Exhibit 10.3
CONFIDENTIAL TREATMENT REQUESTED
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[LOGO]
CREDIT AGREEMENT
Dated as of October 24, 2001
among
COGENT COMMUNICATIONS, INC.,
as Borrower,
COGENT INTERNET, INC,
as Additional Borrower,
CISCO SYSTEMS CAPITAL CORPORATION,
as Agent
and
The Other Lenders Party Hereto
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS...................................................................1
1.1 Definitions........................................................................................1
1.2 Interpretation.....................................................................................10
1.3 Accounting Principles..............................................................................11
SECTION 2. THE LOAN FACILITY..................................................................................12
2.1 The Loans..........................................................................................12
2.2 Use of Proceeds....................................................................................12
2.3 Borrowing Procedure................................................................................12
2.4 Evidence of Indebtedness...........................................................................13
2.5 Interest and Fees..................................................................................14
2.6 Computations.......................................................................................14
2.7 Highest Lawful Rate................................................................................14
2.8 Repayment of the Loans.............................................................................14
2.9 Prepayments........................................................................................15
2.10 Reduction or Termination of the Commitments........................................................15
2.11 Increased Costs; Regulatory Changes................................................................15
2.12 Funding Losses.....................................................................................16
2.13 Rights of CSCC/Assignee............................................................................16
2.14 Reserves on LIBOR Loans............................................................................17
2.15 Illegality.........................................................................................17
2.16 Obligation to Mitigate.............................................................................17
2.17 Payments...........................................................................................17
2.18 Set Off............................................................................................18
2.19 Pro rata Treatment.................................................................................19
2.20 Sharing............................................................................................19
2.21 Taxes..............................................................................................19
2.22 Substitute Basis for Determining Interest..........................................................21
SECTION 3. CONDITIONS PRECEDENT...............................................................................21
3.1 Conditions Precedent to the Initial Loan...........................................................21
3.2 Conditions Precedent to All Loans..................................................................23
SECTION 4. REPRESENTATIONS AND WARRANTIES.....................................................................24
4.1 Representations and Warranties of Holdings and Borrower............................................24
4.2 Representations and Warranties of Lenders..........................................................27
SECTION 5. COVENANTS..........................................................................................27
5.1 Covenants..........................................................................................27
SECTION 6. EVENTS OF DEFAULT..................................................................................42
6.1 Events of Default..................................................................................42
6.2 Effect of Event of Default.........................................................................45
SECTION 7. THE AGENT..........................................................................................46
7.1 Appointment and Authorization; "Agent".............................................................46
7.2 Delegation of Duties...............................................................................46
7.3 Liability of Agent.................................................................................46
7.4 Reliance by Agent..................................................................................47
7.5 Notice of Default..................................................................................47
7.6 Credit Decisions...................................................................................47
7.7 Indemnification of Agent...........................................................................48
7.8 Agent in Individual Capacity.......................................................................48
7.9 Collateral Matters.................................................................................49
7.10 Successor Agent....................................................................................49
SECTION 8. MISCELLANEOUS......................................................................................50
8.1 Amendments.........................................................................................50
8.2 Notices............................................................................................50
8.3 No Waiver; Cumulative Remedies.....................................................................51
8.4 Costs and Expenses; Indemnification................................................................51
8.5 Survival...........................................................................................52
8.6 Benefits of Agreement..............................................................................52
8.7 Binding Effect; Successors and Assigns.............................................................53
8.8 Confidentiality....................................................................................54
8.9 Governing Law......................................................................................56
8.10 Submission to Jurisdiction.........................................................................56
8.11 Waiver of Jury Trial...............................................................................57
8.12 Entire Agreement...................................................................................57
8.13 Severability.......................................................................................57
8.14 Counterparts.......................................................................................57
8.15 Second Amended and Restated
Credit Agreement.......................................................57
8.16 Joint and Several Liability........................................................................57
SCHEDULE OF INFORMATION
LENDER ANNEX
EXHIBITS
A Form of Notice of Borrowing
B Form of Compliance Certificate
C Form of Amended and Restated Borrower Security Agreement
D Form of Amended and Restated Holdings Security Agreement
E Form of Amended and Restated Additional Borrower Security Agreement
F Form of Amended and Restated Borrower Stock Pledge Agreement
G Form of Amended and Restated Additional Borrower Stock Pledge Agreement
H Form of Amended and Restated Holdings Guaranty
I Form of Amended and Restated Additional Borrower Guaranty
J Form of Borrower Guaranty
K Form of Stock Subscription Warrant
L Form of Tranche A Note
M Form of Tranche B Note
N Form of Tranche X Note
O Form of Assignment and Acceptance Agreement
P Form of Confirmation of Position and Release Agreement
CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED
CREDIT AGREEMENT (this "Agreement") is
entered into as of October 24, 2001, among COGENT COMMUNICATIONS, INC., a
Delaware corporation ("Borrower"), COGENT INTERNET, INC. ("Additional
Borrower"), the several financial institutions from time to time party hereto
("Lenders") and CISCO SYSTEMS CAPITAL CORPORATION, as administrative agent for
itself and the other Lenders (in such capacity, "Agent").
WHEREAS, Borrower has requested that Lenders provide Borrower with a
term loan credit facility, and Lenders are willing to do so on the terms and
conditions set forth herein;
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:
"ADDITIONAL BORROWER" means Cogent Internet, Inc. and any Additional
Borrower designated in the Schedule or any Subsidiary of Borrower acceding
hereto as an Additional Borrower as contemplated by the Schedule.
"AFFECTED LENDER" has the meaning set forth in Section 2.11.
"AFFILIATES" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
"AGENT-RELATED PERSONS" means CSCC and any successor agent arising
under Section 7.10, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"AGENT'S PAYMENT INSTRUCTIONS" means the payment instructions of Agent
set forth on the Schedule or such other payment instructions as Agent may from
time to time specify.
"AGGREGATE COMMITMENT" means the combined Commitments of Lenders, as
set forth in Section 1(c) of the Schedule.
"AMENDED AND RESTATED AGREEMENT" means that certain Amended and
Restated
Credit Agreement by and between CSCC, as lender, and Borrower, dated as
of March 14, 2001, which is being amended and restated in its entirety by this
Agreement.
"ANNEX" means the Lender Annex attached hereto.
[*] Indicates confidential treatment requested.
"APPROVED FUND" means with respect to any Lender which is a fund
primarily engaged in making, purchasing or otherwise investing in commercial
loans, any other fund which is primarily engaged in making, purchasing or
otherwise investing in commercial loans or extending, or investing in extensions
of, credit for its own account in the ordinary course of its business and which
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor; PROVIDED, HOWEVER, that Approved Fund
shall not include any Affiliate of Holdings.
"ASSIGNEE" has the meaning set forth in Section 8.7(a).
"ASSIGNMENT AND ACCEPTANCE" has the meaning set forth in Section
8.7(a).
"AVAILABILITY PERIOD" has the meaning set forth in the Schedule.
"BANKING DAY" has the meaning set forth in the Schedule.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy".
"BORROWER" means Cogent Communications, Inc. (subject to Section 8.16).
"BORROWING DATE" means any date on which a Loan is made to Borrower.
"CASUALTY EVENT" has the meaning set forth in Section 2(c) of the
Schedule.
"CHANGE OF CONTROL" means (i) the acquisition of beneficial ownership,
directly or indirectly, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) of shares representing
more than 35% of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of Holdings; or (ii) occupation of a majority of
the seats (other than vacant seats) on the Board of Directors of Holdings by
Persons who were neither (A) nominated by the Board of Directors of Holdings nor
(B) appointed by directors so nominated; or (iii) Holdings shall cease to own
and control directly, of record and beneficially, 100% of each class of
outstanding capital stock of Borrower free and clear of all Liens (other than
any Liens under the Collateral Documents); provided that no Change of Control of
Holdings shall exist hereunder if resulting from an initial public offering of
Holdings' equity securities; and provided further, however, that the issuance of
securities of the Borrower to certain investors in accordance with Borrower's
Series C round of financing shall not constitute a Change of Control hereunder.
"CISCO SYSTEMS" means Cisco Systems, Inc. or any subsidiary or
Affiliate thereof
"CISCO PRODUCTS" means networking and telecommunications equipment and
other goods, spare parts, accessories, software and services which Cisco Systems
manufactures, assembles, sells, licenses or provides, including any such
equipment and other goods, spare parts, accessories, software and services
manufactured, assembled, sold, licensed or provided by Cisco Systems through a
Vendor other than Cisco Systems.
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[*] Indicates confidential treatment requested.
"CLOSING DATE" means the date occurring on or before the Closing
Deadline on which all conditions precedent set forth in Section 3.1 are
satisfied or waived by all Lenders (or, in the case of subsection 3.1(e), waived
by the Person entitled to receive such payment).
"CLOSING DEADLINE" has the meaning set forth in the Schedule.
"COLLATERAL" means the property described in the Collateral Documents,
and all other property now existing or hereafter acquired which may at any time
be or become subject to a Lien in favor of Agent or Lenders pursuant to the
Collateral Documents or otherwise, securing the payment and performance of the
Obligations.
"COLLATERAL DOCUMENTS" means each Collateral Document identified in the
Schedule, any security agreement provided under Section 5.1(o) and any other
agreement pursuant to which any Loan Party or any other Person provides a Lien
on its assets in favor of Agent or Lenders and all filings, documents and
agreements made or delivered pursuant thereto.
"COMMITMENT" means, (a) with respect to each Lender, the Dollar amount
set forth next-to such Lender's name in the Annex, which aggregate principal
amount shall be equal to such Lender's Pro Rata Share of the Aggregate
Commitment or (b) where the context so requires, the obligation of each Lender
to make Loans up to such aggregate principal amount on the terms and conditions
set forth in this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate of Borrower, in
substantially the form of EXHIBIT B, with such changes thereto as Agent may from
time to time reasonably request.
"CSCC" means Cisco Systems Capital Corporation, a Nevada corporation.
"CUSTOMER INFORMATION" has the meaning set forth in Section 8.8.
"DEFAULT" means an Event of Default or an event or condition which with
notice or lapse of time or both would constitute an Event of Default.
"DOLLARS" and the sign "$" each means lawful money of the United
States.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
PROVIDED that such bank is acting through a branch or agency located in the
United States; (c) a Person that is primarily engaged in the business of
commercial banking and having a combined capital and surplus of at least
$100,000,000 and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a
Person of which a Lender is a Subsidiary, or (iii) a Person of which a Lender is
a Subsidiary; (d) any Approved Fund; (e) any other Person which is an
"accredited investor" (as defined in Regulation D under the Securities Exchange
Act of 1934) which extends credit or buys loans as one of its businesses,
including insurance companies, mutual funds and lease financing companies and
having a combined capital and surplus of at least $100,000,000; and (f) any
other Person approved by Agent as a Lender hereunder, provided that such Person,
if
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an individual, has a net worth of at least $50,000,000 (and Agent reasonably
believes that such individual has the ability to perform its obligations as a
Lender in accordance with the terms of this Agreement), and, if not an
individual, has a combined capital and surplus of at least $100,000,000;
PROVIDED that neither Holdings nor any Affiliate of Holdings shall be an
Eligible Assignee.
"ENVIRONMENTAL LAWS" means all governmental laws, statutes, rules,
regulations, ordinances and codes, together with all administrative orders,
directives, requests, licenses, authorizations and permits of, and agreements
with (including consent decrees), any Governmental Authorities, in each case
relating to or imposing liability or standards of conduct concerning land use,
public health, safety and environmental protection matters and pertaining to any
property.
"ERISA" means the Employee Retirement Income Security Act of 1974,
including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
"EUROCURRENCY LIABILITIES" has the meaning set forth in Section 2.14.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.1.
"EXCESS CASH FLOW" has the meaning set forth in Section 2(c) of the
Schedule.
"FCC" means the Federal Communications Commission, or any successor
thereto, administering the Communications Act of 1934.
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to its principal functions.
"FEE LETTER" means the letter agreement between Borrower and Agent
relating to certain fees payable by Borrower in connection with this Agreement.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in the
weekly statistical release designated as H-15(519), or any successor
publication, published by the Federal Reserve Bank of
New York with respect to
the preceding Banking Day opposite the caption "Federal Funds (Effective)"; or,
if for any relevant day such rate is not so published with respect to any such
preceding Banking Day, the rate for such day will be the arithmetic mean as
determined by Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (
New York City time) on that day by each of
three leading brokers of Federal funds transactions in
New York City selected by
Agent.
"FINANCED PRODUCTS" means the Cisco Products and other goods, services
and other property the acquisition of which is financed by Lenders or with
respect to which any Lender is otherwise providing financing or extending credit
to enable Borrower to acquire.
"FINANCING DOCUMENTS" has the meaning set forth in the Schedule.
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[*] Indicates confidential treatment requested.
"FUNDING PROCEDURES AND POLICIES" means Agent's "Funding Procedures and
Policies" as in effect from time to time, as communicated to Borrower.
"GAAP" means generally accepted accounting principles as in effect from
time to time.
"GOVERNMENTAL AUTHORITY" means any national government, or any state,
province or other political subdivision thereof or therein, or any governmental
ministry, department, body, commission, board, bureau, agency, central bank,
court, tribunal or other instrumentality or authority exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTOR" means Holdings or any direct or indirect Subsidiary of
Holdings becoming a guarantor as provided under Section 5.1(o) and any guarantor
identified in the Schedule.
"GUARANTOR DOCUMENTS" means any Guaranty and all other documents,
agreements and instruments delivered to Agent and the Lenders by a Guarantor
under or in connection with any Guaranty.
"GUARANTY" means the guaranty of any Guarantor, as provided under
Section 5.1(o), and any guaranty of any Guarantor identified in the Schedule.
"HAZARDOUS SUBSTANCES" means any toxic or hazardous substances,
materials, wastes, contaminants or pollutants regulated under or forming the
basis for liability under any applicable Environmental Law.
"HOLDINGS" means Cogent Communications Group, Inc., a corporation
organized and existing under the laws of the State of Delaware.
"HOLDINGS PREPAYMENT DATE" has the meaning set forth in Section
2(c)(ii) of the Schedule.
"INDEBTEDNESS" means, for any Person, (i) all indebtedness or other
obligations of such Person for borrowed money, or for the deferred purchase
price of property or services (acquired or obtained other than on normal trade
credit terms); (ii) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (iii) all non-contingent
reimbursement and other obligations of such Person in respect of letters of
credit and bankers acceptances and all net obligations in respect of interest
rate swaps, caps, floors and collars, currency swaps, or other similar financial
products; (iv) all obligations under leases which shall have been or should be,
in accordance with GAAP, recorded as capital leases; and (v) all indebtedness of
another Person of the types referred to in clauses (i) through (iv) guaranteed
directly or indirectly in any manner by the Person for whom Indebtedness is
being determined.
"INDEMNIFIED LIABILITIES" has the meaning set forth in Section 8.4.
"INDEMNIFIED PERSON" has the meaning set forth in Section 8.4.
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[*] Indicates confidential treatment requested.
"INSOLVENCY PROCEEDING" means (i) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (ii) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, in each case undertaken under U.S. federal, state or foreign law,
including the Bankruptcy Code.
"INTEREST PERIOD" has the meaning set forth in the Schedule.
"LENDER" means each lending institution from time to time party to this
Agreement.
"LIEN" means any mortgage, pledge, security interest, assignment,
deposit arrangement, charge or encumbrance, lien or other type of preferential
arrangement (other than a financing statement filed by a lessor in respect of an
operating lease not intended as security).
"LOAN DOCUMENTS" means this Agreement, the Fee Letter, the Notes, any
Collateral Documents, any Guaranty, any Guarantor Documents and all other
certificates, documents, agreements and instruments delivered to Agent or
Lenders under or in connection with this Agreement.
"LOAN PARTY" means Holdings, Borrower, each Additional Borrower and
each Guarantor.
"LOANS" has the meaning set forth in Section 2.1.
"MAJORITY LENDERS" means at any time Lenders then holding in excess of
50% of the then aggregate unpaid principal amount of the Loans or, if no such
principal amount is then outstanding, Lenders then having in excess of 50% of
the Aggregate Commitment.
"MATERIAL ADVERSE CHANGE" means (i) a material adverse change in the
business, operations or financial condition of Holdings, Borrower and their
respective Subsidiaries taken as a whole, or (ii) any event, matter, condition
or circumstance which (A) would materially impair the ability of Holdings,
Borrower or their respective Subsidiaries or any other Person to perform or
observe its obligations under or in respect of the Loan Documents, or (B)
affects the legality, validity, binding effect or enforceability of any of the
Loan Documents.
"MATERIAL CONTRACTS" means each Material Contract identified in the
Schedule and any other telecommunications service provider agreements or other
supply, purchase, service or other agreement to which Holdings, Borrower or any
of their respective Subsidiaries is a party (whether entered into before or
after the Closing Date) for which the aggregate amount or value of goods or
services to be supplied, provided or performed, or funds or property to be paid
or transferred, exceeds $5,000,000 (or its equivalent in another currency)
during any twelve-month period.
"MAXIMUM RATE" has the meaning set forth in Section 2.7.
"NOTE" means each Promissory Note referred to in the Schedule.
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[*] Indicates confidential treatment requested.
"OBLIGATIONS" means the indebtedness, liabilities and other obligations
of all Loan Parties to Agent and Lenders under or in connection with the Loan
Documents, including all Loans, all interest accrued thereon, all fees due under
this Agreement and all other amounts payable by any Loan Party to Agent or
Lenders thereunder or in connection therewith.
"ORIGINAL CLOSING DATE" means March 24, 2000.
"ORIGINAL
CREDIT AGREEMENT" means that certain
Credit Agreement dated
as of March 24, 2000, between Borrower and CSCC, as lender, as amended and
restated by the Amended and Restated Agreement.
"OTHER CHARGES" has the meaning set forth in Section 2.21(b).
"PARTICIPANT" has the meaning set forth in Section 8.7(d).
"PERMITS AND LICENSES" has the meaning set forth in Section 4.1(i).
"PERMITTED LIENS" means: (i) Liens in favor of Agent, Lenders or Cisco
Systems, (ii) the existing Liens disclosed in writing to Lenders on or prior to
the date hereof or incurred in connection with any extension, renewal or
refinancing of the Indebtedness secured by such existing Liens permitted
hereunder, provided that any extension, renewal or replacement Lien shall be
limited to the property encumbered by the existing Lien and the principal amount
of the Indebtedness being extended, renewed or refinanced does not increase;
(iii) Liens securing Indebtedness as permitted under the Schedule; (iv) Liens
for taxes, fees, assessments or other governmental charges or levies, either not
delinquent or being contested in good faith by appropriate proceedings and which
are adequately reserved for in accordance with GAAP, PROVIDED that such Liens do
not have automatic priority over the Liens of any Lender and no notice of tax
lien has been filed of record; (v) Liens of landlords, materialmen, mechanics,
warehousemen, carriers or employees or other similar Liens provided for by
mandatory provisions of law and securing obligations either not delinquent or
being contested in good faith by appropriate proceedings and which do not in the
aggregate materially impair the use or value of the property or risk the loss or
forfeiture thereof, (vi) Liens consisting of deposits or pledges to secure the
performance of bids, trade contracts, letters of credit, leases, public or
statutory obligations, including on account of workers compensation and
unemployment insurance, or other obligations of a like nature incurred in the
ordinary course of business, (other than for Indebtedness); (vii) Liens upon or
in any property acquired or held by Borrower or any of its Subsidiaries to
secure the purchase price of such property or Indebtedness incurred solely for
the purpose of financing the acquisition of such property; PROVIDED that (A) any
such Lien attaches to such property concurrently with or within 20 days after
the acquisition thereof, (B) such Lien attaches solely to the property so
acquired in such transaction, (C) the principal amount of the Indebtedness
secured thereby does not exceed 100% of the cost of such property, and (D) no
Default would occur hereunder as a result of the incurrence of such
Indebtedness; (viii) Liens on specific tangible assets of Persons which become
Subsidiaries after the date of this Agreement; PROVIDED, HOWEVER, that (A) such
Liens existed at the time the respective Persons became Subsidiaries and were
not created in anticipation thereof, (B) any such Lien does not by its terms
cover any assets after the time such Person becomes a Subsidiary which were not
covered immediately prior thereto, (C) any such Lien does not by its terms
secure any Indebtedness other
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than Indebtedness existing immediately prior to the time such Person becomes a
Subsidiary, (D) the acquisition of such Person is permitted hereby, and (E) no
Default would occur hereunder as a result of the incurrence of such
Indebtedness; (ix) Liens consisting of judgment or judicial attachment Liens,
PROVIDED that the enforcement of such Liens is effectively stayed and the
judgments or attachments secured by all such Liens in the aggregate at any time
outstanding for Borrower and its Subsidiaries do not exceed $1,000,000; (x)
easements, rights-of-way, restrictions and other similar encumbrances on the use
of real property which do not interfere with the ordinary conduct of the
business of such Person, or similar Liens incidental to the conduct of the
business of such Person or to the ownership of its properties which were not
incurred in connection with Indebtedness or other extensions of credit and which
do not in the aggregate materially detract from the value of such properties or
materially impair their use in the operation of the business of such Person; and
(xi) any Liens reflected by Uniform Commercial Code financing statements filed
in respect of true leases; PROVIDED that the term "Permitted Liens" shall not
include any Liens on any Collateral consisting of Cisco Products or any
identifiable proceeds thereof except to the extent that (1) Majority Lenders
have consented in writing to the existence of such Liens (or such Liens are in
favor of Agent, Lenders or Cisco Systems), and (2) such Liens are junior and
subordinate to the Liens of Agent in such Collateral pursuant to a lien
subordination agreement in form and substance satisfactory to Agent.
"PERMITTED PERIOD" shall have the meaning set forth in Section 5.1(q).
"PERMITTED PURCHASE" shall have the meaning set forth in Section
5.1(q).
"PERMITTED TRANSACTION" means any transaction or series of related
transactions (the "Transaction") for the purpose of or resulting, directly or
indirectly, in (i) the acquisition of all or substantially all of the assets of
a Person, or of any business or division of a Person, (ii) the acquisition of
all or any of the capital stock, partnership interests, membership interests or
equity of any Person, or otherwise causing such Person to become a Subsidiary,
or (iii) a merger or consolidation or any other combination with another Person,
that in each case conforms to the following requirements: (A) Borrower or its
Subsidiary is the surviving Person or if Borrower or the Subsidiary, as
applicable, is not the surviving Person, the surviving Person takes all actions
reasonably required to assume and succeed to the rights and obligations of
Borrower or the Subsidiary, as applicable, under the Loan Documents and to grant
Agent a perfected security interest in such surviving Person's property (subject
to no Liens other than Permitted Liens); (B) after giving effect to such
Transaction, Borrower or such surviving Person remains in compliance with
Section 5.1(g), (C) Agent shall have received promptly, and in any event no less
than ten Banking Days prior to the consummation of such Transaction, (1)
financial information regarding the assets, Person or business which is the
subject of the Transaction, including pro forma projected financial statements
showing the effect of the Transaction on Borrower, and (2) a completed worksheet
in substantially the form of Schedule 1 to the Compliance Certificate
demonstrating Borrower's or such surviving Person's pro forma compliance with
the financial covenants set forth herein, measured as of the last day of the
fiscal quarter then most recently ended, after giving effect to such
Transaction, (D) the Transaction shall be consummated in accordance with
applicable Requirements of Law, (E) after giving effect to such Transaction: (1)
no Default or Event of Default shall have occurred and be continuing or would
result therefrom, (2) 100% of the capital stock, partnership interests,
membership interests or equity of any acquired or newly formed corporation,
partnership, limited liability company or other
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business entity is owned directly by Borrower or a Subsidiary of Borrower or
100% of the capital stock, partnership interests, membership interests or equity
is pledged to the Agent, and (3) all actions required to be taken with respect
to such acquired or newly formed Subsidiary under Section 5.1(o) or as otherwise
required under Section 5.1(o) shall have been taken, and (F) such Transaction
complies with either of the following: (1) the consideration for such
acquisition consists entirely of Holdings' equity securities, or (2) in the case
of any such Transaction including cash, cash equivalents and/or assumption of
Indebtedness by Borrower, (x) Borrower shall have received from Holdings as a
contribution to common equity total aggregate net proceeds of not less than
$80,000,000 from the sale of shares of Holdings' capital stock prior to the
consummation of such Transaction, and (y) none of the proceeds of any Loans
hereunder shall be used for funding any such Transaction.
"PERSON" means an individual, corporation, partnership, joint venture,
trust, unincorporated organization or any other entity of whatever nature or any
Governmental Authority.
"PRO RATA SHARE" means, as to any Lender at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Lender's Commitment divided by the Aggregate Commitment (or, if all
Commitments have been terminated, the aggregate principal amount of such
Lender's Loans divided by the aggregate principal amount of the Loans then held
by all Lenders). The initial Pro Rata Share of each Lender is set forth opposite
such Lender's name in the Annex.
"PUBLIC DISCLOSURE" has the meaning set forth in Section 8.8(b).
"QUARTERLY DATE" means, with respect to any fiscal quarter of Borrower,
the date occurring on the last day of such quarter.
"REGULATORY CHANGE" has the meaning set forth in Section 2.11.
"REPLACEMENT LENDER" has the meaning set forth in Section 2.11.
"REQUIREMENT OF LAW" means, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.
"RESPONSIBLE OFFICER" means, as to any Person, the chief financial
officer or treasurer of such Person (or any other senior officer of such Person
involved principally in the financial administration or controllership function
of such Person).
"SCHEDULE" means the Schedule of Information attached hereto.
"SECURITIES ACT" has the meaning set forth in Section 4.2.
"SOLVENT" means, as to any Person at any time, that (i) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (whether subordinated, contingent, unmatured, unliquidated or
otherwise); (ii) the present fair saleable
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value of the property of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (iii) such Person is able to realize upon its
property and pay its debts and other liabilities as they mature in the normal
course of business; (iv) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (v) such Person is not engaged in
business or a transaction for which such Person's property would constitute
unreasonably small capital.
"SUBORDINATED DEBT" means unsecured Indebtedness of Holdings in an
amount not to exceed $200,000,000 complying with each of the following
requirements: (i) Holdings shall, in a certificate provided on or immediately
prior to the date of the receipt of proceeds of any such unsecured Indebtedness,
demonstrate its pro forma compliance with the applicable financial covenants set
forth herein (after giving effect to the incurrence of any such unsecured
Indebtedness); (ii) the final maturity date of such unsecured Indebtedness shall
be after the first anniversary of the final maturity date of the last Loans
advanced to Borrower hereunder (the "Maturity Date"); (iii) the terms of such
Indebtedness shall specify that no principal repayments in respect thereof are
required until the Maturity Date; (iv) any such unsecured Indebtedness shall
contain no covenants or provisions materially more restrictive on Holdings and
its Subsidiaries than those contained herein; and (v) such unsecured
Indebtedness shall be subordinated to the payment of the Obligations on terms
that are usual and customary for unsecured Indebtedness issued under similar
circumstances and for similar amounts in the high yield subordinated debt
market.
"SUBSIDIARY" means any corporation, limited liability company,
association, partnership, joint venture or other business entity of which more
than 50% of the voting stock or other equity interest is owned directly or
indirectly by any Person or one or more of the other Subsidiaries of such Person
or a combination thereof.
"TAXES" has the meaning set forth in Section 2.21(a).
"TRANSACTION" has the meaning set forth in the definition of "Permitted
Transaction."
"TRANSFER" has the meaning set forth in Section 5.1(i)
"UNITED STATES" and "U.S." each means the United States of America.
"VENDOR" means Cisco Systems, or any distributor or other reseller or
provider of Cisco Products reasonably satisfactory to Cisco Systems.
"WARRANTS" has the meaning set forth in Section 1(j) of the Schedule.
1.2 INTERPRETATION.
(a) In the Loan Documents, except to the extent the context otherwise
requires: (i) any reference to an Article, a Section, a Schedule or an Exhibit
is a reference to an article or section thereof, or a schedule or an exhibit
thereto, respectively, and to a subsection or a clause is, unless otherwise
stated, a reference to a subsection or a clause of the Section or subsection in
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which the reference appears; (ii) the words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Agreement or any other Loan
Document as a whole and not merely to the specific Article, Section, subsection,
paragraph or clause in which the respective word appears; (iii) the meaning of
defined terms shall be equally applicable to both the singular and plural forms
of the terms defined; (iv) the words "including," "includes" and "include" shall
be deemed to be followed by the words "without limitation;" (v) references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto; (vi) references to
statutes or regulations are to be construed as including all statutory and
regulatory provisions consolidating, amending or replacing the statute or
regulation referred to; (vii) any table of contents, captions and headings are
for convenience of reference only and shall not affect the construction of this
Agreement or any other Loan Document; and (viii) in the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding";
and the word "through" means "to and including."
(b) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of Agent or Lender by way of consent,
approval or waiver shall be deemed modified by the phrase "in its/their
discretion."
(c) This Agreement and the other Loan Documents are the product of
negotiations among and have been reviewed by counsel to Agent, Lenders,
Holdings, Borrower, each Additional Borrower (if any), each Guarantor and the
other parties hereto, and are the product of all such parties. Accordingly, this
Agreement and the other Loan Documents shall not be construed against Agent or
any other Lender merely because of Agent's or such Lender's involvement in their
preparation.
1.3 ACCOUNTING PRINCIPLES. Unless the context otherwise clearly requires,
all accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied; PROVIDED, HOWEVER, that, if GAAP
shall have been modified after the Closing Date and the application of such
modified GAAP shall have a material effect on such financial computations
(including the computations required for the purpose of determining compliance
with the financial covenants set forth herein), then such computations shall be
made and such financial statements, certificates and reports shall be prepared,
and all accounting terms not otherwise defined herein shall be construed, in
accordance with GAAP as in effect prior to such modification, unless and until
Majority Lenders, Holdings and Borrower shall have agreed upon the terms of the
application of such modified GAAP.
SECTION 2. THE LOAN FACILITY.
2.1 THE LOANS. Subject to the provisions hereof, including satisfaction of
all conditions precedent set forth in Sections 3.1 and 3.2, each Lender agrees,
on the terms and conditions hereinafter set forth, to make loans (each a "Loan"
and, collectively, the "Loans") to Borrower and Additional Borrower during the
Availability Period, in an aggregate principal amount up to but not exceeding
such Lender's Commitment; PROVIDED, HOWEVER, that after giving effect to any
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Loans made by any Lender hereunder, the aggregate principal amount of all such
outstanding Loans together shall not exceed the Aggregate Commitment. Any amount
of the Loans repaid may not be reborrowed.
2.2 USE OF PROCEEDS. Borrower agrees to use the proceeds of any Loans made
hereunder solely for the purposes described in the Schedule.
2.3 BORROWING PROCEDURE.
(a) Each Loan to be made hereunder shall be in such minimum principal
amount and subject to such advance written notice to Agent as shall be specified
in the Schedule. Each such written notice of borrowing shall be in substantially
the form of EXHIBIT A (with appropriate completions). Each borrowing of Loans
hereunder shall be made from the Lenders through advances of their respective
Pro Rata Shares of such Loan. Agent will promptly notify each Lender of Agent's
receipt of any notice of borrowing and of the amount of such Lender's Pro Rata
Share of such requested borrowing. Each Lender will make the amount of its Pro
Rata Share of each such borrowing available to Agent for the account of Borrower
or Additional Borrower, as applicable, in accordance with Agent's Payment
Instructions by 11:00 a.m. (
New York City time) on the proposed Borrowing Date,
as notified by Agent, in funds immediately available to Agent. Upon fulfillment
of the applicable conditions set forth in Section 3.1 and 3.2, and subject to
the Funding Procedures and Policies, Agent shall make the proceeds of the Loans
available to Borrower or Additional Borrower, as applicable, in accordance with
Borrower's payment instructions. Without limiting the generality of the
foregoing, in the case of any Loans made hereunder for the purpose of paying the
purchase price of Cisco Products, (i) Agent shall pay the proceeds of the Loans
directly to the applicable Vendor, and (ii) if such Vendor is Cisco Systems,
each such Loan shall be deemed to be outstanding hereunder and under the Notes
evidencing such Loans effective as of the date occurring 30 days after the
invoice date of the Cisco Products which are being financed by such Loans (or on
such date thereafter as Cisco Systems shall agree to in its sole discretion),
and Lenders are hereby authorized to make such Loans at the request of CSCC
(through Agent) without being required to receive a notice of borrowing with
respect thereto, PROVIDED that if Borrower provides written notice to Agent
within 25 days after the invoice date that payment or performance due Cisco
Systems is not then due because one or more conditions of payment or performance
has or have not been satisfied by Cisco Systems, then clause (ii) of this
section shall not apply and no such Loans shall be made until Borrower provides
a notice of borrowing with respect to such invoice. Borrower hereby authorizes
and directs Agent to make direct payment to any Vendor and any other intended
recipient, if any, of Loan proceeds. Notwithstanding anything in the Funding
Procedures and Policies to the contrary, Agent shall, subject to the provisions
of this Agreement, make Loan proceeds available to any Vendor or other recipient
thereof on or not later than five Banking Days after the requested Borrowing
Date. Notwithstanding anything in this Agreement to the contrary, on any date
after any amount of interest or fees becomes payable by Borrower to Agent or any
Lender under this Agreement or any other Loan Document, Borrower shall be deemed
to have submitted a notice of borrowing requesting Lenders to make Tranche X
Loans to Borrower in the aggregate amount of such interest and/or fees,
whereupon, provided no Default or Event of Default has occurred and is
continuing, Lenders shall make such Tranche X Loans, subject to the terms and
conditions set forth in this Agreement, the Schedule and the other Loan
Documents, and Agent shall retain the proceeds of such Tranche X Loans and shall
immediately apply such
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proceeds as payment by Borrower for such interest and/or fees. All borrowings of
Loans shall be subject to the Funding Procedures and Policies unless CSCC shall
no longer act as Agent hereunder.
(b) Unless Agent receives notice from a Lender on or prior to the
Closing Date or, with respect to any borrowing after the Closing Date, at least
one Banking Day prior to the date of such borrowing, that such Lender will not
make available as and when required hereunder to Agent for the account of
Borrower the amount of that Lender's Pro Rata Share of the borrowing, Agent may
assume that each Lender has made such amount available to Agent in immediately
available funds on the Borrowing Date and Agent may (but shall not be so
required), in reliance upon such assumption, make available to Borrower on such
date a corresponding amount. If and to the extent any Lender shall not have made
its full amount available to Agent in immediately available funds and Agent in
such circumstances has made available to Borrower such amount, that Lender shall
on the Banking Day following such Borrowing Date make such amount available to
Agent, together with interest at the Federal Funds Rate for each day during such
period. A notice prepared by Agent submitted to any Lender with respect to
amounts owing under this subsection (b) shall be conclusive, absent manifest
error. If such amount is so made available, such payment to Agent shall
constitute such Lender's Loan on the date of borrowing for all purposes of this
Agreement. If such amount is not made available to Agent on the Banking Day
following the Borrowing Date, Agent will notify Borrower of such failure to fund
and, upon demand by Agent, Borrower shall pay such amount to Agent for Agent's
account, together with interest thereon for each day elapsed since the date of
such borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such borrowing. (c) The failure of any Lender to
make any Loan on any Borrowing Date shall not relieve any other Lender of any
obligation hereunder to make a Loan on such Borrowing Date, but no Lender shall
be responsible for the failure of any other Lender to make the Loan to be made
by such other Lender on any Borrowing Date.
2.4 EVIDENCE OF INDEBTEDNESS. As additional evidence of the Indebtedness of
Borrower and any Additional Borrowers to Lenders resulting from the Loans made
by Lenders hereunder, Borrower and any Additional Borrowers shall execute and
deliver the Notes required pursuant to the Schedule. Additionally, the Loans
made by Lenders shall be evidenced by the records of Agent and one or more loan
accounts maintained by each Lender in the ordinary course of business. The loan
accounts and records maintained by Agent and each Lender shall be conclusive
absent manifest error of the amount of the Loans made by Lenders to Borrower and
the interest and payments thereon. Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the obligation of
Borrower hereunder to pay any amount owing with respect to the Loans.
2.5 INTEREST AND FEES.
(a) INTEREST. Borrower shall pay interest on the unpaid principal
amount of the Loans and on other Obligations, including interest on overdue
payments, at the interest rate and on the dates set forth in the Schedule.
(b) FEES. Borrower agrees to pay to Agent, for its own account or for
the account of Lenders or any other Person as provided in the Fee Letter, such
fees as may be specified in the
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Fee Letter, payable on the dates set forth therein. All fees payable under the
Fee Letter shall be fully-earned when paid and shall be nonrefundable for any
reason whatsoever.
(c) DETERMINATIONS. Each determination by Agent of any applicable rate
of interest, and of any change therein, in the absence of manifest error shall
be conclusive and binding on the parties hereto.
2.6 COMPUTATIONS. All computations of fees and interest hereunder shall be
made on the basis of a year of 360 days for the actual number of days occurring
in the period for which any such interest or fee is payable.
2.7 HIGHEST LAWFUL RATE. Anything herein to the contrary notwithstanding,
if during any period for which interest is computed hereunder, the applicable
interest rate, together with all fees, charges and other payments which are
treated as interest under applicable law, as provided for herein or in any other
Loan Document, would exceed the maximum rate of interest which may be charged,
contracted for, reserved, received or collected by Agent or any Lender in
connection with this Agreement under applicable law (the "Maximum Rate"),
Borrower shall not be obligated to pay, and neither Agent nor any Lender shall
be entitled to charge, collect, receive, reserve or take, interest in excess of
the Maximum Rate, and during any such period the interest payable hereunder
shall be limited to the Maximum Rate.
2.8 REPAYMENT OF THE LOANS. Borrower shall repay to Agent for the account
of Lenders the principal amount of each Loan on the repayment dates and in
accordance with the terms and conditions set forth in the Schedule.
2.9 PREPAYMENTS. Borrower may prepay the outstanding amount of the Loans in
whole or in part, in a principal amount of at least $100,000 or any amount in
excess thereof. If any mandatory prepayments are required under the Schedule,
Borrower shall prepay the outstanding Loans in the amounts and at the times
specified in the Schedule. Any such prepayments shall not be subject to any fee,
premium, penalty or other charges except as provided in Section 2.12 and except
to the extent a prepayment fee is required under the Schedule. Borrower shall
give prior notice to Lenders (through Agent) of any such prepayment identifying
the Loan or Loans to be prepaid and specifying the date and amount of the
prepayment. Partial prepayments of any amortizing Loan shall be applied to the
installments of principal thereof in the inverse order of maturity. Accrued
interest on any such Loan prepaid shall be due on the prepayment date as to the
principal amount of such Loan prepaid.
2.10 REDUCTION OR TERMINATION OF THE COMMITMENTS. Borrower may, upon prior
notice to Lenders (through Agent), terminate in whole or reduce in part, as of
the date specified by Borrower in such notice, any then unused portion of the
Aggregate Commitment. From the effective date of any reduction or termination,
any commitment fee payable pursuant to the Fee Letter shall be computed on the
basis of the Aggregate Commitment as so reduced or terminated. Except as
provided in the Schedule, once reduced or terminated, the Aggregate Commitment
may not be increased or otherwise reinstated.
2.11 INCREASED COSTS; REGULATORY CHANGES. (a) If, due to either (i) the
adoption of, or any change in, any applicable law, rule or regulation, or any
change in the interpretation or
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administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (a "Regulatory Change"), or (ii)
compliance by any Lender with any request, guideline or directive (whether or
not having the force of law) of any such Governmental Authority, there shall be
any increase in the cost to any Lender of agreeing to make or making, or funding
or maintaining, any Loan, or any reduction of any amount received or receivable
by such Lender under this Agreement or any Note with respect thereto (except for
changes in the rate or method of calculation of tax on the overall net income of
Lender), then from time to time, within 15 days after demand by such Lender
(through Agent), Borrower shall pay to such Lender such additional amounts as
shall compensate such Lender for such increased cost or reduction. The
applicable Lender will use reasonable efforts promptly to notify the Borrower if
such Lender becomes aware of any event occurring after the date hereof which
shall entitle it to compensation pursuant to this Section 2.11 and will take
commercially reasonable steps to reduce the amount of such compensation. (b) If
any Lender shall have determined that any Regulatory Change regarding capital
adequacy, or compliance by such Lender (or any Person controlling such Lender)
with any request, guideline or directive regarding capital adequacy (whether or
not having the force of law) of any Governmental Authority, has or shall have
the effect of reducing the rate of return on such Lender's or such Person's
capital as a consequence of such Lender's obligations hereunder to a level below
that which such Lender or such corporation would have achieved but for such
adoption, change or compliance (taking into consideration such Lender's or such
Person's policies with respect to capital adequacy), then from time to time,
within 15 days after demand by such Lender, through Agent, Borrower shall pay to
such Lender such additional amounts as shall compensate such Lender for such
reduction. (c) Any such request for compensation by any Lender under this
Section 2.11 shall set forth in reasonable detail the basis of calculation
thereof and shall, in the absence of manifest error, be conclusive and binding
for all purposes. In determining the amount of such compensation, Lender may use
any reasonable averaging and attribution methods. (d) Upon the receipt by
Borrower from any Lender (an "Affected Lender") of a claim for compensation
under this Section 2.11, Borrower may: (i) request one or more of the other
Lenders to acquire and assume all or part of such Affected Lender's Loans and
Commitment; or (ii) designate a replacement lending institution (which shall be
an Eligible Assignee) to acquire and assume all or a ratable part of such
Affected Lender's Loans and Commitment (a "Replacement Lender"). Any such
designation of a Replacement Lender under clause (i) or (ii) shall be effected
in accordance with, and subject to the terms and conditions of, the assignment
provisions contained in Section 8.7, and shall in any event be subject to the
prior written consent of Agent (which consent shall not be unreasonably withheld
or delayed).
2.12 FUNDING LOSSES. In addition to such amounts as are required to be paid
by Borrower pursuant to the Schedule and any other indemnities provided by
Borrower in any other Loan Document, Borrower shall indemnify each Lender,
promptly upon receipt of such Lender's written request (made through Agent), for
all losses, costs, expenses and liabilities (including any loss, cost, expense
or liability sustained or incurred by any Lender in obtaining, liquidating or
re-employing deposits or other funds to fund or maintain the Loans), if any,
which such Lender sustains or incurs if. (i) Borrower repays or prepays any Loan
on a date other than the last day of an Interest Period for such Loan (whether
as a result of an optional prepayment, a mandatory prepayment, a payment as a
result of acceleration or otherwise) (except in the case of a scheduled payment
of an installment of principal on a principal payment date which does not fall
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on the last day of an Interest Period); (ii) Borrower fails to borrow a Loan
after giving its notice of borrowing under Section 2.3; (iii) Borrower fails to
prepay a Loan after giving its notice thereof; or (iv) any Loan shall be
acquired from a Lender under Section 2.11 other than on the last day of an
Interest Period for such Loan. For purposes of calculating amounts payable by
Borrower to Lenders under this Section, each Loan accruing interest at LIBOR
made by a Lender (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the rate used
in determining LIBOR for such Loan by a matching deposit or other borrowing in
the interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Loan is in fact so funded. Any such request for
compensation shall set forth the basis for requesting such compensation and
shall, in the absence of manifest error, be conclusive and binding for all
purposes. As used herein, "Interest Period" has the meaning set forth in the
Schedule.
2.13 RIGHTS OF CSCC/ASSIGNEE. Notwithstanding anything to the contrary in
Sections 2.11, 2.12, 2.14 and 2.21, such Sections shall not apply to any Loans
held by CSCC (or an Affiliate thereof), as Lender, but shall be in full force
and effect with respect to any Loans held by a Lender other than CSCC (or an
Affiliate thereof) and shall inure to the benefit of any assignee receiving the
assignment of a Loan (or any portion thereof) under the terms of this Agreement.
2.14 RESERVES ON LIBOR LOANS. Borrower shall pay to each Lender (other than
CSCC), as long as such Lender shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount of each Loan
accruing interest at "LIBOR" (as defined in the Schedule) equal to the actual
costs of such reserves allocated to such Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive), payable on
each date on which interest is payable on such Loan, PROVIDED Borrower shall
have received at least 15 days' prior written notice (with a copy to Agent) of
such additional interest from such Lender. If a Lender fails to give notice 15
days prior to the relevant interest payment date, such additional interest shall
be payable 15 days from receipt of such notice. Any Lender claiming
reimbursement or compensation under this Section 2.14 shall deliver to Borrower
(with a copy to Agent) a certificate setting forth in reasonable detail the
amount payable to such Lender hereunder and such certificate shall be conclusive
and binding on Borrower in the absence of manifest error.
2.15 ILLEGALITY. If any Lender shall reasonably determine that it has
become unlawful, as a result of any Regulatory Change, for such Lender to make
or maintain Loans as contemplated by this Agreement, such Lender shall promptly
give notice, through Agent, of such determination to Borrower, and (a) the
obligation of such Lender to make Loans shall be suspended until such Lender
gives notice that the circumstances causing such suspension no longer exist; and
(b) Borrower shall forthwith (or on such later day as shall, in the good faith
judgment of such Lender, be permitted by such Regulatory Change) prepay the
Loans of such Lender, without penalty, premium or other obligation, other than
as provided for in Section 2.14, together with all accrued interest thereon, if
so requested by such Lender.
2.16 OBLIGATION TO MITIGATE. Each Lender agrees that as promptly as
practicable after it becomes aware of the occurrence of an event that would
entitle it to give notice pursuant to
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Section 2.11 or 2.15, and in any event if so requested by Borrower, each Lender
shall use reasonable efforts to make, fund or maintain its affected Loans
through another lending office if as a result thereof the increased costs would
be avoided or materially reduced or the illegality would thereby cease to exist
and if, in the reasonable opinion of such Lender, the making, funding or
maintaining of such Loans through such other lending office would not in any
material respect be disadvantageous to such Lender or contrary to such Lender's
normal lending practices.
2.17 PAYMENTS.
(a) Borrower shall make each payment under the Loan Documents
unconditionally in full and free and clear of, and without reduction for or on
account of, any present and future taxes or withholdings, and all liabilities
with respect thereto. Each such payment shall be made without set-off,
counterclaim or, to the extent permitted by applicable law, other defense,
including without any deduction or setoff arising out of or in connection with
the purchase of the Financed Products, all of which rights of Borrower are
hereby expressly waived by Borrower; PROVIDED, HOWEVER, that no payment
hereunder shall be deemed to be a waiver of any right or claim that Borrower may
have against Cisco Systems or other Vendor with respect to the Cisco Products.
Each such payment shall be made on the day when due to Agent in Dollars and in
immediately available funds, in accordance with Agent's Payment Instructions, no
later than 11:00 a.m. (
New York City time) on the date specified herein. Agent
will promptly distribute to each Lender its Pro Rata Share (or other applicable
share as expressly provided herein) of such payment in like funds as received.
Any payment received by Agent later than 11:00 a.m. (
New York City time) shall
be deemed to have been received on the following Banking Day and any applicable
interest or fee shall continue to accrue.
(b) Except to the extent otherwise provided in the Schedule or any
other Loan Document, whenever any payment hereunder or under any other Loan
Document shall be stated to be due, or whenever any other date specified
hereunder or thereunder would otherwise occur, on a day other than a Banking
Day, then, except to the extent otherwise provided hereunder, such payment shall
be made, and such other date shall occur, on the next succeeding Banking Day.
(c) Each payment by or on behalf of Borrower or any other Person under
the Loan Documents shall, unless a specific determination is made by Agent or
Majority Lenders with respect thereto, be applied in the following order: (i)
FIRST, to any fees, costs, expenses and other amounts due Agent; (ii) SECOND, to
any fees, costs, expenses and other amounts (other than principal and interest)
due Lenders; (iii) THIRD, to accrued and unpaid interest due Lenders; and (iv)
FOURTH, to principal due Lenders.
(d) Unless Agent receives notice from Borrower prior to the date on
which any payment is due to Lenders that Borrower will not make such payment in
full as and when required, Agent may assume that Borrower has made such payment
in full to Agent on such date in immediately available funds and Agent may (but
shall not be so required), in reliance upon such assumption, distribute to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent Borrower has not made such payment in full to Agent, each
Lender shall repay to Agent on demand such amount distributed to such Lender,
together
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with interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
2.18 SET OFF. In addition to any rights and remedies of Lenders provided by
law, if an Event of Default exists or the Loans have been accelerated, each
Lender is authorized at any time and from time to time, without prior notice to
Holdings, Borrower or any Guarantor (any such notice being expressly waived by
any such Person to the fullest extent permitted by law), to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held by, and other Indebtedness at any time owed by, such Lender to
or for the credit or the account of any such Person against any and all
Obligations owing to such Lender, now or hereafter existing, irrespective of
whether or not Agent or such Lender shall have made demand under this Agreement
or any Loan Document and although such Obligations may be contingent or
unmatured. Each Lender agrees promptly to notify any such Person after any such
set-off and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such set-off and
application.
2.19 PRO RATA TREATMENT. Except as otherwise provided in this Agreement,
each borrowing hereunder, each Commitment reduction, and each payment (including
each prepayment) by Borrower or any other Person on account of the Obligations,
shall be made ratably in accordance with the respective Pro Rata Shares of the
Lenders.
2.20 SHARING. If, other than as expressly provided elsewhere herein, any
Lender shall obtain on account of the Obligations in its favor any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder), such Lender shall immediately (a) notify Agent of such fact, and (b)
purchase from the other Lenders such participations in the Loans made by them as
shall be necessary to cause such purchasing Lender to share the excess payment
pro rata with each of them; PROVIDED, HOWEVER, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender, such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (i)
the amount of such paying Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Borrower agrees that any Lender so purchasing a participation from another
Lender may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off, but subject to Section 2.18) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation. Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify
Lenders following any such purchases or repayments.
2.21 TAXES.
(a) All payments by Borrower to Agent and Lenders of principal,
interest, fees and other amounts due under this Agreement and any other Loan
Document shall be made free and clear of and without deduction for any and all
present and future taxes, levies, imposts, duties, fees, assessments, charges,
deductions or withholdings and all liabilities with respect
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thereto excluding, in the case of Agent and each Lender, income, gross receipts
and franchise taxes imposed on it by the jurisdiction under the laws of which it
is organized or in which its principal executive offices may be located or any
political subdivision or taxing authority thereof or therein (all such
non-excluded taxes, levies, imposts, duties, fees, assessments, charges,
deductions, withholdings and liabilities being hereinafter referred to as
"Taxes"). Borrower agrees to cause all such Taxes to be paid on behalf of Agent
and each Lender directly to the appropriate Governmental Authority. If at any
time Borrower is required by law or is otherwise compelled to withhold or deduct
any such Taxes from any payment to be made by Borrower in respect of the Loan
Documents, Borrower shall increase the amount paid so that Agent and each Lender
receives when due (and is entitled to retain), after deduction or withholding
for or on account of such Taxes (including deductions or withholdings applicable
to additional sums payable under this Section 2.21), the full amount of the
payment provided for in the Loan Documents.
(b) Borrower further agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies and any notarial fees that any Governmental Authorities may impose on
this Agreement, on the issuance of any Note hereunder or on any other Loan
Document, including any stamp taxes or any other similar taxes which may be
required for enforcement purposes (the "Other Charges"). Borrower hereby
indemnifies and holds Agent and each Lender harmless for any and all payments
made by Agent or any Lender of any Taxes and Other Charges and for any
liabilities (including penalties, interest, legal costs and expenses) incurred
by Agent or any Lender or which may be imposed on Agent or any Lender in
connection therewith or any delays in their payment.
(c) Borrower shall provide Agent and each Lender with original tax
receipts, notarized copies of tax receipts, or such other documentation as Agent
or any Lender shall reasonably request, for all Taxes and Other Charges paid by
Borrower pursuant to this Section 2.21. Borrower shall deliver such receipts or
other documentation to Agent or the requesting Lender, as the case may be,
within 30 days after the due date, including any extensions, for the related Tax
or Other Charge.
(d) Each Lender that is incorporated under the laws of any jurisdiction
outside the United States agrees to deliver to the Agent and Borrower on or
prior to the Closing Date, and in a timely fashion thereafter, IRS Form W-8BEN,
IRS Form W-8ECI or such other documents and forms of the U.S. Internal Revenue
Service, duly executed and completed by such Lender, as are required under
United States law to establish such Bank's status for United States withholding
tax purposes.
(e) Notwithstanding the foregoing subsections (a) through (d) of this
Section 2.21, Borrower shall not be required to pay any additional amounts to
any Lender in respect of United States withholding tax pursuant to such
subsections (i) if the obligations to pay such additional amounts would not have
arisen but for the failure by such Lender to comply with the requirements of
Section 2.21 (d) or (ii) at any time that such Lender shall not have furnished
the Borrower with such forms listed in subsection 2.19(d).
(f) Each Lender agrees that as promptly as practicable after it becomes
aware of the occurrence of an event that would cause the Borrower to make any
payment in respect of
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Taxes or Other Charges to such Lender or a payment in indemnification with
respect to any Taxes or Other Charges, and in any event if so requested by the
Borrower following such occurrence, each Lender shall use reasonable efforts to
make, fund or maintain its affected Loan (or relevant part thereof) through
another lending office if as a result thereof the additional amounts so payable
by Borrower would be avoided or materially reduced and if, in the reasonable
opinion of such Lender, the making, funding or maintaining of such Loan (or
relevant part thereof) through such other lending office would not in any
material respect be disadvantageous to such Lender or contrary to such Lender's
normal lending practices.
(g) Upon the receipt by Borrower from any Affected Lender of a claim
for compensation under this Section 2.21, Borrower may: (i) request one or
more of the other Lenders to acquire and assume all or part of such Affected
Lender's Loans and Commitment; or (ii) designate a Replacement Lender. Any
such designation of a Replacement Lender under clause (i) or (ii) shall be
effected in accordance with, and subject to the terms and conditions of, the
assignment provisions contained in Section 8.7, and shall in any event be
subject to the prior written consent of Agent (which consent shall not be
unreasonably withheld or delayed).
2.22 SUBSTITUTE BASIS FOR DETERMINING INTEREST. If Agent or Majority
Lenders shall determine that (a) deposits in Dollars are not available to
Majority Lenders in the interbank market in sufficient amounts in the ordinary
course of business to enable such Lenders to fund or continue to fund any Loans
for the applicable Interest Period (as defined in the Schedule), (b) adequate
and reasonable means do not exist for determining LIBOR (as defined in the
Schedule) for any requested Interest Period with respect to a proposed Loan, or
(c) LIBOR as applicable for any Interest Period with respect to a Loan does not
adequately and fairly reflect the cost to Majority Lenders of making, funding or
maintaining their Loans for the applicable Interest Period for such Loan; THEN,
in each case, Agent will promptly so notify Borrower. Thereafter, the obligation
of Lenders to make or maintain Loans accruing interest at LIBOR hereunder shall
be suspended until Agent (upon the instruction of Majority Lenders) revokes such
notice in writing, and all outstanding Loans shall accrue interest at the Prime
Rate (as defined in the Schedule) plus the Applicable Margin minus two percent
(2%) per annum. Upon receipt of such notice, Borrower may revoke any notice of
borrowing then submitted by it. If Borrower does not revoke such notice, Lenders
shall make the Loans, as proposed by Borrower, in the amount specified in the
applicable notice submitted by Borrower, but such Loans shall accrue interest at
the Prime Rate plus the Applicable Margin minus two percent (2%) per annum.
SECTION 3. CONDITIONS PRECEDENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL LOAN. The obligation of each Lender
to make its Loan on the initial Borrowing Date shall be subject to the
satisfaction of each of the following conditions precedent before or
concurrently with the making of such initial Loan:
(a) DOCUMENTS. Agent shall have received the following, in form and
substance satisfactory to it: (i) this Agreement, executed by each party hereto;
(ii) the Notes required under the Schedule, executed by Borrower and Additional
Borrower; (iii) any required Guaranty and any additional Loan Documents
specified in the Schedule, executed by each of the respective parties thereto,
and (iii) any other documents and information specified in the Schedule.
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(b) ADDITIONAL CLOSING DOCUMENTS. Agent shall have received the
following, in form and substance satisfactory to it: (i) evidence that all
approvals or consents of any other Person, required in connection with the
execution, delivery and performance of the Loan Documents shall have been
obtained; (ii) a certificate of the Secretary or other appropriate officer of
Borrower, dated the Closing Date, or a date not more than five Banking Days
prior to the Closing Date, certifying (A) copies of the certificate or articles
of incorporation and bylaws of Borrower and the resolutions adopted by Borrower
and other actions taken or adopted by Borrower (or any shareholders of Borrower)
authorizing the execution, delivery and performance of the Loan Documents and
(B) the incumbency, authority and signatures of each officer of Borrower
authorized to execute and deliver the Loan Documents and act with respect
thereto; (iii) a certificate of the Secretary or other appropriate officer of
Holdings, dated the Closing Date, or a date not more than five Banking Days
prior to the Closing Date, certifying (A) copies of the certificate or articles
of incorporation and bylaws of Holdings and the resolutions and other actions
taken or adopted by Holdings authorizing the execution, delivery and performance
of any Loan Documents to which Holdings is or shall become a party, and (B) the
incumbency, authority and signatures of each officer of Holdings authorized to
execute and deliver any such Loan Documents and to act with respect thereto; and
(iv) a certificate of the Secretary or other appropriate officer of each
Additional Borrower, dated the Closing Date, or a date not more than five
Banking Days prior to the Closing Date, certifying (A) copies of the respective
certificate or articles of incorporation and bylaws of such Additional Borrower
and the resolutions and other actions taken or adopted by such Additional
Borrower authorizing the execution, delivery and performance of any Loan
Documents to which such Additional Borrower is or shall become a party, and (B)
the incumbency, authority and signatures of each officer of such Additional
Borrower authorized to execute and deliver any such Loan Documents and to act
with respect thereto.
(c) LEGAL OPINION. Agent shall have received a legal opinion of legal
counsel to Holdings, Borrower, each Additional Borrower and each Guarantor,
dated the Closing Date, or a date not more than five Banking Days prior to the
Closing Date, in form and substance satisfactory to Agent.
(d) COLLATERAL. If any Collateral Documents are referred to in the
Schedule, Agent shall have received the following, in form and substance
satisfactory to Agent: (i) executed copies of all UCC-1 financing statements
necessary or appropriate in the reasonable opinion of Agent to perfect the
security interests of Agent created under the Collateral Documents; (ii) such
Lien searches as Agent shall have requested, and such termination statements or
other documents, as may be necessary to confirm that the Collateral described in
the Collateral Documents is subject to no other Liens in favor of any Persons
(other than Permitted Liens); (iii) evidence that all other actions necessary or
appropriate in the reasonable opinion of Agent to perfect and protect the
security interest created by the Collateral Documents have been taken; and (iv)
evidence of insurance coverage, together with evidence that Agent has been named
as loss payee under all policies of property insurance and as additional insured
under all policies of liability insurance, in each case as required by the
Collateral Documents.
(e) FEES, COSTS AND EXPENSES. Borrower shall have paid (i) all fees
then due in accordance with the Fee Letter, (ii) all invoiced costs and
expenses then due in accordance with
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Section 8.4 and (iii) all fees, costs and expenses due under the Amended and
Restated Agreement.
(f) COMPLIANCE CERTIFICATE. Agent shall have received a completed
Compliance Certificate signed by a Responsible Officer of Holdings and Borrower,
indicating compliance with any financial covenants set forth in Section 5.1 in
effect at such date, measured as of the end of the fiscal quarter immediately
preceding the Closing Date.
(g) MATERIAL CONTRACTS. If requested by Agent, Borrower shall have
delivered to Lenders (through Agent) a complete and current copy of each
Material Contract in existence as of the Closing Date, except that Borrower
shall not have any obligation to deliver such Material Contract but shall
instead provide Agent with a description of the material terms of such Material
Contract in reasonable detail, if such delivery is prohibited by the terms of
such Material Contract or by the terms of any confidentiality or other similar
restriction with respect thereto, and if such prohibition was required by a
party other than Borrower or any of its Subsidiaries.
3.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of each Lender to
make each Loan to be made by it hereunder shall be subject to the satisfaction
of each of the following conditions precedent:
(a) USE OF PROCEEDS. Agent shall have received details with respect to
the use of proceeds of the Loan at least five Banking Days prior to the proposed
funding date (in the form of a schedule or other listing of the Financed
Products or otherwise in a form as shall be specified by Agent or in the Funding
Procedures and Policies), and the foregoing (including the proposed use of
proceeds) shall be in a form reasonably satisfactory to Agent; provided,
however, that no such notice shall be required in respect of a borrowing
effected pursuant to clause (ii) of Section 2.3(a).
(b) REPRESENTATIONS AND WARRANTIES; NO DEFAULT. On and as of the date
of such Loan, both before and after giving effect thereto and to the application
of proceeds therefrom: (i) the representations and warranties contained in
Section 4.1 and in the other Loan Documents shall, in each case, be true,
correct and complete as though made on and as of such date (unless they
expressly refer to an earlier date, in which case they shall be true, complete
and correct as of such earlier date); and (ii) no Default shall have occurred
and be continuing or shall result from the making of such Loan. For purposes of
this Section 3.2, clause (i) shall take into account any amendments to any
disclosures made in writing by any Loan Party to Agent after the Closing Date
and approved by Majority Lenders. The giving of any notice of borrowing and the
acceptance by Borrower of the proceeds of each Loan made following the Closing
Date shall each be deemed a certification to Agent and each Lender that on and
as of the date of such Loan such statements are true.
(c) MATERIAL ADVERSE CHANGE. On and as of the date of such Loan, there
shall have occurred no Material Adverse Change since the date of the most recent
financial statements furnished to Lenders (through Agent).
(d) CLOSING DATE. The Closing Date shall have occurred.
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(e) ADDITIONAL DOCUMENTS AND CONDITIONS. Agent shall have received, in
form and substance satisfactory to Agent, such additional approvals, opinions,
documents and other information as Agent may reasonably request, including any
such items specified in the Schedule; and any additional conditions precedent
set forth in the Schedule shall have been satisfied.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
4.1 REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND BORROWER. Borrower
represents and warrants to Agent and each Lender that:
(a) ORGANIZATION AND POWERS. Each of Holdings and Borrower (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (ii) has all requisite power and
authority to own its assets and carry on its business and to execute, deliver
and perform its obligations under each Loan Document, (iii) is qualified to do
business and is in good standing in each jurisdiction in which the failure so to
qualify or be in good standing would result in a Material Adverse Change, and
(iv) is in compliance with all Requirements of Law, except to the extent that
such noncompliance could not reasonably be expected to result in a Material
Adverse Change.
(b) AUTHORIZATION; NO CONFLICT. The execution, delivery and performance
by Borrower of the Loan Documents have been duly authorized by all necessary
corporate action of Borrower and do not and will not (i) contravene the terms of
the articles or certificate of incorporation, or bylaws, of Borrower or result
in a breach of or constitute a default under any Material Contract or any
material lease, instrument or other agreement to which Borrower is a party or by
which it or its properties may be bound or affected; or (ii) violate any
provision of any law, rule, regulation, order, judgment, decree or the like
binding on or affecting Borrower.
(c) BINDING-OBLIGATIONS. The Loan Documents constitute, or when
delivered under this Agreement will constitute, legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and by general equity principles.
(d) CONSENTS. No authorization, consent, approval, license, exemption
of, or filing or registration with, any Governmental Authority, or approval or
consent of any other Person, is required for the due execution, delivery or
performance by Borrower or any Guarantor of any of the Loan Documents or the
purchase of the Financed Products, except as may be set forth in the Schedule
and except for any filings necessary to perfect any Liens on any Collateral.
(e) LITIGATION. There are no actions, suits or proceedings pending or,
to the best of Borrower's knowledge, threatened against or affecting Borrower or
any of its Subsidiaries before any Governmental Authority or arbitrator which if
determined adversely to Borrower or any such Subsidiary would result in a
Material Adverse Change.
(f) FINANCIAL STATEMENTS. All financial statements of Holdings and its
Subsidiaries delivered to Agent are complete and correct and fairly present the
financial
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condition of Holdings and its Subsidiaries as at the times, and for the periods
covered by such statements, in each case in accordance with GAAP, consistently
applied, subject, in the case of any unaudited financial statements, to normal
year-end adjustments and any absence of notes. Since the date of the most recent
financial statements furnished to Agent prior to the Closing Date, there has not
been any Material Adverse Change.
(g) PURCHASE TRANSACTION. Each purchase transaction to be financed with
any Loan represents a bona fide and undisputed transaction between Borrower and
the Vendor (or other applicable vendor of Financed Products) entered into in
compliance with all applicable laws and regulations.
(h) SUBSIDIARIES. (i) Except as set forth in the Schedule, on the date
of this Agreement Borrower has no Subsidiaries; and (ii) Additional Borrower has
not incurred any Indebtedness to any Person other than any Indebtedness
permitted under Section 5.1(k) and disclosed to Lenders in writing.
(i) LICENSES, PATENTS, TRADEMARKS AND OTHER RIGHTS. Except as disclosed
in writing by Borrower, each of Borrower and its Subsidiaries possesses all
material approvals, authorizations, permits, franchises, licenses, patents,
trademarks, trade names, service marks, copyrights, leases and all rights with
respect thereto, free from burdensome restrictions, that are reasonably
necessary for the ownership, maintenance and operation of its business, and
neither Borrower nor any such Subsidiary is in material violation of any rights
of others with respect to the foregoing. Without limiting the generality of the
foregoing, the Schedule sets forth all material authorizations, permits,
licenses and approvals of or from the FCC or any other Governmental Authority
("Permits and Licenses") held by Borrower and each Subsidiary existing on the
date of this Agreement; each Permit and License is in full force and effect and
has not been revoked, suspended, canceled, or modified in any materially adverse
way and, except as may be set forth in the Schedule, is not subject to any
materially adverse conditions or requirements; and Borrower has no knowledge of
the occurrence of any event (including any investigation, proceeding, notice,
violation, or other order or complaint issued by or before and Governmental
Authority) which (i) results in, or after notice or lapse of time or both would
result in, revocation, suspension, adverse modifications, non-renewal,
impairment, restriction, loss or termination of, or order of forfeiture with
respect to, any Permit or License in any respect that could reasonably be
expected to result in a Material Adverse Change, or (ii) affects or could
reasonably be expected in the future to affect any of the rights of Borrower or
any Subsidiary under any Permit or License in any respect that could reasonably
be expected to result in a Material Adverse Change.
(j) LIENS. There are no Liens upon or with respect to any of the
properties or assets of Borrower, including any of the Collateral, except for
Permitted Liens.
(k) INSURANCE. The properties of Borrower and its Subsidiaries are
insured, with financially sound and reputable insurance companies, in such
amounts, with such deductibles and covering such risks as is customarily carried
by companies engaged in similar businesses and owning similar properties in the
localities where Borrower or such Subsidiary operates.
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(l) TAXES. Holdings and its Subsidiaries have filed all federal and
other material tax returns and reports required to be filed, have made timely
remittance of all material amounts as required by any Governmental Authority and
have paid all federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being or will be
contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP. Neither Holdings nor
Borrower have received any notice of any proposed tax assessment against
Holdings or any Subsidiary that would, if made, result in a Material Adverse
Change.
(m) REGULATED ENTITIES. None of Borrower, any Person controlling
Borrower, or any Subsidiary, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. Neither Borrower nor any Guarantor is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities code,
or any other Federal or state statute or regulation limiting its ability to
incur Indebtedness.
(n) DISCLOSURE. (i) Borrower has disclosed to Agent the existence, as
of the date of this Agreement, of each
credit agreement, loan agreement,
indenture, purchase agreement, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Indebtedness or any extension of
credit (or commitment for any extension of credit) to, or guarantee by,
Holdings, Borrower or any of their respective Subsidiaries, the aggregate
principal or face amount of which equals or exceeds (or may equal or exceed)
$100,000 and any Liens with respect thereto. (ii) None of the representations or
warranties made by any Loan Party in the Loan Documents as of the date of such
representations and warranties, and none of the statements contained in any
other information with respect to any Loan Party, including each exhibit or
report, furnished by or on behalf of any Loan Party to Agent or Lenders in
connection with the Loan Documents, contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in the light of the circumstances under which
they are made, not misleading.
(o) ENVIRONMENTAL COMPLIANCE. The Loan Parties conduct in the ordinary
course of business a review of the effect of existing Environmental Laws and
claims alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties, and
as a result thereof each Loan Party has reasonably concluded that, except as
specifically disclosed to Agent on or prior to the date of this Agreement, such
Environmental Laws and claims would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change.
(p) SOLVENCY. Each of Holdings, Borrower and their respective
Subsidiaries is Solvent, both before and after giving effect to any borrowing of
Loans hereunder.
(q) ERISA. Except as specifically disclosed to Agent on or prior to the
date of this Agreement, (i) Holdings, Borrower and their respective Subsidiaries
are in compliance with all applicable provisions of ERISA, unless noncompliance
would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Change; and (ii) there are no pending or, to the best
knowledge of Holdings or Borrower, threatened claims, litigation,
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investigations or other actions or proceedings by or involving any Governmental
Authority, under or in connection with ERISA that would reasonably be expected
to result in a Material Adverse Change.
(r) MATERIAL CONTRACTS. All of the Material Contacts are in full force
and effect and, to the knowledge of the Borrower, (i) neither the Borrower nor
any of its Subsidiaries is in default in any material respect under the terms of
a Material Contract and (ii) no other Person who is a party to a Material
Contract is in default under the terms of such Material Contract.
(s) REPRESENTATIONS AND WARRANTIES AS TO CAPITALIZATION. On the Closing
Date, and after giving effect to any applicable provisions set forth in the
Schedule, the authorized capital stock of Borrower consisted of (A) 211,000,000
shares of common stock, of which 14,098,142 shares are issued and outstanding,
and (B) 95,583,184 shares of preferred stock, all of which are issued and
outstanding. All such outstanding shares have been duly and validly issued, are
fully paid and non-assessable and have been issued free of preemptive rights. On
the Closing Date, the Borrower did not have outstanding any securities
convertible into or exchangeable for, or any rights to subscribe for or to
purchase, or any options or warrants for the purchase of (other than those
provided for herein), or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock, in each case, other than 19,401,858 shares of common stock
reserved for issuance to employees or as separately disclosed in writing to the
Agent.
4.2 REPRESENTATIONS AND WARRANTIES OF LENDERS. Each Lender represents and
warrants to Borrower that such Lender: (i) will acquire each Note for its own
account for investment and (subject to the disposition of its property being at
all times within its control) not with a view to any resale or other
distribution of such Note in a transaction constituting a public offering or
otherwise requiring registration under the Securities Act of 1933 (the
"Securities Act") or in a transaction that would result in noncompliance with
applicable state securities laws; (ii) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and the
risks of its acquisition of any Note and credit extensions to Borrower and any
Additional Borrower, (iii) is an accredited investor as such term is defined in
Rule 501 of Regulation D under the Securities Act, and (iv) understands that
such Note has not been, and will not be, registered under the Securities Act or
any state securities laws.
SECTION 5. COVENANTS.
5.1 COVENANTS. So long as any of the Obligations shall remain unpaid or any
Lender shall have any Commitment, each of Holdings and Borrower agrees that:
(a) FINANCIAL STATEMENTS AND OTHER INFORMATION. Holdings and Borrower
shall furnish to Agent: (i) (A) as soon as available and in any event within 30
days after the end of each calendar month, Borrower's consolidated unaudited
financial statements for such month, prepared in accordance with GAAP, and, if
requested by Agent, its consolidating financial statements for such month, and
(B) as soon as available and in any event with 45 days after the end of each
fiscal quarter of each fiscal year of Holdings (excluding the fourth fiscal
quarter), Holdings' consolidated unaudited financial statements for such quarter
prepared in accordance with GAAP, and, if requested by Agent, its consolidating
financial statements for such quarter,
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accompanied in each case by a certificate of a Responsible Officer of Holdings
stating that such financial statements fairly present the financial condition of
Holdings, Borrower and their respective Subsidiaries as at such date and the
results of operations of Holdings, Borrower and their respective Subsidiaries
for the period ended on such date and have been prepared in accordance with GAAP
consistently applied, subject to changes from normal, year-end adjustments and
except for the absence of notes, (ii) as soon as available and in any event
within 90 days after the end of each fiscal year of Holdings, its consolidated
annual financial statements, prepared in accordance with GAAP and, if requested
by Agent, consolidating annual financial statements, and in the case of
consolidated financial statements, accompanied by an unqualified report thereon
of independent certified public accountants of recognized standing; (iii) as
soon as available and in any event not more than 90 days after the commencement
of each fiscal year, the business plan and financial projections of Holdings,
Borrower and their respective Subsidiaries for such fiscal year; (iv) promptly
after Holdings or Borrower has knowledge or becomes aware thereof, notice of the
occurrence of any Default or Event of Default hereunder; (v) prompt written
notice of any condition or event which has resulted, or that could reasonably be
expected to result, in a Material Adverse Change; (vi) together with the
financial statements required pursuant to clauses (i)and (ii), a Compliance
Certificate of a Responsible Officer of Borrower as of the end of the applicable
accounting period; and (vii) such other information respecting the operations,
properties, business or financial condition of Holdings, Borrower, their
respective Subsidiaries and any Guarantor as Agent may from time to time
reasonably request or as may be specified in the Schedule.
(b) PRESERVATION OF EXISTENCE, ETC. Holdings and Borrower shall, and
shall cause each of their respective Subsidiaries to, maintain and preserve (i)
its corporate (or equivalent) existence, and (ii) all material copyrights,
patents, trademarks, trade names and service marks and other intellectual
property rights, and all other material rights, qualifications, permits,
licenses, franchises and privileges, necessary or desirable in the normal course
of its business and operations and the ownership of its properties, except for
the dissolution of any shell or dormant Subsidiary and except in connection with
any transactions expressly permitted by this Section 5.1.
(c) LICENSES. Holdings and Borrower shall, and shall cause each of
their respective Subsidiaries to, obtain and maintain all licenses,
authorizations, consents, filings, exemptions, registrations and other
governmental approvals of any Governmental Authority necessary or desirable (i)
in connection with the execution, delivery and performance of the Loan
Documents, the purchase of the Financed Products or the consummation of the
transactions therein contemplated, or (ii) in the normal course of its business
and operations and the ownership of its properties, except, in the case of this
clause (ii), to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Change.
(d) COMPLIANCE WITH LAWS. Holdings and Borrower shall comply, and shall
cause each of their respective Subsidiaries to comply, in all material respects
with all Requirements of Law of any Governmental Authority having jurisdiction
over it or its business, except such as may be contested in good faith or as to
which a bona fide dispute may exist or where noncompliance could not reasonably
be expected to result in a Material Adverse Change.
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(e) PAYMENT OF OBLIGATIONS. Holdings and Borrower shall, and shall
cause each of their respective Subsidiaries to, pay and discharge (i) all
federal and other material taxes, fees, assessments and governmental charges or
levies imposed upon it or upon its properties or assets prior to the date on
which penalties attach thereto, and all lawful claims for labor, materials and
supplies which, if unpaid, might become a Lien upon any properties or assets of
Holdings, Borrower or any Subsidiary, except to the extent such taxes, fees,
assessments or governmental charges or levies, or such claims, are being
contested in good faith by appropriate proceedings and are adequately reserved
against in accordance with GAAP; (ii) all lawful claims which, if unpaid, would
by law become a Lien upon its property not constituting a Permitted Lien; and
(iii) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness (except where failure to do so would not otherwise constitute
a Default or Event of Default hereunder).
(f) INSURANCE. Holdings and Borrower shall, and shall cause each of
their respective Subsidiaries to, carry and maintain in full force and effect,
at its own expense and with financially sound and reputable insurance companies,
insurance in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in the same or similar businesses and
owning similar properties in the localities where Holdings, Borrower or such
Subsidiary operates. Without limiting the generality of the foregoing, Holdings
and Borrower shall, and shall cause each of their respective Subsidiaries to,
comply with all requirements of the Collateral Documents pertaining to
maintenance of insurance.
(g) CHANGE IN NATURE OF BUSINESS. Holdings and Borrower shall not, and
shall not permit any of their respective Subsidiaries to, engage in any material
line of business substantially different from those lines of business carried on
by it or contemplated to be carried on by it (as disclosed to Lenders) on the
date hereof.
(h) RESTRICTIONS ON FUNDAMENTAL CHANGE. Borrower shall not, and shall
not permit any of its Subsidiaries to, merge with or consolidate into, or
acquire all or substantially all of the assets of, any Person, or sell,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets, except that (i)
Borrower may enter into a Permitted Transaction; (ii) any of Borrower's wholly
owned Subsidiaries may merge with, consolidate into or transfer all or
substantially all of its assets to another of Borrower's wholly owned
Subsidiaries or to Borrower and in connection therewith such Subsidiary may be
liquidated or dissolved (provided that if any such transaction shall be between
an Additional Borrower and another Subsidiary not an Additional Borrower, or a
Subsidiary which is a Guarantor and a Subsidiary which is not a Guarantor, and
such Additional Borrower or Subsidiary Guarantor is not the continuing or
surviving Person, then the continuing or surviving Person shall have assumed all
of the obligations of such Additional Borrower or Subsidiary Guarantor, as the
case may be, under the Loan Documents to which it is a party); and (iii)
Borrower or any of its Subsidiaries may sell or dispose of assets in accordance
with the provisions of subsection (i) below.
(i) SALES OF ASSETS. Subject to Section 5.1(h), Holdings and Borrower
shall not, and shall not permit any of their respective Subsidiaries to, sell,
lease, transfer, or otherwise dispose of (whether in one transaction or a series
of transactions) any assets (including any shares of stock in any Subsidiary or
other Person) outside the ordinary course of business (each a
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[*] Indicates confidential treatment requested.
"Transfer"), or enter into or consummate any Transfer (i) involving Financed
Products (other than (x) used equipment racks and cables, or (y) in the ordinary
course of business to a wholly owned Subsidiary that is a Guarantor hereunder
and that has granted to Agent a perfected, first priority Lien on such Financed
Products under a security agreement in form and substance satisfactory to
Agent), (ii) that could reasonably be expected to result in a Material Adverse
Change or (iii) that would violate the terms of any other Loan Document;
PROVIDED that as a condition to consummating any Transfer to any such Subsidiary
of Financed Products, Borrower shall provide ten Banking Days' prior written
notice to Agent of the proposed Transfer.
(j) NEGATIVE PLEDGE. Holdings and Borrower shall not, and shall not
permit any of their respective Subsidiaries to, create, incur, assume or suffer
to exist any Lien upon or with respect to any of its properties, revenues or
assets, whether now owned or hereafter acquired, other than Permitted Liens.
(k) INDEBTEDNESS. Borrower shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or otherwise become liable for or suffer
to exist any Indebtedness, other than: (i) Indebtedness of Borrower and its
Subsidiaries to Agent, Lenders or Cisco Systems; (ii) Indebtedness of Borrower
and its Subsidiaries existing on the date hereof and disclosed to Lenders or
extensions, renewals and refinancings of such Indebtedness, provided that the
principal amount of such Indebtedness being extended, renewed or refinanced does
not increase; (iii) Indebtedness of Borrower and its Subsidiaries under the
Financing Documents (if any) or any refinancings, extensions and renewals of
such Indebtedness, provided that the principal amount of such Indebtedness being
refinanced, extended or renewed does not increase; (iv) accounts payable to
trade creditors for goods and services and current operating liabilities (not
the result of the borrowing of money) incurred in the ordinary course of
Borrower's or such Subsidiary's business in accordance with customary terms and
paid within the specified time, unless contested in good faith by appropriate
proceedings and reserved for in accordance with GAAP; (v) Indebtedness
consisting of guarantees resulting from endorsement of negotiable instruments
for collection by Borrower or any such Subsidiary in the ordinary course of
business; (vi) Indebtedness of Borrower and its Subsidiaries under capital
leases or otherwise incurred under or in connection with any Liens of the type
referred to in clause (vii) or (viii) of the definition of Permitted Liens in
Section 1; (vii) Subordinated Debt of Holdings; (viii) in respect of Borrower,
Indebtedness secured by a Permitted Lien; (ix) Indebtedness of Borrower to any
of its wholly owned Subsidiaries or any of its wholly owned Subsidiaries to
another of its wholly owned Subsidiaries; and (x) in respect of Borrower,
Indebtedness incurred in connection with a Permitted Transaction (subject to the
limitations thereon contained in the definition of "Permitted Transaction").
(l) LOANS AND INVESTMENTS. Holdings and Borrower shall not, and shall
not permit any of their respective Subsidiaries to, purchase or otherwise
acquire the capital stock, assets (constituting a business unit), obligations or
other securities of or any interest in any Person, or otherwise extend any
credit to or make any additional investments in any Person, other than in
connection with: (i) a Permitted Transaction; (ii) extensions of credit in the
nature of accounts receivable or notes receivable arising from the sales of
goods or services in the ordinary course of business; (iii) extensions of credit
by Holdings or Borrower to any of their respective wholly owned Subsidiaries or
by any of their respective wholly owned Subsidiaries to another of their
respective wholly owned Subsidiaries, Holdings or Borrower; (iv) employee
29
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loans and guarantees in the ordinary course of business in accordance with
Borrower's or any such Subsidiary's usual and customary practices with respect
thereto; and (v) short term, investment grade money market instruments, in
accordance with Borrower's usual and customary treasury management policies.
(m) DISTRIBUTIONS. Holdings and Borrower shall not declare or pay any
dividends in respect of their respective capital stock, or purchase, redeem,
retire or otherwise acquire for value (other than in consideration for equity
securities of Holdings) any shares of their respective capital stock, or any
warrants, rights or options to acquire such shares, now or hereafter
outstanding, return any capital to its shareholders as such, or make any
distribution of assets to their respective shareholders as such, or permit any
of their respective Subsidiaries to purchase, redeem, retire, or otherwise
acquire for value any shares of stock of Holdings or Borrower or any warrants,
rights or options to acquire such shares, except that (A) Holdings and Borrower
may declare and deliver dividends and distributions payable only in common stock
of Holdings or Borrower (as the case may be); (B) Holdings may purchase, redeem,
retire, or otherwise acquire shares of its capital stock or any warrants, rights
or options to acquire such shares with the proceeds received from a
substantially concurrent issue of new shares of its capital stock; (C) Holdings
may purchase, redeem, retire or otherwise acquire shares of its capital stock or
any warrants, rights or options to acquire such shares from any consultants or
employees of Borrower; and (D) Borrower may make cash transfers to Holdings as
required by Holdings to pay: (1) regularly scheduled payments of interest on
Subordinated Debt, provided no Event of Default exists or would result
therefrom, (2) its tax obligations to any Governmental Authority, and (3)
accounts payable to trade creditors for goods and services and current operating
liabilities (not the result of borrowing of money) incurred in the ordinary
course of Holding's business in accordance with customary terms and in amounts
customary for similar holding companies. Additionally, Borrower shall not permit
any Subsidiary of Borrower to grant or otherwise agree to or suffer to exist any
consensual restrictions on the ability of such Subsidiary to pay dividends and
make other distributions to Borrower, or to pay any Indebtedness owed to
Borrower or transfer properties and assets to Borrower.
(n) SUBORDINATED DEBT. Holdings shall not, and shall not permit any of
its Subsidiaries to, agree to or permit any material amendment, modification or
waiver of any provision of any document or instrument governing or evidencing
Subordinated Debt if such amendment, modification or waiver would adversely
affect the rights of the Lenders hereunder.
(o) ADDITIONAL SUBSIDIARIES. (i) If Borrower proposes to incorporate,
create or acquire any additional Subsidiary, Borrower shall provide Agent with
prior notice thereof. After the incorporation, creation or acquisition of any
such Subsidiary, within five Banking Days following receipt by Borrower from
Agent of a security agreement, a stock pledge agreement and a guaranty of the
Obligations each in form and substance satisfactory to Agent, Borrower shall (A)
cause such Subsidiary to execute and deliver such guaranty and security
agreement to Agent and (B) pledge (or cause to be pledged) the capital stock or
ownership interest of such Subsidiary to Agent and Lenders pursuant to such
stock pledge agreement. Majority Lenders may elect in their sole discretion to
waive any such requirement for any Subsidiary that will remain a dormant or
shell Subsidiary or in the case of any non-U.S. Subsidiary (or in the case of a
stock pledge, to require the pledge of not more than 65% of the capital stock of
any such Subsidiary). (ii) Within five Banking Days after receipt from Agent of
any request to do so,
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Borrower shall, or shall cause such Subsidiary to, have executed and filed any
UCC-1 financing statements furnished by Agent in each jurisdiction in which such
filing is necessary to perfect the security interest of Agent in the Collateral
of such Subsidiary and in which Agent requests that such filing be made. (iii)
Additionally, Borrower and such Subsidiary shall execute and deliver to Agent
such other items as reasonably may be requested by Agent in connection with the
foregoing, including resolutions, incumbency and officers' certificates,
opinions of counsel, search reports and other certificates and documents.
(p) LEASE OBLIGATIONS. Holdings and Borrower shall not, and shall not
suffer or permit any of their respective Subsidiaries to, create or suffer to
exist any obligations for the payment of rent for any property under lease or
agreement to lease (other than capital leases) which would cause the direct or
contingent liabilities of Holdings, Borrower and their respective Subsidiaries,
on a consolidated basis, in respect of all such obligations together to exceed
the greater of (i) $25,000,000 in any fiscal year or (ii) 25% of revenue in any
fiscal year.
(q) CAPITAL EXPENDITURES. In addition to the requirements under Section
5.1(r)(ix) below, Holdings and Borrower shall not, and shall not suffer or
permit any of their respective Subsidiaries to, make any expenditures for fixed
or capital assets (i) in excess of $100,000,000, on a consolidated basis, in any
fiscal year ending prior to the third anniversary of the Original Closing Date
and (ii) $300,000,000, on a consolidated basis, in any fiscal year thereafter;
PROVIDED that Borrower shall be entitled to make capital expenditures up to a
maximum $20,000,000 to purchase (a "Permitted Purchase") long haul fiber and
conduit between Seattle, Washington and Borrower's communications network
without such capital expenditures counting toward the caps on capital
expenditures set forth in this Section 5.1(q) for a three year period (the
"Permitted Period") commencing on the date that such long haul fiber conduit is
first purchased by Borrower.
(r) FINANCIAL COVENANTS.
(i) LEVERAGE RATIO. On a consolidated basis, Holdings and its
Subsidiaries shall not, as of the last day of any fiscal quarter, permit its
ratio of Consolidated Funded Debt to EBITDA (measured on a rolling four quarter
basis for the four fiscal quarters ended as of each quarterly period set forth
below) to be greater than the ratios indicated below:
QUARTERLY PERIOD ENDING REQUIRED RATIO
December 31, 2001 [*]
March 31, 2002 [*]
June 30, 2002 [*]
September 30, 2002 [*]
December 31, 2002 [*]
March 31, 2003 [*]
June 30, 2003 [*]
September 30, 2003 [*]
December 31, 2003 [*]
March 31, 2004 [*]
31
[*] Indicates confidential treatment requested.
QUARTERLY PERIOD ENDING REQUIRED RATIO
June 30, 2004 [*]
September 30, 2004 [*]
December 31, 2004 [*]
March 31, 2005 [*]
June 30, 2005 [*]
September 30, 2005 [*]
December 31, 2005 [*]
March 31, 2006 [*]
June 30, 2006 [*]
September 30, 2006 [*]
December 31, 2006 [*]
March 31, 2007 [*]
June 30, 2007 [*]
September 30, 2007 [*]
December 31, 2007 [*]
March 31, 2008 [*]
Thereafter [*]
(ii) MINIMUM TOTAL REVENUES. On a consolidated basis, Holdings
and its Subsidiaries shall not fail to maintain total monthly or total
annualized quarterly revenues of Holdings and its Subsidiaries, for each monthly
or quarterly period, as applicable, set forth below, of not less than the
correlative amount indicated (it being understood that with respect to any
quarterly period, annualized revenues shall be equal to revenues for such
quarterly period, multiplied by four):
MONTHLY PERIOD ENDING REQUIRED AMOUNT
October 31, 2001 $468,000
November 30, 2001 $580,000
December 31, 2001 $691,000
January 31, 2002 $755,000
February 28, 2002 $985,000
March 31, 2002 $1,215,000
April 30, 2002 $1,510,000
May 31, 2002 $1,855,000
QUARTERLY PERIOD ENDING REQUIRED ANNUALIZED AMOUNT
June 30, 2002 [*]
September 30, 2002 [*]
December 31, 2002 [*]
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March 31, 2003 [*]
June 30, 2003 [*]
September 30, 2003 [*]
December 31, 2003 [*]
March 31, 2004 [*]
June 30, 2004 [*]
September 30, 2004 [*]
December 31, 2004 [*]
March 31, 2005 [*]
June 30, 2005 [*]
September 30, 2005 [*]
December 31, 2005 [*]
March 31, 2006 [*]
June 30, 2006 [*]
September 30, 2006 [*]
December 31, 2006 [*]
March 31, 2007 [*]
June 30, 2007 [*]
September 30, 2007 [*]
December 31, 2007 [*]
March 31, 2008 [*]
Thereafter [*]
(iii) MINIMUM EBITDA. On a consolidated basis, Holdings and
its Subsidiaries shall not fail to maintain EBITDA for each period of four
quarters ended as of the last day of each quarterly period set forth below of
not less than the correlative amount indicated (bracketed amounts (< >) are
negative):
QUARTERLY PERIOD ENDING REQUIRED AMOUNT
December 31, 2001 [*]
March 31, 2002 [*]
June 30, 2002 [*]
September 30, 2002 [*]
December 31, 2002 [*]
March 31, 2003 [*]
June 30, 2003 [*]
September 30, 2003 [*]
December 31, 2003 [*]
March 31, 2004 [*]
June 30, 2004 [*]
September 30, 2004 [*]
33
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QUARTERLY PERIOD ENDING REQUIRED AMOUNT
December 31, 2004 [*]
March 31, 2005 [*]
June 30, 2005 [*]
September 30, 2005 [*]
December 31, 2005 [*]
March 31, 2006 [*]
June 30, 2006 [*]
September 30, 2006 [*]
December 31, 2006 [*]
March 31, 2007 [*]
June 30, 2007 [*]
September 30, 2007 [*]
December 31, 2007 [*]
March 31, 2008 [*]
Thereafter [*]
(iv) INTEREST COVERAGE RATIO. On a consolidated basis,
Holdings and its Subsidiaries shall not permit the ratio of EBITDA to Interest
Expense (measured on a rolling four quarter basis for the four fiscal quarters
ended on the last day of each quarterly period set forth below) for each
quarterly period set forth below to be less than the ratio set forth below
(determined as of the end of the quarterly period set forth below):
QUARTERLY PERIOD ENDING REQUIRED RATIO
December 31, 2001 [*]
March 31, 2002 [*]
June 30, 2002 [*]
September 30, 2002 [*]
December 31, 2002 [*]
March 31, 2003 [*]
June 30, 2003 [*]
September 30, 2003 [*]
December 31, 2003 [*]
March 31, 2004 [*]
June 30, 2004 [*]
September 30, 2004 [*]
December 31, 2004 [*]
March 31, 2005 [*]
34
[*] Indicates confidential treatment requested.
QUARTERLY PERIOD ENDING REQUIRED RATIO
June 30, 2005 [*]
September 30, 2005 [*]
December 31, 2005 [*]
March 31, 2006 [*]
June 30, 2006 [*]
September 30, 2006 [*]
December 31, 2006 [*]
March 31, 2007 [*]
June 30, 2007 [*]
September 30, 2007 [*]
December 31, 2007 [*]
March 31, 2008 [*]
Thereafter [*]
(v) MAXIMUM FUNDED DEBT TO CAPITALIZATION. On a consolidated
basis, Holdings and its Subsidiaries shall not permit the ratio of Consolidated
Funded Debt to Capitalization to exceed the percentage amount set forth below
(determined as of the end of the quarterly period set forth below):
QUARTERLY PERIOD ENDING PERCENTAGE
December 31, 2001 [*]
March 30, 2002 [*]
June 30, 2002 [*]
September 30, 2002 [*]
December 31, 2002 [*]
March 31, 2003 [*]
June 30, 2003 [*]
September 30, 2003 [*]
December 31, 2003 [*]
March 31, 2004 [*]
June 30, 2004 [*]
September 30, 2004 [*]
December 31, 2004 [*]
March 31, 2005 [*]
June 30, 2005 [*]
September 30, 2005 [*]
December 31, 2005 [*]
March 31, 2006 [*]
35
[*] Indicates confidential treatment requested.
QUARTERLY PERIOD ENDING PERCENTAGE
June 30, 2006 [*]
September 30, 2006 [*]
December 31, 2006 [*]
March 31, 2007 [*]
June 30, 2007 [*]
September 30, 2007 [*]
December 31, 2007 [*]
March 31, 2008 [*]
Thereafter [*]
(vi) MINIMUM CUSTOMERS. The number of revenue generating
customers of Holdings and its Subsidiaries (treating each office location of a
Person purchasing services from Holdings or any Subsidiary to be a separate
customer to the extent such office locations are in separate buildings) as of
the end of the monthly or quarterly period set forth below shall not be less
than the number listed opposite such period:
MONTHLY PERIOD NUMBER
October 31, 2001 [*]
November 30, 2001 [*]
December 31, 2001 [*]
January 31, 2002 [*]
February 28, 2002 [*]
March 31, 2002 [*]
April 30, 2002 [*]
May 31, 2002 [*]
QUARTERLY PERIOD NUMBER
June 30, 2002 [*]
September 30, 2002 [*]
December 31, 2002 [*]
March 31, 2003 [*]
June 30, 2003 [*]
September 30, 2003 [*]
December 31, 2003 [*]
March 31, 2004 [*]
June 30, 2004 [*]
36
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September 30, 2004 [*]
December 31, 2004 [*]
March 31, 2005 [*]
June 30, 2005 [*]
September 30, 2005 [*]
December 31, 2005 [*]
March 31, 2006 [*]
June 30, 2006 [*]
September 30, 2006 [*]
December 31, 2006 [*]
March 31, 2007 [*]
June 30, 2007 [*]
September 30, 2007 [*]
December 31, 2007 [*]
March 31, 2008 [*]
Thereafter [*]
(vii) MINIMUM CASH RESERVES. On a consolidated basis, Holdings
and its Subsidiaries shall maintain as of the last day of each quarterly period
Minimum Cash Reserves not less than the amount listed opposite such date below:
DATE NUMBER
December 31, 2001 [*]
March 31, 2002 [*]
June 30, 2002 [*]
September 30, 2002 [*]
December 31, 2002 [*]
March 31, 2003 [*]
June 30, 2003 [*]
September 30, 2003 [*]
December 31, 2003 [*]
March 31, 2004 [*]
June 30, 2004 [*]
September 30, 2004 [*]
December 31, 2004 [*]
March 31, 2005 [*]
June 30, 2005 [*]
September 30, 2005 [*]
December 31, 2005 [*]
March 31, 2006 [*]
June 30, 2006 [*]
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DATE NUMBER
September 30, 2006 [*]
December 31, 2006 [*]
March 31, 2007 [*]
June 30, 2007 [*]
September 30, 2007 [*]
December 31, 2007 [*]
Thereafter [*]
(viii) MINIMUM NODES ON NET. The number of nodes connected to
the network maintained by Holdings and its Subsidiaries as of any date listed
below shall not be less than the number listed opposite such monthly or
quarterly period set forth below:
MONTHLY PERIOD NUMBER
October 31, 2001 [*]
November 30, 2001 [*]
December 31, 2001 [*]
January 31, 2002 [*]
February 28, 2002 [*]
March 31, 2002 [*]
April 30, 2002 [*]
May 31, 2002 [*]
QUARTERLY PERIOD NUMBER
June 30, 2002 [*]
September 30, 2002 [*]
December 31, 2002 [*]
March 31, 2003 [*]
June 30, 2003 [*]
September 30, 2003 [*]
December 31, 2003 [*]
March 31, 2004 [*]
June 30, 2004 [*]
September 30, 2004 [*]
December 31, 2004 [*]
March 31, 2005 [*]
June 30, 2005 [*]
September 30, 2005 [*]
December 31, 2005 [*]
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March 31, 2006 [*]
June 30, 2006 [*]
September 30, 2006 [*]
December 31, 2006 [*]
March 31, 2007 [*]
June 30, 2007 [*]
September 30, 2007 [*]
December 31, 2007 [*]
March 31, 2008 [*]
Thereafter [*]
(ix) MAXIMUM CAPITAL EXPENDITURES. On a consolidated basis,
Holdings and its Subsidiaries shall not make any expenditures for fixed or
capital assets on an annual basis in excess of the amount listed below
(determined as of the end of the annual period set forth below):
DATE ANNUAL AMOUNT
December 31, 2001 [*]
December 31, 2002 [*]
December 31, 2003 [*]
December 31, 2004 [*]
December 31, 2005 [*]
December 31, 2006 [*]
December 31, 2007 [*]
Thereafter [*]
As used in this subsection (r), the following terms shall have the following
meanings: "Capitalization" means, on any date, the sum of (i) Consolidated
Funded Debt, and (ii) the sum of common and preferred equity, including without
duplication capital stock plus paid in capital of Holdings and its Subsidiaries
on such date, on a consolidated basis and as determined in accordance with,
GAAP; "Consolidated Funded Debt" means, as of any date of determination, all
Indebtedness of Holdings and its Subsidiaries on such date, on a consolidated
basis and as determined in accordance with GAAP; "EBITDA" means, for any period
with respect to Holdings and its Subsidiaries, net income (excluding
extraordinary items), plus (except to the extent attributable to extraordinary
items) the amount of any interest, taxes, depreciation, amortization and other
non-cash charges deducted in determining such net income, all of the foregoing
as determined on a consolidated basis for Holdings and its Subsidiaries,
determined in conformity with GAAP; "Interest Expense" means, for any period
with respect to Holdings and its Subsidiaries, the amount of interest expense,
both expensed and capitalized (including
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the portion of any payments in respect of any capital leases allocable to
interest expense), on a consolidated basis, as determined in accordance with
GAAP, paid or payable during such period in respect of any Indebtedness of
Holdings and its Subsidiaries; and "Minimum Cash Reserves" means unrestricted
cash and cash equivalents of Borrower and its wholly-owned Subsidiaries.
Notwithstanding anything in this Section 5.1(r) to the contrary, any
Indebtedness or any Interest Expense thereon accruing or becoming due during the
Permitted Period resulting from Permitted Purchases shall not be included by
Holdings in determining compliance with the financial covenants set forth in
this Section 5.1(r). Notwithstanding any provision to the contrary contained
herein, if Holdings and its Subsidiaries fail to comply with any of the
financial covenants set forth in this Section 5.1(r) prior to the period ending
June 30, 2002, such non-compliance shall not constitute an Event of Default
hereunder, but neither Agent nor any other Lender shall have any obligation to
make any Loans to Borrower (other than Tranche X Loans (as defined in the
Schedule), which shall continue to be available to Borrower), until Holdings and
its Subsidiaries shall have complied with all of the monthly financial covenants
set forth in this Section 5.1(r) for a subsequent month during the period prior
to and including the period ending June 30, 2002. On and after June 30, 2002,
any non-compliance with any of the financial covenants shall constitute an Event
of Default hereunder.
(s) MATERIAL CONTRACTS. Neither Borrower nor Holdings shall, nor shall
they permit any of their respective Subsidiaries to, agree to or permit any
amendment, modification or waiver of any material provision of any Material
Contract, if the effect thereof could reasonably be expected to result in a
Material Adverse Change. If Holdings, Borrower or any of their respective
Subsidiaries enter into a Material Contract after the Closing Date, Borrower
shall promptly notify Agent thereof and, if requested by Agent, Borrower shall
deliver to Lenders (through Agent) a complete and current copy of such Material
Contract in a reasonably prompt fashion after the creation thereof, except that
Borrower shall not have any obligation to deliver such Material Contract if such
delivery is prohibited by the terms of such Material Contract and if such
prohibition was required by a party other than Holdings, Borrower or any of
their respective Subsidiaries.
(t) OWNERSHIP OF SUBSIDIARIES. Holdings and Borrower shall cause each
of their Subsidiaries to remain and be a direct or indirect wholly-owned
Subsidiary.
(u) ACCOUNTING CHANGES. Neither Borrower nor Holdings shall, nor shall
they suffer or permit any of their respective Subsidiaries to, make any
significant change in accounting treatment or reporting practices, except as
required by GAAP, or change the fiscal year of Holdings or Borrower or of any of
their respective Subsidiaries, except to change the fiscal year of a Subsidiary
to conform its fiscal year to Borrower's.
(v) HAZARDOUS SUBSTANCES. Neither Borrower nor Holdings shall, nor
shall they permit any of their Subsidiaries to, use, generate, manufacture,
install, treat, release, store or dispose of any Hazardous Substances, except in
compliance with all applicable Environmental Laws, unless noncompliance would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.
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(w) BOOKS AND RECORDS; INSPECTIONS. Borrower and Holdings shall, and
they shall cause each of their respective Subsidiaries to, keep adequate records
and books of account, in which complete entries will be made in accordance with
GAAP. Holdings and Borrower shall provide Agent, each Lender and their
respective agents access to the premises of Holdings, Borrower and any of their
respective Subsidiaries at any time and from time to time, during normal
business hours and upon reasonable notice under the circumstances, and at any
time on and after the occurrence of a Default or Event of Default, for the
purposes of (i) inspecting and any and all records verifying the Collateral,
(ii) inspecting and copying (at Borrower's expense) pertaining thereto, and
(iii) discussing the affairs, finances and business of Holdings, Borrower and
their respective Subsidiaries with any executive officer or director of Holdings
or Borrower or with their accountants. Borrower shall reimburse Agent for the
reasonable travel and related expenses of Agent's employees or, at Agent's
option, of such outside accountants or examiners as may be retained by Agent to
verify or inspect Collateral, records or documents of Holdings or Borrower on a
regular basis or for a special inspection if Agent deems the same appropriate.
If outside examiners or accountants are used, Borrower shall also pay Agent such
reasonable sum as Agent may be obligated to pay as fees therefor; PROVIDED that
prior to the occurrence of a Default or an Event of Default, Borrower shall only
be liable to Agent for one such inspection during any twelve (12) month period.
(x) CAPITAL CONTRIBUTIONS. Holdings shall contribute to Borrower, and
Borrower shall accept, as common equity, within two Banking Days of receipt, (i)
all net proceeds received from the sale of any of Holdings' equity securities or
debt instruments or securities (other than issuances of equity securities to
officers, directors, employees or consultants of Borrower in the ordinary course
of business), (ii) any cash or cash equivalents generated or received by
Holdings at any time and from time to time, other than cash received by Holdings
from Borrower pursuant to clause (D) of Section 5.1(m) and (iii) any other asset
acquired or received by Holdings at any time and from time to time that is not
reasonably necessary for Holdings to perform its function as the holding company
of Borrower.
(y) FURTHER ASSURANCES AND ADDITIONAL ACTS. Holdings and Borrower shall
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements, instruments, certificates, documents and assurances
and perform such acts as Agent shall deem necessary or appropriate to effectuate
the purposes of the Loan Documents, and promptly provide Agent with evidence of
the foregoing satisfactory in form and substance to Agent.
SECTION 6. EVENTS OF DEFAULT.
6.1 EVENTS OF DEFAULT. Any of the following events which shall occur shall
constitute an "Event of Default":
(a) PAYMENTS. Borrower shall fail to pay when due (i) any amount of
principal of any Loan or Note, or (ii) any amount of interest on any Loan or
Note, or any fee or other amount payable under any of the Loan Documents, or
Holdings or any other Loan Party shall fail to pay when due any amount payable
under any of the Loan Documents, and in the case of this clause (ii) any such
default shall remain unremedied for five days.
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(b) REPRESENTATIONS AND WARRANTIES. Any representation or warranty by
any Loan Party under or in connection with the Loan Documents shall prove to
have been incorrect in any material respect when made or deemed made.
(c) FAILURE BY HOLDINGS OR BORROWER TO PERFORM CERTAIN COVENANTS.
Holdings or Borrower shall fail to perform or observe any term, covenant or
agreement contained in subsections (b)(i) or (g) through (u) of Section 5.1 or
shall fail to issue any of the Warrants that Holdings is required to issue to
Agent pursuant to Section 10 of the Schedule.
(d) FAILURE BY HOLDINGS OR BORROWER TO PERFORM OTHER COVENANTS.
Holdings, Borrower or any other Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document on its part to
be performed or observed and any such failure shall remain unremedied for a
period of 20 days from the occurrence thereof (unless Majority Lenders
reasonably determine that such failure is not capable of remedy).
(e) INSOLVENCY. (i) Holdings, Borrower, any Guarantor or any of their
respective Subsidiaries shall be dissolved, liquidated, wound up or cease its
corporate (or equivalent) existence, except to the extent expressly permitted by
Section 5.1; or (ii) Holdings, Borrower, any Guarantor or any such Subsidiary
(A) shall make a general assignment for the benefit of creditors, or shall
generally fail to pay, or admit in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (B) shall voluntarily cease to conduct its business in
the ordinary course, except as permitted by Section 5.1; (C) shall commence any
Insolvency Proceeding with respect to itself, or (D) shall take any action to
effectuate or authorize any of the foregoing.
(f) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency Proceeding
is commenced or filed against Holdings, Borrower, any Guarantor or any of their
respective Subsidiaries, or any writ, judgment, warrant of attachment, execution
or similar process, is issued or levied against a substantial part of Holdings',
Borrower's, any Guarantor's or any such Subsidiary's properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) Holdings,
Borrower, any Guarantor or any of their respective Subsidiaries admits the
material allegations of a petition against it in any Insolvency Proceeding, or
an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) Holdings, Borrower, any Guarantor or any of
their respective Subsidiaries acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business.
(g) DEFAULTS UNDER OTHER INDEBTEDNESS. Holdings, Borrower, any
Guarantor or any of their respective Subsidiaries shall fail (i) to make any
payment of any Indebtedness evidenced by or arising under any Financing
Document, if any, or any amount of any other Indebtedness in an aggregate
principal amount for all such Indebtedness together of at least $1,000,000 (or
its equivalent in another currency) when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace or notice period, if any, specified in the
agreement or instrument relating to such Indebtedness as of the date of such
failure, or (ii) to perform or observe any term, covenant
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or condition on its part to be performed or observed under any Financing
Document, if any, or any other agreement, note or instrument relating to any
such Indebtedness, when required to be performed or observed, or any other event
shall occur or condition shall exist thereunder, and such failure, event or
condition shall continue after the applicable grace or notice period, if any,
specified in such agreement, note or instrument, if the effect of such failure,
event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or any such Indebtedness shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof, or (without limiting
the generality of the foregoing) any defined "Event of Default" (as defined in
any Financing Document) shall have occurred and be continuing.
(h) CISCO DEFAULTS. So long as CSCC is a Lender hereunder, any of the
Loan Parties or any of their respective Subsidiaries (i) shall fail to pay any
Indebtedness or other obligations owing under any other material agreement with
Cisco Systems or any Subsidiary thereof (including CSCC) or under any note or
instrument in favor of Cisco Systems or any Subsidiary thereof (including CSCC),
when due (whether at scheduled maturity or by required prepayment, acceleration,
demand or otherwise), or (ii) shall otherwise be in breach of or default in any
of its obligations under any such agreement, note or instrument, and such
failure, breach or default shall continue after the applicable grace period, if
any, specified in such agreement, note or instrument.
(i) MATERIAL ADVERSE CHANGE. Any Material Adverse Change shall occur.
(j) FAILURE BY GUARANTOR TO PERFORM COVENANTS; INVALIDITY OF GUARANTY.
Any Guarantor shall fail to perform or observe any term, covenant or agreement
contained in any Guaranty on its part to be performed or observed, or any
default shall occur under any Guaranty, and any such failure or default shall
continue after the applicable grace period, if any, specified in any Guaranty as
of the date of such failure, or any defined "Event of Default" as defined in any
Guaranty shall have occurred and is continuing; or any Guaranty or any other
Guarantor Document shall for any reason be revoked or invalidated, or otherwise
cease to be in full force and effect, or any Guarantor or any other Person shall
contest in any manner the validity or enforceability thereof or deny that it has
any further liability or obligation thereunder.
(k) DEFAULT UNDER OTHER DOCUMENTS. Any defined "Event of Default" (as
defined in any other Loan Document) shall have occurred; or Holdings, Borrower
or any of their respective Subsidiaries shall be in breach of or default in any
of its obligations under any Material Contract, and such failure, breach or
default shall continue after the applicable grace period, if any, specified in
such Material Contract and could reasonably be expected to result in a Material
Adverse Change.
(l) CONSENTS, ETC. Any law, decree, license, consent, authorization,
registration or approval now or hereafter necessary to enable Borrower or any
Loan Party to comply with its obligations incurred in the Loan Documents or in
connection with the purchase of Financed Products shall be modified in a
materially adverse manner, or shall be revoked, withdrawn or withheld or shall
cease to remain in full force and effect if such revocation, withdrawal, or
withholding could reasonably be expected to result in a Material Adverse Change.
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(m) JUDGMENTS. A final judgment or order for the payment of money in
excess of $1,000,000 (or its equivalent in another currency) which is not fully
covered by third-party insurance shall be rendered against Borrower or any
Guarantor or any of their respective Subsidiaries; or (ii) any non-monetary
judgment or order shall be rendered against Borrower, any Guarantor or any such
Subsidiary which has resulted in or would reasonably be expected to result in a
Material Adverse Change; and in each case there shall be any period of 30
consecutive days during which such judgment continues unsatisfied or during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
(n) CHANGE OF CONTROL. Any Change of Control shall occur and Agent
shall have notified Holdings or Borrower that such Change of Control is an Event
of Default within 30 days of Agent receiving notice from Holdings or Borrower of
such Change of Control; PROVIDED that any Change of Control shall automatically
constitute an Event of Default if Holdings or Borrower fails to notify Agent of
such Change of Control within 10 days of the occurrence of such Change of
Control.
(o) SUBORDINATION. Any Loan Party shall make any voluntary or optional
payment or repayment on, redemption, exchange or acquisition for value of, or
any sinking fund or similar payment with respect to, any Subordinated Debt other
than in consideration for equity securities of Holdings or as permitted in the
applicable subordination agreement, or if any Person who has subordinated such
Subordinated Debt terminates or in any way limits its subordination agreement.
(p) LOAN DOCUMENTS. Any of the Loan Documents after delivery thereof
shall for any reason be revoked or invalidated, or otherwise cease to be in full
force and effect, or any Loan Party or any other Person shall contest in any
manner the validity or enforceability thereof, or any Loan Party or any other
Person shall deny that it has any further liability or obligation thereunder; or
any Loan Party or any other Person shall do or undertake any act evidencing an
intent to repudiate the Loan Documents, or any of the Collateral Documents for
any reason, except to the extent permitted by the terms thereof, shall cease to
create a valid and perfected Lien subject only to Permitted Liens in any of the
Collateral purported to be covered thereby; or any of the Financed Products
shall at any time be located outside of the United States.
6.2 EFFECT OF EVENT OF DEFAULT. If any Event of Default shall occur and is
continuing, Agent shall, at the request of, or may, with the consent of,
Majority Lenders, by notice from Agent to Borrower, (i) declare the Commitments
of the Lenders to be terminated, whereupon the same shall forthwith terminate,
and (ii) declare the entire unpaid principal amount of the Loans and the Notes,
all interest accrued and unpaid thereon and all other Obligations to be
forthwith due and payable, whereupon the Loans and the Notes, all such accrued
interest and all such other Obligations shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by Borrower, PROVIDED that if an event
described in Section 6.1(e) or 6.1(f) shall occur, the result which would
otherwise occur only upon giving of notice by Agent to Borrower as specified in
this Section 6.2 shall occur automatically, without the giving of any such
notice. Additionally, Agent and Lenders may exercise any or all of their
respective rights and remedies under the Collateral Documents, and proceed to
enforce all other rights and remedies available to them under the Loan Documents
and applicable law. Notwithstanding anything to the contrary contained
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in this Agreement, Agent shall not issue or maintain in effect any "orders" or
give any "notices of exclusive control" or similar notices pursuant to any
account control agreement among Borrower, Agent and Lenders and a securities
intermediary, except upon the occurrence and continuation of an Event of
Default.
SECTION 7. THE AGENT.
7.1 APPOINTMENT AND AUTHORIZATION; "AGENT". Each Lender hereby irrevocably
(subject to Section 7.10) appoints, designates and authorizes Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent. Without
limiting the generality of the foregoing sentence, the use of the term "agent"
in this Agreement with reference to Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
7.2 DELEGATION OF DUTIES. Agent may execute any of its duties under this
Agreement or any other Loan 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 with
reasonable care.
7.3 LIABILITY OF AGENT. None of Agent-Related Persons 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 Loan 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 Lenders for any recital,
statement, representation or warranty made by Holdings or Borrower or any
Subsidiary or Affiliate of Borrower, or any officer thereof, contained in this
Agreement or in any other Loan 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 Loan Document, or for
the value of or title to any Collateral, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Loan Party to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender 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 Loan Document, or to inspect the properties, books or records of Borrower
or any of Holdings, Borrower or any of their Subsidiaries or Affiliates.
7.4 RELIANCE BY AGENT. (a) Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram,
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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 Borrower), 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 Loan Document unless it
shall first receive such advice or concurrence of Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by Lenders against any and all liability and expense which 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 Loan Document in accordance with a request or
consent of Majority Lenders and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of Lenders. (b) For purposes of
determining compliance with the conditions specified in Section 3.1 or 3.2, each
Lender that has executed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
either sent (or made available) by Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to such Lender.
7.5 NOTICE 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 defaults in the payment of principal, interest and fees required to be paid
to Agent for the account of Lenders, unless Agent shall have received written
notice from a Lender or Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". Agent will notify Lenders of its receipt of any such notice. Agent
shall take such action with respect to such Default or Event of Default as may
be requested by Majority Lenders in accordance with Article VI; 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 shall deem
advisable or in the best interest of Lenders.
7.6 CREDIT DECISIONS. Each Lender acknowledges that none of 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 Holdings, Borrower and
their Subsidiaries, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Lender. Each Lender represents to Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such 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 Holdings,
Borrower and their Subsidiaries, the value of and title to any Collateral, and
all applicable regulatory laws relating to the transactions contemplated hereby,
and made its own decision to enter into this Agreement and to extend credit to
Borrower and any Additional Borrower hereunder. Each Lender 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 Loan 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 the Loan Parties. Except for notices, reports and other
documents expressly
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herein required to be furnished to Lenders by Agent, Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Holdings, Borrower or any Subsidiary
which may come into the possession of any of Agent-Related Persons.
7.7 INDEMNIFICATION OF AGENT. Whether or not the transactions contemplated
hereby are consummated, Lenders shall indemnify upon demand all Agent-Related
Persons (to the extent not reimbursed by or on behalf of Borrower and without
limiting the obligation of Borrower to do so), PRO RATA, from and against any
and all Indemnified Liabilities; PROVIDED, HOWEVER, that no Lender shall be
liable for the payment to Agent-Related Persons of any portion of such
Indemnified Liabilities resulting solely from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender shall
reimburse Agent upon demand for its ratable share of any costs or out-of-pocket
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 Loan
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 Borrower. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Agent.
7.8 AGENT IN INDIVIDUAL CAPACITY. CSCC and its Affiliates (including Cisco
Systems) may make loans to, enter into leases with, sell equipment and provide
related services to, acquire equity interests in and generally engage in any
kind of business with Holdings, Borrower and their Subsidiaries and Affiliates
as though CSCC were not Agent hereunder and without notice to or consent of
Lenders. Lenders acknowledge that, pursuant to such activities, CSCC or its
Affiliates may receive information regarding Holdings, Borrower or their
Affiliates (including information that may be subject to confidentiality
obligations in favor of Holdings, Borrower or such Affiliate) and acknowledge
that Agent shall be under no obligation to provide such information to them.
With respect to its Loans, CSCC shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
Agent, and the terms "Lender" and "Lenders" include CSCC in its individual
capacity.
7.9 COLLATERAL MATTERS. (a) Agent is authorized on behalf of all Lenders,
without the necessity of any notice to or further consent from Lenders, from
time to time to take any action with respect to any Collateral or the Collateral
Documents which may be necessary to perfect and maintain perfected the security
interest in and Liens upon the Collateral granted pursuant to the Collateral
Documents. (b) Lenders irrevocably authorize Agent, at its option and in its
discretion, to release any Lien granted to or held by Agent upon any Collateral
(i) upon termination of the Commitments and payment in full of all Loans and all
other Obligations known to Agent and payable under this Agreement or any other
Loan Document; (ii) constituting property sold or to be sold or disposed of as
part of or in connection with any disposition permitted hereunder; (iii)
constituting property in which a Loan Party owned no interest at the time the
Lien was granted or at any time thereafter; (iv) constituting property leased to
a Loan Party in a transaction permitted under this Agreement; (v) consisting of
an instrument evidencing Indebtedness or other debt instrument, if the
indebtedness evidenced thereby has been paid in full; or (vi) if approved,
authorized or ratified in writing by Majority Lenders or all Lenders, as
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the case may be, as provided in Section 8.1. Upon request by Agent at any time,
Lenders will confirm in writing Agent's authority to release particular types or
items of Collateral pursuant to this Section 7.9, provided that the absence of
any such confirmation for whatever reason shall not affect Agent's rights under
this Section 7.9. (c) EACH LENDER AGREES WITH AND IN FAVOR OF EACH OTHER (WHICH
AGREEMENT SHALL NOT BE FOR THE BENEFIT OF BORROWER OR ANY SUBSIDIARY) THAT THE
OBLIGATIONS TO SUCH LENDER ARE NOT AND SHALL NOT BE SECURED BY ANY REAL PROPERTY
COLLATERAL NOW OR HEREAFTER ACQUIRED BY SUCH LENDER OTHER THAN THE REAL PROPERTY
DESCRIBED IN THE SCHEDULE.
7.10 SUCCESSOR AGENT. Agent may, and at the request of Majority Lenders
shall, resign as Agent upon 30 days' notice to Lenders. If Agent resigns under
this Agreement, Majority Lenders shall appoint from among Lenders a successor
agent for Lenders. If no successor agent is appointed prior to the effective
date of the resignation of Agent, Agent may appoint, after consulting with
Lenders and Borrower, a successor agent from among Lenders. 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 Article VII and Section
8.4 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 Lenders shall perform all of the duties of Agent
hereunder until such time, if any, as Majority Lenders appoint a successor agent
as provided for above.
SECTION 8. MISCELLANEOUS.
8.1 AMENDMENTS. No material amendment or waiver (as reasonably determined
by Agent) of any provision of this Agreement or any other Loan Document, and no
consent with respect to any departure by Holdings, Borrower or any applicable
Subsidiary therefrom, shall be effective unless the same shall be in writing and
signed by Majority Lenders (or by Agent at the written request of Majority
Lenders), Holdings and Borrower and acknowledged by Agent, and then any such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; PROVIDED, HOWEVER, that no such
waiver, amendment, or consent shall, unless in writing and signed by all
Lenders, Holdings and Borrower and acknowledged by Agent, do any of the
following:
(a) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 6.2);
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees (other than any fees
payable solely to Agent, which fees Agent may, in its sole discretion and
without further consent, agree to amend or modify) or other amounts due to
Lenders (or any of them) hereunder or under, any other Loan Document (including
the date of any mandatory prepayment hereunder);
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(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or any fees or other amounts payable hereunder or under any other
Loan Document (other than any fees or other amounts payable solely to Agent,
which fees and other amounts Agent may, in its sole discretion and without
further consent, agree to amend or modify);
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for Lenders or any of them to
take any action hereunder;
(e) amend this Section 8.1, Section 2.20, the definition of "Majority
Lenders" herein, or any provision herein providing for consent or other action
by all Lenders or some specified amount of Lenders; or
(f) discharge any Guarantor, or release any portion of the Collateral
except as otherwise may be provided in this Agreement or the Collateral
Documents or except where the consent of Majority Lenders only is specifically
provided for;
and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by Agent in addition to Majority Lenders or all Lenders, as
applicable, affect the rights or duties of Agent under this Agreement or any
other Loan Document, and (ii) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties thereto.
8.2 NOTICES.
(a) All notices and other communications provided for hereunder and
under the other Loan Documents shall, unless otherwise stated herein, be in
writing (including by facsimile transmission) and mailed, sent or delivered to
the respective parties hereto at or to their respective addresses or facsimile
numbers set forth in the Schedule or the Annex, as the case may be, or at or to
such other address or facsimile number as shall be designated by any party in a
written notice to the other party hereto. All such notices and communications
shall be effective (i) if delivered by hand, when delivered; (ii) if sent by
courier service, when delivered; (iii) if sent by mail, upon the earlier of the
date of receipt or five Banking Days after deposit in the mail, first class (or
air mail, with respect to communications to be sent to or from the United
States), postage prepaid; and (iv) if sent by facsimile transmission, when sent;
provided, however, that notices and communications to Agent or Lenders pursuant
to Section 2 shall not be effective until received.
(b) Any agreement of Agent and Lenders herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of Borrower. Agent and Lenders shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by Borrower to give
such notice and Agent and Lenders shall not have any liability to Borrower or
other Person on account of any action taken or not taken in good faith by Agent
or Lenders in reliance upon such telephonic or facsimile notice. The obligation
of Borrower to repay the Loans shall not be affected in any way or to any extent
by any failure by Agent and Lenders to receive written confirmation of any
telephonic or facsimile notice, or the receipt by
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Agent and Lenders of a confirmation which is at variance with the terms
understood by Agent and Lenders to be contained in the telephonic or facsimile
notice.
(c) Each Lender shall notify Agent in writing of any changes in the
address to which notices to Lender should be directed, of addresses of any
lending office, of payment instructions in respect of all payments to be made to
it hereunder and of such other administrative information as Agent shall
reasonably request.
8.3 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of Agent or any
Lender to exercise, and no delay in exercising, any right, remedy, power or
privilege under any Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights and remedies under the Loan
Documents are cumulative and not exclusive of any rights, remedies, powers and
privileges that may otherwise be available to Agent or any Lender.
8.4 COSTS AND EXPENSES; INDEMNIFICATION. Borrower agrees to pay on demand
by Agent (i) the reasonable out-of-pocket costs and expenses of Agent and any of
its Affiliates, and the reasonable fees and disbursements of counsel to Agent
(excluding allocated costs and expenses for internal legal services), in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents; (ii) all costs and expenses of Agent and its Affiliates, and fees and
disbursements of counsel (excluding allocated costs and expenses for internal
legal services), in connection with any amendments, modifications or waivers of
the terms of any Loan Documents, and (iii) all costs and expenses of Agent, each
Lender and their respective Affiliates, and fees and disbursements of counsel
(including allocated costs and expenses for internal legal services), in
connection with any Default, the enforcement or attempted enforcement of, and
preservation of any rights or interests under, the Loan Documents, and any
out-of-court workout or other refinancing or restructuring or any bankruptcy or
insolvency case or proceeding. In addition, whether or not the transactions
contemplated hereby shall be consummated, each of Holdings and Borrower hereby
agrees to indemnify each Agent-Related Person, each Lender, any Affiliate
thereof and their respective directors, officers, employees, agents, counsel and
other advisors (each an "Indemnified Person") against, and hold each of them
harmless from, any and all liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever, including the reasonable fees and disbursements of
counsel to an Indemnified Person (including, to the extent permitted herein,
allocated costs and expenses for internal legal services), which may be imposed
on, incurred by, or asserted against any Indemnified Person, in any way relating
to or arising out of any of the Loan Documents, the use or intended use of the
proceeds of the Loans or the transactions contemplated hereby or thereby,
including with respect to any investigation, litigation or other proceeding
relating to any of the foregoing, irrespective of whether the Indemnified Person
shall be designated a party thereto (the "Indemnified Liabilities"); provided
that neither Holdings nor Borrower shall be liable to any Indemnified Person for
any portion of such Indemnified Liabilities resulting from such Indemnified
Person's gross negligence or willful misconduct. If and to the extent that the
foregoing indemnification is for any reason held unenforceable, each of Holdings
and Borrower agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
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8.5 SURVIVAL. All covenants, agreements, representations and warranties
made in any Loan Documents shall, except to the extent otherwise provided
therein, survive the execution and delivery of this Agreement, the making of the
Loans and the execution and delivery of any Note, and shall continue in full
force and effect so long as any Lender has any Commitment, any Loans remain
outstanding or any other Obligations remain unpaid or any obligation to perform
any other act hereunder or under any other Loan Document remains unsatisfied.
Without limiting the generality of the foregoing, the obligations of Holdings
and Borrower under Sections 2.11, 2.12, 2.14, 2.21 and 8.4, and all similar
obligations under the other Loan Documents (including all obligations to pay
costs and expenses and all indemnity obligations), shall survive the repayment
of the Loans and the termination of the Commitments.
8.6 BENEFITS OF AGREEMENT. The Loan Documents are entered into for the sole
protection and benefit of the parties hereto and their successors and assigns
and the Indemnified Persons referred to in Section 8.4, and no other Person
(other than Cisco Systems to the extent provided for in the Loan Documents)
shall be a direct or indirect beneficiary of, or shall have any direct or
indirect cause of action or claim in connection with, any Loan Document.
8.7 BINDING EFFECT; SUCCESSORS AND ASSIGNS.
(a) Any Lender may, with the written consent of the Agent (which shall
not be unreasonably withheld), at any time assign and delegate to one or more
Eligible Assignees (each an "Assignee") all, or any ratable part of all, of the
Loans, the Commitment and the other rights and obligations of such Lender
hereunder; PROVIDED, HOWEVER, that (i) no written consent of Agent shall be
required in connection with any assignment and delegation by a Lender to an
Eligible Assignee that is another Lender or an Affiliate of such Lender or an
Approved Fund; and (ii) except in connection with an assignment of all of a
Lender's rights and obligations with respect to its Commitment and Loans, any
such assignment to an Eligible Assignee that is not a Lender hereunder shall be
equal to or greater than $1,000,000; and PROVIDED FURTHER, HOWEVER, that
Holdings, Borrower and Agent may continue to deal solely and directly with such
Lender in connection with the interest so assigned to an Assignee until (A) such
Lender and its Assignee shall have delivered to Holdings, Borrower and Agent an
Assignment and Acceptance Agreement substantially in the form of EXHIBIT L (an
"Assignment and Acceptance"), together with any Note or Notes subject to such
assignment; (B) a written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee, in
substantially the form of the Notice of Assignment and Acceptance attached as
Schedule I to the Assignment and Acceptance, shall have been given to Holdings,
Borrower and Agent by such Lender and the Assignee; (C) the assignor Lender or
Assignee shall have paid to Agent a processing fee in the amount of $4,000; and
(D) Agent shall have provided any required consent to such assignment in
accordance with this Section.
(b) From and after the date that Agent notifies the assignor Lender
that Agent has received (and, if required, provided its consent with respect
thereto) an executed Assignment and Acceptance and payment of the
above-referenced processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, (ii) this Agreement shall
be deemed to be amended to the extent, but only to the extent, necessary to
reflect the addition of the Assignee and the resulting
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adjustment of the Commitments arising therefrom, and (iii) the assignor Lender
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents; PROVIDED, HOWEVER, that the assignor Lender shall not relinquish
its rights under Sections 2.11, 2.12, 2.18 or 2.21 (and any equivalent
provisions of the other Loan Documents) to the extent such rights relate to the
time prior to the effective date of the Assignment and Acceptance. The
Commitment allocated to each Assignee shall reduce the Commitment of the
assigning Lender PRO TANTO.
(c) Within five Banking Days after Borrower's receipt of notice by
Agent that it has received an executed Assignment and Acceptance and payment of
the processing fee, Borrower shall execute and deliver to Agent any new Notes
requested by such Assignee evidencing such Assignee's assigned Loans and
Commitment and, if the assignor Lender has retained a portion of its Loans and
its Commitment, replacement ` Notes as requested by the assignor Lender
evidencing the Loans and Commitment retained by the assignor Lender (such Notes
to be in exchange for, but not in payment of, the Notes held by such Lender, if
any).
(d) Any Lender may at any time sell to one or more lending institutions
or other Persons not Affiliates of Holdings (a "Participant") participating
interests in any Loans, the Commitment of that Lender and the other interests of
that Lender (the "originating Lender") hereunder and under the other Loan
Documents; provided, however, that (i) the originating Lender's obligations
under this Agreement shall remain unchanged, (ii) the originating Lender shall
remain solely responsible for the performance of such obligations, (iii)
Holdings, Borrower and Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous consent of Lenders as
described in the first proviso to Section 8.1. In the case of any such
participation, the Participant shall be entitled to the benefit of Sections
2.11, 2.21 and 8.4 as though it were also a Lender hereunder, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Notes held by it in
favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or
U.S. Treasury Regulation 31 C.F.R. ss.203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
8.8 CONFIDENTIALITY.
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(a) Each of the Lenders and Agent agree to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information respecting Holdings and Borrower and their respective businesses
("Customer Information") and not to use the Customer Information other than for
purposes under this Agreement or the other Loan Documents. Holdings and Borrower
agree that Agent or any Lender may disclose from time to time all Customer
Information in its possession to Agent's or any such Lender's legal counsel,
agents and other professional advisors, and to its Subsidiaries and Affiliates,
to any potential assignees or participants of the rights and/or obligations of
any such Lender hereunder, to any underwriters or placement agents for any
securities to be issued by any such Lender or any of its Subsidiaries or
Affiliates (or any transferee of any such Subsidiaries or Affiliates) and to any
rating agency rating such securities and to their respective legal counsel,
agents and other professional advisors; PROVIDED that such recipients agree not
to disclose such Customer Information for any purposes other than as
contemplated herein. Holdings and Borrower also consent to the disclosure of
Customer Information by Lender, or any of its Subsidiaries or Affiliates, (i) at
the request of any Governmental Authority having jurisdiction over Agent or such
Lender or such Subsidiary or Affiliate, (ii) pursuant to subpoena or other court
process, (iii) to the extent reasonably required in connection with any
litigation to which Agent or such Lender or any of its Subsidiaries or
Affiliates is a party, (iv) to the extent reasonably required in connection with
the exercise of any remedy hereunder or under any other Loan Document, (v) when
otherwise required to do so in accordance with applicable law, and (vi)(A) to
the extent such information is made available by Holdings or Borrower or was or
becomes generally available to the public other than as a result of disclosure
by Agent or such Lender, or (B) was or becomes available on a non-confidential
basis from a source other than Holdings or Borrower, provided that such source
is not bound by a confidentiality agreement with Holdings or Borrower known to
Agent or such Lender; PROVIDED, HOWEVER, that, to the extent that the disclosure
of any Customer Information is to be made by Agent or such Lender pursuant to
the immediately preceding clauses (i), (ii) or (iii) and Agent or such Lender
may lawfully do so, Agent or such Lender shall use commercially reasonable
efforts to first give Holdings or Borrower notice and a reasonable opportunity
to interpose an objection to such disclosure to obtain a protective order
requiring that the Customer Information so disclosed be held in confidence by
such court or government body or, if disclosed, be used only for the purposes
for which such disclosure is required and otherwise permitted under such
clauses.
(b) Holdings and Borrower each agree to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of this
Agreement, the Fee Letter and the terms and provisions hereof and thereof. Agent
and each Lender agree that Holdings and Borrower may disclose from time to time
the existence of this Agreement, the Fee Letter and the terms and provisions
hereof and thereof to Holdings' and Borrower's legal counsel, agents and other
professional advisors, and to their respective Subsidiaries and Affiliates, as
reasonably required in connection with negotiations with a prospective acquirer
of Holdings or Borrower or substantially all of Holdings' or Borrower's assets
or a prospective merger partner, to any bank or other financial institution or
any other Person proposing to provide financing to Holdings or Borrower or any
of their respective Subsidiaries or Affiliates, to any underwriters or placement
agents for any securities to be issued by Holdings or Borrower or any of their
respective Subsidiaries or Affiliates and to any rating agency rating such
securities and to their respective legal counsel, agents and other professional
advisors. Agent and each Lender also consent to the
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disclosure of this Agreement, the Fee Letter and the terms and provisions hereof
and thereof by Holdings or Borrower, or any of their respective Subsidiaries or
Affiliates, (i) at the request of any Governmental Authority having jurisdiction
over Holdings, Borrower or such Subsidiary or Affiliate, (ii) pursuant to
subpoena or other court process, (iii) to the extent reasonably required in
connection with any litigation to which Holdings, Borrower or any of their
respective Subsidiaries or Affiliates is a party, and (iv) when otherwise
required to do so in accordance with applicable law. THE FOREGOING PERMITTED
DISCLOSURE DOES NOT INCLUDE DISCLOSURE TO ANY OTHER VENDOR PROVIDING VENDOR
FINANCING TO HOLDINGS, BORROWER OR ANY OF THEIR RESPECTIVE SUBSIDIARIES (WHETHER
DIRECTLY OR INDIRECTLY). HOLDINGS AND BORROWER SHALL PROVIDE PRIOR NOTICE TO
AGENT OF ANY PROPOSED PUBLIC ANNOUNCEMENTS OR OTHER PUBLIC DISCLOSURE OR FILINGS
OF OR RELATING TO THIS AGREEMENT, THE FEE LETTER, AND THE TERMS AND PROVISIONS
HEREOF AND THEREOF AS PERMITTED BY THIS SUBSECTION (b) ("PUBLIC DISCLOSURE"),
AND NO PUBLIC DISCLOSURE MAY BE MADE IN RESPECT OF THE FEES, INTEREST RATE AND
OTHER PRICING INFORMATION WITH RESPECT HERETO WITHOUT LENDER'S PRIOR CONSENT
(SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD). PRIOR TO MAKING ANY REQUIRED
FILING WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER FEDERAL,
STATE, PROVINCIAL OR FOREIGN GOVERNMENTAL AUTHORITY AS PART OF ANY PUBLIC
DISCLOSURE, HOLDINGS OR BORROWER SHALL REQUEST CONFIDENTIAL TREATMENT OF THE
FEES, INTEREST RATE AND OTHER PRICING INFORMATION WITH RESPECT HERETO TO THE
EXTENT PERMITTED BY APPLICABLE LAW.
8.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
8.10 SUBMISSION TO JURISDICTION.
(a) Each of Holdings and Borrower each hereby (i) submits to the
non-exclusive jurisdiction of the courts of the State of
New York and the
Federal courts of the United States sitting in the Borough of Manhattan
(collectively, the "
New York Courts"), for the purpose of any action or
proceeding arising out of or relating to the Loan Documents, (ii) irrevocably
waives (to the extent permitted by applicable law) any objection which it now or
hereafter may have to the laying of venue of any such action or proceeding
brought in any of the
New York Courts, and any objection on the ground that any
such action or proceeding in any New York Court has been brought in an
inconvenient forum, and (iii) agrees that (to the extent permitted by applicable
law) a final judgment in any such action or proceeding brought in a New York
Court shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner permitted by law.
(b) If a process agent (the "Process Agent") is specified in the
Schedule, Holdings and Borrower each hereby irrevocably appoints the Process
Agent as its authorized agent with all powers necessary to receive on its behalf
service of copies of the summons and complaint and any other process which may
be served in any action or proceeding arising out of or relating to the Loan
Documents in any of the New York Courts. Such service may be made by mailing or
delivering a copy of such process to Holdings and Borrower in care of the
Process Agent at the Process Agent's above address and Holdings and Borrower
each hereby irrevocably authorizes and directs the Process Agent to accept such
service on its behalf and agrees that the failure of the Process Agent to give
any notice of any such service to Holdings and Borrower shall not impair or
affect the validity of such service or of any judgment rendered in any action or
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[*] Indicates confidential treatment requested.
proceeding based thereon. As an alternative method of service, Holdings and
Borrower each also irrevocably consents to the service of any and all process in
any such action or proceeding by the mailing of copies of such process to
Holdings and Borrower at their respective address specified in the Schedule. If
for any reason the Process Agent specified in the Schedule shall cease to act as
such, Holdings and Borrower each shall appoint forthwith, in the manner provided
for herein, a successor Process Agent qualified to act as an agent for service
of process with respect to all New York Courts and acceptable to Agent.
(c) NO LIMITATION. Nothing in this Section 8.10 shall affect the right
of Agent or any Lender to serve legal process in any other manner permitted by
law or limit the right of Agent or any Lender to bring any action or proceeding
against Holdings or Borrower or its property in the courts of other
jurisdictions.
8.11 WAIVER OF JURY TRIAL. EACH OF AGENT, LENDERS, HOLDINGS AND BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION IN CONNECTION WITH ANY LOAN
DOCUMENT.
8.12 ENTIRE AGREEMENT. The Loan Documents reflect the entire agreement
among Holdings, Borrower, each Additional Borrower, if any, Agent and Lenders
with respect to the matters set forth therein and supersede any prior
agreements, commitments, drafts, communication, discussions and understandings,
oral or written, with respect thereto.
8.13 SEVERABILITY. Whenever possible, each provision of the Loan Documents
shall be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If, however, any provision of any of the Loan
Documents shall be prohibited by or invalid under any such law or regulation in
any jurisdiction, it shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law or regulation, or, if for any
reason it is not deemed so modified, it shall be ineffective and invalid only to
the extent of such prohibition or invalidity without affecting the remaining
provisions of such Loan Document, or the validity or effectiveness of such
provision in any other jurisdiction.
8.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
8.15 SECOND AMENDED AND RESTATED
CREDIT AGREEMENT. This Agreement amends
and restates the Original
Credit Agreement, as amended and restated by the
Amended and Restated Agreement, in its entirety, shall constitute a Loan
Document and shall be deemed in all respects to constitute the "Credit
Agreement" for the purposes of the Notes, the Collateral Documents and the other
Loan Documents. In addition, the Borrower hereby expressly acknowledges,
ratifies and confirms each of its obligations under the Original Credit
Agreement, this Agreement and the other Loan Documents.
8.16 JOINT AND SEVERAL LIABILITY. If any Additional Borrowers are
designated in the Schedule, the liability of Borrower and such Additional
Borrowers shall be joint and several and, except as the context otherwise
requires, each reference herein to "Borrower" shall mean and be
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a reference to each Borrower and such Additional Borrowers. Borrower and any
such Additional Borrowers agree that any and all of the Obligations shall be the
joint and several responsibility of each of them notwithstanding any absence
herein or in any other Loan Document of a reference such as "jointly and
severally" with respect to such Obligation. The compromise of any claim with, or
the release of, Borrower shall not constitute a compromise with, or a release
of, any Additional Borrower, and the compromise of any claim with, or the
release of, any Additional Borrower shall not constitute a compromise with, or a
release of, Borrower or any other Additional Borrower.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
CISCO SYSTEMS CAPITAL CORPORATION,
as Agent and as a Lender
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
COGENT COMMUNICATIONS, INC., as Borrower
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
COGENT INTERNET, INC.,
as Additional Borrower
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ACKNOWLEDGED AND AGREED:
COGENT COMMUNICATIONS GROUP, INC.,
as Holdings
By:
----------------------------------------------------
Name:
----------------------------------------------------
Title:
----------------------------------------------------
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[LOGO]
As of October 24, 2001
SCHEDULE OF INFORMATION
This Schedule of Information (this "Schedule") is an integral part of
the Second Amended and Restated Agreement dated as of October 24, 2001 (as
amended, modified, renewed or extended from time to time, the "Agreement") among
Cogent Communications, Inc., ("Borrower"), Cogent Internet, Inc. ("Additional
Borrower"), the several financial institutions from time to time party thereto
("Lenders") and Cisco Systems Capital Corporation, as administrative agent for
itself and the other Lenders (in such capacity, "Agent"). Capitalized terms used
but not otherwise defined herein shall have the respective meanings assigned to
such terms in the Second Amended and Restated Agreement.
1. INFORMATION RELATING TO THE LOANS AND BORROWER:
(a) AVAILABILITY PERIOD: (i) (A) Up to $145,000,000 ("Tranche Al")
shall be available from the Original Closing Date to the Closing Date, (B) up to
$25,000,000, ("Tranche A2"), shall be available from the Closing Date until June
30, 2002 (the "Tranche 2 Availability Termination Date"), and (C) up to
$100,000,000, PLUS any unused portion of Tranche A2 (the aggregate of such
amounts, "Tranche A3"), shall be available from the first Banking Day following
the Tranche 2 Availability Termination Date (the "Tranche A3 Commencement Date")
until December 31, 2004 (the "Tranche 3 Availability Termination Date"); and
(ii) (A) Up to $29,000,000 ("Tranche B1") shall be available from the
Original Closing Date to the Closing Date, and (B) up to $35,000,000, ("Tranche
B3"), shall be available from the first Banking Day following the Tranche 2
Availability Termination Date to the Tranche 3 Availability Termination Date;
and
(iii) (A) Up to $16,000,000 ("Tranche X2") shall be available from the
Closing Date until the Tranche 2 Availability Termination Date, and (B) up to
$59,000,000 ("Tranche X3") shall be available from the Tranche A3 Commencement
Date until December 31, 2005 (the "Tranche X Availability Termination Date");
PROVIDED, however, that in the event that after the Closing Date one or more
investors shall have made cash equity contributions to Borrower and Holdings in
an aggregate amount together in excess of [*], the then unused portion of
Tranche X shall be reduced by [*] percent ([*]%) of the amount by which the
aggregate amount of such cash equity contributions exceeds [*].
Tranche A1 and Tranche B1 are hereinafter collectively referred to as
"Tranche 1", and any Loans outstanding under Tranche 1 are hereinafter referred
to as "Tranche 1 Loans".
1.
[*] Indicates confidential treatment requested.
Any Loans outstanding under Tranche A2 and Tranche X2 are hereinafter
referred to as "Tranche 2 Loans".
Tranche A3, Tranche B3 and Tranche X3 are hereinafter referred to as
"Tranche 3", and any Loans outstanding under Tranche 3 are hereinafter referred
to as "Tranche 3 Loans".
Tranche A1, Tranche A2 and Tranche A3 are hereinafter referred to as
"Tranche A", and any Loans outstanding under Tranche A are hereinafter referred
to as "Tranche A Loans".
Tranche B1 and Tranche B3 are hereinafter referred to as "Tranche B",
and any Loans outstanding under Tranche B are hereinafter referred to as
"Tranche B Loans".
Tranche X2 and Tranche X3 are hereinafter referred to as "Tranche X"
and any Loans outstanding under Tranche X are hereinafter referred to as
"Tranche X Loans".
The last Banking Day on which Tranche X Loans are available is referred
to herein as the "Commitment Expiry Date". A tranche becomes available hereunder
on the first Banking Day that Loans under such tranche are available to Borrower
under this Section 1(a).
(b) NOTICE OF BORROWING, MINIMUM AMOUNTS AND OTHER LIMITATIONS:
Borrower shall provide five Banking Days' advance notice to Agent of any
proposed borrowing. Except to the extent otherwise permitted by Agent in its
sole discretion, each Loan shall be in a minimum principal amount of $1,000,000.
No more than two Loan drawdowns per each tranche available hereunder will be
permitted in any month.
(c) AGGREGATE COMMITMENT: $409,000,000.
(d) INTEREST: Borrower agrees to pay interest on the unpaid principal
amount of each Loan outstanding under the Agreement from the date of such Loan
until the maturity thereof during each Interest Period for such Loan at a rate
per annum equal at all times to LIBOR for such Interest Period PLUS the
applicable margin as set forth in the table below (the "Applicable Margin").
The Applicable Margin for any Interest Period (i) for any Tranche 1
Loan shall be [*] per annum, and (ii) for any other Loan shall be (A) [*] per
annum in the event that the Borrower has negative EBITDA (measured as of the
Quarterly Date immediately preceding such Interest Period) or (B) in the event
that the Borrower has maintained positive EBITDA for two consecutive quarters
(measured at the Quarterly Date immediately preceding such Interest Period), the
rate per annum set forth below based on the Leverage Ratio set forth in Section
5.1(r)(i) of the Agreement (measured as of the Quarterly Date immediately
preceding such Interest Period); in each case, as set forth in the most recently
delivered Compliance Certificate delivered by Borrower pursuant to Section
5.1(a) of the Agreement. Changes in the Applicable Margin resulting from a
change in the Leverage Ratio shall become effective for the Interest Period
immediately succeeding the date of delivery by Borrower of a new Compliance
Certificate pursuant to Section 5.1(a). If any Compliance Certificate is not
delivered by Borrower when required under Section 5.1(a) of the Agreement, the
highest Applicable Margin shall apply until such Compliance Certificate is
delivered by Borrower.
2.
[*] Indicates confidential treatment requested.
--------------------------------------------------------
LEVERAGE RATIO APPLICABLE MARGIN
(PER ANNUM)
--------------------------------------------------------
Equal to or greater than 10.00 [*]
to 1.00
--------------------------------------------------------
Equal or greater than 8.50 to [*]
1.00 but less than 10.00 to 1.00
--------------------------------------------------------
Equal to or greater than 6.00 [*]
to 1.00 but less than 8.50 to
1.00
--------------------------------------------------------
Equal or greater than 5.00 to [*]
1.00 but less than 6.00 to 1.00
--------------------------------------------------------
Less than 5.00 to 1.00 [*]
--------------------------------------------------------
The period between the date of a Loan and the applicable Maturity Date
(as defined below) shall be divided into successive periods, each such period
being an "Interest Period" for purposes of the Agreement. The initial Interest
Period for a Loan shall begin on the date such Loan is made and end on the next
Quarterly Date. Each subsequent Interest Period shall begin on the last day of
the immediately preceding Interest Period and shall end on the next succeeding
Quarterly Date (with the last Interest Period to end on the applicable Maturity
Date). Interest shall accrue on each outstanding Loan during each Interest
Period with respect thereto from the first day of such Interest Period to the
last day thereof. As used herein, "LIBOR" means for any Interest Period the rate
of interest per annum determined by Agent to be the rate of interest per annum
(rounded upward, if necessary, to the nearest 1/100 of 1%) for deposits in
Dollars for three months appearing on "Telerate Page 3750", at or about 11:00
a.m. (London time) on the second Banking Day preceding the first day of the
applicable calendar quarter in which such Interest Period occurs, provided that
if no, or only one, offered quotation appears on such page, "LIBOR" shall be
determined by reference to the Reuters Screen LIBOR Page of the Reuters Monitor
Money Rates Service (or any replacement page thereof or other applicable Reuters
display page) or other comparable source of interest quotations for such
interbank rates selected by Agent. For purposes hereof, "Telerate Page 3750"
means the display designated as "3750" by Bridge Information Systems, Inc.
(formerly known as Dow Xxxxx Market Service) or any replacement page thereof.
Interest on each Loan shall be payable in arrears by Borrower to
Lenders (through Agent) on each Quarterly Date and on the applicable Maturity
Date; PROVIDED that if any prepayment of the Loans is effected other than on a
Quarterly Date, accrued interest on the Loans shall be due on such prepayment
date as to the principal amount prepaid.
If any Quarterly Date or the applicable Maturity Date would occur on a
day other than a Banking Day, then such Quarterly Date or the applicable
Maturity Date, as the case may be, shall occur on the next succeeding Banking
Day.
As used herein, "Banking Day" means a day other than a Saturday or
Sunday on which commercial banks are not required or authorized by law to close
in San Jose, California,
3.
[*] Indicates confidential treatment requested.
except that if the applicable Banking Day relates to any determination of LIBOR,
"Banking Day" means such a day on which dealings are carried out in the
applicable offshore U.S. Dollar interbank market.
In the event that any amount of principal of the Loans or interest
thereon, or any other Obligations, shall not be paid in full when due (whether
at stated maturity, by acceleration or otherwise), Borrower shall pay interest
(after as well as before entry of judgment thereon to the extent permitted by
law) on such unpaid amount to Lenders (through Agent), from the date such amount
becomes due until the date such amount is paid in full, payable on demand of
Agent, at a fluctuating rate per annum, equal at all times to the Prime Rate (as
defined below) plus the Applicable Margin plus [*] per annum (the "Default
Rate"). Additionally, and without limiting the foregoing, following the
occurrence and during the continuance of any Event of Default, at the option of
Majority Lenders, the interest rate on all Loans shall be the Default Rate.
As used herein, "Prime Rate" means for any day the rate of interest in
effect for such day as publicly announced from time to time by Citibank, N.A.,
in New York, New York, as its base rate. Each change in the interest rate on the
Obligations based on a change in the Prime Rate shall be effective at the
opening of business on the day specified in the public announcement of such
change.
(e) AMORTIZATION: Borrower shall repay to Lenders the aggregate
principal amount of the outstanding Tranche 2 Loans and Tranche 3 Loans made by
such Lenders in twelve (12) substantially equal consecutive quarterly
installments, commencing on March 31, 2005, with subsequent installments payable
on each Quarterly Date thereafter, and with the last such installment to be due
and payable on December 31, 2007, and in the amount necessary to repay in full
the unpaid principal balance of the Tranche 2 Loans and the Tranche 3 Loans
owing to such Lenders; and Borrower shall repay to Lenders the aggregate
principal amount of the outstanding Tranche 1 Loans and Tranche X Loans made by
such Lenders in twelve (12) substantially equal consecutive quarterly
installments, commencing on March 31, 2006, with subsequent installments payable
on each Quarterly Date thereafter, and with the last such installment to be due
and payable on December 31, 2008 (the "Maturity Date") and in the amount
necessary to repay in full the unpaid principal balance of the Tranche 1 Loans,
the Tranche X Loans, and any and all other unpaid amounts under the Loan
Documents, owing to such Lenders.
(f) PREPAYMENT FEES: In connection with any prepayment of Loans
hereunder, Borrower shall pay to Agent, for the ratable benefit of each Lender,
any fees arising under Section 2.12 of the Agreement.
(g) CLOSING DEADLINE: November 16, 2001.
(h) ADDITIONAL CLOSING DOCUMENTS AND INFORMATION: (i) Completion of
additional due diligence satisfactory to Agent including satisfactory analysis
validating underlying industry and market assumptions with regard to Borrower's
business plan and pro forma financials; (ii) Borrower and Cisco Systems shall
have executed Amendment No. 4 to the Service Provider Agreement; and (iii)
Borrower shall have delivered to Agent such documents
4.
[*] Indicates confidential treatment requested.
and other information with respect to Borrower's purchase of the assets of
Netrail as Agent may require to evaluate and approve or disapprove of such
transaction.
(i) OTHER CONDITIONS:
(i) CONDITIONS PRECEDENT TO THE INITIAL DRAW: Loans under Tranche 2,
Tranche 3 or Tranche X shall not be available unless Holdings has provided Agent
with reasonably satisfactory evidence that an amount of at least $62,000,000 in
the aggregate of additional cash equity has been contributed to Holdings by one
or more investors in its Series C round of equity financing. Each Loan Party
acknowledges that, as of the Closing Date, the Tranche 1 Loans have been fully
funded and no additional Loan amounts are available to Borrower thereunder.
(ii) CONDITIONS PRECEDENT TO TRANCHE A2: Loans under Tranche A2 shall
be available in accordance with the terms of the Tranche A2 availability
schedule prepared by Agent on or before the Closing Date.
(iii) CONDITIONS PRECEDENT TO TRANCHE 3: Loans under Tranche 3 shall
not be available unless Borrower has provided Agent with reasonably satisfactory
evidence that the business plan of Borrower is "fully funded" (as described
below). For purposes of this Agreement, Borrower's business plan shall be deemed
"fully funded" if, on June 30, 2002, Borrower maintains (x) Minimum Cash
Reserves equal to or greater than [*], and (y) minimum annualized EBITDA equal
to or greater than [*].
(iv) CONDITIONS PRECEDENT TO TRANCHE X3: Tranche X3 Loans shall not be
available after the Tranche 3 Availability Termination Date, unless all
conditions to availability with respect to the Tranche 3 Loans were satisfied by
Borrower as of such date (regardless of whether the Tranche 3 Loans are fully
drawn at such time).
(v) CONDITIONS PRECEDENT TO EACH BORROWING DATE: Additionally, the
following conditions precedent shall be satisfied on or prior to each Borrowing
Date: (A) After giving effect to any borrowing of Tranche B Loans, the aggregate
principal amount of outstanding Tranche A Loans and Tranche B Loans shall not
exceed [*] of the aggregate principal amount of Tranche A Loans then
outstanding, and (B) Borrower shall be in compliance with all of the financial
covenants contained in Section 5.1(r) of this Agreement.
(j) WARRANTS: As an integral part of the consideration for the making
of the Loans hereunder, Holdings shall issue to Agent, on or prior to the
Closing Date, stock subscription warrants in substantially the form of EXHIBIT J
(the "Warrants") in an aggregate amount of up to [*] (which aggregate amount
shall include the Warrants granted under the Amended and Restated Agreement for
[*] of Holdings' fully diluted common stock) of Holdings' fully diluted common
stock (including for this purpose any shares of Holdings' common stock reserved
for issuance to employees) determined as of the Closing Date. The incremental
Warrants (i.e., the Warrants excluding the outstanding Warrants) shall be
exercisable at a price equal to $1.25 per share. The Warrants shall be
exercisable for 8 years from the date of issuance. Agent shall have the option
to exercise the Warrants without payment of the exercise price and shall then
receive the number of shares of common stock of Holdings that represents the
value of
5.
[*] Indicates confidential treatment requested.
the difference between the fair market value of such common stock at the time of
exercise and the exercise price.
(k) ADDITIONAL BORROWER: Cogent Internet, Inc. The Additional Borrower
shall be entitled to obtain Loans under the Credit Agreement. For purposes of
requesting any Loans, receiving any Loan proceeds and otherwise administering
the Loans and the Credit Agreement, each such Additional Borrower hereby
irrevocably appoints, designates and authorizes Borrower to act on such
Additional Borrower's behalf, and the action of Borrower in the name of any
Additional Borrower shall in each case bind such Additional Borrower. Agent and
Lenders shall be fully entitled to rely upon and act following receipt of any
notice, request or instructions by Borrower on behalf of any Additional
Borrower.
(l) SUBSIDIARIES: Cogent Internet, Inc.
2. ADDITIONAL TERMS AND CONDITIONS:
(a) USE OF PROCEEDS:
(i) The Tranche A Loans shall be used solely for the purpose of
purchasing new Cisco Products from the Vendor thereof. Not less than [*] of the
Tranche A2 Loans may be used to purchase new Cisco Products (consisting of
networking hardware only) from Cisco Systems and not more than [*] of the
Tranche A2 Loans may be used to finance Cisco Systems' soft costs.
(ii) The Tranche B Loans shall be used for the financing of any soft
costs or other related costs of Borrower associated with or otherwise incurred
by Borrower in connection with the integration and installation of networking
and telecommunications equipment and services or shall be used for working
capital, capital expenditure, or general corporate purposes (but not for the
purpose of financing any acquisition transaction (including Permitted
Transactions) or any interest, fees, costs or expenses due under the Loan
Documents).
(iii) The Tranche X Loans shall be used solely for the purpose of
financing interest and fees payable by Borrower to Agent or Lenders hereunder or
pursuant to the Agreement.
(b) NOTES: (i) Promissory Note(s) in favor of each Lender, in
substantially the form of EXHIBIT L, evidencing the Indebtedness of Borrower to
each such Lender in respect of the Tranche A Loans to be made by each such
Lender; (ii) Promissory Note(s) in favor of each Lender, in substantially the
form of EXHIBIT M, evidencing the Indebtedness of Borrower to each such Lender
in respect of the Tranche B Loans to be made by each such Lender, and (iii)
Promissory Note(s) in favor of each Lender, in substantially the form of EXHIBIT
N, evidencing the Indebtedness of Borrower to each such Lender in respect of the
Tranche X Loans to be made by each such Lender, in each case (i), (ii) and
(iii), as amended, amended and restated or modified from time to time.
(c) MANDATORY PREPAYMENT: (i) Promptly after the end of each fiscal
year, Borrower shall calculate Excess Cash Flow for the fiscal year then ended
and shall, not later than 90 days after the end of such fiscal year, prepay the
outstanding principal amount of the Loans,
6.
[*] Indicates confidential treatment requested.
in an amount equal to [*] of the Excess Cash Flow for such fiscal year;
PROVIDED, HOWEVER, that any such prepayment shall not be required if the amount
of Excess Cash Flow for such year is less than [*].
(ii) The Tranche B Loans and the Tranche X Loans shall be subject to
mandatory prepayment on or before the later of (A) the third Banking Day after
any date Holdings receives the net proceeds from the sale of any of its equity
securities or debt instruments or securities (the "Holdings Prepayment Date")
(other than issuances of equity securities to officers, directors, employees or
consultants in the ordinary course of business); PROVIDED, that Holdings shall
not be required to make any such mandatory prepayment if it contributes such
proceeds to Borrower as common equity prior to the Holdings Prepayment Date and,
in such case, any mandatory prepayment required by this subsection 2(c)(ii)
shall be made according to the provisions of the immediately succeeding clause
(B) and (B) the next Banking Day after Borrower receives from Holdings the net
proceeds from the sale of any of Holdings' equity securities or debt instruments
or securities (other than issuances of equity securities to officers, directors,
employees or consultants in the ordinary course of business), in each case,
whether in one transaction or a series of transactions and in the amount of such
proceeds; PROVIDED, however, that Holdings or Borrower may retain (A) the first
[*] of proceeds of equity offerings of Holdings or Borrower measured from the
date of the Borrower's incorporation and (B) up to [*] of proceeds of
Subordinated Debt offerings of Holdings without being required to make such
prepayment; PROVIDED that any retained proceeds retained by Holdings shall be
contributed by Holdings to Borrower as common equity pursuant to the terms of
this Agreement and the Guaranty executed by Holdings in connection herewith.
(iii) The Loans shall be subject to mandatory prepayment on any date
Holdings or Borrower makes any voluntary prepayments under the Financing
Documents, if any, or on any term loans or other Indebtedness for borrowed money
(other than revolving working capital loans, unless a permanent commitment
reduction occurs simultaneously with the principal payment), on a PRO RATA basis
with the principal payment made to the holder(s) of such Indebtedness.
(iv) The Loans shall be subject to mandatory prepayment on any date
Borrower or any of its Subsidiaries sells, transfers or otherwise disposes of
any Financed Products, in the amount of such proceeds; PROVIDED that any such
sales, transfers or other dispositions shall be done in compliance with the
restrictions and limitations thereon set forth in the Agreement. Additionally,
the Loans shall be subject to mandatory prepayment on the date Holdings or
Borrower or any of their respective Subsidiary receives the net proceeds from
the sale, transfer or other disposition of any of Holdings, Borrower's or any
Subsidiary's assets (or group of related assets) other than Financed Products,
in the amount of such proceeds; PROVIDED, that Holdings or Borrower (or such
Subsidiary) may retain the first $100,000 of such proceeds in any calendar year
without being required to make such prepayment; PROVIDED, that in the case of
Holdings, any such proceeds shall be contributed to Borrower as common equity in
accordance with the terms of this Agreement and the Guaranty executed by
Holdings in connection herewith; and PROVIDED further that any such sales,
transfers or other dispositions shall be done in compliance with the
restrictions and limitations thereon set forth in the Agreement.
7.
[*] Indicates confidential treatment requested.
(v) If any Casualty Event shall occur with respect to any of Holdings',
Borrower's or their respective Subsidiaries' properties or assets in an amount
exceeding $100,000, or any of the Financed Products, the Loans shall be subject
to mandatory prepayment on the date Holdings, Borrower or such Subsidiary
receives the net proceeds therefrom, in the amount of such proceeds, unless
Holdings or Borrower (or such Subsidiary) applies all or a portion of such
proceeds to the repair or replacement thereof and completes such repair within
six months of such Casualty Event; PROVIDED that in the case of Holdings, any
such proceeds along with any asset being repaired or replaced with such proceeds
shall be contributed to Borrower as common equity pursuant to the terms of this
Agreement and the Guaranty executed by Holdings in connection herewith.
Except to the extent that any such prepayment is required to be applied
to a particular tranche, any such amounts received as a mandatory prepayment of
the Loans shall be applied first to the Tranche X Loans, second to the Tranche B
Loans and third to the Tranche A Loans.
If the amount of funds available for application to a prepayment
pursuant to clause (i), (ii) or (iii) above exceeds the outstanding principal
amount of Loans subject to the prepayment requirement (the "Subject Loans") and
any part of the unused Aggregate Commitment is available for the borrowing of
additional Subject Loans, the Aggregate Commitment with respect to the Subject
Loans shall be reduced by an amount equal to the difference between (1) the
amount of outstanding Subject Loans and (2) the amount that would be required to
be prepaid assuming the Aggregate Commitment with respect to the Subject Loans
were fully utilized.
As used herein, "Casualty Event" means, with respect to any property of
any Person, any loss of or damage to, or any condemnation or other taking of,
such property for which such Person or any of its Subsidiaries receives
insurance proceeds, or proceeds of a condemnation award or other compensation;
"Excess Cash Flow" means for any period, determined with respect to Holdings and
its Subsidiaries on a consolidated basis in accordance with GAAP, without
duplication, EBITDA for such period, MINUS Capital Expenditures made during such
period, PLUS the aggregate amount of capital leases and other Indebtedness
incurred during such period for the purpose of financing such Capital
Expenditures made during such period, MINUS all principal payments on
Indebtedness made during such period, but only to the extent not refinanced from
the proceeds of other Indebtedness, MINUS (PLUS) additions (reductions) to
non-cash working capital for such period (i.e., the increase or decrease in
consolidated non-cash current assets of Holdings and its Subsidiaries MINUS the
consolidated current liabilities (excluding the current maturities of long term
debt) of Holdings and its Subsidiaries from the beginning to the end of such
period) MINUS income taxes; and "Capital Expenditures" means, with respect to
Holdings and its Subsidiaries for any period, the aggregate amount of all
expenditures during such period which are or should be included as "capital
expenditures", "additions to property, plant and equipment" or similar items in
the financial statements of Holdings and its Subsidiaries in conformity with
GAAP.
(d) COLLATERAL DOCUMENTS: As conditions precedent to the effectiveness
of the Agreement, Borrower, Holdings and Additional Borrower, as applicable,
shall have delivered to Agent, on or prior to the Closing Date, the following
documents, each in form and substance
8.
[*] Indicates confidential treatment requested.
satisfactory to Agent: (i) Amended and Restated Security Agreement between Agent
(on behalf of each Lender) and Borrower in substantially the form of EXHIBIT C;
(ii) Amended and Restated Security Agreement between Agent (on behalf of each
Lender) and Holdings in substantially the form of EXHIBIT D; (iii) Amended and
Restated Security Agreement between Agent (on behalf of each Lender) and
Additional Borrower in substantially the form of EXHIBIT E; (iv) Amended and
Restated Stock Pledge Agreement between Agent (on behalf of each Lender) and
Holdings in substantially the form of EXHIBIT F; and (v) Amended and Restated
Stock Pledge Agreement between Agent (on behalf of each Lender) and Borrower in
substantially the form of EXHIBIT G.
(e) GUARANTY: As conditions precedent to the effectiveness of the
Agreement, Holdings and Additional Borrower, as applicable, shall have delivered
to Agent, on or prior to the Closing Date, the following documents, each in form
and substance satisfactory to Agent: (i) Amended and Restated Guaranty, made by
Holdings in favor of Agent and Lenders, in substantially the form of EXHIBIT H;
(ii) Amended and Restated Guaranty, made by Additional Borrower in favor of
Agent and Lenders, in substantially the form of EXHIBIT I; and (iii) Guaranty
made by Borrower in favor of Agent and Lenders, in substantially the form of
EXHIBIT J.
(f) ADDITIONAL LOAN DOCUMENTS: As conditions precedent to the
effectiveness of the Agreement, Borrower, Holdings and Additional Borrower, as
applicable, shall have delivered to Agent, on or prior to the Closing Date, the
following documents, each in form and substance satisfactory to Agent: (i) Stock
Subscription Warrant, executed by Holdings, in substantially the form of EXHIBIT
K; (ii) Confirmation of Position and Release Agreement, executed by each of
Borrower, Holdings and Additional Borrower, in substantially the form of EXHIBIT
P; (iii) Guarantor Consent Agreement, executed by Holdings and Additional
Borrower, in substantially the form of EXHIBIT Q; (iv) Collateral Access
Agreements, as required pursuant to the Collateral Documents; (v) the Fee
Letter, and (vi) if required by Agent in its reasonable discretion,
Intercreditor Agreement(s), in form and substance satisfactory to Agent.
(g) FINANCING DOCUMENTS: None.
(h) MATERIAL CONTRACTS: Fiber Optic Network Lease Fiber Agreement
Product Order dated as of February 7, 2000 between Borrower and Metromedia Fiber
Network Services, Inc. (the "MFN Agreement"); and Dark Fiber IRU Agreement dated
as of April 14, 2000 between Borrower and Xxxxxxxx Communications, Inc. (now
known as Xxxxxxxx Communications, LLQ.
(i) GOVERNMENTAL LICENSES AND PERMITS: None.
(j) OTHER REQUIRED CONSENTS: Consent of Shareholders of Holdings and
Borrower to the Loan Documents and such other consents of each Guarantor as
Agent may reasonably require. Consent of each of Metromedia Fiber Network
Services, Inc. and Xxxxxxxx Communications, Inc. with respect to the liens
granted to Agent hereunder.
(k) ADDITIONAL PERMITTED LIENS: None.
(l) ADDITIONAL REPORTING REQUIREMENTS: None.
3. ADDRESSES FOR NOTICES:
9.
[*] Indicates confidential treatment requested.
(a) BORROWER:
Cogent Communications, Inc.
0000 00xx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attn: Xx. Xxxxx Xxxxxxxxx
Fax No.: (000) 000-0000
(b) ADDITIONAL BORROWER:
Cogent Internet, Inc.
0000 00xx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attn: Xx. Xxxxx Xxxxxxxxx
Fax No.: (000) 000-0000
(c) HOLDINGS
Cogent Communications Group, Inc.
0000 00xx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attn: Xx. Xxxxx Xxxxxxxxx
Fax No.: (000) 000-0000
(d) AGENT:
Cisco Systems Capital Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx, XX 00000
Attn.: Loan Compliance and Administration
Fax: (000) 000-0000
4. AGENT'S ACCOUNT FOR PAYMENTS:
Account no.: 00000000
Account Name: Citicorp North America as Agent for Cisco Systems
Ref. "Cisco Systems Capital/Cogent Communications, Inc."
ABA no.: 000000000
Account maintained with:
Citibank, N.A.
5. PROCESS AGENT: CT Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10.
[*] Indicates confidential treatment requested.
ACKNOWLEDGED AND AGREED:
-----------------------
Cisco Systems Capital Corporation,
as Agent and as Lender
By:
-------------------------------------------------
Title:
Cogent Communications, Inc.
By:
-------------------------------------------------
Title:
Cogent Communications Group, Inc.
By:
-------------------------------------------------
Title:
Cogent Internet, Inc.
By:
-------------------------------------------------
Title:
11.
[*] Indicates confidential treatment requested.
LENDER ANNEX
COMMITMENTS
AND PRO RATA SHARES
LENDER COMMITMENT PRO RATA SHARE
------ ---------- --------------
Cisco Systems Capital Corporation $409,000,000 100%
TOTAL $409,000,000 100%
ADDRESS FOR NOTICES TO LENDERS
CISCO SYSTEMS CAPITAL CORPORATION
as Lender
NOTICES FOR BORROWING AND PAYMENTS:
Cisco Systems Capital Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx, XX 00000
Attn.: Loan Compliance and Administration
Fax: (000) 000-0000
OTHER NOTICES:
Cisco Systems Capital Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx, XX 00000
Attn.: Loan Compliance and Administration
Fax: (000) 000-0000
Annex 1.
[*] Indicates confidential treatment requested.
EXHIBIT A
FORM OF NOTICE OF BORROWING
Date: __________
To: Cisco Systems Capital Corporation, as Agent
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx, XX 00000
Attn.: Loan Compliance and Administration
Fax: (000) 000-0000
Ladies and Gentlemen:
The undersigned, Cogent Communications, Inc. ("Borrower"), refers to
the Second Amended and Restated Credit Agreement dated as of October 24, 2001
(as amended, modified, renewed or extended from time to time, the "Credit
Agreement"), among Borrower, any Additional Borrower party thereto ("Additional
Borrower"), the several financial institutions from time to time party thereto
("Lenders") and Cisco Systems Capital Corporation, as administrative agent for
itself and the other Lenders (in such capacity, "Agent"). Capitalized terms used
but not otherwise defined herein shall have the respective meanings assigned to
such terms in the Credit Agreement. Borrower hereby gives Agent irrevocable
notice, pursuant to Section 2.3 of the Credit Agreement, of the borrowing of the
Loans specified herein:
1. The date of the proposed borrowing is [the Closing Date]
[_____________].
2. The amount of the proposed borrowing is $___________.
3. The borrowing is a utilization of Tranche __ .
4. The purpose of the borrowing is ____________________. Detailed
information on any purchase transaction being financed by the proposed borrowing
is attached hereto.
5. The borrowing requested hereby is being made available to
[Borrower][________________] as Additional Borrower.
6. In the case of a funding to any Person other than Cisco Systems, the
payment instructions with respect to the funds to be made available by Lenders
are as follows: __________.
7. After giving effect to all borrowings of Loans, including any
borrowings requested hereby, Borrower will be in full compliance with the
requirements of Clause (ii) of Section 1(v) of the Schedule.
8. Borrower hereby certifies to Agent and each Lender that on and as of
the date of the borrowing requested hereby, both before and after giving effect
thereto and to the
A-1
[*] Indicates confidential treatment requested.
application of proceeds therefrom: (i) the representations
and warranties contained in Section 4.1 of the Credit Agreement and in the other
Loan Documents shall be true, correct and complete as though made on and as of
such date (unless such representations and warranties expressly refer to an
earlier date, in which case they shall be true, complete and correct as of such
earlier date); and (ii) no Default or Event of Default shall have occurred and
be continuing or shall result from the making of any Loans on such borrowing
date. For purposes hereof, clause (i) above shall take into account any
amendments to any disclosures made in writing by Borrower, Additional Borrower,
or any Loan Parties to Agent and Lenders after the Closing Date and approved by
Majority Lenders.
Cogent Communications, Inc.
By:
---------------------------------
Title:
------------------------------
A-2
[*] Indicates confidential treatment requested.
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
Date: __________, ___
To: Cisco Systems Capital Corporation, as Agent
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx, XX 00000
Attn.: Loan Compliance and Administration
Fax: (000) 000-0000
Re: COGENT COMMUNICATIONS, INC.
--------------------------
Ladies and Gentlemen:
This Compliance Certificate is made and delivered pursuant to the
Second Amended and Restated Credit Agreement, dated as of October 24, 2001 (as
amended, modified, renewed or extended from time to time, the "Credit
Agreement"), among Cogent Communications Group, Inc. ("Holdings"), Cogent
Communications, Inc. ("Borrower"), any Additional Borrower party thereto
("Additional Borrower"), the several financial institutions party thereto
("Lenders") and Cisco Systems Capital Corporation, as administrative agent for
itself and the other Lenders (in such capacity, "Agent"). Reference is made to
the Credit Agreement for full particulars of the matters described therein. All
capitalized terms used but not otherwise described in this Compliance
Certificate shall have the respective meanings assigned to such terms in the
Credit Agreement. This Compliance Certificate relates to the accounting period
ending __________, ____.
I am a Responsible Officer of Holdings and Borrower. I have reviewed
the terms of the Credit Agreement and I have made, or caused to be made under my
supervision, a detailed review of the transactions and conditions of Holdings
and its Subsidiaries during such accounting period. I hereby certify that the
information set forth on SCHEDULE 1 hereto (and on any additional schedules
hereto setting forth further supporting detail) is true, accurate and complete
in all material respects as of the end of such accounting period.
I hereby further certify that (i) as of the date hereof that no Default
has occurred and is continuing, and (ii) on and as of the date hereof, there has
occurred no Material Adverse Change since the date of the financial statements
furnished to Agent prior to the Closing Date, except in each case as may be set
forth in a separate attachment hereto describing in detail the nature of each
condition or event constituting an exception to the foregoing statements, the
period during which it has existed and the action which Borrower is taking or
proposes to take with respect to each such condition or event.
IN WITNESS WHEREOF, the undersigned officer has signed this Compliance
Certificate this ____ day of ______________, ____.
B-1
[*] Indicates confidential treatment requested.
-----------------------------------------
Title:
B-2
[*] Indicates confidential treatment requested.
SCHEDULE 1
TO THE COMPLIANCE CERTIFICATE
Dated _________________, _____
For the fiscal [month/quarter] ended __________, _____
ACTUAL REQUIRED/PERMITTED
------ ------------------
SECTION 5.1(r)(i) - LEVERAGE RATIO
(A) Holdings Consolidated Funded Debt
$______
(B) Holdings EBITDA calculation (measured for each
four consecutive fiscal quarter period on a rolling
four quarter basis)
consolidated net income (excluding extraordinary
items) $_______
PLUS consolidated interest expense _______
PLUS consolidated income tax expense _______
PLUS consolidated depreciation expense _______
PLUS consolidated amortization expense _______
MINUS extraordinary gains _______
PLUS extraordinary losses _______
Holdings EBITDA
$_______
(C) Ratio of (A) to (B) ____:____ Not greater than ____:____
See Table in Section
5.1(r)(i) of the Credit
Agreement
SECTION 5.1(r)(ii) - MINIMUM TOTAL REVENUES
Holdings consolidated total revenues (measured as set forth in $_________ Not less than $_________
Section 5.1(r)(ii) of the Credit Agreement)
See Table in Section
5.1(r)(ii) of the Credit
Agreement
Schedule 1 to Compliance Certificate
Page 1
[*] Indicates confidential treatment requested.
ACTUAL REQUIRED/PERMITTED
------ ------------------
SECTION 5.1(r)(iii) - MINIMUM EBITDA
------------------------------------
Holdings EBITDA calculation (measured as set forth in
Section 5.1(r)(iii) of the Credit Agreement). $_______ Not less than $_______
See Table in
Section 5.1(r)(iii) of the
Credit Agreement
SECTION 5.1(r)(iv) - INTEREST COVERAGE RATIO
--------------------------------------------
(A) Holdings EBITDA calculation (measured for each four
consecutive fiscal quarter period on a rolling four $________
quarter basis), as calculated as provided above
(B) Holdings Interest Expense (measured for each four
consecutive fiscal quarter period on a rolling four
quarter basis)
Interest payments in respect of any Indebtedness $_______
Holdings Interest Expense $________
(C) Ratio of (A) to (B) ___:___ Not less than ___:___
See Table in
Section 5.1(r)(iv) of the
Credit Agreement
SECTION 5.1(r)(v) - MAXIMUM FUNDED DEBT TO CAPITALIZATION
(A) Holdings Consolidated Funded Debt
$________
(B) Capitalization
Holdings Consolidated Funded Debt $_______
PLUS capital stock _______
PLUS paid in capital _______
Capitalization $________
Schedule 1 to Compliance Certificate
Page 2
[*] Indicates confidential treatment requested.
ACTUAL REQUIRED/PERMITTED
------ ------------------
(C) Ratio of (A) to (B)
_______% Not to exceed ______%
See Table in
Section 5.1(r)(vi) of the
Credit Agreement
SECTION 5.1(r)(vi) - MINIMUM CUSTOMERS
Total revenue generating customers (measured as set
forth in Section 5.1(r)(vi) of the Credit Agreement). ________ Not less than _____
See Table in
Section 5.1(r)(vii) of the
Credit Agreement
SECTION 5.1(r)(vii) - MINIMUM CASH RESERVES
-------------------------------------------
Borrower consolidated unrestricted cash $_______
PLUS Borrower consolidated cash equivalents
Borrower Minimum Cash Reserves $______
$________ Not less than $________
See Table in
Section 5.1(r)(vii) of the
Credit Agreement
SECTION 5.1(r)(viii) - MINIMUM NODES ON NET
Borrower Minimum Nodes on Net $______ $______ Not less than $_________
See Table in
Section 5.1(r)(viii) of the
Credit Agreement
SECTION 5.1(r)(ix) - MAXIMUM CAPITAL EXPENDITURES
Borrower Maximum Capital Expenditures (measured as
set forth in Section 5.1(r)(ix) of the Credit _______ ________ Not more than _____
Agreement)
See Table in
Section 5.1(r)(ix) of the
Credit Agreement
Schedule 1 to Compliance Certificate
Page 3
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EXHIBIT C
FORM OF BORROWER AMENDED AND RESTATED SECURITY AGREEMENT
(SEE ATTACHED SECURITY AGREEMENT)
C-1
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EXHIBIT D
FORM OF HOLDINGS AMENDED AND RESTATED SECURITY AGREEMENT
(SEE ATTACHED SECURITY AGREEMENT)
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EXHIBIT E
FORM OF ADDITIONAL BORROWER AMENDED AND RESTATED SECURITY AGREEMENT
(SEE ATTACHED SECURITY AGREEMENT)
E-1
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EXHIBIT F
FORM OF BORROWER AMENDED AND RESTATED STOCK PLEDGE AGREEMENT
(SEE ATTACHED STOCK PLEDGE AGREEMENT)
F-1
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EXHIBIT G
FORM OF ADDITIONAL BORROWER AMENDED AND RESTATED STOCK PLEDGE AGREEMENT
(SEE ATTACHED STOCK PLEDGE AGREEMENT)
G-1
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EXHIBIT H
FORM OF AMENDED AND RESTATED HOLDINGS GUARANTY
(SEE ATTACHED GUARANTY)
H-1
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EXHIBIT I
FORM OF AMENDED AND RESTATED ADDITIONAL BORROWER GUARANTY
(SEE ATTACHED GUARANTY)
I-1
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EXHIBIT J
FORM OF BORROWER GUARANTY
(SEE ATTACHED GUARANTY)
J-1
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EXHIBIT K
FORM OF STOCK SUBSCRIPTION WARRANT
(SEE ATTACHED STOCK SUBSCRIPTION WARRANT)
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EXHIBIT L
FORM OF TRANCHE A NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS. IT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNDER CIRCUMSTANCES THAT WOULD RESULT IN A
VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933 OR SUCH OTHER LAWS.
U.S.$270,000,000 October __, 2001
FOR VALUE RECEIVED, the undersigned, Cogent Communications, Inc.
("Borrower"), a Delaware corporation, and the Additional Borrower party hereto
("Additional Borrower"), HEREBY UNCONDITIONALLY PROMISE TO PAY to the order of
CISCO SYSTEMS CAPITAL CORPORATION ("Lender"), the principal sum of Two Hundred
Seventy Million United States Dollars (U.S.$270,000,000), or such greater or
lesser amount as represents the aggregate principal amount of the Tranche A
loans (the "Loans") made by Lender to Borrower and Additional Borrower pursuant
to the Credit Agreement referred to below, on the dates and in the amounts
referred to in the Credit Agreement.
Borrower and Additional Borrower further promise to pay interest on the
unpaid principal amount of the Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the Credit Agreement.
Lender shall record the date and amount of each Loan made to Borrower
and Additional Borrower, as applicable, the amount of principal and interest due
and payable from time to time hereunder, each payment thereof, and the resulting
unpaid principal balance hereof, in Lender's internal records, and any such
records shall be conclusive evidence absent manifest error of the amount of the
Loans made by Lender and the interest and payments thereon; PROVIDED, HOWEVER,
that Lender's failure so to record shall not limit or otherwise affect the
obligations of Borrower hereunder and under the Credit Agreement to repay the
principal of and interest on the Loans.
This promissory note is a Note referred to in, and is subject to and
entitled to the benefits of, the Second Amended and Restated Credit Agreement,
dated as of October 24, 2001, among Borrower, Additional Borrower, the several
financial institutions party thereto and Lender (as amended, modified, renewed
or extended from time to time, the "Credit Agreement"). Capitalized terms used
but not otherwise defined herein shall have the respective meanings assigned to
such terms in the Credit Agreement.
The Credit Agreement provides, among other things, for acceleration
(which in certain cases shall be automatic) of the maturity hereof upon the
occurrence of certain stated events, in each case without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived.
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This promissory note is subject to prepayment in whole or in part as
provided in the Credit Agreement.
This promissory note is secured by certain Collateral as more
specifically described in the Credit Agreement and the Collateral Documents.
This promissory note replaces and supercedes in its entirety that
certain Tranche A promissory note (the "Original Tranche A Note") dated as of
[___________] in the principal amount of $[_____________], made by Borrower in
favor of Cisco Systems Capital Corporation, as "Lender," in connection with the
Original Credit Agreement and evidences a continuation and not a novation or
repayment of the Loans evidenced by the Original Credit Agreement and the
Original Tranche A Note.
Borrower and Additional Borrower hereby waive diligence, presentment,
protest or notice of total or partial nonpayment or dishonor with respect to
this promissory note.
Failure by the holder hereof to exercise any of its rights hereunder in
any instance shall not constitute a waiver thereof in that or any other
instance.
Borrower and Additional Borrower agree to pay on demand all costs and
expenses of Lender and its Affiliates, and fees and disbursements of counsel
(including allocated costs and expenses for internal legal services), in
connection with the enforcement or attempted enforcement of, and preservation of
any rights or interests under, (i) this promissory note, and (ii) any
out-of-court workout or other refinancing or restructuring or any bankruptcy or
insolvency case or proceeding, including any losses, costs and expenses
sustained by Lender as a result of any failure by Borrower or Additional
Borrower to perform or observe its obligations contained herein.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, Borrower and each Additional Borrower signing below
by its duly authorized legal representative(s) has executed this promissory note
on the date and in the year first above mentioned.
BORROWER
COGENT COMMUNICATIONS, INC.
By:
------------------------
Title:
ADDITIONAL BORROWER
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COGENT INTERNET, INC.
By:
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Title:
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EXHIBIT M
FORM OF TRANCHE B NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS. IT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNDER CIRCUMSTANCES THAT WOULD RESULT IN A
VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933 OR SUCH OTHER LAWS.
U.S.$64,000,000 October __, 2001
FOR VALUE RECEIVED, the undersigned, Cogent Communications, Inc.
("Borrower"), a Delaware corporation, and the Additional Borrower party hereto
("Additional Borrower"), HEREBY UNCONDITIONALLY PROMISE TO PAY to the order of
CISCO SYSTEMS CAPITAL CORPORATION ("Lender"), the principal sum of Sixty-Four
Million United States Dollars (U.S.$64,000,000), or such greater or lesser
amount as represents the aggregate principal amount of the Tranche B loans (the
"Loans") made by Lender to Borrower and Additional Borrower pursuant to the
Credit Agreement referred to below, on the dates and in the amounts referred to
in the Credit Agreement.
Borrower and Additional Borrower further promise to pay interest on the
unpaid principal amount of the Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the Credit Agreement.
Lender shall record the date and amount of each Loan made to Borrower
and Additional Borrower, as applicable, the amount of principal and interest due
and payable from time to time hereunder, each payment thereof, and the resulting
unpaid principal balance hereof, in Lender's internal records, and any such
records shall be conclusive evidence absent manifest error of the amount of the
Loans made by Lender and the interest and payments thereon; PROVIDED, HOWEVER,
that Lender's failure so to record shall not limit or otherwise affect the
obligations of Borrower hereunder and under the Credit Agreement to repay the
principal of and interest on the Loans.
This promissory note is a Note referred to in, and is subject to and
entitled to the benefits of, the Second Amended and Restated Credit Agreement,
dated as of October 24, 2001, among Borrower, Additional Borrower, the several
financial institutions party thereto and Lender (as amended, modified, renewed
or extended from time to time, the "Credit Agreement"). Capitalized terms used
but not otherwise defined herein shall have the respective meanings assigned to
such terms in the Credit Agreement.
The Credit Agreement provides, among other things, for acceleration
(which in certain cases shall be automatic) of the maturity hereof upon the
occurrence of certain stated events, in each case without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived.
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This promissory note is subject to prepayment in whole or in part as
provided in the Credit Agreement.
This promissory note is secured by certain Collateral as more
specifically described in the Credit Agreement and the Collateral Documents.
This promissory note replaces and supercedes in its entirety that
certain Tranche B promissory note (the "Original Tranche B Note") dated as of
[___________] in the principal amount of $[_____________], made by Borrower in
favor of Cisco Systems Capital Corporation, as "Lender," in connection with the
Original Credit Agreement and evidences a continuation and not a novation or
repayment of the Loans evidenced by the Original Credit Agreement and the
Original Tranche B Note.
Borrower and Additional Borrower hereby waive diligence, presentment,
protest or notice of total or partial nonpayment or dishonor with respect to
this promissory note.
Failure by the holder hereof to exercise any of its rights hereunder in
any instance shall not constitute a waiver thereof in that or any other
instance.
Borrower and Additional Borrower agree to pay on demand all costs and
expenses of Lender and its Affiliates, and fees and disbursements of counsel
(including allocated costs and expenses for internal legal services), in
connection with the enforcement or attempted enforcement of, and preservation of
any rights or interests under, (i) this promissory note, and (ii) any
out-of-court workout or other refinancing or restructuring or any bankruptcy or
insolvency case or proceeding, including any losses, costs and expenses
sustained by Lender as a result of any failure by Borrower or Additional
Borrower to perform or observe its obligations contained herein.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, Borrower and each Additional Borrower signing below
by its duly authorized legal representative(s) has executed this promissory note
on the date and in the year first above mentioned.
BORROWER
COGENT COMMUNICATIONS, INC.
By:
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Title:
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ADDITIONAL BORROWER
COGENT INTERNET, INC.
By:
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Title:
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EXHIBIT N
FORM OF TRANCHE X NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS. IT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNDER CIRCUMSTANCES THAT WOULD RESULT IN A
VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933 OR SUCH OTHER LAWS.
U.S.$75,000,000 October __, 2001
FOR VALUE RECEIVED, the undersigned, Cogent Communications, Inc.
("Borrower"), a Delaware corporation, and the Additional Borrower party hereto
("Additional Borrower"), HEREBY UNCONDITIONALLY PROMISE TO PAY to the order of
CISCO SYSTEMS CAPITAL CORPORATION ("Lender"), the principal sum of Seventy-Five
Million United States Dollars (U.S.$75,000,000), or such greater or lesser
amount as represents the aggregate principal amount of the Tranche X loans (the
"Loans") made by Lender to Borrower and Additional Borrower pursuant to the
Credit Agreement referred to below, on the dates and in the amounts referred to
in the Credit Agreement.
Borrower and Additional Borrower further promise to pay interest on the
unpaid principal amount of the Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the Credit Agreement.
Lender shall record the date and amount of each Loan made to Borrower
and Additional Borrower, as applicable, the amount of principal and interest due
and payable from time to time hereunder, each payment thereof, and the resulting
unpaid principal balance hereof, in Lender's internal records, and any such
records shall be conclusive evidence absent manifest error of the amount of the
Loans made by Lender and the interest and payments thereon; PROVIDED, HOWEVER,
that Lender's failure so to record shall not limit or otherwise affect the
obligations of Borrower hereunder and under the Credit Agreement to repay the
principal of and interest on the Loans.
This promissory note is a Note referred to in, and is subject to and
entitled to the benefits of, the Second Amended and Restated Credit Agreement,
dated as of October 24, 2001, among Borrower, Additional Borrower, the several
financial institutions party thereto and Lender (as amended, modified, renewed
or extended from time to time, the "Credit Agreement"). Capitalized terms used
but not otherwise defined herein shall have the respective meanings assigned to
such terms in the Credit Agreement.
The Credit Agreement provides, among other things, for acceleration
(which in certain cases shall be automatic) of the maturity hereof upon the
occurrence of certain stated events, in each case without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived.
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This promissory note is subject to prepayment in whole or in part as
provided in the Credit Agreement.
This promissory note is secured by certain Collateral as more
specifically described in the Credit Agreement and the Collateral Documents.
Borrower and Additional Borrower hereby waive diligence, presentment,
protest or notice of total or partial nonpayment or dishonor with respect to
this promissory note.
Failure by the holder hereof to exercise any of its rights hereunder in
any instance shall not constitute a waiver thereof in that or any other
instance.
Borrower and Additional Borrower agree to pay on demand all costs and
expenses of Lender and its Affiliates, and fees and disbursements of counsel
(including allocated costs and expenses for internal legal services), in
connection with the enforcement or attempted enforcement of, and preservation of
any rights or interests under, (i) this promissory note, and (ii) any
out-of-court workout or other refinancing or restructuring or any bankruptcy or
insolvency case or proceeding, including any losses, costs and expenses
sustained by Lender as a result of any failure by Borrower or Additional
Borrower to perform or observe its obligations contained herein.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, Borrower and each Additional Borrower signing below
by its duly authorized legal representative(s) has executed this promissory note
on the date and in the year first above mentioned.
BORROWER
COGENT COMMUNICATIONS, INC.
By:
------------------------
Title:
ADDITIONAL BORROWER
COGENT INTERNET, INC.
By:
------------------------
Title:
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EXHIBIT O
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Agreement") dated as of
_____________________________, ____, is made between ___________________
______________________________ (the "Assignor") and
______________________________ (the "Assignee").
PRELIMINARY STATEMENTS
1. The Assignor is party to that certain Second Amended and Restated
Credit Agreement, dated as of October 24, 2001 (as amended, restated, modified,
supplemented or renewed from time to time, the "Credit Agreement"), among Cogent
Communications, Inc (the "Borrower"), any Additional Borrower named therein, the
several financial institutions from time to time party thereto (including the
Assignor) (the "Lenders") and Cisco Systems Capital Corporation, as
administrative agent for itself and the other Lenders (in such capacity, the
"Agent"). All capitalized terms used but not otherwise defined in this Agreement
shall have the respective meanings assigned to such terms in the Credit
Agreement.
2. As provided under the Credit Agreement, the Assignor has committed
to making Loans to the Borrower in an aggregate amount not to exceed $__________
(the "Commitment") [, and its Commitment to make Loans has terminated];
3. [The Assignor has made Loans in the aggregate principal amount of
$__________ to the Borrower and Additional Borrower consisting of _____________
[DESCRIBE LENDER'S INTERESTS IN TRANCHES OUTSTANDING]] [No Loans are outstanding
under the Credit Agreement.]
4. The Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Credit Agreement in respect of
its Commitment, [together with a corresponding portion of each of its
outstanding Loans], in an amount equal to ___% of the Assignor's Commitment [and
Loans], on the terms and subject to the conditions set forth herein, and the
Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions.
Accordingly, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Agreement, (i) the
Assignor hereby sells, transfers and assigns to the Assignee, and (ii) the
Assignee hereby purchases, assumes and undertakes from the Assignor, without
recourse and without representation or warranty (except as provided in this
Agreement) ___% (the "Assignee's Percentage Share") of (A) the Commitment [and
the Loans] of the Assignor and (B) all related rights, benefits,
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obligations, liabilities and indemnities of the Assignor under and in connection
with the Credit Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined in Section
5 hereof), the Assignee shall be a party to the Credit Agreement and succeed to
all of the rights and be obligated to perform all of the obligations of a Lender
under the Credit Agreement, including the requirements concerning
confidentiality, if any, and the payment of indemnification, with a Commitment
in the amount set forth in subsection (c) below. The Assignee agrees that it
shall perform in accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender. It
is the intent of the parties hereto that the Commitment of the Assignor shall,
as of the Effective Date, be reduced by an amount equal to the portion thereof
assigned to the Assignee hereunder, and the Assignor shall relinquish its rights
and be released from its obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee; PROVIDED, HOWEVER, that the
Assignor shall not relinquish its rights under Sections 2.11, 2.12, 2.21, 8.4 or
8.16 of the Credit Agreement (and any equivalent provisions of the other Loan
Documents) to the extent such rights relate to the time prior to the Effective
Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date: (i) the Assignee's Commitment shall be
$__________; and (ii) the Assignee's aggregate outstanding Loans shall be
$_______________.
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date: (i) the Assignor's Commitment shall be
$__________; and (ii) the Assignor's aggregate outstanding Loans shall be
$_______________.
2. PAYMENTS.
(a) As consideration for the sale, assignment and transfer contemplated
in Section 1 hereof, the Assignee shall pay to the Assignor on the Effective
Date in immediately available funds an amount equal to $__________, representing
the Assignee's Percentage Share of the principal amount of all Loans previously
made by the Assignor to the Borrower under the Credit Agreement and outstanding
on the Effective Date.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section 8.7(a) of the Credit
Agreement.
3. REALLOCATION OF PAYMENTS. Any interest, fees and other payments
accrued to the Effective Date with respect to the Commitment [and Loans] of the
Assignor shall be for the account of the Assignor. Any interest, fees and other
payments accrued on and after the Effective Date with respect to the portion of
such Commitment [and Loans] assigned to the Assignee shall be for the account of
the Assignee. Each of the Assignor and the Assignee agrees that it will hold in
trust for the other party any interest, fees and other amounts which it may
receive to which the other party is entitled pursuant to the preceding sentence
and pay to the other party any such amounts which it may receive promptly upon
receipt.
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4. INDEPENDENT CREDIT DECISION. The Assignee (a) acknowledges that it
has received a copy of the Credit Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements delivered
pursuant to the Credit Agreement, and such other documents and information as it
has deemed appropriate to make its own credit and legal analysis and decision to
enter into this Agreement; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement and the other Loan Documents.
5. EFFECTIVE DATE; NOTICES.
(a) As between the Assignor and the Assignee, the effective date for
this Agreement shall be ______________ (the "Effective Date"); provided that the
following conditions precedent have been satisfied on or before the Effective
Date:
(i) this Agreement shall have been executed and delivered by the
Assignor and the Assignee;
(ii) any consent of the Agent required under Section 8.7 of the Credit
Agreement for the effectiveness of the assignment hereunder by the Assignor to
the Assignee shall have been duly obtained and shall be in full force and effect
as of the Effective Date;
(iii) the Assignee shall have paid to the Assignor all amounts due to
the Assignor under this Agreement;
(iv) the processing fee referred to in Section 2(b) hereof and in
Section 8.7(a) of the Credit Agreement shall have been paid to the Agent; and
(v) the Assignor and Assignee shall have complied with the other
requirements of Section 8.7 of the Credit Agreement (to the extent applicable).
(b) Promptly following the execution of this Agreement, the Assignor
shall deliver to Holdings, the Borrower and the Agent for acknowledgment by the
Agent, a Notice of Assignment substantially in the form attached hereto as
Schedule 1.
6. AGENT. The Assignee hereby appoints and authorizes the Assignor to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement and the other Loan Documents as are delegated to the Agent by
the Lenders pursuant to the terms of the Credit Agreement and such other Loan
Documents. [The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement and the other Loan
Documents.
7. WITHHOLDING TAX. The Assignee (a) represents and warrants to the
Assignor, the Agent and the Borrower that under applicable law and treaties no
tax will be required to be withheld by the Assignor with respect to any payments
to be made to the Assignee hereunder, and (b) agrees to furnish (if it is
organized under the laws of any jurisdiction other
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than the United States or any State thereof) to the Agent and the Borrower prior
to the time that the Agent or Borrower is required to make any payment of
interest or fees under the Credit Agreement, duplicate executed originals of IRS
Form W-8BEN, IRS Form W-8ECI or such other documents and forms of the United
States Internal Revenue Service, duly executed and completed by the Assignee, as
are required under United States law to establish the Assignee's status for
United States withholding tax purposes.
8. REPRESENTATIONS AND WARRANTIES.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Agreement and any other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations hereunder; (iii) no notices
to, or consents, authorizations or approvals of, any Person are required (other
than those referred to in Section 5(a)(ii) hereof and any already given or
obtained) for its due execution, delivery and performance of this Agreement, and
apart from any agreements or undertakings or filings required by the Credit
Agreement, no further action by, or notice to, or filing with, any Person is
required of it for such execution, delivery or performance; and (iv) this
Agreement has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of the Assignor, enforceable against the Assignor
in accordance with the terms hereof, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and other laws of general application
relating to or affecting creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other Loan Document. The Assignor makes no
representation or warranty in connection with, and assumes no responsibility
with respect to, the solvency, financial condition or statements of the Borrower
or any other Person, or the performance or observance by the Borrower or any
other Person, of any of its respective obligations under the Credit Agreement or
any other Loan Document.
(c) The Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Agreement and any other documents
required or permitted to be executed or delivered by it in connection with this
Agreement, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
those referred to in Section 5(a)(ii) hereof and any already given or obtained)
for its due execution, delivery and performance of this Agreement; and apart
from any agreements or undertakings or filings required by the Credit Agreement,
no further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance; (iii) this Agreement has been duly
executed and delivered by it and constitutes the legal, valid and binding
obligation of the Assignee, enforceable against the Assignee in accordance with
the terms hereof, subject, as
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to enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles; and (iv) it is an Eligible Assignee.
9. FURTHER ASSURANCES. The Assignor and the Assignee each hereby agrees
to execute and deliver such other instruments, and take such other action, as
either party may reasonably request in connection with the transactions
contemplated by this Agreement, including the delivery of any notices or other
documents or instruments to the Borrower or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Agreement shall be
in writing and signed by the parties hereto.
(b) No failure on the part of the Assignor or Assignee to exercise, and
no delay in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, remedy, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights and remedies under this Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges that may otherwise be available to the
parties.
(c) All payments made hereunder shall be made without any set-off or
counterclaim.
(d) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Agreement.
(e) This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
(F) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
[OTHER PROVISIONS TO BE ADDED AS MAY BE NEGOTIATED BETWEEN THE ASSIGNOR
AND THE ASSIGNEE, PROVIDED THAT SUCH PROVISIONS ARE NOT INCONSISTENT WITH THE
CREDIT AGREEMENT.]
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IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Agreement to be executed and delivered by their duly authorized officers or
agents as of the date first above written.
THE ASSIGNOR
[__________________________]
By:________________________
Title:_____________________
THE ASSIGNEE
[__________________________]
By:________________________
Title:_____________________
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SCHEDULE 1
to the Assignment and Acceptance Agreement
NOTICE OF ASSIGNMENT AND ACCEPTANCE
Date: _________________________
To: Cisco Systems Capital Corporation, as Agent
Cogent Communications, Inc
Cogent Communications Group, Inc
Re: COGENT COMMUNICATIONS, INC
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of ____________, 2001 (as
amended, restated, modified, supplemented or renewed from time to time, the
"Credit Agreement") among Cogent Communications Group, Inc ("Holdings"), Cogent
Communications, Inc (the "Borrower"), any Additional Borrower named therein, the
Lenders named therein (including the Assignor), and Cisco Systems Capital
Corporation, as administrative agent (the "Agent"). Terms defined in the Credit
Agreement are used herein as therein defined.
1. We hereby give you notice of[, and request the consent of the Agent
to,] the assignment by ________________________ (the "Assignor") to
____________________ (the "Assignee") of ____% of the right, title and interest
of the Assignor in and to the Credit Agreement (including, without limitation,
____% of the right, title and interest of the Assignor in and to the Commitment
of the Assignor [and all outstanding Loans made by the Assignor]) pursuant to
that certain Assignment and Acceptance Agreement, dated as of ___________ (the
"Assignment and Acceptance") between Assignor and Assignee, a copy of which
Assignment and Acceptance is attached hereto. Before giving effect to such
assignment the Assignor's Commitment is $___________. [The Assignor has made
Loans in the aggregate principal amount of $__________ to the Borrower
consisting of ____________ [describe Lender's interests in tranches
outstanding]. [No Loans are outstanding under the Credit Agreement.]
2. The Assignee agrees that, upon receiving the consent of the Agent to
such assignment (if applicable) and from and after the Effective Date (as such
term is defined in Section 5 of the Assignment and Acceptance), the Assignee
shall be bound by the terms of the Credit Agreement, with respect to the
interest in the Credit Agreement assigned to it as specified above, as fully and
to the same extent as if the Assignee were the Lender originally holding such
interest in the Credit Agreement.
Schedule 1 to Assignment and Acceptance Agreement
Page 1.
[*] Indicates confidential treatment requested.
3. The following administrative details apply to the Assignee:
(a) Lending Office(s):
Assignee name: _________________________________
Address: _________________________________
_________________________________
_________________________________
_________________________________
Attention: _________________________________
Telephone: (________)_______________________
Facsimile: (________)_______________________
(b) Address for Notices
Assignee name: _________________________________
Address: _________________________________
_________________________________
_________________________________
_________________________________
Attention: _________________________________
Telephone: (________)_______________________
Facsimile: (________)_______________________
(c) Payment Instructions:
Account No.: _________________________________
ABA No.: _________________________________
At: _________________________________
_________________________________
_________________________________
Reference: _________________________________
Attention: _________________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
5. This Notice of Assignment and Acceptance may be executed by the
Assignor and the Assignee in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute one and the same notice and agreement.
Schedule 1 to Assignment and Acceptance Agreement
Page 2.
[*] Indicates confidential treatment requested.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officers or agents as of the date first above written.
Very truly yours,
ADJUSTED COMMITMENT: [ASSIGNOR]
-------------------
$ By:___________________________
------------------------------- Title:________________________
ADJUSTED PRO RATA SHARE:
-----------------------
____________%
COMMITMENT: [ASSIGNEE]
----------
$_____________________________ By:___________________________
Title:________________________
PRO RATA SHARE:
--------------
____________%
ACKNOWLEDGED [AND CONSENTED TO] this ____ day of ________:
Cisco Systems Capital Corporation,
as Agent
By:__________________________________
Title:_______________________________
Schedule 1 to Assignment and Acceptance Agreement
Page 3.
[*] Indicates confidential treatment requested.
EXHIBIT P
FORM OF CONFIRMATION OF POSITION AND RELEASE AGREEMENT
(SEE ATTACHED CONFIRMATION OF POSITION AND RELEASE AGREEMENT)
P-1
[*] Indicates confidential treatment requested.
