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EXHIBIT 10.34
GUARANTY AND LOAN PURCHASE AGREEMENT
THIS GUARANTY AND LOAN PURCHASE AGREEMENT (this "AGREEMENT") made as of
the 6th day of December, 2000, by Accelerated Networks, Inc., a Delaware
corporation (referred to herein as "OBLIGOR"), with and for the benefit of
Siemens Financial Services, Inc., a Delaware corporation (referred to herein as
"LENDER").
A. WCI Capital Corp., a Delaware corporation (referred to herein as
"BORROWER") has requested Lender to make a loan to Borrower in the original
principal amount of Two Hundred Million and 00/100 Dollars ($200,000,000.00)
(which loan, as more fully described hereinbelow, is referred to herein as the
"LOAN").
B. Obligor has requested Siemens Carrier Networks LLC, a limited
liability company (referred to herein as "SIEMENS NETWORK"), and/or Siemens
Aktiengesellschaft (referred to herein as "SIEMENS AG"), a German corporation,
and/or other affiliates of Siemens AG (Siemens Network, Siemens AG and all such
other affiliates of Siemens AG are herein collectively referred to as "SIEMENS")
to purchase Accelerated Equipment (as defined below) from Obligor for sale by
Siemens to one or more affiliates of Borrower, including WinStar Communications,
Inc., a Delaware corporation (referred to herein as "WINSTAR COMMUNICATIONS"),
pursuant to the Winstar Purchase Agreement (as defined below).
C. To induce Lender to make the Loan to Borrower, and to induce Siemens
to purchase the Accelerated Equipment from Obligor, Obligor has agreed to either
(i) guarantee the payment of a portion of the Loan as more fully set forth in
this Agreement (the "PAYMENT GUARANTEE"), or, (ii) at Lender's option, purchase
a portion of the Loan from Lender, provided that any portion of the Loan so
purchased by Obligor from Lender shall reduce Obligor's liability under the
Payment Guarantee by the amount of the purchase price paid by Obligor to Lender
for such portion of the Loan so purchased, as more fully set forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt of which is hereby acknowledged, and to
induce Lender to make the Loan to Borrower, and to induce Siemens to purchase
the Accelerated Equipment from Obligor, Obligor and Lender hereby covenant and
agree with each other as follows:
ARTICLE I
CONSTRUCTION AND DEFINED TERMS
SECTION 1.01. ARTICLES; SECTIONS; CAPTIONS. The Article and Section
headings and captions in this Agreement are for convenience only and shall not
affect the construction or interpretation of this Agreement. The references in
this Agreement to Articles and Sections shall be read as Articles or Sections of
this Agreement unless otherwise specifically provided.
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SECTION 1.02. DEFINED TERMS. Capitalized terms used in this Agreement
shall have the following meanings:
"ACCELERATED EQUIPMENT" Equipment purchased by Siemens from Obligor
for sale by Siemens to WinStar.
"ACCELERATED EQUIPMENT PERCENTAGE" As of any date of determination,
the percentage amount obtained by dividing (a) the aggregate amount (based on
the purchase price that Siemens charges to Winstar) of Accelerated Equipment
sold by Siemens to Winstar under the Winstar Purchase Agreement through such
date, by (b) the lesser of (i) the aggregate amount (based on the purchase price
that Siemens charges to Winstar) of all equipment and services sold by Siemens
to Winstar under the Winstar Purchase Agreement through such date or (ii)
$150,000,000.
"BASE REDUCTION AMOUNT" As of any date of determination, the greater
of (a) the amount equal to the difference of (i) the aggregate principal amount
of the Loan repaid by Borrower through such date, minus (ii) the aggregate
amount (based on the purchase price that Siemens charges to Winstar) of
Accelerated Equipment sold by Siemens to Winstar through such date, or (b) zero
dollars ($0).
"DEFAULT INTEREST RATE" means, as of any date, the prime rate
(currently described as the base rate on corporate loans posted by at least 75%
of the nation's 30 largest banks) published in the "Money Rates" column of The
Wall Street Journal (the "Wall Street Journal") on such date, or if the prime
rate is not published therein on such date, then the prime rate most recently
published therein prior to such date ("WSJ PRIME RATE"). If the Wall Street
Journal ceases to publish the WSJ Prime Rate, then "Default Interest Rate" shall
thereafter mean, as of any date, the most current prime rate published by the
Federal Reserve Board in its most recent H.15 Statistical Release ("Selected
Interest Rates") ("FEDERAL RESERVE PRIME RATE"). The Default Interest Rate will
increase or decrease, as the case may be, with increases or decreases in the WSJ
Prime Rate (or the Federal Reserve Prime Rate, if applicable) from time to time.
"EVENT OF DEFAULT" As defined in Section 4.01.
"GUARANTEED AMOUNT" As of any date of determination, the amount
equal to the difference of (a) the Maximum Guaranteed Amount, minus (b) the
greater of (i) the Reduction Amount or (ii) zero dollars ($0). If as of the date
of determination of the Guaranteed Amount the Reduction Amount is greater than
the Maximum Guaranteed Amount, then the Guaranteed Amount shall be deemed to be
zero ($0).
"INCLUDE" and "INCLUDING" Unless otherwise expressly limited herein,
the words "include" and "including" shall be read to mean "include, without
limitation," and "including, without limitation," as the case may be.
"LOAN" The loan in the principal amount of Two Hundred Million
Dollars (US$200,000,000) made by Lender to Borrower and evidenced by the Loan
Agreement and the other Loan Documents.
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"LOAN AGREEMENT" The Revolving Credit and Term Loan Agreement dated
as of May 4, 2000, by and among WinStar Communications, Inc., a Delaware
corporation (the "Parent"), WCI Capital Corp., a Delaware corporation (the
"Borrower"), each of the entities listed on the signature pages thereof under
the heading "Guarantors" and the Additional Guarantors (as defined in Section
6.09 thereof) from time to time parties thereto, each of the lenders from time
to time parties thereto (collectively, the "Lenders"), The Bank of New York, as
letter of credit issuer, administrative agent and collateral agent for the
Lenders, Citicorp North America, Inc., as syndication agent for the Lenders, and
CIBC World Markets Corp. and Credit Suisse First Boston, as documentation agents
for the Lenders, and shall include such amendments, supplements, and
replacements as may be made thereto or therefor from time to time, including the
"Amendment No. 2 and New Lender Agreement", dated as of December 6, 2000
(referred to herein as the "AMENDMENT NO. 2").
"LOAN DEFAULT" Any default or event of default under the Loan
Documents, which entitles the Lenders thereunder to accelerate the Loan, whether
or not the Loan is accelerated.
"LOAN DOCUMENT" or "LOAN DOCUMENTS" The Loan Agreement, and each and
every other Credit Document (as defined therein). This Agreement is not a Loan
Document.
"LOAN PURCHASE DEMAND" A written demand made by Lender to Obligor
for Obligor to purchase from Lender a portion of the Loan, which demand shall
state that it is a Loan Purchase Demand made under this Agreement.
"LOAN PURCHASE PRICE" The amount equal to the Guaranteed Amount.
"MAXIMUM GUARANTEED AMOUNT" As of any date of determination, the
dollar amount equal to one-tenth (1/10th) of the aggregate amount (based on the
purchase price that Obligor charges to Siemens) of all Accelerated Equipment
through such date.
"OBLIGATIONS" Any and all of Obligor's now existing and hereafter
arising obligations arising under this Agreement.
"OUTSTANDING LOAN BALANCE" As defined in Section 2.01.
"PERSON" Any individual, corporation, company, partnership, joint
venture, entity, association, joint-stock company, trust or unincorporated
organization and any governmental authority.
"PURCHASED LOAN AMOUNT" As defined in Section 2.02.
"REDUCTION AMOUNT" As of any date of determination, the amount equal
to the product of (a) the Reduction Factor multiplied by (b) the Base Reduction
Amount.
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"REDUCTION FACTOR" One-tenth (1/10th) of the Accelerated Equipment
Percentage.
"SUPPLEMENTAL AGREEMENT" That certain Supplemental Agreement among
WinStar Communications, Siemens Network and Siemens AG, dated as of December 6,
2000, as now in effect or as hereafter amended (the "INITIAL SUPPLEMENTAL
AGREEMENT"), and if the Frame Agreement (the "FRAME AGREEMENT") referred to in
the Initial Supplemental Agreement shall be entered into, then "SUPPLEMENTAL
AGREEMENT" shall mean and refer to both the Initial Supplemental Agreement and
the Frame Agreement, as hereafter in effect or amended.
"WINSTAR" Winstar Communications and/or any of its affiliates other
than Borrower.
"WINSTAR PURCHASE AGREEMENT" The Point to Multi Point Supply and
Services Agreement executed September 13, 1999, as amended by Amendment No. 1
thereto executed as of November 3, 2000, as supplemented by the Supplemental
Agreement, as now in effect or as hereafter amended.
ARTICLE II
GUARANTY OF PAYMENT; LOAN PURCHASE AGREEMENT
SECTION 2.01. GUARANTY OF PAYMENT. (a) Subject to the limitation on
Obligor's liability set forth in subsection 2.01(c) below, Obligor hereby
unconditionally guarantees to pay to Lender all principal, interest and other
amounts due under the Loan Documents in respect of the Loan (the "OUTSTANDING
LOAN BALANCE"), in the amounts, at the times and in the manner set forth in the
Loan Documents. During the continuation of a Loan Default, and subject to the
limitation on Obligor's liability set forth in subsection 2.01(c) below, Obligor
agrees to pay to Lender the Outstanding Loan Balance (or the Guaranteed Amount
(less any amount thereof paid to Lender in accordance with the provisions of
Section 2.02)) within ten (10) calendar days after Lender's demand.
(b) This guaranty of payment is irrevocable, absolute and unconditional,
and is one of payment and not just collection. Obligor shall pay to Lender all
amounts due by Obligor hereunder, and shall not exercise against Lender any
rights of setoff, recoupment, or counterclaim that Obligor might otherwise have
against Lender or Borrower or any other Person, and Obligor shall pay and
perform Obligor's obligations hereunder free of any deductions and without
abatement, diminution, or setoff.
(c) The amount of Obligor's maximum liability under this Section 2.01 is
limited to the lesser of (i) the Guaranteed Amount (less any amount thereof paid
to Lender in accordance with the provisions of Section 2.02) determined as of
the date of the Loan Default referred to in Lender's demand under Section
2.01(a), or (ii) the amount of the Outstanding Loan Balance due to Lender on the
date of the Loan Default referred to in Lender's demand under Section 2.01(a).
If the Guaranteed Amount is determined as of a date on which there is a
Reduction Amount greater than zero dollars ($0), then Lender's demand for
payment under this Section 2.01 shall also set forth the calculation of the
Reduction Amount.
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(d) All Accelerated Equipment that is sold by Siemens to Winstar shall,
as between Obligor and Lender, be deemed to have been sold by Siemens to Winstar
under the Winstar Purchase Agreement.
SECTION 2.02. LOAN PURCHASE AGREEMENT. Notwithstanding the provisions of
Section 2.01, Obligor hereby covenants to purchase from Lender a portion of the
Loan in accordance with the following provisions of this Section 2.02:
(a) Subject to subsection 2.02(b) below, within ten (10) calendar
days after Lender gives a Loan Purchase Demand to Obligor, Obligor shall
purchase from Lender, and Lender shall sell to Obligor, a portion of the
outstanding principal balance of the Loan (such portion of the outstanding
principal balance of the Loan being referred to herein as the "PURCHASED LOAN
AMOUNT") which when added to the amount of the accrued but unpaid interest on
the Purchased Loan Amount, if any, and the amount of any unpaid charges, costs,
expenses and fees, if any, to which the holder of the Purchased Loan Amount may
be entitled in accordance with the terms of the Loan Agreement, equals the
Guaranteed Amount. The purchase and sale of the Purchased Loan Amount shall be
consummated by Obligor paying to Lender the Loan Purchase Price in immediately
available funds.
(b) Lender agrees not to give a Loan Purchase Demand to Obligor
unless (i) an Event of Default has occurred and is continuing, or (ii) a Loan
Default has occurred and is continuing. For purposes of this subsection 2.02, if
the Loan Purchase Demand is based on a Loan Default, then the Guaranteed Amount
shall be determined as of the date of such Loan Default, and if the Loan
Purchase Demand is based on an Event of Default, then the Guaranteed Amount
shall be determined as of the date of such Event of Default. If the Guaranteed
Amount is determined as of a date on which there is a Reduction Amount greater
than zero dollars ($0), then the Loan Purchase Demand under this subsection 2.02
shall also set forth the calculation of the Reduction Amount.
(c) If Lender gives a Loan Purchase Demand to Obligor and Obligor
pays the Loan Purchase Price to Lender, then Obligor's liability to Lender under
Section 2.01 of this Article shall be deemed satisfied by such payment.
(d) Upon Obligor's payment of the Loan Purchase Price to Lender in
accordance with a Loan Purchase Demand, Lender shall assign to Obligor, without
recourse, and without representation or warranty of any kind, the Purchased Loan
Amount so purchased by Obligor, in accordance with the procedures set forth in
the Loan Agreement, and upon such assignment Obligor shall own the Purchased
Loan Amount and shall be entitled to receive from Borrower in accordance with
the terms of the Loan Agreement, all accrued and unpaid interest on the
Purchased Loan Amount, and such portion of any unpaid charges, costs, expenses,
and fees, if any, to which the holder of the Purchased Loan Amount may be
entitled in accordance with the terms of the Loan Agreement by virtue of being
the holder of the Purchased Loan Amount. In connection with any Loan Purchase
Demand under this Agreement, Obligor agrees to execute an Assignment and
Acceptance in the form required by the terms of the Loan Agreement.
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(e) If Lender gives a Loan Purchase Demand to Obligor but Lender is
not permitted to sell the Purchased Loan Amount to Obligor (or Obligor is not
permitted to purchase the Purchased Loan Amount from Lender) in accordance with
the provisions of the Loan Documents, then (i) Lender and Obligor shall not
consummate the purchase and assignment of the Purchased Loan Amount pursuant to
such Loan Purchase Demand and (ii) such Loan Purchase Demand shall be deemed
rescinded, preserving Lender's continuing right to demand payment under the
guaranty of payment set forth in Section 2.01 or to give other Loan Purchase
Demands thereafter.
(f) Notwithstanding anything to the contrary set forth in this
Section 2.02, if Lender shall have demanded payment from Obligor under Section
2.01, and Obligor shall have paid to Lender the amount of Obligor's maximum
liability as determined under Section 2.01(c), then Obligor shall not be
obligated to purchase any portion of the Loan under this Section 2.02.
SECTION 2.03. OBLIGOR'S LIABILITY ABSOLUTE AND UNCONDITIONAL. The
liability of Obligor under this Agreement shall in no way be affected, limited,
modified or released by, subject to or conditioned upon, and may be enforced
against Obligor irrespective of any of the following:
(a) Any enforcement or exhaustion of any rights and remedies Lender
may at any time have to collect any or all of the Loan from Borrower under the
provisions of the Loan Documents or otherwise;
(b) Any resort or recourse to or against any assets or property now
or hereafter held or serving as collateral and security for any or all of the
Loan;
(c) Any counterclaim, recoupment, setoff, reduction or defense based
on any claim that Obligor may now or hereafter have against Lender or Borrower;
(d) The genuineness, validity, priority, regularity or
enforceability of any or all of the Loan Documents;
(e) Any event, circumstance or matter to which Obligor has consented
pursuant to the provisions of this Agreement; or
(f) Any modification, limitation or discharge of any of the
liabilities or obligations of Borrower or any other Person, arising out of, or
by virtue of, any bankruptcy or similar proceeding for relief of debtors under
federal or state law initiated by or against Borrower or any other Person.
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SECTION 2.04. BORROWER. Obligor's liability under this Agreement is not
conditioned on, and shall not be affected by, any consent, request, agreement,
or other action by Borrower or any other Person.
SECTION 2.05. NO DUTY TO DISCLOSE. Lender shall have no present or
future duty or obligation, and Obligor waives any right to claim or assert any
such duty or obligation, to discover or to disclose to Obligor any information,
financial or otherwise, concerning Borrower, any other Person, or any collateral
securing the obligations of Borrower to Lender or any other Person.
Notwithstanding the preceding sentence, Lender shall provide to Obligor the
following information promptly upon Obligor's written request:
(a) the aggregate amount of Accelerated Equipment sold by Siemens to
Winstar under the Winstar Purchase Agreement;
(b) the aggregate amount of all equipment and services sold by
Siemens to Winstar under the Winstar Purchase Agreement;
(c) the outstanding balance of the Loan;
(d) copies of any amendments to the Supplemental Agreement;
(e) copies of any amendments to the Loan Documents; and
(f) copies of any written notices regarding the Loan that Lender
receives from the administrative agent for the Lenders under the Loan Agreement,
except to the extent that providing such copies (or providing information
contained in such written notices) to Obligor would not be permitted by the Loan
Agreement.
SECTION 2.06. NO OBLIGATION TO MAKE LOAN. Nothing in this Agreement
shall be construed as obligating Lender or any other Person to make the Loan,
but Obligor acknowledges that if the Loan is made, Lender will be making the
Loan in reliance on this Agreement.
SECTION 2.07. NO OBLIGATION TO PURCHASE ACCELERATED EQUIPMENT. Nothing
in this Agreement shall be construed as obligating Siemens to purchase any
Accelerated Equipment from Obligor, but Obligor acknowledges that if Siemens
purchases Accelerated Equipment from Obligor, such purchases will be made in
reliance on this Agreement.
SECTION 2.08. LOAN DEFAULTS. In the event of more than one Loan Default,
Lender shall be entitled to determine which Loan Default is the Loan Default for
purposes of exercising any right that Lender may have under this Agreement upon
the occurrence of a Loan Default.
SECTION 2.09. EVENTS OF DEFAULT. In the event of more than one Event of
Default, Lender shall be entitled to determine which Event of Default is the
Event of Default for purposes of exercising any right that Lender may have under
this Agreement upon the occurrence of an Event of Default.
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SECTION 2.10. ASSIGNMENT REQUEST. If (i) Lender shall have demanded
payment from Obligor under Section 2.01, and (ii) within ten (10) calendar days
after such demand Obligor shall have unconditionally paid to Lender in response
to such demand the full amount of Obligor's maximum liability as determined
under Section 2.01(c) (the "DEMAND AMOUNT"), and (iii) within ten (10) calendar
days after Lender's receipt of the Demand Amount Obligor shall have made a
request to Lender in writing (an "ASSIGNMENT REQUEST") for Lender to assign to
Obligor a portion (the "ASSIGNMENT PORTION") of the outstanding principal
balance of the Loan, which Assignment Portion shall equal the amount that the
"Purchased Loan Amount" would have been if Lender had made a Loan Purchase
Demand under Section 2.02 equal to the Demand Amount paid to Lender, then within
fifteen (15) calendar days after Lender's receipt of such Assignment Request,
Lender shall request such written consents as Lender may be required to obtain
("REQUIRED WRITTEN CONSENTS") under the Loan Documents for a sale of such
Assignment Portion of the Loan to Obligor. If such Required Written Consents are
granted and given to Lender within forty-five (45) calendar days after Lender's
requests for such Required Written Consents (such 45 calendar day period being
referred to herein as the "CONSENT PERIOD") then, and subject to the
qualifications set forth below in this Section, Lender shall promptly thereafter
assign such Assignment Portion of the Loan to Obligor as though Lender had given
a Loan Purchase Demand to Obligor and the Demand Amount had been paid as the
Loan Purchase Price, provided that Obligor shall execute the Assignment and
Acceptance in the form required by the terms of the Loan Agreement and pay such
fees as may be required under the Loan Documents in connection with such
assignment, and provided further that Lender shall not be responsible for
obtaining any Required Written Consents (but only to request such Required
Written Consents) and in the event that any Required Written Consent is not
granted and given to Lender within the Consent Period Lender shall not be
obligated to assign any portion of the Loan to Obligor, and provided further
that if Lender is not permitted to assign a portion of the Loan to Obligor (or
Obligor is not permitted to accept an assignment of such portion of the Loan
from Lender) in accordance with the provisions of the Loan Documents, then
Lender shall not in any event be obligated to assign such portion of the Loan to
Obligor. Nothing in this Agreement shall be interpreted as obligating Lender to
assign any portion of the Loan to Obligor in return for payment of the Demand
Amount or as requiring Lender to return the Demand Amount paid to Lender (or any
portion thereof) to Obligor under any circumstances.
SECTION 2.11. PARTICIPATION REQUEST. If (i) Lender shall have demanded
payment from Obligor under Section 2.01, and (ii) within ten (10) calendar days
after such demand Obligor shall have unconditionally paid to Lender in response
to such demand the Demand Amount, and (iii) within ten (10) calendar days after
Lender's receipt of the Demand Amount Obligor shall have made an Assignment
Request to Lender in writing for Lender to assign to Obligor the Assignment
Portion of the outstanding principal balance of the Loan in accordance with the
provisions of Section 2.10, but (X) the Required Written Consents shall not have
been given to Lender within the Consent Period or (Y) Lender is not permitted to
assign a portion of the Loan to Obligor (or Obligor is not permitted to accept
an assignment of such portion of the Loan from Lender) in accordance with the
provisions of the Loan Documents, then, and subject
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to the qualifications set forth below in this Section, if Oligor shall within
thirty (30) calendar days after the Consent Period make a request to Lender in
writing (a "PARTICIPATION REQUEST") for Lender to grant to Obligor a
participating interest in the Loan, Lender shall grant to Obligor a
participating interest in the Loan, in an amount equal to the amount that the
Assignment Portion would have been under Section 2.10, upon the execution and
delivery by Lender and Obligor of a participation agreement in form and
substance mutually satisfactory to Lender and Obligor (which participation
agreement must also comply with the provisions of the Loan Documents applicable
to participations), and provided further that if Lender is not permitted to
grant a participating interest in the Loan to Obligor in accordance with the
provisions of the Loan Documents, then Lender shall not in any event be
obligated to grant any participating interest in the Loan to Obligor. Nothing in
this Agreement shall be interpreted as obligating Lender to grant any
participating interest in the Loan to Obligor in return for payment of the
Demand Amount or as requiring Lender to return the Demand Amount paid to Lender
(or any portion thereof) to Obligor under any circumstances.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Obligor hereby makes the following representations and warranties to
Lender on the date of this Agreement, and Lender shall be entitled to rely upon
the truth, accuracy, and completeness of the following representations and
warranties without regard to any other information that may be now or hereafter
known by or disclosed to Lender:
SECTION 3.01. EXISTENCE. Obligor (a) is a corporation duly organized,
validly existing and in good standing under the laws of Delaware; and (b) has
all requisite corporate or other power, and has all material governmental
licenses, authorizations, consents, permits and approvals, to own its assets and
carry on its business as now being or as proposed to be conducted.
SECTION 3.02. ACTION. (a) Obligor has all necessary corporate or other
power, authority and legal right to execute, deliver and perform Obligor's
obligations under this Agreement; (b) the execution, delivery and performance by
Obligor of this Agreement have been duly authorized by all necessary corporate
action on Obligor's part (including any required shareholder or like approvals);
and (c) this Agreement has been duly and validly executed and delivered by
Obligor and constitutes Obligor's legal, valid and binding obligation,
enforceable against Obligor, in accordance with its terms.
SECTION 3.03. APPROVALS. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency, or any securities exchange, are necessary for the execution, delivery
or performance of this Agreement by Obligor or for the legality, validity or
enforceability of this Agreement. The execution, delivery and performance of the
Agreement will not (a) contravene any provision of law, any order of any court
or other agency of government; or (b) contravene the Articles of Incorporation
(or Certificate of Incorporation) or By-laws of Obligor; or (c) be in conflict
with, result in the breach of or constitute (with due notice or lapse of time or
both) a default under any indenture, agreement or other instrument binding upon
Obligor.
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SECTION 3.04. INFORMATION. Obligor has received a copy of the Loan
Agreement, including Amendment No. 1 thereto, as provided to Lender by WinStar
Communications, and has received from Lender a copy of the Amendment No. 2 as it
will be signed by the parties thereto. Obligor is not relying on any
information, representation or warranty from Lender or any employee, agent, or
other representative of Lender in entering into this Agreement.
ARTICLE IV
EVENTS OF DEFAULT; REMEDIES
SECTION 4.01. EVENTS OF DEFAULT. Each of the following events shall
constitute an Event of Default: (a) Obligor's failure to make any payment when
due under this Agreement, or if Obligor fails to carry out any of its agreements
set forth herein; (b) any representation or warranty of Obligor is materially
inaccurate or incomplete when made or given; (c) Obligor sells, transfers,
encumbers, or otherwise disposes of substantially all of Obligor's assets in one
transaction or a series of related transactions; (d) Obligor merges or
consolidates with any other person in a transaction in which Obligor is not the
surviving corporation; (e) Obligor dissolves; or (f) any petition under federal
bankruptcy law is filed by or against Obligor, or any application is made for
the appointment of a receiver for Obligor or any of Obligor's property, or
Obligor makes a general assignment for the benefit of creditors, or Obligor
becomes insolvent, and in the case of any involuntary petition, and such
petition is not withdrawn or dismissed within sixty (60) calendar days of the
date of filing.
SECTION 4.02. ACCELERATION. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived by Lender in writing or cured, Lender may take any or all of the
following actions against Obligor: (a) declare the Obligations to be due,
whereupon the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
Obligor; and/or (b) enforce any and all rights and interests created and
existing under this Agreement and all rights of set-off; provided, however,
without limiting the generality of the foregoing, upon the occurrence of an
Event of Default described in Section 4.01(f) above, the Obligations shall be
immediately due and payable to Lender without any action on the part of Lender,
and without presentment, demand, protest, or other notice of any kind, all of
which are hereby waived.
SECTION 4.03. DEFAULT INTEREST. If Obligor fails to pay the Guaranteed
Amount or the Loan Purchase Price when due, then Obligor covenants to pay to
Lender interest ("DEFAULT INTEREST") on such unpaid amount at the Default
Interest Rate until all unpaid amounts due under this Agreement have been paid
in full. Default Interest shall be immediately due and payable as and when
accrued. Obligor and Lender agree that the Default Interest provided for under
this Agreement is intended to compensate Lender for the time value of money and
is not a penalty.
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ARTICLE V
CONSENTS; WAIVERS; AND GENERAL PROVISIONS
SECTION 5.01. ACTS BY LENDER. Obligor authorizes Lender, without notice
to Obligor or further consent of Obligor, and without in any way affecting or
impairing Obligor's liability hereunder, from time to time to (a) change the
amount, time or manner of payment amounts due under the Loan Documents; (b)
change or waive strict compliance with any of the terms, covenants, conditions
or provisions of the Loan Documents; (c) amend, renew, extend, modify, change or
supplement any provisions of the Loan Documents; (d) make advances for the
purpose of performing any obligation of Borrower under the Loan Documents; (e)
effect any release, compromise or settlement with Borrower, or any other Person
obligated to repay the Loan; (f) assign portions of its interest in the Loan in
which event, if the assignee is an affiliate of Lender (but not otherwise), this
Agreement will inure to the benefit of Lender's assignee to the extent of such
assignment; or (g) enforce any provisions of the Loan Documents.
SECTION 5.02. WAIVERS BY OBLIGOR.
(a) Obligor waives any right to require Lender to: (i) proceed
against Borrower or any other guarantor of the Loan, or (ii) pursue any other
remedy in Lender's power whatsoever, or (iii) except as expressly set forth
herein, notify Obligor of any default by Borrower in the performance of any
agreement of Borrower under the Loan Documents.
(b) Obligor waives any defense arising by reason of any of the
following: (i) any disability or any counterclaim or right of set-off or other
defense of Borrower, (ii) any lack of authority of Borrower with respect to the
Loan Documents, (iii) the invalidity, illegality or lack of enforceability of
the Loan Documents or any provision thereof from any cause whatsoever, including
any action or inaction by Lender, (iv) the failure of Lender or any other Person
to perfect or maintain perfection of any security interest in any collateral for
the Loan, (v) the cessation from any cause whatsoever of the liability of
Borrower, (vi) that the Loan Documents shall be void or voidable as against
Borrower or any of Borrower's creditors, including a trustee in bankruptcy of
Borrower, by reason of any fact or circumstance, (vii) the delay or failure of
Lender to exercise any of its rights and remedies against the Borrower or any
collateral or security for the Loan Documents or this Agreement, (viii) any
event or circumstance which might otherwise constitute a legal or equitable
discharge of Obligor's obligations hereunder; provided, however, that Obligor
does not waive any defense arising from the due performance by Obligor of the
terms and conditions of this Agreement.
(c) Obligor waives all presentments, demands for performance,
notices of nonperformance, protests, notices of dishonor, and notices of
acceptances of this Agreement.
SECTION 5.03. TERM. The term of this Agreement shall commence with the
date of this Agreement and continue in full force and effect and be binding upon
Obligor until the earlier of (a) repayment of the Loan in full, (b) Obligor has
paid the Guaranteed Amount to Lender in accordance with Section 2.01, or has
purchased the Purchased Loan Amount and paid Lender the Loan Purchase Price in
accordance with Section 2.02, together with such interest at the Default
Interest Rate as may be due under Section 4.03, or (c) all Obligations hereunder
shall have been fully paid and satisfied.
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SECTION 5.04. NOTICES. Any notice or demand required or permitted by or
in connection with this Agreement shall be in writing and shall be made by
telecopy, or by hand delivery, or by overnight delivery service, or by certified
mail, return receipt requested, postage prepaid, addressed to the parties at the
appropriate address set forth below or to such other address as may be hereafter
specified by written notice by the parties to each other. Notice or demand shall
be considered given as of the earlier of the date of actual receipt, or the date
of the telecopy or hand delivery, or one (1) calendar day after delivery to an
overnight delivery service, or three (3) calendar days after the date of
mailing, independent of the date of actual delivery. Notwithstanding the
aforesaid procedures, any notice or demand upon Lender or Obligor, in fact
received by such person, shall be sufficient notice or demand.
If to Obligor: Accelerated Networks, Inc.
000 Xxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Attn: Chief Financial Officer
Telephone No.: 000-000-0000 Ext. 297
Telecopy No.: 000-000-0000
With copy to: Xxxxx X. Xxxxxxx, Esquire
Xxxxxxx, Phleger & Xxxxxxxx LLP
00000 Xx Xxxxxx Xxxx Xxx Xxxxx, XX
00000 Telecopy No.: 000-000-0000
If to Lender: Siemens Financial Services, Inc.
000 Xxxxxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxx
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
With copy to: Siemens Carrier Networks, LLC
000 Xxxxxx Xxxxx Xxxxxxx(X-0)
Xxxx Xxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxxxx
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
SECTION 5.05. REMEDIES CUMULATIVE. No failure or delay on the part of
Lender in exercising any right, power or privilege hereunder and no course of
dealing between Lender and Obligor shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
otherwise preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
Lender would otherwise have. No notice to or demand on Obligor in any case shall
constitute a waiver of the rights of Lender to any other or further action in
any circumstances without notice or demand.
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SECTION 5.06. GOVERNING LAW. This Agreement and all other related
instruments and documents and the rights and obligations of the parties
hereunder and thereunder shall, in all respects, be governed by, and construed
in accordance with, the laws of the State of New York (excluding New York
conflict of laws rules), including all matters of construction, validity and
performance.
SECTION 5.07. MISCELLANEOUS. This Agreement shall not be amended,
changed, waived, discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing signed by Obligor and Lender. This
Agreement shall inure to the benefit Lender and Lender's successors and assigns
and shall burden Obligor and Obligor's successors and assigns. Any provision of
this Agreement or of any related instrument or document executed pursuant hereto
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
thereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
This Agreement may be executed in counterparts and each shall be effective as an
original, and a telecopy of this executed Agreement shall be effective as an
original. This Agreement and the amounts referred to or calculated hereunder are
denominated in U.S. dollars.
SECTION 5.08. ENTIRE AGREEMENT. This Agreement and any documents
executed with this Agreement constitute a complete and exclusive expression of
all the terms of the matters expressed therein and all prior agreements,
statements, and representations, whether written or oral, which relate thereto
in any way are hereby superseded and shall be given no force and effect. No
promise, inducement, or representation has been made by either party which
relates in any way to the matters expressed in this Agreement and in any other
documents executed with this Agreement, other than what is expressly stated in
this Agreement and in any documents executed with this Agreement.
SECTION 5.09. NO THIRD PARTY BENEFICIARIES. There shall be no third
party beneficiaries of this Agreement.
SECTION 5.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS
AGREEMENT WAIVES ALL RIGHT TO TRIAL BY JURY OF ANY AND ALL CLAIMS ARISING UNDER
OR RELATING TO THIS AGREEMENT. EACH OF THE PARTIES TO THIS AGREEMENT
ACKNOWLEDGES THAT THIS IS A WAIVER OF A LEGAL RIGHT AND THAT THIS WAIVER IS MADE
KNOWINGLY AND VOLUNTARILY AFTER CONSULTATION WITH, OR THE OPPORTUNITY TO CONSULT
WITH, COUNSEL OF SUCH PARTY'S CHOICE. ALL SUCH CLAIMS SHALL BE TRIED BEFORE A
JUDGE OF A COURT HAVING JURISDICTION, WITHOUT A JURY.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
undersigned parties execute this Agreement as of the day and year first above
written.
WITNESS: SIEMENS FINANCIAL SERVICES, INC.
/s/ Xxxxx Xxxxx-Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Sr. V.P & CFO
WITNESS: ACCELERATED NETWORKS, INC.
/s/ Xxx Xxxxxx By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: CFO
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