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EXHIBIT 10.29
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of October 26, 1998,
by and between Abovenet Communications, Inc. ("Borrower") and Silicon Valley
Bank ("Bank").
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among
other documents, a Loan and Security Agreement, dated May 22, 1998, as may be
amended from time to time, (the "Loan Agreement"). The Loan Agreement provided
for, among other things, a Committed Revolving Line in the original principal
amount of Seven Hundred Fifty Thousand Dollars ($750,000). Defined terms used
but not otherwise defined herein shall have the same meanings as in the Loan
Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement and the
Intellectual Property Security Agreement, dated May 22, 1998.
Hereinafter, the above-described security documents and guarantees, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Waiver of Covenant Default.
1. Bank hereby waives Borrower's existing default under the Loan
Agreement by virtue of Borrower's failure to comply with the
Maximum Quarterly Loss covenant as of the quarter ended September
30, 1998. Bank's waiver of Borrower's compliance of this covenant
shall apply only to the foregoing period. Accordingly, for the
quarter ending December 31, 1998, Borrower shall be in compliance
with this covenant, as amended herein.
Bank's agreement to waive the above-described default (1) in no
way shall be deemed an agreement by the Bank to waive Borrower's
compliance with the above-described covenant as of all other
dates and (2) shall not limit or impair the Bank's right to
demand strict performance of this covenant as of all other dates
and (3) shall not limit or impair the Bank's right to demand
strict performance of all other covenants as of any date.
B. Modification(s) to Loan Agreement.
1. The Sub-Section (iii) of Section 6.7 entitled "Financial
Covenants" is hereby amended to read, in its entirety, as
follows:
(iii) Maximum Quarterly Losses. Borrower shall not suffer
quarterly losses in excess of: $6,351,000 for the quarter ending
December 31, 1998; and $7,062,000 for the quarter ending March
31, 1999.
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4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.
6. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness, Bank
is relying upon Borrower's representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Bank's agreement to modifications
to the existing Indebtedness pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Indebtedness.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Indebtedness. It is the intention of Bank and Borrower to retain as liable
parties all makers and endorsers of Existing Loan Documents, unless the party is
expressly released by Bank in writing. No maker, endorser, or guarantor will be
released by virtue of this Loan Modification Agreement. The terms of this
paragraph apply not only to this Loan Modification Agreement, but also to all
subsequent loan modification agreements.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
ABOVENET COMMUNICATIONS, INC. SILICON VALLEY BANK
By: /s/ XXXXX HOULIGAN By: /s/ [ILLEGIBLE]
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Name: Xxxxx Houligan Name: [ILLEGIBLE]
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Title: VP, Finance & Controller Title: VP
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