Exhibit 10.1
REVOLVING LOAN AND SECURITY
AGREEMENT
BETWEEN
ZIPLINK, INC.
AND
FLEET NATIONAL BANK
JULY 26, 2000
REVOLVING LOAN AND SECURITY AGREEMENT
AGREEMENT, made July 26, 2000, between ZIPLINK, INC., a Delaware
corporation, with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Borrower") and FLEET NATIONAL BANK, a
national banking association with an office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lender").
PREAMBLE
WHEREAS, Borrower has requested Lender to extend to Borrower a
revolving loan in the maximum aggregate principal amount of $10,000,000 (the
"Loan").
WHEREAS, Lender has agreed to extend the Loan to Borrower subject to
the terms and conditions set forth below.
NOW, THEREFORE, for the mutual considerations contained in this
Agreement, Borrower and Lender agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 ACCOUNTING TERMS; ETC. Unless otherwise defined, all
accounting terms shall be construed, and all computations or classifications of
assets and liabilities and of income and expenses shall be made or determined in
accordance with GAAP consistently applied. As used herein, unless otherwise
defined, the following terms shall have the following meanings:
(a) "Agreement" shall mean this Revolving Loan and Security Agreement
as the same may from time to time be amended, supplemented or
otherwise modified.
(b) "Base Rate Loan" means each Revolving Loan which bears interest
based on Lender's "prime rate" or "base rate" of interest.
(c) "Borrower Collateral" shall have the meaning provided in SECTION
7.1 hereof.
(d) "Borrowing Base" shall mean, as of any date as of which the
amount thereof shall be determined, an amount of up to the lesser
of: (i) the Commitment Amount, or (ii) the aggregate of (A) sixty
percent (60%) of the then current market value of the Vodafone
common stock then pledged by Guarantor as Collateral pursuant to
the Pledge Agreement and subject to terms of the Control
Agreement, plus (B) seventy percent (70%) of the then current
market value of any Securities listed on the New York Stock
Exchange or American Stock
Exchange and pledged by Guarantor to the Lender as additional
Collateral pursuant to the terms of the Pledge Agreement, plus
(C) fifty percent (50%) of the then current market value of any
Securities listed on any other stock exchange acceptable to the
Lender in its sole discretion and pledged by Guarantor to the
Lender as additional Collateral pursuant to the terms of the
Pledge Agreement, plus (D) eighty percent (80%) of the then
current market value of any municipal bonds having the highest
rating by a nationally recognized securities rating service and
pledged by Guarantor to the Lender as additional Collateral
pursuant to the terms of the Pledge Agreement, plus (E) ninety
percent (90%) of the then current market value of United States
Treasury bonds and notes pledged by Guarantor to the Lender as
additional Collateral pursuant to the terms of the Pledge
Agreement.
(e) "Business Day" shall mean any day other than a day on which
commercial banks in Hartford, Connecticut are required or
permitted by law to close.
(f) "Closing Date" shall mean the date hereof.
(g) "Collateral" shall have the meaning provided in the Pledge
Agreement or the Control Agreement, as the context may require.
(h) "Collateral Assignment" shall mean the Collateral Assignment of
Rights of even date herewith between Borrower and Lender with
respect to the assignment of Borrower's rights under any Interest
Rate Protection Contracts.
(i) "Commitment Amount" shall mean TEN MILLION DOLLARS
($10,000,000.00), or such lesser amount as the Borrower may
stipulate.
(j) "Control Agreement" shall mean that certain Account Control
Agreement of even date herewith by and among Guarantor, Lender,
and the securities intermediary party thereto.
(k) "Defaulting Event" shall mean the occurrence of an Event of
Default or the occurrence of any condition or event which but for
the giving of notice or passage of time or both would constitute
an Event of Default.
(l) "Default Rate" shall have the meaning assigned in SECTION 3.1(c)
hereof.
(m) "Dollar" and the sign "$" shall mean lawful money of the United
States of America.
(n) "ERISA" shall mean the Employee Retirement Income Security Act of
1974 and all rules and regulations promulgated pursuant thereto,
as the same may be supplemented or amended.
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(o) "Event of Default" and "Events of Default" shall have the
meanings assigned in SECTION 8.1 hereof.
(p) "Financing Document" or "Financing Documents" shall mean this
Agreement, the Note, the Guaranty, the Pledge Agreement, the
Control Agreement, the Collateral Assignment of Rights, any and
all Interest Rate Protection Contracts, and any and all other
instruments, agreements and documents executed in connection
herewith or therewith or related hereto or thereto, together with
any amendments, supplements or modifications hereto or thereto.
(q) "GAAP" shall mean generally accepted accounting principals.
(r) "Guarantor" means ▇▇▇▇▇ ▇. ▇▇▇▇▇.
(s) "Guaranty" shall mean the Guaranty Agreement dated the date
hereof from the Guarantor to the Lender, as the same may from
time to time be amended, supplemented or otherwise modified.
(t) "Interest Payment Date" shall mean (i) with respect to any Base
Rate Loan, the first day of each month, commencing September 1,
2000, and July 26, 2002, and (ii) with respect to any LIBOR Rate
Loan, the last day of the Interest Period applicable thereto and
July 26, 2002.
(u) "Interest Period" shall mean, (i) with respect to each Base Rate
Loan, a period commencing on the date such Revolving Loan is
advanced and ending on the earlier of (1) the date such Base Rate
Loan is paid in full, (2) the date upon which such Base Rate Loan
is converted to a LIBOR Rate Loan, if the Borrower so requests
and Lender so consents (which consent shall be in Lender's sole
discretion) and (3) July 26, 2002, and (ii) for each LIBOR Rate
Loan, a period commencing on (for the initial Interest Period)
the date such Revolving Loan is advanced or (for each subsequent
Interest Period) the first day after the expiration of the
immediately preceding Interest Period, and ending thirty (30),
sixty (60) or ninety (90) days thereafter, as the Borrower may
elect in the Notice of Borrowing; and provided that:
(1) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in
the next calendar month, in which case such Interest Period
shall end on the immediately preceding Business Day;
(2) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the
end of such Interest Period) shall, subject to clause (3)
below, end on the last Business Day of a calendar month;
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(3) unless agreed to in advance by the Lender, the Borrower may
not elect an Interest Period which would otherwise end after
the end of the Term.
(v) "Interest Rate Protection Contracts" shall mean any and all
Interest Rate Protection Contracts, swap agreements, or swap
arrangements signed by and between the Borrower and Fleet
National Bank in connection with the Revolving Loans.
(w) "LIBOR" or "LIBOR Rate" shall mean for the then current Interest
Period relating thereto the rate of interest per annum (rounded
upward, if necessary, to the nearest 1/32 of one percent) as
determined on the basis of the offered rates for deposits in U.S.
dollars for a period of time comparable to such Interest Period
which appears on the Telerate page 3750 as of 11:00 a.m. London
time on the day that is two (2) London Banking Days preceding the
first day of such Interest Period; provided, however, if the rate
described above does not appear on the Telerate System on any
applicable interest determination date, the LIBOR Rate shall be
the rate (rounded upwards as described above, if necessary) for
deposits in dollars for a period substantially equal to the
Interest Period on the Reuters Page "LIBO" (or such other page as
may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time), on the
day that is two (2) London Banking Days prior to the beginning of
such Interest Period. If both the Telerate and Reuters system are
unavailable, then the rate for that date will be determined on
the basis of the offered rates for deposits in U.S. dollars for a
period of time comparable to such Interest Period which are
offered by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the day that is two (2)
London Banking Days preceding the first day of such Interest
Period as selected by the Lender. The principal London office of
each of the four major London banks will be requested to provide
a quotation of its U.S. dollar deposit offered rate. If at least
two such quotations are provided, the rate for that date will be
the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will
be determined on the basis of the rates quoted for loans in U.S.
dollars to leading European banks for a period of time comparable
to such Interest Period offered by major banks in New York City
at approximately 11:00 a.m. New York City time, on the day that
is two (2) London Banking Days preceding the first day of such
Interest Period. In the event that the Bank is unable to obtain
any such quotation as provided above, it will be deemed that
LIBOR cannot be determined, and the Lender will set an interest
rate for the Revolving Loans by such means as it shall reasonably
deem equitable so that such rate is comparable to the rate that
would be established by the foregoing means. In the event that
the Board of Governors of the Federal Reserve System shall impose
a Reserve Percentage with respect to LIBOR deposits of the
Lender, then for any period during which such Reserve
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Percentage shall apply, LIBOR shall be equal to the amount
determined above divided by an amount equal to one minus the
Reserve Percentage.
(x) "LIBOR Rate Loan" means each Revolving Loan which bears interest
based on the LIBOR Rate as elected by Borrower in accordance with
Section 2.3.
(y) "Loan" means the revolving loan made pursuant hereto in the
maximum principal amount of the Commitment Amount.
(z) "London Banking Day" means any day on which commercial banks are
open for business in London, England.
(aa) "Note" means the Revolving Loan Note.
(bb) "Notice of Borrowing" shall have the meaning assigned in SECTION
2.3 hereof.
(cc) "Obligation" and "Obligations" mean and include all loans,
advances, interest, indebtedness, liabilities, obligations, fees,
charges, expenses, guaranties, swaps, covenants and duties at any
time owing by Borrower to Lender of every kind and description,
whether or not evidenced by any note or other instrument, whether
or not for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or
hereafter arising, including, but not limited to, the Revolving
Loans, and all other indebtedness, liabilities and obligations of
Borrower arising under this Agreement and the other Financing
Documents or otherwise, and all costs, expenses, fees, charges
incurred by Lender hereunder or otherwise with respect to
Borrower, including without limitation fees and expenses of
attorneys and other professionals incurred in connection with any
of the foregoing, or in any way connected with, involving or
relating to the preservation, enforcement, protection or defense
of, or realization under this Agreement, any of the other
Financing Documents, any related agreement, document or
instrument, the Collateral, the Borrower Collateral and the
rights and remedies hereunder or thereunder.
(dd) "Plan" means any employee benefit plan or other plan maintained
by Borrower or any entity affiliated with Borrower for employees
covered by Title I of ERISA.
(ee) "Pledge Agreement" shall mean that certain Stock Pledge Agreement
of even date herewith by and between Guarantor and Lender,
pursuant to which Guarantor is pledging the Collateral to Lender.
(ff) "Revolving Loan" and "Revolving Loans" have the respective
meanings assigned in SECTION 2.1 hereof.
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(gg) "Revolving Loan Account" shall mean the revolving loan account
maintained by the Borrower with the Lender.
(hh) "Revolving Loan Note" shall have the meaning assigned in SECTION
2.3 hereof.
(ii) "Security" or "Securities" shall have the meaning assigned in the
Pledge Agreement.
(jj) "Term" shall have the meaning assigned in SECTION 10.1 hereof.
(kk) "Vodafone" shall mean Vodafone Airtouch PLC, a public limited
company incorporated in England and Wales.
SECTION 1.2. Each reference herein to Lender shall be deemed to include
its successors and/or assigns and each reference to the Borrower and/or any
guarantor of the Obligations, and any pronouns referring thereto as used herein
shall be construed in the masculine, feminine, neuter, singular or plural as the
context may require and shall be deemed to include the heirs, executors,
administrators, legal representatives, successors and/or assigns of the Borrower
and/or any such guarantor, all of whom shall be bound by each of the provisions
contained herein.
ARTICLE II
REVOLVING LOANS
SECTION 2.1 AMOUNTS. Subject to the terms and conditions contained in
this Agreement, and so long as no Defaulting Event has occurred, Lender agrees
to make advances on the Loan (the "Revolving Loans" and, individually, a
"Revolving Loan") to Borrower from time to time until terminated as provided
below in principal amounts not exceeding in the aggregate at any one time
outstanding the Borrowing Base, it being agreed and understood that at no time
shall the maximum aggregate principal amount of the Revolving Loans outstanding
exceed the Borrowing Base.
SECTION 2.2 PAYMENT.
(a) Interest only as accrued shall be due and payable on the
Revolving Loans on each Interest Payment Date provided, however,
that the entire outstanding principal amount of the Revolving
Loans plus all accrued and outstanding interest thereon, and all
other amounts hereunder, shall be due and payable on July 26,
2002.
(b) In the event that the market value of the Vodafone common stock
initially pledged as Collateral pursuant to the Pledge Agreement
shall decline so as to
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cause the outstanding principal balance of the Revolving Loans to
exceed seventy percent (70%) of the then current market value of
such common stock (unless the Guarantor shall have pledged
additional Collateral to Lender as permitted by and pursuant to
the Pledge Agreement so that the outstanding principal balance of
the Revolving Loans does not exceed the Borrowing Base), a
Defaulting Event shall be deemed to have occurred, which
Defaulting Event shall constitute an Event of Default unless,
within seven (7) days of the date such outstanding principal
balance first exceeds seventy percent (70%) of the current market
value of such common stock, the Borrower either pays down the
outstanding principal balance of the Revolving Loans or the
Guarantor pledges additional Collateral pursuant to the Pledge
Agreement, in either case so that the outstanding principal
balance of the Revolving Loans as of such date no longer exceeds
the Borrowing Base.
(c) In the event that the principal amount of the Revolving Loans
outstanding at any time shall exceed the Borrowing Base for any
reason other than one described in subparagraph (b) above, the
Borrower shall, within five (5) days after such outstanding
principal amount first exceeds the Borrowing Base, either pay
down the outstanding principal balance of the Revolving Loans or
cause the Guarantor to pledge additional Collateral pursuant to
the terms of the Pledge Agreement, in either case so that the
outstanding principal balance of the Revolving Loans no longer
exceeds the Borrowing Base. In the event that the Borrower has
not reduced such principal balance below the Borrowing Base by
the end of such five (5) day period, an Event of Default shall
immediately exist.
SECTION 2.3 ABILITY TO REBORROW, PROCEDURE FOR ADVANCES, NOTICE OF
BORROWING, REVOLVING LOAN NOTE, REVOLVING LOAN ACCOUNT, ETC. Within the limits
of the Borrowing Base and the Term, so long as Borrower is in compliance with
all of the terms and conditions of this Agreement and the other Financing
Documents and no Defaulting Event has occurred, Borrower may request borrowings,
repay and request reborrowings of Revolving Loans. Whenever Borrower desires an
advance, Borrower shall notify Lender in writing or by telephone of the proposed
borrowing. Such notice (each, a "Notice of Borrowing") shall specify the date of
the proposed borrowing, the amount to be borrowed and the length of the Interest
Period applicable thereto and shall indicate whether such proposed borrowing is
to bear interest as a LIBOR Rate Loan or Base Rate Loan. Each Notice of
Borrowing must be received by Lender no later than 10:00 a.m., Hartford,
Connecticut time on the second London Banking Day preceding the business day on
which such borrowing is requested. The Borrower shall not request any advance in
an amount less than One Hundred Thousand Dollars ($100,000.00) and shall not
request more than one advance per week. In addition to this Agreement, the
Revolving Loans shall be evidenced by a revolving loan promissory note payable
to Lender in the form of EXHIBIT A attached hereto (the "Revolving Loan Note").
Insofar as Borrower may request and Lender shall make Revolving Loans hereunder,
Lender shall enter such advances as debits on a revolving loan account
maintained by Borrower with Lender (the "Revolving Loan Account") and deposit
such amounts in a demand deposit checking account maintained by Borrower with
Lender. Lender may also record to the
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Revolving Loan Account, in accordance with customary accounting practices and
procedures, all fees, accrued and unpaid interest, late fees, usual and
customary charges for the maintenance and administration of checking and any
other accounts maintained by Borrower with Lender and other fees, charges and
liens which are properly chargeable to Borrower under this Agreement; all
payments, subject to collection, made by Borrower on account of indebtedness
evidenced by the Revolving Loan Account; all proceeds of Borrower Collateral
which are finally paid to Lender in its own office in cash or collected items;
and other appropriate debits and credits. Lender shall record as credits to the
Revolving Loan Account, in accordance with customary accounting practices and
procedures, all Revolving Loan payments made by Borrower. Borrower hereby
authorizes Lender to maintain the Revolving Loan Account and agrees that the
amount shown on the Revolving Loan Account as outstanding from time to time
shall constitute the amount owing to Lender by reason of the Revolving Loans and
other appropriate charges and credits hereunder, absent manifest error. Borrower
hereby authorizes Lender to make such charges as are described in this SECTION
2.3 against the Revolving Loan Account or any other account maintained by
Borrower with Lender.
SECTION 2.4 MONTHLY STATEMENTS. On a monthly basis, Lender may render a
statement for the Revolving Loan Account, which statement shall be considered
correct and accepted by Borrower and conclusively binding upon Borrower unless
Borrower notifies Lender to the contrary within thirty (30) days of the receipt
of said statement by Borrower.
SECTION 2.5 LENDER DISCRETION. Nothing herein shall be construed to
prohibit Lender from lending in excess of the Borrowing Base, it being agreed
that all such loans and advances shall be at Lender's sole discretion and shall
not establish a pattern or custom binding upon Lender.
ARTICLE III
INTEREST, FEES AND OTHER CHARGES
SECTION 3.1 INTEREST.
(a) INTEREST RATES. So long as no Defaulting Event or Event of
Default has occurred, (i) each LIBOR Rate Loan shall bear
interest for the applicable Interest Period at a fixed rate per
annum equal to the LIBOR Rate, plus .30% and (ii) each Base Rate
Loan shall bear interest at the annual rate of interest announced
from time to time by Lender as its "prime rate" or "base rate",
minus one percent (1%). The Borrower shall elect the length of
each applicable Interest Period, subject to the provisions of
this Agreement. At the expiration of an applicable Interest
Period for a Revolving Loan, the Borrower may elect the length of
the next Interest Period for such Revolving Loan; provided that,
if the Borrower fails to indicate the length of any Interest
Period applicable to a Revolving Loan, such Revolving Loan shall
be deemed to be a Base Rate Loan
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and the Interest Period applicable thereto shall be determined in
accordance with the terms of Section 1.1(u)(i). The Borrower
shall not choose an Interest Period that extends beyond the end
of the Term.
(b) PAYMENT OF INTEREST. So long as any of the Obligations remain
outstanding, interest on the Revolving shall be due and payable
without notice or demand on each Interest Payment Date.
(c) DEFAULT INTEREST RATE. Notwithstanding the foregoing, interest on
the Revolving Loans, at all times after the occurrence of an
Event of Default, and interest on all payments of interest that
are not paid when due, shall accrue at a rate per annum equal to
three percentage points (3.0%) above the applicable interest
rates otherwise in effect under this Agreement (the "Default
Rate").
(d) CALCULATION OF INTEREST. Interest on the Revolving Loans shall be
calculated on the basis of a 360-day year and the actual number
of days elapsed.
(e) LATE PAYMENT. If any interest installment or principal payment
due hereunder or under the Note is not paid in full within ten
(10) days after the date it is due and payable, without in any
way affecting Lender's right to make demand hereunder or to
declare an Event of Default to have occurred, Lender may in its
sole discretion assess a late charge equal to five percent (5%)
of such late payment against Borrower, which late charge shall be
immediately due and payable and may be paid by a charge to
Borrower's Revolving Loan Account as contemplated in SECTION 2.3
above.
(f) LAWFUL INTEREST. It being the intent of the parties that the rate
of interest and all other charges to Borrower be lawful, if for
any reason the payment of a portion of interest, fees or charges
as required by this Agreement would exceed the limit established
by applicable law which a lender such as Lender may charge to a
commercial borrower such as Borrower, then the obligation to pay
interest or charges shall automatically be reduced to such limit
and, if any amounts in excess of such limits shall have been
paid, then such amounts shall be applied to the unpaid principal
amount of the Obligations or refunded so that under no
circumstances shall interest or charges required hereunder exceed
the maximum rate allowed by law, as aforesaid.
(g) SWAP ARRANGEMENT. In order for Borrower to make regular payments
as if the interest rates on the Revolving Loans were fixed, the
Lender shall extend to the Borrower the right, but not the
obligation, to enter into an interest rate swap agreement with
respect to the Loan, such swap agreement to be in a form provided
by and acceptable to the Lender in its sole discretion. In the
event Borrower elects to enter into a swap arrangement with
Lender, all Revolving Loans to which the swap relates shall use
thirty (30), sixty (60) or ninety (90) day Interest Periods only
and shall bear interest per annum at the LIBOR Rate
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plus .20% for each such thirty (30), sixty (60) or ninety (90)
day Interest Period.
SECTION 3.2 PREPAYMENT.
(a) The Borrower shall have the right at any time and from
time-to-time to prepay any Revolving Loan subject to the rights
of the Borrower to reborrow as set forth in this Agreement,
together with the applicable premium.
(b) Except as expressly otherwise provided pursuant to Section 2.2,
the outstanding balance of the Revolving Loans shall, at any
time, exceed the Borrowing Base, the Borrower shall immediately
repay the Revolving Loans in the amount of such excess.
(c) The Borrower agrees to pay to the Lender a prepayment fee on the
principal amount of the Revolving Loans being prepaid equal to
the excess, discounted to its present value as of the date paid
to Lender, of (i) the amount of interest which otherwise would
have accrued on the principal amount of the Revolving Loans being
prepaid during the period (the "Indemnity Period") commencing
with the date of such prepayment and ending on the last day of
the applicable Interest Period at the rate of interest applicable
to such Revolving Loan during such Interest Period over (ii) the
amount of interest which would be earned by the Lender during the
Indemnity Period if it invested the principal amount so prepaid
at a rate per annum determined by the Lender as the rate it would
bid in the London interbank market for a deposit of eurodollars
in an amount approximately equal to such principal amount for a
period of time comparable to the Indemnity Period, plus any other
reasonable expenses that the Lender may sustain or incur by
reason of the prepayment. In the event that Borrower has entered
into a swap arrangement as described above, Borrower agrees to
pay to Lender upon prepayment of any Revolving Loans to which
such swap relates a yield maintenance fee that compensates Lender
for any actual loss or expense sustained or incurred by Lender in
respect of such swap arrangement as a result of such prepayment.
For the purposes of this Section, the determination by the Lender
of any prepayment, fees and expenses shall be conclusive if made
reasonably and in good faith. A certificate as to any additional
amounts payable pursuant to this Section setting forth the basis
and method of determining such amounts shall be conclusive,
absent manifest error, as to determination by the Lender set
forth therein if made reasonably and in good faith.
(d) The above premiums for prepayment of the Revolving Loans apply at
any time the Revolving Loans are prepaid, for any reason,
including demand due to the occurrence of an Event of Default.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Lender that:
(a) GOOD STANDING AND QUALIFICATION. It is duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware. It has all requisite power and authority to own and
operate its properties and to carry on its business as presently
conducted and is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the
failure to so qualify would have a material adverse effect on the
Borrower.
(b) AUTHORITY. It has full power and authority to enter into this
Agreement, the Note and the other Financing Documents to which it
is a party, to make the borrowings contemplated herein, to
execute and deliver the Note and the other Financing Documents to
which it is a party, and to incur the obligations provided for
herein and therein, all of which have been duly authorized by all
necessary and proper action. No other consent or approval or the
taking of any other action in respect of its stockholders or of
any public authority is required as a condition to the validity
or enforceability of this Agreement, the Note, the other
Financing Documents or any other instrument, document or
agreement delivered in connection herewith or therewith.
(c) BINDING AGREEMENTS. This Agreement, the Note and the other
Financing Documents executed and/or delivered by Borrower in
connection herewith or therewith constitute valid and legally
binding obligations of Borrower, enforceable in accordance with
their respective terms, except as enforcement may be limited by
principles of equity, bankruptcy, insolvency, or other laws
affecting the enforcement of creditors' rights generally.
(d) LITIGATION. Except as set forth on SCHEDULE 4.1(d) hereof, there
are no actions, suits or proceedings pending against Borrower
before any court or administrative agency, nor are there any
actions, suits or proceedings threatened, which, either in any
case or in the aggregate, would materially and adversely affect
the financial condition, assets or operations of Borrower, nor
are there any such actions, suits or proceedings which question
the validity of this Agreement, the Note, any of the other
Financing Documents, or any action to be taken in connection with
the transactions contemplated hereby or thereby.
(e) NO CONFLICTING LAW OR AGREEMENTS. The execution, delivery and
performance by Borrower of this Agreement, the Note and the other
Financing Documents, as the case may be, do not (i) violate any
provision of its Certificate of Incorporation or Bylaws or any
order, decree or judgment, or any provision of any statute, rule
or regulation; (ii) violate or conflict with, result in a breach
of
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or constitute (with notice or lapse of time, or both) a default
under any agreement, mortgage, indenture or other contract or
undertaking to which it is a party, or by which its properties
are bound; and (iii) result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any
property or assets of Borrower except for the liens granted
hereunder to Lender.
(f) TAXES. It has filed all tax returns which are required to be
filed and all federal, state, municipal, franchise and other
taxes shown on such filed returns have been paid or are being
diligently contested by appropriate proceedings and have been
reserved against, as required by GAAP, consistently applied.
(g) FINANCIAL STATEMENTS. It has heretofore delivered to Lender its
annual balance sheet as of December 31, 1999, and the related
statements of income, retained earnings and cash flows for the
fiscal year or period then ended. Each of such statements fairly
presents in all material respects its consolidated financial
condition as of the dates and for the periods referred to and has
been prepared in accordance with GAAP consistently applied by it
throughout the periods involved. There are no liabilities, direct
or indirect, fixed or contingent, of Borrower as of the dates of
said balance sheets which are required to be disclosed and listed
under GAAP and which are not reflected in such statements or in
the notes thereto.
(h) ADVERSE DEVELOPMENTS. Since March 31, 2000, there has been no
material adverse change in the financial condition, business,
operations, affairs or prospects of Borrower or in any of its
properties or assets.
(i) TITLE TO ASSETS. It has good title to its properties and assets,
including the properties and assets reflected in the financial
statements referred to herein. Such properties and assets are not
subject to any mortgage, pledge, lien, lease, encumbrance or
charge except those shown on SCHEDULE 4.1(i), if any.
(j) REGULATIONS G, T, U AND X. The proceeds of the borrowings
hereunder are not being used and will not be used, directly or
indirectly, for the purposes of purchasing or carrying any margin
stock in contravention, or which would cause any Lender to be in
violation, of Regulations G, T, U or X promulgated by the Board
of Governors of the Federal Reserve System.
(k) COMPLIANCE. It is not in default with respect to any order, writ,
injunction or decree of any court or of any federal, state,
municipal or other governmental department, commission, board,
bureau, agency, authority or official, nor is it in violation of
any law, statute, rule or regulation to which it is or its
properties are subject and it has not received notice of any such
default from any party and is not in default in the payment or
performance of any of its obligations to any third parties or in
the performance of any mortgage, indenture, lease, contract
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or other agreement to which it is a party or by which any of its
assets or properties are bound.
(l) PENSION PLANS.
(i) No fact, including but not limited to any "reportable
event", as that term is defined in Section 4043 of ERISA,
exists in connection with any Plan which might constitute
grounds for termination of any such Plan by the Pension
Benefit Guaranty Corporation (the "PBGC"), or for the
appointment by the appropriate United States District Court
of a trustee to administer any such Plan. Each Plan of the
Borrower, if any, is described on SCHEDULE 4.1(l) attached
hereto;
(ii) No "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") exists or will exist upon the
execution and delivery of this Agreement and the other
Financing Documents, or the performance by the parties
hereto or thereto of their respective duties and obligations
hereunder and thereunder;
(iii) Any Plan complies currently, and has complied in the past,
both as to form and operation, with its terms and with
provisions of the Code and ERISA, and all applicable
regulations thereunder and all rules issued by the Internal
Revenue Service, U.S. Department of Labor and the PBGC and
as such, is and remains a "qualified" plan under the Code;
(iv) No actions, suits or claims are pending (other than routine
claims for benefits) against any Plan, or the assets of any
such Plan; and
(v) The Borrower has performed all obligations required to be
performed by it under any Plan is not in default, or in
violation of any Plan.
(m) OFFICE. Its chief executive office and principal place of
business, and the office where its books and records concerning
Borrower Collateral are kept, is at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(n) PLACES OF BUSINESS. Except as set forth on the attached SCHEDULE
4.1(n), it has no other places of business and locates no
Borrower Collateral, specifically including books and records, at
any location other than as set forth in the first paragraph of
this Agreement. It shall locate a full and complete set of its
books and records in its offices at the chief executive office
described in the immediately preceding paragraph.
(o) UNIONS. It is not a party to any collective bargaining or union
agreement.
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(p) LICENSES. It has all licenses, permits and other permissions
required by any government, agency or subdivision thereof, or
from any licensing entity necessary for the conduct of its
business, all of which it represents to be in good standing and
in full force and effect.
(q) BORROWER COLLATERAL. It is and shall continue to be the sole
owner of the Borrower Collateral; Borrower is fully authorized to
sell, transfer, pledge and/or grant a security interest in each
and every item of the Borrower Collateral to Lender; all
documents and agreements related to the Borrower Collateral shall
be true and correct and in all respects what they purport to be;
all signatures and endorsements that appear thereon shall be
genuine and all signatories and endorsers shall have full
capacity to contract; none of the transactions underlying or
giving rise to the Borrower Collateral shall violate any
applicable state or federal laws or regulations; all documents
relating to the Borrower Collateral shall be legally sufficient
under such laws or regulations and shall be legally enforceable
in accordance with their terms; and Borrower agrees to defend the
Borrower Collateral against the claims of all persons other than
Lender.
(r) TRADENAMES. Except as set forth on the attached SCHEDULE 4.1(r),
it does not have any tradenames.
(s) FINANCIAL INFORMATION. All financial information submitted by it
to Lender, whether previously or in the future, is and will be
true, correct and complete in all material respects.
(t) PARENT, AFFILIATE OR SUBSIDIARY CORPORATIONS. Except as set forth
on the attached SCHEDULE 4.1(t), Borrower has no parent
corporation and has no affiliate or subsidiary.
(u) OFFICERS AND DIRECTORS. The officers and directors of Borrower
are set forth on the attached SCHEDULE 4.1(u).
(v) PAYMENT OF DEBTS. Prior to and immediately after receiving the
Revolving Loans, the Borrower is solvent and able to pay its
debts as they come due.
(w) USE OF PROCEEDS. It will use the proceeds of the Revolving Loans
solely for working capital purposes.
(x) SECURITIES FILINGS. Borrower has timely filed all forms, reports,
and documents (including prospectuses, offering memoranda, and
filing statements) with the Securities and Exchange Commission
and the NASDAQ Stock Market, Inc. required to be filed by it
pursuant to all applicable laws. As of their respective dates,
all such reports complied in all material respects with all
applicable laws and regulations and did not contain any untrue
statement of a material fact or
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omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.1 CONDITIONS OF THE INITIAL REVOLVING LOAN. Subject to the
terms hereof, the obligation of Lender to make the Loan under this Agreement is
subject to the fulfillment of the following conditions precedent at the time of
the execution of this Agreement:
(a) NOTE. Lender shall have received a duly executed Revolving Loan
Note drawn to its order.
(b) EVIDENCE OF ACTION. Lender shall have received certified copies
of all director action (in form and substance satisfactory to
Lender) taken by Borrower to authorize the execution, delivery
and performance of this Agreement, the Note, and the other
Financing Documents to which it is a party, and the borrowings to
be made hereunder and thereunder, together with true copies of
Borrower's Articles of Incorporation and Bylaws and such other
papers as Lender or its counsel may require.
(c) OPINION OF COUNSEL. Lender shall have received a favorable
written opinion of counsel for Borrower and the Guarantor, and
accompanied by such supporting documents as Lender or its counsel
may require.
(d) GUARANTOR'S DOCUMENTS. Lender shall have received the Guaranty,
the Pledge Agreement and the Control Agreement, each duly
executed by the Guarantor, and in the case of the Control
Agreement, by the securities intermediary party thereto.
(e) UCC-1 FINANCING STATEMENTS. Lender shall have received from
Borrower and the Guarantor duly executed UCC-1 financing
statements and such other documents as Lender deems necessary or
proper to perfect the security interest in the Collateral and the
Borrower Collateral, all of which shall be in form, scope and
substance satisfactory to Lender and its counsel.
(f) STOCK POWERS. Lender shall have received the stock powers
executed in blank, and all other conditions and requirements of
the Pledge Agreement shall have been met to the satisfaction of
the Lender and its counsel.
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(g) INSURANCE. Lender shall have received evidence of insurance of
such types and in such amounts and with such companies reasonably
satisfactory to Lender, and Lender shall be named as a loss payee
on all such insurance.
(h) SOLVENCY CERTIFICATE. Lender shall have received a Solvency
Certificate from the Guarantor in the form of EXHIBIT B attached
hereto.
(i) FINANCIAL STATEMENTS. Lender shall have received such internally
generated financial statements of the Borrower and the Guarantor
as Lender shall require in its sole discretion.
(j) NO MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the financial condition or operating condition
of Borrower or Guarantor since March 31, 2000.
(k) REGULATION U. Borrower shall have executed and delivered to
Lender such documentation as Lender shall require to evidence and
confirm that the Revolving Loans will not be used in any fashion
as to cause the Lender to be in violation of Regulation U or any
other regulation promulgated by the Board of Governors of the
Federal Reserve System relating to "margin stock".
(l) FURTHER DOCUMENTS. Lender shall have received such further
documents, instruments and agreements as Lender may request.
SECTION 5.2 CONDITIONS OF ADDITIONAL REVOLVING LOANS. In addition to
the conditions in SECTION 5.1 above, Lender shall make no further Revolving
Loans (collectively, the "Further Loans") unless the following conditions shall
exist or have been satisfied by Borrower at the time any Further Loan is
requested:
(a) ABSENCE OF TERMINATION OR DEFAULT. Lender shall not have
terminated the Revolving Loan facility hereunder, nor shall a
Defaulting Event or Event of Default exist.
(b) COMPLIANCE CERTIFICATES. On the date of each request for a
Revolving Loan hereunder, and from time-to-time as Lender shall
have requested, Borrower shall have delivered to Lender, upon
Lender's request, a Certificate of Compliance executed by its
chief financial officer (or officer with equivalent position)
which shall state, among other things, that: (i) Borrower has
complied, and is when in compliance, with all the terms,
covenants and conditions of this Agreement and the other
Financing Documents which are binding upon it; (ii) there exists
no Event of Default or Defaulting Event; and (iii) the
representations and warranties contained herein and in the other
Financing Documents are true and correct with the same effect as
though such representations and warranties had been made as of
the time of each Further Loan.
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(c) BORROWING BASE. The indebtedness of Borrower by virtue of the
making of any Further Loan shall not exceed the Borrowing Base.
Borrower shall not request any Further Loan if the effect of such
Further Loan shall be to cause the principal balance of all
outstanding Revolving Loans to exceed the Borrowing Base.
(d) FURTHER DOCUMENTS. Lender shall have received such further
documents, instruments and agreements as Lender may reasonably
request.
ARTICLE VI
COVENANTS
A. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that from the date hereof until payment
and performance in full of all Obligations, and until the termination of this
Agreement, unless Lender otherwise consents in writing, Borrower shall:
SECTION 6.1 FINANCIAL STATEMENTS. Deliver or cause to be delivered to
Lender:
(a) within ninety (90) days after the close of each fiscal quarter of
Borrower internally prepared financial statements of Borrower
including (i) balance sheet; (ii) statement of income; and (iii)
statement of retained earnings, each as of the close of such
quarter, and for that portion of the fiscal year-to-date then
ended, and each prepared on a basis consistent with that of the
preceding quarter or containing disclosure of the effect on
financial condition or results of operations of any change in the
application of GAAP during such period, and each certified by the
chief financial officer (or equivalent position) of Borrower as
being accurate and fairly presenting the financial condition of
Borrower.
(b) within ninety (90) days after the close of each fiscal year of
Borrower, audited financial statements of borrower including (i)
balance sheet; (ii) statement of income; and (iii) statement of
retained earnings, each as of the close of such fiscal year, and
each prepared on a basis consistent with that of the preceding
year or containing disclosure of the effect on financial
condition or results of operations of any change in the
application of GAAP during such period, and each accompanied by
an unqualified certification from a nationally recognized public
accounting firm as being accurate and fairly presenting the
financial condition of Borrower;
(c) contemporaneously with the delivery to shareholders or
governmental agencies, copies of all reports and information
delivered to shareholders or filed with
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governmental agencies, including, without limitation, all
quarterly, annual and other reports filed with the Securities and
Exchange Commission and each annual or other report delivered to
shareholders;
(d) within one hundred twenty (120) days after the close of each
calendar year, Borrower shall cause the Guarantor to deliver to
Lender (i) annual updates of personal financial statements and
(ii) personal tax returns prepared by an accountant reasonably
acceptable to Lender;
(d) promptly upon Lender's written request, such other information
about the financial condition and operations of Borrower or the
Guarantor, as Lender may, from time to time, reasonably request;
and
(e) promptly upon becoming aware of any Event of Default, or the
occurrence or existence of a Defaulting Event, notice thereof in
writing.
SECTION 6.2 INSURANCE AND ENDORSEMENTS. (a) Keep the Borrower
Collateral insured against fire and other hazards (so-called "All Risk"
coverage) in amounts and with companies satisfactory to Lender to the same
extent and covering such risks as is customary in the same or a similar
business; maintain public liability coverage, including without limitation,
products liability coverage, against claims for personal injuries or death; and
maintain all worker's compensation, employment or similar insurance as may be
required by applicable law; and (b) all insurance shall contain such terms, be
in such form, and be for such periods reasonably satisfactory to Lender, and be
written by such carriers duly licensed by the appropriate states where any
Borrower Collateral is located and reasonably satisfactory to Lender. Without
limiting the generality of the foregoing, such insurance must provide that it
may not be cancelled without thirty (30) days' prior written notice to Lender.
Borrower shall cause Lender to be endorsed as a loss payee with a long form
Lender's Loss Payable Clause, in form and substance acceptable to Lender on all
insurance. In the event of failure to provide and maintain insurance as herein
provided, Lender may, at its option, provide such insurance and charge the
amount thereof to the Revolving Loan Account. Borrower shall furnish to Lender
certificates or other satisfactory evidence of compliance with the foregoing
insurance provisions. Borrower hereby irrevocably appoints Lender as its
attorney-in-fact, coupled with an interest, to make proofs of loss and claims
for insurance, and to receive payments of the insurance and execute and endorse
all documents, checks and drafts in connection with payment of the insurance.
Any insurance proceeds received by Lender shall be applied to the Obligations in
such order and manner as Lender shall determine in its sole discretion.
SECTION 6.3 TAX AND OTHER LIENS. Comply with all statutes and
government regulations and pay all taxes, assessments, governmental charges or
levies, or claims for labor, supplies, rent and other obligations made against
it or its property which, if unpaid, might become a lien or charge against
Borrower or its properties, except liabilities being contested in good faith and
against which, if requested by Lender, Borrower shall set up reserves in amounts
and in form satisfactory to Lender.
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SECTION 6.4 PLACE OF BUSINESS. Maintain its chief place of business and
chief executive offices at the address set forth in SECTION 4.1(m) unless
Borrower shall have given Lender thirty (30) days' prior written notice of any
change in such place of business.
SECTION 6.5 INSPECTIONS. Allow Lender by or through any of its
officers, attorneys, and/or accountants designated by it, for the purpose of
ascertaining whether or not each and every provision hereof and of any related
agreement, instrument and document is being performed, to enter the offices and
plants of Borrower to examine or inspect any of the properties, books and
records or extracts therefrom, to make copies of such books and records or
extracts therefrom, and to discuss the affairs, finances and accounts thereof
with Borrower all at such reasonable times, upon reasonable notice and as often
as Lender or any representative of Lender may reasonably request.
SECTION 6.6 LITIGATION. Promptly advise Lender of the commencement or
threat of litigation, including arbitration proceedings and any proceedings
before any governmental agency (but excluding product liability claims which are
either fully covered by insurance or adequately covered by insurance and which
is not likely to have a material adverse effect on the business, assets or
condition (financial or otherwise) of Borrower), which is instituted against
Borrower or the Guarantor and is reasonably likely to have a materially adverse
effect upon the condition, financial, operating or otherwise, of Borrower or the
Guarantor.
SECTION 6.7 MAINTENANCE OF EXISTENCE. Maintain its existence and comply
with all valid and applicable statutes, rules and regulations, and maintain its
properties in good repair, working order and operating condition. Borrower shall
immediately notify Lender of any event causing material loss in the value of its
assets.
SECTION 6.8 ERISA. Immediately notify Lender of any event which causes
it not to be in compliance in all material respects with ERISA.
SECTION 6.9 NOTICE OF CERTAIN EVENTS. Give prompt written notice to
Lender of:
(a) any material dispute that may arise between Borrower and any
governmental regulatory body or law enforcement agency;
(b) any labor controversy resulting or likely to result in a strike
or work stoppage against Borrower;
(c) any proposal by any public authority to acquire the assets or
business of Borrower;
(d) the location of any Borrower Collateral other than at Borrower's
places of business disclosed in this Agreement other than
Borrower Collateral in transit in the ordinary course of
Borrower's business;
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(e) any proposed or actual change of the name, identity or structure
of Borrower; and
(f) any other matter which has resulted or is reasonably likely to
result in a material adverse change in the financial condition or
operations of Borrower or Guarantor.
SECTION 6.10 DEFAULTS. Upon the occurrence of an Event of Default or of
a Defaulting Event, give prompt written notice of such occurrence to Lender
signed by the president or chief financial officer of Borrower describing such
occurrence and the steps, if any, being taken to cure the Event of Default or
Defaulting Event.
SECTION 6.11 DUTIES. Comply with any and all federal, state and local
laws affecting its business. Borrower agrees to indemnify Lender against and
hold Lender harmless from, all claims, actions and losses, including reasonable
attorneys' fees and costs incurred by Lender arising from any contention,
whether well founded or otherwise, that there has been a failure to comply with
such laws.
SECTION 6.12 BORROWER COLLATERAL DUTIES. Do whatever Lender may
reasonably request from time to time by way of obtaining, executing, delivering
and filing financing statements, assignments and other notices and amendments
and renewals thereof, and Borrower will take any and all steps and observe such
formalities as Lender may request, in order to create and maintain a valid and
enforceable first lien upon, pledge of, and first priority security interest in,
any and all of the Borrower Collateral. Lender is authorized to file financing
statements without the signature of Borrower and to execute and file such
financing statements on behalf of Borrower as specified by the Uniform
Commercial Code to perfect or maintain its security interest in all of the
Borrower Collateral. All reasonable charges, expenses and fees Lender may incur
in filing any of the foregoing, together with reasonable costs and expenses of
any lien search required by Lender, and any taxes relating thereto, shall be
charged to the Revolving Loan Account and added to the Obligations.
SECTION 6.13 OFFICERS AND DIRECTORS. Promptly notify Lender in writing
upon any changes or additions to Borrower's officers or board of directors.
B. NEGATIVE COVENANTS.
Borrower covenants and agrees that from the date hereof until payment
and performance in full of all Obligations, and until the termination of this
Agreement, unless Lender otherwise consents in writing, Borrower shall not:
SECTION 6.14 ENCUMBRANCES. After the occurrence of an Event of Default
or Defaulting Event, incur or permit to exist any lien, mortgage, charge or
other encumbrance against any of the Borrower Collateral, except: (a) liens
required or expressly permitted by this Agreement; (b) pledges or deposits in
connection with or to secure worker's
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compensation, unemployment or liability insurance; and (c) those
listed on SCHEDULE 4.1(i) attached hereto.
SECTION 6.15 CONSOLIDATION OR MERGER. Merge into or consolidate with or
into any entity.
SECTION 6.16 SALE AND LEASE OF ASSETS. Sell or lease any of the assets
of Borrower, except for sales of inventory and equipment in the ordinary course
of business consistent with past practices and on an arms-length basis.
SECTION 6.17 NAME CHANGES. Change its name or conduct its business
under any trade name or style other than as set forth in this Agreement.
SECTION 6.18 PROHIBITED TRANSFERS. Transfer, in any manner, either
directly or indirectly, any cash, property, or other assets to any parent or any
of its affiliates or subsidiaries, or any shareholder, officer and director,
other than sales made in the ordinary course of business and for fair
consideration on terms no less favorable than if such sale had been an
arms-length transaction between Borrower and an unaffiliated entity.
SECTION 6.19 MANAGEMENT CHANGE. Suffer any material change in the
ownership interest of the Guarantor in the Borrower or in the Guarantor's
participation in the management of the Borrower and no longer remains a member
of the Borrower's board of directors.
ARTICLE VII
BORROWER COLLATERAL
SECTION 7.1 GRANT. To secure the prompt payment and performance of each
and all of the Obligations, Borrower pledges, assigns, transfers and grants to
Lender a continuing, first lien security interest in the following property of
Borrower, now owned or hereafter acquired or arising (herein called the
"Borrower Collateral"):
(a) All accounts and accounts receivable related to or arising from
the sale or lease of inventory or rendering of services by
Borrower (the "Accounts") and all other accounts, bank accounts,
contracts, contract rights, notes, documents, chattel paper,
instruments, acceptances, drafts or other forms of obligations
and receivables (collectively with Accounts, the "Receivables"),
whether or not the same are listed on any schedules, assignments
or reports furnished to Lender from time to time, and whether
such Receivables are now existing or are created or arise at any
time hereafter, together with all goods, inventory and
merchandise returned by or reclaimed by or repossessed from
customers wherever such goods, inventory and merchandise are
located, and all proceeds thereof including without limitation,
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proceeds of insurance thereon and all guaranties, securities, and
liens which Borrower may hold for the payment of any such
Receivables, including without limitation, all rights of stoppage
in transit, replevin and reclamation and all other rights and
remedies of an unpaid vendor or lienor, and any liens held by
Borrower as a mechanic, contractor, subcontractor, processor,
materialman, machinist, manufacturer, artisan, or otherwise;
(b) All documents, instruments, documents of title, general
intangibles, policies and certificates of insurance, guaranties,
securities, chattel paper, deposits, tax returns, proceeds of
insurance, proceeds of an eminent domain or condemnation award,
cash, liens or other property, which are now or may hereinafter
be in the possession of Borrower or as to which Borrower may now
or hereafter control possession by documents of title or
otherwise, including, but not limited to, all property at locable
to unshipped orders relating to Receivables and Inventory;
(c) All books, records, customer lists, supplier lists, ledgers,
evidences of shipping, invoices, purchase orders, sales orders
and all other evidences of Borrower's business records, including
all cabinets, drawers, etc. that may hold the same; computer
records, lists, software, programs, wherever located, all whether
now existing or hereafter arising or acquired;
(d) All of Borrower's inventory, whether now owned or hereafter
acquired, including without limitation (collectively herein
called the "Inventory"): (i) all goods manufactured or acquired
for sale or lease, and any piece goods, raw materials, work in
process and finished merchandise, findings or component
materials, and all supplies, goods, incidentals, office supplies,
packaging materials, and any and all items including machinery
and equipment used or consumed in the operation of the business
of Borrower or which contribute to the finished product or to the
sale, promotion and shipment thereof, in which Borrower now or at
any time hereafter may have an interest; (ii) all inventory
whether or not the same is in transit or in the constructive,
actual or exclusive occupancy or possession of Borrower or is
held by Borrower or by others for the Accounts, including without
limitation, all goods covered by purchase orders and contracts
with suppliers and all goods billed and held by suppliers; (iii)
all inventory which may be located on premises of Borrower or of
any carrier, forwarding agents, truckers, warehousemen, vendors,
selling agents or third parties; (iv) all general intangibles
relating to or arising out of inventory; and (v) all proceeds and
products of the foregoing resulting from the sale, lease or other
disposition of inventory, including cash, accounts receivable,
other non-cash proceeds and trade-ins;
(e) All general intangibles, including without limitation, tax
refunds, proceeds of insurance, eminent domain awards,
condemnation proceeds, and patents, copyrights, tradenames,
trademarks, applications therefor, and licenses to any
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patent, copyright, trademark, or tradename that Borrower now
owns, has the right to use or may hereafter own or acquire the
right to use;
(f) All equipment, machinery, appliances, and furniture and fixtures,
now existing or hereafter arising, wherever located, and all
contracts, contract rights and chattel paper arising out of any
lease of any of the foregoing;
(g) All other collateral in which Borrower may hereafter grant to
Lender a security interest; and
(h) All renewals, substitutions, replacements, additions, accessions,
proceeds, and products of any and all of the foregoing, including
without limitation, all proceeds of credit, fire and other
insurance.
SECTION 7.2 SUBORDINATION AND RELEASE. In the event that no Defaulting
Event or Event of Default shall exist, and the outstanding principal amount of
the Revolving Loans shall not otherwise exceed the Borrowing Base, then, upon
written request of the Borrower, with the written consent of the Guarantor, each
delivered at least ten (10) days in advance of the requested date of
subordination or release, Lender shall execute and deliver such documents as
shall be reasonably requested by Borrower in order to subordinate Lender's
security interest in any or all of the Borrower Collateral to that of another
creditor of Borrower or release Lender's interest in any or all of the Borrower
Collateral, as requested by Borrower with the written consent of the Guarantor;
provided that (a) all costs and expenses associated with such subordination or
release shall be borne by Borrower, and (b) in no event shall Lender be required
to make any representation, warranty, covenant or agreement in connection with
such subordination or release beyond the subordination or release of its
security interest in the Borrower Collateral. In no event shall Lender be
required to take any action with respect to the Collateral notwithstanding that
Lender shall in all events retain a perfected first-priority security interest
therein. In no event shall Lender be required to subordinate or release its
security interest in the Borrower Collateral if a Defaulting Event or Event of
Default shall exist on the date of the requested subordination or release, or if
the outstanding principal balance of the Revolving Loans otherwise exceeds the
Borrowing Base on such date. The Borrower shall not request the release of any
Borrower Collateral pursuant to this SECTION 7.2 or otherwise without the
written consent of the Guarantor.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 EVENTS OF DEFAULT. Any and all Obligations, including
without limitation, the Obligations arising pursuant to or in connection with
the Revolving Loans shall, at the option of Lender and notwithstanding any time
or credit allowed by any note or agreement, become immediately due and payable
without notice if any one or more of the
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following events (herein called "Events of Default" and individually, an
"Event of Default") shall occur:
(a) Borrower's failure to pay principal due hereunder or under the
Note or under any other Financing Document;
(b) Borrower's failure to pay interest or any other sum due hereunder
or under the Note or under any other Financing Document (except
as provided in (a) above) for three (3) business days after
notice from Lender; provided that Lender shall not be obligated
to wait such three (3) day period after notice in the event that
Lender reasonably concludes that such delay will materially
impair its ability to recover from the Borrower, the Guarantor,
the Collateral or the Borrower Collateral.
(c) The occurrence of an Event of Default under SECTION 2.2(b) or
2.2(c) hereof;
(d) Borrower's failure to pay or perform when due any other covenant,
duty, indebtedness, liability or obligation arising under this
Agreement or any other Financing Document, or any such failure by
Guarantor under any Financing Document, in each case within
fifteen (15) days after notice from Lender, provided that if any
such covenant cannot be reasonably performed within fifteen (15)
days it shall not constitute an Event of Default if Borrower or
Guarantor, as the case may be, has commenced performance within
such fifteen (15) day period and diligently completes the same;
(e) any representation or warranty by Borrower herein or by Borrower
or Guarantor in any other Financing Document or otherwise made to
Lender in connection with the Loan is untrue in any material
respect;
(f) the failure by Borrower to maintain the insurance required by
this Agreement or any other Financing Document;
(g) the failure of the Borrower or Guarantor generally to pay its
debts as such debts become due;
(h) the entry of a decree or order for relief by a court having
jurisdiction in respect of the Borrower or Guarantor in an
involuntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or the appointment
of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Borrower or the
Guarantor or for any substantial part of the Borrower's or
Guarantor's property, and the continuance of any such decree or
order unstayed and in effect for a period of sixty (60)
consecutive days; or upon the commencement by the Borrower or the
Guarantor of a voluntary case under the federal bankruptcy laws,
as now or hereafter constituted, or any other
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applicable federal or state bankruptcy, insolvency or other
similar law, or the consent by the Borrower or the Guarantor
to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Borrower or the Guarantor or for any
substantial part of the property of the Borrower or the Guarantor
or the making by the Borrower or the Guarantor of any assignment
for the benefit of creditors;
(i) a final, unappealed judgment shall be entered against the
Guarantor by any court for the payment of money which is not
satisfied within thirty (30) days after the last date for which
an appeal can be filed and which, together with all such other
outstanding judgments against the Borrower or the Guarantor, as
applicable, exceeds $750,000 in the aggregate;
(j) the occurrence of a default or event of default (howsoever
defined) under the Pledge Agreement, the Control Agreement, the
Guaranty or any other Financing Document;
(k) the declaration of a default under any material obligation of
Borrower or Guarantor to any other creditor; and
(l) for so long as any stock of Vodafone shall constitute Collateral,
Vodafone shall fail to be current on any regular, periodic or
other required filing with the Securities and Exchange
Commission.
Upon the occurrence of any Event of Default, at the option of Lender:
(x) any and all Obligations, including without limitation the Obligations
arising from or in connection with the Revolving Loans, shall become immediately
due and payable, and (y) Borrower's eligibility to request any further Revolving
Loans shall automatically and immediately terminate, without presentment,
demand, protest, notice of protest or other notice or requirements of any kind,
all of which Borrower expressly waives. Notwithstanding the foregoing sentence,
if any Event of Default under clause (h) occurs, the acceleration of Obligations
and termination of Borrower's eligibility to request further Revolving Loans
shall be automatic.
Thereafter, Lender may proceed to enforce the rights of Lender whether
by suit in equity or by action at law, whether for specific performance of any
covenant or agreement contained in this Agreement, the Note or the other
Financing Documents, or in aid of the exercise of any power granted in either
this Agreement or the Note or any other Financing Document, or it may proceed to
obtain judgment or any other relief whatsoever appropriate to the enforcement of
such rights, or proceed to enforce any legal or equitable right which Lender may
have by reason of the occurrence of any Event of Default hereunder.
ARTICLE IX
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RIGHTS AND REMEDIES OF LENDER
SECTION 9.1 REMEDIES OF LENDER. Upon the occurrence of any Event of
Default, Lender shall have in any jurisdiction where enforcement hereof is
sought, in addition to all other rights and remedies which Lender may have under
law and equity, the following rights and remedies, all of which may be exercised
with or without further notice to Borrower and without a prior judicial or
administrative hearing, which notice and hearing are expressly waived: to
enforce or foreclose the liens and security interests created under this
Agreement or under any other Financing Document relating to Borrower Collateral
by any available judicial procedure or without judicial process; to enter any
premises where any Borrower Collateral may be located for the purpose of taking
possession or removing the same; to sell, assign, lease, or otherwise dispose of
Borrower Collateral or any part thereof, either at public or private sale, in
lots or in bulk, for cash, on credit or otherwise, with or without
representations or warranties, and upon such terms as shall be acceptable to
Lender, all at Lender's sole option and as Lender in its sole discretion may
deem advisable; to bid or become purchaser at any such sale if public; and, at
the option of Lender, to apply or be credited with the amount of all or any part
of the Obligations owing to Lender against the purchase price bid by Lender at
any such sale.
SECTION 9.2 SPECIFIC POWERS. Lender may at any time, after the
occurrence of an Event of Default, at Lender's sole reasonable discretion: (i)
give notice of assignment to any entity obligated to Borrower upon an Account
(an "Account Debtor"); (ii) collect Receivables and charge, or cause to be
charged, the collection costs and expenses to the Revolving Loan Account; (iii)
exercise all other rights granted in this Agreement and the other Financing
Documents; (iv) receive, open and dispose of all mail addressed to Borrower and
notify the Post Office authorities to change the address for delivery of
Borrower's mail to an address designated by Lender; (v) endorse the name of
Borrower on any checks or other evidence of payment that may come into
possession of Lender and on any invoice, freight or express ▇▇▇▇, ▇▇▇▇ of lading
or other document; (vi) in the name of Borrower or otherwise, demand, ▇▇▇ for,
collect and give acquittance for any and all monies due or to become due on
Receivables; (vii) compromise, prosecute or defend any action, claim or
proceeding concerning Receivables; and (viii) do any and all things necessary
and proper to carry out the purposes contemplated in this Agreement, the other
Financing Documents and any other agreement between the parties. Neither Lender
nor any person acting as its representative hereunder shall be liable for any
acts or omissions or for any error of judgment or mistake of fact or law, except
for bad faith or willful misconduct or failure to act in a commercially
reasonable manner. Borrower agrees that the powers granted hereunder, being
coupled with an interest, shall be irrevocable so long as any Obligation remains
unsatisfied. Notwithstanding the foregoing, it is understood that Lender is
under no duty to take any of the foregoing actions and that after having made
demand upon Account Debtors for payment, Lender shall have no further duty as to
the collection or protection of Receivables or any income therefrom and no
further duty to preserve any rights pertaining thereto, other than the safe
custody thereof.
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SECTION 9.3 DUTIES AFTER DEMAND OR DEFAULT. Borrower will, at Lender's
request, assemble all Borrower Collateral and make it available to Lender at
places which Lender may reasonably select, whether at the premises of Borrower
or elsewhere and will make available to Lender all premises and facilities of
Borrower for the purpose of Lender taking possession of Borrower Collateral or
of removing or putting the Borrower Collateral in salable form. In the event any
goods called for in any sales order, contract, invoice or other instrument or
agreement evidencing or purporting to give rise to any Receivable shall not have
been delivered or shall be claimed to be defective by any customer, Lender shall
have the right in its discretion to use and deliver to such customer any goods
of Borrower to fulfill such order, contract or the like so as to make good any
such Receivable. If any Borrower Collateral shall require repairing,
maintenance, preparation, or the like, or is in process or other unfinished
state, Lender shall have the right, but shall not be obligated, to do such
repairing, maintenance, preparation, processing or completion of manufacturing
for the purpose of putting the same in such salable form as Lender shall deem
appropriate, but Lender shall have the right to sell or dispose of such Borrower
Collateral without such processing. The net cash proceeds resulting from the
collection, liquidation, sale, lease or other disposition of Borrower Collateral
shall be applied first to the expenses (including all reasonable attorneys' and
professionals' fees) of retaking, holding, storing, processing and preparing for
sale, selling, collecting, liquidating and the like and then to the satisfaction
of all Obligations, application as to particular Obligations or against
principal or interest or other sums to be at Lender's sole discretion, and then,
upon full and final payment of the Obligations, and unless otherwise prohibited
by court order or law, to Borrower, it being agreed that if any such payment
made to Lender is recovered from or repaid by Lender in whole or in part in any
bankruptcy, insolvency or similar proceeding instituted by or against Borrower,
this Agreement automatically shall be reinstated without any further action by
Borrower and Lender. Borrower shall be liable to Lender and shall pay to Lender
on demand any deficiency which may remain after such sale, disposition,
collection or liquidation of Borrower Collateral.
SECTION 9.4 CUMULATIVE REMEDIES. The enumeration of Lender's rights and
remedies set forth in this Article is not intended to be exhaustive and the
exercise by Lender of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative and shall be in
addition to any other right or remedy given hereunder or under any other
agreement between the parties or which may now or hereafter exist in law or at
equity or by suit or otherwise. No delay or failure to take action on the part
of Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between Borrower and Lender or its
employees shall be effective to change, modify or discharge any provision of
this Agreement or to constitute a waiver of any Event of Default.
ARTICLE X
TERM AND TERMINATION
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SECTION 10.1 TERM AND TERMINATION. Unless sooner terminated by Lender
as a result of an Event of Default or a Defaulting Event, Borrower's eligibility
to request Revolving Loans shall commence on the date hereof and shall continue
for a period through and including July 26, 2002 (the "Term"). Borrower's
eligibility to request Revolving Loans may be extended after the Term only with
the express written consent of both Borrower and Lender. At the end of the Term,
Borrower shall pay the entire balance of the Revolving Loans outstanding and all
other outstanding Obligations. Further, upon termination of the Revolving Loan
facility, all of the rights, interests and remedies of Lender and Obligations of
Borrower shall survive and Borrower shall have no right to receive, and Lender
shall have no obligation to make, any further Revolving Loans. Upon full, final
and indefeasible payment of the Obligations to Lender, all rights and remedies
of Borrower and Lender hereunder shall cease, so long as any payment so made to
Lender and applied to the Obligations is not thereafter recovered from or repaid
by Lender in whole or in part in any bankruptcy, insolvency or similar
proceeding instituted by or against Borrower, whereupon this Agreement shall be
automatically reinstated without any further action by Borrower and Lender and
shall continue to be fully applicable to such Obligations to the same extent as
though the payment so recovered or repaid had never been originally made on such
Obligations.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 PAYMENT SET-ASIDE. To the extent that Borrower makes a
payment or payments to Lender (whether hereunder, under the Note, or under the
other Financing Documents) or Lender enforces its security interests or rights
or exercises its right of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to Borrower, a
trustee, receiver or any other person under any law (including without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action) in each case in connection with any bankruptcy or similar
proceeding involving Borrower, then to the extent of any such restoration, the
obligation, or part thereof originally intended to be satisfied, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
SECTION 11.2 SET-OFF. Borrower hereby gives Lender a lien, security
interest and right of setoff for all its liabilities and obligations to Lender
upon and against all its deposits, credits, collateral and property now or
hereafter in the possession, custody, safekeeping or control of Lender or any
entity under the control of Fleet Bank Financial Corporation or in transit to
any of them. Lender may, at any time, without demand or notice apply or set off
the same, or any part thereof, to any liability or obligation of Borrower or any
guarantor of the Obligations, to Lender, even though unmatured and regardless of
the adequacy of any other collateral now or hereafter securing the Obligations.
Any and all rights to require thereunder
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to exercise its rights or remedies with respect to any other collateral which
secures the Obligations prior to exercising its right of set off with respect
to such deposits, credit or other property of Borrower and/or any such
guarantor are hereby knowingly, voluntarily and irrevocably waived.
SECTION 11.3 COVENANTS TO SURVIVE; BINDING AGREEMENT. All covenants,
agreements, warranties and representations made herein, in the Note, in the
other Financing Documents, and in all certificates or other documents of
Borrower shall survive the advances of money made by Lender to Borrower
hereunder and the delivery of the Note and the other Financing Documents, and
all such covenants, agreements, warranties and representations shall be binding
upon and inure to the benefit of Lender and its successors and assigns, whether
or not so expressed.
SECTION 11.4 CROSS-DEFAULT. Borrower acknowledges and agrees that an
Event of Default and/or Defaulting Event under any one of the Financing
Documents shall constitute an Event of Default or Defaulting Event under all of
the other Financing Documents.
SECTION 11.5 AMENDMENTS AND WAIVERS. Neither this Agreement, the Note,
the Guaranty, the Pledge Agreement, the Control Agreement, the Collateral
Assignment, the other Financing Documents, nor any term, covenant or condition
hereof or thereof may be changed, waived, discharged, modified or terminated
except by a writing executed by the parties hereto or thereto. No failure on the
part of Lender to exercise, and no delay in exercising, any right, remedy or
power hereunder or under the Note or the other Financing Documents shall
preclude any other or future exercise thereof, or the exercise of any other
right, remedy or power.
SECTION 11.6 NOTICES. All notices or other communications required or
permitted to be given under this Agreement shall be considered properly given if
sent by a nationally recognized overnight messenger service or mailed first
class United States mail, postage prepaid, registered or certified mail, with
return receipt requested, or by delivery of same to the address listed below by
prepaid messenger or telegram, as follows:
If to Borrower: ZIPLINK, INC.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
With copies to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
And
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▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Lender: Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Private Clients Group
Mail Stop: CTEH40203A
or such other place as any party hereto may be notified in writing as a place
for service or notice hereunder. Notice so sent shall be effective upon delivery
to such address, whether or not receipt thereof is acknowledged or is refused by
the addressee or any person at such address.
SECTION 11.7 WAIVERS.
(a) BORROWER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, NOTICE
OF NONPAYMENT, PROTEST AND NOTICE OF ANY RENEWALS OR EXTENSIONS. BORROWER
ACKNOWLEDGES THAT THE LOANS EVIDENCED HEREBY ARE COMMERCIAL TRANSACTIONS AND
WAIVES ITS RIGHT TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH
RESPECT TO ANY PREJUDGMENT REMEDY WHICH LENDER MAY DESIRE TO USE, AND FURTHER
WAIVES ITS RIGHTS TO REQUEST THAT LENDER POST A BOND, WITH OR WITHOUT SURETY, TO
PROTECT BORROWER AGAINST DAMAGES THAT MAY BE CAUSED BY ANY PREJUDGMENT REMEDY
SOUGHT OR OBTAINED BY LENDER.
(b) BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT,
ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY
RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART AND/OR
THE ENFORCEMENT OF ANY OF LENDER'S RIGHTS, INCLUDING WITHOUT LIMITATION, TORT
CLAIMS. BORROWER ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY,
WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER
WITH ITS ATTORNEYS. BORROWER FURTHER ACKNOWLEDGES THAT LENDER HAS NOT
REPRESENTED TO BORROWER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.
(c) BORROWER ACKNOWLEDGES THAT IT MAKES THE FOREGOING WAIVERS IN (a)
AND (b) ABOVE, KNOWINGLY, VOLUNTARILY, WITHOUT
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DURESS AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS WITH
ITS ATTORNEYS.
SECTION 11.8 SECTION HEADINGS; SEVERABILITY; ENTIRE AGREEMENT. Section
and subsection headings have been inserted herein for convenience only and shall
not be construed as part of this Agreement. Every provision of this Agreement,
the Note and the other Financing Documents is intended to be severable; if any
term or provision of this Agreement, the Note, the other Financing Documents, or
any other document delivered in connection herewith shall be invalid, illegal or
unenforceable for any reason whatsoever, the validity, legality and
enforceability of the remaining provisions hereof or thereof shall not in any
way be affected or impaired thereby. All Exhibits and Schedules to this
Agreement shall be annexed hereto and shall be deemed to be part of this
Agreement. This Agreement, the other Financing Documents, and the Exhibits and
Schedules attached hereto and thereto embody the entire agreement and
understanding between Borrower and Lender and supersede all prior agreements and
understandings relating to the subject matter hereof unless otherwise
specifically reaffirmed or restated herein.
SECTION 11.9 GOVERNING LAW. This Agreement and the other Financing
Documents, and all transactions, assignments and transfers hereunder and
thereunder, and all the rights of the parties, shall be governed as to validity,
construction, enforcement and in all other respects by the laws of the State of
Connecticut (but not its conflicts of law provisions). Borrower agrees that the
Superior Court for the Judicial District of Hartford or the United States
District Court for the District of Connecticut at Hartford shall have
jurisdiction to hear and determine any claims or disputes pertaining to the
financing transactions of which this Agreement is a part and/or to any matter
arising or in any way related to this Agreement or any other agreement between
Lender and Borrower, and Borrower expressly submits and consents in advance to
such jurisdiction in any action or proceeding.
SECTION 11.10 INDEMNIFICATION. In consideration of Lender's execution
and delivery of this Agreement and Lender's making of the Revolving Loans
hereunder and in addition to all other obligations of Borrower under this
Agreement, Borrower hereby agrees to defend, protect, indemnify and hold
harmless Lender, its successors, assigns, officers, directors, employees and
agents (including without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnities")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages and expenses in connection
therewith (irrespective of whether any such Indemnities is a party to any action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements as and when incurred (the "Indemnifiable
Liabilities") incurred by the Indemnities or any of them as a result of, or
arising out of, or relating to (i) the execution, delivery, performance or
enforcement of this Agreement and the other Financing Documents and any
instrument, document or agreement executed pursuant hereto to any of the
Indemnities; (ii) Lender's status as lender to, or creditor of, Borrower; or
(iii) the operation of Borrower's business from and after the date hereof. To
the extent that the foregoing undertaking by Borrower may be unenforceable for
any reason,
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Borrower shall make the maximum contribution to the payment and satisfaction
of each of the Indemnifiable Liabilities which is permissible under
applicable law.
SECTION 11.11 PLEDGE TO THE FEDERAL RESERVE. Lender may at any time
pledge all or any portion of its rights under the Financing Documents including
any portion of the Note to any of the twelve (12) Federal Reserve Lenders
organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No
such pledge or enforcement thereof shall release Lender from its obligations
under any of the Financing Documents. Lender shall have the unrestricted right
at any time and from time to time, and without the consent of or notice to
Borrower or any guarantor of the Obligations to grant to one or more banks or
other financial institutions (each, a "Participant") participating interests in
Lender's obligation to lend hereunder and/or any or all of the loans held by
Lender hereunder. In the event of any such grant by Lender of a participating
interest to a Participant, whether or not upon notice to the Borrower or any
guarantor of the Obligations, Lender will remain responsible for the performance
of its obligations hereunder and Borrower and any such guarantor shall continue
to deal solely and directly with Lender in connection with Lender's rights and
obligations hereunder. The Borrower shall not be permitted to assign the Note or
any other Financing Document or any and all of the obligations created herein.
Lender may furnish any information concerning Borrower or any guarantor of the
Obligations in its possession from time to time to prospective assignees and
Participants, provided that Lender shall require any such prospective assignee
or Participant to agree in writing to maintain the confidentiality of such
information.
SECTION 11.12 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of any
Financing Document or any other document or security instrument executed in
connection therewith and which is not of public record, and in the case of any
such mutilation, upon surrender and cancellation of such Financing Document or
such other document or security instrument, the Borrower and/or any guarantor or
obligor of the Obligations, as the case may be, shall be obligated to execute
and deliver or issue, in lieu thereof, a replacement document or security
instrument of like tenor, and, if applicable, in the same principal amount.
SECTION 11.13 FEES AND EXPENSES. The Borrower shall pay all costs and
expenses that it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement and shall reimburse the reasonable fees of special
counsel for Lender and shall, upon receipt of bills therefor, reimburse the
reasonable out-of-pocket expenses of such counsel. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the
Note or any other Financing Document, the Company shall pay the reasonable
attorney's fees, costs and necessary disbursements incurred by Lender in
connection therewith.
[Remainder of page intentionally left blank. Next page is signature page.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
ZIPLINK, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Chief Executive Officer
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Vice President