COLLATERAL AGENT AGREEMENT
COLLATERAL AGENT AGREEMENT (this "Agreement") dated as of January 9,
2001 among Xxxxxxx X. Xxxxxxx (the "Collateral Agent"), the parties identified
on Schedule A hereto as being in the First Group or Second Group (each,
individually, a "Lender" and collectively, the "Lenders"), who hold or have
subscribed for Secured Convertible Notes in the principal amounts set forth on
Schedule A hereto (collectively, the Notes") issued or to be issued by Vianet
Technologies, Inc., a Delaware corporation ("Vianet").
WHEREAS, the Lenders are making loans to Vianet to be secured by
certain collateral; and
WHEREAS, it is desirable to provide for the orderly administration of
such collateral by requiring each Lender to appoint the Collateral Agent, and
the Collateral Agent has agreed to accept such appointment and to receive, hold
and deliver such collateral, all upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, it is desirable to allocate the enforcement of certain rights
of the Lenders under the Notes for the orderly administration thereof.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the parties hereto agree as follows:
1. Collateral.
(a) Contemporaneously with the execution and delivery of this
Agreement by the Collateral Agent and the Lenders, (i) the Collateral Agent has
or will have entered into a Security Agreement between the Collateral Agent and
Vianet, Bayard Holdings, a Liberian corporation, Sonata Holdings, a Liberian
corporation and Xelix Capital, a Liberian corporation, who are shareholders of
Vianet (collectively "Shareholders") (the "Security Agreement"), regarding the
grant of a security interest in certain assets owned by Vianet and Shareholders
(such assets are referred to herein as the "Collateral") to the Collateral
Agent, for the benefit of the Lenders and (ii) Vianet is issuing the Notes to
the Lenders.
(b) For purposes solely of perfection of the security
interests granted to the Collateral Agent, as agent on behalf of the Lenders,
and on its own behalf under the Security Agreement, the Collateral Agent hereby
acknowledges that any Collateral held by the Collateral Agent is held for the
benefit of the Lenders in accordance with this Agreement and the Security
Agreement. No reference to the Security Agreement or any other instrument or
document shall be deemed to incorporate any term or provision thereof into this
Agreement unless expressly so provided.
(c) The Collateral Agent is to distribute any proceeds
received from the Collateral which are distributable to the Lenders in the
following order: first to the holders of Notes in the First Group, in proportion
to their respective interests in the Obligations (as defined in the Security
Agreement), and then to holders of Notes in the Second Group, in proportion to
their respective interests in the Obligations. No sums shall be paid to the
Second Group until all Obligations due to the First Group have been satisfied.
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2. Appointment of the Collateral Agent.
The Lenders hereby appoint the Collateral Agent (and the
Collateral Agent hereby accepts such appointment) to take any action including,
without limitation, the registration of any Collateral in the name of the
Collateral Agent or its nominees prior to or during the continuance of an Event
of Default (as defined in the Security Agreement), the exercise of voting rights
upon the occurrence and during the continuance of an Event of Default, the
application of any cash collateral received by the Collateral Agent to the
payment of the Obligations (as defined in the Security Agreement), the exercise
of any remedies given to the Collateral Agent pursuant to the Security Agreement
and the exercise of any authority pursuant to the appointment of the Collateral
Agent as an attorney-in-fact pursuant to the Security Agreement that the
Collateral Agent deems necessary or proper for the administration of the
Collateral pursuant to the Security Agreement. Upon disposition of the
Collateral in accordance with the Security Agreement, the Collateral Agent shall
promptly distribute any cash or Collateral in accordance with Section 10.4 of
the Security Agreement. Distribution to Lenders in each of the First Group and
Second Group shall be in proportion to the aggregate amounts owed to them under
the Notes.
3. Action by the Majority in Interest.
(a) Certain Actions. Each of the Lenders covenants and
agrees that only a Majority in Interest shall have the right, but not the
obligation, to undertake the following actions (it being expressly understood
that less than a Majority in Interest hereby expressly waive the following
rights that they may otherwise have under the Notes, but only insofar as such
waiver affects their right to receive proceeds from the Collateral):
(i) Acceleration. If an Event of Default occurs, after
the applicable cure period, if any, a Majority in Interest may, on behalf of all
the Lenders, instruct the Collateral Agent to provide to Vianet or any one or
more of the Shareholders notice to cure such default and/or declare the unpaid
principal amount of the Notes to be due and payable, together with any and all
accrued interest thereon and all costs payable pursuant to such Notes;
(ii) Enforcement. Upon the occurrence of any Event of
Default after the applicable cure period, if any, a Majority in Interest may
instruct the Collateral Agent to proceed to protect, exercise and enforce, on
behalf of all the Lenders, their rights and remedies under the Notes against
Vianet and the Shareholders, and such other rights and remedies as are provided
by law or equity; and
(iii) Waiver of Past Defaults. A Majority in Interest
may instruct the Collateral Agent to waive any Event of Default by written
notice to Vianet and the Shareholders, and the other Lenders.
(iv) Amendment. A Majority in Interest may instruct the
Collateral Agent to waive, amend, supplement or modify any term, condition or
other provision in the Notes or Security Agreement in accordance with the terms
of the Notes or Security Agreement so long as such waiver, amendment, supplement
or modification is made with respect to all of the Notes and with the same force
and effect with respect to each of the Notes.
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(v) A Majority in Interest may consent to the release
from Security Interest the portion of the Collateral represented by Vianet's
ownership of Vianet Access, Inc., a Texas corporation.
(b) Permitted Subordination. A Majority in Interest may
instruct the Collateral Agent to agree to subordinate any Collateral to any
claim and may enter into any agreement with Vianet and Shareholders to evidence
such subordination; provided, however, that subsequent to any such
subordination, each Note shall remain pari passu with the other Notes held among
the First Group and Second Group, respectively.
(c) Further Actions. A Majority in Interest may instruct
the Collateral Agent to take any action that it may take under this Agreement by
instructing the Collateral Agent in writing to take such action on behalf of all
the Lenders.
(d) Majority in Interest. For so long as any obligations
remain outstanding on the Secured Notes, Majority in Interest shall mean Lenders
who are members of the First Group who hold not less than seventy-five percent
(75%) of the Obligations outstanding on the Notes held by members of the First
Group. Thereafter, Majority in Interest shall mean Lenders who are members of
the Second Group who hold not less than seventy-five percent (75%) of the
Obligations outstanding on the Notes held by members of the Second Group.
4. Power of Attorney.
(a) To effectuate the terms and provisions hereof, the
Lenders hereby appoint the Collateral Agent as their attorney-in-fact (and the
Collateral Agent hereby accepts such appointment) for the purpose of carrying
out the provisions of this Agreement including, without limitation, taking any
action on behalf of, or at the instruction of, the Majority in Interest at the
written direction of the Majority in Interest and executing any consent
authorized pursuant to this Agreement and taking any action and executing any
instrument that the Collateral Agent may deem necessary or advisable (and
lawful) to accomplish the purposes hereof.
(b) All acts done under the foregoing authorization are
hereby ratified and approved and neither the Collateral Agent nor any designee
nor agent thereof shall be liable for any acts of commission or omission, for
any error of judgment, for any mistake of fact or law except for acts of gross
negligence or willful misconduct.
(c) This power of attorney, being coupled with an interest,
is irrevocable while this Agreement remains in effect.
5. Expenses of the Collateral Agent. The Lenders shall pay any
and all costs and expenses incurred by the Collateral Agent, all waivers,
releases, discharges, satisfactions, modifications and amendments of this
Agreement, the administration and holding of the Collateral, insurance expenses,
and the enforcement, protection and adjudication of the parties' rights
hereunder by the Collateral Agent, including, without limitation, the reasonable
disbursements, expenses and fees of the attorneys the Collateral Agent may
retain, if any, each of the foregoing in proportion to their holdings of the
Notes.
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6. Reliance on Documents and Experts. The Collateral Agent shall
be entitled to rely upon any notice, consent, certificate, affidavit, statement,
paper, document, writing or communication (which may be by telegram, cable,
telex, telecopier, or telephone) reasonably believed by it to be genuine and to
have been signed, sent or made by the proper person or persons, and upon
opinions and advice of its own legal counsel, independent public accountants and
other experts selected by the Collateral Agent.
7. Duties of the Collateral Agent; Standard of Care.
(a) The Collateral Agent's only duties are those expressly
set forth in this Agreement, and the Collateral Agent hereby is authorized to
perform those duties in accordance with commercially reasonable practices. The
Collateral Agent may exercise or otherwise enforce any of its rights, powers,
privileges, remedies and interests under this Agreement and applicable law or
perform any of its duties under this Agreement by or through its officers,
employees, attorneys, or agents.
(b) The Collateral Agent shall act in good faith and with
that degree of care that an ordinarily prudent person in a like position would
use under similar circumstances.
(c) Any funds held by the Collateral Agent hereunder need
not be segregated from other funds except to the extent required by law. The
Collateral Agent shall be under no liability for interest on any funds received
by it hereunder.
8. Resignation. The Collateral Agent may resign and be discharged
of its duties hereunder at any time by giving written notice of such resignation
to the other parties hereto, stating the date such resignation is to take
effect. Within 15 days of the giving of such notice, a successor collateral
agent shall be appointed by the Majority in Interest; provided, however, that if
the Lenders are unable so to agree upon a successor within such time period, the
successor collateral agent may be a person designated by the Collateral Agent,
and any and all fees of such successor collateral agent shall be the joint and
several obligation of the Lenders. The Collateral Agent shall continue to serve
until the effective date of the resignation or until its successor accepts the
appointment and receives the Collateral held by the Collateral Agent but shall
not be obligated to take any action hereunder. The Collateral Agent may deposit
any Collateral with the Supreme Court of the State of New York for New York
County or any such other court in New York State that accepts such Collateral.
9. Exculpation. The Collateral Agent and its officers, employees,
attorneys and agents, shall not incur any liability whatsoever for the holding
or delivery of documents or the taking of any other action in accordance with
the terms and provisions of this Agreement, for any mistake or error in
judgment, for compliance with any applicable law or any attachment, order or
other directive of any court or other authority (irrespective of any conflicting
term or provision of this Agreement), or for any act or omission of any other
person engaged by the Collateral Agent in connection with this Agreement, unless
occasioned by the exculpated person's own gross negligence or willful
misconduct; and each party hereto hereby waives any and all claims and actions
whatsoever against the Collateral Agent and its officers, employees, attorneys
and agents, arising out of or related directly or indirectly to any or all of
the foregoing acts, omissions and circumstances.
10. Indemnification. The Lenders hereby agree to indemnify,
reimburse and hold harmless the Collateral Agent and its directors, officers,
employees, attorneys and agents, jointly and severally, from and against any and
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all claims, liabilities, losses and expenses that may be imposed upon, incurred
by, or asserted against any of them, arising out of or related directly or
indirectly to this Agreement or the Collateral, except such as are occasioned by
the indemnified person's own gross negligence or willful misconduct.
11. Miscellaneous.
(a) Rights and Remedies Not Waived. No act, omission or
delay by the Collateral Agent shall constitute a waiver of the Collateral
Agent's rights and remedies hereunder or otherwise. No single or partial waiver
by the Collateral Agent of any default hereunder or right or remedy that it may
have shall operate as a waiver of any other default, right or remedy or of the
same default, right or remedy on a future occasion.
(b) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts or choice of law (or any other law that would make
any substantive laws of any state other than the State of New York applicable
hereto).
(c) Waiver of Jury Trial and Setoff; Consent to
Jurisdiction; Etc.
(i) In any litigation in any court with respect to, in
connection with, or arising out of this Agreement or any instrument or document
delivered pursuant to this Agreement, or the validity, protection,
interpretation, collection or enforcement hereof or thereof, or any other claim
or dispute howsoever arising, between the Collateral Agent and the Lenders or
any Lender, then each Lender, to the fullest extent it may legally do so, (i)
waives the right to interpose any setoff, recoupment, counterclaim or
cross-claim in connection with any such litigation, irrespective of the nature
of such setoff, recoupment, counterclaim or cross-claim, unless such setoff,
recoupment, counterclaim or cross-claim could not, by reason of any applicable
federal or state procedural laws, be interposed, pleaded or alleged in any other
action; and (ii) WAIVES TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION AND
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. EACH LENDER AGREES THAT THIS SECTION 11(c) IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGE THAT THE
COLLATERAL AGENT WOULD NOT ENTER THIS AGREEMENT IF THIS SECTION 11(c) WERE NOT
PART OF THIS AGREEMENT.
(ii) Each Lender irrevocably consents to the exclusive
jurisdiction of any State or Federal Court located within the County of New
York, State of New York, in connection with any action or proceeding arising out
of or relating to this Agreement or any document or instrument delivered
pursuant to this Agreement or otherwise. In any such litigation, each Lender
waives, to the fullest extent it may effectively do so, personal service of any
summons, complaint or other process and agree that the service thereof may be
made by certified or registered mail directed to such Lender at its address for
notice determined in accordance with Section 11(e) hereof. Each Lender hereby
waives, to the fullest extent it may effectively do so, the defenses of forum
non conveniens and improper venue.
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(d) Admissibility of this Agreement. Each of the Lenders
agrees that any copy of this Agreement signed by it and transmitted by
telecopier for delivery to the Collateral Agent shall be admissible in evidence
as the original itself in any judicial or administrative proceeding, whether or
not the original is in existence.
(e) Address for Notices. Any notice or other communication
under the provisions of this Agreement shall be given in writing and delivered
in person, by reputable overnight courier or delivery service, by facsimile
machine (receipt confirmed) with a copy sent by first class mail on the date of
transmissions, or by registered or certified mail, return receipt requested,
directed to its addresses set forth below (or to any new address of which either
party hereto shall have informed the other by the giving of notice in the manner
provided herein):
In the case of the Collateral Agent, to it at:
Xxxxxxx X. Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
In the case of the Lenders, to:
the addresses and telecopier numbers
set forth on Schedule A hereto.
In the case of Vianet, to:
Vianet Technologies, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Fax: (000) 000-0000
With a copy to:
Sichenzia, Ross & Xxxxxxxx, LLP
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
(f) Amendments and Modification; Additional Lender. No
provision hereof shall be modified, altered, waived or limited except by written
instrument expressly referring to this Agreement and to such provision, and
executed by the parties hereto. Any transferee of a Note who acquires a Note
after the date hereof may become a party hereto by signing the signature page
and sending an executed copy of this Agreement to the Collateral Agent.
(g) Fee. Upon the occurrence of an Event of Default, the
Lenders collectively shall pay the Collateral Agent the sum of $5,000 to apply
against an hourly fee of $350 to be paid to the Collateral Agent by the Lenders
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for services rendered pursuant to this Agreement. All payments due to the
Collateral Agent under this Agreement including reimbursements must be paid when
billed. The Collateral Agent may refuse to act on behalf of or make a
distribution to any Lender who is not current in payments to the Collateral
Agent. Payments required pursuant to this Agreement shall be pari passu to the
Lenders' interests in the Notes. The Collateral Agent is hereby authorized to
deduct any sums due the Collateral Agent from Collateral in the Collateral
Agent's possession.
(h) Counterparts. This Agreement may be executed by the
parties hereto individually or in any combination, in one or more counterparts,
and by facsimile signature and transmission, each of which shall be an original
and all of which shall together constitute one and the same agreement.
(i) Successors and Assigns. Whenever in this Agreement
reference is made to any party, such reference shall be deemed to include the
successors, assigns, heirs and legal representatives of such party. No party
hereto may transfer any rights under this Agreement, unless the transferee
agrees to be bound by, and comply with all of the terms and provisions of this
Agreement, as if an original signatory hereto on the date hereof.
(j) Captions: Certain Definitions. The captions of the
various sections and paragraphs of this Agreement have been inserted only for
the purposes of convenience; such captions are not a part of this Agreement and
shall not be deemed in any manner to modify, explain, enlarge or restrict any of
the provisions of this Agreement. As used in this Agreement the term "person"
shall mean and include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
(k) Severability. In the event that any term or provision
of this Agreement shall be finally determined to be superseded, invalid, illegal
or otherwise unenforceable pursuant to applicable law by an authority having
jurisdiction and venue, that determination shall not impair or otherwise affect
the validity, legality or enforceability (i) by or before that authority of the
remaining terms and provisions of this Agreement, which shall be enforced as if
the unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.
(l) Entire Agreement. This Agreement contains the entire
agreement of the parties and supersedes all other agreements and understandings,
oral or written, with respect to the matters contained herein.
(m) Schedules. The Collateral Agent is authorized to annex
hereto any schedules referred to herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Collateral Agent Agreement to be signed, by their respective duly authorized
officers or directly, as of the date first written above.
-------------------------------------- -------------------------------------
XXXXXXX TRUST REG. - Lender ESQUIRE TRADE & FINANCE INC. - Lender
-------------------------------------- -------------------------------------
SENECA CAPITAL L.P. - Lender SENECA CAPITAL INTERNATIONAL LTD.
- Lender
-------------------------------------- -------------------------------------
XXXXXX X. LOW - Lender PEQUOT NAVIGATION OFFSHORE FUND
INC. - Lender
-------------------------------------- -------------------------------------
PEQUOT SCOUT FUND, L.P. - Lender XXXXXXXXXX SHIPPING, S.A. - Lender
-------------------------------------
XXXXXXX X. XXXXXXX
Collateral Agent
Acknowledged:
Vianet Technologies, Inc.
By:
-----------------------------------
Name:
Title:
--------------------------------------
BAYARD HOLDINGS - Shareholder
--------------------------------------
SONATA HOLDINGS - Shareholder
--------------------------------------
XELIX CAPITAL - Shareholder
This Collateral Agent Agreement may be signed by facsimile signature and
delivered by confirmed facsimile transmission.
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SCHEDULE A TO COLLATERAL AGENT AGREEMENT
FIRST GROUP
LENDERS PRINCIPAL AMOUNT OF SECURED
CONVERTIBLE NOTES
--------------------------------------------------------------------------------
XXXXXXX TRUST REG. $250,000.00
X/x Xxxxxxx-Xxxxxxxx-Xxxxxxx
Xxxxxxxxxxx 0
Xxxxxxxxxxx 0000
Xxxxxxx, Xxxxxxxxxxxxx
Fax: 000-000-000-000000
--------------------------------------------------------------------------------
ESQUIRE TRADE & FINANCE, INC. $250,000.00
Trident Xxxxxxxx
X.X. Xxx 000
Xxxx Xxxx, Xxxxxxx, B.V.I.
Fax: 000-00-00-000-0000
--------------------------------------------------------------------------------
SENECA CAPITAL L.P. $258,000.00
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------
SENECA CAPITAL INTERNATIONAL LTD. $492,000.00
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------
XXXXXX X. LOW $100,000.00
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------
PEQUOT NAVIGATION OFFSHORE FUND, INC. $75,000.00
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------
PEQUOT SCOUT FUND, L.P. $425,000.00
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------
XXXXXXXXXX SHIPPING, S.A. $250,000.00
Xxxx House, 00 Xxxxxx Xxxxxx
Xxxxxxxx XX00, Xxxxxxx
Fax: 000-000-0000
--------------------------------------------------------------------------------
TOTAL $2,100,000.00
--------------------------------------------------------------------------------
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SECOND GROUP
--------------------------------------------------------------------------------
LENDERS PRINCIPAL AMOUNT OF SECURED
CONVERTIBLE NOTES
--------------------------------------------------------------------------------
SENECA CAPITAL L.P. $1,512,000.00
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------
SENECA CAPITAL INTERNATIONAL LTD. $2,688,000
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------
XXXXXXX TRUST REG. $250,000.00
X/x Xxxxxxx-Xxxxxxxx-Xxxxxxx
Xxxxxxxxxxx 0
Xxxxxxxxxxx 0000
Xxxxxxx, Xxxxxxxxxxxxx
Fax: 000-000-000-000000
--------------------------------------------------------------------------------
ESQUIRE TRADE & FINANCE, INC. $250,000.00
Trident Xxxxxxxx
X.X. Xxx 000
Xxxx Xxxx, Xxxxxxx, B.V.I.
Fax: 000-00-00-000-0000
--------------------------------------------------------------------------------
TOTAL $4,700,000.00
--------------------------------------------------------------------------------
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