Exhibit 10.3

 

 

 

INTERCREDITOR AGREEMENT

 

by and among

 

HSBC BANK USA, NATIONAL ASSOCIATION,

as Trustee and Collateral Agent

 

THE SENIOR NOTEHOLDERS

Named Herein

 

and

 

GLOBIX CORPORATION

 

Dated as of December 13, 2005

 

 

 

 

 

 

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TABLE OF CONTENTS

 

 

1.

Definitions

1

2.

Lien Priorities

5

3.

Enforcement

5

4.

Payments

6

5.

Other Agreements

7

6.

Reliance; Waivers; Etc

8

7.

Miscellaneous

10

 

 

 

-i-

 

 

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INTERCREDITOR AGREEMENT

 

INTERCREDITOR AGREEMENT, dated as of December 13, 2005, among the Senior
Noteholders whose names are set forth on the signature pages hereof, HSBC BANK
USA, NATIONAL ASSOCIATION (as successor to HSBC Bank USA), as Trustee and
Collateral Agent (the “Collateral Agent”), and GLOBIX CORPORATION, a Delaware
corporation (“Globix”).

W I T N E S S E T H :

WHEREAS, Globix, certain Subsidiary Guarantors and the Trustee have entered into
that certain Indenture dated as of April 23, 2002, as supplemented by the First
Supplemental Indenture dated as of June 17, 2003, and the various Supplemental
Indentures dated as of March 8, 2005 (as further amended, restated, supplemented
or otherwise modified from time to time, the “Indenture”), pursuant to which
Globix has issued the 11% Notes to the purchasers thereof;

WHEREAS, the Obligations of Globix and the Subsidiary Guarantors under the 11%
Noteholder Documents are secured by various assets of Globix and the Subsidiary
Guarantors;

WHEREAS, Globix has entered into one or more Note Purchase Agreements dated as
of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Note Purchase Agreements”) between Globix and the
purchaser or purchasers named therein, providing for the purchase of up to
$5,000,000 in aggregate principal amount of Globix’s Senior Secured Notes due
May 1, 2008 (the “Senior Notes”), and pursuant to which Globix is issuing the
Senior Notes; and

WHEREAS, the Obligations of Globix and the Subsidiary Guarantors under the
Senior Noteholder Documents are secured by various assets of Globix and the
Subsidiary Guarantors;

WHEREAS, it is a condition precedent to the effectiveness of the Note Purchase
Agreements that the parties hereto enter into this Agreement;

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
obligations herein set forth and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

1.

Definitions.

(a)   As used in this Agreement, the following terms have the meanings specified
below:

“11% Notes” means the 11% Senior Secured Notes due 2008 issued by Globix under
the Indenture.

 

 

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“11% Noteholder Claims” means all Obligations in respect of the 11% Notes or
arising under the 11% Noteholder Documents or any of them.

“11% Noteholder Collateral” means all of the assets of any Obligor, whether
real, personal or mixed, with respect to which a Lien is granted as security for
any 11% Noteholder Claim.

“11% Noteholder Collateral Documents” means the Indenture, the Security
Documents (as defined in the Indenture), and any other document or instrument
pursuant to which a Lien is granted by any Obligor to secure any 11% Noteholder
Claims or under which rights or remedies with respect to any such Lien are
governed.

“11% Noteholder Documents” means (a) the Indenture, the 11% Notes, the 11%
Noteholder Collateral Documents and any document or instrument evidencing or
governing any Obligations with respect to the 11% Notes and (b) any other
related document or instrument executed and delivered pursuant to any 11%
Noteholder Document described in clause (a) above evidencing or governing any
Obligations thereunder.

“11% Noteholder Mortgages” means a collective reference to each mortgage, deed
of trust and any other document or instrument under which any Lien on real
property owned by any Obligor is granted to secure any 11% Noteholder Claims or
under which rights or remedies with respect to any such Liens are governed.

“11% Noteholder Pledge Agreements” means the Security Agreement (as defined in
the Indenture) and the Subsidiary Security Agreements (as defined in the
Indenture).

“11% Noteholders” means the Persons holding 11% Noteholder Claims.

“Account” has the meaning given such term in Section 9-102(a)(2) of the UCC.

“Agreement” means this Agreement, as amended, restated, renewed, extended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.

“Bankruptcy Law” means Title 11 of the United States Code and any similar
Federal, state or foreign law for the relief of debtors, as amended from time to
time.

“Business Day” means any day other than a Saturday, a Sunday or a day that is a
legal holiday under the laws of the State of New York or on which banking
institutions in the State of New York are required or authorized by law or other
governmental action to close.

“Collateral Agent” means HSBC Bank USA, National Association, in its capacity as
trustee under the Indenture and/or collateral agent under the 11% Noteholder
Collateral Documents, and also includes its successors hereunder as collateral
agent for the 11% Noteholders under the 11% Noteholder Collateral Documents.

“Common Collateral” means the Accounts, and cash and non-cash Proceeds of the
Accounts, of any Obligor constituting both Senior Noteholder Collateral and 11%
Noteholder Collateral.

 

 

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“Comparable 11% Noteholder Collateral Document” means, in relation to any Common
Collateral subject to any Lien created under any Senior Noteholder Collateral
Document, that 11% Noteholder Collateral Document which creates a Lien on the
same Common Collateral, granted by the same Obligor.

“Designated Senior Debt” has the meaning given to such term in the Indenture.

“Globix” has the meaning set forth in the preamble hereto.

“Indebtedness” means and includes all Obligations that constitute “Indebtedness”
within the meanings of the Indenture or the Note Purchase Agreements.

“Indenture” has the meaning set forth in the recitals hereto.

“Insolvency or Liquidation Proceeding” means (a) any voluntary or involuntary
case or proceeding under any Bankruptcy Law with respect to any Obligor, (b) any
other voluntary or involuntary insolvency, reorganization or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding with respect to any Obligor or with respect to any of their
respective assets, (c) any liquidation, dissolution, reorganization or winding
up of any Obligor whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy or (d) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of any Obligor.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

“Note Purchase Agreements” has the meaning set forth in the recitals hereto.

“Obligations” means any and all obligations with respect to the payment of
(a) any principal of or interest (including interest accruing on or after the
commencement of any Insolvency or Liquidation Proceeding, whether or not a claim
for post-filing interest is allowed in such proceeding) or premium on any
Indebtedness, including any reimbursement obligation in respect of any letter of
credit, and (b) any fees, indemnification obligations, expense reimbursement
obligations or other liabilities payable under the documentation governing any
Indebtedness.

“Obligors” means each of Globix, the Subsidiary Guarantors and any other Person
that has executed and delivered an 11% Noteholder Collateral Document or a
Senior Note Collateral Document.

“Payment of the Senior Obligations” means payment in full of the Senior
Obligations.

“Permitted Senior Secured Debt” has the meaning given to such term in the
Indenture.

 

 

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“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership (whether general or
limited), entity or other party, including any government and any political
subdivision, agency or instrumentality thereof.

“Proceeds” has the meaning given such term in Section 9-102(a)(64) of the UCC.

“Required Noteholders” means, with respect to any amendment or modification of
the Note Purchase Agreements, or any termination or waiver of any provision of
the Note Purchase Agreements, or any consent or departure by Globix any of its
Subsidiaries therefrom, those Senior Noteholders the approval of which is
required to approve such amendment or modification, termination or waiver or
consent or departure pursuant to the terms thereof.

“Senior Note Collateral Documents” means the Senior Noteholder Documents and any
other agreement, document or instrument pursuant to which a Lien is granted
securing any Senior Obligations or under which rights or remedies with respect
to such Liens are governed.

“Senior Noteholder Collateral” means all of the Accounts, whether now existing
or hereafter coming into existence, and cash and non-cash Proceeds of such
Accounts, of any Obligor, with respect to which a Lien is granted, or purported
to be granted, as security for any Senior Obligation, provided, that such
collateral shall not extend to such Accounts, and cash and non-cash Proceeds of
such Accounts, in excess of Accounts, and cash and non-cash Proceeds of the
Accounts, having an aggregate outstanding amount thereof without regard to aging
greater than 1.5 multiplied by the amount of the Permitted Senior Facility (as
defined in the Indenture) or Permitted Senior Guaranty (as defined in the
Indenture), as applicable.

“Senior Noteholder Documents” means the (a) Note Purchase Agreement, (b) Senior
Notes, (c) Subsidiary Guaranty Agreement dated as of the date hereof, made by
the Subsidiary Guarantors in favor of the Senior Noteholders and (d) the
Security Agreement, dated as of the date hereof, by and among Globix, the
Subsidiary Guarantors and the Secured Parties named therein.

“Senior Noteholders” means the Persons holding Senior Notes from time to time.

“Senior Obligations” means the Obligations owed by Globix or any Subsidiary
Guarantor to the Senior Noteholders.

“Subsidiary” means any “Subsidiary” of Globix, as defined in the Indenture or
the Note Purchase Agreements.

“Subsidiary Guarantors” has the meaning given such term in the Note Purchase
Agreements.

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as from
time to time in effect in the State of New York.

(b)   Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words

 

 

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“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, restated, supplemented or otherwise
modified, (b) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (c) the words “herein”, “hereof’ and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Sections shall be construed to refer to Sections of this
Agreement and (e) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.

2.

Lien Priorities.

 

 

2.1.

Subordination.

(a)    Notwithstanding the date, manner or order of attachment or perfection or
the description of any the description of any collateral or security interests,
Liens, claims or encumbrances covered or granted by the 11% Noteholder
Collateral Documents or any similar documents entered into between Globix or any
Subsidiary Guarantor and the Senior Noteholders, the security interest of the
Collateral Agent in the Common Collateral is and shall be subordinate to the
security interest of the Senior Noteholders in the Common Collateral.

(b)   Notwithstanding the provisions of Section 2.1(a), (i) the subordination of
the Liens on Common Collateral securing any of the 11% Noteholder Claims shall
extend only to the extent of Common Collateral securing Permitted Senior Secured
Debt or Designated Senior Debt the aggregate indebtedness thereof not exceeding
$20,000,000, and (ii) the Lien granted to the Senior Noteholders to secure
Permitted Senior Secured Debt or Designated Senior Debt, as applicable, shall
not extend to property or assets in excess of property or assets having a fair
market value equal to or as close as practicable to 1.5 multiplied by the amount
of the Permitted Senior Facility (as defined in the Indenture) or Permitted
Senior Guaranty (as defined in the Indenture), as applicable.

2.2.         Prohibition on Contesting Liens. The Collateral Agent, for itself
and on behalf of each 11% Noteholder agrees that it shall not (and hereby waives
any right to) contest, bring or join in any action or proceeding (including any
Insolvency or Liquidation Proceeding) contesting the validity, perfection or
priority of a Lien held by the Senior Noteholders in the Common Collateral to
the extent of the Senior Obligations.

3.

Enforcement.

3.1.         Prohibition on Demand or Suit. So long as the Payment of the Senior
Obligations has not occurred, the Collateral Agent and the 11% Noteholders will
not ask, demand or sue for any right or remedy in respect of the Common
Collateral or proceeds thereof that secures Senior Obligations.

 

 

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3.2.         Prohibition on Foreclosure. So long as the Payment of the Senior
Obligations has not occurred, the Collateral Agent will not commence any
enforcement, collection, levy or foreclosure proceeding with respect to the
Common Collateral or proceeds of Common Collateral.

3.3.        Manner of Enforcement. In exercising rights and remedies with
respect to the Common Collateral, the Senior Noteholders may enforce the
provisions of the Senior Noteholder Documents and exercise remedies thereunder,
all in such order and in such manner as they may determine in the exercise of
their sole discretion. Such exercise and enforcement shall include the rights of
an agent appointed by them to sell or otherwise dispose of Common Collateral
upon foreclosure, to incur expenses in connection with such sale or disposition,
and to exercise all the rights and remedies of a secured lender under the
Uniform Commercial Code of any applicable jurisdiction and of a secured creditor
under Bankruptcy Laws of any applicable jurisdiction.

3.4.         No Receipt of Common Collateral. The Collateral Agent, on behalf of
itself and the 11% Noteholders, agrees that it will not take or receive any
Common Collateral or any proceeds of Common Collateral in connection with the
exercise of any remedy (including set-off) with respect to any Common
Collateral, unless and until the Payment of the Senior Obligations has occurred.

3.5.         No Interference. The Collateral Agent, for itself or on behalf of
the 11% Noteholders, agrees not to take any action that would hinder any
exercise of remedies undertaken by the Senior Noteholders under the Senior
Noteholder Documents, including any sale, lease, exchange, transfer or other
disposition of the Common Collateral, whether by foreclosure or otherwise,
provided, that (a) in any Insolvency or Liquidation Proceeding commenced by or
against any Obligor, the Collateral Agent may file a claim or statement of
interest with respect to the 11% Noteholder Claims, and (b) the Collateral Agent
may take any action (not adverse to the prior Liens on the Common Collateral
securing the Senior Noteholder Claims, or the rights of the Senior Noteholders
to exercise remedies in respect thereof) in order to preserve or protect their
Lien on the Common Collateral.

3.6.        Release of Liens. Upon its receipt of written request by the Senior
Noteholders, the Collateral Agent will release its Liens and security interests
in any Common Collateral upon any sale, lease, transfer or other disposition of
any of such Common Collateral pursuant to the terms of the Senior Noteholder
Documents (but subject to the rights of the Collateral Agent in and to such
Common Collateral and any proceeds thereof to the extent of any excess thereof
over the amount of the Senior Obligations).

4.

Payments.

4.1.        Application of Proceeds. As long as the Payment of the Senior
Obligations has not occurred, the Common Collateral or proceeds thereof received
in connection with the sale or other disposition of, or collection on, such
Common Collateral upon the exercise of remedies, shall be applied by the Senior
Noteholders to the Senior Obligations in such order as specified in the relevant
Senior Noteholder Documents until the Payment of the Senior Obligations has
occurred. Upon the Discharge of the Senior Obligations, the Senior Noteholders
shall deliver to the Collateral Agent any proceeds of Common Collateral held by
them in the

 

 

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same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct to be applied by the Collateral
Agent to the 11% Noteholder Claims in such order as specified in the relevant
11% Noteholder Documents.

4.2.         Payments Over. Any Common Collateral or proceeds thereof received
by the Collateral Agent or any 11% Noteholder in connection with the exercise of
any right or remedy (including set-off) relating to the Common Collateral in
contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the Senior Noteholders in the same form as received, with
any necessary endorsements or as a court of competent jurisdiction may otherwise
direct. Nothing in this Agreement shall impair the rights of or alter the claims
of, or payments to, the Collateral Agent under or pursuant to Section 607 of the
Indenture.

5.

Other Agreements.

5.1.        Amendments to 11% Noteholder Collateral Documents. Unless and until
the Payment of the Senior Obligations has occurred, without the prior written
consent of the Senior Noteholders and the Required Noteholders, no 11%
Noteholder Collateral Document may be amended, supplemented or otherwise
modified or entered into to the extent such amendment, supplement or
modification, or the terms of any new 11% Noteholder Collateral Document, would
be inconsistent with the terms of this Agreement. The Collateral Agent agrees
that any 11% Noteholder Collateral Document covering any Common Collateral shall
contain such language as the Senior Noteholders may reasonably request to
reflect the subordination of such 11% Noteholder Collateral Document to the
Senior Note Collateral Document covering such Common Collateral.

5.2.        Rights As Unsecured Creditors. Notwithstanding anything to the
contrary in this Agreement, the Collateral Agent and the 11% Noteholders may
exercise rights and remedies as an unsecured creditor against Globix or any
Subsidiary that has guaranteed the 11% Noteholder Claims in accordance with the
terms of the 11% Noteholder Documents and applicable law. Nothing in this
Agreement shall prohibit the receipt by the Collateral Agent or any 11%
Noteholders of the required payments of interest and principal with respect to
the 11% Notes so long as such receipt is not the direct or indirect result of
the exercise by the Collateral Agent or any 11% Noteholder of rights or remedies
as a secured creditor or enforcement in contravention of this Agreement of any
Lien held by any of them. In the event the Collateral Agent or any 11%
Noteholder becomes a judgment lien creditor in respect of Common Collateral as a
result of its enforcement of its rights as an unsecured creditor, such judgment
lien shall be subordinated to the Liens securing Senior Obligations on the same
basis as the other Liens securing the 11% Noteholder Claims are so subordinated
to such Senior Obligations under this Agreement. Nothing in this Agreement
impairs or otherwise adversely affects any rights or remedies the Senior
Noteholders may have with respect to the Senior Noteholder Collateral.

 

5.3.

Collateral Agent’s Rights.

(a)   Until the Payment of the Senior Obligations has occurred, the rights of
the Collateral Agent shall at all times be subject to the terms of this
Agreement and to the Senior Noteholders’ rights under the Senior Noteholder
Documents, provided, however, that nothing in this Agreement shall restrict the
Collateral Agent’s rights under the Indenture.

 

 

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(b)   The Collateral Agent shall have no obligation whatsoever to any Senior
Noteholder to assure that the Common Collateral is genuine or owned by any of
the Obligors or to preserve rights or benefits of any Person except as expressly
set forth in this Section 5.3.

(c)   The Collateral Agent shall not have by reason of the Senior Noteholder
Collateral Documents or this Agreement or any other document a fiduciary
relationship in respect of any Senior Noteholder.

6.

Reliance; Waivers; Etc.

6.1.        Reliance. The Senior Noteholders acknowledges that they have,
independently and without reliance on the Collateral Agent or any 11%
Noteholder, and based on documents and information deemed by them appropriate,
made their own credit analysis and decision to enter into the Note Purchase
Agreements, this Agreement and the transactions contemplated hereby and thereby
and they will continue to make their own credit decision in taking or not taking
any action under the Note Purchase Agreements or this Agreement.

6.2.         No Warranties or Liability. The parties hereto acknowledge and
agree that they have made no express or implied representation or warranty,
including with respect to the execution, validity, legality, completeness,
collectibility or enforceability of any of the Senior Noteholder Documents, the
11% Noteholder Documents, the ownership of any Common Collateral or the
perfection or priority of any Liens thereon. Each of the Senior Noteholders, the
Collateral Agent and the 11% Noteholders will be entitled to manage and
supervise their respective loans and extensions of credit to the Obligors in
accordance with law and as they may otherwise, in their sole discretion, deem
appropriate, and may manage their loans and extensions of credit without regard
to any rights or interests that any of the others of them have in the Common
Collateral or otherwise, except as otherwise provided in this Agreement. None of
the Senior Noteholders shall have any duty to the Collateral Agent or any of the
11% Noteholders to act or refrain from acting in a manner which allows, or
results in, the occurrence or continuance of an event of default or default
under any agreements with any Company or any Subsidiary thereof (including the
11% Noteholder Documents), regardless of any knowledge thereof which they may
have or be charged with.

 

6.3.

No Waiver of Lien Priorities.

(a)    No right of the Senior Noteholders or any of them to enforce any
provision of this Agreement or any Senior Noteholder Document shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
any Obligor or by any act or failure to act by any Senior Noteholder or, or by
any noncompliance by any Person with the terms, provisions and covenants of this
Agreement, any of the Senior Noteholder Documents or any of the 11% Noteholder
Documents, regardless of any knowledge thereof which the Senior Noteholders, or
any of them, may have or be otherwise charged with.

(b)   Without in any way limiting the generality of the foregoing paragraph (but
subject to the rights of the Obligors under the Senior Noteholder Documents),
the Senior Noteholders, and any of them, may, at any time and from time to time,
without the

 

 

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consent of, or notice to, the Collateral Agent or any 11% Noteholder, without
incurring any liabilities to the Collateral Agent or any 11% Noteholder and
without impairing or releasing the Lien priorities and other benefits provided
in this Agreement (even if any right of subrogation or other right or remedy of
the Collateral Agent or any 11% Noteholder is affected, impaired or extinguished
thereby) do any one or more of the following, provided no release of any Lien
granted to the Collateral Agent or the 11% Noteholders on the Common Collateral
shall result therefrom:

(i)           subject to the terms of the Indenture, change the manner, place or
terms of payment or change or extend the time of payment of, or amend, renew,
exchange, increase or alter, the terms of any of the Senior Obligations or any
Lien on any Senior Noteholder Collateral or guaranty thereof or any liability of
any Obligor, or any liability incurred directly or indirectly in respect thereof
(including any increase in or extension of the Senior Obligations, without any
restriction as to the amount, tenor or terms of any such increase or extension)
or otherwise amend, renew, exchange, extend, modify or supplement in any manner
any Liens held by the Senior Noteholders, the Senior Obligations or any of the
Senior Noteholder Documents;

(ii)          sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any part of the Senior
Noteholder Collateral or any liability of any Obligor to the Senior Noteholders,
or any liability incurred directly or indirectly in respect thereof;

(iii)        settle or compromise any Senior Obligation or any other liability
of any Obligor or any security therefor or any liability incurred directly or
indirectly in respect thereof and apply any sums by whomsoever paid and however
realized to any liability (including the Senior Obligations) in any manner or
order; and

(iv)         exercise or delay in or refrain from exercising any right or remedy
against any Obligor or any other Person, elect any remedy and otherwise deal
freely with any Obligor or any Senior Noteholder Collateral and any security and
any guarantor or any liability of any Obligor to the Senior Noteholders or any
liability incurred directly or indirectly in respect thereof.

6.4.         Obligations Unconditional. All rights, interests, agreements and
obligations of the Senior Noteholders and the Collateral Agent and the 11%
Noteholders, respectively, hereunder shall remain in full force and effect
irrespective of:

(a)   any lack of validity or enforceability of any Senior Noteholder Documents
or any 11% Noteholder Documents;

(b)   subject to the terms of the Indenture, any change in the time, manner or
place of payment of, or in any other terms of, all or any of the Senior
Obligations or 11% Noteholder Claims, or any amendment or waiver or other
modification, including any increase in the amount thereof, whether by course of
conduct or otherwise, of the terms of the Note Purchase Agreements or any other
Senior Noteholder Document or of the terms of the Indenture or any other 11%
Noteholder Document;

 

 

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(c)   any exchange of any security interest in any Common Collateral or any
other collateral, or any amendment, waiver or other modification, whether in
writing or by course of conduct or otherwise, of all or any of the Senior
Obligations or 11% Noteholder Claims or any guarantee thereof;

(d)   the commencement of any Insolvency or Liquidation Proceeding in respect of
any or any other Obligor; or

(e)   any other circumstances which otherwise might constitute a defense
available to, or a discharge of, any Obligor in respect of the Senior
Obligations, or of the Collateral Agent or any 11% Noteholder in respect of this
Agreement.

7.

Miscellaneous.

7.1.         Conflicts. In the event of any conflict between the provisions of
this Agreement and the provisions of the Senior Noteholder Documents, the
provisions of this Agreement shall prevail.

7.2.         Continuing Nature of this Agreement; Severability. This Agreement
shall continue to be effective until the Payment of the Senior Obligations shall
have occurred. The terms of this Agreement shall survive, and shall continue in
full force and effect, in any Insolvency or Liquidation Proceeding. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall not invalidate the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

7.3.        Amendments; Waivers. No amendment, modification or waiver of any of
the provisions of this Agreement by the Collateral Agent or the Senior
Noteholders shall be deemed to be made unless the same shall be in writing
signed on behalf of the party making the same or its authorized agent and each
waiver, if any, shall be a waiver only with respect to the specific instance
involved and shall in no way impair the rights of the parties making such waiver
or the obligations of the other parties to such party in any other respect or at
any other time. No Obligor shall have any right to consent to or approve any
amendment, modification or waiver of any provision of this Agreement except to
the extent their rights are directly affected.

7.4.        Information Concerning Financial Condition of Globix and the
Subsidiary Guarantors. The Senior Noteholders, on the one hand, and, subject to
the terms of the Indenture, the Collateral Agent and the 11% Noteholders, on the
other hand, shall each be responsible for keeping themselves informed of (a) the
financial condition Globix and of the Subsidiary Guarantors and all endorsers
and/or guarantors of the 11% Noteholder Claims or the Senior Obligations and
(b) all other circumstances bearing upon the risk of nonpayment of the 11%
Noteholder Claims or the Senior Obligations. The Senior Noteholders shall have
no duty to advise the Collateral Agent or any 11% Noteholder of information
known to it or them regarding such condition or any such circumstances or
otherwise. In the event any of the Senior Noteholders, in its or their sole
discretion, undertakes at any time or from time to time to provide any such
information to the Collateral Agent or any 11% Noteholder, it or they shall be
under no obligation (w) to make, and the Senior Noteholders shall not make, any
express or implied representation or warranty, including with respect to the
accuracy, completeness, truthfulness or

 

 

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validity of any such information so provided, (x) to provide any additional
information or to provide any such information on any subsequent occasion,
(y) to undertake any investigation or (z) to disclose any information which,
pursuant to accepted or reasonable commercial finance practices, such party
wishes to maintain confidential or is otherwise required to maintain
confidential.

 

7.5.

[Intentionally deleted.]

7.6.        Application of Payments. All payments received by the Senior
Noteholders may be applied, reversed and reapplied, in whole or in part, to such
part of the Senior Obligations as the Senior Noteholders, in their sole
discretion, deem appropriate. The Collateral Agent, on behalf of itself and the
11% Noteholders, assents to any extension or postponement of the time of payment
of the Senior Obligations or any part thereof and to any other indulgence with
respect thereto, to any substitution, exchange or release of any security which
may at any time secure any part of the Senior Obligations and to the addition or
release of any other Person primarily or secondarily liable therefor.

7.7.         Consent to Jurisdiction; Waivers. The parties hereto consent to the
jurisdiction of any state or federal court located in New York, New York, and
consent that all service of process may be made by registered mail directed to
such party as provided in Section 7.8 below for such party. Service so made
shall be deemed to be completed three days after the same shall be posted as
aforesaid. The parties hereto waive any objection to any action instituted
hereunder based on forum non conveniens, and any objection to the venue of any
action instituted hereunder. Each of the parties hereto waives any right it may
have to trial by jury in respect of any litigation based on, or arising out of,
under or in connection with this Agreement or any other Senior Noteholder
Document, or any course of conduct, course of dealing, verbal or written
statement or action of any party hereto.

7.8.         Notices. All notices to the Noteholders and the Senior Noteholders
permitted or required under this Agreement may be sent to the Collateral Agent
and the Senior Noteholders, respectively. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied,
electronically mailed or sent by courier service or U.S. mail and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of a telecopy or electronic mail or four Business Days after deposit in
the U.S. mail (registered or certified, with postage prepaid and properly
addressed). For the purposes hereof, (a) the addresses of Globix and the
Subsidiary Guarantors shall be c/o Globix Corporation, 139 Centre Street, New
York, NY 10013, (b) the addresses the Senior Noteholders shall be as set forth
on Exhibit A hereto, and (c) the address of the Collateral Agent shall be as set
forth below its name on the signature pages hereto, or, as to each party, at
such other address as may be designated by such party in a written notice to all
of the other parties.

7.9.         Further Assurances. The parties agree that they shall take such
further action and shall execute and deliver to the other parties such
additional documents and instruments (in recordable form, if requested) as any
party may reasonably request to effectuate the terms of and the lien priorities
contemplated by this Agreement.

 

 

11

 

 

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7.10.      Governing Law. This Agreement has been delivered and accepted at and
shall be deemed to have been made at New York, New York and shall be
interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.

7.11.      Binding on Successors and Assigns. This Agreement shall be binding
upon the Senior Noteholders, the Collateral Agent, the Noteholders, Globix, the
Subsidiary Guarantors and their respective permitted successors and assigns.

7.12.      Specific Performance. The Senior Noteholders may demand specific
performance of this Agreement.

7.13.      Section Titles. The section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of this Agreement.

7.14.      Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same document. The delivery of an executed signature page
by facsimile or electronic means shall be binding upon the party delivering such
a signature page with the full effect as if an executed original signature page
had been delivered.

7.15.      Authorization. By its signature, each Person executing this Agreement
on behalf of a party hereto represents and warrants to the other parties hereto
that it is duly authorized to execute this Agreement.

7.16.      No Third Party Beneficiaries. This Agreement and the rights and
benefits hereof shall inure to the benefit of each of the parties hereto and
their respective successors and assigns and shall inure to the benefit of each
of the holders of Senior Obligations and 11% Noteholder Claims. No other Person
shall have or be entitled to assert rights or benefits hereunder.

7.17.      Effectiveness. This Agreement shall become effective when executed
and delivered by the parties hereto. This Agreement shall be effective both
before and after the commencement of any Insolvency or Liquidation Proceeding.
All references to Globix, the Subsidiary Guarantors or any other Obligor shall
include Globix, or any other Obligor as debtor and debtor-in-possession and any
receiver or trustee for Globix or any other Obligor (as the case may be) in any
Insolvency or Liquidation Proceeding.

[Signature pages follow.]

 

 

12

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

Senior Noteholders:

 

LAMPE, CONWAY & CO. LLC

 

 

 

By:

_______________________

 

Name:

_______________________

 

Title:

_______________________

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

GREYWOLF CAPITAL PARTNERS II LP

By: Greywolf Advisors LLC, its general partner

 

 

 

By:

_______________________

 

Name:

_______________________

 

Title:

_______________________

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

METRONOME LPC 1, INC.

 

 

 

By:

_______________________

 

Name:

_______________________

 

Title:

_______________________

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

MILFAM I, L.P.

 

 

 

By:

_______________________

 

Name:

Lloyd I. Miller III

 

 

Title:

General Partner

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

_______________________

Karen Singer

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

Collateral Agent:

 

HSBC BANK USA, NATIONAL ASSOCIATION,

as Collateral Agent

 

By:                                           
                                    

Name:                                           
                                

Title:                                           
                                  

 

Address:

 

452 Fifth Avenue

New York, New York 10018

 

  Attention: Corporate Trust & Loan Agency

Telecopy No.:                                                                

 

 

 

S-2

 

 

--------------------------------------------------------------------------------

 

 

Globix:

 

GLOBIX CORPORATION

 

By:                                           
                                    

Name:                                           
                                

Title:                                           
                                  

 

Address:

139 Centre Street

New York, NY 10013

Attn:                                           
                                  

Tel:                                           
                                    

Fax:                                           
                                  

 

Acknowledged and Accepted:

 

The Subsidiary Guarantors:

 

NEON COMMUNICATIONS, INC.

 

 

 

By:

___________________________

Name: ___________________________

Title: ____________________________

 

NEON OPTICA, INC.

 

 

 

By:

___________________________

Name: ___________________________

Title: ____________________________

 

NEON TRANSCOM, INC.

 

 

 

By:

___________________________

Name: ___________________________

Title: ____________________________

 

 

 

 

 

S-3

 

 

--------------------------------------------------------------------------------

 

 

NEON CONNECT, INC.

 

 

 

By:

___________________________

Name: ___________________________

Title: ____________________________

 

NEON SECURITIES CORP.

 

 

 

By:

___________________________

Name: ___________________________

Title: ____________________________

 

NORTHEAST OPTIC NETWORK OF CONNECTICUT, INC.

 

 

 

By:

___________________________

Name: ___________________________

Title: ____________________________

 

NORTHEAST OPTIC NETWORK OF NEW YORK, INC.

 

 

 

By:

___________________________

Name: ___________________________

Title: ____________________________

 

 

 

 

 

S-4

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

INFORMATION RELATING TO SENIOR NOTEHOLDERS

 

 

 

Names and Addresses of Senior Noteholders

 

Lampe, Conway & Co. LLC

730 Fifth Avenue

Suite 2102

New York, New York 10019-4105

 

Metronome LPC 1, Inc.

c/o Loeb Partners Corp.

61 Broadway

24th Floor

New York, NY 10006

Attn: Robert Grubin

 

Greywolf Capital Partners II LP

c/o Greywolf Capital Management

4 Manhattanville Road

Suite 201

Purchase, NY 10577

 

Milfam I, L.P.

c/o Lloyd I. Miller III

4550 Gordon Drive

Naples, FL 34102

 

Karen Singer

c/o Romulus Holdings, Inc.

560 Sylvan Avenue

Englewood Cliffs, NJ 07632