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EXHIBIT 10.13
MASTER LOAN AND SECURITY AGREEMENT
THIS AGREEMENT dated as of May 22, 1998, is made by AboveNet
Communications, Inc. (the "Borrower"), a California corporation having its
principal place of business and chief executive office at ▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ #▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in favor of Transamerica Business
Credit Corporation, a Delaware corporation (the "Lender"), having its principal
office at Riverway II, West Office Tower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Borrower has requested that the Lender make Loans to it
from time to time; and
WHEREAS, the Lender has agreed to make such Loans on the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and to induce the
Lender to extend credit, the Borrower hereby agrees with the Lender as follows:
SECTION 1. DEFINITIONS.
As used herein, the following terms shall have the following
meanings, and shall be equally applicable to both the singular and plural forms
of the terms defined:
Additional Collateral shall have the meaning specified in Section 2(b).
Agreement shall mean this Master Loan and Security Agreement together with all
schedules and exhibits hereto, as amended, supplemented, or otherwise modified
from time to time.
Applicable Law shall mean the laws of the State of Illinois (or any
jurisdiction whose laws are mandatorily applicable notwithstanding the parties'
choice of Illinois law) or the laws of the United States of America, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.
Business Day shall mean any day other than a Saturday, Sunday, or public holiday
or the equivalent for banks in New York City.
Code shall have the meaning specified in Section 8(d).
Collateral shall have the meaning specified in Section 2.
Collateral Access Agreement shall mean any landlord waiver, mortgage waiver,
bailee letter, or similar acknowledgement of any warehouseman or processor in
possession of any Equipment.
Effective Date shall mean the date on which all of the conditions specified in
Section 3.3 shall have been satisfied.
Equipment shall have the meaning specified in Section 2.
Equity Funding Requirement shall mean that Borrower shall have received at
least $7,000,000 net proceeds from its Series D or similar preferred stock
financing.
Event of Default shall mean any event specified in Section 7.
Financial Statements shall have the meaning specified in Section 6.1.
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GAAP shall mean generally accepted accounting principles in the United States
of America, as in effect from time to time.
Loans shall mean the loans and financial accommodations made by the Lender to
the Borrower in accordance with terms of this Agreement and the Notes.
Loan Documents shall mean, collectively, this Agreement, the Notes, and all
other documents, agreements, certificates, instruments, and opinions executed
and delivered in connection herewith and therewith, as the same may be
modified, extended, restated, or supplemented from time to time.
Material Adverse Change shall mean, with respect to any Person, a material
adverse change in the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise) of such Person taken
as a whole.
Material Adverse Effect shall mean, with respect to any Person, a material
adverse effect on the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise) of such Person taken
as a whole.
Note shall mean each Promissory Note made by the Borrower in favor of the
Lender, as amended, supplemented, or otherwise modified from time to time.
Obligations shall mean all indebtedness, obligations, and liabilities of the
Borrower under the Notes and under this Agreement, whether on account of
principal, interest, indemnities, fees (including, without limitation,
attorneys' fees, remarketing fees, origination fees, collection fees, and all
other professionals' fees), costs, expenses, taxes, or otherwise.
Permitted Liens shall mean such of the following as to which no enforcement,
collection, execution, levy, or foreclosure proceeding shall have been
commenced: (a) liens for taxes, assessments, and other governmental charges or
levies or the claims or demands of landlords, carriers, warehousemen,
mechanics, laborers, materialmen, and other like Persons arising by operation
of law in the ordinary course of business for sums which are not yet due and
payable, or liens which are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves
are maintained to the extent required by GAAP; (b) deposits or pledges to
secure the payment of worker's compensation, unemployment insurance, or other
social security benefits or obligations, public or statutory obligations,
surety or appeal bonds, bid or performance bonds, or other obligations of a
like nature incurred in the ordinary course of business; (c) licenses,
restrictions, or covenants for or on the use of the Equipment which do not
materially impair either the use of the Equipment in the operation of the
business of the Borrower or the value of the Equipment; (d) attachment or
judgment liens that do not constitute an Event of Default; (e) security
interests in and liens granted to current and future lenders to the Borrower
which are subordinate to the security interest and lien granted to Lender
hereunder; and (f) with respect to the Additional Collateral only, senior
security interests and liens in favor of Silicon Valley Bank.
Person shall mean any individual, sole proprietorship, partnership, limited
liability partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution, entity,
party, or government (including any division, agency, or department thereof),
and the successors, heirs, and assigns of each.
Schedule shall mean each Schedule in the form of Schedule A hereto delivered by
the Borrower to the Lender from time to time.
Solvent means, with respect to any Person, that as of the date as to which such
Person's solvency is measured.
(a) the fair saleable value of its assets is in excess of the
total amount of its liabilities (including contingent liabilities as valued in
accordance with GAAP) as they become absolute and matured;
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(b) it has sufficient capital to conduct its business; and
(c) it is able generally to meet its debts as they mature.
Taxes shall have the meaning specified in Section 5.5.
SECTION 2. CREATION OF SECURITY INTEREST; COLLATERAL. (a) The
Borrower hereby assigns and grants to the Lender a continuing general, first
priority lien on, and security interest in, all the Borrower's right, title,
and interest in and to the collateral described in the next sentence (the
"Collateral") to secure the payment and performance of all the Obligations.
Subject to paragraph (b) below, the Collateral consists of all equipment set
forth on all the Schedules delivered from time to time under the terms of this
Agreement (the "Equipment"), together with all present and future additions,
parts, accessories, attachments, substitutions, repairs, improvements, and
replacements thereof or thereto, and any and all proceeds thereof, including,
without limitation, proceeds of insurance and all manuals, blueprints,
know-how, warranties, and records in connection therewith, all rights against
suppliers, warrantors, manufacturers, sellers, or others in connection
therewith, and together with all substitutes for any of the foregoing.
(b) In addition to the foregoing, for the period beginning on
the date hereof and ending on the date that the Equity Funding Requirement is
met, the Borrower hereby assigns and grants to the Lender a continuing general
lien on, and security interest in, all the Borrower's right, title, and
interest in and to the collateral described in the next sentence (the
"Additional Collateral") to secure the payment and performance of all the
Obligations. The Additional Collateral consists of
(i) all present and future machinery, equipment,
furniture, fixtures, leasehold improvements, conveyors, tools,
materials, storage and handling equipment, hydraulic presses,
cutting equipment, computer equipment and hardware, including
central processing units, terminals, drives, memory units,
printers, keyboards, screens, peripherals and input or output
devices, molds, dies, stamps, and other equipment of every kind
and nature and wherever situation now or hereafter owned and held
for use by the Borrower or in which the Borrower may have any
interest as lessee (to the extent of such interest), together with
all additions and accessions thereto, all replacements and all
accessories and parts therefore, all manuals, blueprints,
know-how, warranties and records in connection therewith
(including, without limitation, any computer software, whether on
tape, disc, card, strip or cartridge or in any other form) and all
rights against suppliers, warrantors, manufacturers, and sellers
or others in connection therewith, together with all substitutes
for any of the foregoing;
(ii) all present and future goods intended for sale,
lease or other disposition by the Borrower including, without
limitation, all raw materials, work in process, systems,
accessories, spare parts, finished goods and other retail
inventory, goods in the possession of outside processors or other
third parties, consigned goods (to the extent of the consignee's
interest therein), materials, parts and supplies of any kind,
nature or description which are or might be used in connection
with the manufacture, packing, shipping, advertising, selling or
finishing of any such goods, all documents of title or documents
representing the same and all records, files and writings
(including, without limitation, any computer software, whether on
tape, disc, card, strip or cartridge or in any other form) with
respect thereto;
(iii) all of the Borrower's present and future accounts
(including rights to receive payments for goods sold or services
rendered arising out of the sale or delivery of personal property
or work done or labor performed), contract rights, agreements,
understandings, open purchase and sale orders, promissory notes,
chattel paper, documents, tax refunds, rights to receive tax
refunds, bonds, certificates, insurance proceeds, patents, patent
applications, copyrights (registered and unregistered), royalties,
licenses, rights to receive fees, royalties and other payments
under license agreements, permits, franchise rights,
authorizations, customer and supplier lists, rights of
indemnification, contribution and subrogation, leases,
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computer tapes, programs, discs and software, trade secrets,
computer service contracts, trademarks, trade names, service marks
and names, logos, goodwill, deposits, causes of action, chooses in
action, judgments, designs, blueprints, quotations and bids,
plans, specifications, sales literature, know-how, all other
general intangibles, claims against third parties of every kind or
nature, investment securities, notes, drafts, acceptances, letters
of credit and rights to receive payments under letters of credit,
deposit accounts, book accounts, prepaid expenses, credits and
reserves and all forms of obligations whatsoever owing,
instruments, documents of title, leasehold rights, including in
any goods, books, ledgers, files (including credit and project
files) and records (including tax records) with respect to any
collateral or security, together with all right, title, security
and guaranties with respect to thereto, including any right of
stoppage in transit; and
(iv) all proceeds of the foregoing.
SECTION 3. THE CREDIT FACILITY.
SECTION 3.1. BORROWINGS. Each Loan shall be in an amount
not less than $100,000 and in no event shall the sum of the aggregate Loans made
exceed the amount of the Lender's written commitment to the Borrower in effect
from time to time. Notwithstanding anything herein to the contrary, the Lender
shall be obligated to make the initial Loan and each other Loan only after the
Lender, in its sole discretion, determines that the applicable conditions for
borrowing contained in Sections 3.3 and 3.4 are satisfied. The timing and
financial scope of Lender's obligation to make Loans hereunder are limited as
set forth in a commitment letter executed by Lender and Borrower, dated as of
April 29, 1998 and attached hereto as Exhibit A (the "Commitment Letter").
SECTION 3.2. APPLICATION OF PROCEEDS. The Borrower shall
not directly or indirectly use any proceeds of the Loans, or cause, assist,
suffer, or permit the use of any proceeds of the Loans, for any purpose other
than for the purchase, acquisition, installation, or upgrading of Equipment or
the reimbursement of the Borrower for its purchase, acquisition, installation,
or upgrading of Equipment.
SECTION 3.3. CONDITIONS TO INITIAL LOAN.
(a) The obligation of the Lender to make the initial Loan is
subject to the Lender's receipt of the following, each dated the date of the
initial Loan or as of an earlier date acceptable to the Lender, in form and
substance satisfactory to the Lender and its counsel:
(i) completed requests for information (Form UCC-11)
listing all effective Uniform Commercial Code financing statements
naming the Borrower as debtor and all tax lien, judgment, and
litigation searches for the Borrower as the Lender shall deem
necessary or desirable;
(ii) Uniform Commercial Code financing statements (Form
UCC-1) duly executed by the Borrower (naming the Lender as secured
party and the Borrower as debtor and in form acceptable for filing
in all jurisdictions that the Lender deems necessary or desirable
to perfect the security interests granted to it hereunder) and, if
applicable, termination statements or other releases duly filed in
all jurisdiction that the Lender deems necessary or desirable to
perfect and protect the priority of the security interests granted
to it hereunder in the Equipment related to such initial Loan;
(iii) a Note duly executed by the Borrower evidencing the
amount of such Loan;
(iv) a Collateral Access Agreement duly executed by the
lessor or mortgagee, as the case may be, of premises in Vienna,
Virginia where the Equipment is located;
(v) certificates of insurance required under Section 5.4
of this Agreement together with loss payee endorsements for all
such policies naming the Lender as lender loss payee and as an
additional insured;
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(vi) a copy of the resolutions of the Board of Directors of the
Borrower (or a unanimous consent of directors in lieu thereof) authorizing
the execution, delivery, and performance of this Agreement, the other Loan
Documents, and the transactions contemplated hereby and thereby, attached
to which is a certificate of the Secretary or an Assistant Secretary of the
Borrower certifying (A) that the copy of the resolutions is true, complete,
and accurate, that such resolutions have not been amended or modified since
the date of such certification and are in full force and effect and (B) the
incumbency, names, and true signatures of the officers of the Borrower
authorized to sign the Loan Documents to which it is a party;
(vii) the opinion of counsel for the Borrower covering such matters
incident to the transactions contemplated by this Agreement as the Lender
may reasonably require; and
(viii) such other agreements and instruments as the Lender deems
necessary in its sole and absolute discretion in connection with the
transactions contemplated hereby.
(b) There shall be no pending or, to the knowledge of the Borrower after
due inquiry, threatened litigation, proceeding, inquiry, or other action (i)
seeking an injunction or other restraining order, damages, or other relief with
respect to the transactions contemplated by this Agreement or the other Loan
Documents or thereby or (ii) which affects or could affect the business,
prospects, operations, assets, liabilities, or condition (financial or
otherwise) of the Borrower, except, in the case of clause (ii), where such
litigation, proceeding, inquiry, or other action could not be expected to have a
Material Adverse Effect in the judgment of the Lender.
(c) The Borrower shall have paid all fees and expenses required to be paid
by it to the Lender as of such date.
(d) The security interests in the Collateral and the Additional Collateral
granted in favor of the Lender under this Agreement shall have been duly
perfected and, with respect to the Equipment related to the initial Loan, shall
constitute first priority liens.
SECTION 3.4. CONDITIONS PRECEDENT TO EACH LOAN. The obligation of
the Lender to make each Loan is subject to the satisfaction of the following
conditions precedent:
(a) the Lender shall have received the documents, agreements, and
instruments set forth in Section 3.3(a)(i) through (v) applicable to such Loan,
each in form and substance satisfactory to the Lender and its counsel and each
dated the date of such Loan or as of an earlier date acceptable to the Lender;
(b) the Lender shall have received a Schedule of the Equipment related to
such Loan, in form and substance satisfactory to the Lender and its counsel, and
the security interests in such Equipment related to such loan granted in favor
of the Lender under this Agreement shall have been duly perfected and shall
constitute first priority liens;
(c) all representations and warranties contained in this Agreement and the
other Loan Documents shall be true and correct on and as of the date of such
Loan as if then made, other than representations and warranties that expressly
relate solely to an earlier date, in which case they shall have been true and
correct as of such earlier date;
(d) no Event of Default or event which with the giving of notice or the
passage of fame, or both, would constitute an Event of Default shall have
occurred and be continuing or would result from the making of the requested Loan
as of the date of such request; and
(e) the Borrower shall be deemed to have hereby reaffirmed and ratified
all security interests, liens, and other encumbrances heretofore granted by the
Borrower to the Lender.
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SECTION 4. THE BORROWER'S REPRESENTATIONS AND WARRANTIES.
SECTION 4.1. GOOD STANDING; QUALIFIED TO DO BUSINESS. The Borrower
(a) is duly organized, validly existing, and in good standing under the laws of
the State of its organization, (b) has the power and authority to own its
properties and assets and to transact the business in which it is presently, or
proposes to be, engaged, and (c) is duly qualified and authorized to do business
and is in good standing in every jurisdiction in which the failure to be so
qualified could have a Material Adverse Effect on (i) the Borrower, (ii) the
Borrower's ability to perform its obligations under the Loan Documents, or (iii)
the rights of the Lender hereunder.
SECTION 4.2. DUE EXECUTION, ETC. The execution, delivery, and
performance by the Borrower of each of the Loan Documents to which it is a party
are within the powers of the Borrower, do not contravene the organizational
documents, if any, of the Borrower, and do not (a) violate any law or
regulation, or any order or decree of any court or governmental authority, (b)
conflict with or result in a breach of, or constitute a default under, any
material indenture, mortgage, or deed of trust or any material lease, agreement,
or other instrument binding on the Borrower or any of its properties, or (c)
require the consent, authorization by, or approval of or notice to or filing or
registration with any governmental authority or other Person. This Agreement is,
and each of the other Loan Documents to which the Borrower is or will be a
party, when delivered hereunder or thereunder, will be, the legal, valid, and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by general principles of equity.
SECTION 4.3. SOLVENCY; NO LIENS. The Borrower is Solvent and will be
Solvent upon the completion of all transactions contemplated to occur hereunder
(including, without limitations, the Loan to be made on the Effective Date); the
security interests granted herein constitute and shall at all times constitute
the first and only liens on the Collateral other than Permitted Liens, and, with
respect to the Additional Collateral, the first lien other than the lien of
Silicon Valley Bank; and the Borrower is, or will be at the time additional
Collateral is acquired by it, the absolute owner of the Collateral with full
right to pledge, sell, consign, transfer, and create a security interest
therein, free and clear of any and all claims or liens in favor of any other
Person other than Permitted Liens.
SECTION 4.4. NO JUDGMENTS, LITIGATION. No judgments are outstanding
against the Borrower nor is there now pending or, to the best of the Borrower's
knowledge after diligent inquiry, threatened any litigation, contested claim, or
governmental proceeding by or against the Borrower except judgments and pending
or threatened litigation, contested claims, and governmental proceedings which
would not, in the aggregate, have a Material Adverse Effect on the Borrower.
SECTION 4.5. NO DEFAULTS. The Borrower is not in default or has not
received a notice of default under any material contract, lease, or commitment
to which it is a party or by which it is bound. The Borrower knows of no dispute
regarding any contract, lease, or commitment which could have a Material Adverse
Effect on the Borrower.
SECTION 4.6. COLLATERAL LOCATIONS. On the date hereof, each item of
the Collateral is located at the place of business specified in the applicable
Schedule.
SECTION 4.7. NO EVENTS OF DEFAULT. No Event of Default has occurred
and is continuing nor has any event occurred which, with the giving of notice or
the passage of time, or both, would constitute an Event of Default.
SECTION 4.8. NO LIMITATION ON LENDER'S RIGHTS. Except as permitted
herein, none of the Collateral is subject to contractual obligations that may
restrict or inhibit the Lender's rights or abilities to sell or dispose of the
Collateral or any part thereof after the occurrence of an Event of Default.
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SECTION 4.9. PERFECTION AND PRIORITY OF SECURITY INTEREST.
This Agreement creates a valid and, upon completion of all required filings of
financing statements, perfected first priority and exclusive security interest
in the Collateral, and, subject to the senior lien of Silicon Valley Bank, in
the Additional Collateral, securing the payment of all the Obligations.
SECTION 4.10. MODEL AND SERIAL NUMBERS. The Schedules set
forth the true and correct model number and serial number of each item of
Equipment that constitutes Collateral.
SECTION 4.11. ACCURACY AND COMPLETENESS OF INFORMATION. All
data, reports, and information heretofore, contemporaneously, or hereafter
furnished by or on behalf of the Borrower in writing to the Lender or for
purposes of or in connection with this Agreement or any other Loan Document, or
any transaction contemplated hereby or thereby, are or will be true and
accurate in all material respects on the date as of which such data, reports,
and information are dated or certified and not incomplete by omitting to state
any material fact necessary to make such data, reports, and information not
misleading at such time. There are no facts now known to the Borrower which
individually or in the aggregate would reasonably be expected to have a
Material Adverse Effect and which have not been specified herein, in the
Financial Statements, or in any certificate, opinion, or other written
statement previously furnished by the Borrower to the Lender.
SECTION 4.12. PRICE OF EQUIPMENT. The cost of each item of
Equipment does not exceed the fair and usual price for such type of equipment
purchased in like quantity and reflects all discounts, rebates and allowances
for the Equipment (including, without limitation, discounts for advertising,
prompt payment, testing, or other services) given to the Borrower by the
manufacturer, supplier, or any other person.
SECTION 5. COVENANTS OF THE BORROWER.
SECTION 5.1. EXISTENCE, ETC. The Borrower shall: (a) retain
its existence and its current yearly accounting cycle, (b) maintain in full
force and effect all licenses, bonds, franchises, leases, trademarks, patents,
contracts, and other rights necessary or desirable to the profitable conduct
of its business unless the failure to do so could not reasonably be expected to
have a Material Adverse Effect on the Borrower, (c) continue in, and limit its
operations to, the same general lines of business as those presently conducted
by it, and (d) comply with all applicable laws and regulations of any federal,
state, or local governmental authority, except for such laws and regulations
the violations of which would not, in the aggregate, have a Material Adverse
Effect on the Borrower.
SECTION 5.2. NOTICE TO THE LENDER. As soon as possible, and
in any event within five days after the Borrower learns of the following, the
Borrower will give written notice to the Lender of (a) any proceeding
instituted or threatened to be instituted by or against the Borrower in any
federal, state, local, or foreign court or before any commission or other
regulatory body (federal, state, local, or foreign) involving a sum, together
with the sum involved in all other similar proceedings, in excess of $50,000
in the aggregate, (b) any contact that is terminated or amended and which has
had or could reasonably be expected to have a Material Adverse Effect on the
Borrower, (c) the occurrence of any Material Adverse Change with respect to the
borrower, and (d) the occurrence of any Event of Default or event or condition
which, with notice or lapse of time or both, would constitute an Event of
Default, together with a statement of the action which the Borrower has taken
or proposes to take with respect thereto.
SECTION 5.3. MAINTENANCE OF BOOKS AND RECORDS. The Borrower
will maintain books and records pertaining to the Collateral in such detail,
form, and scope as the Lender shall require in its commercially reasonable
judgment. The Borrower agrees that the Lender or its agents may enter upon the
Borrower's premises at any time and from time to time during normal business
hours, and at any time upon the occurrence and continuance of an Event of
Default, for the purpose of inspecting the Collateral and any and all records
pertaining thereto.
SECTION 5.4 INSURANCE. The Borrower will maintain insurance
on the Collateral under such policies of insurance, with such insurance
companies, in such amounts, and covering such risks as are at
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all times satisfactory to the Lender. All such policies shall be made payable to
the Lender, in case of loss, under a standard non-contributory "lender" or
"secured party" clause and are to contain such other provisions as the Lender
may reasonably require to protect the Lender's interests in the Collateral and
to any payments to be made under such policies. Certificates of insurance
policies are to be delivered to the Lender, premium prepaid, with the loss
payable endorsement in the Lender's favor, and shall provide for not less than
thirty days' prior written notice to the Lender, of any alteration or
cancellation of coverage. If the Borrower fails to maintain such insurance, the
Lender may, arrange for (at the Borrower's expense and without any
responsibility on the Lender's part for) obtaining the insurance. Unless the
Lender shall otherwise agree with the Borrower in writing, the Lender shall have
the sole right, in the name of the Lender or the Borrower, to file claims under
any insurance policies, to receive and give acquittance for any payments that
may be payable thereunder, and to execute any endorsements, receipts, releases,
assignments, reassignments, or other documents that may be necessary to effect
the collection, compromise, or settlement of any claims under any such insurance
policies.
SECTION 5.5. TAXES. The Borrower will pay, when due, all taxes,
assessments, claims, and other charges ("Taxes") lawfully levied or assessed
against the Borrower or the Collateral other than taxes that are being
diligently contested in good faith by the Borrower by appropriate proceedings
promptly instituted and for which an adequate reserve is being maintained by
the Borrower in accordance with GAAP. If any Taxes remain unpaid after the date
fixed for the payment thereof, or if any lien shall be claimed therefor, then,
without notice to the Borrower, but on the Borrower's behalf, the Lender may
pay such Taxes, and the amount thereof shall be included in the Obligations.
SECTION 5.6. BORROWER TO DEFEND COLLATERAL AGAINST CLAIMS; FEES ON
COLLATERAL. The Borrower will defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein.
The Borrower will not permit any notice creating or otherwise relating to liens
on the Collateral or any portion thereof to exist or be on file in any public
office other than Permitted Liens. The Borrower shall promptly pay, when
payable, all transportation, storage, and warehousing charges and license fees,
registration fees, assessments, charges, permit fees, and taxes (municipal,
state, and federal) which may now or hereafter be imposed upon the ownership,
leasing, renting, possession, sale, or use of the Collateral, other than taxes
on or measured by the Lender's income and fees, assessments, charges, and taxes
which are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are maintained to the
extent required by GAAP.
SECTION 5.7. NO CHANGE OF LOCATION, STRUCTURE, OR IDENTITY. The
Borrower will not (a) change the location of its chief executive office or
establish any place of business other than those specified herein or (b) move
or permit the movement of any item of Collateral from the location specified in
the applicable Schedule, except that the Borrower may change its chief
executive office and keep Collateral at other locations within the United
States provided that the Borrower has delivered to the Lender (i) prior written
notice thereof and (ii) duly executed financing statements and other agreements
and instruments (all in form and substance satisfactory to the Lender)
necessary or, in the opinion of the Lender, desirable to perfect and maintain
in favor of the Lender a first priority security interest in the Collateral.
Notwithstanding anything to the contrary in the immediately preceding sentence,
the Borrower may keep any Collateral consisting of motor vehicles or rolling
stock at any location in the United States provided that the Lender's security
interest in any such Collateral is conspicuously marked on the certificate of
title thereof and the Borrower has complied with the provisions of Section 5.9.
SECTION 5.8. USE OF COLLATERAL; LICENSES; REPAIR. The Collateral
shall be operated by competent, qualified personnel in connection with the
Borrower's business purposes, for the purpose for which the Collateral was
designed and in accordance with applicable operating instructions, laws, and
government regulations, and the Borrower shall use every reasonable precaution
to prevent loss or damage to the Collateral from fire and other hazards. The
Collateral shall not be used or operated for personal, family, or household
purposes. The Borrower shall procure and maintain in effect all orders,
licenses, certificates, permits, approvals, and consents required by federal,
state, or local laws or by any governmental body, agency, or authority in
connection with the delivery, installation, use, and operation of the
Collateral. The Borrower shall keep all of the Equipment in a satisfactory
state of repair and satisfactory operating condition in accordance with
industry standards, and will make all repairs and replacements when and where
necessary and practical. The Borrower will not waste or destroy the
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Equipment or any part thereof, and will not be negligent in the care or use
thereof. The Equipment shall not be annexed or affixed to or become part of any
realty without the Lender's prior written consent.
SECTION 5.9. FURTHER ASSURANCES. The Borrower will, promptly upon request
by the Lender, execute and deliver or use its best efforts to obtain any
document required by the Lender (including, without limitation, warehouseman or
processor disclaimers, mortgagee waivers, landlord disclaimers, or
subordination agreements with respect to the Obligations and the Collateral),
give any notices, execute and file any financing statements, mortgages, or
other documents (all in form and substance satisfactory to the Lender), ▇▇▇▇ any
chattel paper, deliver any chattel paper or instruments to the Lender, and take
any other actions that are necessary or, in the opinion of the Lender,
desirable to perfect or continue the perfection and the first priority of the
Lender's security interest in the Collateral, to protect the Collateral against
the rights, claims, or interests of any Persons, or to effect the purposes of
this Agreement. The Borrower hereby authorizes the Lender to file one or more
financing or continuation statements, and amendments thereto, relating to all
or any part of the Collateral without the signature of the Borrower where
permitted by law. A carbon, photographic, or other reproduction of this
Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law. To
the extent required under this Agreement, the Borrower will pay all costs
incurred in connection with any of the foregoing.
SECTION 5.10. NO DISPOSITION OF COLLATERAL. The Borrower will not in any
way hypothecate or create or permit to exist any lien, security interest,
charge, or encumbrance on or other interest in any of the Collateral, except
for the lien and security interest granted hereby and Permitted Liens which are
junior to the lien and security interest of the Lender, and the Borrower will
not sell, transfer, assign, pledge, collaterally assign, exchange, or otherwise
dispose of any of the Collateral. In the event the Collateral, or any part
thereof, is sold, transferred, assigned, exchanged, or otherwise disposed of in
violation of these provisions, the security interest of the Lender shall
continue in such Collateral or part thereof notwithstanding such sale,
transfer, assignment, exchange, or other disposition, and the Borrower will
hold the proceeds thereof in a separate account for the benefit of the Lender.
Following such a sale, the Borrower will transfer such proceeds to the Lender
in kind.
SECTION 5.11. NO LIMITATION ON LENDER'S RIGHTS. The Borrower will not
enter into any contractual obligations which may restrict or inhibit the
Lender's rights or ability to sell or otherwise dispose of the Collateral or
any part thereof.
SECTION 5.12. PROTECTION OF COLLATERAL. Upon notice to the Borrower
(provided that if an Event of Default has occurred and is continuing the Lender
need not give any notice), the Lender shall have the right at any time to make
any payments and do any other acts the Lender may deem necessary to protect its
security interests in the Collateral, including, without limitation, the rights
to satisfy, purchase, contest, or compromise any encumbrance, charge, or lien
which, in the reasonable judgment of the lender, appears to be prior to or
superior to the security interests granted hereunder, and appear in, and defend
any action or proceeding purporting to affect its security interests in, or the
value of, any of the Collateral. The Borrower hereby agrees to reimburse the
Lender for all payments made and expenses incurred under this Agreement
including reasonable fees, expenses, and disbursements of attorneys and
paralegals (including the allocated costs of in-house counsel) acting for the
Lender, including any of the foregoing payments under, or acts taken to protect
its security interests in, any of the Collateral, which amounts shall be
secured under this Agreement, and agrees it shall be bound by any payment made
or act taken by the Lender hereunder absent the Lender's gross negligence or
willful misconduct. The Lender shall have no obligation to make any of the
foregoing payments or perform any of the foregoing acts.
SECTION 5.13. DELIVERY OF ITEMS. The Borrower will (a) promptly (but in no
event later than one Business Day) after its receipt thereof, deliver to the
Lender any documents or certificates of title issued with respect to any
property included in the Collateral, and any promissory notes, letters of
credit or instruments related to or otherwise in connection with any property
included in the Collateral, which in any such
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case come into the possession of the Borrower, or shall cause the issuer thereof
to deliver any of the same directly to the Lender, in each case with any
necessary endorsements in favor of the Lender and (b) deliver to the Lender as
soon as available copies of any and all press releases and other similar
communications issued by the Borrower.
SECTION 5.14. SOLVENCY. The Borrower shall be and remain Solvent
at all times.
SECTION 5.15. FUNDAMENTAL CHANGES. The Borrower shall not (a)
amend or modify its name, unless the Borrower delivers to the Lender thirty
days prior to any such proposed amendment or modification written notice of
such amendment or modification and within ten days before such amendment or
modification delivers executed Uniform Commercial Code financing statements (in
form and substance satisfactory to the Lender) or (b) merge or consolidate with
any other entity or make any material change in its capital structure, in each
case without the Lender's prior written consent which shall not be unreasonably
withheld.
SECTION 5.16. ADDITIONAL REQUIREMENTS. The Borrower shall take all
such further actions and execute all such further documents and instruments as
the Lender may reasonably request.
SECTION 6. FINANCIAL STATEMENTS. Until the payment and satisfaction in
full of all Obligations, the Borrower shall deliver to the Lender the following
financial information:
SECTION 6.1. ANNUAL FINANCIAL STATEMENTS. As soon as available,
but not later than 120 days after the end of each fiscal year of the Borrower
and its consolidated subsidiaries, the consolidated balance sheet, income
statement, and statements of cash flows and shareholders equity for the
Borrower and its consolidated subsidiaries (the "Financial Statements") for
such year, reported on by independent certified public accountants without an
adverse qualification; and
SECTION 6.2. QUARTERLY FINANCIAL STATEMENTS. As soon as available,
but not later than 60 days after the end of each of the first three fiscal
quarters in any fiscal year of the Borrower and its consolidated subsidiaries,
the Financial Statements for such fiscal quarter, together with a certification
duly executed by a responsible officer of the Borrower that such Financial
Statements have been prepared in accordance with GAAP and are fairly stated in
all material respects (subject to normal year-end audit adjustments).
SECTION 7. EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an Event of Default hereunder:
(a) the Borrower shall fail to pay within five days of when due
any amount required to be paid by the Borrower under or in connection with any
Note and this Agreement;
(b) any representation or warranty made or deemed made by the
Borrower under or in connection with any Loan Document or any Financial
Statement shall prove to have been false or incorrect in any material respect
when made;
(c) the Borrower shall fail to perform or observe (i) any of the
terms, covenants or agreements contained in Sections 5.4, 5.7, 5.10, 5.14, or
5.15 hereof of (ii) any other term, covenant, or agreement contained in any Loan
Document (other than the other Events of Default specified in this Section 7)
and such failure remains unremedied for the earlier of fifteen days from (A) the
date on which the Lender has given the Borrower written notice of such failure
and (B) the date on which the Borrower knew or should have known of such
failure;
(d) any provision of any Loan Document to which the Borrower is a
party shall for any reason cease to be valid and binding on the Borrower, or
the Borrower shall so state;
(e) dissolution, liquidation, winding up, or cessation of the
Borrower's business, failure of the Borrower generally to pay its debts as they
mature, admission in writing by the Borrower of its inability generally to pay
its debts as they mature, or calling of a meeting of the Borrower's creditors
for purposes of compromising any of the Borrower's debts;
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(f) the commencement by or against the Borrower of any
bankruptcy, insolvency, arrangement, reorganization, receivership, or similar
proceedings under any federal or state law and, in the case of any such
involuntary proceeding, such proceeding remains undismissed or unstayed for
forty-five days following the commencement thereof, or any action by the
Borrower is taken authorizing any such proceedings;
(g) an assignment for the benefit of creditors is made
by the Borrower, whether voluntary or involuntary, the appointment of a
trustee, custodian, receiver, or similar official for the Borrower or for any
substantial property of the Borrower, or any action by the Borrower authorizing
any such proceeding;
(h) the Borrower shall default in (i) the payment of
principal or interest on any indebtedness in excess of $50,000 (other than the
Obligations) beyond the period of grace, if any, provided in the instrument or
agreement under which such indebtedness was created; or (ii) the observance or
performance of any other agreement or condition relating to any such
indebtedness or contained in any instrument or agreement relating thereto, or
any other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or permit the holder or holders of such
indebtedness to cause, with the giving of notice if required, such indebtedness
to become due prior to its stated maturity; or (iii) any loan or other
agreement under which the Borrower has received financing from Transamerica
Corporation or any of its affiliates;
(i) the Borrower suffers or sustains a Material Adverse
Change;
(j) any tax lien, other than a Permitted Lien, is filed
of record against the Borrower and is not bonded or discharged within five
Business Days;
(k) any judgment which has had or could reasonably be
expected to have a Material Adverse Effect on the Borrower and such judgment
shall not be stayed, vacated, bonded, or discharged within sixty days;
(l) any material covenant, agreement, or obligation, as
determined in the sole discretion of the Lender, made by the Borrower and
contained in or evidenced by any of the Loan Documents shall cease to be
enforceable, or shall be determined to be unenforceable, in accordance with its
terms; the Borrower shall deny or disaffirm the Obligations under and of the
Loan Documents or any liens granted in connection therewith; or any liens
granted on any of the Collateral in favor of the lender shall be determined to
be void, voidable, or invalid, or shall not be given the priority contemplated
by this Agreement; or
(m) there is a change in more than 35% of the ownership
of any equity interests of the Borrower on the date hereof or more than 35% of
such interests become subject to any contractual, judicial, or statutory lien,
charge, security interest, or encumbrance.
SECTION 8. REMEDIES. If any Event of Default shall have occurred
and be continuing:
(a) The lender may, without prejudice to any of its
other rights under any Loan Document or Applicable Law, declare all Obligations
to be immediately due and payable (except with respect to any Event of Default
set forth in Section 7(f) hereof, in which case all Obligations shall
automatically become immediately due and payable without necessity of any
declaration) without presentment, representation, demand of payment, or
protest, which are hereby expressly waived.
(b) The Lender may take possession of the Collateral
and, for that purpose may enter, with the aid and assistance of any person or
persons, any premises where the Collateral or any part hereof is, or may be
placed, and remove the same.
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(c) The obligation of the Lender, if any, to make
additional Loans or financial accommodations of any kind to the Borrower shall
immediately terminate.
(d) The Lender may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein (or in
any Loan Document) or otherwise available to it, all the rights and remedies of
a secured party under the applicable Uniform Commercial Code (the "Code")
whether or not the Code applies to the affected Collateral and also may (i)
require the Borrower to, and the Borrower hereby agrees that it will at its
expense and upon request of the Lender forthwith, assemble all or part of the
Collateral as directed by the Lender and make it available to the Lender at a
place to be designated by the Lender that is reasonably convenient to both
parties and (ii) without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or private sale, at any of
the lender's offices or elsewhere, for cash, on credit, or for future delivery,
and upon such other terms as the Lender may deem commercially reasonable. The
Borrower agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to the Borrower of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Lender shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Lender may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(e) All cash proceeds received by the Lender in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of the Lender, be held by the Lender as
collateral for, or then or at any time thereafter applied in whole or in part
by the Lender against, all or any part of the Obligations in such order as the
Lender shall elect. Any surplus of cash or cash proceeds held by the Lender and
remaining after the full and final payment of all the Obligations shall be paid
over to the Borrower or to such other Person to which the Lender may be
required under applicable law, or directed by a court of competent
jurisdiction, to make payment of such surplus.
SECTION 9. MISCELLANEOUS PROVISIONS.
SECTION 9.1. NOTICES. Except as otherwise provided herein,
all notices, approvals, consents, correspondence, or other communications
required or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to the Lender, then to Transamerica Technology Finance
Division, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Assistant Vice President, Lease Administration, with a copy to the Lender at
Riverway II, West Office Tower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Legal Department, and if to the Borrower, then to AboveNet
Communications, Inc., ▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Controller or such other address as shall be designated by the
Borrower or the Lender to the other party in accordance herewith. All such
notices and correspondence shall be effective when received.
SECTION 9.2. HEADINGS. The headings in this Agreement are
for purposes of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
SECTION 9.3. ASSIGNMENTS. The Borrower shall not have the
right to assign any Note or this Agreement or any interest therein unless the
Lender shall have given the Borrower prior written consent and the Borrower and
its assignee shall have delivered assignment documentation in form and
substance satisfactory to the Lender in its sole discretion. The Lender may
assign its rights and delegate its obligations under any Note or this Agreement.
SECTION 9.4. AMENDMENTS, WAIVERS, AND CONSENTS. Any
amendment or waiver of any provision of this Agreement and any consent to any
departure by the Borrower from any provision of this Agreement shall be
effective only by a writing signed by the Lender and shall bind and benefit the
Borrower and the Lender and their respective successors and assigns, subject,
in the case of the Borrower, to the first sentence of Section 9.3
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SECTION 9.5. INTERPRETATION OF AGREEMENT. Time is of the essence in
each provision of this Agreement of which time is an element. All terms not
defined herein or in a Note shall have the meaning set forth in the applicable
Code, except where the context otherwise requires. To the extent a term or
provision of this Agreement conflicts with any Note, or any term or provision
thereof, and is not dealt with herein with more specificity, this Agreement
shall control with respect to the subject matter of such term or provision.
Acceptance of or acquiescence in a course of performance rendered under this
Agreement shall not be relevant in determining the meaning of this Agreement
even though the accepting or acquiescing party had knowledge of the nature of
the performance and opportunity for objection.
SECTION 9.6. CONTINUING SECURITY INTEREST. This Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until the indefeasible payment in full of the Obligations,
(ii) be binding upon the Borrower and its successors and assigns and (iii)
inure, together with the rights and remedies of the Lender hereunder, to the
benefit of the Lender and its successors, transferees, and assigns.
SECTION 9.7. REINSTATEMENT. To the extent permitted by law, this
Agreement and the rights and powers granted to the Lender hereunder and under
the Loan Documents shall continue to be effective or be reinstated if at any
time any amount received by the Lender in respect of the Obligations is
rescinded or must otherwise be restored or returned by the Lender upon the
insolvency, bankruptcy, dissolution, liquidation, or reorganization of the
Borrower or upon the appointment of any receiver, intervenor, conservator,
trustee, or similar official for the Borrower or any substantial part of its
assets, or otherwise, all as though such payments had not been made.
SECTION 9.8. SURVIVAL OF PROVISIONS. All representations,
warranties, and covenants of the Borrower contained herein shall survive the
execution and delivery of this Agreement, and shall terminate only upon the full
and final payment and performance by the Borrower of the Obligations secured
hereby.
SECTION 9.9. INDEMNIFICATION. The Borrower agrees to indemnify and
hold harmless the Lender and its directors, officers, agents, employees, and
counsel from and against any and all costs, expenses, claims, or liability
incurred by the Lender or such Person hereunder and under any other Loan
Document or in connection herewith or therewith, unless such claim or liability
shall be due to willful misconduct or gross negligence on the part of the Lender
or such Person.
SECTION 9.10. COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement may
be executed in counterparts, each of which when so executed and delivered shall
be an original, but both of which shall together constitute one and the same
instrument. This Agreement and each of the other Loan Documents and any notices
given in connection herewith or therewith may be executed and delivered by
telecopier or other facsimile transmission all with the same force and effect as
if the same was a fully executed and delivered original manual counterpart.
SECTION 9.11. SEVERABILITY. In case any provision in or obligation
under this Agreement or any Note or any other Loan Document shall be invalid,
illegal, or unenforceable in any jurisdiction, the validity, legality, and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 9.12. DELAYS; PARTIAL EXERCISE OF REMEDIES. No delay or
omission of the Lender to exercise any right or remedy hereunder, whether before
or after the happening of any Event of default, shall impair any such right or
shall operate as a waiver thereof or as a waiver of any such Event of Default,
single or partial exercise by the Lender of any right or remedy shall preclude
any other or further exercise thereof, or preclude any other right or remedy.
14
SECTION 9.13. ENTIRE AGREEMENT. The Borrower and the Lender agree
that this Agreement, the Schedule hereto, and the Commitment Letter are the
complete and exclusive statement and agreement between the parties with respect
to the subject matter hereof, superseding all proposals and prior agreements,
oral or written, and all other communications between the parties with respect
to the subject matter hereof. Should there exist any inconsistency between the
terms of the Commitment Letter and this Agreement, the terms of this Agreement
shall prevail.
SECTION 9.14. SETOFF. In addition to and not in limitation of all
rights of offset that the Lender may have under Applicable Law, and whether or
not the Lender has made any demand or the Obligations of the Borrower have
matured, the Lender shall have the right to appropriate and apply to the payment
of the Obligations of the Borrower all deposits and other obligations then or
thereafter owing by the Lender to or for the credit or the account of the
Borrower.
SECTION 9.15. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR THE TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
SECTION 9.16. GOVERNING LAW. THE VALIDITY, INTERPRETATION, AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF.
SECTION 9.17. VENUE; SERVICE OF PROCESS. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS SITUATED IN ▇▇▇▇ COUNTY, OR OF
THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES, IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING, (a) ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENTS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (b) THE RIGHT TO
INTERPOSE ANY NONCOMPULSORY SETOFF, COUNTERCLAIM, OR CROSS-CLAIM. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS
FOR IT SPECIFIED IN SECTION 9.1 HEREOF. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER
JURISDICTION, SUBJECT IN EACH INSTANCE TO THE PROVISIONS HEREOF WITH RESPECT TO
RIGHTS AND REMEDIES.
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IN WITNESS WHEREOF, the undersigned Borrower has caused this Agreement
to be duly executed and delivered by its proper and duly authorized officer as
of the date first set forth above.
ABOVENET COMMUNICATIONS, INC.
By:
----------------------------------
Name:
Title:
Federal Tax ID:
Accepted as of the
____ day of ________, 199_
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:
------------------------------------
Name:
Title:
Form16
16
MASTER LOAN AND SECURITY AGREEMENT
THIS AGREEMENT dated as of May 28, 1998, is made by AboveNet
Communications, Inc. (the "Borrower"), a California corporation having its
principal place of business and chief executive officer at ▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ #▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in favor of Transamerica Business
Credit Corporation, a Delaware corporation (the "Lender"), having its principal
office at Riverway II, West Office Tower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Borrower has requested that the Lender make Loans to it
from time to time; and
WHEREAS, the Lender has agreed to make such Loans on the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and to induce the
Lender to extend credit, the Borrower hereby agrees with the Lender as follows:
SECTION 1. DEFINITIONS.
As used herein, the following terms shall have the following
meanings, and shall be equally applicable to both the singular and plural forms
of the terms defined:
Additional Collateral shall have the meaning specified in Section 2(b).
Agreement shall mean this Master Loan and Security Agreement together with all
schedules and exhibits hereto, as amended, supplemented, or otherwise modified
from time to time.
Applicable Law shall mean the laws of the State of Illinois (or any other
jurisdiction whose laws are mandatorily applicable notwithstanding the parties'
choice of Illinois law) or the laws of the United States of America, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.
Business Day shall mean any day other than a Saturday, Sunday, or public holiday
or the equivalent for banks in New York City.
Code shall have the meaning specified in Section 8(d).
Collateral shall have the meaning specified in Section 2.
Collateral Access Agreement shall mean any landlord waiver, mortgagee waiver,
bailee letter, or similar acknowledgement of any warehouseman or processor in
possession of any Equipment.
Effective Date shall mean the date on which all of the conditions specified in
Section 3.3 shall have been satisfied.
Equipment shall have the meaning specified in Section 2.
Equity Funding Requirement shall mean that Borrower shall have received at
least $7,000,000 net proceeds from its Series D or similar preferred stock
financing.
Event of Default shall mean any event specified in Section 7.
Financial Statements shall have the meaning specified in Section 6.1.
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GAAP shall mean generally accepted accounting principles in the United States
of America, as in effect from time to time.
Loans shall mean the loans and financial accommodations made by the Lender to
the Borrower in accordance with terms of this Agreement and the Notes.
Loan Documents shall mean, collectively, this Agreement, the Notes, and all
other documents, agreements, certificates, instruments, and opinions executed
and delivered in connection herewith and therewith, as the same may be
modified, extended, restated, or supplemented from time to time.
Material Adverse Change shall mean, with respect to any Person, a material
adverse change in the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise) of such Person taken
as a whole.
Material Adverse Effect shall mean, with respect to any Person, a material
adverse effect on the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise) of such Person taken
as a whole.
Note shall mean each Promissory Note made by the Borrower in favor of the
Lender, as amended, supplemented, or otherwise modified from time to time.
Obligations shall mean all indebtedness, obligations, and liabilities of the
Borrower under the Notes and under this Agreement, whether on account of
principal, interest, indemnities, fees (including, without limitation,
attorneys' fees, remarketing fees, origination fees, collection fees, and all
other professionals' fees), costs, expenses, taxes, or otherwise.
Permitted Liens shall mean such of the following as to which no enforcement,
collection, execution, levy, or foreclosure proceeding shall have been
commenced: (a) liens for taxes, assessments, and other governmental charges or
levies or the claims or demands of landlords, carriers, warehousemen,
mechanics, laborers, materialmen, and other like Persons arising by operation
of law in the ordinary course of business for sums which are not yet due and
payable, or liens which are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves
are maintained to the extent required by GAAP; (b) deposits or pledges to
secure the payment of worker's compensation, unemployment insurance, or other
social security benefits or obligations, public or statutory obligations,
surety or appeal bonds, bid or performance bonds, or other obligations of a
like nature incurred in the ordinary course of business; (c) licenses,
restrictions, or covenants for or on the use of the Equipment which do not
materially impair either the use of the Equipment in the operation of the
business of the Borrower or the value of the Equipment; (d) attachment or
judgment liens that do not constitute an Event of Default; (e) security
interests in and liens granted to current and future lenders to the Borrower
which are subordinate to the security interest and lien granted to Lender
hereunder; (f) subject to a maximum limit of $2,000,000, purchase money
security interests or liens representing equipment leases for equipment
purchased after the date hereof; (g) purchase money security interests or liens
representing equipment leases for equipment purchased prior to the date hereof
and (h) with respect to the Additional Collateral only, senior security
interests and liens in favor of Silicon Valley Bank.
Person shall mean any individual, sole proprietorship, partnership, limited
liability partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution, entity,
party, or government (including any division, agency, or department thereof),
and the successors, heirs, and assigns of each.
Schedule shall mean each Schedule in the form of Schedule A hereto delivered by
the Borrower to the Lender from time to time.
Solvent means, with respect to any Person, that as of the date as to which such
Person's solvency is measured.
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(a) the fair saleable value of its assets is in excess of the
total amount of its liabilities (including contingent liabilities as valued in
accordance with GAAP) as they become absolute and matured;
(b) it has sufficient capital to conduct its business; and
(c) it is able generally to meet its debts as they mature.
Taxes shall have the meaning specified in Section 5.5.
SECTION 2. CREATION OF SECURITY INTEREST; COLLATERAL. (a) The
Borrower hereby assigns and grants to the Lender a continuing general, first
priority lien on, and security interest in, all the Borrower's right, title,
and interest in and to the collateral described in the next sentence (the
"Collateral") to secure the payment and performance of all the Obligations.
Subject to paragraph (b) below, the Collateral consists of all equipment set
forth on all the Schedules delivered from time to time under the terms of this
Agreement (the "Equipment"), together with all present and future additions,
parts, accessories, attachments, substitutions, repairs, improvements, and
replacements thereof or thereto, and any and all proceeds thereof, including,
without limitation, proceeds of insurance and all manuals, blueprints,
know-how, warranties, and records in connection therewith, all rights against
suppliers, warrantors, manufacturers, sellers, or others in connection
therewith, and together with all substitutes for any of the foregoing.
(b) In addition to the foregoing, for the period beginning on
the date hereof and ending on the date that the Equity Funding Requirement is
met, the Borrower hereby assigns and grants to the Lender a continuing general
lien on, and security interest in, all the Borrower's right, title, and
interest in and to the collateral described in the next sentence (the
"Additional Collateral") to secure the payment and performance of all the
Obligations. The Additional Collateral consists of
(i) all present and future machinery, equipment,
furniture, fixtures, leasehold improvements, conveyors, tools,
materials, storage and handling equipment, hydraulic presses,
cutting equipment, computer equipment and hardware, including
central processing units, terminals, drives, memory units,
printers, keyboards, screens, peripherals and input or output
devices, molds, dies, stamps, and other equipment of every kind
and nature and wherever situated now or hereafter owned and held
for use by the Borrower or in which the Borrower may have any
interest as lessee (to the extent of such interest), together with
all additions and accessions thereto, all replacements and all
accessories and parts therefore, all manuals, blueprints,
know-how, warranties and records in connection therewith
(including, without limitation, any computer software, whether on
tape, disc, card, strip or cartridge or in any other form) and all
rights against suppliers, warrantors, manufacturers, and sellers
or others in connection therewith, together with all substitutes
for any of the foregoing;
(ii) all present and future goods intended for sale,
lease or other disposition by the Borrower including, without
limitation, all raw materials, work in process, systems,
accessories, spare parts, finished goods and other retail
inventory, goods in the possession of outside processors or other
third parties, consigned goods (to the extent of the consignee's
interest therein), materials, parts and supplies of any kind,
nature or description which are or might be used in connection
with the manufacture, packing, shipping, advertising, selling or
finishing of any such goods, all documents of title or documents
representing the same and all records, files and writings
(including, without limitation, any computer software, whether on
tape, disc, card, strip or cartridge or in any other form) with
respect thereto;
(iii) all of the Borrower's present and future accounts
(including rights to receive payments for goods sold or services
rendered arising out of the sale or delivery of personal property
or work done or labor performed), contract rights, agreements,
understandings, open purchase and sale orders, promissory notes,
chattel paper, documents, tax refunds, rights to receive tax
refunds, bonds, certificates, insurance policies, insurance
proceeds, patents, patent
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applications, copyrights (registered and unregistered), royalties,
licenses, rights to receive fees, royalties and other payments
under license agreements, permits, franchise rights,
authorizations, customer and supplier lists, rights of
indemnification, contribution and subrogation, leases, computer
tapes, programs, discs and software, trade secrets, computer
service contracts, trademarks, trade names, service marks and
names, logos, goodwill, deposits, causes of action, choices in
action, judgments, designs, blueprints, quotations and bids,
plans, specifications, sales literature, know-how, all other
general intangibles, claims against third parties of every kind or
nature, investment securities, notes, drafts, acceptances, letters
of credit and rights to receive payments under letters of credit,
deposit accounts, book accounts, prepaid expenses, credits and
reserves and all forms of obligations whatsoever owing,
instruments, documents of title, leasehold rights, including in
any goods, books, ledgers, files (including credit and project
files) and records (including tax records) with respect to any
collateral or security, together with all right, title, security
and guaranties with respect to thereto, including any right of
stoppage in transit; and
(iv) all proceeds of the foregoing.
SECTION 3. THE CREDIT FACILITY.
SECTION 3.1. BORROWINGS. Each Loan shall be in an amount
not less than $100,000, and in no event shall the sum of the aggregate Loans
made exceed the amount of the Lender's written commitment to the Borrower in
effect from time to time. Notwithstanding anything herein to the contrary, the
Lender shall be obligated to make the initial Loan and each other Loan only
after the Lender, in its good faith business judgment, determines that the
applicable conditions for borrowing contained in Sections 3.3 and 3.4 are
satisfied. The timing and financial scope of Lender's obligation to make Loans
hereunder are limited as set forth in a commitment letter executed by Lender
and Borrower, dated as of April 29, 1998 and attached hereto as Exhibit A (the
"Commitment Letter").
SECTION 3.2. APPLICATION OF PROCEEDS. The Borrower shall
not directly or indirectly use any proceeds of the Loans, or cause, assist,
suffer, or permit the use of any proceeds of the Loans, for any purpose other
than for the purchase, acquisition, installation, or upgrading of Equipment or
the reimbursement of the Borrower for its purchase, acquisition, installation,
or upgrading of Equipment.
SECTION 3.3. CONDITIONS TO INITIAL LOAN.
(a) The obligation of the Lender to make the initial Loan is
subject to the Lender's receipt of the following, each dated the date of the
initial Loan or as of an earlier date acceptable to the Lender, in form and
substance satisfactory to the Lender and its counsel:
(i) completed requests for information (Form UCC-11)
listing all effective Uniform Commercial Code financing statements
naming the Borrower as debtor and all tax lien, judgment, and
litigation searches for the Borrower as the Lender shall deem
necessary or desirable;
(ii) Uniform Commercial Code financing statements (Form
UCC-1) duly executed by the Borrower (naming the Lender as secured
party and the Borrower as debtor and in form acceptable for filing
in all jurisdictions that the Lender deems necessary or desirable
to perfect the security interests granted to it hereunder) and, if
applicable, termination statements or other releases duly filed in
all jurisdictions that the Lender deems necessary or desirable to
perfect and protect the priority of the security interests granted
to it hereunder in the Equipment related to such initial Loan;
(iii) a Note duly executed by the Borrower evidencing the
amount of such Loan;
(iv) a Collateral Access Agreement duly executed by the
lessor or mortgagee, as the case may be, of premises in Vienna,
Virginia where the Equipment is located;
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(v) certificates of insurance required under Section 5.4 of this
Agreement together with loss payee endorsements for all such policies
naming the Lender as lender loss payee and as an additional insured;
(vi) a copy of the resolutions of the Board of Directors of the
Borrower (or a unanimous consent of directors in lieu thereof) authorizing
the execution, delivery, and performance of this Agreement, the other Loan
Documents, and the transactions contemplated hereby and thereby, attached
to which is a certificate of the Secretary or an Assistant Secretary of the
Borrower certifying (A) that the copy of the resolutions is true, complete,
and accurate, that such resolutions have not been amended or modified since
the date of such certification and are in full force and effect and (B) the
incumbency, names, and true signatures of the officers of the Borrower
authorized to sign the Loan Documents to which it is a party;
(vii) the opinion of counsel for the Borrower covering such matters
incident to the transactions contemplated by this Agreement as the Lender
may reasonably require; and
(viii) such other agreements and instruments as the Lender deems
necessary in its good faith business judgment in connection with the
transactions contemplated hereby.
(b) There shall be no pending or, to the knowledge of the Borrower after
due inquiry, threatened litigation, proceeding, inquiry, or other action (i)
seeking an injunction or other restraining order, damages, or other relief with
respect to the transactions contemplated by this Agreement or the other Loan
Documents or thereby or (ii) which affects or could affect the business,
prospects, operations, assets, liabilities, or condition (financial or
otherwise) of the Borrower, except, in the case of clause (ii), where such
litigation, proceeding, inquiry, or other action could not be expected to have a
Material Adverse Effect in the judgment of the Lender.
(c) The Borrower shall have paid all fees and expenses required to be paid
by it to the Lender as of such date (fees and expenses in connection closing
this transaction are capped at $5,000).
(d) The security interests in the Collateral and the Additional Collateral
granted in favor of the Lender under this Agreement shall have been duly
perfected and, with respect to the Equipment related to the initial Loan, shall
constitute first priority liens.
SECTION 3.4. CONDITIONS PRECEDENT TO EACH LOAN. The obligation of
the Lender to make each Loan is subject to the satisfaction of the following
conditions precedent:
(a) the Lender shall have received the documents, agreements, and
instruments set forth in Section 3.3(a)(i) through (v) applicable to such Loan,
each in form and substance satisfactory to the Lender and its counsel and each
dated the date of such Loan or as of an earlier date acceptable to the Lender;
(b) the Lender shall have received a Schedule of the Equipment related to
such Loan, in form and substance satisfactory to the Lender and its counsel, and
the security interests in such Equipment related to such Loan granted in favor
of the Lender under this Agreement shall have been duly perfected and shall
constitute first priority liens;
(c) all representations and warranties contained in this Agreement and the
other Loan Documents shall be true and correct on and as of the date of such
Loan as if then made, other than representations and warranties that expressly
relate solely to an earlier date, in which case they shall have been true and
correct as of such earlier date;
(d) no Event of Default or event which with the giving of notice or the
passage of fame, or both, would constitute an Event of Default shall have
occurred and be continuing or would result from the making
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of the requested Loan as of the date of such request; and
(e) the Borrower shall be deemed to have hereby reaffirmed and ratified
all security interests, liens, and other encumbrances heretofore granted by the
Borrower to the Lender.
SECTION 4. THE BORROWER'S REPRESENTATIONS AND WARRANTIES.
SECTION 4.1. GOOD STANDING; QUALIFIED TO DO BUSINESS. The Borrower
(a) is duly organized, validly existing, and in good standing under the laws of
the State of its organization, (b) has the power and authority to own its
properties and assets and to transact the business in which it is presently, or
proposes to be, engaged, and (c) is duly qualified and authorized to do business
and is in good standing in every jurisdiction in which the failure to be so
qualified could have a Material Adverse Effect on (i) the Borrower, (ii) the
Borrower's ability to perform its obligations under the Loan Documents, or (iii)
the rights of the Lender hereunder.
SECTION 4.2. DUE EXECUTION, ETC. The execution, delivery, and
performance by the Borrower of each of the Loan Documents to which it is a party
are within the powers of the Borrower, do not contravene the organizational
documents, if any, of the Borrower, and do not (a) violate any law or
regulation, or any order or decree of any court or governmental authority, (b)
conflict with or result in a breach of, or constitute a default under, any
material indenture, mortgage, or deed of trust or any material lease, agreement,
or other instrument binding on the Borrower or any of its properties, or (c)
require the consent, authorization by, or approval of or notice to or filing or
registration with any governmental authority or other Person. This Agreement is,
and each of the other Loan Documents to which the Borrower is or will be a
party, when delivered hereunder or thereunder, will be, the legal, valid, and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by general principles of equity.
SECTION 4.3. SOLVENCY; NO LIENS. The Borrower is Solvent and will be
Solvent upon the completion of all transactions contemplated to occur hereunder
(including, without limitation, the Loan to be made on the Effective Date); the
security interests granted herein constitute and shall at all times constitute
the first and only liens on the Collateral other than Permitted Liens, and, with
respect to the Additional Collateral, the first lien other than the lien of
Silicon Valley Bank; and the Borrower is, or will be at the time additional
Collateral is acquired by it, the absolute owner of the Collateral with full
right to pledge, sell, consign, transfer, and create a security interest
therein, free and clear of any and all claims or liens in favor of any other
Person other than Permitted Liens.
SECTION 4.4. NO JUDGMENTS, LITIGATION. No judgments are outstanding
against the Borrower nor is there now pending or, to the best of the Borrower's
knowledge after diligent inquiry, threatened any litigation, contested claim, or
governmental proceeding by or against the Borrower except judgments and pending
or threatened litigation, contested claims, and governmental proceedings which
would not, in the aggregate, have a Material Adverse Effect on the Borrower.
SECTION 4.5. NO DEFAULTS. The Borrower is not in default or has not
received a notice of default under any material contract, lease, or commitment
to which it is a party or by which it is bound. The Borrower knows of no dispute
regarding any contract, lease, or commitment which could have a Material Adverse
Effect on the Borrower.
SECTION 4.6. COLLATERAL LOCATIONS. On the date hereof, each item of
the Collateral is located at the place of business specified in the applicable
Schedule.
SECTION 4.7. NO EVENTS OF DEFAULT. No Event of Default has occurred
and is continuing nor has any event occurred which, with the giving of notice or
the passage of time, or both, would constitute an Event of Default.
SECTION 4.8. NO LIMITATION ON LENDER'S RIGHTS. Except as permitted
herein,
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none of the Collateral is subject to contractual obligations that may restrict
or inhibit the Lender's rights or abilities to sell or dispose of the
Collateral or any part thereof after the occurrence of an Event of Default.
SECTION 4.9. PERFECTION AND PRIORITY OF SECURITY INTEREST.
This Agreement creates a valid and, upon completion of all required filings of
financing statements, perfected first priority and exclusive security interest
in the Collateral, and, subject to Permitted Liens and, in the Additional
Collateral, the senior lien of Silicon Valley Bank securing the payment of all
the Obligations.
SECTION 4.10. MODEL AND SERIAL NUMBERS. The Schedules set
forth the true and correct model number and serial number of each item of
Equipment that constitutes Collateral.
SECTION 4.11. ACCURACY AND COMPLETENESS OF INFORMATION. All
data, reports, and information heretofore, contemporaneously, or hereafter
furnished by or on behalf of the Borrower in writing to the Lender or for
purposes of or in connection with this Agreement or any other Loan Document, or
any transaction contemplated hereby or thereby, are or will be true and
accurate in all material respects on the date as of which such data, reports,
and information are dated or certified and not incomplete by omitting to state
any material fact necessary to make such data, reports, and information not
misleading at such time. There are no facts now known to the Borrower which
individually or in the aggregate would reasonably be expected to have a
Material Adverse Effect and which have not been specified herein, in the
Financial Statements, or in any certificate, opinion, or other written
statement previously furnished by the Borrower to the Lender.
SECTION 4.12. PRICE OF EQUIPMENT. The cost of each item of
Equipment does not exceed the fair and usual price for such type of equipment
purchased in like quantity and reflects all discounts, rebates and allowances
for the Equipment (including, without limitation, discounts for advertising,
prompt payment, testing, or other services) given to the Borrower by the
manufacturer, supplier, or any other person.
SECTION 5. COVENANTS OF THE BORROWER.
SECTION 5.1. EXISTENCE, ETC. The Borrower shall: (a) retain
its existence and its current yearly accounting cycle, (b) maintain in full
force and effect all licenses, bonds, franchises, leases, trademarks, patents,
contracts, and other rights necessary or desirable to the profitable conduct
of its business unless the failure to do so could not reasonably be expected to
have a Material Adverse Effect on the Borrower, (c) continue in, and limit its
operations to, the same general lines of business as those presently conducted
by it, and (d) comply with all applicable laws and regulations of any federal,
state, or local governmental authority, except for such laws and regulations
the violations of which would not, in the aggregate, have a Material Adverse
Effect on the Borrower.
SECTION 5.2. NOTICE TO THE LENDER. As soon as possible, and
in any event within five days after the Borrower learns of the following, the
Borrower will give written notice to the Lender of (a) any proceeding instituted
or threatened to be instituted by or against the Borrower in any federal, state,
local, or foreign court or before any commission or other regulatory body
(federal, state, local, or foreign) involving a sum, together with the sum
involved in all other similar proceedings, in excess of $100,000 in the
aggregate, (b) any contract that is terminated or amended and which has had or
could reasonably be expected to have a Material Adverse Effect on the Borrower,
(c) the occurrence of any Material Adverse Change with respect to the borrower,
and (d) the occurrence of any Event of Default or event or condition which, with
notice or lapse of time or both, would constitute an Event of Default, together
with a statement of the action which the Borrower has taken or proposes to take
with respect thereto.
SECTION 5.3. MAINTENANCE OF BOOKS AND RECORDS. The Borrower
will maintain books and records pertaining to the Collateral in such detail,
form, and scope as the Lender shall require in its commercially reasonable
judgment. The Borrower agrees that the Lender or its agents may enter upon the
Borrower's premises at any time and from time to time during normal business
hours after reasonable notice, and at any time upon the occurrence and
continuance of an Event of Default, for the purpose of inspecting the
Collateral and any and all records pertaining thereto.
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SECTION 5.4. INSURANCE. The Borrower will maintain insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, and covering such risks as are at all times satisfactory to the
Lender. All such policies shall be made payable to the Lender, in case of loss,
under a standard non-contributory "lender" or "secured party" clause and are to
contain such other provisions as the Lender may reasonably require to protect
the Lender's interests in the Collateral and to any payments to be made under
such policies. Certificates of insurance policies are to be delivered to the
Lender, premium prepaid, with the loss payable endorsement in the Lender's
favor, and shall provide for not less than thirty days' prior written notice to
the Lender, of any alteration or cancellation of coverage. If the Borrower
fails to maintain such insurance, the Lender may, after notice to the Borrower,
arrange for (at the Borrower's expense and without any responsibility on the
Lender's part for) obtaining the insurance. Unless the Lender shall otherwise
agree with the Borrower in writing, the Lender shall have the sole right, in
the name of the Lender or the Borrower, to file claims under any insurance
policies, to receive and give acquittance for any payments that may be payable
thereunder, and to execute any endorsements, receipts, releases, assignments,
reassignments, or other documents that may be necessary to effect the
collection, compromise, or settlement of any claims under any such insurance
policies.
SECTION 5.5. TAXES. The Borrower will pay, when due, all taxes,
assessments, claims, and other charges ("Taxes") lawfully levied or assessed
against the Borrower or the Collateral other than taxes that are being
diligently contested in good faith by the Borrower by appropriate proceedings
promptly instituted and for which an adequate reserve is being maintained by
the Borrower in accordance with GAAP. If any Taxes remain unpaid after the date
fixed for the payment thereof, or if any lien shall be claimed therefor, then,
without notice to the Borrower, but on the Borrower's behalf, the Lender may
pay such Taxes, and the amount thereof shall be included in the Obligations.
SECTION 5.6. BORROWER TO DEFEND COLLATERAL AGAINST CLAIMS; FEES ON
COLLATERAL. The Borrower will defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein.
The Borrower will not permit any notice creating or otherwise relating to liens
on the Collateral or any portion thereof to exist or be on file in any public
office other than Permitted Liens. The Borrower shall promptly pay, when
payable, all transportation, storage, and warehousing charges and license fees,
registration fees, assessments, charges, permit fees, and taxes (municipal,
state, and federal) which may now or hereafter be imposed upon the ownership,
leasing, renting, possession, sale, or use of the Collateral, other than taxes
on or measured by the Lender's income and fees, assessments, charges, and taxes
which are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are maintained to the
extent required by GAAP.
SECTION 5.7. NO CHANGE OF LOCATION, STRUCTURE, OR IDENTITY. The
Borrower will not (a) change the location of its chief executive office or
establish any place of business other than those specified herein or (b) move
or permit the movement of any item of Collateral from the location specified in
the applicable Schedule, except that the Borrower may change its chief
executive office and keep Collateral at other locations within the United
States provided that the Borrower has delivered to the Lender (i) prior written
notice thereof and (ii) duly executed financing statements and other agreements
and instruments (all in form and substance satisfactory to the Lender)
necessary or, in the opinion of the Lender, desirable to perfect and maintain
in favor of the Lender a first priority security interest in the Collateral.
Notwithstanding anything to the contrary in the immediately preceding sentence,
the Borrower may keep any Collateral consisting of motor vehicles or rolling
stock at any location in the United States provided that the Lender's security
interest in any such Collateral is conspicuously marked on the certificate of
title thereof and the Borrower has complied with the provisions of Section 5.9.
SECTION 5.8. USE OF COLLATERAL; LICENSES; REPAIR. The Collateral
shall be operated by competent, qualified personnel in connection with the
Borrower's business purposes, for the purpose for which the Collateral was
designed and in accordance with applicable operating instructions, laws, and
government regulations, and the Borrower shall use every reasonable precaution
to prevent loss or damage to the Collateral from fire and other hazards. The
Collateral shall not be used or operated for personal, family, or household
purposes. The Borrower shall procure and maintain in effect all orders,
licenses, certificates, permits, approvals, and consents required by federal,
state, or local laws or by any governmental body, agency, or authority in
connection with the
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delivery, installation, use, and operation of the Collateral. The Borrower
shall keep all of the Equipment in a satisfactory state of repair and
satisfactory operating condition in accordance with industry standards, and
will make all repairs and replacements when and where necessary and practical.
The Borrower will not waste or destroy the Equipment or any part thereof, and
will not be negligent in the care or use thereof. The Equipment shall not be
annexed or affixed to or become part of any realty without the Lender's prior
written consent.
SECTION 5.9. FURTHER ASSURANCES. The Borrower will, promptly upon request
by the Lender, execute and deliver or use its best efforts to obtain any
document required by the Lender (including, without limitation, warehouseman or
processor disclaimers, mortgagee waivers, landlord disclaimers, or
subordination agreements with respect to the Obligations and the Collateral),
give any notices, execute and file any financing statements, mortgages, or
other documents (all in form and substance satisfactory to the Lender), ▇▇▇▇ any
chattel paper, deliver any chattel paper or instruments to the Lender, and take
any other actions that are necessary or, in the opinion of the Lender,
desirable to perfect or continue the perfection and the first priority of the
Lender's security interest in the Collateral, to protect the Collateral against
the rights, claims, or interests of any Persons, or to effect the purposes of
this Agreement. The Borrower hereby authorizes the Lender to file one or more
financing or continuation statements, and amendments thereto, relating to all
or any part of the Collateral without the signature of the Borrower where
permitted by law. A carbon, photographic, or other reproduction of this
Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law. To
the extent required under this Agreement, the Borrower will pay all costs
incurred in connection with any of the foregoing.
SECTION 5.10. NO DISPOSITION OF COLLATERAL. The Borrower will not in any
way hypothecate or create or permit to exist any lien, security interest,
charge, or encumbrance on or other interest in any of the Collateral, except
for the lien and security interest granted hereby and Permitted Liens which are
junior to the lien and security interest of the Lender, and the Borrower will
not sell, transfer, assign, pledge, collaterally assign, exchange, or otherwise
dispose of any of the Collateral. In the event the Collateral, or any part
thereof, is sold, transferred, assigned, exchanged, or otherwise disposed of in
violation of these provisions, the security interest of the Lender shall
continue in such Collateral or part thereof notwithstanding such sale,
transfer, assignment, exchange, or other disposition, and the Borrower will
hold the proceeds thereof in a separate account for the benefit of the Lender.
Following such a sale, the Borrower will transfer such proceeds to the Lender
in kind.
SECTION 5.11. NO LIMITATION ON LENDER'S RIGHTS. The Borrower will not
enter into any contractual obligations which may restrict or inhibit the
Lender's rights or ability to sell or otherwise dispose of the Collateral or
any part thereof.
SECTION 5.12. PROTECTION OF COLLATERAL. Upon notice to the Borrower
(provided that if an Event of Default has occurred and is continuing the Lender
need not give any notice), the Lender shall have the right at any time to make
any payments and do any other acts the Lender may deem necessary to protect its
security interests in the Collateral, including, without limitation, the rights
to satisfy, purchase, contest, or compromise any encumbrance, charge, or lien
which, in the reasonable judgment of the lender, appears to be prior to or
superior to the security interests granted hereunder, and appear in, and defend
any action or proceeding purporting to affect its security interests in, or the
value of, any of the Collateral. The Borrower hereby agrees to reimburse the
Lender for all payments made and expenses incurred under this Agreement
including reasonable fees, expenses, and disbursements of attorneys and
paralegals (including the allocated costs of in-house counsel) acting for the
Lender, including any of the foregoing payments under, or acts taken to protect
its security interests in, any of the Collateral, which amounts shall be
secured under this Agreement, and agrees it shall be bound by any payment made
or act taken by the Lender hereunder absent the Lender's gross negligence or
willful misconduct. The Lender shall have no obligation to make any of the
foregoing payments or perform any of the foregoing acts.
SECTION 5.13. DELIVERY OF ITEMS. The Borrower will (a) promptly (but in no
event later than one Business Day) after its receipt thereof, deliver to the
Lender any documents or certificates of title issued with respect to any
property included in the Collateral, and any promissory notes, letters of
credit or instruments related to or otherwise in connection with any property
included in the Collateral, which in any such
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case come into the possession of the Borrower, or shall cause the issuer thereof
to deliver any of the same directly to the Lender, in each case with any
necessary endorsements in favor of the Lender and (b) deliver to the Lender as
soon as available copies of any and all press releases and other similar
communications issued by the Borrower.
SECTION 5.14. SOLVENCY. The Borrower shall be and remain Solvent
at all times.
SECTION 5.15. FUNDAMENTAL CHANGES. The Borrower shall not (a)
amend or modify its name, unless the Borrower delivers to the Lender thirty
days prior to any such proposed amendment or modification written notice of
such amendment or modification and within ten days before such amendment or
modification delivers executed Uniform Commercial Code financing statements (in
form and substance satisfactory to the Lender) or (b) merge or consolidate with
any other entity or make any material change in its capital structure, in each
case without the Lender's prior written consent which shall not be unreasonably
withheld.
SECTION 5.16. ADDITIONAL REQUIREMENTS. The Borrower shall take all
such further actions and execute all such further documents and instruments as
the Lender may reasonably request.
SECTION 6. FINANCIAL STATEMENTS. Until the payment and satisfaction in
full of all Obligations, the Borrower shall deliver to the Lender the following
financial information:
SECTION 6.1. ANNUAL FINANCIAL STATEMENTS. As soon as available,
but not later than 120 days after the end of each fiscal year of the Borrower
and its consolidated subsidiaries, the consolidated balance sheet, income
statement, and statements of cash flows and shareholders equity for the
Borrower and its consolidated subsidiaries (the "Financial Statements") for
such year, reported on by independent certified public accountants without an
adverse qualification; and
SECTION 6.2. QUARTERLY FINANCIAL STATEMENTS. As soon as available,
but not later than 60 days after the end of each of the first three fiscal
quarters in any fiscal year of the Borrower and its consolidated subsidiaries,
the Financial Statements for such fiscal quarter, together with a certification
duly executed by a responsible officer of the Borrower that such Financial
Statements have been prepared in accordance with GAAP and are fairly stated in
all material respects (subject to normal year-end audit adjustments).
SECTION 7. EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an Event of Default hereunder:
(a) the Borrower shall fail to pay within five days of when due
any amount required to be paid by the Borrower under or in connection with any
Note and this Agreement;
(b) any representation or warranty made or deemed made by the
Borrower under or in connection with any Loan Document or any Financial
Statement shall prove to have been false or incorrect in any material respect
when made;
(c) the Borrower shall fail to perform or observe (i) any of the
terms, covenants or agreements contained in Sections 5.4, 5.10, 5.14, or 5.15
hereof or (ii) any other term, covenant, or agreement contained in any Loan
Document (other than the other Events of Default specified in this Section 7)
and such failure remains unremedied for the earlier of fifteen days from (A)
the date on which the Lender has given the Borrower written notice of such
failure and (B) the date on which the Borrower knew or should have known of
such failure;
(d) any provision of any Loan Document to which the Borrower is a
party shall for any reason cease to be valid and binding on the Borrower, or
the Borrower shall so state;
(e) dissolution, liquidation, winding up, or cessation of the
Borrower's business, failure of the Borrower generally to pay its debts as they
mature, admission in writing by the Borrower of its inability generally to pay
its debts as they mature, or calling of a meeting of the Borrower's creditors
for purposes of compromising any of the Borrower's debts;
10
26
(f) the commencement by or against the Borrower of any
bankruptcy, insolvency, arrangement, reorganization, receivership, or similar
proceedings under any federal or state law and, in the case of any such
involuntary proceeding, such proceeding remains undismissed or unstayed for
forty-five days following the commencement thereof, or any action by the
Borrower is taken authorizing any such proceedings;
(g) an assignment for the benefit of creditors is made
by the Borrower, whether voluntary or involuntary, the appointment of a
trustee, custodian, receiver, or similar official for the Borrower or for any
substantial property of the Borrower, or any action by the Borrower authorizing
any such proceeding;
(h) the Borrower shall default in (i) the payment of
principal or interest on any indebtedness in excess of $100,000 (other than the
Obligations) beyond the period of grace, if any, provided in the instrument or
agreement under which such indebtedness was created; or (ii) the observance or
performance of any other agreement or condition relating to any such
indebtedness or contained in any instrument or agreement relating thereto, or
any other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of such
indebtedness to cause, with the giving of notice if required, such indebtedness
to become due prior to its stated maturity; or (iii) any loan or other agreement
under which the Borrower has received financing from Transamerica Corporation or
any of its affiliates;
(i) the Borrower suffers or sustains a Material Adverse
Change;
(j) any tax lien, other than a Permitted Lien, is filed
of record against the Borrower and is not bonded or discharged within five
Business Days;
(k) any judgment which has had or could reasonably be
expected to have a Material Adverse Effect on the Borrower and such judgment
shall not be stayed, vacated, bonded, or discharged within sixty days;
(l) any material covenant, agreement, or obligation, as
determined in the sole discretion of the Lender, made by the Borrower and
contained in or evidenced by any of the Loan Documents shall cease to be
enforceable, or shall be determined to be unenforceable, in accordance with its
terms; the Borrower shall deny or disaffirm the Obligations under any of the
Loan Documents or any liens granted in connection therewith; or any liens
granted on any of the Collateral in favor of the Lender shall be determined to
be void, voidable, or invalid, or shall not be given the priority contemplated
by this Agreement; or
(m) there is a change, other than a change which
results from the sale of newly issued securities to investors, in more than 35%
of the ownership of any equity interests of the Borrower on the date hereof or
more than 35% of such interests become subject to any contractual, judicial, or
statutory lien, charge, security interest, or encumbrance.
SECTION 8. REMEDIES. If any Event of Default shall have occurred
and be continuing:
(a) The Lender may, without prejudice to any of its
other rights under any Loan Document or Applicable Law, declare all Obligations
to be immediately due and payable (except with respect to any Event of Default
set forth in Section 7(f) hereof, in which case all Obligations shall
automatically become immediately due and payable without necessity of any
declaration) without presentment, representation, demand of payment, or
protest, which are hereby expressly waived.
(b) The Lender may, upon three (3) days' prior notice,
take possession of the Collateral and, for that purpose may enter, with the aid
and assistance of any person or persons, any premises where the Collateral or
any part hereof is, or may be placed, and remove the same.
11
27
(c) The obligation of the Lender, if any, to make
additional Loans or financial accommodations of any kind to the Borrower shall
immediately terminate.
(d) The Lender may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein (or in
any Loan Document) or otherwise available to it, all the rights and remedies of
a secured party under the applicable Uniform Commercial Code (the "Code")
whether or not the Code applies to the affected Collateral and also may (i)
require the Borrower to, and the Borrower hereby agrees that it will at its
expense and upon request of the Lender forthwith, assemble all or part of the
Collateral as directed by the Lender and make it available to the Lender at a
place to be designated by the Lender that is reasonably convenient to both
parties and (ii) without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or private sale, at any of
the Lender's offices or elsewhere, for cash, on credit, or for future delivery,
and upon such other terms as the Lender may deem commercially reasonable. The
Borrower agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to the Borrower of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Lender shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Lender may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(e) All cash proceeds received by the Lender in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of the Lender, be held by the Lender as
collateral for, or then or at any time thereafter applied in whole or in part
by the Lender against, all or any part of the Obligations in such order as the
Lender shall elect. Any surplus of cash or cash proceeds held by the Lender and
remaining after the full and final payment of all the Obligations shall be paid
over to the Borrower or to such other Person to which the Lender may be
required under applicable law, or directed by a court of competent
jurisdiction, to make payment of such surplus.
SECTION 9. MISCELLANEOUS PROVISIONS.
SECTION 9.1. NOTICES. Except as otherwise provided
herein, all notices, approvals, consents, correspondence, or other
communications required or desired to be given hereunder shall be given in
writing and shall be delivered by overnight courier, hand delivery, or
certified or registered mail, postage prepaid, if to the Lender, then to
Transamerica Technology Finance Division, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Assistant Vice President, Lease Administration,
with a copy to the Lender at Riverway II, West Office Tower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department, and if to the
Borrower, then to AboveNet Communications, Inc., ▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
#▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Controller, with a copy to
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq. or such other address as shall be designated by
the Borrower or the Lender to the other party in accordance herewith. All such
notices and correspondence shall be effective when received.
SECTION 9.2. HEADINGS. The headings in this Agreement are
for purposes of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
SECTION 9.3. ASSIGNMENTS. The Borrower shall not have the
right to assign any Note or this Agreement or any interest therein unless the
Lender shall have given the Borrower prior written consent and the Borrower and
its assignee shall have delivered assignment documentation in form and
substance satisfactory to the Lender in its sole discretion. The Lender may
assign its rights and delegate its obligations under any Note or this Agreement.
SECTION 9.4. AMENDMENTS, WAIVERS, AND CONSENTS. Any
amendment or waiver of any provision of this Agreement and any consent to any
departure by the Borrower from any provision of this Agreement shall be
effective only by a writing signed by the Lender and shall bind and benefit the
Borrower and the Lender and their respective successors and assigns, subject,
in the case of the Borrower, to the first sentence of
12
28
Section 9.3.
SECTION 9.5. INTERPRETATION OF AGREEMENT. Time is of the essence in
each provision of this Agreement of which time is an element. All terms not
defined herein or in a Note shall have the meaning set forth in the applicable
Code, except where the context otherwise requires. To the extent a term or
provision of this Agreement conflicts with any Note, or any term or provision
thereof, and is not dealt with herein with more specificity, this Agreement
shall control with respect to the subject matter of such term or provision.
Acceptance of or acquiescence in a course of performance rendered under this
Agreement shall not be relevant in determining the meaning of this Agreement
even though the accepting or acquiescing party had knowledge of the nature of
the performance and opportunity for objection.
SECTION 9.6. CONTINUING SECURITY INTEREST. This Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until the indefeasible payment in full of the Obligations,
(ii) be binding upon the Borrower and its successors and assigns and (iii)
inure, together with the rights and remedies of the Lender hereunder, to the
benefit of the Lender and its successors, transferees, and assigns.
SECTION 9.7. REINSTATEMENT. To the extent permitted by law, this
Agreement and the rights and powers granted to the Lender hereunder and under
the Loan Documents shall continue to be effective or be reinstated if at any
time any amount received by the Lender in respect of the Obligations is
rescinded or must otherwise be restored or returned by the Lender upon the
insolvency, bankruptcy, dissolution, liquidation, or reorganization of the
Borrower or upon the appointment of any receiver, intervenor, conservator,
trustee, or similar official for the Borrower or any substantial part of its
assets, or otherwise, all as though such payments had not been made.
SECTION 9.8. SURVIVAL OF PROVISIONS. All representations,
warranties, and covenants of the Borrower contained herein shall survive the
execution and delivery of this Agreement, and shall terminate only upon the full
and final payment and performance by the Borrower of the Obligations secured
hereby.
SECTION 9.9. INDEMNIFICATION. The Borrower agrees to indemnify and
hold harmless the Lender and its directors, officers, agents, employees, and
counsel from and against any and all costs, expenses, claims, or liability
incurred by the Lender or such Person hereunder and under any other Loan
Document or in connection herewith or therewith, unless such claim or liability
shall be due to willful misconduct or gross negligence on the part of the Lender
or such Person.
SECTION 9.10. COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement may
be executed in counterparts, each of which when so executed and delivered shall
be an original, but both of which shall together constitute one and the same
instrument. This Agreement and each of the other Loan Documents and any notices
given in connection herewith or therewith may be executed and delivered by
telecopier or other facsimile transmission all with the same force and effect as
if the same was a fully executed and delivered original manual counterpart.
SECTION 9.11. SEVERABILITY. In case any provision in or obligation
under this Agreement or any Note or any other Loan Document shall be invalid,
illegal, or unenforceable in any jurisdiction, the validity, legality, and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 9.12. DELAYS; PARTIAL EXERCISE OF REMEDIES. No delay or
omission of the Lender to exercise any right or remedy hereunder, whether before
or after the happening of any Event of Default, shall impair any such right or
shall operate as a waiver thereof or as a waiver of any such Event of Default.
No single or partial exercise by the Lender of any right or remedy shall
preclude any other or further exercise thereof, or preclude any other right or
remedy.
13
29
SECTION 9.13. ENTIRE AGREEMENT. The Borrower and the Lender agree
that this Agreement, the Schedule hereto, and the Commitment Letter are the
complete and exclusive statement and agreement between the parties with respect
to the subject matter hereof, superseding all proposals and prior agreements,
oral or written, and all other communications between the parties with respect
to the subject matter hereof. Should there exist any inconsistency between the
terms of the Commitment Letter and this Agreement, the terms of this Agreement
shall prevail.
SECTION 9.14. SETOFF. In addition to and not in limitation of all
rights of offset that the Lender may have under Applicable Law, and whether or
not the Lender has made any demand or the Obligations of the Borrower have
matured, the Lender shall have the right to appropriate and apply to the payment
of the Obligations of the Borrower all deposits and other obligations then or
thereafter owing by the Lender to or for the credit or the account of the
Borrower.
SECTION 9.15. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 9.16. GOVERNING LAW. THE VALIDITY, INTERPRETATION, AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF.
SECTION 9.17. VENUE; SERVICE OF PROCESS. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS SITUATED IN ▇▇▇▇ COUNTY, OR OF
THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES, IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING, (a) ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (b) THE RIGHT TO
INTERPOSE ANY NONCOMPULSORY SETOFF, COUNTERCLAIM, OR CROSS-CLAIM. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS
FOR IT SPECIFIED IN SECTION 9.1 HEREOF. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER
JURISDICTION, SUBJECT IN EACH INSTANCE TO THE PROVISIONS HEREOF WITH RESPECT TO
RIGHTS AND REMEDIES.
14
30
IN WITNESS WHEREOF, the undersigned Borrower has caused this Agreement
to be duly executed and delivered by its proper and duly authorized officer as
of the date first set forth above.
ABOVENET COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Exec. VP & CFO
Federal Tax ID: ▇▇-▇▇▇▇▇▇▇
Accepted as of the /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
29th day of May, 1998 ----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Controller
TRANSAMERICA BUSINESS CREDIT CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Form16
15
31
SCHEDULE A
By and between
TO: Transamerica Business Credit Corporation as Lender
And
Master Loan & Security Agreement AboveNet Communications, Inc. as Borrower
▇▇▇▇ Financing Statement
Dated May 29, 1998
----------------------------------------------------------------------------------------------------------------------
QTY. DESCRIPTION INVOICE # VENDOR # SERIAL # DATE LOCATION COST
----------------------------------------------------------------------------------------------------------------------
ACL, Inc.
4 SIMM MEMORY 23997 ACLOO1 S323660 1/16/98 SAN ▇▇▇▇ 2,463.77
4 MEMORY 24072 ACL001 D12884F3V60ECC 1/20/98 SAN ▇▇▇▇ 203.21
American Express AME003
1 NOTE BOOK 41498 Dell N/A 5/11/98 SAN ▇▇▇▇ 2,924.91
N/A NOTEBOOK ACCESSORIES 31598 PC Connection N/A 3/31/98 SAN ▇▇▇▇ 1,072.88
American Consulting Engineers, Inc.
N/A 18F REDESIGN 4557 AME005 N/A 4/25/98 SAN ▇▇▇▇ 6,400.00
N/A 18F REMODAL 4558 AME005 N/A 4/25/98 SAN ▇▇▇▇ 8,000.00
Anistar
1 MICROTEST SCANNER 264109 ANI001 38P98BA0211 4/10/98 SAN ▇▇▇▇ 2,995.01
2 RACK/7 STRIP 267173 ANI001 135883/155883 4/30/98 SAN ▇▇▇▇ 896.79
10 RACK/10 STRIP 267647 ANI001 158528/155883 5/11/98 SAN ▇▇▇▇ 2,836.15
▇▇▇▇▇▇
N/A POWER ROOM 98005 ARV001 N/A 2/10/98 SAN ▇▇▇▇ 500.00
N/A POWER ROOM 98004 ARV001 N/A 2/10/98 SAN ▇▇▇▇ 1,361.65
▇/▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ARV001 N/A 2/10/98 SAN ▇▇▇▇ 411.00
N/A POWER ROOM 98001 ARV001 N/A 2/10/98 SAN ▇▇▇▇ 7,742.00
▇/▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ARV001 N/A 2/10/98 SAN ▇▇▇▇ 440.55
Price Costco
11 NOTEBOOKS 20598 BEN001 206628 2/5/98 SAN ▇▇▇▇ 22,624.13
▇▇▇▇▇ ▇▇▇▇▇▇▇ Associates, Inc.
N/A BATTERY SUPPORT/RACKS 22439 BIG001 N/A 3/13/98 SAN ▇▇▇▇ 3,150.00
N/A BATTERY SUPPORT/RACKS 22845 BIG001 N/A 4/24/98 SAN ▇▇▇▇ 2,835.00
32
SCHEDULE A
By and between
TO: Transamerica Business Credit Corporation as Lender
And
Master Loan & Security Agreement AboveNet Communications, Inc. as Borrower
▇▇▇▇ Financing Statement
Dated May 29, 1998
▇▇▇▇▇ ▇▇▇▇▇ BRI001
1 PRINTER 42498 Fry's 401484 4/24/98 SAN ▇▇▇▇ 1,416.91
Civtel
N/A FEASIBILITY STUDIES 20 CIV001 3 3/26/98 SAN ▇▇▇▇ 2,520.00
Compel
N/A A/A AGRMNT 6048 COM005 N/A 2/27/98 SAN ▇▇▇▇ 112,555.00
N/A A/A AGRMNT 6147 COM005 N/A 4/1/98 SAN ▇▇▇▇ 81,040.00
N/A A/A AGRMNT 6189 COM005 N/A 4/15/98 SAN ▇▇▇▇ 49,165.27
N/A A/A AGRMNT 6225 COM005 N/A 4/23/98 SAN ▇▇▇▇ 52,424.39
CompUSA
1 NOTEBOOKS 76102043 COM011 178991 3/30/98 SAN ▇▇▇▇ 2,167.55
3 NOTEBOOKS 12414941 COM011 178991 4/6/98 SAN ▇▇▇▇ 5,679.95
1 NOTEBOOKS 76102086 COM011 186937 4/14/98 SAN ▇▇▇▇ 4,219.97
2 NOTEBOOKS 76102118 COM011 154208 4/16/98 SAN ▇▇▇▇ 1,898.49
Cypress Computer
2 NOTEBOOKS 1108837 CYP001 P520M 3/13/98 SAN ▇▇▇▇ 6,609.13
1 3GB 2.5" IDE HDD 1108849 CYP001 T03G 3/13/98 SAN ▇▇▇▇ 270.63
Dexon Computer
1 CISCO CATYLST 1900 12059 DEX001 WS-C1900 1/23/98 SAN ▇▇▇▇ 1,614.00
Enviro
N/A DC DRAWING 110102 ENV001 N/A 2/10/98 WASHINGTON DC 725.00
N/A D.C. CONSTRUCTION 110107 ENV001 N/A 4/9/98 WASHINGTON DC 6,910.00
N/A D.C. CONSTRUCTION 110109 ENV001 N/A 2/12/98 WASHINGTON DC 2,954.00
33
SCHEDULE A
By and between
TO: Transamerica Business Credit Corporation as Lender
And
Master Loan & Security Agreement AboveNet Communications, Inc. as Borrower
▇▇▇▇ Financing Statement
Dated May 29, ▇▇▇▇
▇ & ▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇/▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ EOC001 N/A 2/23/98 SAN ▇▇▇▇ 550.00
N/A NEW CIRCUIT 11064 EOC001 N/A 2/24/98 SAN ▇▇▇▇ 150.00
N/A POWER ROOM 11053 EOC001 N/A 1/27/98 SAN ▇▇▇▇ 6,460.00
N/A POWER ROOM 11037 EOC001 N/A 1/27/98 SAN ▇▇▇▇ 6,460.00
N/A POWER ROOM 11057 EOC001 N/A 2/10/98 SAN ▇▇▇▇ 1,606.08
N/A POWER ROOM 11060 EOC001 N/A 2/10/98 SAN ▇▇▇▇ 16,194.32
N/A POWER ROOM 11058 EOC001 N/A 2/10/98 SAN ▇▇▇▇ 808.43
N/A POWER ROOM 11056 EOC001 N/A 2/10/98 SAN ▇▇▇▇ 3,339.73
N/A TURN UPS 11084 EOC001 N/A 3/10/98 SAN ▇▇▇▇ 2,915.00
N/A INSTALLATION 11062 EOC001 N/A 3/10/98 SAN ▇▇▇▇ 2,323,09
N/A SET RACK 11077 EOC001 N/A 3/13/98 SAN ▇▇▇▇ 100.00
N/A TURN UP 11076 EOC001 N/A 3/13/98 SAN ▇▇▇▇ 150.00
N/A POWER READING 11086 EOC001 N/A 3/17/98 SAN ▇▇▇▇ 452.00
N/A INSTALL INVERTOR 11087 EOC001 N/A 3/17/98 SAN ▇▇▇▇ 3,150.00
N/A INSTALLATION ▇▇▇▇▇ ▇▇▇▇▇▇ ▇/▇ ▇/▇▇/▇▇ ▇▇▇ ▇▇▇▇ 2,819.00
N/A INSTALLATION 11079 EOC001 N/A 3/24/98 SAN ▇▇▇▇ 2,669.00
N/A RETORQUE 11102 EOC001 N/A 3/30/98 SAN ▇▇▇▇ 452.00
N/A REMOVE RACK 11100 EOC001 N/A 3/30/98 SAN ▇▇▇▇ 378.00
N/A FURNISH & INSTALLATION 11099 EOC001 N/A 3/30/98 SAN ▇▇▇▇ 1,450.00
N/A REMOVE INVERTOR 11101 EOC001 N/A 3/30/98 SAN ▇▇▇▇ 508.00
N/A TERMINATE DS3 11103 EOC001 N/A 3/30/98 SAN ▇▇▇▇ 150.00
N/A INSTALLATION 11138 EOC001 N/A 5/12/98 SAN ▇▇▇▇ 294.24
Face Associates, Inc.
N/A DC DESIGN 0197-171 FAC001 N/A 5/6/98 SAN ▇▇▇▇ 11,364.40
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ FAI001 N/A 3/17/98 SAN ▇▇▇▇ 9,059.85
N/A T.I. PLAN G0591030 FAI001 N/A 3/26/98 SAN ▇▇▇▇ 513.75
Graybar
4 SOUNDSTATN 326111 GRA001 2200-00696 4/10/98 SAN ▇▇▇▇ 1,851.08
10 RACKS 268761 GRA001 46353-508 1/27/98 SAN ▇▇▇▇ 4,496,76
20 SHELVES 287236 GRA001 40108-519 2/9/98 SAN ▇▇▇▇ 1,739.15
3 SHELVES 284542 GRA001 40108-519 2/9/98 SAN ▇▇▇▇ 271.27
6 RACKS 289829 GRA001 46353-508 2/10/98 SAN ▇▇▇▇ 2,918.21
20 SHELVES 330278 GRA001 40108-519 4/9/98 SAN ▇▇▇▇ 1,850.54
6 RACKS 334737 GRA001 46353-508 4/17/98 SAN ▇▇▇▇ 1,510.48
10 RACKS 343532 GRA001 46353-508 5/11/98 SAN ▇▇▇▇ 2,517.46
8 RACKS 347032 GRA001 46353-508 5/11/98 SAN ▇▇▇▇ 2,013.96
2 RACKS/20 SHELVES 346786 GRA001 46353-508/40108-519 5/11/98 SAN ▇▇▇▇ 2,242.64
8 RACK/30 SHELVES 354931 GRA001 46353-508/40108-519 5/12/98 SAN ▇▇▇▇ 4,614.20
8 RACKS 647032 GRA001 46353-508 4/28/98 SAN ▇▇▇▇ 1,860.48
34
SCHEDULE A
By and between
TO: Transamerica Business Credit Corporation as Lender
And
Master Loan & Security Agreement AboveNet Communications, Inc. as Borrower
▇▇▇▇ Financing Statement
Dated May 29, 1998
King Fence
N/A DEMOLITION 22598 KIN002 N/A 3/24/98 SAN ▇▇▇▇ 3,200.00
Kroymann Associates
1 GS2.05 SITE 12499 KRO001 GS2 005 5/6/98 SAN ▇▇▇▇ 752.34
Larscom
1 ACCESS-T45 NETWORK SERVICE 139124 LAR001 ACST-45-DC 2/17/98 PALO ALTO 5,362.83
Microwarehouse
40 MICROSOFT OFFICE 97 UPGRAD B5962220 MIC003 LP1789 4/10/98 SAN ▇▇▇▇ 6,732.80
Network Hardware Resale, Inc.
2 POSIP 50 SINGLE MODE 3537 NET001 POSIP-50 5/6/98 SAN ▇▇▇▇ 31,340.30
1 PROCESSOR 3564 NET001 CX-FSIP8 5/11/98 SAN ▇▇▇▇ 6,886.95
4 CAT SWITCH 3584 NET001 N/A 5/11/98 SAN ▇▇▇▇ 19,582.58
4 AC/4 DC POWER 3347 NET001 PWER-7000-AC/DC 3/13/98 SAN ▇▇▇▇ 16,654.00
1 PROCESSOR 3219 NET001 CX-EIP6 2/6/98 PALO ALTO 6,028.75
Nova Construction
N/A SITE DRAWING 16479 NOV001 N/A 1/27/98 SAN ▇▇▇▇ 4,800.00
N/A SITE DRAWING 16479B NOV001 N/A 1/27/98 SAN ▇▇▇▇ 2,500.00
N/A SITE DRAWING 16479A NOV001 N/A 1/27/98 SAN ▇▇▇▇ 2,700.00
▇/▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ NOV001 N/A 3/17/98 WASHINGTON DC 1,675.00
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
N/A 18F BLUEPRINT 9800594 ROB001 N/A 3/24/98 SAN ▇▇▇▇ 47.48
N/A 18F EXPANTION 9800595 ROB001 N/A 3/24/98 SAN ▇▇▇▇ 4,315.90
N/A 18F BLUEPRINT 9800596 ROB001 N/A 3/24/98 SAN ▇▇▇▇ 53.83
N/A 18F EXPANTION 9800597 ROB001 N/A 3/24/98 SAN ▇▇▇▇ 672.87
N/A 18F EXPANTION 9800039 ROB001 N/A 3/25/98 SAN ▇▇▇▇ 13.34
N/A 18F EXPANTION 9800703 ROB001 N/A 4/14/98 SAN ▇▇▇▇ 6,487.50
N/A 18F EXPANTION 9801137 ROB001 N/A 4/30/98 SAN ▇▇▇▇ 4,514.90
N/A 18F EXPANTION 9801138 ROB001 N/A 4/30/98 SAN ▇▇▇▇ 228.00
35
SCHEDULE A
By and between
TO: Transamerica Business Credit Corporation as Lender
And
Master Loan & Security Agreement AboveNet Communications, Inc. as Borrower
▇▇▇▇ Financing Statement
Dated May 29, 1998
Rocky Mountain Ram
10 RAM UPGRAD 203543 ROC001 TO32M040U 3/18/98 SAN ▇▇▇▇ 1,328.00
Server Technology, Inc.
N/A REBOOT UNT 38875 SER001 N/A 3/7/98 SAN ▇▇▇▇ 6,062.00
▇▇▇▇▇▇▇ ▇▇▇▇ SHE001
1 NOTEBOOK 30598 Fry's 1944868 3/6/98 SAN ▇▇▇▇ 2,432.03
4 BATTERIES 12498 Craters & Freighters N/A 2/6/98 N/A 693.78
Solar Depot
4 INVERTER 58283 SOL001 PI/TE-SW5548 5/11/98 SAN ▇▇▇▇ 10,933.25
4 INVERTER 57241 SOL001 PI/TE-SW4048 1/27/98 SAN ▇▇▇▇ 10,286.78
3 INVERTER 57299 SOL001 PI/TE-SW4048 1/29/98 SAN ▇▇▇▇ 7,533.23
4 INVERTER 57433 SOL001 PI/TE-SW4048 2/23/98 SAN ▇▇▇▇ 9,707.11
1 INVERTER 57418 SOL001 PI/TE-SW4048 3/7/98 SAN ▇▇▇▇ 2,389.84
3 INVERTER 57692 SOL001 PI/TE-SW5548 3/13/98 SAN ▇▇▇▇ 8,583.67
4 INVERTER 58363 SOL001 PI/TE-SW5548/4048 5/5/98 SAN ▇▇▇▇ 11,214.92
36
SCHEDULE A
By and between
TO: Transamerica Business Credit Corporation as Lender
And
Master Loan & Security Agreement AboveNet Communications, Inc. as Borrower
▇▇▇▇ Financing Statement
Dated May 29, 1998
Trucost Inc.
1 NOC BACKUP 17157 TRU001 806010-3628 2/10/98 SAN ▇▇▇▇ 1,518.59
U-Tron
2 586SYS/▇▇▇ 96605 UTR001 A-20-2120-0 1/23/98 SAN ▇▇▇▇ 2,602.83
1 21'MONITOR 96570 UTR001 A-99-9999-9 1/23/98 SAN ▇▇▇▇ 1,259.88
1 586SYS/SC 96543 UTR001 A-20-2120-0 1/23/98 SAN ▇▇▇▇ 696.49
1 586SYS/BL 96526 UTR001 A-20-2120-0 1/23/98 SAN ▇▇▇▇ 636.65
1 PENTIEM 133/166 96320 UTR001 A-20-2120-0 1/26/98 SAN ▇▇▇▇ 702.20
1 MINITWR/JC 96560 UTR001 A-20-2120-0 1/26/98 SAN ▇▇▇▇ 625.83
3 586 SYSTEM 97325 UTR001 A-20-4288-8 2/10/98 SAN ▇▇▇▇ 2,939.77
1 COMPUTER SYSTEM 97993 TRU001 A-20-8550-0 2/27/98 SAN ▇▇▇▇ 1,452.43
1 COMPUTER SYSTEM 99541 TRU001 A-20-8550-0 4/6/98 SAN ▇▇▇▇ 1,522.59
1 COMPUTER SYSTEM 99540 TRU001 A-20-8550-0 4/6/98 SAN ▇▇▇▇ 2,598.21
1 COMPUTER SYSTEM 99800 TRU001 A-20-2120-0 4/14/98 SAN ▇▇▇▇ 1,079.24
1 COMPUTER SYSTEM 100078 TRU001 A-20-8550-0 4/21/98 2,104.43
Westinghouse Electric
22 BATTERY 3688 WES002 85 RC-33 1/8/98 WASHINGTON DC 1,700.00
LENDER: BORROWER:
TRANSAMERICA BUSINESS CREDIT ABOVENET COMMUNICATIONS, INC.
CORPORATION
/s/ ▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ ------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President Title: Exec. V.P. & CEO