Cash Collateral Agreement - Fleet Capital Corp. and Navisite Inc.
NAVISITE, INC.
400 Minuteman Road
Andover, Massachusetts 01810
December 11, 2000
Fleet Capital Corporation
50 Kennedy Plaza
Providence, Rhode Island 02903
Re: Cash Collateral Agreement
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Ladies and Gentlemen:
We refer to Lease Schedule No. 35076-00002 to Master Equipment Lease
Agreement No. 35076 (such Master Equipment Lease Agreement is referred to herein
as the "Master Lease") dated as of May 26, 2000, as amended by Amendment dated
as of May 26, 2000 and a Second Amendment dated as of December 8, 2000, between
Navisite, Inc., as lessee (the "Lessee" or "we") and Fleet Capital Corporation,
as lessor (the "Lessor" or "you") (such Lease Schedule, as amended, which
incorporates the terms of the Master Lease, together with all exhibits,
schedules, addenda and riders, is hereafter referred to as the "Lease").
Capitalized terms which are used herein without definition and which are defined
in the Lease shall have the respective meanings assigned to such terms in the
Lease.
On the date hereof, we have furnished to you a cash sum in the amount of
$23,250,000 which has been deposited into an account with your affiliate, Fleet
National Bank (the "Bank"), entitled "Fleet National Bank, as Collateral Trustee
for Navisite, Inc. - Cash Collateral Account" Account #522137343-CL (the "Cash
Collateral Account") and may from time to time deposit additional cash sums in
such Cash Collateral Account, in each case, as cash collateral for the
Obligations under the Lease. We agree that some or all of the funds from time to
time in the Cash Collateral Account may be invested in money market mutual funds
and time deposits, including, without limitation, certificates of deposit (such
money market mutual funds, certificates of deposit or other time deposits being
hereinafter referred to, collectively, as "Deposits"), designated by us and
which are satisfactory to you. Interest earned on the Deposits, and the
principal of the Deposits at maturity which is not invested in new Deposits,
shall be deposited in the Cash Collateral Account. Such funds will not be
commingled with other funds of the Lessee.
We hereby acknowledge and agree that we shall have no right to withdraw any
sums in the Cash Collateral Account or any Deposits or any proceeds of any
thereof or to ask you or the Bank to part with physical possession of any of the
evidences of Deposits constituting instruments until all Obligations under the
Lease have been
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satisfied and paid in full in cash and the Lease has terminated or the Lessor in
its sole discretion shall have instructed the Bank to release cash from the Cash
Collateral Account to pay the Obligations or otherwise; provided that to the
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extent that the funds on deposit in the Cash Collateral Account exceed the
amount required to be maintained thereon pursuant to Section 5A of the Master
Lease (as incorporated into the Lease) under the heading "Affirmative
Covenants - 1. Cash Collateral" and no Event of Default has occurred and is
continuing, the Lessee may request that the Lessor release any funds in excess
of the required level, whereupon the Lessor shall direct the Bank to so release
such excess funds.
In order to secure our payment and performance in full of all of the
Obligations under the Lease, we hereby assign and grant to you a security
interest in and lien upon the Cash Collateral Account, all of the sums from time
to time in the Cash Collateral Account, the Deposits, if any, and in any and all
proceeds of any thereof, whether now or hereafter existing or arising. Upon our
failure to pay any of the Obligations under the Lease as and when due and
payable, then, without any demand or notice of any kind, you shall have the
rights and remedies of a secured party under the Uniform Commercial Code of The
Commonwealth of Massachusetts and, in addition, you shall be entitled to
instruct the Bank to debit the Cash Collateral Account in the amount of such
Obligations in default and transfer such funds to you and, to the extent that
the amount of such Obligations in default exceeds the balance of the Cash
Collateral Account, you may instruct the Bank to collect or redeem any Deposits
issued by it for application to such Obligations, with any withdrawal penalties
on any Deposits being considered a collection expense to be added to such
Obligations. All the Lessor's rights and remedies hereunder shall be cumulative
and in addition to all other rights and remedies, however existing or arising.
If you so elect, you shall be entitled to file a photocopy of this
agreement as a financing statement in any central or local Uniform Commercial
Code filing offices where we have our chief executive office.
The Lessee represents and warrants to the Lessor that this agreement has
been authorized by all necessary corporate action, has been duly executed and
delivered by the Lessee and is in full force and effect as of the date hereof,
and the respective agreements and obligations of the Lessee contained herein
constitute the legal, valid and binding obligations of the Lessee, enforceable
against it in accordance with its terms, subject only to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and to the fact that the
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.
The Lessee agrees that at the request of the Lessor it will at Lessee's
expense, promptly execute and deliver all further instruments and documents and
take all
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further action that the Lessor may reasonably deem necessary or advisable in
order to perfect or protect the security interest and lien granted hereunder.
Any reasonable fees and disbursements of legal counsel to the Lessor in
connection with the preparation, execution or enforcement of this agreement
shall be for our account.
This agreement shall be governed by the law of The Commonwealth of
Massachusetts (without reference to conflicts of law) and shall be construed as
a sealed instrument under such law.
This Agreement may be executed in counterparts, each of which shall be an
original, and all of which shall be one agreement. No amendment to or waiver of
this Agreement shall be effective unless signed by the Lessor and the Lessee.
EACH OF THE LESSOR AND THE LESSEE WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL FOR ANY DISPUTE ARISING UNDER THIS AGREEMENT.
REMAINDER OF PAGE INTENTIONALLY OMITTED
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Please indicate you agreement and acceptance of the foregoing by executing
and returning to us the enclosed duplicate of this letter.
Very truly yours,
NAVISITE, INC.
By: /s/ Kenneth W. Hale
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AGREED to and ACCEPTED by:
FLEET CAPITAL CORPORATION
By: /s/ Kevin G. McGrath
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ACKNOWLEDGED and AGREED to by:
FLEET NATIONAL BANK, as Collateral Trustee
By: /s/ George A. Nicholson
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