exv10w12





Exhibit 10.12


NextG Networks, Inc., 

NextG Networks of California, Inc., 

NextG Networks of NY, Inc., 

NextG Networks of Illinois, Inc., 

and

NextG Networks Atlantic Inc.


LOAN AND SECURITY AGREEMENT



 








 





     This Loan and Security Agreement (this “Agreement”) is entered into as of
January 10, 2008, by and among United Commercial Bank (the “Agent”), the financial
institutions named on this Agreement’s signature pages (each, a “Lender” and collectively,
the “Lenders”) and NextG Networks, Inc., a Delaware corporation, NextG
Networks Of California, Inc., a Delaware corporation, NextG Networks Of NY, Inc., a
Delaware corporation, NextG Networks Of Illinois, Inc., a Delaware corporation, and
NextG Networks Atlantic Inc., a Virginia corporation (each referred to individually as a
“Borrower” and collectively, as the “Borrowers”).



Recitals




     Borrowers wish to obtain credit from time to time from Lenders, and Lenders desire to extend
credit to Borrowers. This Agreement states the terms on which Lenders will advance credit to
Borrowers, and Borrowers will repay the amounts owing to Agent.



Agreement




     The parties agree as follows:



1. Definitions and Construction.




     1.1 Definitions. As used in this Agreement, the following terms have the following
definitions:



     “Accounts” means all presently existing and hereafter arising accounts, contract rights, and
all other forms of obligations owing to a Borrower arising out of the sale or lease of goods
(including the licensing of software and other technology) or the rendering of services by such
Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and
other security therefor, as well as all merchandise returned to or reclaimed by a Borrower and
Borrower’s Books relating to any of the foregoing.



     “Advance” or “Advances” means a cash advance or cash advances made, or Letters of Credit
issued, under the Revolving Facility or the Term Facility.



     “Affiliate” means, with respect to any Person, any Person that owns or controls directly or
indirectly such Person, any Person that controls or is controlled by or is under common control
with such Person, and each of such Person’s senior executive officers, directors, and partners.



     “Agent Expenses” means all: (a) reasonable and documented costs or expenses (including
reasonable attorneys’ fees and expenses for one firm acting as Agent’s counsel) incurred in
connection with the preparation and negotiation of the Loan Documents; (b) reasonable and
documented costs or expenses (including reasonable attorneys’ fees and expenses for one firm acting
as Agent’s counsel) incurred in connection with administration and enforcement of the Loan
Documents, except as otherwise provided in this Agreement; (c) reasonable and documented Collateral
audit fees; and (d) Agent’s reasonable and documented attorneys’ fees and expenses incurred in
amending, enforcing, or defending the Loan Documents (including fees and expenses of appeal) in
connection with an Insolvency Proceeding, whether incurred before, during, or after the Insolvency
Proceeding and whether or not suit is brought.



     “Borrower’s Books” means all of a Borrower’s books and records, including: ledgers, records
concerning a Borrower’s assets or liabilities, the Collateral, business operations, or financial
condition, in electronic or hard copy format.



     “Business Day” means any day that is not a Saturday, Sunday, or other day on which Lenders in
the State of California are authorized or required to close.



     “Cash” means unrestricted cash and cash equivalents, and marketable securities.



     “Change in Control” means a transaction in which any “person” or “group” (within the meaning
of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) becomes the
“beneficial owner” (as



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defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of a sufficient number of shares of all classes of stock then outstanding of a Borrower
ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to
elect a majority of the members of the Board of Directors of a Borrower, who did not have such
power before such transaction; provided that “Change in Control” expressly excludes the Parent’s
Initial Public Offering.



     “Closing Date” means the date of this Agreement.



     “Code” means the California Uniform Commercial Code, as amended from time to time.



     “Collateral” means the property described on Exhibit A attached hereto, except to the
extent any such property (i) is nonassignable by its terms without the consent of the licensor
thereof or another party (but only to the extent such prohibition on transfer is enforceable under
applicable law, including Sections 9-406 and 9-408 of the Code), or (ii) the granting of a security
interest therein is contrary to applicable law, provided that upon the cessation of any such
restriction or prohibition, such property shall automatically become part of the Collateral.



     “Common Stock Dividend” means the $0.40 per share common stock dividend paid or payable on all
issued and outstanding Parent common stock in an aggregate amount not to exceed $3,300,000 and as
contemplated by the Equity Documents.



     “Contingent Obligation” means, as applied to any Person, any direct or indirect liability,
contingent or otherwise (without duplication), of that Person with respect to (i) any indebtedness,
lease, dividend, letter of credit, or other obligation of another, including any such obligation
directly or indirectly guaranteed, endorsed, co-made, or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit issued for the account of that Person; and
(iii) all obligations arising under any interest rate, currency or commodity swap agreement,
interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement
designed to protect a Person against fluctuation in interest rates, currency exchange rates, or
commodity prices; provided, however, that the term “Contingent Obligation” shall not include
endorsements for collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of
the primary obligation in respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as determined by such
Person in good faith; provided, however, that such amount shall not in any event exceed the maximum
amount of the obligations under the guarantee or other support arrangement.



     “Copyrights” means any and all copyright rights, copyright applications, copyright
registrations in each work of authorship, and derivative work thereof, whether published or
unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing,
created, acquired, or held.



     “Credit Commitment” means the aggregate maximum amount of Credit Extensions that a Lender is
obliged to make under this Agreement, as set forth below such Lender’s signature hereto.



     “Credit Extension” means each Advance or any other extension of credit by Agent or Lenders for
the benefit of a Borrower hereunder.



     “Current Liabilities” means, as of any applicable date, all amounts that should, in accordance
with GAAP, be included as current liabilities on the consolidated balance sheet of Borrowers and
each Borrower’s Subsidiaries, as of such date, plus, to the extent not already included therein,
all outstanding Obligations under this Agreement, including all outstanding Indebtedness (including
drawn standby letters of credit, if any) that is payable upon demand or within one year from the
date of determination thereof.



     “Deferred Revenue” is all amounts received or invoiced in advance of performance under
contracts and not yet recognized as revenue.



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     “Eligible Foreign Accounts” means Accounts with respect to which the account debtor does not
have its principal place of business in the United States and that are (i) supported by one or more
letters of credit in an amount and of a tenor, and issued by a financial institution, acceptable to
Agent, or (ii) approved by Agent on a case-by-case basis. All Eligible Foreign Accounts must be
calculated in U.S. Dollars.



     “Equipment” means all present and future machinery, equipment, tenant improvements, furniture,
fixtures, vehicles, tools, parts, and attachments in which a Borrower has any interest.



     “Equity Documents” means that certain Series C Preferred Stock Purchase Agreement and all
related agreements entered into by Parent on December 20, 2007 in connection with Parent’s Series C
Preferred Stock Financing.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder.



     “Event of Default” has the meaning assigned in Section 8.



     “GAAP” means generally accepted accounting principles as in effect from time to time in the
United States.



     “Indebtedness” means, without duplication, (a) all indebtedness for borrowed money or the
deferred purchase price of property or services, including reimbursement and other obligations with
respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds,
debentures, or similar instruments, (c) all capital lease obligations, and (d) all Contingent
Obligations.



     “Initial Public Offering” means Parent’s first firm commitment underwritten public offering of
securities pursuant to an effective registration statement under the Securities Act of 1933, as
amended, in which the gross proceeds to Borrower is greater than or equal to $70,000,000.



     “Insolvency Proceeding” means any proceeding commenced by or against any person or entity
under any provision of the United States Bankruptcy Code, as amended, or under any other Bankruptcy
or insolvency law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.



     “Intellectual Property” means all of a Borrower’s right, title, and interest in and to the
following:



     (a) Copyrights, Trademarks, and Patents;



     (b) Any and all trade secrets, and any and all intellectual property rights in computer
software and computer software products now or hereafter existing, created, acquired, or held;



     (c) Any and all design rights which may be available to a Borrower now or hereafter existing,
created, acquired, or held;



     (d) Any and all claims for damages by way of past, present, and future infringement of any of
the rights included above, with the right, but not the obligation, to sue for and collect such
damages for such use or infringement of the intellectual property rights identified above;



     (e) All licenses or other rights to use any of the Copyrights, Patents, or Trademarks, and all
license fees and royalties arising from such use to the extent permitted by such license or rights;



     (f) All amendments, renewals, and extensions of any of the Copyrights, Trademarks, or Patents;
and



     (g) All proceeds and products of the foregoing, including all payments under insurance or any
indemnity or warranty payable in respect of any of the foregoing.



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     “Inventory” means all present and future inventory in which a Borrower has any title or
ownership interest.



     “Investment” means any beneficial ownership of (including stock, partnership interest, or
other securities) any Person, or any loan, advance, or capital contribution to any Person.



     “IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.



     “Letter of Credit” means standby, sight, or usance (with or without title) letter of credit or
similar undertaking issued by Agent at a Borrower’s request in accordance with Section 2.1.1.



     “Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest, or other
encumbrance.



     “Loan Documents” means, collectively, this Agreement, any note or notes executed by a
Borrower, and any other agreement entered into between a Borrower and Agent in connection with this
Agreement, all as amended or extended from time to time.



     “Majority Lenders” means, as of any date of determination, Lenders owed more than 50% of the
then aggregate unpaid principal amount of the Advances, or, if no principal amount of the Revolving
Notes is outstanding, then Lenders having more than 50% of the Credit Commitments.



     “Material Adverse Effect” means a material adverse effect on (i) the business operations or
financial condition of the Borrowers and their Subsidiaries taken as a whole, (ii) the ability of
Borrowers, taken as a whole, to repay the Obligations or otherwise perform their obligations under
the Loan Documents, or (iii) Borrowers’ interest in, or the value, perfection, or priority of
Agent’s security interest in the Collateral.



     “Maturity Date” means the Term Facility Maturity Date or the Revolving Facility Maturity Date,
as applicable.



     “Negotiable Collateral” means all of a Borrower’s present and future letters of credit of
which such Borrower is a beneficiary, notes, drafts, instruments, securities, documents of title,
and chattel paper, and Borrower’s Books relating to any of the foregoing.



     “Net Fixed Assets” means Equipment used in the Borrowers’ business, excluding any obsolete
Equipment, as reflected on the books of a Borrower.



     “Network Assets” means all costs associated with designing, permitting, and building
each network backbone for which ownership remains with Borrowers.



     “Obligations” means all debt, principal, interest, Agent Expenses, and other amounts owed to
Lenders or Agent by a Borrower or Borrowers pursuant to this Agreement or any other Loan Document,
whether absolute or contingent, due or to become due, now existing or hereafter arising, including
any interest that accrues after the commencement of an Insolvency Proceeding, and including any
debt, liability, or obligation owing from a Borrower to others that Agent may have obtained by
assignment or otherwise.



     “Patents” means all patents and patent applications including improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the same.



     “Parent” means NextG Networks, Inc., a Delaware corporation.



     “Permitted Indebtedness” means



     (a) Indebtedness existing on the Closing Date and disclosed in the Schedule;



     (b) Indebtedness of a Borrower in favor of Agent or the Lenders arising under this Agreement
or any other Loan Document;



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     (c) Indebtedness not to exceed $1,000,000 in the aggregate in any fiscal year of a Borrower
secured by a lien described in clause (c) of the defined term “Permitted Liens,” provided such
Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed
with such Indebtedness;



     (d) Subordinated Debt;



     (e) Indebtedness to trade creditors incurred in the ordinary course of business;



     (f) Extensions, refinancings, and renewals of any of items (a) through (e), provided that the
principal amount is not increased or the terms modified to impose more burdensome terms upon a
Borrower or its Subsidiaries, as the case may be.



     “Permitted Investment” means:



     (a) Investments existing on the Closing Date disclosed in the Schedule;



     (b) (i) Marketable direct obligations issued or unconditionally guaranteed by the United
States of America or any agency or any State thereof maturing within one year from the date of
acquisition thereof, (ii) commercial paper maturing no more than one year from the date of creation
thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s
Corporation or Moody’s Investors Service, and (iii) Agent’s money market accounts;



     (c) Investments accepted in connection with Permitted Transfers;



     (d) Investments of a Borrower in or to other Subsidiaries or Borrower and Investments by
Parent in Subsidiaries not to exceed $1,000,000 in the aggregate in any fiscal year;



     (e) Investments not to exceed $1,000,000 in the aggregate in any fiscal year consisting of (i)
travel advances and employee relocation loans and other employee loans and advances in the ordinary
course of business, and (ii) loans to employees, officers, or directors relating to the purchase of
equity securities of a Borrower or its Subsidiaries pursuant to employee stock purchase plan
agreements approved by a Borrower’s Board of Directors;



     (f) Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers arising in the ordinary course of a Borrower’s business;



     (g) Investments consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business,
provided that this subparagraph (g) shall not apply to Investments of a Borrower in any Subsidiary;



     (h) Joint ventures or strategic alliances in the ordinary course of a Borrower’s business
consisting of the non-exclusive licensing of technology, the development of technology, or the
providing of technical support, provided that any cash Investments by a Borrower do not exceed
$1,000,000 in the aggregate in any fiscal year; and



     (i) other Investments with Agent’s consent which shall not be unreasonably withheld,
conditioned, or delayed.



     “Permitted Liens” means the following:



     (a) Any Liens existing on the Closing Date and disclosed in the Schedule or arising under this
Agreement or the other Loan Documents;



     (b) Liens for taxes, fees, assessments, or other governmental charges or levies incurred in
the ordinary course of business, either not delinquent or being contested in good faith by
appropriate proceedings;



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     (c) Liens not to exceed $1,000,000 in the aggregate (i) upon or in any Equipment acquired or
held by Borrower or any of its Subsidiaries to secure the purchase price of such Equipment or
indebtedness incurred solely for the purpose of financing the acquisition or lease of such
Equipment, or (ii) existing on such Equipment at the time of its acquisition, provided that the
Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of
such Equipment;



     (d) Liens incurred in connection with the extension, renewal, or refinancing of the
indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that
any extension, renewal, or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness being extended, renewed, or refinanced
does not increase;



     (e) Liens arising from judgments, decrees, or attachments in circumstances not constituting an
Event of Default under Sections 8.4 or 8.8; and



     (f) Liens in favor of other financial institutions arising in connection with Borrowers’
deposit accounts held at such institutions to secure standard fees for deposit services charged by
such institutions, provided that Agent has a perfected security interest in the amounts held in
such deposit accounts;



     (g) Liens securing claims or demands or materialmen, mechanics, carriers, warehousemen,
landlords, and other like persons or entities incurred in the ordinary course of business that are
not yet due and payable or being contested in good faith;



     (h) Liens in favor of Agent for the benefit of Lenders securing the Obligations of Borrowers
hereunder.



     “Permitted Transfer” means the conveyance, sale, lease, transfer, or disposition by any
Borrower or any of its Subsidiaries of:



     (a) Inventory in the ordinary course of business;



     (b) licenses and similar arrangements for the use of the property (including Intellectual
Property) of Borrower or its Subsidiaries in the ordinary course of business;



     (c) worn-out or obsolete Equipment;



     (d) other assets of Borrowers or its Subsidiaries that do not in the aggregate exceed
$1,000,000 during any fiscal year; provided, however, that Parent shall be permitted to make
transfers of network assets and their related deferred revenue in excess of the above limitation to
any Subsidiary who becomes a Borrower under this Agreement pursuant to the Joinder Agreement
attached hereto as Exhibit G;



     (e) cash balances on deposit at Silicon Valley Asset Management or Morgan Stanley that are
subject to the account control agreements for the benefit of Agent dated as of the Closing Date, or
to any other financial institution of Borrowers’ choosing so long as accounts are subject to an
executed account control agreement in form and substance satisfactory to Agent; or



     (f) any of its assets or property to any Borrower.



     “Person” means any individual, sole proprietorship, partnership, limited liability company,
joint venture, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity, or governmental agency.



     “Prime Rate” means, as of any particular measurement date, the variable rate of interest, per
annum, as published in The Wall Street Journal on the measurement date.



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     “Pro Rata Share” means each Lender’s pro rata share of the Obligations, as evidenced by the
percentage set forth on the signature pages to this Agreement.



     “Qualified Accounts” means those Accounts that arise in the ordinary course of Borrowers’
business provided, that Agent may change the standards of eligibility by giving Borrowers 30 days
prior written notice. Unless otherwise agreed to by Agent, Qualified Accounts shall not include
the following:



     (a) Accounts that the account debtor has failed to pay in full within 90 days of invoice date;



     (b) Credit balances over 90 days;



     (c) Accounts with respect to an account debtor, 25% of whose Accounts the account debtor has
failed to pay within 90 days of invoice date;



     (d) Accounts with respect to an account debtor, including Subsidiaries and Affiliates, whose
total obligations to any Borrower exceed twenty five percent (25%) of all Accounts (the
“Concentration Limit”), to the extent such obligations exceed the aforementioned
percentage, except as approved in writing by Agent and except that the Concentration Limit shall
not apply to Accounts to which the account debtor is AT&T, T-Mobile, Leap (Cricket), MetroPCS,
Verizon, Sprint Nextel, Google, CableVision, Comcast, Time Warner, or any bidder in the FCC’s 2008
700-megahertz auction;



     (e) Accounts with respect to which the account debtor does not have its principal place of
business in the United States, except for Eligible Foreign Accounts;



     (f) Accounts with respect to which the account debtor is the United States or any department,
agency, or instrumentality of the United States;



     (g) Accounts with respect to which a Borrower is liable to the account debtor for goods sold
or services rendered by the account debtor to a Borrower, but only to the extent of any amounts
owing to the account debtor against amounts owed to such Borrower;



     (h) Accounts with respect to which goods are placed on consignment, guaranteed sale, sale or
return, sale on approval, bill and hold, demo or promotional, credit memo, or other terms by reason
of which the payment by the account debtor may be conditional;



     (i) Accounts with respect to which the account debtor is an officer, employee, agent, or
Affiliate of a Borrower;



     (j) Accounts that have not yet been billed to the account debtor or that relate to deposits
(such as good faith deposits) or other property of the account debtor held by a Borrower for the
performance of services or delivery of goods which Borrower has not yet performed or delivered;



     (k) Accounts with respect to which the account debtor disputes liability or makes any claim
with respect thereto as to which Agent believes, in its sole discretion, that there may be a basis
for dispute (but only to the extent of the amount subject to such dispute or claim), or is subject
to any Insolvency Proceeding, or becomes insolvent, or goes out of business;



     (l) Retentions and hold-backs; and



     (m) Accounts the collection of which Agent reasonably determines to be doubtful.



     “Qualified Invoices” means invoices for the purchase of Network Assets, supported by executed
agreements acceptable to Agent, dated between April 1, 2007 and December 31, 2008.



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     “Responsible Officer” means each of the Chief Executive Officer, the Chief Financial Officer,
Vice President, Finance, Vice President, Treasurer, and General Counsel of a Borrower.



     “Revolving Advance” means a cash advance or cash advances under the Revolving Facility.



     “Revolving Facility” means the facility under which Borrowers may request Agent to issue
Credit Extensions, as specified in Section 2.1.1.



     “Revolving Facility Maturity Date” means second anniversary of the Closing Date.



     “Revolving Line” means Credit Extensions of up to five million dollars ($5,000,000).



     “Revolving Note” means the promissory note attached hereto as Exhibit D-1.



     “Schedule” means the Schedule of Exceptions attached hereto.



     “Series C Preferred Stock Financing” means Parent’s equity financing that was consummated
prior to the Closing Date, in which Parent has sold and issued its Series C Preferred Stock for
minimum proceeds of $30,000,000.



     “Shares” means the shares of capital stock issued by any Subsidiaries.



     “Subordinated Debt” means any debt incurred by a Borrower that is subordinated to the debt
owing by such Borrower to Agent on terms reasonably acceptable to Agent (and identified in writing
as being such by such Borrower and Agent).



     “Subsidiary” means any corporation, partnership, or limited liability company or joint venture
in which (i) any general partnership interest or (ii) more than 50% of the stock, limited liability
company interest, or joint venture interest of which by the terms thereof ordinary voting power to
elect the Board of Directors, managers, or trustees of the entity, at the time as of which any
determination is being made, is owned by a Borrower, either directly or through an Affiliate.



     “Tangible Net Worth” means, as of any particular determination date, the sum of the capital
stock, partnership interest, or limited liability company interest of Borrowers and its
Subsidiaries minus intangible assets, determined in accordance with GAAP.



     “Term Advance” means a cash advance or cash advances under the Term Facility.



     “Term Facility Maturity Date” means December 31, 2012.



     “Term Facility” means a Credit Extension of up to fifty-five million dollars ($55,000,000).



     “Term Note” means the promissory note attached hereto as Exhibit D-2.



     “Total Liabilities” means, as of any particular determination date, all obligations that
should, in accordance with GAAP, be classified as liabilities on the consolidated balance sheet of
Borrowers, including in any event all Indebtedness.



     “Trademarks” means any trademark rights, whether registered or not, applications to register,
and registrations of the same, and the entire goodwill of the business of a Borrower connected with
and symbolized by such trademarks.



     1.2 Accounting Terms. All accounting terms not specifically defined herein shall be construed
in accordance with GAAP and all calculations made hereunder shall be made in accordance with GAAP.
When used herein, the terms “financial statements” shall include the notes and schedules thereto.



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2. Loan And Terms Of Payment.




     2.1 Credit Extensions.



     Borrowers promise to pay to the order of Lenders, in lawful money of the United States, the
aggregate unpaid principal amount of all Credit Extensions made by Lenders to Borrowers hereunder
in accordance with the terms hereof. The Borrowers shall also pay interest on the unpaid principal
amount of such Credit Extensions at rates and times in accordance with the terms hereof.



          2.1.1 Advances under the Revolving Facility.




               (a) Advance Amounts. Subject to and upon the terms and conditions of this Agreement,
Borrowers may request Revolving Advances in an aggregate outstanding amount not to exceed the
Revolving Line minus the aggregate face amount of outstanding Letters of Credit, including any
drawn but unreimbursed Letters of Credit, and each Lender shall make Revolving Advances up to its
Pro Rata Share of the requested Advance, provided no Lender shall at any time be required to make
Revolving Advances in excess of its Credit Commitment. Subject to the terms and conditions of this
Agreement, amounts borrowed pursuant to this Section 2.1.1 may be repaid and reborrowed at any time
prior to the Revolving Facility Maturity Date, at which time all Revolving Advances under this
Section 2.1.1 shall be immediately due and payable.



               (b) Borrowing Procedure. Whenever Borrowers desire a Revolving Advance, Borrowers will notify
Agent by facsimile transmission of an advance request in substantially the form of Exhibit B hereto
no later than noon Pacific Time on the Business Day that is one (1) Business Day prior to the
Business Day on which a Revolving Advance is made. Agent is authorized to make Advances under this
Agreement based upon instructions received from a Responsible Officer or a designee of a
Responsible Officer. Agent will credit the amount of Revolving Advances made under this Section
2.1.1 to a Borrower’s deposit account, as specified on the advance request by Borrowers.



               (c) Payments. Borrowers shall pay interest on the aggregate outstanding principal amount of
the Revolving Advances on the first day of each month for so long as any Revolving Advances are
outstanding. All Revolving Advances shall be due and payable on the Revolving Advance Maturity
Date.



               (d) Letter of Credit. Subject to the availability under the Revolving Line at any time and
from time to time from the date hereof through the Business Day that is one month prior to the
Maturity Date, Agent shall issue for the account of Borrowers such Letters of Credit as Borrowers
may request by delivering to Agent a duly executed letter of credit application on Agent’s standard
form, a copy of which is attached; hereto provided, however, that (i) the expiration date of each
Letter of Credit shall be no later than the date that is one month prior to the Revolving Maturity
Date, (ii) the outstanding and undrawn amounts under all Letters of Credit shall not at any time
exceed the Revolving Line, and (iii) the outstanding and undrawn amounts under all Letters of
Credit shall be deemed to constitute Revolving Advances for the purpose of calculating availability
under the Revolving Line. All Letters of Credit shall be in form and substance acceptable to Agent
in its sole discretion and shall be subject to the terms and conditions of Agent’s form application
and letter of credit agreement. In addition to the fees set forth herein, Borrowers shall pay, in
connection with the issuance of Letters of Credit hereunder, Agent’s standard international fees.
Agent shall distribute, in accordance with Section 2.5, fees received by Agent in connection with
the issuance of Letters of Credit hereunder to Lenders pro rata based upon their respective shares,
if any, of the Obligations. Upon termination of this Agreement in accordance with the terms
hereof, Borrower may prepay its obligations with respect to the Letters of Credit or cash secure to
Agent’s satisfaction its obligations with respect to any Letters of Credit on terms satisfactory to
Agent. All other Letters of Credit shall be subject to the terms and conditions, including
pricing, in effect as of the date of such issuance. If Agent or a Lender shall honor any draw
request under, and make payment in respect of, a Letter of Credit, (A) Borrowers shall be deemed to
have immediately requested that Lenders make a Revolving Advance, in a principal amount equal to
the amount of such draw request and (B) the proceeds of such Revolving Advance shall be used to
reimburse Agent or such Lender, as applicable, for the amount of such payment by the end of the day
on which Agent or such Lender shall make such payment. Agent shall promptly notify Lenders of any
such deemed request and each Lender shall make available to Agent not later than noon (California
time) on the Business Day following such notification from Agent such Lender’s Pro Rata Share of
such Revolving Advance. Each Lender absolutely and unconditionally



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agrees to fund such Lender’s Pro Rata Share of the Revolving Advance described in the
immediately preceding sentence, unaffected by any circumstance whatsoever.




               (e) Lenders Disbursement. Unless Agent shall have received notice from a Lender prior to the
date of any Revolving Advance that such Lender will not make available to Agent such Lender’s Pro
Rata Share of such Revolving Advance, Agent may assume that such Lender has made such portion
available to Agent on the date of such Revolving Advance in accordance with this Section 2.1.1 and
Agent may, in reliance upon such assumption, make available to Borrowers on such date a
corresponding amount. If and to the extent that such Lender shall not have so made such ratable
portion available to Agent, such Lender and Borrowers severally agree to repay to Agent forthwith
on demand such ratable portion together with interest thereon, for each day from the date such
ratable portion is made available to Borrowers until the date such ratable portion is repaid to
Agent, at (i) in the case of Borrowers, the interest rate applicable at the time to such Revolving
Advance and (ii) in the case of such Lender, the Federal Funds Rate, as such rate is quoted in The
Wall Street Journal on such date; provided that no Borrowers will be required to repay any such
ratable portion or corresponding interest under this Section 2.1.1(e), unless the Agent requests in
writing the return of such ratable portion of such Revolving Advance no later than one Business Day
after such ratable portion of such Revolving Advance is made. If such Lender shall repay to Agent
such corresponding amount, such amount so repaid shall constitute such Lender’s Pro Rata Share of
such Revolving Advance for purposes of this Agreement. The failure of any Lender to make available
its Pro Rata Share of any Revolving Advance shall not relieve any other Lender of its obligation,
if any, hereunder, to make available its Pro Rata Share of such Revolving Advance on the date of
such Revolving Advance, but no Lender shall be responsible for the failure of any other Lender to
make available its Pro Rata Share of any Advance on the date of any Advance.



               (f) Revolving Notes. The Revolving Advances made by Lenders pursuant this Section 2.1.1 shall
be evidenced by the Revolving Notes in substantially the form of Exhibit D-1 attached hereto,
payable to the order of each Lender and representing the obligation of Borrowers to pay the
aggregate unpaid principal amount of all Advances made by that Lender, with interest thereon as
prescribed in Section 2.2. Each Lender is hereby authorized to record in its books and records and
on any schedule annexed to its Revolving Note, the date and amount of each Advance made by that
Lender, and the date and amount of each payment of principal thereof, and any such recordation
shall constitute prima facie evidence of the accuracy of the information so recorded; provided that
failure by any Lender to effect such recordation shall not affect Borrowers’ obligations hereunder.
Prior to the transfer of a Revolving Note, the transferring Lender shall record such information
on any schedule annexed to and forming a part of such Revolving Note.



          2.1.2 Advances under the Term Facility.




               (a) Term Advance Amounts. Subject to and upon the terms and conditions of this Agreement,
Borrowers may request Term Advances at any time from the Closing Date through December 31, 2008.
The aggregate outstanding amount shall not at any time exceed the Term Facility. Each Term Advance
shall be in an amount not less than $5,000,000, and not more than eighty five percent (85%) of the
Qualified Invoices delivered to Agent in connection with the request for such Term Advance. Each
Lender shall make Term Advances up to its Pro Rata Share of the requested Term Advance, provided no
Lender shall at any time be required to make Term Advances in excess of its Credit Commitment.



               (b) Borrowing Procedure. Whenever Borrowers desire a Term Advance, Borrowers will notify
Agent by facsimile transmission of an advance request in substantially the form of Exhibit B hereto
no later than noon Pacific Time on the Business Day that is three (3) Business Days prior to the
Business Day on which a Term Advance is made, and include documentation of all Qualified Invoices.
Agent is authorized to make Term Advances under this Agreement based upon instructions received
from a Responsible Officer or a designee of a Responsible Officer. Agent will credit the amount of
Term Advances made under this Section 2.1.2 to a Borrower’s deposit account, as specified by
Borrowers in the advance request.



               (c) Payments. Borrower shall pay interest on the aggregate outstanding principal amount of
the Term Advances on the first day of each month for so long as any Term Advances are outstanding.
Beginning January 1, 2009 and continuing on the first day of each month thereafter, Borrower shall
repay any outstanding Term Advance in 48 equal monthly installments of principal, plus accrued
interest. The entire principal



10









 




balance and all accrued but unpaid interest on such Term Advance shall be due and payable on
the Term Facility Maturity Date.




               (d) Lenders Disbursement. Unless Agent shall have received notice from a Lender prior to the
date of any Term Advance that such Lender will not make available to Agent such Lender’s Pro Rata
Share of such Term Advance, Agent may assume that such Lender has made such portion available to
Agent on the date of such Term Advance in accordance with this Section 2.1.2 and Agent may, in
reliance upon such assumption, make available to Borrowers on such date a corresponding amount. If
and to the extent that such Lender shall not have so made such ratable portion available to Agent,
such Lender and Borrowers severally agree to repay to Agent forthwith on demand such ratable
portion together with interest thereon, for each day from the date such ratable portion is made
available to Borrowers until the date such ratable portion is repaid to Agent, at (i) in the case
of Borrowers, the interest rate applicable at the time to such Term Advance and (ii) in the case of
such Lender, the Federal Funds Rate, as such rate is quoted in The Wall Street Journal on such
date; provided that no Borrowers will be required to repay any such ratable portion or
corresponding interest under this Section 2.1.2(d), unless the Agent requests in writing the return
of such ratable portion of such Revolving Advance no later than one Business Day after such ratable
portion of such Revolving Advance is made. If such Lender shall repay to Agent such corresponding
amount, such amount so repaid shall constitute such Lender’s Pro Rata Share of such Term Advance
for purposes of this Agreement. The failure of any Lender to make available its Pro Rata Share of
any Term Advance shall not relieve any other Lender of its obligation, if any, hereunder, to make
available its Pro Rata Share of such Term Advance on the date of such Advance, but no Lender shall
be responsible for the failure of any other Lender to make available its Pro Rata Share of any Term
Advance on the date of any Advance.



               (e) Term Notes. The Term Advances made by Lenders pursuant hereto shall be evidenced by the
Term Notes in substantially the form of Exhibit D-2 attached hereto, payable to the order of each
Lender and representing the obligation of Borrowers to pay the aggregate unpaid principal amount of
all Term Advances made by that Lender, with interest thereon as prescribed in Section 2.2. Each
Lender is hereby authorized to record in its books and records and on any schedule annexed to its
Term Note, the date and amount of each Term Advance made by that Lender, and the date and amount of
each payment of principal thereof, and any such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded; provided that failure by any Lender to effect such
recordation shall not affect Borrowers’ obligations hereunder. Prior to the transfer of a Term
Note, the transferring Lender shall record such information on any schedule annexed to and forming
a part of such Term Note.



     2.2 Interest Rates, Payments, and Calculations.



          (a) Interest Rates. Except as set forth in Section 2.2(b), (i) the outstanding principal
balance of each Revolving Advance shall bear interest (computed daily on the basis of a 360-day
year and actual days elapsed), at a floating rate per annum equal to the Prime Rate minus 0.25%;
and (ii) the outstanding principal balance of each Term Advance shall bear interest (computed daily
on the basis of a 360-day year and actual days elapsed), at a floating rate per annum equal to the
Prime Rate plus 0.50%, provided, however, that upon the consummation of the Initial Public
Offering, the applicable interest rate on Term Advances shall be reduced by fifty basis points.




          (b) Late Fee/Default Rate. All Obligations shall bear interest, from and during the
continuance of one or more Events of Default, at a rate equal to two (2) percentage points above
the interest rate applicable immediately prior to the occurrence of the one or more continuing
Events of Default.




          (c) Payments. Any interest not paid when due shall be compounded by becoming a part of the
Obligations, and such interest shall thereafter accrue interest at the rate then applicable
hereunder. All payments shall be made free and clear of, and without deduction or withholding for,
any present or future taxes or other charges imposed by any jurisdiction. Payments will be made
via auto debit from the Borrowers’ account at Agent. Agent, in the ordinary course of Agent’s
business, will deliver monthly statements to Parent evidencing such debits.




          (d) Computation. The applicable rate of interest hereunder shall be increased or decreased
effective as of the day the Prime Rate is changed as provided in the definition thereof, by an
amount equal to such change in the Prime Rate.




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     2.3 [Intentionally Omitted].



     2.4 Crediting Payments. Prior to the occurrence of an Event of Default, Agent shall credit a
wire transfer of funds, check, or other item of payment to such deposit account or Obligation as
Borrowers specify. Upon and during the continuance of an Event of Default, the receipt by Agent of
any wire transfer of funds, check, or other item of payment shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment on account unless such
payment is of immediately available federal funds or unless and until such check or other item of
payment is honored when presented for payment. Notwithstanding anything to the contrary contained
herein, any wire transfer or other payment received by Agent after 3:00 pm Pacific time shall be
deemed to have been received by Agent as of the opening of business on the immediately following
Business Day. Any wire transfer or other payment received by Agent before 3:00 pm Pacific time
shall be deemed to have been received by Agent as of the opening of business on such Business Day.
Whenever any payment to Agent or Lenders under the Loan Documents would otherwise be due (except by
reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on
the next Business Day, and additional fees or interest, as the case may be, shall accrue and be
payable for the period of such extension.



     2.5 Payments Pro Rata. Except as provided in Section 2.4, after its receipt of each payment
from or on behalf of Borrowers in respect of any Obligations of the Borrowers hereunder, Agent
shall distribute such payment to Lenders pro rata based upon their respective shares, if any, of
the Obligations with respect to which such payment was received.



     2.6 Sharing of Payments. If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on account of the Advances
owing to it in excess of its Pro Rata Share of payments on account of the Advances obtained by all
the Lenders, then such Lender shall forthwith purchase from the other Lenders such participations
in the Advances owing to them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender’s Pro Rata Share (according to
the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Borrowers agree that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.6 or any other provision
of this Agreement may, to the fullest extent permitted by law, exercise all of its rights of
payment (including the right to set-off) with respect to such participation as fully as if such
Lender were the direct creditor of Borrowers in the amount of such participation.



     2.7 Fees. Borrowers shall pay to Agent the following:



               (a) Commitment Fee. On the Closing Date, a fee of $390,000, of which $20,000 has already
been paid by Borrower;



               (b) Standby Letters of Credit Fee. On the date a standby Letter of Credit is issued and
annually thereafter for so long as such Letter of Credit is outstanding, one percent (1%) per annum
of such Letters of Credit; and



               (c) Agent Expenses. On the Closing Date, all Agent Expenses incurred through the Closing
Date, and, after the Closing Date, all other Agent Expenses, except as provided in Section 14.3 and
Section 14.14.



     2.8 Increased Costs. If any law imposes any reserve or charge against the assets of a Lender
or subjects any Lender to any tax or charge, and the result is to increase the cost to a Lender of
making any Credit Extension, Borrowers will pay to such Lender upon such Lender’s request such
amount as will compensate such Lender for such additional costs.



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     2.9 Term. This Agreement shall become effective on the Closing Date and, subject to Section
14.13, shall continue in full force and effect for so long as any Obligations remain outstanding or
Agent has any obligation to make Credit Extensions under this Agreement. Notwithstanding the
foregoing, (a) Agent shall have the right to terminate its obligation to make Credit Extensions
under this Agreement immediately upon the occurrence and during the continuance of an Event of
Default and (b) Parent shall have the right to terminate all Agent and Lender obligations to make
Credit Extensions under this Agreement at any time by delivering to Agent a termination notice that
is signed by a Responsible Officer, which termination notice may be conditional or unconditional
and which termination may be effective immediately upon delivery or upon some fixed or contingent
future date or event, as specified in the termination notice. Notwithstanding termination of the
Lenders’ obligations to make Credit Extensions, Agent’s Lien on the Collateral shall remain in
effect for so long as any Obligations are outstanding.



3. Conditions Of Loans.




     3.1 Conditions Precedent to Initial Credit Extension. The obligation of Agent to make the
initial Credit Extension is subject to the condition precedent that Agent shall have received, in
form and substance reasonably satisfactory to Agent, the following:



               (a) this Agreement;



               (b) a legal opinion from the Borrowers’ counsel;



               (c) a certificate of the Secretary of each Borrower with respect to incumbency and resolutions
authorizing the execution and delivery of this Agreement in the form of Exhibit F attached hereto;



               (d) financing statements (Form UCC-1);



               (e) intellectual property security agreements;



               (f) an audit of the Collateral conducted by an auditor satisfactory to Agent, the results of
which shall be reasonably satisfactory to Agent;



               (g) a Warrant in the name of each Lender;



               (h) evidence of the completion of Series C Preferred Stock Financing;



               (i) an assignment separate from certificate covering the capital stock of each Borrower other
than NextG Networks, Inc. and each Subsidiary, together with the certificate evidencing the Shares;



               (j) good standing certificates of each Borrower;



               (k) a Compliance Certificate in the form of Exhibit C attached hereto, or other mutually
agreeable form of such certificate; and



               (l) such other documents, and completion of such other matters, as Agent may reasonably deem
necessary or appropriate.



     3.2 Conditions Precedent to all Credit Extensions. The obligation of Agent to make each
Credit Extension, including the initial Credit Extension, is further subject to the following
conditions:



               (a) timely receipt by Agent of an advance request as provided in Section 2.1;



               (b) the representations and warranties contained in Section 5 shall be true and correct in all
material respects on and as of the date of such advance request and on the effective date of each
Credit Extension as though made at and as of each such date, and no Event of Default shall have
occurred and be continuing, or would exist after giving effect to such Credit Extension (provided,
however, that those representations



13









 




and warranties expressly referring to another date shall be true, correct, and complete in all
material respects as of such date). The making of each Credit Extension shall be deemed to be a
representation and warranty by Borrowers on the date of such Credit Extension as to the accuracy of
the facts referred to in this Section 3.2(b); and




               (c) timely receipt by Agent of company prepared unaudited consolidated and consolidating
balance sheets and income statements for the most recently ended month in accordance with
Section 6.3 and the delivery of such other documentation specified in Section 6.3 for the most
recently ended month.



4. Creation of security interest.




     4.1 Grant of Security Interest. Borrowers grant and pledge to Agent a continuing security
interest in all presently existing and hereafter acquired or arising Collateral in order to secure
prompt payment of any and all Obligations and in order to secure prompt performance by each
Borrower of such Borrower’s covenants and duties under the Loan Documents. Except for Permitted
Liens, such security interest constitutes a valid, first priority security interest in the
presently existing Collateral, and will constitute a valid, first priority security interest in
Collateral acquired after the Closing Date. Each Borrower also hereby agrees not to sell,
transfer, assign, mortgage, pledge, lease, grant a security interest in, or encumber any of its
Intellectual Property except for Permitted Transfers.



     4.2 Pledge of Shares. Borrowers pledge, assign, and grant to Agent a security interest in all
the Shares held or owned of record by Borrowers, together with all proceeds and substitutions
thereof, all cash, stock, and other moneys and property paid thereon, all rights to subscribe for
securities declared or granted in connection therewith, and all other cash and non-cash proceeds of
the foregoing, as security for the performance of the Obligations. On the Closing Date, the
certificate or certificates for the Shares will be delivered to Agent, accompanied by an instrument
of assignment duly executed in blank by each Borrower. To the extent required by the terms and
conditions governing the Shares, Borrower shall cause the books of each entity whose Shares are
part of the Collateral and any transfer Agent to reflect the pledge of the Shares. Unless an Event
of Default shall have occurred and be continuing, each Borrower shall be entitled to exercise any
voting rights with respect to the relevant Shares and to give consents, waivers, and ratifications
in respect thereof, provided that no vote shall be cast or consent, waiver, or ratification given
or action taken which would constitute or create any violation of any of the terms of this
Agreement. All such rights to vote and give consents, waivers, and ratifications shall be
suspended upon the occurrence and continuance of an Event of Default.



     4.3 Delivery of Additional Documentation Required. Borrowers shall from time to time execute
and deliver to Agent, at the request of Agent, all Negotiable Collateral, all financing statements,
and other documents that Agent may reasonably request, in form satisfactory to Agent, to perfect
and continue perfected Agent’s security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents.



     4.4 Right to Inspect. Agent (through any of its officers, employees, or agents) shall have
the right, upon reasonable prior notice, from time to time during Borrower’s usual business hours
but no more than once a year (unless an Event of Default has occurred and is continuing), to
inspect Borrower’s Books and to make copies thereof and to check, test, and appraise the Collateral
in order to verify Borrowers’ financial condition or the amount, condition of, or any other matter
relating to, the Collateral.



5. Representations And Warranties.




     Except as described in the Schedule, each Borrower represents and warrants as follows:



     5.1 Due Organization and Qualification. Each Borrower and each Subsidiary is a corporation or
other legal entity duly existing under the laws of its jurisdiction of organization and qualified
and licensed to do business in any jurisdiction in which the conduct of its business or its
ownership of property requires that it be so qualified except where the failure to be so qualified
would not reasonably likely to have a Material Adverse Effect.



     5.2 Due Authorization; No Conflict. The execution, delivery, and performance of the Loan
Documents are within each Borrower’s powers, have been duly authorized, and are not in conflict
with, and do not



14









 







constitute a breach of, any provision contained in each Borrower’s Certificate or Articles of
Incorporation or Bylaws, each as amended to date, nor will they constitute an event of default
under any material agreement to which each Borrower is a party or by which each Borrower is bound.
Each Borrower is not in default under any agreement to which it is a party or by which it is bound,
except to the extent such default would not reasonably be expected to cause a Material Adverse
Effect.



     5.3 No Prior Encumbrances. Borrowers have good and marketable title to the Collateral, free
and clear of Liens, except for Permitted Liens as determined to exist from time to time.



     5.4 Shares. Borrowers have full power and authority to create a first lien on the Shares and
no disability or contractual obligation exists that would prohibit the Borrowers from pledging the
Shares pursuant to this Agreement. There are no subscriptions, warrants, rights of first refusal,
or other restrictions on transfer relative to, or options exercisable with respect to the Shares.
The Shares have been and will be duly authorized and validly issued, and are fully paid and
non-assessable. The Shares are not the subject of any present or threatened suit, action,
arbitration, administrative, or other proceeding, and the Borrowers know of no reasonable grounds
for the institution of any such proceedings.



     5.5 Intellectual Property. Borrowers are the sole owners of the Intellectual Property, except
for non-exclusive licenses granted by Borrowers to its customers or other third parties in the
ordinary course of business. To the best of each Borrower’s knowledge, each of the Patents is
presumed valid and enforceable. No part of the Intellectual Property has been judged invalid or
unenforceable, in whole or in part, and except as disclosed in the Schedule, no claim has been made
that any part of the Intellectual Property violates the rights of any third party. Borrowers’
rights as licensees of any individual licensor of Intellectual Property do not give rise to more
than five percent (5%) of its gross revenue in any given quarter, including revenue derived from
the sale, licensing, rendering, or disposition of any product or service. Each Borrower is not a
party to, or bound by, any agreement that restricts the grant by Borrowers of a security interest
in Borrowers’ rights under such agreement other than agreements entered into by each Borrower with
licensors, vendors, and business partners in the ordinary course of Borrowers’ business.



     5.6 Name; Location of Chief Executive Office. As of the Closing Date, Borrowers have not done
business under any name other than those specified on this Agreement’s signature page. As of the
Closing Date, each Borrower’s chief executive office is located at the address indicated in Section
10.



     5.7 Litigation. There are no actions or proceedings pending by or against Borrowers or any
Subsidiary before any court or administrative agency in which an adverse decision would reasonably
be expected to have a Material Adverse Effect.



     5.8 No Material Adverse Change in Financial Statements. All consolidated financial statements
other than projections related to Borrowers and any Subsidiary that are delivered by Borrowers to
Agent fairly present in all material respects Borrowers’ consolidated financial condition as of the
date thereof and Borrowers’ consolidated results of operations for the period then ended. There
has not been a material adverse change in the consolidated financial condition of Borrowers since
the date of the most recent of such financial statements submitted to Agent.



     5.9 Solvency, Payment of Debts. Borrowers, taken as a whole, are solvent and able to pay
their debts (including trade debts) as they mature; the fair saleable value of Borrowers’ assets
(including goodwill minus disposition costs) exceeds the fair value of its liabilities; and
Borrowers, taken as a whole, are not left with unreasonably small capital after the transactions
contemplated by this Agreement



     5.10 Compliance with Laws and Regulations. Each Borrower and each Subsidiary have met the
minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA.
No event has occurred resulting from any Borrower’s failure to comply with ERISA that is reasonably
likely to result in any Borrower’s incurring any liability that could have a Material Adverse
Effect. No Borrower is an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940. No Borrower is engaged
principally, or as one of the important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the



15









 







Board of Governors of the Federal Reserve System). Each Borrower has complied in all material
respects with all the provisions of the Federal Fair Labor Standards Act except where the failure
to comply is not reasonably likely to have a Material Adverse Effect. Each Borrower is in
compliance with all environmental laws, regulations, and ordinances except where the failure to
comply is not reasonably likely to have a Material Adverse Effect. No Borrower has violated any
statutes, laws, ordinances, or rules applicable to it, the violation of which would reasonably be
expected to have a Material Adverse Effect.



     5.11 Taxes. Each Borrower and each Subsidiary has filed or caused to be filed all tax returns
required to be filed, and has paid, or has made adequate provision for the payment of, all taxes
reflected therein except those being contested in good faith with adequate reserves under GAAP or
where the failure to file such returns or pay such taxes would not reasonably be expected to have a
Material Adverse Effect.



     5.12 Subsidiaries. Borrower does not own any stock, partnership interest, or other equity
securities of any Person, except for Permitted Investments and except for the Parent’s exclusive
ownership interests in the Parent’s Subsidiaries who are parties to this Agreement.



     5.13 Inbound Licenses. No Borrower is a party to, nor is bound by, any license or other
agreement that prohibits or otherwise restricts Borrower from granting a security interest in
Borrower’s interest in such license or agreement or any other property.



     5.14 Government Consents. Borrower and each Subsidiary has obtained all consents, approvals,
and authorizations of, made all declarations or filings with, and given all notices to, all
governmental authorities that are necessary for the continued operation of Borrowers’ business as
currently conducted except where the failure to do so is not reasonably likely to have a Material
Adverse Effect.



     5.15 Full Disclosure. No representation, warranty, or other statement made by Borrowers in
any certificate or written statement furnished to Agent contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements contained in such
certificates or statements not misleading.



6. Affirmative Covenants.




     6.1 Good Standing. Each Borrower shall maintain its and each of its Subsidiaries’ legal
existence in its jurisdiction of organization and maintain qualification in each jurisdiction in
which the failure to so qualify is reasonably likely to have a Material Adverse Effect. Each
Borrower shall maintain, and shall cause each of its Subsidiaries to maintain in force all
licenses, approvals, and agreements, the loss of which is reasonably likely to have a Material
Adverse Effect.



     6.2 Government Compliance. Borrowers shall meet, and shall cause each Subsidiary to meet, the
minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA.
Borrowers shall comply, and shall cause each Subsidiary to comply, with all statutes, laws,
ordinances, and government rules and regulations to which it is subject, except where the failure
to so comply would not reasonably be likely to cause a Material Adverse Effect.



     6.3 Financial Statements, Reports, Certificates. Borrowers shall deliver or make available to
Agent the following, in each case in form and substance reasonably satisfactory to Agent:



          (a) as soon as available, but in any event within 20 days after the end of each calendar
month, a company prepared consolidated balance sheet and income statement covering Borrowers’
operations during such period, in a form reasonably acceptable to Agent and certified by a
Responsible Officer, together with a Compliance Certificate signed by a Responsible Officer in
substantially the form of Exhibit C; provided however, that upon the consummation of the Initial
Public Offering, the above referenced financial statements shall only be provided within forty-five
(45) days after the end of each fiscal quarter;




          (b) within 20 days after the last day of each month, an accounts receivable aging report
(against invoice dates) and an accounts payable aging report (against invoice dates);




16









 








          (c) as soon as available, but in any event within one hundred twenty (120) days after the end
of Borrower’s fiscal year, audited consolidated financial statements of Borrower prepared in
accordance with GAAP, consistently applied, together with an opinion which is unqualified or
otherwise consented to in writing by Agent on such financial statements of an independent certified
public accounting firm reasonably acceptable to Agent;




          (d) promptly upon receipt of notice thereof, a report of any legal actions pending or
threatened in writing against either Borrower or any Subsidiary that is reasonably likely to result
in damages or costs to Borrowers or any Subsidiary of Five Hundred Thousand Dollars ($500,000) or
more;




          (e) promptly, and in any event within five (5) Business Days after the discovery thereof, a
report signed by a Responsible Officer notifying Agent of an Event of Default or of any material
labor dispute, material tax dispute, or any change in any Borrower’s Chairman, President, Chief
Executive Officer, Chief Financial Officer, or Chief Technology Officer;




          (f) as frequently as desired by Borrowers subject to Agent’s consent thereto, updates of (i)
the Schedule and (ii) the representations and warranties in Section 5 to reflect changes since the
most recent making of such representations and warranties;




          (g) within 30 days of the last day of each fiscal quarter, a report signed by Borrowers, in
form reasonably acceptable to Agent, listing any applications or registrations that Borrower has
made or filed in respect of any Patents, Copyrights, or Trademarks and the status of any
outstanding applications or registrations, as well as any material change in any Borrowers’
Intellectual Property Collateral, including any subsequent ownership right of Borrowers in or to
any Trademark, Patent, or Copyright not specified in Exhibits A, B, and C of any Intellectual
Property Security Agreement delivered to Agent by Borrowers in connection with this Agreement; and




          (h) within 15 days after written request, such budgets, sales projections, operating plans, or
other financial information as Agent may reasonably request from time to time.




     6.4 Collateral Audits. At Borrowers’ expense, Agent shall have a right to audit Borrowers’
Accounts and appraise Collateral through Agent’s appointed auditor, provided that such audits will
be conducted no more often than once every 12 months, unless an Event of Default has occurred and
is continuing. For the avoidance of doubt, all such audits shall be conducted at Borrower’s
expense.



     6.5 Financial Covenants. Borrowers shall at all times maintain the following financial ratios
and covenants:



          (a) Quick Ratio. A ratio of Cash plus Qualified Accounts to Current Liabilities of at least
1.00 to 1.00.




          (b) Adjusted Debt Ratio. A ratio of Total Liabilities (other than Subordinated Debt) less 80%
of Deferred Revenue to Tangible Net Worth not greater than 4.50 to 1:00.




          (c) Fixed Assets Ratio. A ratio of Net Fixed Assets to Deferred Revenue not greater than 1.50
to 1:00.




     6.6 Inventory. Borrowers shall promptly notify Agent of all terminations of customer
agreements, and of all customer disputes and customer claims, where the termination, dispute, or
claim involves more than one million dollars ($1,000,000).



     6.7 Taxes. Each Borrower shall make, and shall cause each Subsidiary to make, due and timely
payment or deposit of all material federal, state, and local taxes, assessments, or contributions
required of it by law, and will execute and deliver to Agent, on written demand, appropriate
certificates attesting to the payment or deposit thereof; and each Borrower will make, and will
cause each Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including those laws concerning



17









 







F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will,
upon written request, furnish Agent with proof satisfactory to Agent indicating that each Borrower
or a Subsidiary has made such payments or deposits; provided that each Borrower or a Subsidiary
need not make any payment if the amount or validity of such payment is contested in good faith by
appropriate proceedings and is appropriately reserved against (to the extent required by GAAP) by
Borrower.



     6.8 Insurance.



          (a) Borrowers, at their expense, shall keep the Collateral insured against loss or damage by
fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as
ordinarily insured against by other owners in similar businesses conducted in the locations where
Borrowers’ business is conducted on the Closing Date, provided that such amounts shall at all times
be at least $15,000,000 on domestic business personal property. Borrowers shall also maintain
insurance relating to Borrowers’ ownership and use of their property in amounts and of a type that
are customary to businesses similar to Borrowers’.




          (b) All such policies of insurance shall be in such form, with such companies, and in such
amounts as reasonably satisfactory to Agent. All such policies of property insurance shall contain
a lender’s loss payable endorsement, in a form satisfactory to Agent, showing Agent as an
additional loss payee thereof and all liability insurance policies shall show the Agent as an
additional insured, and shall specify that the insurer must give at least twenty (20) days’ notice
to Agent before canceling its policy for any reason. Upon Agent’s request, Borrowers shall deliver
to Agent certified copies of such policies of insurance and evidence of the payments of all
premiums therefor. All proceeds payable under any such policy shall, at the option of Agent at any
time any Obligations are outstanding, be payable to Agent to be applied on account of the
Obligations.




     6.9 Primary Depository. Borrowers shall transfer within 60 days of the Closing Date and
maintain all operating and deposit accounts with Agent or Agent’s Affiliates. Borrowers may
maintain investment accounts with other financial institutions provided (i) Agent has a first
priority security interest in such accounts, (ii) such accounts are subject to account control
agreements in form and substance satisfactory to Agent, and (iii) Agent, Lender, or its affiliates
are unable to provide investment options, projected returns (based solely on historical
performance), and fees that are comparable or more favorable to the Borrowers than those proposed,
in good faith, by or existing with any other Person. Borrowers shall cause all remittances in the
form of cash or checks made by any customer to be made to an account maintained with Agent.
Borrower shall provide Lenders or the investment management affiliate(s) of Lenders, with the right
of first refusal to serve as manager for the investment services of Borrowers, provided that Agent
or its affiliates are able to provide investment options, projected returns (based solely on
historical performance), and fees no less favorable to the Borrowers than those proposed, in good
faith, by any other Person bidding to provide such services.



     6.10 Registration of Intellectual Property Rights.



          (a) Borrowers shall register or cause to be registered on an expedited basis (to the extent
not already registered) with the United States Patent and Trademark Office or the United States
Copyright Office, as the case may be, those registrable Intellectual Property rights now owned or
hereafter developed or acquired by Borrowers, to the extent that Borrowers, in their reasonable
business judgment, deems it appropriate to so protect such Intellectual Property rights.




          (b) Within 30 days of the last day of each fiscal quarter, Borrowers shall (i) give Agent a
report of any applications or registrations filed during that quarter with the United States
Copyright Office, including the title of such Intellectual Property rights registered and the date
such applications or registrations were filed; (ii) execute such documents as Agent may reasonably
request for Agent to maintain its perfection in such Intellectual Property rights registered by
such Borrower; (iii) upon the request of Agent, either deliver to Agent or file such documents as
are necessary for Agent to maintain its perfection in such Intellectual Property rights; (iv)
provide Agent with a copy of such applications or registrations together with any exhibits,
evidence of the filing of any documents requested by Agent to be filed for Agent to maintain the
perfection and priority of its security interest in such Intellectual Property rights, and the date
of such filing.




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          (c) Borrowers shall execute and deliver such additional instruments and documents from time to
time as Agent shall reasonably request to perfect and maintain the perfection and priority of
Agent’s security interest in the Intellectual Property.




          (d) Borrowers shall (i) protect, defend, and maintain the validity and enforceability of the
trade secrets, Trademarks, Patents, and Copyrights, (ii) use commercially reasonable efforts to
detect infringements of the Trademarks, Patents, and Copyrights and promptly advise Agent in
writing of material infringements detected, and (iii) not allow any material Trademarks, Patents,
or Copyrights to be abandoned, forfeited, or dedicated to the public without the written consent of
Agent, which shall not be unreasonably withheld, conditioned, or delayed.




          (e) Agent may audit Borrowers’ Intellectual Property to confirm compliance with this Section
6.10, provided such audit may not occur more often than once per year, unless an Event of Default
has occurred and is continuing. Agent shall have the right, but not the obligation, to take, at
any Borrower’s sole expense, any actions that such Borrower is required under this Section 6.10 to
take but which Borrower fails to take, after 15 days’ notice to such Borrower.




     6.11 Subsidiaries. Borrower will cause each Subsidiary not currently in existence as of the
Closing Date to sign a joinder agreement in substantially similar form as Exhibit G at the time of
its formation, and such Subsidiary shall become party to this Agreement as a co-Borrower.



     6.12 Further Assurances. At any time and from time to time, Borrowers shall execute and
deliver such further instruments and take such further action as may reasonably be requested by
Agent to effect the purposes of this Agreement.



7. Negative Covenants. Neither any Borrower nor any Subsidiary will do any of the
following:




     7.1 Dispositions. Without the prior written consent of Agent, which shall not be unreasonably
withheld, conditioned or delayed, convey, sell, lease, transfer, or otherwise dispose of
(collectively, a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any
substantial part of its business, assets, or property, other than Permitted Transfers; provided
however, that only advance written notice to the Agent (but not any Agent consent) will be required
for any Transfer if all Obligations are paid in full as a condition to the consummation of such
Transfer.



     7.2 Change in Business. Without the prior written consent of Agent, which shall not be
unreasonably withheld, conditioned or delayed, engage in or suffer a Change of Control, engage in
any business, or permit any of its Subsidiaries to engage in any business, other than the
businesses currently engaged in by Borrowers and any business substantially similar or related
thereto (or incidental thereto); provided, however, that only advance written notice to the Agent
(but not any Agent consent) will be required for any action restricted by this Section 7.2 if all
Obligations are paid in full as a condition to the consummation of such action.



     7.3 Mergers or Acquisitions. Without the prior written consent of Agent, which shall not be
unreasonably withheld, conditioned or delayed, merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or property of another
Person, except a Subsidiary may merge or consolidate into another Subsidiary or into Borrower, and
except where (i) such transactions do not in the aggregate exceed $3,000,000 during any fiscal
year, (ii) no Event of Default has occurred, is continuing or would exist after giving effect to
such transactions, (iii) such transactions do not result in a Change in Control, (iv) the
applicable Borrower is the surviving entity, and (v) if such transaction involves the acquisition
of all or substantially all of the capital stock or property of another Person, such acquisition is
with respect to a line of business related or connected to the applicable Borrower’s business;
provided that (a) only advance written notice to the Agent (but not any Agent consent) will be
required for any action restricted by this Section 7.3 if all Obligations are paid in full as a
condition to the consummation of such action.



19









 





     7.4 Indebtedness. Create, incur, assume, guarantee, or be or remain liable with respect to
any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or prepay
any Permitted Indebtedness or take any actions which impose on any Borrower an obligation to prepay
any Permitted Indebtedness, except Indebtedness to Agent.



     7.5 Encumbrances. Create, incur, assume, or suffer to exist any Lien with respect to any of
its property, or assign or otherwise convey any right to receive income, including the sale of any
Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens, or enter into any
agreement with any Person other than Agent that prohibits or otherwise restricts any Borrower from
encumbering any of its property other than restrictions in equipment leases or equipment financing
documents on Liens on the specific equipment being leased or financed.



     7.6 Distributions. Pay any dividends or make any other distribution or payment on account of
or in redemption, retirement, or purchase of any capital stock (other than the Common Stock
Dividend), unless such payment is made from the cash proceeds (a) of the Initial Public Offering,
(b) a leveraged buyout or acquisition of Borrower, or (c) the sale of additional equity, whereby an
Event of Default does not exist prior to or after such sale. Notwithstanding the foregoing, (i)
any Borrower may repurchase the stock of employees, former employees, consultants, or former
consultants pursuant to stock repurchase agreements as long as an Event of Default does not exist
prior to such repurchase or would not exist after giving effect to such repurchase without the
consent of Agent and (ii) any Borrower may pay dividends to Parent to enable Parent to pay
dividends on its stock, provided that the Borrowers are in compliance with the financial covenants
contained in Section 6.5 at the time of such payment, and after giving effect to such payment.



     7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or to any
Person, or permit any of its Subsidiaries so to do, other than Permitted Investments.



     7.8 Transactions with Affiliates. Except as set forth in the Schedule, directly or indirectly
enter into or permit to exist any material transaction with any Affiliate of Borrower without
Agent’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed,
except for (i) such transactions that are in the ordinary course of Borrower’s business, including
employee compensation arrangements and bonus plans or payments to employees, and (ii) the Common
Stock Dividend.



     7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit any of
its Subsidiaries to make any such payment, except in compliance with the terms of such Subordinated
Debt, or amend any provision contained in any documentation relating to the Subordinated Debt
without Agent’s prior written consent which shall not be unreasonably withheld, conditioned, or
delayed.



     7.10 Inventory and Equipment. Store the Inventory with a bailee, warehouseman, or similar
party (for the avoidance of doubt, such “similar party” shall not include a landlord) unless Agent
has received a pledge of the warehouse receipt covering such Inventory. Except for Inventory sold
in the ordinary course of business and except for such other locations as Borrowers may determine
is reasonably necessary for the conduct of its business, Borrowers shall keep the Inventory only at
the location set forth in Section 10, the locations set forth in the Schedule, and such other
locations of which Borrowers give Agent prior notice.



     7.11 Compliance. Become an “investment company” or be controlled by an “investment company,”
within the meaning of the Investment Company Act of 1940, or become principally engaged in, or
undertake as one of its important activities, the business of extending credit for the purpose of
purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose,
or fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur, fail to comply in any material respect with the Federal
Fair Labor Standards Act, or violate any law or regulation, which failure to comply or violation is
reasonably likely to have a Material Adverse Effect, or a material adverse effect on the Collateral
or the priority of Agent’s Lien on the Collateral, or permit any of its Subsidiaries to do any of
the foregoing.



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8. Events Of Default.




     Any one or more of the following events shall constitute an Event of Default by Borrowers
under this Agreement:



     8.1 Payment Default. If a Borrower fails to pay any of the Obligations when due;



     8.2 Covenant Default. If a Borrower fails to perform any obligation under Section 6 or
violate any of the covenants contained in Section 7; or if a Borrower fails or neglects to perform,
keep, or observe any other material term, provision, condition, covenant, or agreement contained in
this Agreement, in any of the Loan Documents, or in any other present or future agreement between a
Borrower and Agent and, as to any default under such other term, provision, condition, covenant, or
agreement that can be cured, has failed to cure such default within twenty (20) days after Borrower
receives notice thereof;



     8.3 Material Adverse Effect. If any circumstance arises that has a Material Adverse Effect;



     8.4 Attachment. If greater than $1,000,000 of a Borrower’s assets is attached, seized,
subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any
trustee, receiver, or person acting in a similar capacity and such attachment, seizure, writ or
distress warrant, or levy has not been removed, discharged, or rescinded within thirty (30) days,
or if a Borrower is enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or other claim in an
amount in excess of $1,000,000 becomes a lien or encumbrance upon any portion of a Borrower’s
assets, or if a notice of lien, levy, or assessment is filed of record with respect to any material
of a Borrower’s assets by the United States Government, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same
is not paid within thirty (30) days after a Borrower receives notice thereof, provided that none of
the foregoing shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by such Borrower (provided that no
Credit Extensions will be required to be made during such cure period);



     8.5 Insolvency. If Borrowers, taken as a whole, become insolvent, or if an Insolvency
Proceeding is commenced by a Borrower, or if an Insolvency Proceeding is commenced against a
Borrower and is not dismissed or stayed within forty five (45) days (provided that no Credit
Extensions will be made prior to the dismissal of such Insolvency Proceeding);



     8.6 Other Agreements. If there shall occur an event which is an event of default under any
agreement to which a Borrower is a party with the effect that a Person shall have the right,
whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of
One Million Dollars ($1,000,000); provided, however, that the foregoing event shall not be an Event
of Default under this Loan Agreement if the event of default under such other agreement is cured
within any applicable cure period;



     8.7 Subordinated Debt. If a Borrower makes any payment on account of Subordinated Debt,
except to the extent such payment is allowed under any subordination agreement entered into with
Agent;



     8.8 Judgments. If a judgment or judgments (not covered by a bond or insurance by an insurance
company not an Affiliate of Borrower that has acknowledged such coverage) for the payment of money
in an amount, individually or in the aggregate, of at least One Million Dollars ($1,000,000) shall
be rendered against a Borrower and shall remain unsatisfied and unstayed for a period of twenty
(20) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of
such judgment);



     8.9 Guaranty. If any guaranty of all or a portion of the Obligations (a “Guaranty”)
ceases for any reason to be in full force and effect, other than due to the act or omission of
Agent or Lenders or any guarantor fails to perform any obligation under any Guaranty or a security
agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any event of
default occurs under any Guaranty Document or any guarantor revokes or purports to revoke a
Guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any
warranty or representation set forth in any Guaranty Document or in any certificate delivered to
Lender in



21









 







connection with any Guaranty Document, or if any of the circumstances described in Sections
8.3 through 8.9 (other than 8.7) occurs with respect to any guarantor; or



     8.10 Misrepresentations. If any material misrepresentation or material misstatement exists
now or hereafter in any warranty or representation set forth herein or in any certificate delivered
to Agent by any Responsible Officer pursuant to this Agreement or to induce Agent to enter into
this Agreement or any other Loan Document.



9. Agent’s Rights And Remedies.




     9.1 Rights and Remedies. Upon the occurrence and during the continuation of an Event of
Default, Agent may, at its election, without notice of its election and without demand, do any one
or more of the following, all of which are authorized by Borrowers:



               (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event
of Default described in Section 8.5 all Obligations shall become immediately due and payable
without any action by Agent);



               (b) Cease advancing money or extending credit to or for the benefit of Borrowers under this
Agreement or under any other agreement between a Borrower and Agent;



               (c) Require that Borrowers (i) deposit cash with Agent in an amount equal to the amount of any
Letters of Credit remaining undrawn, as collateral security for the repayment of any future
drawings under such Letter of Credit, and Borrowers shall forthwith deposit and pay such amounts,
and (ii) pay in advance all Letters of Credit fees scheduled to be paid or payable over the
remaining term of the Letters of Credit;



               (d) Settle or adjust disputes and claims directly with account debtors for amounts, upon terms
and in whatever order that Agent reasonably considers advisable;



               (e) Make such payments and do such acts as Agent reasonably considers necessary or reasonable
to protect its security interest in the Collateral;



               (f) Set off and apply to the Obligations any and all (i) balances and deposits of Borrowers
held by Agent, or (ii) indebtedness at any time owing to or for the credit or the account of
Borrowers held by Agent;



               (g) Ship, store, finish, repair, prepare for disposition, and dispose of the Collateral in
accordance with the Code, and apply any proceeds to the Obligations in whatever manner or order
Agent deems appropriate, including the application of such proceeds to all costs and expenses
incurred in connection with such disposition;



               (h) Effect the transfer of any securities included in the Collateral (including the Shares)
into the name of Agent and cause new certificates representing such securities to be issued in the
name of Agent or its transferee;



               (i) Agent may credit bid and purchase Collateral at any public sale;



               (j) Apply for the appointment of a receiver, trustee, liquidator, or conservator of the
Collateral, without notice and without regard to the adequacy of the security for the Obligations
and without regard to the solvency of Borrower, any guarantor or any other Person liable for any of
the Obligations; and



               (k) Any deficiency that exists after disposition of the Collateral as provided above will be
paid immediately by Borrowers.



22









 





     9.2 Power of Attorney. Effective only upon the occurrence and during the continuance of an
Event of Default, Borrowers hereby irrevocably appoint Agent (and any of Agent’s designated
officers, or employees) as each Borrower’s true and lawful attorney to: (a) send requests for
verification of Accounts or notify account debtors of Agent’s security interest in the Accounts;
(b) endorse a Borrower’s name on any checks or other forms of payment or security that may come
into Agent’s possession; (c) sign a Borrower’s name on any invoice or bill of lading relating to
any Account, drafts against account debtors, schedules and assignments of Accounts, verifications
of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and
adjust all claims under and decisions with respect to a Borrower’s policies of insurance; (f)
settle and adjust disputes and claims respecting the accounts directly with account debtors, for
amounts and upon terms which Agent determines to be reasonable; (g) file, in its sole discretion,
one or more financing or continuation statements and amendments thereto, relative to any of the
Collateral without the signature of Borrowers where permitted by law; and (h) dispose of the
Collateral to the extent permitted under the Code. The appointment of Agent as each Borrower’s
attorney in fact, and each and every one of Agent’s rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully repaid and performed and
Agent’s obligation to provide advances hereunder is terminated.



     9.3 Accounts Collection. Upon and during the continuation of an Event of Default, Agent may
notify any Person owing funds to Borrower of Agent’s security interest in such funds and verify the
amount of such Account. Each Borrower shall collect all amounts owing to such Borrower for Agent,
receive in trust all payments as Agent’s trustee, and immediately deliver such payments to Agent in
their original form as received from the account debtor, with proper endorsements for deposit.



     9.4 Right of Set-off. Subject to Section 2, in addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any such rights, upon
the occurrence and during the continuation of an Event of Default, each Lender is authorized at any
time or from time to time, without presentment, demand, protest, or other notice of any kind to
Borrowers or to any other Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other Indebtedness at any
time held or owing by such Lender (including by branches and agencies of such Lender wherever
located) to or for the credit or the account of a Borrower against and on account of the
Obligations and liabilities of a Borrower to such Lender under this Agreement or under any of the
other Loan Documents, and all other claims of any nature or description arising out of or connected
with this Agreement or any other Loan Document, irrespective of whether or not such Lender shall
have made any demand hereunder and although such Obligations, liabilities, or claims, or any of
them, shall be contingent or unmatured. Notwithstanding the foregoing provisions of this Section
9.4, if at any time the Credit Extensions are secured by real property, no Lender shall exercise a
right of setoff, banker’s lien, or counterclaim or take any court or administrative action to
enforce any provision of the Credit Documents if such action would constitute an “action” within
the meaning of Section 726 of the California Code of Civil Procedure without obtaining the prior
consent of Agent and the other Lender, and any attempted exercise by any Lender of any such action
without first obtaining such consent shall be null and void. The provisions of the preceding
sentence are solely for the benefit of the Lenders and no Borrower shall have any rights therein.



     9.5 Agent and Lender Expenses. If Borrowers fail to pay any amounts or furnish any required
proof of payment due to third persons or entities, as required under the terms of this Agreement,
then Agent may do any or all of the following after reasonable written notice to Borrowers: (a)
make payment of the same or any part thereof; (b) set up such reserves under the Revolving Facility
as Agent deems reasonably necessary to protect Agent from the exposure created by such failure; or
(c) obtain and maintain insurance policies of the type discussed in Section 6.8, and take any
action with respect to such policies as Agent deems prudent. Any amounts so paid or deposited by
Agent shall constitute Agent Expenses, shall be immediately due and payable, and shall bear
interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral.
Any payments made by Agent shall not constitute an agreement by Agent to make similar payments in
the future or a waiver by Agent of any Event of Default under this Agreement. Upon and during the
continuation of an Event of Default, Borrowers shall reimburse each Lender, upon demand, for all
costs and expenses, including reasonable attorney’s fees, incurred in connection with any of the
Loan Documents.



     9.6 Shares. Each Borrower recognizes that Agent may be unable to effect a public sale of any
or all the Shares, by reason of certain prohibitions contained in federal securities laws and
applicable state securities laws



23









 







or otherwise, and may be compelled to resort to one or more private sales thereof to a
restricted group of purchasers which will be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view to the distribution or resale
thereof. Each Borrower acknowledges and agrees that any such private sale may result in prices and
other terms less favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall not be deemed to have been made in a
commercially unreasonable manner simply because the private sale results in prices or other terms
less favorable than if such sale were a public sale. Agent shall be under no obligation to delay a
sale of any of the Shares for the period of time necessary to permit the issuer thereof to register
such securities for public sale under federal securities laws or under applicable state securities
laws, even if such issuer would agree to do so. Upon and during the continuation of an Event of
Default, Agent shall have the right to exercise all such rights as a secured party under the
California Uniform Commercial Code as it, in its sole judgment, shall deem necessary or
appropriate, including the right to liquidate the Shares and apply the proceeds thereof to reduce
the Obligations. Effective only upon the occurrence and during the continuance of an Event of
Default, each Borrower hereby irrevocably appoints Agent (and any of Agent’s designated officers,
or employees) as such Borrower’s true and lawful attorney to enforce such Borrower’s rights against
any Subsidiary, including the right to compel any Subsidiary to make payments or distributions
owing to such Borrower.



     9.7 Agent’s Liability for Collateral. So long as Agent (i) complies with reasonable banking
practices, (ii) is not grossly negligent, or (iii) does not engage in willful misconduct with
respect to the Collateral, Agent shall not in any way or manner be liable or responsible for: (a)
the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any
manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever. All
risk of loss, damage, or destruction of the Collateral not consented to by Agent nor the result of
the Agent’s gross negligence or willful misconduct shall be borne by Borrowers. Any surplus
remaining after payment in full of the Obligations from the proceeds of the liquidation of any of
the Collateral shall be paid to Borrowers as provided by law.



     9.8 Remedies Cumulative. Agent’s remedies under this Agreement, the Loan Documents, and all
other agreements shall be cumulative, but such remedies may only be exercised, if at all, following
and during the continuation of an Event of Default. Agent shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Agent
of one right or remedy shall be deemed an election, and no waiver by Agent of any Event of Default
on a Borrower’s part shall be deemed a continuing waiver. No delay by Agent shall constitute a
waiver, election, or acquiescence by it. No waiver by Agent shall be effective unless made in a
written document signed on behalf of Agent and then shall be effective only in the specific
instance and for the specific purpose for which it was given. Each Borrower expressly agrees that
this Section 9.8 may not be waived or modified by Agent by course of performance, conduct,
estoppel, or otherwise.



     9.9 Demand; Protest. Each Borrower waives demand, protest, notice of protest, notice of
default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by Agent on which a Borrower may in any
way be liable.



10. Notices.




     Unless otherwise provided in this Agreement, all notices or demands by any party relating to
this Agreement or any other agreement entered into in connection herewith shall be in writing and
(except for financial statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery
service, certified mail, postage prepaid, return receipt requested, or by facsimile to Borrowers or
to Agent, as the case may be, at its addresses set forth below:



	 	 	 
	If to Borrower:

	 	NextG Networks, Inc.
	 

	 	2216 O’Toole Avenue
	 

	 	San Jose, CA 95311
	 

	 	Attn: General Counsel
	 

	 	Fax: (408) 383-9106






24









 






	 	 	 
	If to Agent:

	 	United Commercial Bank
	 

	 	5201 Great America Parkway, #300
	 

	 	Santa Clara, CA 95054-1140
	 

	 	Attn: Yu-Fu Lin
	 

	 	FAX: (408) 748-1268






     The parties hereto may change the address at which they are to receive notices hereunder, by
notice in writing in the foregoing manner given to the other.



11. Jury Trial Waiver, Judicial Reference.




     BORROWERS, LENDERS, AND AGENT EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS,
AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY
REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
IF THIS JURY TRIAL WAIVER IS NOT ENFORCEABLE THE PARTIES HERETO WILL RESOLVE ALL CLAIMS, DISPUTES,
AND OTHER MATTERS BY JUDICIAL REFERENCE UNDER CODE OF CIVIL PROCEDURE SECTION 638 ET SEQ. BEFORE A
MUTUALLY ACCEPTABLE REFEREE OR, IF NONE, BY A REFEREE APPOINTED BY THE PRESIDING JUDGE OF THE
CALIFORNIA SUPERIOR COURT FOR SANTA CLARA COUNTY.



12. The Agent.




     12.1 Authorization and Action. Each Lender appoints and authorizes Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement as are delegated to Agent
by the terms hereof, together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including enforcement or collection of the
Notes), Agent shall not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, and such instructions shall be binding
upon all Lenders and all holders of Notes; provided, however, that Agent shall not be required to
take any action that exposes Agent to personal liability or that is contrary to this Agreement or
applicable law. Except as otherwise provided for in this Agreement, no Lender shall take any
action to collect amounts due hereunder, enforce any obligations of Borrowers, or exercise any
remedies against Borrowers arising out of this Agreement without the prior written consent of
Agent. Agent agrees to give to each Lender prompt notice of (a) each notice or report given to it
by Borrowers pursuant to the terms of this Agreement (including those set forth in Section 6.3),
and (b) any Event of Default hereunder. The provisions of this Section 12 are solely for the
benefit of Lenders and Agent and no Borrower has any rights as a third party beneficiary of any of
the provisions hereof.



     12.2 Agent’s Reliance, Etc. Neither Agent nor any of its directors, officers, agents, or
employees shall be liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, Agent: (i) may treat the payee of any Note
as the holder thereof until Agent receives written notice of the assignment or transfer thereof
signed by such payee and in form satisfactory to Agent; (ii) may consult with legal counsel,
independent public accountants, and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants, or experts; (iii) makes no warranty or representation to any Lender and shall
not be responsible to any Lender for any statements, warranties, or representations made in or in
connection with this Agreement; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants, or conditions of this Agreement on the
part of Borrowers or to inspect the property (including the books and records) of Borrowers; (v)
shall not be responsible to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency, or value of this Agreement or any other instrument or document furnished
pursuant hereto; and (vi) shall incur no liability under or in respect of this Agreement by acting
upon any notice, consent, certificate, or other instrument or writing



25









 







believed by it to be genuine and signed or sent by the proper party or parties.



     12.3 Agent and Affiliates. With respect to its obligations hereunder, the Advances made by
it, and the Note issued to it, Agent shall have the same rights and powers under this Agreement as
any other Lender and may exercise the same as though it were not Agent; and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, include Agent in its individual capacity.
Agent and its respective Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, Borrowers, any subsidiaries of a
Borrower, and any Person who may do business with or own securities of a Borrower or any subsidiary
of a Borrower, all as if Agent were not Agent, and without any duty to account therefor to Lenders.



     12.4 Lender Credit Decision. Each Lender acknowledges that it has, independently and without
reliance upon Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon Agent or any other
Lender and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under this Agreement.



     12.5 Indemnification. Lenders shall indemnify Agent (to the extent not reimbursed by
Borrowers), ratably according to the respective principal amounts of the Notes then held by each of
them (or if no Notes are at the time outstanding or if any Notes are held by Persons who are not
Lenders, ratably according to the respective amounts of their Credit Commitments), from and against
any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed on, incurred by,
or asserted against Agent in any way relating to or arising out of this Agreement or any action
taken or omitted by Agent under this Agreement in its capacity as Agent, provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements resulting from Agent’s gross
negligence or willful misconduct. Without limiting the foregoing, each Lender shall reimburse
Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel
fees) incurred by Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal proceedings, or
otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to
the extent that Agent is not reimbursed for such expenses by Borrowers. Notwithstanding the
foregoing, to the extent that both Lenders and Borrowers have indemnification obligations with
respect to any matter, the indemnification obligations of Borrowers shall be primary and the
indemnification obligations of Lenders shall be secondary with respect to such matter, and if Agent
shall recover any amount from Borrowers with respect to a Borrower’s indemnification obligation for
which the Agent has received any payment from Lenders, Agent shall return to such contributing
Lenders on a pro rata basis any amount in excess of the amount necessary to fully indemnify Agent



     12.6 Successor Agent. Agent may resign at any time by giving written notice thereof to
Lenders and Borrowers and may be removed at any time with or without cause by the Majority Lenders.
Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a
successor Agent with the prior consent of Borrowers, which consent shall not be unreasonably
withheld, conditioned, or delayed, provided that such consent of the Borrowers shall not be
required at any time an Event of Default exists and continues. If no successor Agent shall have
been so appointed by the Majority Lenders, and shall have accepted such appointment, within thirty
(30) days after the retiring Agent’s giving of notice of resignation or the Majority Lenders’
removal of the retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a commercial Lender organized under the laws of the United States
or of any State thereof and having a combined capital and surplus of at least One-Hundred Million
Dollars ($100,000,000). Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges, and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations as Agent under this Agreement. After any retiring Agent’s
resignation or removal hereunder as Agent, the provisions of this Section 12 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent under this
Agreement.



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13. Co-borrowers. 




     13.1 Co-Borrowers. Borrowers are jointly and severally liable for the Obligations and Agent
may proceed against one Borrower to enforce the Obligations without waiving its right to proceed
against the other Borrower. This Agreement and the Loan Documents are a primary and original
obligation of each Borrower and shall remain in effect notwithstanding future changes in
conditions, including any change of law or any invalidity or irregularity in the creation or
acquisition of any Obligations or in the execution or delivery of any agreement between Agent and
any Borrower. Each Borrower shall be liable for existing and future Obligations as fully as if all
of the Advance was advanced to such Borrower. Agent may rely on any certificate or representation
made by any Borrower as made on behalf of, and binding on, all Borrowers. Each Borrower appoints
each other Borrower as its agent with all necessary power and authority to give and receive
notices, certificates, or demands for and on behalf of both Borrowers, to act as disbursing agent
for receipt of any loans on behalf of each Borrower, and to apply to Agent on behalf of each
Borrower for the Advance, any waivers, and any consents. This authorization cannot be revoked, and
Agent need not inquire as to one Borrower’s authority to act for or on behalf of another Borrower.



     13.2 Subrogation and Similar Rights. Each Borrower irrevocably waives, until all Obligations
are satisfied, all rights that it may have at law or in equity (including any law subrogating the
Borrower to the rights of Agent under the Loan Documents) to seek contribution, indemnification, or
any other form of reimbursement from any other Borrower, or any other Person now or hereafter
primarily or secondarily liable for any of the Obligations, for any payment made by the Borrower
with respect to the Obligations in connection with the Loan Documents or otherwise and all rights
that it might have to benefit from, or to participate in, any security for the Obligations as a
result of any payment made by the Borrower with respect to the Obligations in connection with the
Loan Documents or otherwise. Any agreement providing for indemnification, reimbursement, or any
other arrangement prohibited under this Section 13.2 shall be subject and subordinate to the rights
and Lien of Agent and Lenders under this Agreement and the other Loan Documents. If any payment is
made to a Borrower in contravention of this Section 13.2, such Borrower shall hold such payment in
trust for Agent and such payment shall be promptly delivered to Agent for application to the
Obligations, whether matured or unmatured.



     13.3 Waivers of Notice. Each Borrower waives, to the extent permitted by law, notice of
acceptance hereof; notice of the existence, creation or acquisition of any of the Obligations;
notice of an Event of Default except as set forth herein; notice of the amount of the Obligations
outstanding at any time; notice of any adverse change in the financial condition of any other
Borrower or of any other fact that might increase the Borrower’s risk; presentment for payment;
demand; protest and notice thereof as to any instrument; and all other notices and demands to which
the Borrower would otherwise be entitled by virtue of being a co-borrower or a surety. Each
Borrower waives any defense arising from any defense of any other Borrower, or by reason of the
cessation from any cause whatsoever of the liability of any other Borrower. Agent’s failure at any
time to require strict performance by any Borrower of any provision of the Loan Documents shall not
waive, alter, or diminish any right of Agent thereafter to demand strict compliance and performance
therewith. Each Borrower also waives any defense arising from any act or omission of Agent that
changes the scope of the Borrower’s risks hereunder. Each Borrower hereby waives any right to
assert against Agent any defense (legal or equitable), setoff, counterclaim, or claims that such
Borrower individually may now or hereafter have against another Borrower or any other Person liable
to Agent with respect to the Obligations in any manner or whatsoever.



     13.4 Subrogation Defenses. Until all Obligations are paid in full and Agent has no further
obligation to make Credit Extensions to Borrower, each Borrower hereby waives any defense based on
impairment or destruction of its subrogation or other rights against any other Borrower and waives
all benefits which might otherwise be available to it under California Civil Code Sections 2809,
2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure
Sections 580a, 580b, 580d and 726, as those statutory provisions are now in effect and hereafter
amended, and under any other similar statutes now and hereafter in effect.



     13.5 Right to Settle, Release.



               (a) The liability of Borrowers hereunder shall not be diminished by (i) any agreement,
understanding, or representation that any of the Obligations is or was to be guaranteed by another
Person or secured by other property, or (ii) any release or unenforceability, whether partial or
total, of rights, if any, which Agent may now or hereafter have against any other Person, including
another Borrower, or property with respect to any of the Obligations.




27












 





               (b) Without notice to any given Borrower and without affecting the liability of any given
Borrower hereunder, Agent may (i) compromise, settle, renew, extend the time for payment, change
the manner or terms of payment, discharge the performance of, decline to enforce, or release all or
any of the Obligations with respect to any other Borrower by written agreement with such other
Borrower, (ii) grant other indulgences to another Borrower in respect of the Obligations, (iii)
modify in any manner any documents relating to the Obligations with respect to any other Borrower
by written agreement with such other Borrower, (iv) release, surrender, or exchange any deposits or
other property securing the Obligations, whether pledged by a Borrower or any other Person, or (v)
compromise, settle, renew, or extend the time for payment, discharge the performance of, decline to
enforce, or release all or any obligations of any guarantor, endorser, or other Person who is now
or may hereafter be liable with respect to any of the Obligations.



     13.6 Subordination. All indebtedness of a Borrower now or hereafter arising for borrowed
money held by another Borrower is subordinated to the Obligations and the Borrower holding the
indebtedness shall take all actions reasonably requested by Agent to effect, to enforce, and to
give notice of such subordination.



14. Miscellaneous.




     14.1 Amendments. No amendment or waiver of any provision of the Loan Documents nor consent to
any departure by a Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided, however, that no
amendment, waiver, or consent shall, unless in writing and signed by each affected Lender, do any
of the following: (a) waive any of the conditions specified in Section 3.1, (b) reduce the
principal of, or interest on, the Notes or any fees or other amounts payable hereunder, (c)
postpone any date fixed for, or amount of, any payment of principal of, or interest on, the Notes
or any fees or other amounts payable hereunder, (d) increase the Credit Commitment of any Lender,
(e) change the percentage of the Credit Commitments or of the aggregate unpaid principal amount of
the Notes, that shall be required for the Lenders or any of them to take any action hereunder, or
release any material portion of any Collateral, (f) amend the definition of “Majority Lenders” set
forth in Section 1, or (g) amend this Section 14.1; and provided, further, that no amendment,
waiver, or consent shall, unless in writing and signed by Agent in addition to the Lenders required
above to take such action, affect the rights or duties of Agent under this Agreement or any other
Loan Document. With the consent of the Agent, additional Lenders may execute this Agreement, and,
as a consequence of such additions, the aggregate Credit Commitments hereunder may be increased.
Upon the concurrence of Agent and Borrowers, any Lender may be replaced and the Credit Commitments
hereunder adjusted accordingly.



     14.2 Notices, Etc. Except as otherwise set forth in this Agreement, all notices and other
communications provided for hereunder shall be in writing (including telex or facsimile
communication) and mailed or sent by facsimile or delivered, if to the Borrowers, at the address
set forth in Section 10; if to any Borrower, at its address set forth on the signature page hereof;
and if to any Lender, or Agent, at Agent’s address set forth in Section 10; or, as to each party,
at such other address as shall be designated by such party in a written notice to the other
parties. All such notices and communications shall be effective three (3) Business Days after
deposit in the U.S. mail, postage prepaid, when sent by facsimile, or when delivered, respectively.



     14.3 Additional Lenders; Assignments; Participations.



          (a) None of the Loan Documents nor any rights thereunder may be assigned by Borrowers (other
than assignments between and among Borrowers and assignments to a Subsidiary in circumstances not
otherwise constituting an Event of Default) without the prior written consent of all the Lenders,
which consent may be granted or withheld in the Lenders’ sole discretion. Upon prior consent of
Borrowers before an Event of Default (which Borrower consent will not be unreasonably withheld,
conditioned, or delayed), and upon written notice to Borrowers after an Event of Default, any
Lender may assign, from time to time, all or any portion of its Pro Rata Share of the Credit
Commitments and its Note in an amount not less than the lesser of $5,000,000 or one hundred percent
(100%) of such Lender’s interest in the Credit Commitments and Note to (i) an Affiliate of that
Lender (which will not require the prior written approval of Agent or Borrowers, even before an
Event of Default) or (ii) any other assignee financial institution acceptable to Agent, provided
that an original assignee may not assign its



28









 




interest (A) to any Person who is not itself an original assignee and (B) without notice to
Borrowers and the consent of the Agent, and provided further that the parties to each such
assignment shall execute and deliver to Agent and Borrowers an assignment agreement in a form
acceptable to Agent. Upon (A) such execution and delivery and (B) except in the case of an
assignment pursuant to clause (i) of the preceding sentence, payment of a fee in the amount of
$2,500 to Agent to cover administrative costs, from and after the effective date of such assignment
(x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it, have the rights and obligations of a Lender hereunder and (y)
the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it, relinquish its rights and be released from its obligations under this Agreement
(other than pursuant to Section 14.3(f)), and, in the case of an assignment covering all or the
remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto, subject to its continuing obligations under Section 14.3(f). The
Credit Commitments hereunder shall be modified to reflect the Credit Commitment of such assignee,
and, if any such assignment occurs while any Notes are outstanding, new Notes shall, upon the
surrender of the assigning Lender’s Notes, be issued to such assignee and to the assigning Lender
as necessary to reflect the new Credit Commitments of the assigning Lender and of its assignee.
Notwithstanding anything to the contrary in this Agreement or in any other Loan Documents, no
Borrower will be required to pay any fees, expenses, or other Agent Expenses that Agent, any
Lender, or any assignee incurs in connection with any actions or circumstances contemplated by
Section 14.3(a).




          (b) If, in connection with any proposed amendment, waiver, or consent to any of the provisions
of this Agreement or any other Loan Document as contemplated by Section 14.1, the consent of the
Majority Lenders or the unanimous consent of all Lenders is required but cannot be obtained for the
lack of consent by a Lender or if any Lender requests compensation pursuant to Section 2.8 for
increased costs, then the Agent shall have the right, but not the obligation, to cause any such
non-accepting or non-consenting Lender (each, a “Replaced Lender”) to assign (a “Forced
Assignment”) all of the Credit Commitments and other rights and obligations of the Replaced
Lender under the Loan Documents to another Person (which may be a Lender or any other Person
reasonably acceptable to the Borrowers (such Lender or other Person, a “Replacement
Lender”)) identified by the Agent in writing to the Replaced Lender, provided that such
Replacement Lender is willing to consent to the proposed amendment, waiver, or consent.



     If a Forced Assignment occurs, the Replaced Lender and the Replacement Lender shall enter into
an Assignment and Acceptance, in form and substance acceptable to Agent, pursuant to which the
Replacement Lender shall acquire all of the outstanding Credit Commitments of the Replaced Lender
and, in connection therewith, shall pay to the Replaced Lender in respect thereof an amount equal
to the sum of (a) an amount equal to the principal of, and all accrued interest on, all outstanding
Credit Commitments of the Replaced Lender, and (b) an amount equal to all accrued, but theretofore
unpaid, fees, expenses, and other reimbursable costs owing to the Replaced Lender under the Loan
Documents. Upon (i) the execution of an Assignment and Acceptance in connection with a Forced
Assignment by the Replaced Lender and the Replacement Lender; (ii) delivery of a copy of such
Assignment and Acceptance to the Agent, together with payment instructions, addresses, and related
information with respect to the Replacement Lender; (iii) the payment to the Replaced Lender by the
Replacement Lender of the amounts referred to in the preceding sentence; (iv) the payment to the
Replaced Lender by the Borrowers of all obligations of the Borrowers due and owing to the Replaced
Lender at such time (other than those specifically described in the preceding sentence), if any;
(v) the payment to the Agent by the Replacement Lender of a $3,500 processing fee; and (vi) if so
requested by the Replacement Lender, delivery to the Replacement Lender of the appropriate Note or
Notes executed by the Borrowers, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with respect to
indemnification provisions under this Agreement (including Section 14.9), which shall survive as to
such Replaced Lender with respect to any liabilities incurred by such Replaced Lender relating to
periods prior to the date such Replaced Lender ceased to be a Lender hereunder.



     Notwithstanding anything to the contrary in this Agreement or in any other Loan Documents, no
Borrower will be required to pay any fees, expenses, or other Agent Expenses that Agent, any
Lender, or any assignee incurs in connection with any actions or circumstances contemplated by
Section 14.3(b).



          (c) Each Lender may sell, negotiate, or grant participations to other parties who are
assignees in all or part of the obligations of the Borrowers outstanding under the Loan Documents,
upon written notice to the Agent and the Borrowers; provided that any such sale, negotiation, or
participation shall be in compliance with the



29









 




applicable federal and state securities laws and the other requirements of this Section 14.3.
No participant shall constitute a “Lender” under any Loan Document, and Borrowers shall continue to
deal solely and directly with Agent and the Lenders. No such participant is intended to be a third
party beneficiary of the provisions of this Agreement or the other Loan Documents, permitted to
enforce any of the provisions hereof or thereof. Notwithstanding anything to the contrary in this
Agreement or in any other Loan Documents, no Borrower will be required to pay any fees, expenses,
or other Agent Expenses that Agent, any Lender, or any assignee incurs in connection with any
actions or circumstances contemplated by Section 14.3(c).




          (d) Each Lender may disclose to any proposed assignee or participant any information relating
to Borrowers or any Subsidiary of a Borrower; provided, that prior to such disclosure such proposed
assignee or participant shall have agreed in writing to keep any such information confidential
substantially on the terms of Section 14.3(f).



          (e) The grant of a participation interest shall be on such terms as the granting Lender
determines are appropriate, provided only that (i) the holder of such a participation interest
shall not have any of the rights of a Lender under this Agreement, (ii) the consent of the holder
of such a participation interest shall not be required for amendments or waivers of provisions of
the Loan Documents other than those that (A) extend the term of the Credit Commitments, (B)
decrease the rate of interest or the amount of any fee or any other amount payable to the Lenders
under the Loan Documents, (C) reduce the principal amount payable under the Loan Documents, or (D)
extend the date fixed for the payment of principal or interest or any other amount payable under
the Loan Documents, and (iii) the holder may not transfer or participate any of its interest
without the consent of the Agent.



          (f) Each Lender understands that some of the information and documents furnished to it
pursuant to this Agreement may be confidential and each Lender agrees that it will keep all
non-public information, documents, and agreements so furnished to it confidential and will make no
disclosure to other Persons of such information or agreements until it shall have become public,
except (i) to the extent required in connection with matters involving operations under or
enforcement or amendment of the Loan Documents; (ii) to such Lender’s examiners and auditors or in
accordance with such Lender’s obligations under law or regulations or pursuant to subpoenas or
other process to make information available to governmental agencies and examiners or to others;
provided that, to the extent legally permissible, the Lender will give the Borrowers advance notice
of any such disclosure under any such law, regulation, subpoena, or other process so the Borrowers
can seek confidential treatment or other protective orders; (iii) to any corporate parent of any
Lender so long as such parent agrees to accept such information or agreement subject to the
restrictions provided in this Section 14.3(f); (iv) to any participant Lender or trust company of
any Lender so long as such participant shares the corporate parent with such Lender and agrees to
keep such information, documents, or agreement confidential in accordance with the restrictions
provided in this Section 14.3(f); (v) to Agent or to any other Lender and their respective counsel
and other professional advisors and to its own counsel and professional advisors so long as such
Persons are instructed to keep such information confidential in accordance with the provisions of
this Section 14.3(f); (vi) to proposed assignees and participants in accordance with Section
14.3(d); (vii) as Agent or Lender reasonably determines necessary after the occurrence of an Event
of Default; and (viii) with the prior written consent of the Borrowers.



     14.4 Effectiveness; Binding Effect; Governing Law. This Agreement shall become effective when
it shall have been executed by the Borrowers, Agent, and each Lender and thereafter shall be
binding upon and inure to the benefit of the Borrowers, the Agent, each Lender and their respective
successors and assigns, except that the Borrowers shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of Agent and all the Lenders,
which will not be unreasonably withheld, conditioned, or delayed. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT
GIVING EFFECT TO ITS CHOICE OF LAW DOCTRINE.



     14.5 Consent to Jurisdiction; Venue; Agent for Service of Process. All judicial proceedings
brought against any party to this Agreement with respect to this Agreement and the Loan Documents
may be brought in any state or federal court of competent jurisdiction in the County of Santa Clara
in the State of California, and by execution and delivery of this Agreement, each party hereto
accepts for itself and in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. Each party irrevocably waives any



30









 




right it may have to assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this Section 14.5. Each party designates and
appoints its respective Responsible Officer, from time to time, and such other Persons as may
hereafter be selected by such party irrevocably agreeing in writing to so serve as its agent to
receive on its behalf service of all process in any such proceedings in any such court, such
service being hereby acknowledged by such party to be effective and binding service in every
respect. A copy of any such process so served shall be mailed by registered mail to a party at the
address provided in Section 10, except that unless otherwise provided by applicable law, any
failure to mail such copy shall not affect the validity of service of process. If any agent
appointed by a party refuses to accept service, such party hereby agrees that service upon it by
mail shall constitute sufficient notice. Nothing herein shall affect the right to serve process in
any other manner permitted by law or shall limit the right of a party hereto to bring proceedings
against another in courts of any jurisdiction.




     14.6 Entire Agreement. This Agreement with Exhibits and Schedules and the other Loan
Documents embody the entire agreement and understanding between the parties hereto and supersedes
all prior and contemporaneous agreements and understandings relating to the subject matter hereof,
provided that any financing statements previously filed for the benefit of Agent and/or any Lender
shall continue to perfect Agent’s security interest in the Collateral.



     14.7 Severability of Provisions. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.



     14.8 Obligations Several. The obligation of each Lender hereunder is several, and no Lender
shall be responsible for the obligation or commitment of any other Lender hereunder. Nothing
contained in this Agreement and no action taken by the Lenders pursuant hereto shall be deemed to
constitute the Lenders to be a partnership, an association, a joint venture, or any other kind of
entity.



     14.9 Indemnification and Waiver. Each Borrower shall indemnify, defend, protect, and hold
harmless Agent, each Lender, and their respective officers, employees, and agents (each, an
“Indemnitee”) against (a) all third-party obligations, demands, claims, and liabilities
claimed or asserted, in each case, in writing, by any third-party in connection with the
transactions evidenced by the Loan Documents (each a “Third-Party Claim”); and (b) all
Lender losses or Lender expenses in any way suffered, incurred, or paid as a result of such
Third-Party Claim (including reasonable attorneys’ fees and expenses), in each case except for
losses or expenses under (a) or (b) above caused by Agent’s or such Lender’s or their respective
officers’, employees’ and agents’ gross negligence, or willful misconduct.



     14.10 Damages. To the fullest extent permitted by applicable law, each Borrower shall not
assert, and waives, any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of, in connection with, or as a result of,
this Agreement and the transactions contemplated hereby. Notwithstanding anything to the contrary
in Section 14.9, Agent and each Lender shall not assert, and waives, any claim against any Borrower
and their respective officers, employees, and agents, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of, in connection with, or as a result of,
this Agreement or other Loan Documents and the transactions contemplated hereby or thereby.



     14.11 Construction. Time is of the essence for the performance of all obligations set forth
in this Agreement. As used in this Agreement, the term “including” is used illustratively, is not
used in limitation, and will be construed to mean “including, without limitation,” and “including,
but not limited to.”



     14.12 Patriot Act. Each Lender and Agent notifies each Borrower that pursuant to Title III of
Pub. L. 107-56 (the “Act”) it is required to obtain, verify, and record information that
identifies each Borrower, which information includes the name and address of each borrower and
other information that will allow such Lender or Agent, as applicable, to identify each Borrower in
accordance with the Act.



     14.13 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall constitute but one and the
same Agreement. Delivery of an executed



31









 




counterpart of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement. Delivery of manually executed counterparts
of this Agreement shall immediately follow delivery by telecopy.




     14.14 Prevailing-Party Attorneys’ Fees. In any action, lawsuit, or proceeding that is filed
by Agent or any Lender against any Borrower or by any Borrower against Agent or any Lender to
interpret, enforce, or defend the Loan Agreements or any provisions contained in the Loan
Agreements, the non-prevailing party will reimburse the prevailing party for all reasonable and
documented attorneys’ fees, costs, and expenses (including expert witness fees and all appeals)
that the prevailing party incurred in connection with such action, lawsuit, or proceeding.



     14.15 Survival. All covenants, representations, and warranties made in this Agreement shall
continue in full force and effect so long as any Obligations remain outstanding. The obligations
of Borrowers to indemnify Agent and Lenders with respect to the expenses, damages, losses, costs,
and liabilities described in Section 14.9 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against any of them have run.


15. California Finance Lenders Law. Pursuant to Section 22050(a) of the California Finance Lenders
Law, Agent and each Lender hereby represent that they are exempted from the provisions of the
California Finance Lenders Law.




[remainder of this page intentionally left blank]




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     The parties have caused this Agreement to be executed as of the Closing Date.


	 	 	 	 	 
	 	Borrowers:





NextG Networks, Inc., a Delaware Corporation
 	 
	 	By:  	/s/ Hab
Siam	 
	 	 	Hab Siam 	 
	 	 	General Counsel & Corporate Secretary 	 
	 



	 	 	 	 	 
	 	NextG Networks of California, Inc., 

a Delaware Corporation
 	 
	 	By:  	/s/ Hab Siam	 
	 	 	Hab Siam 	 
	 	 	General Counsel & Corporate Secretary 	 
	 



	 	 	 	 	 
	 	NextG Networks of NY, Inc., 

a Delaware Corporation
 	 
	 	By:  	/s/ Hab Siam	 
	 	 	Hab Siam 	 
	 	 	General Counsel & Corporate Secretary 	 
	 



	 	 	 	 	 
	 	NextG Networks of Illinois, Inc., 

a Delaware Corporation
 	 
	 	By:  	/s/ Hab Siam	 
	 	 	Hab Siam 	 
	 	 	General Counsel & Corporate Secretary 	 
	 



	 	 	 	 	 
	 	NextG Networks Atlantic Inc., 

a Virginia Corporation
 	 
	 	By:  	/s/ Hab Siam	 
	 	 	Hab Siam 	 
	 	 	General Counsel & Corporate Secretary 	 
	 



[Signature Page to Loan and Security Agreement]


 








 





	 	 	 	 	 	 	 
	 	 	Agent:	 	 
	 	 	 	 	 	 	 
	 	 	United Commercial Bank	 	 
	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Yu-Fu Lin	 	 
	 	 	 	 	 
	 	 
	 	 	Name:	 	Yu-Fu Lin	 	 
	 	 	 	 	 
	 	 
	 	 	Title:	 	VP & Relationship Manager	 	 
	 	 	 	 	 
	 	 




[Signature Page to Loan and Security Agreement]


 








 





	 	 	 	 	 	 	 
	 	 	Lender:	 	 
	 	 	 	 	 	 	 
	 	 	United Commercial bank	 	 
	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Yu-Fu Lin	 	 
	 	 	 	 	 

	 	 
	 	 	Name:	 	Yu-Fu Lin	 	 
	 	 	 	 	 

	 	 
	 	 	Title:	 	VP & Relationship Manager	 	 
	 	 	 	 	 

	 	 
	 	 	 	 	 	 	 
	 	 	Pro Rata Share: 58.33%	 	 
	 	 	 	 	 	 	 
	 	 	Credit Commitment: $35,000,000	 	 




[Signature Page to Loan and Security Agreement]


 








 





	 	 	 	 	 	 	 
	 	 	Lender:	 	 
	 	 	 	 	 	 	 
	 	 	EastWest Bank	 	 
	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas Chen	 	 
	 	 	 	 	 

	 	 
	 	 	Name:	 	Thomas Chen	 	 
	 	 	 	 	 

	 	 
	 	 	Title:	 	FVP & Manager	 	 
	 	 	 	 	 

	 	 
	 	 	 	 	 	 	 
	 	 	Pro Rata Share: 41.67%	 	 
	 	 	 	 	 	 	 
	 	 	Credit Commitment: $25,000,000	 	 




[Signature Page to Loan and Security Agreement]