. In the event Agent is not reimbursed
for such costs and expenses from such payments or proceeds of Collateral
received by Agent, each Guarantor hereby agrees that it is and shall be
obligated to pay to or reimburse Agent for the amount of such Guarantor's
ratable share thereof. Whether or not the transactions contemplated hereby are
consummated, the Guarantors shall indemnify upon demand within five (5) business
days the Agent-Related Persons (to the extent not reimbursed by or on behalf of
Obligor and without limiting the obligation of Obligor to do so), according to
their ratable shares, from and against any and all Claims; PROVIDED, HOWEVER,
that no Guarantor shall be liable for the payment to any Agent-Related Person of
any portion of such Claims resulting solely from such Person's gross negligence
or
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willful misconduct. Without limitation of the foregoing, each Guarantor shall
reimburse Agent upon demand for such Guarantor's ratable share of any costs or
out-of-pocket expenses (including attorneys fees and expenses) incurred by Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Operative Document, or any
document contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Obligor. The undertaking in this
Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.
(h) AGENT IN INDIVIDUAL CAPACITY. Agent and its Affiliates may make
loans to, acquire equity interests in, and generally engage in any kind of other
business with Obligors and their Subsidiaries and Affiliates and any other
Person party to any Operative Documents as though Agent were not Agent
hereunder, and, in each case, without notice to or consent of the other
Guarantors; PROVIDED that nothing herein is intended to alter obligations of the
parties that may be set forth other than in the Operative Documents.
(i) SUCCESSOR AGENT. Agent may resign as Agent upon 30 days notice to
the Guarantors. If Agent resigns under this Agreement, the Required Guarantors
shall appoint a successor Agent for the Guarantors. If no successor Agent is
appointed prior to the effective date of the resignation of Agent, Agent may
appoint, after consulting with the Guarantors, a successor Agent. If Agent has
materially breached or failed to perform any material provision of this
Agreement or of applicable law, the Required Guarantors may agree in writing to
remove and replace Agent with a successor Agent from among the Guarantors. In
any such event, upon the acceptance of its appointment as successor Agent
hereunder, such successor Agent shall succeed to all the rights, powers, and
duties of the retiring Agent and the term "Agent" shall mean such successor
Agent and the retiring Agent's appointment, powers, and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this SECTION 7 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement. If no
successor Agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Guarantors
shall perform all of the duties of Agent hereunder until such time, if any, as
the Guarantors appoint a successor Agent as provided for above.
(j) GUARANTOR IN INDIVIDUAL CAPACITY. Any Guarantor and its respective
Affiliates may make loans to, acquire equity interests in and generally engage
in any kind of other business with Obligors and their Subsidiaries and
Affiliates and any other Person party to any Operative Documents as though such
Guarantor were not a Guarantor hereunder without notice to or consent of the
Guarantors; PROVIDED that nothing herein is intended to alter obligations of the
parties that may be set forth other than in the Operative Documents.
(k) COLLATERAL MATTERS.
(a) The Guarantors hereby irrevocably authorize Agent, at its
option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Guaranty and payment and satisfaction in full by
Obligor of all Obligations, or (ii) constituting property being sold or disposed
of if a release is required or desirable in connection therewith and if Obligor
certifies to Agent that the sale or disposition is permitted pursuant to the
terms of this Agreement or the other Operative Documents (and Agent may rely
conclusively on any such certificate, without further inquiry). Except as
provided above, Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of the Required Guarantors.
Upon request by Agent or Obligor at any time, the Guarantors will confirm in
writing Agent's authority to release any such Liens on particular types or items
of Collateral pursuant to this SECTION 7(k); PROVIDED, HOWEVER, that (1) Agent
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent's opinion, would expose Agent to liability or create any
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obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Obligor in respect of)
all interests retained by Obligor, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the
Guarantors to assure that the Collateral exists or is owned by Obligor or is
cared for, protected, or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the
Operative Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, subject to the terms
and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent's own interest in the Collateral
in its capacity as one of the Guarantors and that Agent shall have no other duty
or liability whatsoever to any Guarantor as to any of the foregoing, except as
otherwise provided herein.
(l) RESTRICTIONS ON ACTIONS BY GUARANTORS; SHARING OF PAYMENTS.
(a) Each of the Guarantors agrees that it shall not, unless
specifically requested to do so by Agent, take or cause to be taken any action,
including, the commencement of any legal or equitable proceedings, to foreclose
any Lien on, or otherwise enforce any security interest in, any of the
Collateral the purpose of which is, or could be, to give such Guarantor any
preference or priority against the other Guarantors with respect to the
Collateral.
(b) If, at any time or times any Guarantor shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Operative Documents, except for any such proceeds of
Collateral or payments received by such Guarantor from Agent pursuant to the
terms of this Agreement, or (ii) payments from Agent in excess of such
Guarantor's ratable portion of all such distributions by Agent, such Guarantor
promptly shall turn the same over to Agent, in kind, and with such endorsements
as may be required to negotiate the same to Agent, or in immediately available
funds, as applicable, for the account of all of the Guarantors and for
application to the Obligations in accordance with the applicable provisions of
this Agreement.
(m) CONCERNING THE COLLATERAL AND RELATED OPERATIVE DOCUMENTS. Each of
the Guarantors authorizes and directs Agent to enter into this Agreement and the
other Operative Documents relating to the Collateral, for the benefit of the
Guarantors. Each of the Guarantors agrees that any action taken by Agent in
accordance with the terms of this Agreement or the other Operative Documents
relating to the Collateral and the exercise by Agent of its powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Guarantors.
(n) NO LIABILITY. Nothing contained herein shall confer upon any
Guarantor any interest in, or subject any Guarantor to any liability for, or in
respect of, the business, assets, profits, losses, or liabilities of any other
Guarantor. Except as provided in SECTION 7(g), none of the Guarantors shall have
any liability for the acts or any of the other Guarantors.
8. MISCELLANEOUS.
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(a) NOTICES. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Obligor, Agent or Guarantors under this Agreement shall be in writing and
delivered by facsimile, hand delivery, overnight courier service or certified
mail, return receipt requested, to each party at the address most recently
provided by such party to the other party.
(b) NONWAIVER. No failure or delay on Agent's or any Guarantor's part
in exercising any right hereunder shall operate as a waiver thereof or of any
other right nor shall any single or partial exercise of any such right preclude
any other further exercise thereof or of any other right.
(c) AMENDMENTS AND WAIVERS. This Agreement may not be amended or
modified, nor may any of its terms be waived, except by written instruments
signed by Obligor and Required Guarantors. Each waiver or consent under any
provision hereof shall be effective only in the specific instances for the
purpose for which given.
(d) ASSIGNMENTS. This Agreement shall be binding upon and inure to the
benefit of Agent, Guarantors and Obligor and their respective successors and
assigns; PROVIDED, HOWEVER, that Obligor may not assign or delegate rights and
obligations hereunder without the prior written consent of Required Guarantors.
(e) CUMULATIVE RIGHTS, ETC. The rights, powers and remedies of Agent
and Guarantors under this Agreement shall be in addition to all rights, powers
and remedies given to Agent and Guarantors by virtue of any applicable law, rule
or regulation of any governmental authority or any other agreement, all of which
rights, powers, and remedies shall be cumulative and may be exercised
successively or concurrently without impairing Agent's or Guarantor's rights
hereunder.
(f) PARTIAL INVALIDITY. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
(g) EXPENSES. Each Obligor shall pay on demand all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by Agent
and Guarantors in connection with any enforcement or attempt to enforce any of
the obligations of any Obligor which are not performed as and when required by
this Agreement.
(h) ENTIRE AGREEMENT. This Agreement and the other Operative Documents
constitutes and contains the entire agreement of Obligor and Agent and
Guarantors with respect to the subject matter hereof and supersedes any and all
prior agreements, negotiations, correspondence, understandings and
communications among the parties, whether written or oral, respecting the
subject matter hereof, including, without limitation, that certain Guaranty
Agreement, dated as of October 8, 2002, by and between Obligor and VantagePoint
Venture Partners III (Q), L.P.
(i) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
(j) JURY TRIAL. OBLIGOR, AGENT AND EACH GUARANTOR, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.
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(k) RELEASE OF ADDITIONAL GUARANTORS. In the event that an Additional
Guarantor does not enter into a Guaranty on or before January 31, 2003, then
such Additional Guarantor's rights and obligations under this Agreement and the
other Operative Documents to which it is a party shall automatically terminate
and such Additional Guarantor shall be deemed released from this Agreement and
such other Operative Documents.
(l) RIGHT TO TERMINATE GUARANTY. In the event that Obligor does not
borrow any loans under the Credit Agreement on or before March 31, 2003, then
the Credit Agreement shall terminate automatically on March 31, 2003 pursuant to
its terms and all Guaranties shall automatically terminate on March 31, 2003
pursuant to their respective terms (the "TERMINATION EVENT"). In the event of a
Termination Event, (i) Guarantor's rights and obligations under each Operative
Document to which it is a party shall automatically terminate and such Guarantor
shall be deemed released from such Operative Document and (ii) any Warrants
issued to Guarantor in connection with the transactions contemplated by the
Operative Documents shall be deemed terminated as of the date of such
Termination Election.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
XXX.XXX, INC.,
AS OBLIGOR
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------------
Title: CEO
----------------------------------
AGREED & ACCEPTED:
VANTAGEPOINT VENTURE PARTNERS III (Q), L.P., AS AGENT AND A GUARANTOR
By: VantagePoint Venture Associates III, L.L.C.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------------------
Xxxxx X. Xxxxxx
------------------------------ , Managing Member
Signature Page to the Reimbursement Agreement
AGREED & ACCEPTED:
COLUMBIA CAPITAL EQUITY PARTNERS II (QP), LP, AS A GUARANTOR
By: Columbia Capital Equity Partners, L.P., its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------------------
Title: Chief Financial Officer
-------------------------------------------------
COLUMBIA CAPITAL EQUITY PARTNERS II (CAYMAN), LP, AS A GUARANTOR
By: Columbia Capital Equity Partners, L.P., its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------------------
Title: Chief Financial Officer
------------------------------------------------
COLUMBIA CAPITAL EQUITY PARTNERS II LP, AS A GUARANTOR
By: Columbia Capital Equity Partners, L.P., its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------------------
Title: Chief Financial Officer
------------------------------------------------
COLUMBIA CAPITAL INVESTORS, LLC, AS A GUARANTOR
By: Columbia Capital, LLC, its Manager
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------------------
Title: Chief Financial Officer
------------------------------------------------
Signature Page to the Reimbursement Agreement
AGREED & ACCEPTED:
COLUMBIA CAPITAL EQUITY PARTNERS III (QP), LP, AS A GUARANTOR
By: Columbia Capital Equity Partners III, L.P., its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------------------
Title: Chief Financial Officer
------------------------------------------------
COLUMBIA CAPITAL EQUITY PARTNERS III (CAYMAN), LP, AS A GUARANTOR
By: Columbia Capital Equity Partners III, L.P., its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------------------
Title: Chief Financial Officer
------------------------------------------------
COLUMBIA CAPITAL EQUITY PARTNERS III (AI), LP, AS A GUARANTOR
By: Columbia Capital Equity Partners III, L.P., its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------------------
Title: Chief Financial Officer
------------------------------------------------
COLUMBIA CAPITAL INVESTORS III, LLC, AS A GUARANTOR
By: Columbia Capital III, LLC, its Manager
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------------------
Title: Chief Financial Officer
------------------------------------------------
Signature Page to the Reimbursement Agreement
AGREED & ACCEPTED:
THE LAFAYETTE INVESTMENT FUND, L.P., AS A GUARANTOR
By: Layafette Investment Partners, L.P., its sole General Partner
By: Layafette Private Equities, Inc., its sole General Partner
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Signature Page to the Reimbursement Agreement
AGREED & ACCEPTED:
XXXXXXX RIVER PARTNERSHIP X, A LIMITED PARTNERSHIP, AS A GUARANTOR
By: Xxxxxxx River X GP, LLC, General Partner
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
--------------------------------------------------
Title: Managing Member
XXXXXXX RIVER PARTNERSHIP X-A, A LIMITED PARTNERSHIP, AS A GUARANTOR
By: Xxxxxxx River X GP, LLC, General Partner
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
--------------------------------------------------
Title: Managing Member
XXXXXXX RIVER FRIENDS X-B, LLC, AS A GUARANTOR
By: Xxxxxxx River Friends, Inc., Manager
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
--------------------------------------------------
Title: Officer
XXXXXXX RIVER FRIENDS X-C, LLC, AS A GUARANTOR
By: Xxxxxxx River Friends, Inc., Manager
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
--------------------------------------------------
Title: Officer
Signature Page to the Reimbursement Agreement
SCHEDULE 1
Existing Indebtedness:
Type Creditor Amount
---- -------- ------
Capital Lease Comdisco, Inc. $ 194,978
Capital Lease Copper Mountain Networks, Inc. $ 4,098,813
Capital Lease Lucent Technologies/Avaya, Inc. $ 295,546
Capital Lease Insight Technologies/Verserv, Inc. $ 35,187
Capital Lease Other $ 30,482
Letter of Credit People's Bank #SB-1199 $ 406,666
Letter of Credit People's Bank #SB-1187 $ 194,031
Letter of Credit People's Bank #SB-1222 $ 166,000
Letter of Credit People's Bank #SB-1240 $ 253,500
SCHEDULE 2
Maximum Principal
Guarantor Amount of Guaranty
--------- ------------------
VantagePoint Venture Partners III (Q), LP $ 5,000,000.00
Columbia Capital Equity Partners II (QP), LP $ 68,757.63
Columbia Capital Equity Partners II (Cayman), LP $ 56,132.51
Columbia Capital Equity Partners II, LP $ 2,899.72
Columbia Capital Investors, LLC $ 12,337.14
Columbia Capital Equity Partners III (QP), LP $ 518,532.22
Columbia Capital Equity Partners III, (Cayman), LP $ 284,753.65
Columbia Capital Equity Partners III, (AI), LP $ 28,645.20
Columbia Capital Investors III, LLC $ 127,941.93
The Lafayette Investment Fund, L.P. $ 500,000.00
Xxxxxxx River Partnership X, a Limited Partnership $ 117,661.28
Xxxxxxx River Partnership X-A, a Limited Partnership $ 3,230.00
Xxxxxxx River Friends X-B, LLC $ 7,762.14
Xxxxxxx River Friends X-C, LLC $ 1,346.58
--------------------------------
TOTAL: $ 6,730,000.00
SCHEDULE 3
Guarantor Warrant Shares
--------- --------------
VantagePoint Venture Partners III (Q), LP 10,379,420(1)
Columbia Capital Equity Partners II (QP), LP 102,166
Columbia Capital Equity Partners II (Cayman), LP 83,406
Columbia Capital Equity Partners II, LP 4,309
Columbia Capital Investors, LLC 18,332
Columbia Capital Equity Partners III (QP), LP 770,479
Columbia Capital Equity Partners III, (Cayman), LP 423,111
Columbia Capital Equity Partners III, (AI), LP 42,563
Columbia Capital Investors III, LLC 190,107
The Lafayette Investment Fund, L.P. 742,942
Xxxxxxx River Partnership X, a Limited Partnership 174,831
Xxxxxxx River Partnership X-A, a Limited Partnership 4,799
Xxxxxxx River Friends X-B, LLC 11,534
Xxxxxxx River Friends X-C, LLC 2,001
----------
(1) Includes 2,950,000 warrant shares that Obligor previously agreed to
grant pursuant to that certain superceded Guaranty Agreement, dated as of
October 8, 2002.
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