January 31, 2001
Digital Teleport, Inc.
8112 Maryland Avenue, Suite 400
St. Louis, Missouri 63105
Re: $25,000,000 Senior Secured Revolving
Credit Facility
Gentlemen:
Pursuant to the Second Amended and Restated Agreement between
KLT Telecom Inc. ("Lender") and Richard D. Weinstein, Lender agreed to provide
or arrange for a revolving credit facility for Digital Teleport, Inc.
("Borrower") in the amount of $25 million to be made available in 2001. While
Lender is in the process of arranging for a third party to provide the Borrower
with the required credit facility, Lender hereby agrees to make available a
bridge senior secured revolving credit facility (the "Loan") to the Borrower on
the terms and conditions set forth below and the additional terms, conditions
and definitions set forth in Exhibit A attached hereto and incorporated by this
reference herein, until such time as the permanent credit facility can be
closed. This Commitment supersedes and replaces all prior offers and
negotiations regarding the loan. A definitive loan agreement and certain
ancillary documents, in form and substance acceptable to Lender, will
incorporate the terms of this Commitment and will include representations,
warranties, covenants, conditions precedent, events of default, indemnification
and other provisions as are customary and appropriate for loans of this type
(the "Loan Documents").
1. Borrower: Digital Teleport, Inc., a Missouri corporation
2. Loan Terms:
Principal Up to Twenty-Five Million Dollars ($25,000,000) at
Amount: any time.
Interest Rate: 91/2% per annum.
Amortization The Loan borrowings, includig the entire unpaid
And Maturity: principal balance and accrued interest, shall be due
and payable upon demand.
Underwriting Borrower will pay all out-of-pocket costs and
Expenses: expenses incurred by Lender in connection with the
proposed Loan promptly upon Lender's submission of a
statement to Borrower. This will include, but not be
limited to, attorneys' fees and such other expenses
and costs as Lender may incur or pay, including
without limitation, lien search fees, filing fees,
registration and recordation fees or taxes,
inspection fees and appraisal costs. All fees and
expenses incurred by Lender prior to Closing shall be
paid by Lender as a condition to Closing and whether
or not the transaction contemplated herein is closed.
Fees and expenses incurred by Lender after Closing
will be payable as specified in the Loan Documents.
Post-Maturity If the Loan is not fully paid upon demand, the entire
Interest: outstanding Loan balance shall bear interest at a
rate of three (3) percentage points in excess of the
then applicable rate.
Prepayment: The Loan may be prepaid at any time, without penalty
or premium.
Transferability: Prohibited without Lender's prior written consent.
Use of Proceeds: The proceeds of the Loan shall be used for Borrower's
working capital needs and for Borrower's general
corporate purposes.
Additional The Loan Documents evidencing the Loan shall contain
Covenants: covenants customary for this type of transaction,
including, without limitation, certain covenants
acceptable to the Lender and the Borrower, including,
without limitation, (i) the following affirmative
covenants: maintenance of existence and collateral,
payment of taxes and other obligations, maintenance
of insurance, preservation of books and records,
inspection rights, use of proceeds, compliance with
laws, and further assurances and (ii) the following
negative covenants: restrictions on additional
indebtedness, additional liens,
dividends/distributions (including restrictions on
preferred distributions), investments and advances,
sales of assets, capital expenditures, mergers and
acquisitions, business activities, transactions with
affiliates, modification of certain material
contracts, ERISA and environmental matters and
accounting and fiscal year changes.
3. Security: The Loan will be secured by perfected first priority
security interests in and liens on all assets of the
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Borrower, now owned and hereafter acquired, subject
only to permitted liens agreed to by Lender and
subject to necessary regulatory approvals (the
"Collateral").
4. Loan Commitment The commitment of Lender to make the Loan will expire
Expiration: sixty (60) calendar days after the date of this
letter, and the Loan must be closed by that date. In
the event the Loan is not closed by that date, all
obligations of Lender under this Commitment shall
cease.
5. Additional The obligations of Lender to make the Loan shall be
Contingencies: expressly contingent on the following conditions:
(a) Borrower delivering the most current
financial statements regarding Borrower
available prior to the date of Closing and
certified financial statements annually
thereafter. The financial statements
provided shall be audited if available, but
in any event shall be prepared in accordance
with generally accepted accounting
principles.
(b) Lender's satisfactory inspection of the
Collateral.
(c) Borrower executing and delivering all Loan
Documents required by Lender.
(d) Lender's counsel's satisfactory review of
the legality, validity, binding effect, and
enforceability of all instruments,
agreements, and documents used to effect and
consummate the Loan and transactions herein
contemplated.
(e) Borrower providing to Lender such evidence,
reports and information as Lender may
require concerning the Collateral,
Borrower's ownership of the Collateral, the
compliance of the Collateral with all laws,
ordinances, regulations and legal
requirements, and the necessary regulatory
approvals for the pledge of the Collateral
as security for the Loan.
(f) Lender's receipt of satisfactory evidence
that the directors of the Borrower have
approved the Loan; and all legal and other
approvals for the Loan, including for the
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pledge of the Collateral to secure the Loan,
have been obtained.
(g) Absence of injunction or temporary
restraining order which, in the judgment of
the Lender, would prohibit the making of the
Loan; and absence of litigation which could
reasonably be expected to result in any such
prohibition or have a material adverse
effect on the Borrower.
(h) Evidence satisfactory to the Lender that
Lender has a first priority security
interest in all Collateral, subject only to
permitted liens to be agreed upon.
(i) All legal, including income tax, and
regulatory matters shall be satisfactory to
the Lender.
(j) No default or unmatured default or material
adverse change or litigation shall exist or
have arisen on or prior to the date of the
closing of the Loan.
(k) Receipt by Lender of other customary closing
documentation, including without limitation,
legal opinions, applicable governmental and
other approvals certificates of existence,
lien/bankruptcy/judgment searches, all in
acceptable form and substance.
6. Closing: The place, date and time of the execution and
delivery of all documents evidencing or relating to
the Loan and the effective date of such documents
(the "Closing") shall be as soon as possible after
Borrower obtains the necessary regulatory approvals
for the pledge of the Collateral to secure the Loan
and shall be at the sole option of Lender and
Lender's counsel. If no other place is specified,
such Closing shall be at the offices of Stinson, Mag
& Fizzell, P.C., 1201 Walnut, Kansas City, Missouri.
The Closing shall occur no later than the expiration
date of this Commitment specified above in item 4.
7. Commitment Unless this Commitment is accepted by Borrower and
Acceptance: received by Lender, prior to 5:00 p.m., prevailing
time in Kansas City, Missouri, not later than ten
(10) business days after the date of this letter, the
obligation of Lender to make the Loan shall expire.
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If you wish to accept this Commitment, please sign
the enclosed copy of this Commitment where indicated
and initial each page, showing your acceptance of the
terms and conditions of this Commitment, and return
the signed copy to the attention of the undersigned.
Time is of the essence of this Commitment. 8.
Regulatory Compliance: This Commitment is subject to
compliance with all applicable laws and regulations.
9. Governing Law: This Commitment will become effective upon receipt by
Lender, at its main office in Overland Park, Kansas,
of a copy of this Commitment signed by Borrower. This
Commitment shall be governed by Missouri law. This
Commitment supersedes all prior agreements between
Borrower and Lender relating to the Loan.
10. Notice: ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A
DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER(S)) AND
US (LENDER) FROM MISUNDERSTANDING OR DISAPPOINTMENT,
ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE
CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
KLT TELECOM, INC.
By: /s/ Mark R. Schroeder
-----------------------------------
Name: Mark R. Schroeder
Title: Vice President
Accepted this 1st day of February, 2001, by:
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DIGITAL TELEPORT, INC., a Missouri
corporation
By: /s/ Gary W. Douglass
----------------------------
Name: Gary W. Douglass
Title: Senior Vice President -
Finance and Administration
and Chief Financial Officer
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EXHIBIT A
ADDITIONAL TERMS AND CONDITIONS
Following are additional terms and conditions of the Commitment from Lender to
Borrower.
1. DOCUMENTATION - Prior to funding under this Commitment, Borrower shall at its
sole cost supply Lender with all the following instruments, documents and
assurances, as well as any additional instruments, documents and assurances as
Lender or its counsel may require. Each document is to be in form and content
satisfactory to Lender and its legal counsel.
a. LOAN AGREEMENT. The Loan shall be governed by the terms and conditions of a
comprehensive loan agreement prepared by Lender's legal counsel (the "Loan
Agreement"), which shall contain such representations, warranties and agreements
of Borrower as Lender may require.
b. NOTE. The Loan shall be evidenced by a promissory note or notes.
c. SECURITY DOCUMENTS. The loan shall be secured by a security agreement,
financing statements, and such other documents or agreements as Lender or its
counsel deem necessary in order to grant Lender a perfected security interest in
the Collateral. All loan documents or agreements shall be prepared by Lender's
counsel unless otherwise agreed.
d. CERTIFICATE OF TAXES DUE. Borrower shall furnish Lender with a current
certificate of taxes due, showing no unpaid taxes or special assessments on the
Collateral.
e. OTHER DOCUMENTS. Borrower shall execute such other loan documents as Lender
shall require.
2. COST AND EXPENSES - Borrower shall pay for all brokerage, loan fees or other
fees, expenses, taxes, costs and charges incurred with respect to the Loan,
including but not limited to, recording and filing fees, document registration
fees and taxes, intangible taxes and legal fees and expenses of Lender,
regardless of whether the Loan does or does not close.
3. OTHER FEES AND COMMISSIONS - Lender shall not be required to pay any premium,
tax, or other charge or any brokerage fee or commission or similar compensation
in connection with the Loan; by acceptance of this Commitment, Borrower agrees
to indemnify and save harmless Lender from any and all liability and claims with
respect thereto.
4. CREDIT INVESTIGATION - Borrower acknowledges that all credit information it
has supplied to Lender is factual and accurate. Borrower hereby authorizes
Lender to review its creditworthiness and agrees to provide reasonable
information to Lender for this purpose during the term of this Commitment and
after the Loan is closed so long as Borrower owes any obligations to Lender.
Borrower hereby agrees to notify Lender of any adverse material change in
financial condition of Lender during the term of this Commitment or of any other
event or occurrence which might adversely affect the ability of Borrower to
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repay the Loan contemplated by this Commitment. In the event of any such adverse
change or event or occurrence, Lender may terminate this Commitment.
5. ADDITIONAL FINANCING OR SALE OF COLLATERAL - Borrower agrees that during the
term of the Loan or any extension thereof, there shall be no sale, transfer,
lease, or financing of or other lien against the Collateral, other than that
either contemplated by this Commitment or in the ordinary course of Borrower's
business, without the prior written consent of Lender. In the event such consent
is given, any and all leases, financing, and liens shall be absolutely and
unconditionally subordinated to Lender's lien.
6. NO ASSIGNMENT - Neither this Commitment nor any loan proceeds shall be
assignable by Borrower without the prior written consent of Lender. Any such
assignment without such consent shall be void and shall constitute a default
hereunder.
7. RIGHT TO INSPECT - Lender and/or its representative shall have the right to
inspect the Collateral and shall have access to all records specifically related
to the Collateral. Borrower also agrees to pay all fees for an independent
accountant to review the books and records of the Borrower for the benefit of
Lender, if so required by Lender.
8. NO PARTNERSHIP - Notwithstanding anything to the contrary herein contained,
Lender shall not, by this Commitment or by any action taken pursuant hereto, be
deemed a partner or joint venturer with Borrower or agent or principal of
Borrower.
9. CONTINUITY OF OWNERSHIP - Borrower shall not cause or permit any change in
the ownership of the Collateral or a change in the ownership of the interests
(legal or beneficial) in Borrower without the prior written consent of Lender.
Borrower will not permit an amendment to its charter or by-laws without the
written consent of Lender.
10. AGREEMENT TO INDEMNIFY - Borrower agrees to protect, indemnify, defend and
save harmless Lender and its directors, officers, agents and employees from and
against any and all liability, expense, or damage of any kind or nature and from
any suits, claims or demands, including reasonable legal fees and expenses, on
account of any matter or thing, whether in suit or not, arising out of this
Commitment or in connection herewith. The obligations under this paragraph shall
survive any termination or expiration of this Commitment and the Closing of the
Loan and repayment thereof.
11. PERSONAL PROPERTY LIST - Prior to Closing, Borrower shall furnish to Lender
an itemized list of all of Borrower's assets, including all fixtures, equipment,
furniture, furnishings and other personal property owned by Borrower.
12. EVENTS OF DEFAULT - The occurrence of any one or more of the following
shall, at the option of Lender, constitute an event of default hereunder, and
Lender reserves the right, upon ten (10) days' notice to Borrower, to cancel
this Commitment and terminate its obligations hereunder unless within that ten
(10) day period the default has been cured to Lender's satisfaction: (a) if
Borrower shall have failed to observe and perform any of the terms, covenants,
promises, and agreements on its part to be observed and performed under this
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Commitment, or (b) in the event that, prior to Closing, the financial condition
of Borrower shall have changed unfavorably in any material degree from the date
hereof; or (c) non-occurrence of any condition precedent to Lender's obligation
to close the Loan and/or make any disbursement thereunder; or (d) filing by or
against Borrower of a petition in bankruptcy or insolvency or for
reorganization, or for the appointment of a receiver or trustee, or the making
by Borrower of an assignment for the benefit of creditors, or the filing of a
petition for arrangement by Borrower or in the event of any similar act or
occurrence.
13. ENTIRE AGREEMENT - No change or modification of this Commitment shall be
valid unless the same is in writing and signed by the parties hereto. Until
Closing of the Loan, this Commitment contains the entire agreement between the
parties hereto, and there are no promises, agreements, conditions, undertakings,
warranties, and representations, either written or oral, express or implied,
between the parties hereto other than as set forth herein. It is expressly
understood and agreed that the parties hereto intend this Commitment to be an
integration of all prior and contemporaneous promises, agreements, conditions,
undertakings, warranties and representations between the parties hereto with
regard to the Loan.
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