EXHIBIT 10.28
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
EXODUS COMMUNICATIONS, INC.
TABLE OF CONTENTS
Page
1. ACCOUNTING AND OTHER TERMS...........................................1
2. LOAN AND TERMS OF PAYMENT............................................1
2.1 Credit Extensions...........................................1
2.2 Committed Letter of Credit Facility.........................2
2.3 Interest Rate; Payments.....................................2
2.4 Fees and Expenses...........................................3
2.5 Additional Costs............................................3
2.6 Purpose.....................................................3
3. CONDITIONS PRECEDENT.................................................3
4. CREATION OF SECURITY INTEREST........................................4
5. REPRESENTATIONS AND WARRANTIES ......................................4
5.1 Due Organization and Authorization..........................4
5.2 Collateral..................................................4
5.3 Litigation..................................................4
5.4 No Material Adverse Change in Financial Statements .........4
5.5 Solvency....................................................5
5.6 Regulatory Compliance.......................................5
5.7 Subsidiaries................................................5
5.8 Full Disclosure.............................................5
6. AFFIRMATIVE COVENANTS................................................5
6.1 Government Compliance.......................................6
6.2 Financial Statements, Reports, Certificates.................6
6.3 Inventory; Returns..........................................6
6.4 Taxes .....................................................6
6.5 Insurance...................................................6
6.6 Primary Accounts............................................7
6.7 Financial Covenants.........................................7
6.8 Further Assurances..........................................7
7. NEGATIVE COVENANTS...................................................8
7.1 Dispositions................................................8
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TABLE OF CONTENTS
(continued)
Page
7.2 Changes in Business, Ownership, Management or
Business Locations...........................................8
7.3 Mergers or Acquisitions......................................8
7.4 Indebtedness.................................................8
7.5 Encumbrance..................................................8
7.6 Investments; Distributions...................................8
7.7 Transactions with Affiliates.................................8
7.8 Subordinate Debt.............................................9
7.9 Compliance...................................................9
8. EVENTS OF DEFAULT.....................................................9
8.1 Payment Default..............................................9
8.2 Covenant Default.............................................9
8.3 Material Adverse Change......................................9
8.4 Attachment..................................................10
8.5 Insolvency..................................................10
8.6 Other Agreements............................................10
8.7 Judgements..................................................10
8.8 Misrepresentations..........................................10
9. AGENT'S RIGHTS AND REMEDIES..........................................10
9.1 Rights and remedies.........................................10
9.2 Power of Attorney...........................................11
9.3 Accounts Collection.........................................11
9.4 Bank Expenses...............................................12
9.5 Agent's Liability for Collateral............................12
9.6 Remedies Cumulative.........................................12
9.7 Demand Waiver...............................................12
10. NOTICES..............................................................12
11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER...........................12
12. BANK AS ISSUING BANK AND AGENT.......................................13
12.1 Sharing of Payments.........................................13
12.2 Participations..............................................13
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TABLE OF CONTENTS
(continued)
Page
12.3 Reimbursement...............................................14
12.4 Payments by Agents..........................................14
12.5 Obligations Absolute........................................14
12.6 Disbursement Procedures.....................................15
12.7 Interim Interest............................................15
12.8 Resignation of the Issuing Bank.............................15
13. THE BANK AS AGENT....................................................16
13.1 Actions.....................................................16
13.2 Exculpation.................................................16
13.3 Successor...................................................17
13.4 Loans and Other Transactions by SVB.........................17
13.5 Copies......................................................17
13.6 Delegation of Duties........................................17
13.7 Reliance by Agent...........................................17
13.8 Notice of Default...........................................18
13.9 Collateral Matters..........................................18
14. ASSIGNMENTS..........................................................19
15. AMENDMENTS AND WAIVERS...............................................19
16. SET-OFFS.............................................................19
17. INDEMNIFICATION......................................................20
18. GENERAL PROVISIONS...................................................20
18.1 Successors and Assigns......................................20
18.2 Time of Essence.............................................20
18.3 Severability of Provision ..................................20
18.4 Amendments in Writing, Integration..........................20
18.5 Counterparts................................................21
18.6 Survival....................................................21
18.7 Confidentiality.............................................21
18.8 Attorneys' Fees, Costs and Expenses.........................21
18.9 Effect of Restatement.......................................21
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TABLE OF CONTENTS
(continued)
Page
19. DEFINITIONS..........................................................21
EXHIBITS
Exhibit A - Description of Collateral
Exhibit B - Form of L.C. Application
Exhibit C - Form of Compliance Certificate
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AMENDED AND RESTATED
--------------------
LOAN AND SECURITY AGREEMENT
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This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this "Agreement") is
entered into as of March 8, 2000, by and among SIL1CON VALLEY BANK, as a lender
(in that capacity, "Bank") and as an agent for itself and the other Banks (in
that capacity, "Agent"), whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the other financial institutions that from time to time become
party hereto (collectively with the Bank. the "Banks"), and EXODUS
COMMUNICATIONS, INC., a Delaware corporation as borrower ("Borrower"), whose
address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in
reliance upon the following:
RECITALS
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A. Bank and Borrower are parties to that certain Loan and Security Agreement
dated June 14, 1996, as amended (the "Original Agreement"), pursuant to which
Bank has made certain credit facilities available to Borrower.
B. Borrower has requested that Bank increase the letter of credit facility
under the Original Agreement, and in connection therewith Bank and Borrower have
agreed upon certain new terms and conditions regarding such increase. Bank and
Borrower therefore desire to amend and restate the Original Agreement in its
entirety without novation, all in accordance with the terms and provisions set
forth herein.
AGREEMENT
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NOW, THEREFORE, in reliance upon the foregoing and in consideration of the
mutual covenants set forth herein, the parties agree as follows
1. ACCOUNTING AND OTHER TERMS
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Accounting tents not defined in this Agreement will be construed in
accordance with GAAP. Calculations and determinations must be made in accordance
with GAAP. The term "financial statements" includes the notes and schedules. The
terms "including" and "includes" always mean "including (or includes) without
limitation" in this Agreement or any other Loan Document. Capitalized terms in
this Agreement shall have the meanings set forth in Article 19. This Agreement
shall be construed to impart upon each of the Banks a duty to act reasonably at
all times.
2. LOAN AND TERMS OF PAYMENT
-------------------------
2.1 Credit Extension. Borrower will pay to Agent the unpaid principal amount of
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all Credit Extensions and interest on the unpaid principal amount of the Credit
Extensions in accordance with the terms of this Agreement.
2.2 Committed Letter Of Credit Facility
-----------------------------------
(a) Bank hereby establishes for the account of Borrower the Committed
Letter of Credit Facility. Pursuant thereto, Bank shall from time to time during
the Term of this Agreement issue one or more irrevocable stand-by letters of
credit (each, a "Letter of Credit") for the account of Borrower, provided that
at no time shall the aggregate face amount of all Letters of Credit (including
all currently outstanding Letters of Credit, all unreimbursed Advances arising
from draws on any Letter of Credit and any Letter of Credit Reserve) exceed
Twenty Million Dollars ($20,000,000). Bank is sometimes hereafter referred to as
"Issuing Bank" in its capacity as the issuer of the Letters of Credit.
(b) Each Letter of Credit will have an expiry date of not later than 180
days after the Maturity date, but Borrower's reimbursement obligations will be
secured by cash on terms acceptable to Agent at any time after the Maturity Date
if the Term of this Agreement is not extended by the Banks. Notwithstanding the
foregoing, Borrower shall provide Agent with a cash secured letter, in form and
substance acceptable to Agent, to support any Letters of Credit with an expiry
date later than 180 days after the Maturity Date.
(c) Each Letter of Credit shall be drawn on such terms and conditions as
are acceptable to Issuing Bank and shall be governed by the terms of this
Agreement and the terms of that certain standard form "Application for Standby
Letter of Credit" of Issuing Bank, a copy of which is attached hereto as Exhibit
"B" (the "Application"). Borrower shall execute and deliver to Issuing Bank an
Application for each Letter of Credit to be issued by Issuing Bank, and shall
also execute and deliver any further documentation in connection with the
Letters of Credit as Issuing Bank may reasonably request.
(d) Borrower affirms and acknowledges to Agent that, as of the date
hereof there are currently outstanding Letters of Credit issued by Issuing Bank
for the account of Borrower with an aggregate face amount of Sixteen Million
Nine Hunched Four Thousand Five Hundred Fourteen and 78/100 Dollars
($16,904,514.78). All outstanding Letters of Credit (including but not limited
to those identified in this paragraph 2.2(d)), and Borrower's Obligations with
respect thereto, shall be governed by the terms of this Agreement.
2.3 Interest Rate: Payments:
-----------------------
(a) Advances shall accrue interest on the outstanding principal balance
at a per annum rate equal to the Prime Rate for a period commencing on the date
of the Advance and ending on the second Business Day after notice to reimburse
pursuant to Section 12.3; thereafter Advances shall accrue interest at the
Default Rate (as defined below). After an Event of Default, all Obligations
shall accrue interest at five percent above the rate of interest that was
effective immediately before the Event of Default (the "Default Rate"). The
interest rate increases or decreases when the Prime Rate changes. Interest is
computed on a 360-day year for the actual number of days elapsed.
(b) Interest is due and payable upon payment of Advances and any other
principal sum due and owing hereunder. Agent may debit any of Borrower's deposit
accounts, including
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Account Number 3300027233, for principal and interest payments owing and any
other amounts Borrower owes Agent. Agent will notify Borrower when it debits
Borrower's accounts. These debits are not a set-off. Payments received after
12:00 noon Pacific time are considered received at the opening of business on
the next Business Day. When a payment is due on a day that is not a Business
Day, the payment is due on the next Business Day and additional fees and
interest accrue.
2.4 Fees and Expenses.
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(a) Borrower will pay to Agent, for the benefit of the Banks, a fully
earned, nonrefundable facility fee of $50,000.00, due on the Closing Date.
(b) Borrower will pay to Agent for the benefit of Issuing Bank, for
Issuing Bank's own account, those fees set forth in that certain fee letter of
even date herewith by and between Borrower and Issuing Bank.
(c) Borrower will reimburse Agent on demand for all Bank Expenses
(including reasonable attorneys' fees and expenses) for the documentation and
negotiation of this Agreement incurred through and after the Closing Date.
(d) Borrower will pay to Agent, for the benefit of the Banks, a Letter of
Credit fee. The Letter of Credit fee shall be equal to one percent (1.00%) of
the face amount of each Letter of Credit issued, up to the aggregate face amount
of such Letters of Credit of Ten Million Dollars ($l0,000.000). The Letter of
Credit fee shall thereafter be increased to an amount equal to one half percent
(1.50%) of the face amount of each Letter of Credit issued in excess of
$10,000,000 in the aggregate. Each Letter of Credit fee shall be due and payable
upon the issuance of the Letter of Credit to which it relates.
2.5 Additional Costs. If any law or regulation increases any of the Banks'
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costs or reduces the income of any of the Banks with respect to any Letter of
Credit or Advance hereunder, Borrower will pay the increase in cost or reduction
in income or additional expense; provided, however, that Borrower shall not be
liable for any amount attributable to any period before 180 days prior to the
date on which Agent notifies Borrower of such increased costs. Each of the Banks
agrees that it will allocate any increased costs among its customers similarly
affected in good faith and in a manner consistent with its customary practice.
2.6 Purpose. The credit made available to Borrower under this Agreement may
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only be used to issue Letters of Credit.
3. CONDITIONS PRECEDENT
--------------------
Issuing Bank's obligation to issue each Letter of Credit and the Banks'
obligations to make any Credit Extension (other than payment of a draw under a
Letter of Credit) is subject to satisfaction of the following conditions
precedent:
(a) receipt of all the agreements, documents and fees it requires;
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(b) timely receipt of an Application; and
(c) the representations and warranties in Section 5 must be materially
true on the date of the Application and on the effective date of each Credit
Extension, and no Event of Default shall have occurred and be continuing, or
result from the issuance of a Letter of Credit or the Credit Extension. Each
submission by Borrower of an Application constitutes Borrower's representation
and warranty on that date that the representations and warranties in Section 5
remain true.
4. CREATION OF SECURITY INTEREST
-----------------------------
Borrower grants Agent a continuing security interest in all presently
existing and later acquired Collateral to secure all Obligations and performance
of each of Borrower's duties under the Loan Documents. Except for Permitted
Liens, any security interest of Agent in the Collateral shall be a first
priority security interest in the Collateral. Agent may place a "hold" on any
deposit account pledged as Collateral. If this Agreement is terminated, the lien
and security interest of Agent in the Collateral will continue until Borrower
fully satisfies its obligations.
5. REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants as follows:
5.1 Due Organization and Authorization. Borrower and each Subsidiary is duly
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existing and in good standing in its state of formation and qualified and
licensed to do business in, and in good standing in, any state in which the
conduct of its business or its ownership of property requires that it be
qualified, except where the failure to do so could not reasonably be expected to
cause a Material Adverse Change. The execution, delivery and performance of the
Loan Documents have been duly authorized, and do not conflict with Borrower's
formation documents nor constitute an event of default under any material
agreement by which Borrower is bound. Borrower is not in default under any
agreement to which or by which it is bound in which the default could reasonably
be expected to cause a Material Adverse Change
5.2 Collateral. Borrower has good title to the Collateral, free of Liens except
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Permitted Liens. The Accounts are bona fide, existing obligations, and the
service or property has been performed or delivered to the account debtor or its
agent for immediate shipment to and unconditional acceptance by the account
debtor. Borrower has no notice of any actual or imminent Insolvency Proceeding
of any account debtor. All Inventory is in all material respects of good and
marketable quality, free from material defects.
5.3 Litigation. Except as disclosed to Agent in writing prior to the date
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hereof, there are no actions or proceedings pending or, to the knowledge of
Borrower and Borrower's Responsible Officers and legal counsel, threatened by or
against Borrower or any Subsidiary in which an adverse decision could reasonably
be expected to cause a Material Adverse Change.
5.4 No Material Adverse Change in Financial Statements. All consolidated
--------------------------------------------------
financial statements for Borrower and any Subsidiary delivered to Agent fairly
present in all material
4
respects Borrower's consolidated financial condition and Borrower's consolidated
results of operations. There has not been any material deterioration in
Borrower's consolidated financial condition since the date of the most recent
financial statements submitted to Agent.
5.5 Solvency. The fair salable value of Borrower's assets (including goodwill
--------
minus disposition costs) exceeds the fair value of its liabilities; Borrower is
not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they
mature.
5.6 Regulatory Compliance. Borrower is not an "investment company" or a company
---------------------
"controlled" by an "investment company" under the Investment Company Act.
Borrower is not engaged as one of its important activities in extending credit
for margin stock (under Regulations T and U of the Federal Reserve Board of
Governors). Borrower has complied in all material respects with the Federal Fair
Labor Standards Act. Borrower has not violated any laws, ordinances or rules,
the violation of which could cause a Material Adverse Change. None of Borrower's
or any Subsidiary's properties or assets has been used by Borrower or any
Subsidiary or, to the best of Borrower's knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally. Borrower and each Subsidiary has timely filed all required
tax returns and paid, or made adequate provision to pay, all material taxes,
except those being contested in good faith with adequate reserves under GAAP.
Borrower and each Subsidiary has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices
to, all government authorities that are necessary to continue its business as
currently conducted except where the failure to do so could not reasonably be
expected to cause a Material Adverse Change.
5.7 Subsidiaries. Borrower does not own any stock, partnership interest or
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other equity securities except for Permitted Investments.
5.8 Full Disclosure. No representation, warranty or other statement of Borrower
---------------
in any certificate or written statement given to Agent (taken together with all
such certificates and written statements given to Agent) contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading (it
being recognized by Agent that the projections and forecasts provided by
Borrower in good faith and based upon reasonable assumptions are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections and forecasts may differ from the projected or forecasted
results).
6. AFFIRMATIVE COVENANTS
---------------------
Borrower will do all of the following:
6.1 Government Compliance. Borrower will maintain its and all Subsidiaries'
---------------------
corporate existence and good standing in its jurisdiction of incorporation and
maintain qualification in each jurisdiction in which the failure to so qualify
could have a material adverse effect on Borrower's business or operations.
Borrower will comply, and have each Subsidiary comply, with all laws, ordinances
and regulations to which it is subject, noncompliance with which could have a
5
material adverse effect on Borrower's business or operations or cause a Material
Adverse Change.
6.2 Financial Statements, Reports, Certificates.
-------------------------------------------
(a) Borrower will deliver to Agent: (i) within 5 days of its distribution
or filing same, written notice that all statements, reports and notices made
available to Borrower's security holders or to any holders of Subordinated Debt,
and all reports on Form 10-K, l0-Q and 8-K (with all exhibits thereto) filed
with the Securities and Exchange Commission (the "SEC"), have been posted on the
SEC's website on the Internet at website address ▇▇▇.▇▇▇.▇▇▇ or Free ▇▇▇▇▇
-----------
website on the internet at website address ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇, provided that
-----------------
Borrower will deliver to Agent a copy of any of the foregoing that is not so
posted on the internet within five (5) days of its filing or otherwise
distributing same; (ii) a prompt report of any 1egal actions pending or
threatened against Borrower or any Subsidiary that could result in damages or
costs to Borrower or any Subsidiary of $100,000 or more; (iii) prompt notice of
any material change in the composition of the Intellectual Property, including
any subsequent ownership right of Borrower in or to any Copyright, Patent or
Trademark not shown in any intellectual property security agreement between
Borrower and Agent or knowledge of an event that materially adversely affects
the value of the Intellectual Property; and (iv) budgets, sales projections,
operating plans or other financial information Agent requests.
(b) Within 60 days after the last day of each quarter, Borrower will
deliver to Agent a Compliance Certificate, in the form of Exhibit "C" hereto,
signed by a Responsible Officer.
(c) Agent has the right to audit Borrower's Accounts at Borrower's
expense if an Event of Default has occurred and is continuing, and Borrower will
notify Agent in writing that an Event of Default has occurred within 10 days
after the occurrence thereof.
6.3 Inventory: Returns. Borrower will keep all Inventory in good and marketable
------------------
condition, free from material defects. Returns and allowances between Borrower
and its account debtors will follow Borrower's customary practices as they exist
at the Closing Date. Borrower must promptly notify Agent of all returns,
recoveries, disputes and claims that involve more than $50,000.
6.4 Taxes. Borrower will make, and cause each Subsidiary to make, timely
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payment material federal, state, and local taxes or assessments and will deliver
to Agent, on demand appropriate certificates attesting to the payment.
6.5 Insurance. Borrower will keep its business and the Collateral insured for
---------
risks and in amounts, as Agent requests. Insurance policies will be in a form
with companies, and in amounts that are satisfactory to Agent. All property
policies will have a lender's loss payable endorsement showing Agent as a loss
payee and all liability policies will show the Agent as an additional insured
and provide that the insurer must give Agent at least 20 days notice before
canceling its policy. At Agent's request, Borrower will deliver certified copies
of policies and evidence of all premium payments. Proceeds payable under any
policy will, at Agent's option, be payable to Agent on account of the
Obligations.
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6.6 Primary Accounts. Borrower will maintain its primary depository and
----------------
operating accounts with Agent.
6.7 Financial Covenants.
-------------------
Borrower will maintain as of the last day of each quarter, unless otherwise
noted:
(a) at all times at least $100,000,000 of cash and unrestricted
marketable securities ("Unrestricted Cash") on hand;
(b) leverage ratios of Net Debt (Total Funded Debt less Unrestricted
Cash) to Annualized Quarterly Revenue not to exceed:
(i) 4.00 : 1.00 through 3/31/00;
(ii) 3.50 : 1.00 from 4/01/00 through 6/30/00; and
(iii) 2.50 : 1.00 thereafter.
(c) at least the following revenues for the trailing twelve-month periods
ending on the corresponding dates set forth below:
(i) $200,000,000 as of 3/31/00;
(ii) $250,000,00 as of 6/30/00;
(iii) $300,000,000 as of 9/30/00 and thereafter.
(d) at least the following EBITDA for the trailing twelve-month periods
ending on the corresponding dates set forth below:
(i) ($34,000,000) as of 3/31/00
(ii) ($10,000,000) as of 6/30/00;
(iii) $22,000,000 as of 9/30/00 and thereafter.
6.8 Further Assurance. Borrower will execute any further instruments and take
----------------
further action as Agent requests to perfect or continue Agent's security
interest in the collateral or to effect the purposes of this Agreement.
Specifically, Borrower will execute and deliver on or before the Closing Date to
Agent UCC-1 Financing Statements relating to the Collateral for each
jurisdiction in which Borrower maintains an office or otherwise engages in
business. Borrower will also notify Agent at least 30 days prior to Borrower's
changing the location of any material portion of the Collateral.
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7. NEGATIVE COVENANTS
------------------
Borrower will not do nay of the following without Agent's written consent:
7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of
------------
(collectively a "Transfer"), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, other than (i) a Transfer of Inventory
in the ordinary course of business; (ii) non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; or (iii) worn-out or obsolete Equipment.
7.2 Changes in Business, Ownership, Management or Business Locations. Engage in
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or permit any of its Subsidiaries to engage in any business other than the
businesses currently engaged in by Borrower or reasonably related thereto, or
have a material change in its ownership (other then the sale of Borrower's
equity securities in a public offering or to venture capital investors approved
by Agent) of greater than 25%. Borrower will not, without at least 30 days prior
written notice to Agent, relocate its principal executive office. Borrower will
notify Agent on each Compliance Certificate of any new office or business
location opened by Borrower during the quarter to which such Compliance
Certificate relates.
7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its
-----------------------
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person (an "Acquisition"), except that
Borrower or any Subsidiary may make an Acquisition for stock or other non-cash
consideration, or make an Acquisition for cash consideration of an amount up to
25% of Borrower's cash balances at the time of such Acquisition (so long as
Borrower's cash position exceeds an amount equal to two times (2x) the
outstanding face amount of all Letters of Credit), without Agent's prior written
consent if no Event of Default has occurred and is continuing or would exist
after giving effect to the Acquisition. Notwithstanding the foregoing, a
Subsidiary may merge or consolidate into another Subsidiary or into Borrower.
7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness,
------------
or permit any Subsidiary to do so, other than Permitted Indebtedness.
7.5 Encumbrance. Create, incur, or allow any Lien on any of its property,
-----------
or assign or convey any right to receive income, including the sale of any
Accounts, or permit any of its Subsidiaries to do so, except for Permitted
Liens, or permit any Collateral not to be subject to Agent's first priority
security interest in the Collateral granted herein, subject only to Permitted
Liens.
7.6 Investments; Distributions. (i) Directly or indirectly acquire or own
--------------------------
any Person, or make any Investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so, or (ii) pay any
dividends or make any distribution or payment or redeem, retire or purchase any
capital stock, subject to the provisions of Section 7.3.
7.7 Transactions with Affiliates. Directly or indirectly enter or permit any
----------------------------
material transaction with any Affiliate, except transactions that are in the
ordinary course of Borrower's
8
business, on terms less favorable to Borrower than would be obtained in an arm's
length transaction with a non-affiliated Person.
7.8 Subordinated Debt. Make or permit any payment on any Subordinated Debt,
-----------------
except in the ordinary course under the terms of the Subordinated Debt, or amend
any provision in any document relating to the subordinated Debt, without Agent's
prior written consent.
7.9 Compliance. Become an "investment company" or a company controlled by an
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"investment company" under the Investment Company Act of 1940; undertake as one
of its important activities extending credit to purchase or carry margin stock,
or use the proceeds of any Advance for that purpose; fail to meet the minimum
funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA to occur; fail to comply with the Federal Fair
Labor Standards Act or violate any other law or regulation; if the violation
could reasonably be expected to have a material adverse effect on Borrower's
business or operations or cause a Material Adverse Change, or permit any of its
Subsidiaries to do so.
8. EVENTS OF DEFAULT
-----------------
Any one of the following is an Event of Default:
8.1 Payment Default. Borrower fails to reimburse Agent for any Advance arising
---------------
from a draw on a Letter of Credit within 2 Business Days after notification from
Agent or fails to pay any other Obligations within 3 days after their due date.
During the additional period the failure to cure the default is not an Event of
Default (but no Credit Extensions other than Advances to honor draws on Letters
of Credit will be made, nor will Letters of Credit be issued, during the cure
period):
8.2 Covenant Default. Borrower does not perform any Obligations in Article 6 or
----------------
violates any covenant in Article 7, or does not perform or observe any other
material term, condition or covenant in this Agreement, any Loan Documents or in
any other agreement between Borrower and Agent and, as to any default under a
term, condition or covenant that can be cured within 10 days or cannot be cured
after Borrower's attempts in the 10-day period, and the default may be cured
within a reasonable time, then Borrower has an additional time of not more than
30 days to attempt to cure the default. During the additional period the failure
to cure the default is not an Event of Default (but no Credit Extensions other
than Advances to honor draws on Letters of Credit will be made, nor will Letters
of Credit be issued, during the cure period);
8.3 Material Adverse Change. If there occurs a material impairment in the
-----------------------
perfection or priority of Agent's security interest in the Collateral or in the
value of such Collateral other than normal depreciation which is not covered by
adequate insurance; or if Agent determines, based upon information available to
it and in its reasonable judgment, that there is a reasonable likelihood that
borrower will fail to comply with one or more of the financial covenants in
Section 6 during the next succeeding financial reporting period;
9
8.4 Attachment. If any material portion of Borrower's assets is attached,
----------
seized, levied on, or comes into possession of a trustee or receiver and the
attachment, seizure or levy is not removed in 10 days; or Borrower is enjoined,
restrained, or prevented by court order from conducting a material part of its
business; or a judgment or other claim becomes a Lien on a material portion of
Borrower's assets or a notice of lien, levy, or assessment is filed against any
of Borrower's assets by any government agency and not paid within 10 days after
Borrower receives notice. These are not Events of Default if stayed or if a bond
is posted pending contest by Borrower (but no Credit Extensions other than
Advances to honor draws on Letters of Credit will be made, nor will Letters of
Credit be issued, during the cure period);
8.5 Insolvency. If Borrower becomes insolvent, or begins an Insolvency
----------
Proceeding; or an Insolvency Proceeding is begun against Borrower and not
dismissed or stayed within 30 days (but no Credit Extensions other than Advances
to honor draws on Letters of Credit will be made, nor will Letters of Credit be
issued, before any Insolvency Proceeding is dismissed);
8.6 Other Agreements. If there is a default under any agreement between
----------------
Borrower and a third party that gives the third party the right to accelerate
any Indebtedness exceeding $100,000.00 or that could cause a Material Adverse
Change;
8.7 Judgments. If a money judgement(s) in the aggregate of at least $50,000 is
---------
rendered against the Borrower and is unsatisfied or unstayed for 10 days (but no
Credit Extension other than Advances to honor draws on Letters of Credit will be
made, nor will Letters of Credit be issued, until the judgement is stayed or
satisfied); or
8.8 Misrepresentations. If Borrower or any Person acting for Borrower makes any
------------------
material misrepresentation or material omission or misstatement now or later in
any warranty or representation in this Agreement or in nay communication
delivered to Agent or to induce Agent to enter this Agreement or any Loan
Document.
9. AGENT'S RIGHTS AND REMEDIES
---------------------------
9.1 Rights and Remedies. When an Event of Default occurs and continues Agent
-------------------
may, without notice or demand, do any or all of the following:
(a) Declare all Obligations immediately due and payable (but if an Event of
Default described in Section 8.5 occurs all Obligations are immediately due and
payable without any action by Agent);
(b) Stop advancing money, issuing Letters of Credit or extending credit for
Borrower's benefit under this Agreement or under any other agreement between
Borrower and Agent;
(c) Settle or adjust disputes and claims directly with account debtors for
amounts, on terms and in any order that Agent considers advisable;
10
(d) Make any payments and do any acts it considers necessary or reasonable
to protect its security interest in the Collateral. Borrower will assemble the
Collateral if Agent requests and make it available as Agent designates. Agent
may enter premises where the Collateral is located, take and maintain possession
of any part of the Collateral, and pay, purchase, contest, or compromise any
Lien which appears to be prior or superior to its security interest and pay all
expenses incurred. Borrower grants Agent a license to enter and occupy any of
its premises, without charge, to exercise any of Agent's rights or remedies;
(e) Apply to the Obligations (i) any balances and deposits of Borrower it
holds, or (ii) any amount held by Agent owing to or for the credit or the
account of Borrower;
(f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell the Collateral. Agent is granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower's labels, Patents, Copyrights, Mask Works, rights of use of any name,
trade secrets, trade names, Trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, In completing
production of; advertising for sale, and selling any Collateral and, in
connection with Agent's exercise of its rights under this Section, Borrower's
rights under all licenses and all franchise agreements inure to Agent's benefit;
and
(g) Dispose of the Collateral according to the Code.
9.2 Power of Attorney. When an Event of Default occurs and continues,
-----------------
Borrower irrevocably appoints Agent as its lawful attorney to: (i) endorse
Borrower's name on any cheeks or other forms of payment or security; (ii) sign
Borrower's name on any invoice or ▇▇▇▇ of lading for any Account or drafts
against account debtors, (iii) make, settle, and adjust all claims under
Borrower's insurance policies; (iv) settle and adjust disputes and claims about
the Accounts directly with account debtors, for amounts and on terms Agent
determines reasonable; and (v) transfer the Collateral into the name of Agent or
a third party as the Code permits. Agent may exercise the power of attorney to
sign Borrower's name on any documents necessary to perfect or continue the
perfection of any security interest regardless of whether an Event of Default
has occurred. Agent's appointment as Borrower's attorney-in-fact, and all of
Agent's rights and powers, coupled with an interest, are irrevocable until all
Obligations have been fully repaid and performed and each Bank's obligation to
provide Credit Extensions terminates.
9.3 Account Collection. When an Event of Default occurs and continues, Agent
------------------
may notify any Person owing Borrower money of Agents security interest in the
funds and verify the amount of the Account. Borrower must collect all payments
in trust for Agent and, if requested by Agent, immediately deliver the payments
to Agent in the form received from the account debtor, with proper endorsements
for deposit.
9.4 Bank Expenses. If Borrower fails to pay any amount or furnish any required
-------------
proof of payment to third persons Agent may make all or part of the payment or
obtain insurance policies required in Section 6.5, and take any action under the
policies Agent deems prudent. Any amounts paid by Agent are Bank Expenses and
immediately due and payable, bearing interest at
11
the then applicable rate and secured by the Collateral. No payments by Agent are
deemed an agreement to make similar payments in the future or Agent's waiver of
any Event of Default.
9.5 Agent's Liability for Collateral. If Agent complies with reasonable banking
--------------------------------
practices and Section 9-207 of the code, it is not liable or responsible for:
(i) the safekeeping of the Collateral; (ii) any loss or damage to the
Collateral; (iii) any diminution in the value of the collateral; or (iv) any act
of default of any carrier, warehouseman, bailee, or other person. Borrower bears
all risk of loss, damage or destruction of the Collateral.
9.6 Remedies Cumulative. Agent's rights and remedies under this Agreement, the
-------------------
other Loan Documents and all other agreements are cumulative. Agent has all
rights and remedies provided under the code, by law, and in equity. Bank's
exercise of one right of remedy is not an election, and Agent's waiver of any
Event of Default is not a continuing waiver. Agent's delay is not a waiver,
election, or acquiescence. No waiver is effective unless signed by Agent and
then is only effective for the specific instance and purpose for which it was
given.
9.7 Demand Waiver. Borrower waives demand, notice of default or dishonor,
-------------
notice of payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattle paper, and guaranties held by Agent on which Borrower is
liable.
10. NOTICES
-------
All notices or demands by any party to this Agreement or any other related
agreement must be in writing and be personally delivered or sent by an overnight
delivery service, by certified mail, postage prepaid, return receipt requested,
or by telephonic facsimile transmission at the addresses listed at the beginning
of this Agreement. A Party may change its notice address by giving the other
Party written notice.
11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
------------------------------------------
California law governs the Loan Documents without regard to principles of
conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Santa ▇▇▇▇▇ County, California. BORROWER AND
BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
12
12. BANK AS ISSUING BANK AND AGENT
------------------------------
Bank intends to assign a portion of its rights and obligations under the
Loan Documents to another financial institution. Upon the effective date of such
assignment, the other financial institution shall become a party to the Loan
Documents like Bank, and Bank shall become the Agent as well as the Issuing Bank
and a lender to Borrower. Thereafter, the other financial institution shall have
those rights and obligations hereunder as are set forth herein and in that
certain Assignment Agreement by and between Bank and said financial institution,
and the term "Bank" or "Banks" shall mean both of Bank and the other financial
institution as the context may require.
12.1 Sharing of Payments. If, other than as expressly provided elsewhere
-------------------
herein, a Bank shall obtain on account of the Credit Extensions made by it any
payment (whether voluntary. involuntary, through the exercise of any right of
set-off or otherwise) in excess of its Percentage of payments on account of the
Credit Extensions obtained by all the Banks, such Bank shall forthwith (i)
notify the Agent of such fact, and (ii) purchase from the other Bank such
participations in the Credit Extensions made by them as shall be necessary to
cause such purchasing Bank to share the excess payment ratably with each of
them, provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefore, together with an amount equal to such paying
Bank's applicable Percentage (according to the proportion of (i) the amount of
such paying Bank's required repayment to (ii) the total amount so recovered from
the purchasing Bank of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered). The Borrower
agrees that any Bank so purchasing a participation from another Bank pursuant
to this Section 12.1 may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Bank were the direct creditor of the Borrower
in the amount of such participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased pursuant to this Section 12.1 and will in each case notify the Banks
following any such purchases or repayments.
12.2 Participations. By the issuance of a Letter of Credit and without any
--------------
further action on the part of the Issuing Bank or the Banks, the Issuing Bank
hereby grants to each Bank, and each Bank hereby acquires from the Issuing Bank,
a participation in such Letter of Credit equal to such Bank's Percentage of the
aggregate amount available to be drawn under such Letter of Credit, effective
upon the issuance of such Letter of Credit. In consideration and in furtherance
of the foregoing, each Bank hereby absolutely and unconditionally agrees to pay
to the Agent, for the account of the Issuing Bank, such Bank's Percentage of
each draw paid by the Issuing Bank and not reimbursed by the Borrower (or, if
applicable, another party pursuant to its obligations under any other Loan
Document) forthwith on the date of draw. Each Bank acknowledges and agrees that
its obligation to acquire participations pursuant to this Section 12.2 with
respect to Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.
13
12.3 Reimbursement. If the Banks shall pay any draw with respect to a
-------------
Letter of Credit, the Agent may debit the Borrower's deposit accounts for
reimbursement of such draw. If there are insufficient funds in the accounts to
reimburse the Banks, the Borrower shall pay to the Agent for the benefit of the
Banks an amount equal to such disbursement not later then two (2) Business Days
after the Borrower shall have received notice from the Agent that payment of
such draft will be made, together with interest thereon for the time such amount
remains unpaid from the date of such draws.
12.4 Payments by Agent. The Agent shall promptly pay to each OF the Banks
-----------------
its respective Percentage of each PAYMENT received BY THE Agent for the account
OF THE Banks FROM OR ON BEHALF OF THE Borrower, including reimbursement of
draws, interest thereon AND FEES.
12.5 Obligations Absolute. The Borrower's obligations to reimburse the
--------------------
Agent for disbursements under a Letter of Credit as provided above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, and irrespective of:
(a) any lack of validity or enforceability of any Letter of Credit or any
Loan Document, or any term or provision therein;
(b) any amendment or waiver of or any consent to departure from all or any
of the provisions of any Letter of Credit or any Loan Document;
(c) the existence of any claim, setoff, defense or other right that the
Borrower, any other party guaranteeing, or otherwise obligated with, the
Borrower, any Subsidiary or other Affiliate thereof or any other Person may at
any time have against the beneficiary under any Letter of Credit, the Issuing
Bank, the Agent, any of the Banks or any other Person, whether in connection
with this Agreement, any other Loan Document or any other related or unrelated
agreement or transaction;
(d) any draft or other document presented under a Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(e) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit; and
(f) any other act or omission to act or delay of any kind of the Issuing
Bank, any of the Banks, the Agent or any other Person or any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 12.5, constitute a legal or
equitable discharge of the Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse such disbursements will not be excused by the
gross negligence or willful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
14
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims with respect to which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's gross negligence or willful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented wider such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute willful
misconduct or gross negligence of the Issuing Bank.
12.6 Disbursement Procedures. The Issuing Bank shall, promptly following
-----------------------
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by telecopy, to the Agent and the
Borrower of such demand for payment and whether the Issuing Bank has made or
will make a disbursement thereunder, provided that any failure to give or delay
in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Agent for the account of the Banks with respect to any such
disbursement. The Agent shall promptly give each of the Banks notice thereof.
12.7 Interim Interest. If the Issuing Bank shall make any disbursement with
----------------
respect to a Letter of Credit, then, unless the Borrower shall reimburse such
disbursement in full on such date, the unpaid amount thereof shall bear interest
for each day from and including the date of such disbursement to but excluding
the date of payment by the Borrower at the applicable rate per annum set forth
in Section 2.3.
12.8 Resignation of the Issuing Bank. The Issuing Bank may resign at any
-------------------------------
time by giving 180 days' prior written notice to the Agent, the Banks and the
Borrower. Upon the acceptance of any appointment as the Issuing Bank hereunder
by one of the Banks that shall agree to serve as a successor Issuing Bank, such
successor shall succeed to and become vested with all of the interests, rights
and obligations of the retiring Issuing Bank and the retiring Issuing Bank shall
be discharged from its obligations to issue additional Letters of Credit
hereunder. At the time such resignation shall become effective, the Borrower
shall pay all accrued and unpaid fees to the, Agent for the benefit of the
retiring Issuing Bank pursuant to this Agreement. The acceptance of any
appointment as a successor Issuing Bank hereunder by one of the Banks shall be
evidenced by an agreement entered into by such Bank, in a form satisfactory to
the Borrower and the Agent, and from and after the effective date of such
agreement (i) such Bank shall have all of the rights and obligations of the
previous Issuing Bank under this Agreement and the other Loan
15
Documents, and (ii) references herein and in the other Loan Documents to the
term "Issuing Bank" shall be deemed to refer to such successor or to the
previous Issuing Bank, as the context shall require. After the resignation of
the Issuing Bank hereunder, the retiring Issuing Bank shall remain a party
hereto and shall continue to have all of the rights and obligations of an
Issuing Bank under this Agreement and the other loan documents with respect to
Letters of Credit issued by it prior to such resignation or removal, but shall
not be required to issue additional Letters of Credit.
13. THE BANK AS AGENT
-----------------
13.1 Actions. Each of the Banks hereby appoints SILICON VALLEY BANK ("SVB")
-------
as its agent under and for purposes of this Agreement and each other Loan
Document. Each of the Banks authorizes the Agent to act on behalf of such Bank
under this Agreement and each other Loan Document and, in the absence of other
written instructions from the Banks received from time to time by the Agent
(with respect to which the Agent agrees that it will comply, except as otherwise
provided in this Section 13.1 or as otherwise advised by counsel), to exercise
such powers hereunder and thereunder as are required of the Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto. Each of the Banks agrees that it shall not take any action against, or
exercise any right or remedy with respect to, the Borrower except through the
Agent, which shall act only upon the instructions of those Banks holding in the
aggregate Percentages in excess of fifty-one percent (51.00%). Each of the Banks
hereby indemnifies (which indemnity shall survive any termination of this
Agreement) the Agent, pro rata according to such Bank's Percentage, from and
against any and all liabilities, obligations, losses, damages, claims, costs or
expenses of any kind or nature whatsoever which may at any time be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement and any other Loan Document, including reasonable attorneys'
fees, and as to which the Agent is not reimbursed by Borrower; provided,
however, that no Bank shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, negligence or willful misconduct. The
Agent shall not be required to take any action hereunder or under any other loan
Document, unless it is indemnified hereunder to its satisfactions. If any
indemnity in favor of the Agent shall be or become inadequate, in the Agent's
determination, the Agent may call for additional indemnification form the Banks
and cease to do the acts indemnified against hereunder until such additional
indemnity is given.
13.2 Exculpation. Neither the Agent nor any of its directors, officers,
-----------
employees or agents shall be liable to any of the Banks for any action taken or
omitted to be taken by it under this Agreement or any other Loan Document, or in
connection herewith or therewith, except for its own willful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or therein, or
for the effectiveness, enforceability, validity or due execution of this
Agreement or any other Loan Document, or for the creation, perfection or
priority of any Liens purported to be created by any of the loan Documents, or
the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral security, or to make any inquiry respecting the performance by
the Borrower or any of its Subsidiaries of their respective obligations under
the Loan
16
Documents, and such inquiry which may be made by the agent shall not obligate it
to make any further inquiry or to take any action.
13.3 Sucessor. The Agent may resign as such at any time upon at least 30
---------
days' prior notice to the Borrower and all of the Banks. If the Agent at any
time shall resign, the Banks may appoint another Bank as a successor to the
Agent which shall thereupon become the Agent hereunder. If no successor Agent
shall have been so appointed by the Banks and shall have accepted such
appointment, within 30 days after the retiring Agent's giving notice of
resignation then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be one of the Banks or a commercial banking
institution organized under the laws of the United States (or any State thereof)
or a United States branch or agency of a commercial banking institution, and
having a combined capital and surplus of at least S500,000.000. Upon the
acceptance of any appointment as the Agent hereunder by a successor Agent, such
successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights)
powers. privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article 13 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Agent under this Agreement.
13.4 Loans and Other Transactions by SVB. SVB shall have the same rights
-----------------------------------
and powers as any of the Banks and may exercise the same as if it were not the
Agent. SVB and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with Borrower, any of its Subsidiaries
or any of their Affiliates, all as IF SVB were not the Agent hereunder.
13.5 Copies. The Agent shall give prompt notice to each of the Banks of
------
each notice or request required or permitted to be given to the Agent by
Borrower pursuant to the terms of this Agreement (unless concurrently delivered
to the Banks by the Borrower). The Agent will distribute to each of the Banks
each document or instrument received for its account and copies of all other
communications received by the Agent from Borrower for distribution to the Banks
by the Agent in accordance with the terms of this Agreement.
13.6 Delegation of Duties. The 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. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
13.7 Reliance by Agent. The Agent shall be entitled to rely, and shall be
-----------------
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall be fully
17
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
the Banks, and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
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 the Banks, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Banks.
13.8 Notice of Default. The 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 the Agent for the account of the Banks, unless the Agent shall have received
written notice from one or more of the Banks or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Banks of its receipt
of any such notice. The Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Banks; provided, however,
that unless and until the Agent has received any such request, the 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 the Banks.
13.9 Collateral Matters. The Agent is authorized on behalf of all the
------------------
Banks, without the necessity of any notice to or further consent from the Banks,
from time to time to take any action with respect to any Collateral which may be
necessary to perfect and maintain perfected the security interest in and Liens
upon the Collateral granted pursuant to the Loan Documents. The Banks
irrevocably authorize the Agent, as its option and in its discretion, to release
any Lien granted to or held by the Agent upon any Collateral (i) upon
termination of the Loan Documents and payment in full of all Obligations known
to the Agent and payable under this Agreement or any other Loan Document; (ii)
constituting property sold or to be sold or disposed of hereunder, (iii)
constituting property in which the Borrower or any Subsidiary owned no interest
at the time the Lien was granted or at any time thereafter (iv) constituting
property leased to the Borrower or any subsidiary under a lease which has
expired or been terminated in a transaction permitted under this Agreement or is
about to expire and which has not been, and is not intended by the Borrower or
such Subsidiary to be, renewed or extended; (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 all the Banks, as the case may be. Upon request by the Agent at any
time, the Banks will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this Section 13.9, provided,
that the absence of any such confirmation for whatever reason shall not affect
the Agent's rights under this Section 13.9. Each of the Banks agrees with and in
favor of each other (which agreement shall not be for the benefit of the
Borrower or any Subsidiary) that the Borrower's obligations to such Bank under
this Agreement and the other Loan Documents are not and shall not be secured by
any real property collateral now or hereafter acquired by such Bank.
18
14. ASSIGNMENTS
-----------
Subject to the limitations set forth herein, each Bank may at any time,
with the approval of the Agent, assign and delegate to one or more commercial
banks or other financial institutions a portion of such Bank's interests
hereunder in an amount which is not less than $5,000,000.00 or, if less, such
Bank's entire Commitment (each Person to whom such assignment and delegating is
to be made being hereinafter referred to as an "Assignee Bank"); provided,
however, that the Borrower and the Agent shall be entitled to continue to deal
solely and directly with such Bank in connection with the interests so assigned
and delegated to an Assignee Bank until (i) written notice of such assignment
and delegation, together with payment instructions, addresses and related
information with respect to such Assignee Bank, shall have been given to the
Agent by such Bank and such Assignee Bank; and (ii) the Agent shall have
received its customary processing fee of $3,000 from such Bank or Assignee Bank
and an executed assignment agreement in form and substance satisfactory to
Agent. From and after the date that an assignment becomes effective as provided
in this Section 14, (i) the Assignee Bank thereunder shall be deemed
automatically to have become a party hereto and, to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Bank in
connection with such assignment, shall have the rights and obligations of a Bank
hereunder and under the other Loan Documents, and (ii) the assignor Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it in connection with such assignment, shall be released from its obligations
hereunder and under the other Loan Documents. Any attempted assignment and
delegation not made in accordance with this Section 14 shall be null and void.
15. AMENDMENTS AND WAIVERS
----------------------
Any term, covenant, agreement or condition of this Agreement or any other
Credit Document may be amended or waived, and any consent under this Agreement
or any other Credit Document may be given, only if such amendment, waiver or
consent is in writing and is signed by Borrower and each of the Banks (or the
Agent on behalf of the Banks with the written approval of each of the Banks). No
failure or delay by the Agent or any Bank in exercising any right under this
Agreement or any other Credit Document shall operate as a waiver thereof or of
any other right hereunder or thereunder nor shall any single or partial exercise
of any such right preclude any other further exercise thereof or of any other
right hereunder or thereunder. Unless otherwise specified in such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
16. SET-OFFS
--------
Upon the occurrence and during the continuance of any Event of Default, the
Agent and each of the Banks is hereby authorized at any time and from time to
time, without notice to the Borrower (any such notice being expressly waived by
the Borrower), to set off and apply to the payment of the Obligation (whether or
not then due and regardless of whether the Agent shall have made any demand
therefore), and as security for each Obligations, the Borrower hereby grants to
the Agent, for the benefit of the Banks, a continuing security interest in any
and all balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter maintained
19
with the Agent or any Bank (whether general or special, time or demand,
provisional or final). The Agent and each of the Banks agrees promptly to notify
the Borrower after set-off and application made by the Agent or any Bank,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The provisions of this Article 16 are in addition
to other rights and remedies (including without limitation other rights of
set-off) which the Agent may have.
17. INDEMNIFICATION
---------------
In consideration of the execution and delivery of this Agreement by the
Agent and the Bank, and each Bank's agreement to provide the Credit Extensions
hereunder, the Borrower hereby indemnifies, exonerates and holds the Agent and
each of the Banks, and each of its respective parents, officers, directors,
employees, equity holders and agents (collectively, the "Indemnified Parties")
free and harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expense incurred in connection
therewith (irrespective of whether any such Indemnified Party is a party to the
action for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified Liabilities"),
incurred by the Indemnified Parties or any of them as a result of, or arising
out of, or relating to any transaction financed or to be financed in whole or in
part, directly or indirectly with the proceeds of the Loans; except for any such
Indemnified Liabilities arising for the account of a particular Indemnified
Party by reason of the relevant Indemnified Party's gross negligence or willful
misconduct. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The indemnity obligations
of the Borrower under this Article 17 shall survive the expiration of the term
hereof, the repayment of the Loans, and the invalidity or unenforceability of
any term or provision of any Loan Documents.
18. GENERAL PROVISIONS
------------------
18.1 Successors and Assigns. This Agreement binds and is for the benefit of
----------------------
the successors and permitted assigns of each party. Borrower may not assign this
Agreement or any rights or Obligations under it without Agent's prior written
consent, which may be granted or withheld in their respective discretion. Each
Bank has the right, without the consent of or notice to Borrower, to sell,
transfer, negotiate, or grant participation in all or any part of, or any
interest in, the Bank's obligations, rights and benefits under this Agreement,
the Loan Documents or any related agreement pursuant to the terms of Article 14.
18.2 Time of Essence. Time is of the essence for the performance of all
---------------
Obligations in this Agreement.
18.3 Severability of provisions. Each provision of this Agreement is severable
--------------------------
from every other provision in determining the enforceability of any provision.
18.4 Amendments in Writing, Integration. All amendments to this Agreement,
----------------------------------
must be in writing signed by Agent, each of the Banks and Borrower. This
Agreement and the Loan
20
Documents represent the entire agreement about this subject matter, and
supercedes prior or contemporaneous negotiations or agreements. All prior or
contemporaneous agreements, understandings, representations, warranties, and
negotiations between the parties about the subject matter of this Agreement and
the Loan Documents merge into this Agreement and the Loan Document.
18.5 Counterparts. This Agreement may be executed in any number of counterparts
------------
and by different parties on separate counterparts, each of which, when executed
and delivered, are an original, and all taken together, are one Agreement.
18.6 Survival. All covenants, representations and warranties made in this
-------
Agreement continue in full force while any Obligations remain outstanding. The
obligations of Borrower in Article 17 to indemnify each Bank and the Agent will
survive until all statutes of limitations for actions that may be brought
against any of them have run.
18.7 Confidentiality. In handling any confidential information, the Agent
---------------
and each Bank will exercise the same degree of care that it exercises for its
own proprietary information, but disclosure of information may be made: (i) to
each Bank's subsidiaries or affiliates in connection with their present or
prospective business relations with Borrower, (ii) to prospective transferees or
purchasers of any interest in the Credit Extensions; (iii) as required by law,
regulations, subpoena, or other order, (iv) as required in connection with each
Bank's examination or audit; and (v) as Agent considers appropriate in
exercising remedies under this Agreement. Confidential Information does not
include information that either: (i) is in the public domain or in Agent's or a
Bank's possession when disclosed to Agent or that Bank, or becomes part of the
public domain after disclosure to Agent or that Bank; or (ii) is disclosed to
Agent or a Bank by a third party, if Agent or that Bank does not know that the
third party is prohibited from disclosing the information.
18.8 Attorneys' Fees, Costs and Expenses. In any action or proceeding
-----------------------------------
arising out of the Loan Documents, the prevailing party will be entitled to
recover its reasonable attorneys' fees and other costs and expenses incurred, in
addition to any other relief to which it may be entitled, whether or not a
lawsuit is filed.
18.9 Effect of Restatement. This Agreement amends and restates the Original
---------------------
Agreement and upon the effectiveness of this Agreement it shall supplant and
replace the Original Agreement in all respects.
19. DEFINITIONS
-----------
"Accounts" are all existing and later arising accounts, contract rights,
and other obligations owed Borrower in connection with its sale or lease of
goods (including the licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.
21
"Advance" or "Advances" is any advance (or advances) of funds by any of the
Banks to Borrower or for Borrower's account or benefit under the Committed
Letter of Credit Facility, or to preserve or protect any Collateral.
"Affiliate" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person's managers and members.
"Annualized Quarterly Revenue" is revenues as reported quarterly by the
Company in accordance with GAAP, multiplied by 4.
"Bank Expenses" are all audit fees and expenses and reasonable costs or
expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).
"Borrower's Books" are all Borrower's books and records including ledgers,
records regarding Borrower's assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or discs or any
equipment containing the information.
"Business Day" is any day that is not a Saturday, a Sunday or any other day
on which Agent is closed for business.
"Closing Date" is the date of this Agreement.
"Code" is the California Uniform Commercial Code.
"Collateral" is the property described in Exhibit "A".
"Commitment" is the amount by which each Bank commits to be obligated to
pay draws under Letters of Credit.
"Committed Letter of Credit Facility" is the commitment by Issuing Bank
under this Agreement to issue standby letter of credit for the account of
Borrower in an aggregate face amount of up to Twenty Million and No/100 Dollars
($20,000,000.00).
"Contingent Obligation" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it
22
determined by the Person in good faith; but the amount may not exceed the
maximum of the obligations under the guarantee or other support arrangement.
"Copyrights" are all copyright rights, applications or registrations and
like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.
"Credit Extension" is each Advance, whether or not in connection with a
draw under a Letter of Credit, and any other extension of credit (including the
issuance of a Letter of Credit) by a Bank to Borrower or for Borrower's benefit,
or to preserve or protect any Collateral.
"Current Assets" are amounts that under GAAP should be included on that
date as current assets on Borrower's consolidated balance sheet.
"Current Liabilities" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year.
"Equipment" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.
"EBITDA" is earnings before interest, taxes, depreciation, authorization
and other non-cash items, adjusted for extraoridnary or non-recurring gains or
losses, all as determined in accordance with GAAP.
"ERISA" is the Employee Retirement Income Security Act of 1974, and its
regulations.
"GAAP" is generally accepted accounting principles.
"Indebtedness" is (a) indebtedness for borrowed money or the deferred price
of property or services, such as reimbursement and other obligations for surety
bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.
"Insolvency Proceedings" is any proceeding by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
"Intellectual Property" is:
(a) Copyrights, Trademarks, Patents, and Mask Works including amendments,
renewals, extensions, and all licenses or other rights to use and all license
fees and royalties from the use;
(b) Any trade secrets and any Intellectual Property Rights in computer
software and computer software products now or later existing, created, acquired
or held;
23
(c) All design rights which may be available to Borrower now or later
created, acquired or held;
(d) Any claims for damanges (past, present or future) for infringement of
any of the rights above, with the right, but not the obligation, to ▇▇▇ and
collect damages for use or infringement of the intellectual property rights
above;
All proceeds and products of the foregoing, including all insurance,
indemnity or warranty payments.
"Inventory" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract or service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.
"Investment" is any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.
"Lien" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.
"Loan Documents" are, collectively, this Agreement, any note, or notes or
guaranties executed by Borrower or Guarantor, each and every Application, each
and every UCC-1 Financing Statement and any other present or future agreement
between Borrower and/or for the benefit of Agent or any Bank in connection with
this Agreement, as all amended, extended or restated.
"Material Adverse Change" is defined in Section 8.3.
"Mask Works" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.
"Maturity Date" is the earlier of (i) December 31, 2000 or (ii) the date on
which Agent accelerates all Obligations as a result of an Event of Default.
"Obligations" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Agent now or later, including letters of credit and
foreign exchange contracts, if any, and including interest accruing after
Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower
assigned to Agent.
"Patents" are patents, patent applications and like protections, including
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.
24
"Percentage" is the percentage that each Bank's Commitment bears to the
aggregate Commitments of all of the Banks.
"Permitted Indebtedness" is:
(a) Borrower's indebtedness to Agent under this Agreement, the Loan
Documents or any other agreement by and between SVB and Borrower;
(b) Indebtedness existing on the Closing Date and disclosed to Agent in
writing by Borrower;
(c) Subordinated Debt;
(d) Indebtedness to trade creditors incurred in the ordinary course of
business; and
(e) Indebtedness secured by Permitted Liens;
(f) Indebtedness associated with Acquisitions permitted by Section 7.3; and
(g) Extensions, refinancings, modifications, amendments and restatements of
any items of Permitted Indebtedness (a) through (f) above, provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose more burdensome terms upon Borrower or its Subsidiary, as the case may
be.
"Permitted Investments" are:
(a) Investments disclosed to Agent in writing by Borrower and existing on
the Closing Date;
(b) (i) marketable direct obligations issued or unconditionally guaranteed
by the United Sates or its agency or any State maturing within 1 year from its
acquisition, (ii) commercial paper maturing no more than 1 year after its
creation and having the highest rating from either Standard & Poor's Corporation
or ▇▇▇▇▇'▇ Investors Service, Inc. and (iii) Bank's certificates of deposit
issued maturing no more than 1 year after issue;
(c) interests in any money market funds that invest solely in one or more
of the Investments described in paragraph (b) of this definition; and
(d) Investments associated with Acquisitions permitted by Section 7.3.
"Permitted Liens" are:
(a) Liens existing on the Closing Date and disclosed to Agent in writing by
Borrower or arising under this Agreement or other Loan Documents;
25
(b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, if they have no priority over
any Agent's security interests;
(c) Purchase money Liens (i) on Equipment acquired or held by Borrower or
its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the equipment;
(d) Leases or subleases and licenses or sublicenses granted in the ordinary
course of Borrower's business, if the leases, subleases, licenses and
sublicenses permit granting Agent a security interest;
(e) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (e), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase.
"Person" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.
"Prime Rate" is Agent's most recently announced "prime rate," even if it is
not Agent's lowest rate.
"Quick Assets" are, on any date, the Borrower's consolidated, unrestricted
cash, cash equivalents, net billed accounts receivable and investments with
maturities of less than 12 months determined according to GAAP.
"Responsible Officer" is each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Controller of Borrower.
"Subordinated Debt" is debt incurred by Borrower that is subordinated to
Borrower's indebtedness owed to the Banks and which is reflected in a written
agreement in a manner and form acceptable to Agent and approved by Agent in
writing.
"Subsidiary" is, for any Person, a joint venture or any other business
entity of which more than 50% of the voting stock or other equity interests is
owned or controlled, directly or indirectly, by the Person or one or more
Affiliates of the Person.
"Tangible Net Worth" is, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus, (i) any amounts attributable to (a)
goodwill, (b) intangible items such as unamortized debt discount and expense,
Patents, trade and service marks and names, Copyrights and research and
development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and (ii) Total Liabilities plus Subordinated Debt.
26
"Term" is the term of this Agreement, commencing on the date of this
Agreement and expiring on the Maturity Date.
"Total Funded Debt" is all Indebtedness of Borrower.
"Total Liabilities" is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness and the current portion Subordinated Debt allowed to be paid
but excluding all other Subordinated Debt.
"Trademarks" are trademark and service ▇▇▇▇ rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Borrower connected with the trademarks.
IN WITNESS WHEREOF, each of the parties has caused its duly authorized
representative to execute this Agreement as of the date first set forth above.
BORROWER: BANK:
EXODUS COMMUNICATIONS, INC., SILICON VALLEY BANK
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------ ---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------- -------------------------------
Title: VP Finance Title: SVP
-------------------------- ------------------------------
[APPROVED EXODUS LEGAL SEAL]
27
EXHIBIT A
---------
COLLATERAL
----------
The Collateral consists of all of Borrower's right, title and interest in
and to the following:
All goods and equipment now owned or hereafter acquired, including, without
limitation, all machinery, fixtures, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;
All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;
All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;
All documents, cash, deposit accounts, securities, securities entitlements,
securities accounts, investment property, financial assets, letters of credit,
certificates of deposit, instruments and chattel paper now owned or hereafter
acquired and Borrower's Books relating to the foregoing;
All copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; all trade secret
rights, including all rights to unpatented inventions, know-how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired; all claims
for damages by way of any past, present and future infringement of any of the
foregoing; and
All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof.
2
EXHIBIT B
FORM OF APPLICATION
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[BANK LOGO OMITTED]
SILICON VALLEY BANK APPLICATION FOR STANDBY LETTER OF CREDIT
--------------------------------------------------------------------------------
LOCATION DATE
--------------------------------------------------------------------------------
FOR BANK USE ONLY
--------------------------
L/C NO.
--------------------------
TO: SILICON VALLEY BANK
Please issue an irrevocable standby letter of credit as shown on this
application by Full Text Teletransmission or Express Mail.
--------------------------------------------------------------------------------
For Account of (Applicant, In Favor of (Beneficiary,
Name and Address) Name and Address)
--------------------------------------------------------------------------------
Amount Expiration Date
Drafts to be drawn and
presented to the
negotiating or paying bank
on or before:
--------------------------------------------------------------------------------
Available be drafts as sight on you, your branch or your correspondent at your
option or you may waive draft requirement. Documents required (should clearly
reflect beneficiary's right or reason for drawing):
All documents will be sent in one cover be airmail unless stated otherwise under
Special Instructions. Special Instructions:
--------------------------------------------------------------------------------
The opening of this credit is subject to the terms and conditions of the Standby
Letter of Credit (the "Agreement") on the reverse. If this application is signed
by more than one person, the Agreement will be the contract of the signers both
as individuals and as a group.
I have read and agree to the terms and conditions on the reverse.
--------------------------------------------------------------------------------
Name of Applicant Signed Title
--------------------------------------------------------------------------------
Name of Applicant Signed Title
--------------------------------------------------------------------------------
(If more than one page is used, all pages must be signed)
--------------------------------------------------------------------------------
TERMS AND CONDITIONS
1. Applicant will reimburse Silicon Valley Bank ("Bank") on demand in
U.S. Dollars, the amount required to pay each draft or instrument in connection
with the Letter of Credit (the "Credit"). If the Credit is issued in a foreign
currency, applicant will pay the U.S. Dollar equivalents (as determined by Bank)
of the foreign currency amounts of all drawings under the Credit. In addition to
such reimbursement, Applicant will pay Bank on demand, interest (on the amount
disbursed by Bank to pay each instrument) at a per annum rate equal to Bank's
Prime Rate from time to time in effect plus _______%. Interest shall be
calculated for the actual number of days from the date of payment of the
Instrument to the date of reimbursement on the basis of a 360 day year.
Applicant authorizes and directs Bank to debit Applicant's deposit accounts with
the Bank to satisfy Applicant's reimbursement obligations hereunder (including
any interest thereon). Any such debit shall constitute a payment on the
reimbursement debt of Applicant created under this Section 1. Notwithstanding
anything to the contrary herein, if Applicant's reimbursement obligations
hereunder is a submit under an already existing loan, the time of reimbursement
and the interest rate charge shall be governed by the repayment terms under such
loan to the extent that such terms are inconsistent with the reimbursement terms
under this Applicant. If Applicant is party to a Loan Agreement with Bank, the
terms set forth therein (including, without limitation, any terms of the Loan
Agreement or ancillary agreements relating to collateral) shall remain in full
force and effect, so long as Applicant owes obligations to Bank in connection
with this Credit. Applicant will comply with all governmental exchange
regulations new or hereafter applicable to the Credit or instruments or payments
related thereto and will pay Bank, on demand, in United States currency, such
amount as Bank may be required to expend on account of such regulations. Upon
the occurrences of any one or more of the Events of Default described in
paragraph 7 below, Applicant will pay Bank a sum equal to Bank's outstanding
liability under the Credit.
2. Applicant will pay Bank, on demand, Bank's commission, Interest
where chargeable, and all charges, expenses (including attorneys' fees), taxes
and fees paid or incurred by Bank in connection with the Credit and the
enforcement of Bank's rights hereunder.
3. Applicant agrees to hold Bank and its correspondences harmless
against and reimburse it for any claim, loss, liability, cost or damage
(including attorneys' fees) arising from or in connection with the Credit. If
any law or regulation or the interpretation thereof by any court or
administrative or governmental authority shall either (i) impose, modify or deem
applicable any reserve, or similar requirement against letters of credit, issued
by, or assets held by, or deposits in or for the account of, Bank or (ii) impose
on Bank any insurance premium or other condition regarding the Credit, and the
result shall be to increase the costs of lending or maintaining the Credit over
that which Bank assumed in determining its fees as provided for above, then,
upon written notice and demand by Bank, from time to time as specified by Bank,
additional amounts which shall be sufficient to compensate Bank for such
increased cost.
4. The Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce, Publication No 500 and later
revisions adhered to by Bank, shall govern the Credit. Neither Bank nor its
correspondents shall be responsible for the condition, quality or delivery of
the property to which the Credit or any documents purportedly relate, or the
sufficiency, validity or genuineness of documents (including forgeries and
fraud) or insurances; any delay in giving or failure to give notice of removal
or other notices; the validity or sufficiency of any endorsements; any error,
omission, or delay in giving or failure to give notice of arrival or other
notices; any error, omission, or delay in transmission of any messages. Any
action taken, or any failure to set by Bank or any correspondent with the Credit
or the relative Instruments, documents or property. If in good faith, shall be
binding on Applicant and shall not place Bank or any correspondent under any
liability to Applicant or others.
5. As security for the payment of performance of any of all of
Applicant's obligations and liabilities hereunder. Applicant grants Bank a
security interest in the following accounts: ____________________.
6. We certify that the Board of Directors and Applicants has duly
authorized the officer(s) signing below to secure and deliver this Application
to Bank. We certify that the Board has authorized Applicants to borrow money
from Bank, to request Bank to issue the Credit and to reimburse Bank for all
amounts paid by Bank in connection with the Credit, all on terms agreed to from
time to time, to grant security for all obligations owing to Bank, and to
execute and deliver such documents, and take such other actions, as are
necessary or appropriate in connection with the performance of this Agreement.
We certify that all the resolutions authorizing the foregoing remain in full
force and effect.
7. Each of the following shall constitute an Event of Default under
this Agreement (a) if Bank shall in good ▇▇▇▇▇ ▇▇▇▇ itself insecure at any time;
(b) if any of the obligations or liabilities of Applicant to Bank hereunder or
under any other agreement between Applicant and Bank shall not be paid or
performed when due; (c) if Applicant shall become insolvent; (d) if a petition
is submitted by or against Applicant for any relief under any bankruptcy laws or
any law relating to the relief of debtors; (e) if any government authority,
receiver or court shall take possession of or exercise control over any
substantial part of the property of Applicant. Upon occurrence of an Event of
Default, unless Bank shall otherwise elect, any and all obligations and
liabilities of Applicant to Bank, whether now existing or hereafter incurred,
shall become due and payable without notice and Bank may exercise all the
remedies of a secured party under Division B of the California Uniform
Commercial Code.
By:_________________________________ By: ________________________________
Name: ______________________________ Name: _____________________________
Title: Title:
(President of Vice President) (Secretary, Asst. Secretary,
CPO or Treasurer)
--------------------------------------------------------------------------------
There will be a fee of ____% of the commitment amount per annum associated with
the Issuance of the Letter of Credit.
2
EXHIBIT C
---------
COMPLIANCE CERTIFICATE
----------------------
TO: SILICON VALLEY BANK
FROM: EXODUS COMMUNICATIONS, INC.
The undersigned authorized officer of Exodus Communications, Inc., a
Delaware corporation, certifies that under the terms and conditions of the
Amended and Restated Loan and Security Agreement by and among Borrower, Bank and
Agent (the "Agreement"); (i) Borrower is in complete compliance for the period
ending ____________________ with all required covenants except as noted below,
and (ii) all representations and warranties in the Agreement are true and
correct in all material respects on this date. Attached are the required
documents supporting the certification. The Officer certifies that these are
prepared in accordance with Generally Accepted Accounting Principles (GAAP)
consistently applied from one period to the next except as explained in an
accompanying letter of footnotes. The Officer acknowledges that no Letters of
Credit may be requested at any time or date of determination that Borrower is
not in compliance with any of the terms of the Agreement and that compliance is
determined not just at the date this certificate is delivered.
Please indicate compliance status by circling Yes/No under "Complies"
column.
Reporting Covenant Required Complies
------------------ -------- --------
10-Q, 10-K and 8-K Within 5 days after filing with SEC Yes No
Financial Covenant Required Actual Complies
------------------ -------- ------ --------
Cash and Unrestricted Marketable Securities $100,000,000 $_________ Yes No
Maintain on a Quarterly Basis:
Net Debt to Annualized Quarterly Revenues Yes No
through 3/31/00 4.00 : 1.00 _______:1.00
from 4/01/00 to 6/30/00 3.50 : 1.00 _______:1.00
after 6/30/00 2.50 : 1.00 _______:1.00
Revenues for trailing 12 mos. Yes No
as of 3/31/00 $200,000,000 $__________
as of 6/30/00 $250,000,000 $__________
as of 9/30/00 and thereafter $300,000,000 $__________
EBITDA for trailing 12 mos. Yes No
as of 3/31/00 ($34,000,000) $__________
as of 6/30/00 ($10,000,000) $__________
as of 9/30/00 and thereafter $22,000,000 $__________
NEW OFFICES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
---------------------------------
Comments Regarding Exceptions: See Attached. BANK USE ONLY
Sincerely, Received by: ____________________
AUTHORIZED SIGNER
__________________________________
SIGNATURE Date:____________________________
__________________________________ Verified: _______________________
TITLE AUTHORIZED SIGNER
__________________________________ Date: ___________________________
DATE Compliance Status: Yes No
---------------------------------
2
FIRST AMENDMENT
---------------
TO
--
AMENDED AND RESTATED
--------------------
LOAN AND SECURITY AGREEMENT
---------------------------
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (the "Amendment") is entered into as of April 28,2000, by and among
SILICON VALLY BANK as Agent and a Bank (the "Agent"), EXODUS COMMUNICATIONS,
INC., a Delaware corporation as borrower (the "Borrower"), and those certain
financial institutions from time to time party to that certain Amended and
Restated Loan and Security Agreement dated as of March 8, 2000 (the "Loan
Agreement") as Banks (the "Banks"). Unless otherwise defined herein, each
capitalized term used in this Agreement shall have the meaning accorded to it in
the Loan Agreement.
RECITALS
--------
A. On or about March 8, 2000, the Borrower and the Agent (for itself
and for the Banks) entered into the Loan Agreement pursuant to which the Banks
made available to the Borrower the Committed Letter of Credit Facility in the
principal amount of up to Twenty Million Dollars ($20,000,000.00).
B. The Borrower has requested that the Banks increase the principal
amount available under the Committed Letter of Credit Facility to Thirty Million
Dollars ($30,000,000.00) and the Banks and the Agent have agreed to do so, all
in accordance with the terms of this Amendment.
AGREEMENT
---------
NOW, THEREFORE, in reliance upon the foregoing and in consideration of
the mutual covenants set forth herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Amendmentto Loan Agreement.
--------------------------
1.1 Increase to Commiment. The principal amount available to the
----------------------
Borrower under the Committed Letter of Credit Facility is hereby increased to
Thirty Million Dollars ($30,000,000.00); provided, however, that such
availability shall be decreased by the aggregate of all currently outstanding
Letters of Credit, all Advances arising from time to time as a result of
unreimbursed draws on any Letter of Credit and all Letter of Credit reserves (if
any) that may be established from time to time by the Agent. Section 2.2 of the
Loan Agreement is hereby amended accordingly.
1.2 Fees and Expenses. The Borrower will pay to the Agent, for the
-----------------
benefit of the Banks, a fee equal to Sixteen Thousand Six Hundred Sixty-Six and
66/100 Dollars ($16,666.66) (the "Increased Commitment Fee"). The Increased
Commitment Fee shall be due and owing concurrently with the execution and
delivery of this Amendment, shall be deemed to be earned in full upon payment
and non-refundable, and shall be in addition to all other fees and expenses set
forth under the Loan Agreement, including but not limited to those set forth in
Section 2.4 thereof.
1.3 Increase to Minimum Unrestricted Cash Covenant. The Borrower
----------------------------------------------
agrees that it shall at all times hereafter maintain Unrestricted Cash on hand
in the amount of not less than One Hundred Twenty-five Million Dollars
($125,000,000.00). Paragraph (a) of Section 6.7 of the Loan Agreement is hereby
amended accordingly.
2. Reaffirmation of Obligations. The Borrower reaffirms to the Agent,
----------------------------
for the benefit of the Banks, that as of the date hereto the outstanding face
amount of all Letter of Credit is Twenty Million Nine Hundred Ninety Thousand
Seventy-two and 16/100 Dollars ($20,990,072.16). The Borrower acknowledges that
the Loan Agreement fully and accurately reflects and constitutes valid and
enforceable obligations of the Borrower to the Agent and the Banks, and the
Borrower remains fully obligated to perform all covenants and has no defenses to
or offsets against such obligations.
3. Conditions to Effectiveness. The following conditions must be
---------------------------
satisfied in full, or waived in writing by the Agent on behalf of the Banks,
before this Amendment shall be effective and the Banks shall become obligated
hereunder.
3.1 Execution and Delivery of Documents. The Borrower shall have
-----------------------------------
executed and delivered to the Agent this Amendment, and the Agent shall have
received any and all other instruments and documents contemplated hereby or
otherwise reasonably requested by the Agent, all in form and substance
acceptable to the Agent, including the written consent of each Bank to increase
its Commitment under the Loan Agreement commensurate with the terms of this
Amendment.
3.2 Payment of Fees and Expenses. The Borrower shall have paid to
----------------------------
the Agent all fees due and owing under the Loan Agreement as amended hereby and
a sum sufficient to reimburse the Agent for all costs and expenses incurred by
the Agent in entering into this Amendment (including but not limited to all
attorneys' fees and expenses).
3.3 Payment of Accrued Interest and Fees. The Borrower shall have
------------------------------------
paid to the Agent all outstanding accrued interest and fees under the Loan
Agreement that are due and owing as of the date on which this Amendment becomes
effective.
3.4 Representations and Warranties. The representations and
------------------------------
warranties of the Borrower as set forth in the Loan Agreement shall be true and
correct as of the date on which this Amendment becomes effective, and no Event
of Default shall have occurred and be continuing as of such date without cure.
4. Continued Full Force and Effect. Except to the extent expressly
-------------------------------
amended hereby, all of the terms and provisions of the Loan Agreement shall
remain in full force and effect, and the lien in favor of the Agent, as agent
for the Banks, in the Collateral shall be and remain a fully perfected senior
lien upon all of the Collateral pursuant to the terms of the Loan Agreement, it
being the intent of the parties that nothing herein shall affect or impair the
Agent's rights or remedies under the Loan Agreement or its lien upon the
Collateral. Henceforth, the term "Loan Agreement" shall be deemed to mean the
Loan Agreement as modified and supplemented by the terms of this Amendment, and
any default of the Borrower hereunder shall constitute an Event of Default under
the Loan Agreement.
2
5. General Provisions.
5.1 Choice of Law and Venue. This Amendment shall be governed by and
-----------------------
construed in accordance with the internal laws of the Sate of California,
without regard to principles of conflicts of law, and any action or proceeding
arising out of this Agreement shall be commenced in the Superior Court of the
State of California for the County of Santa ▇▇▇▇▇, or in the District Court of
the United States in the Northern District of California.
5.2 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, ON THE ONE HAND, AND
--------------------
THE AGENT AND THE BANKS, ON THE OTHER HAND, WAIVES ITS RIGHT TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AMENDMENT, THE
LOAN AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH
OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH OF
THE PARTIES TO ENTER INTO THIS AMENDMENT. EACH PARTY HAS REVIEWED THIS WAIVER
WITH ITS COUNSEL AND UNDERSTANDS THE RAMIFICATIONS THEREOF.
5.3 Entire Agreement. This Amendment and the Loan Agreement together
----------------
constitute the entire agreement and understanding between the parties hereto
with respect to the transactions contemplated hereunder and thereunder and
supersede all prior negotiations, understandings and agreements between the
parties with respect to such transactions.
5.4 Counterparts. This Amendment may be executed and delivered in
------------
any number of counterparts, each of which shall be an original and all of which
together shall constitute one and the same agreement.
5.5 Time of the Essence. Times if of the essence in the performance
-------------------
by each party of its obligations hereunder and the satisfaction of all
conditions specified herein.
IN WITNESS THEREOF, each of the parties hereto has caused its duly
authorized representative to execute this Agreement as of the date first set
forth above.
BORROWER: AGENT AND BANK:
EXODUS COMMUNICATIONS, INC., SILICON VALLEY BANK
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------ ------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------- -------------------------------
Title: VP FINANCE Title: SVP
--------------------------- ------------------------------
3
SECOND AMENDMENT TO
-------------------
AMENDED AND RESTATED
--------------------
LOAN AND SECURITY AGREEMENT
---------------------------
THIS SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (the "Amendment") is entered into as of July 14, 2000, by and among
SILICON VALLEY BANK as Agent and a Bank (the "Agent"), EXODUS COMMUNICATIONS,
INC., a Delaware corporation as borrower (the "Borrower"), and those certain
financial institutions from time to time party to that certain Amended and
Restated Loan and Security Agreement dated as of March 8, 2000 as Banks (the
"Banks").
RECITALS
--------
A. On or about March 8, 2000, the Borrower and the Agent (for itself
and for the Banks) entered into that certain Amended and Restated Loan and
Security Agreement pursuant to which the Banks made available to the Borrower
the Committed Letter of Credit Facility in the principal amount of up to Twenty
Million Dollars ($20,000,000.00). On or about April 28, 2000, the Borrower and
the Agent (for itself and the Banks) entered into that certain First Amendment
to Amended and Restated Loan and Security Agreement (the "First Amendment")
pursuant to which the Banks increased the principal amount available under the
Committed Letter of Credit Facility to Thirty Million Dollars ($30,000,000.00)
and changed certain covenants therein. The Amended and Restated Loan and
Security Agreement, as amended by the First Amendment, is hereinafter referred
to as the "Loan Agreement", and each capitalized term used in this Amendment
shall have the meaning accorded to it in the Loan Agreement unless it is
otherwise defined herein.
B. The parties now desire to extend the Maturity Date to March 31, 2001
and amend certain covenants in the Loan Agreement, all in accordance with the
terms of this Amendment.
AGREEMENT
---------
NOW, THEREFORE, in reliance upon the foregoing and in consideration of
the mutual covenants set forth herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Amendments to Loan Agreement.
----------------------------
1.1 Extension of Maturity Date. The Maturity Date is hereby extended
--------------------------
from December 31, 2000 to March 31, 2001. The definition of "Maturity Date" in
Section 19 of the Loan Agreement is hereby amended by substituting the words
"March 31, 2001" for the words "December 31, 2000" therein.
1.2 Increase to Minimum Trailing Twelve-Month EBITDA Covenant. The
---------------------------------------------------------
Borrower agrees that it shall, at all times after December 31, 2000, maintain
its EBITDA for a trailing twelve-month period in the amount of not less than
Thirty Million Dollars ($30,000,000.00). Paragraph (d) of Section 6.7 of the
Loan Agreement is hereby amended by changing clause (iii) and adding a new
clause (iv) as follows: "(iii) $22,000,000 as of 9/30/00 and through 12/31/00;
and (iv) $30,000,000 at all times after 12/31/00."
2. Extension Fee. The Borrower will pay to the Agent, for the benefit
-------------
of the Banks, a fee (the "Extension Fee") in the amount of Eighteen Thousand
Seven Hundred Fifty and No/100
Dollars ($18,750.00). The Extension Fee shall be due and owing concurrently with
the execution and delivery of this Amendment, shall be deemed to be earned in
full upon payment and non-refundable, and shall be in addition to all other fees
and expenses set forth under the Loan Agreement, including but not limited to
those set forth in Section 2.4 hereof.
3. Consent to Investment in Mirror Image. The Agent hereby consents, on
-------------------------------------
behalf of the Banks, to the investment by the Borrower of cash in the amount of
$75,000,000 and equity securities of the Borrower worth $310,000,000 to acquire
a 17.0% ownership interest in Mirror Image Interest on or about April 21, 2000
(the "Mirror Image Investment").
4. Reaffirmation of Obligations. The Borrower reaffirms to the Agent,
----------------------------
for the benefit of the Banks, that as of the date hereof the outstanding face
amount of all Letters of Credit outstanding under the Credit Facility if
Twenty-nine Million Four Hundred and Fifteen Thousand and Seven Hundred and
----------- ------------------------ -----------------
Sixty Eight Dollars and eight-eight/100 Dollars ($29,415,768.88). The Borrower
----------- --------------
acknowledges that the Loan Agreement fully and accurately reflects and
constitutes the valid and enforceable obligations of the Borrower to the Agent
and the Banks, and the Borrower remains fully obligated to perform all covenants
thereunder and has no defenses to or offsets against such obligations.
5. Conditions to Effectiveness. The following conditions must be
---------------------------
satisfied in full, or waived in writing by the Agent on behalf of the Banks,
before this Amendment shall be effective and the Banks shall become obligated
hereunder.
5.1 Execution and Delivery of Documents. The Borrower shall have
-----------------------------------
executed and delivered to the Agent this Amendment, and the Agent shall have
received the Extension Fee and any and all other instruments and documents
contemplated hereby or otherwise reasonably requested by the Agent, all in form
and substance acceptable to the Agent, including the written consent of each
Bank to the Mirror Image Investment and to the extension of the Maturiy Date in
accordance with the terms of this Amendment.
5.2 Payment of Fees and Expenses. The Borrower shall have paid to
----------------------------
the Agent all fees due and owing under the Loan Agreement as amended hereby, as
well as the Extension Fee and a sum sufficient to reimburse the Agent for all
costs and expenses incurred by the Agent in entering into this Amendment
(including but not limited to all attorneys' fees and expenses).
5.3 Payment Accrued Interest. The Borrower shall have paid to the
------------------------
Agent all outstanding accrued interest under the Loan Agreement that is due and
owing as of the date on which this Amendment becomes effective.
5.4 Representations and Warranties; No Default. The representations
------------------------------------------
and warranties of the Borrower as set forth in the Loan Agreement shall be true
and correct as of the date on which this Amendment becomes effective, and no
Event of Default shall have occurred and be continuing as of such date without
cure.
6. Continued Full Force and Effect. Except to the extent expressly
amended hereby, all of the terms and provisions of the Loan Agreement shall
remain in full force and effect, and the lien in favor of the Agent, as agent
for the Banks, in the Collateral shall be and remain a fully perfected senior
lien upon all of the Collateral pursuant to the terms of the Loan Agreement, it
being the intent of the parties that nothing herein shall affect or impair the
Agent's rights or remedies under the Loan Agreement or its lien upon the
Collateral. Henceforth, the term "Loan Agreement" shall be deemed to
2
mean the Loan Agreement as modified and supplemented by the terms of this
Agreement, and any default of the Borrower hereunder shall constitute an Event
of Default under the Loan Agreement.
7. General Provisions.
------------------
7.1 Choice of Law and Venue. This Amendment shall be governed by and
-----------------------
construed in accordance with the internal laws of the Sate of California,
without regard to principles of conflicts of law, and any action or proceeding
arising out of this Agreement shall be commenced in the Superior Court of the
State of California for the County of Santa ▇▇▇▇▇, or in the District Court of
the United States in the Northern District of California.
7.2 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, ON THE ONE HAND, AND
--------------------
THE AGENT AND THE BANKS, ON THE OTHER HAND, WAIVES ITS RIGHT TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AMENDMENT, THE
LOAN AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH
OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH OF
THE PARTIES TO ENTER INTO THIS AMENDMENT. EACH PARTY HAS REVIEWED THIS WAIVER
WITH ITS COUNSEL AND UNDERSTANDS THE RAMIFICATIONS THEREOF.
7.3 Entire Agreement. This Amendment and the Loan Agreement together
----------------
constitute the entire agreement and understanding between the parties hereto
with respect to the transactions contemplated hereunder and thereunder and
supersede all prior negotiations, understandings and agreements between the
parties with respect to such transactions.
7.4 Counterparts. This Amendment may be executed and delivered in
------------
any number of counterparts, each of which shall be an original and all of which
together shall constitute one and the same agreement.
7.5 Time of Essence. Time is of the essence in the performance by
---------------
each party of its obligations hereunder and the satisfaction of all conditions
specified herein.
IN WITNESS THEREOF, each of the parties hereto has caused its duly
authorized representative to execute this Agreement as of the date first set
forth above.
BORROWER: AGENT AND BANK
EXODUS COMMUNICATIONS, INC., SILICON VALLEY BANK
a Delaware corporation
BY: /s/ ▇▇▇▇ ▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- -----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- --------------------------
Title: VP Finance Title: AVP
--------------------------- --------------------------
3