Exhibit 10.43
EXECUTION COPY
REVOLVING CREDIT
AGREEMENT
This Revolving Credit Facility
(“ Agreement ” or “ Credit Facility
”) is entered into as of March 30, 2006 (“
Effective Date ”) by and between Vistula
Communications Services, Inc., a Delaware corporation (“
Borrower ” or the “ Company ”) and
Indigo Investments I LLC (“ Lender ”, or “
Purchaser ”). Each of Borrower and Lender may be
referred to herein individually as a “ Party ”
and collectively as the “ Parties ”.
W
I T N
E S S E T
H:
WHEREAS, the Company desires to sell and issue to the
Lender, and the Purchaser wishes to purchase from the Company, a
Note in the principal amount of up to five million United States
dollars ($5,000,000).
NOW, THEREFORE,
in consideration of the foregoing
premises and the covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto agree as
follows:
SECTION 1.
Initial Advance; Periodic
Loans . (a) From and
after the date hereof through and until September 30, 2006,
Lender hereby agrees to make periodic loans to the Borrower in an
aggregate principal amount at any one time outstanding, not to
exceed $5,000,000 (“ Maximum Amount ”). Borrower
shall execute a promissory note substantially in the form of
Exhibit A hereto evidencing its obligations hereunder
(the “ Note ”). On the Effective Date, up to
$1,300,000 shall be advanced to the Borrower for working capital
and general corporate purposes (the “ Initial Advance
”). For the avoidance of doubt, the first $1,300,000 advanced
to the Company pursuant to this Section 1(a), regardless of
when such advances are made, shall not be subject to the
requirements set forth in Section 1(b) below.
(b)
During the Term (as defined below),
from time to time, Borrower may notify the Lender of its need
to borrow additional funds pursuant to this Agreement. Within ten
(10) business days of receipt of such notice from the Borrower
seeking to borrow funds, the Lender shall forward to the Borrower
the amount of funds requested by Borrower in such notice, up to,
but (together with the Initial Advance) not in excess of, the
Maximum Amount; provided, that Borrower provides Lender with an
officer’s certificate, the form and substance of which
must be satisfactory to Lender, certifying that at the time of such
notice: (i) Borrower is in compliance with the covenants set
forth in Section 7 of this Agreement; (ii) Borrower has
not violated any of the negative covenants set forth in
Section 8 of this Agreement; and (iii) such requested
advance does not exceed 80% of the Company’s Computer
Directed Router Reports (“ CDR ”) detailing
charges to be billed to acceptable customers. Lender shall have the
absolute right to request additional evidence, as deemed necessary
by the Lender in its sole discretion, in support of such
officer’s certificate.
SECTION 2.
Periodic Finance Charges;
Commitment Fee; Warrants . (a) All outstanding principal shall bear
interest at a rate of 1.5% per month simple interest. In an Event
of
Default (as defined in Section 12) the
interest rate shall increase by an amount equal to the lesser of
2.5% per month or the maximum amount permitted under applicable law
(the “ Default Rate ”).
(b)
In addition, the Company shall pay
the Lender a 2.25% commitment fee on the entire amount of the
Credit Facility (the “ Commitment Fee ”) and
shall grant Lender a five (5) year warrant to purchase up to
500,000 shares of the Company’s common stock at an exercise
price equal to $1.50 per share (the “ Warrant ”;
and such shares the “ Warrant Shares ”). The
Warrant is attached hereto as Exhibit B . Lender
may distribute the Warrant Shares to its Members on a pro rata
basis based on each Member’s percentage interest in
Lender.
SECTION 3.
Payments . All outstanding principal and interest on the
Credit Facility plus the Commitment Fee shall be due and payable on
the earlier of (i) the six (6) month anniversary of the
Effective Date (“ Maturity Date ”), or
(ii) the closing of a Qualified Equity Financing (as defined
below); provided, that, in the event that a Qualified Equity
Financing closes prior to the Maturity Date, the Company shall pay
the Lender an early repayment fee equal to 2.25% of the total
amount of the Credit Facility. For purposes of this Agreement,
“ Qualified Equity Financing ” shall mean the
sale of a minimum of $6,000,000 of equity securities of the
Company.
SECTION 4.
Term . This Agreement shall be effective from the
date hereof and shall terminate on September 30, 2006, unless
terminated earlier pursuant to the default provisions of this
Agreement (the “ Term ”).
SECTION 5.
Priority . The rights of the Lender under the terms of
this Agreement shall be junior to the Company’s existing
indebtedness.
SECTION 6.
Personal Guaranty
. In order to induce Lender to
extend the Credit Facility to Borrower, the Company’s
President, Mr. Rupert Galliers-Pratt absolutely and
unconditionally guarantees to Lender, to the fullest extent
permitted by applicable law and pursuant to the terms of the
Guaranty attached hereto as Exhibit C , the payment by
the Company when due of all amounts owing under the Credit Facility
and any and all other documents related thereto, including, without
limitation, all principal, interest, commitment fees, prepayment
fees, expenses, professional fees and other amounts now or
hereafter owing in connection with the Credit Facility.
SECTION 7.
Covenants of Borrower
. The Borrower agrees and covenants
as follows:
(a)
Payment of Principal and Interest
and Fees . The Borrower
shall promptly pay when due the principal of and interest on the
indebtedness evidenced by the Note issued under this Agreement, and
all other sums secured by this Agreement, including but not limited
to, the Commitment Fee.
(b)
Corporate Existence
. The Borrower is a corporation duly
organized and existing under the laws of the State of Delaware and
is duly qualified in every other state in which it is doing
business except where the failure to be so qualified would not have
a Material Adverse
2
Effect on the Company. “ Material
Adverse Effect ” means any circumstance, change in, or
effect on the Company that, individually or in the aggregate with
any other similar circumstances, changes in, or effects on, the
Company taken as a whole: (a) is, or is reasonably expected to
be, materially adverse to the business, operations, assets,
liabilities, employee relationships, customer or supplier
relationships, prospects, results of operations or the condition
(financial or otherwise) of the Company taken as a whole or
(b) is reasonably expected to adversely affect the ability of
the Company to operate or conduct the Company’s business in
the manner in which it is currently operated or conducted or
proposed to be operated or conducted by the Company.
(c)
Corporate Authority
. The execution, delivery, and
performance of this Agreement, and the execution and payment of the
Note issued pursuant to the terms hereof are within
Borrower’s corporate powers, have been duly authorized, and
are not in contravention of law or the terms of the
Borrower’s articles of incorporation and bylaws, or of
an
