EXHIBIT 10.1
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CREDIT AGREEMENT
dated as of
July 3, 2001,
among
CAIS, INC.,
as Borrower,
CAIS INTERNET, INC.,
as Guarantor,
The Lenders Party Hereto,
and
CII VENTURES II LLC,
as Administrative Agent
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ...................................................... 1
SECTION 1.01. Defined Terms................................................. 1
SECTION 1.02. Terms Generally.............................................. 10
SECTION 1.03. Accounting Terms; GAAP....................................... 10
ARTICLE II THE CREDITS .................................................... 10
SECTION 2.01. Commitments.................................................. 10
SECTION 2.02. Loans and Borrowings......................................... 11
SECTION 2.03. Requests for Borrowings...................................... 11
SECTION 2.04. Funding of Borrowings........................................ 12
SECTION 2.05. Termination and Reduction of Commitments..................... 12
SECTION 2.06. Repayment of Loans; Evidence of Debt......................... 13
SECTION 2.07. Prepayment of Loans.......................................... 14
SECTION 2.08. Interest..................................................... 15
SECTION 2.09. Increased Costs.............................................. 15
SECTION 2.10. Break Funding Payments....................................... 16
SECTION 2.11. Taxes........................................................ 16
SECTION 2.12. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.. 17
SECTION 2.13. Mitigation Obligations; Replacement of Lenders............... 19
ARTICLE III Representations and Warranties............................... 19
SECTION 3.01. Organization; Powers......................................... 20
SECTION 3.02. Authorization; Enforceability................................ 20
SECTION 3.03. Governmental Approvals; No Conflicts......................... 20
SECTION 3.04. Compliance with Laws and Agreements.......................... 20
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SECTION 3.05. Investment and Holding Company Status........................ 20
ARTICLE IV CONDITIONS ..................................................... 20
SECTION 4.01. Effective Date............................................... 21
SECTION 4.02. Each Credit Event............................................ 22
SECTION 4.03. Second Credit Event.......................................... 23
ARTICLE V AFFIRMATIVE COVENANTS............................................ 23
SECTION 5.01. Financial Statements and Other Information................... 23
SECTION 5.02. Existence; Conduct of Business............................... 23
SECTION 5.03. Books and Records; Inspection and Audit Rights............... 23
SECTION 5.04. Compliance with Laws......................................... 24
SECTION 5.05. Use of Proceeds.............................................. 24
SECTION 5.06. Additional Subsidiaries...................................... 24
ARTICLE VI NEGATIVE COVENANTS.............................................. 24
SECTION 6.01. Indebtedness................................................. 24
SECTION 6.02. Liens........................................................ 25
SECTION 6.03. Restricted Payments.......................................... 25
SECTION 6.04. Capital Expenditures......................................... 26
SECTION 6.05. Investments.................................................. 26
ARTICLE VII EVENTS OF DEFAULT.............................................. 26
ARTICLE VIII THE ADMINISTRATIVE AGENT...................................... 28
ARTICLE IX MISCELLANEOUS................................................... 30
SECTION 9.01. Notices...................................................... 30
SECTION 9.02. Waivers; Amendments.......................................... 31
SECTION 9.03. Expenses; Indemnity; Damage Waiver........................... 32
SECTION 9.04. Successors and Assigns....................................... 33
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SECTION 9.05. Survival..................................................... 35
SECTION 9.06. Counterparts; Integration; Effectiveness..................... 36
SECTION 9.07. Severability................................................. 36
SECTION 9.08. Right of Setoff.............................................. 36
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process... 36
SECTION 9.10. WAIVER OF JURY TRIAL......................................... 37
SECTION 9.11. Headings..................................................... 38
SECTION 9.12. Confidentiality.............................................. 38
SECTION 9.13. Interest Rate Limitation..................................... 38
SECTION 9.14. Representations of the Lenders............................... 39
SECTION 9.15. Subordination Agreement...................................... 39
SECTION 9.16. Consent to Nortel Sixth Amendment............................ 39
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SCHEDULES:
Schedule 1.01 Excess Inventory
Schedule 2.01 -- Commitments
Schedule 6.01 -- Existing Indebtedness
Schedule 6.01A -- Agreed to Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.02A -- Agreed to Liens
Schedule 6.03 -- Restricted Payments
Schedule 6.04 -- Capital Expenditures
Schedule 6.05 -- Employee Advances
Schedule 6.05A -- Other Investments
EXHIBITS:
Exhibit A -- Form of Opinion of Legal Counsel to the Loan Parties
Exhibit B -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit C -- Form of Subsidiary Guarantee Agreement
Exhibit D -- Form of Parent Guarantee Agreement
Exhibit E Form of Subordination Agreement
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CREDIT AGREEMENT dated as of July 3, 2001, among CAIS, INC., as Borrower,
CAIS INTERNET, INC., as Guarantor, the LENDERS party hereto, and CII
VENTURES II LLC, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
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following terms have the meanings specified below:
"Administrative Agent" means CII Ventures II LLC, in its capacity as
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administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in
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a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
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that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Xxxxx" has the meaning set forth in Section 2.01(b).
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"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in any form
approved by the Administrative Agent.
"Board" means the Board of Governors of the Federal Reserve System of
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the United States of America.
"Borrower" means CAIS, Inc., a Virginia corporation.
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"Borrowing" means Loans made on the same date.
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"Borrowing Request" means a request by the Borrower for a Borrowing in
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accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
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day on which commercial banks in New York City are authorized or required by law
to remain closed.
"CAIS, Inc." means CAIS, Inc., a Virginia corporation.
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"CAIS Software" means CAIS Software Solutions, Inc., a California
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corporation.
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"Capital Expenditures" means for any period, with respect to any
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Person, the aggregate of all expenditures by such Person and its subsidiaries
for the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its subsidiaries.
"Capital Lease Obligations" of any Person means the obligations of such
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Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means any and all shares, interest, participations or
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other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents" means (a) marketable direct obligations issued by,
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or unconditionally guaranteed by, the United States Government or issued by an
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United Stated or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by Xxxxx'x
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Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
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nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or any commercial bank satisfying the requirement of clause (b) of
this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Change in Law" means (a) the adoption of any law, rule or regulation
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after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
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"Cisco Capital Credit Facility" means the $50,000,000 Credit Facility,
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dated June 30, 1999, between Cisco Systems Capital Corporation, a Nevada
corporation, as lender and CAIS, Inc., as borrower, as amended, supplemented or
otherwise modified from time to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
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time.
"Commitment" means, with respect to each Lender, the commitment, if
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any, of such Lender to make Loans hereunder, expressed as an amount representing
the maximum principal amount of such Lender's Loans to be outstanding hereunder,
as such Commitment may be (a) reduced from time to time pursuant to Section 2.05
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04. The initial amount of each Lender's
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable.
The initial aggregate amount of the Lenders' Commitments is $19,500,000.
"Control" means the possession, directly or indirectly, of the power to
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direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
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"Default" means any event or condition which constitutes an Event of
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Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"dollars" or "$" refers to lawful money of the United States of
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America.
"Effective Date" means the date on which the conditions specified in
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Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Equity Interests" means shares of Capital Stock, partnership
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interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"Event of Default" has the meaning assigned to such term in Article
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VII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
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Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income, net profits or gross receipts by the United
States of America (or any State or other political subdivision thereof or
therein), or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.13(b)), any withholding tax that (i) is in effect and would
apply to amounts payable to such Foreign Lender at the time such Foreign Lender
becomes a party to this Agreement (or
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designates a new lending office), except to the extent that such Foreign Lender
(or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from the Borrower
with respect to such withholding tax pursuant to Section 2.11(a), or (ii) is
attributable to such Foreign Lender's failure to comply with Section 2.11(e).
"Federal Funds Effective Rate" means, for any day, the weighted average
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(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, senior
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vice-president - finance, principal accounting officer, treasurer or controller
of the Borrower.
"Financing Transactions" means the execution, delivery and performance
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by each Loan Party of the Loan Documents to which it is to be a party, the
borrowing of Loans and the use of the proceeds thereof.
"Foreign Lender" means any Lender that is organized under the laws of a
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jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
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laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
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States of America.
"Governmental Authority" means the government of the United States of
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America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
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contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
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including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition
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or liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Indebtedness
or obligation; provided that the term "Guarantee" shall not include endorsements
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for collection or deposit in the ordinary course of business.
"Guarantee Agreements" means the Parent Guarantee Agreement and the
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Subsidiary Guarantee Agreement.
"Guaranteed Parties" has the meaning assigned to such term in the
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Subsidiary Guarantee Agreement.
"Hedging Agreement" means any interest rate protection agreement,
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foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Holdings" means CAIS Internet, Inc., a Delaware corporation that, as
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of the Effective Date, owns all the outstanding capital stock of the Borrower.
"Indebtedness" of any Person means, without duplication, (a) all
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obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA and current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor. The amount of any Indebtedness described in
clause (g) above shall be limited to the maximum amount payable under the
applicable Guarantee of such Person if such Guarantee contains limitations on
the amount payable thereunder.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
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"Indemnity, Subrogation and Contribution Agreement" means the
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Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit B, among Holdings, the Borrower, the Subsidiary Loan Parties and the
Administrative Agent.
"Interest Payment Date" means the last day of each calendar month.
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"Lender Affiliate" means, (a) with respect to any Lender, (i) an
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Affiliate of such Lender or (ii) an entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by such Lender or an Affiliate of
such Lender and (b) with respect to any Lender that is a fund that invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"Lenders" means the Persons listed on Schedule 2.01 and any other
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Person that shall have become a party hereto pursuant to an Assignment and
Acceptance or pursuant to Section 9.02(c), other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance or Section
9.02(c).
"Lien" means, with respect to any asset, (a) any mortgage, deed of
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trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Guarantee Agreements, the
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Indemnity, Subrogation and Contribution Agreement, and the promissory notes, if
any, executed and delivered pursuant to Section 2.06(e).
"Loan Parties" means Holdings, the Borrower, and the Subsidiary Loan
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Parties.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
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this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
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business, assets, operations, prospects or condition, financial or otherwise, of
Holdings, CAIS, Inc., and the Subsidiaries taken as a whole, (b) the ability of
Holdings, CAIS, Inc. or any Subsidiary Loan Party to perform any of its
obligations under any Loan Document or (c) the ability of the Lenders to enforce
any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans), or
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obligations in respect of one or more Hedging Agreements, of any one or more of
Holdings, CAIS, Inc., and the Subsidiaries in an aggregate principal amount
exceeding $2,500,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of Holdings, CAIS, Inc. or any Subsidiary
in respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that Holdings, CAIS, Inc. or
such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"Maturity Date" means December 31, 2001.
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"Microsoft Portal Agreement" means the Internet and Portal Development
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and Co-Marketing Agreement, dated May 1, 2000, between Microsoft Corporation, a
Washington corporation, and CAIS, Inc., as amended, supplemented or otherwise
modified from time to time.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
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received in respect of such event, including any cash received in respect of any
non-cash proceeds, but only as and when received, net of (b) the sum of (i) all
commissions, fees and out-of-pocket expenses paid by Holdings, CAIS, Inc. and
the Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and leaseback transaction), the amount of
all payments required to be made by Holdings, CAIS, Inc. and the Subsidiaries as
a result of such event to repay Indebtedness (other than Loans) secured by such
asset or otherwise subject to mandatory prepayment as a result of such event and
(iii) the amount of all Taxes paid (or reasonably estimated to be payable) by
Holdings, CAIS, Inc. and the Subsidiaries, and the amount of any reserves
established by Holdings, CAIS, Inc. and the Subsidiaries to fund (A) retained
liabilities relating to the assets sold or (B) contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the
Borrower).
"Nortel" means Nortel Networks Inc., a Delaware corporation.
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"Nortel Credit Agreement" means the Credit Agreement dated as of June
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4, 1999 (as amended, supplemented or otherwise modified form time to time) by
and between CAIS, Inc. and Nortel.
"Other Taxes" means any and all current or future recording, stamp,
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documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of any Loan Document.
"Parent Guarantee Agreement" means the Parent Guarantee Agreement,
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substantially in the form of Exhibit D, made by Holdings in favor of the
Administrative Agent for the benefit of the Guaranteed Parties.
"Permitted Encumbrances" means:
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(a) Liens imposed by law for taxes that are not yet due or are
being contested in good faith by appropriate proceedings, provided that
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Holdings, CAIS, Inc. or the applicable Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, such contest
effectively suspends collection of the contested obligation and the enforcement
of any Lien securing such obligation and the failure to make payment pending
such contest would not reasonably be expected to result in a Material Adverse
Effect;
(b) 'carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in good faith by appropriate proceedings, provided that
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Holdings, CAIS, Inc. or the applicable Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, such contest
effectively suspends collection of the contested obligation and the enforcement
of any Lien
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securing such obligation and the failure to make payment pending such contest
would not reasonably be expected to result in a Material Adverse Effect;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the ordinary
course of business;
(e) judgment liens in respect of judgments for payments of
money in an aggregate amount not greater than $1,000,000; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of Holdings, CAIS, Inc. or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited liability
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company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Prepayment Event" means:
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(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction but excluding (i) any sale,
transfer or other disposition of collateral securing the obligations under the
Nortel Credit Agreement as in effect on the date hereof the net proceeds of
which are required to prepay such obligations and (ii) any sale, transfer or
other disposition of excess inventory to the extent such excess inventory is
described on Schedule 1.01 and the net proceeds thereof do not exceed
$1,750,000) of any property or asset of Holdings, CAIS, Inc. or any Subsidiary
outside the ordinary course of business.
(b) the issuance by Holdings, CAIS, Inc. or any Subsidiary of
any Equity Interests, or the receipt by Holdings, CAIS, Inc. or any Subsidiary
of any capital contribution, other than any such issuance of Equity Interests
to, or receipt of any such capital contribution from, Holdings, CAIS, Inc. or a
Subsidiary Loan Party; or
(c) the incurrence by Holdings, CAIS, Inc. or any Subsidiary
of any Indebtedness, other than Indebtedness permitted by Section 6.01.
"QWest IRU Agreement" means the IRU Agreement, dated September 28,
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1999, between Qwest Communications Corporation, a Delaware corporation, and
CAIS, Inc., as amended, supplemented or otherwise modified from time to time.
"Register" has the meaning set forth in Section 9.04.
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"Related Parties" means, with respect to any specified Person, such
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Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Loans and unused
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Commitments representing more than 50% of the total outstanding Loans and unused
Commitments at such time.
"Restricted Payment" means (a) any dividend or other distribution
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(whether in cash, securities or other property) with respect to any Equity
Interests in Holdings, CAIS, Inc. or any Subsidiary or (b) any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Equity Interests in Holdings, CAIS, Inc. or
any Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in Holdings, CAIS, Inc. or any Subsidiary.
"Revolving Availability Period" means the period from and including the
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Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"SAIC Dispute" means the dispute with Science Applications
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International Corporation and its lien claim against the escrow fund established
by the Escrow Agreement, dated December 4, 2000, among other parties, Cisco
Systems, Inc., a California corporation, CAIS, Inc., and Holdings, as amended,
supplemented or otherwise modified from time to time.
"Subordination Agreement" means the Subordination Agreement, dated as
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of July 3, 2001, by and among CII Ventures II LLC, Xxxxxxx X. Xxxxx, XX, R.
Xxxxxxxx Xxxxx, Nortel Networks Inc. and the "Obligors" (as defined therein).
"subsidiary" means, with respect to any Person (the "parent") at any
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date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of Holdings other than CAIS, Inc.
----------
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee
------------------------------
Agreement, substantially in the form of Exhibit C, made by the Subsidiary Loan
Parties in favor of the Administrative Agent for the benefit of the Guaranteed
Parties.
"Subsidiary Loan Party" means any Subsidiary other than any Foreign
---------------------
Subsidiary.
"TA Funding Date" has the meaning set forth in Section 2.01(b).
---------------
10
"Taxes" means any and all present or future taxes, levies, imposts,
-----
deductions, charges or withholdings imposed by any taxing authority.
SECTION 1.02. Terms Generally. The definitions of terms herein
-----------------------------
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise
------------------------------------
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
--------
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. (a) Subject to the terms and
-------------------------
conditions set forth herein, including, without limitation, Section 2.01(b),
each Lender agrees to make Loans to the Borrower from time to time during the
Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Loans exceeding such Lender's Commitment, provided that
--------
no more than $3,000,000 in Loans may be made in any calendar week (except that
the initial Borrowing hereunder may be made in any amount up to $5,000,000).
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Loans.
11
(b) Notwithstanding any other provision of this Agreement, R.
Xxxxxxxx Xxxxx ("Xxxxx") shall not be obligated to make Loans to the Borrower
-----
pursuant to his Commitment until the date (the "TA Funding Date") that is the
---------------
earlier of (i) December 1, 2001 and (ii) any date Xxxxx notifies the
Administrative Agent that it will fund Loans to the Borrower. Prior to the TA
Funding Date, any Loans requested by the Borrower in accordance with the terms
of this Agreement shall be made by the Lenders other than Xxxxx ratably in
accordance with the respective Commitments of the Lenders other than Xxxxx.
After the TA Funding Date, Xxxxx and his successors and assigns shall be
obligated to make Loans to the Borrower in the full amount of their Commitments
in accordance with the following sentence. If any Loans are outstanding on the
date of any Borrowing after the TA Funding Date, then such Borrowing shall be
funded by the Lenders not ratably in accordance with their respective
Commitments, but rather in amounts such that after giving effect to such
Borrowing the aggregate principal amount of the Loans outstanding of the Lenders
are ratable in accordance with the respective Commitments of the Lenders (or, if
the amount of such Borrowing is insufficient for such purpose, then as close
thereto as possible); provided that subsequent to the first date on which the
--------
aggregate principal amount of the Loans are outstanding ratably in accordance
with the respective Commitments of each of the Lenders, all Loans made
thereafter shall be made ratably in accordance with the respective Commitments
of the Lenders.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be
----------------------------------
made as part of a Borrowing made by the Lenders ratably in accordance with their
respective Commitments, except as set forth in Section 2.01(b). The failure of
any Lender to make any Loan required to be made by it shall not relieve any
other Lender of its obligations hereunder; provided that the Commitments of the
--------
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
(b) At the time that each Borrowing is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of $500,000 and not
less than $1,000,000; provided that a Borrowing may be in an aggregate amount
--------
that is equal to the entire unused balance of the total Commitments,
notwithstanding the foregoing.
SECTION 2.03. Requests for Borrowings. To request a Borrowing,
-------------------------------------
the Borrower shall notify the Administrative Agent of such request by telephone
not later than 11:00 a.m., New York City time, one Business Day before the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.04.
12
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each applicable Lender of the
details thereof and of the amount of such Lender's Loan to be made as part of
the requested Borrowing.
SECTION 2.04. Funding of Borrowings. (a) Xxxxxxx X. Xxxxx XX
-----------------------------------
shall provide immediately available funds in the full amount of his Commitment
to the Administrative Agent on or prior to the Effective Date to fund Loans made
in respect of its Commitment. Xxxxx shall provide immediately available funds in
the full amount of his Commitment to the Administrative Agent on or prior to the
TA Funding Date. The Administrative Agent will make Loans available to the
Borrower no later than 1:00 p.m., New York City time on the proposed date by
transferring the amounts to an account of the Borrower designated by the
Borrower in the applicable Borrowing Request.
(b) Subject to Section 2.01(b), unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, 15% per annum. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.05. Termination and Reduction of Commitments. (a)
------------------------------------------------------
Unless previously terminated, the Commitments shall terminate at 5:00 p.m., New
York City time, on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of the
--------
Commitments shall be in an amount that is an integral multiple of $500,000 and
not less than $500,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with this Agreement, the outstanding principal amount of the Loans
would exceed the total Commitments.
(c) In the event and on each occasion that any Net Proceeds
are received by or on behalf of Holdings, the Borrower or any Subsidiary in
respect of any Prepayment Event, the Commitments shall be reduced in an
aggregate amount equal to 100% (or 50% in the case of a Prepayment Event
pursuant to paragraph (b) of the definition thereof) of such Net Proceeds.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section, or any required
13
reduction of the Commitments under paragraph (c) of this Section, at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments
--------
delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Except as
provided in paragraph (e) below, each reduction of the Commitments shall be made
ratably among the Lenders in accordance with their respective Commitments.
(e) In the event the Borrower is entitled to replace a
non-consenting Lender pursuant to Section 9.02(c), the Borrower shall have the
right, upon five Business Days' written notice to the Administrative Agent
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), to terminate the entire Commitment of such Lender, so long as (i) all
Loans, together with accrued and unpaid interest and other amounts owing to such
Lender are repaid pursuant to Section 2.07(e) concurrently with the
effectiveness of such termination and (ii) the consents required by Section
9.02(c) in connection with the prepayment shall have been obtained, and at such
time, such Lender shall no longer constitute a "Lender" for purposes of this
Agreement, except with respect to Sections 2.09, 2.10, 2.11 and 9.03 of this
Agreement, which shall survive as to such Lender.
SECTION 2.06. Repayment of Loans; Evidence of Debt. (a) The
--------------------------------------------------
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Loan of such
Lender on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
-----------
existence and amounts of the obligations recorded therein; provided that the
--------
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) The Borrower or any Lender may request that any Loan made
by it be evidenced by a promissory note. In such event, the Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such
14
Lender, to such Lender and its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, any Loan evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
SECTION 2.07. Prepayment of Loans. (a) The Borrower shall have
---------------------------------
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) In the event and on each occasion that the outstanding
principal amount of the Loans exceeds the total Commitments then in effect, the
Borrower shall prepay Borrowings in an aggregate amount equal to such excess.
(c) In the event and on each occasion that any Net Proceeds
are received by or on behalf of Holdings, the Borrower or any Subsidiary in
respect of any Prepayment Event, the Borrower shall prepay Borrowings in an
aggregate amount equal to 100% (or 50% in the case of a Prepayment Event
pursuant to paragraph (b) of the definition thereof) of such Net Proceeds.
(d) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (e) of this Section.
(e) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date and
the principal amount of each Borrowing or portion thereof to be prepaid;
provided that, if a notice of optional prepayment is given in connection with a
--------
conditional notice of termination of the Commitments as contemplated by Section
2.05, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.05. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest for the period up to and including the date of
prepayment calculated in accordance with Section 2.08.
(f) In the event the Borrower is entitled to replace a
non-consenting Lender pursuant to Section 9.02(c), the Borrower shall have the
right, upon five Business Days' prior written notice to the Administrative Agent
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), to prepay all Loans, together with accrued and unpaid interest and
other amounts, owing to such Lender in accordance with Section 9.02(c) so long
as (i) in the case of the prepayment of the Loans of any Lender pursuant to this
Section 2.07(f), the Commitment of such Lender is terminated concurrently with
such prepayment pursuant to Section 2.05(b), and (ii) in the case of the
prepayment of the Loans of any Lender, the consents required by Section 9.02(c)
in connection with the prepayment pursuant to this Section 2.07(f) shall have
been obtained, and at such time, such Lender shall no longer constitute a
"Lender" for
15
purposes of this Agreement, except with respect to Sections 2.09, 2.10, 2.11 and
9.03 of this Agreement, which shall survive as to such Lender.
SECTION 2.08. Interest. (a) The Loans shall bear interest at
----------------------
the rate of 15% per annum.
(b) Notwithstanding the foregoing, if any principal of any
Loan or other amount payable by the Borrower hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to 17% in the case of overdue principal of any Loan or any other amount.
(c) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan, upon termination of the Commitments
and pursuant to Section 2.07; provided, that (i) interest accrued pursuant to
--------
paragraph (b) of this Section shall be payable on demand and (ii) in the case of
any interest due on any Interest Payment Date (excluding the Maturity Date) and
interest due pursuant to Section 2.07, the Borrower may elect to satisfy its
obligation to pay interest by having the amount of interest payable treated as
an additional Loan. If the Borrower elects to have the amount of interest
payable treated as an additional Loan, the Borrower shall deliver a notice
signed by an officer to the Administrative Agent not less than three Business
Days before the applicable Interest Payment Date or other date for the payment
of interest.
(d) All interest hereunder shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
SECTION 2.09. Increased Costs. (a) If any Change in Law shall:
-----------------------------
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender; or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement made by such Lender or any
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan or to increase the cost to such Lender
of participating in, or to reduce the amount of any sum received or receivable
by such Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or the Loans made by such Lender to a
level below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
16
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company, as the case
may be, as specified in paragraph (a) or (b) of this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower shall not
--------
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than 180 days prior to the date that such
Lender notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
----------------
increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.10. Break Funding Payments. In the event of the
------------------------------------
failure to borrow or prepay any Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.07(e) and is revoked in accordance therewith), the Borrower
shall compensate each Lender for the loss, cost and expense attributable to such
event. A certificate of any Lender setting forth any amount or amounts that such
Lender is entitled to receive pursuant to this Section, shall be delivered to
the Borrower and shall be conclusive absent manifest error. The Borrower shall
pay such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.
SECTION 2.11. Taxes. (a) Any and all payments by or on account
-------------------
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required to deduct any
--------
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder or under
17
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender, or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Lender that is entitled to an exemption from or
reduction of the deduction, withholding or payment of an Indemnified Tax or
Other Tax under the law of the United States or the jurisdiction in which the
Borrower is located (or any political subdivision thereof), or any treaty to
which such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines in good
faith, but in its sole discretion, that it has received a refund (or a reduction
in Taxes attributable to foreign tax credits) in respect of any Indemnified
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section 2.11, it shall pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.11 with respect to the Indemnified Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such refund
or reduction in Taxes); provided, however, that the Borrower, upon the request
-------- -------
of the Administrative Agent or such Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. Nothing contained in this Section 2.11(f)
shall require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.
SECTION 2.12. Payments Generally; Pro Rata Treatment; Sharing
-------------------------------------------------------------
of Set-offs. (a) The Borrower shall make each payment required to be made by it
-----------
hereunder or under any other Loan Document (whether of principal, interest, or
of amounts payable under Section 2.09, 2.10 or 2.11, or otherwise) prior to
12:00 noon, New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been
18
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at 0 Xxxx 00/xx/ Xxxxxx, Xxxxx 0000, except that payments pursuant
to Sections 2.09, 2.10, 2.11 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person for the benefit
of the appropriate recipient promptly following receipt thereof. If any payment
under any Loan Document shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. All payments under each Loan Document shall be
made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal and
interest then due hereunder, such funds shall be applied (i) first, towards
payment of interest then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest then due to such parties, and
(ii) second, towards payment of principal then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal then due to
such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
--------
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this paragraph shall apply). The Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute for the benefit of the Lenders
entitled thereto the amount due. In such event, if the Borrower has not in fact
made such payment, then the applicable Lenders severally agree to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the
19
date such amount is distributed to it to but excluding the date of payment to
the Administrative Agent, at the greater of the Federal Funds Effective Rate and
a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(b), 2.12(d) or 9.03(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.13. Mitigation Obligations; Replacement of Lenders.
------------------------------------------------------------
(a) If any Lender requests compensation under Section 2.09, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.11, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.09 or 2.11, as the case may be, in the future and (ii) in the
reasonable judgment of such Lender, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.09, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.11,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
--------
shall have received the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans accrued
interest thereon, and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest) or
the Borrower (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.09 or
payments required to be made pursuant to Section 2.11, such assignment will
result in a material reduction in such compensation or payments. A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Borrower to require such assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Holdings and CAIS, Inc. represents and warrants to the
Lenders that:
20
SECTION 3.01. Organization; Powers. Each of Holdings, CAIS,
----------------------------------
Inc. and the Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. Authorization; Enforceability. The Financing
-------------------------------------------
Transactions to be entered into by each Loan Party are within such Loan Party's
corporate powers and have been duly authorized by all necessary corporate and,
if required, stockholder action. This Agreement has been duly executed and
delivered by each of Holdings and CAIS, Inc. and constitutes, and each other
Loan Document to which any Loan Party is to be a party, when executed and
delivered by such Loan Party, will constitute, a legal, valid and binding
obligation of Holdings, CAIS, Inc. or such Loan Party (as the case may be),
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
--------------------------------------------------
Financing Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of Holdings, CAIS, Inc. or any of the
Subsidiaries or any order of any Governmental Authority and (c) will not violate
or result in a default under any indenture, agreement or other instrument
binding upon Holdings, CAIS, Inc. or any of the Subsidiaries or their assets, or
give rise to a right thereunder to require any payment (other than the payments
required to be made under the Loan Documents) to be made by Holdings, CAIS, Inc.
or any of the Subsidiaries.
SECTION 3.04. Compliance with Laws and Agreements. Each of
-------------------------------------------------
Holdings, CAIS, Inc. and the Subsidiaries is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
SECTION 3.05. Investment and Holding Company Status. Neither
---------------------------------------------------
Holdings, CAIS, Inc. nor any of the Subsidiaries is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
ARTICLE IV
CONDITIONS
21
SECTION 4.01. Effective Date. This Credit Agreement shall not
----------------------------
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this Agreement
signed on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement.
(b) The Lenders shall have received favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of Sidley Xxxxxx Xxxxx & Xxxx, counsel for Holdings, CAIS, Inc. and the
other Loan Parties, substantially in the form of Exhibit A, and covering such
other matters relating to the Loan Parties, the Loan Documents or the Financing
Transactions as the Required Lenders shall reasonably request. CAIS, Inc. hereby
requests the counsel referred to in this paragraph to deliver such opinion.
(c) The Lenders shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Loan Party,
the authorization of the Financing Transactions and any other legal matters
relating to the Loan Parties, the Loan Documents or the Financing Transactions,
all in form and substance satisfactory to the Administrative Agent and its
counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a Vice
President or a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all amounts
due and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by any Loan Party hereunder or under any other Loan Document.
(f) The Administrative Agent shall have received (i)
counterparts of the Subsidiary Guarantee Agreement signed on behalf of each
Subsidiary Loan Party, (ii) counterparts of the Indemnity, Subrogation and
Contribution Agreement signed on behalf of the Borrower and each Loan Party and
(iii) counterparts of the Parent Guarantee Agreement, signed on behalf of each
of the parties thereto.
(g) The obligations relating to the Microsoft Portal Agreement
shall have been terminated or released in a manner satisfactory to the Lenders.
(h) All claims arising from the SAIC Dispute shall have been
resolved in a manner satisfactory to the Lenders.
(i) All issues relating to the termination of the Cisco
Capital Credit Facility and the release of the Cisco Inc. escrow and collateral
relating thereto (including obtaining the insurance policy required to replace
the escrow and such insurance policy being in full force and effect) shall have
been resolved in a manner satisfactory to the Lenders.
22
(j) The issues relating to the Qwest IRU Agreement shall have
been resolved in a manner satisfactory to the Lenders.
(k) CAIS, Inc. shall have received, in respect of the Nortel
Credit Agreement, appropriate waivers or amendments necessary for the execution,
delivery and performance of this Agreement and the other Loan Documents, in form
and substance satisfactory to the Lenders.
(l) The payment terms of the obligations of Holdings, CAIS,
Inc. and their Subsidiaries to their respective vendors and the documentation
relating thereto shall have been resolved in a manner satisfactory to the
Lenders.
(m) The Lenders shall have completed to their satisfaction
full legal, accounting and tax due diligence relating to Holdings, the Borrower
and each of the Subsidiaries and the results thereof shall be satisfactory to
the Lenders.
(n) The Borrower shall have delivered to the Lenders cash flow
projections for Holdings and its Subsidiaries in a form and for a period to be
agreed upon.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on July
3, 2001 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender
-------------------------------
to make a Loan on the occasion of any Borrowing is subject to receipt of the
request therefor in accordance herewith and to the receipt of a certificate from
a Financial Officer:
(a) Certifying that the representations and warranties of each
Loan Party set forth in the Loan Documents shall be true and correct in all
material respects on and as of the date of such Borrowing.
(b) Certifying that at the time of and immediately after
giving effect to such Borrowing, no Default or Event of Default shall have
occurred and be continuing.
(c) (i) Specifying in reasonable detail (x) the working
capital requirements for which the proceeds of such Borrowing will be used and
(y) the actual cash flows of Holdings, the Borrower and the Subsidiaries for
each week from the Effective Date to and including the date of such Borrowing
calculated in a manner consistent with the cash flow projections delivered
pursuant to Section 4.01(n) and (ii) certifying (x) that such cash flows are
within 10% on a cumulative basis of the cash flow projections delivered to the
Lenders pursuant to Section 4.01(n) and (y) that the proceeds of the Borrowing
will be used solely to fund working capital requirements specified in the cash
flow projections delivered to the Lenders pursuant to Section 4.01(n) to be
funded at such time.
23
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
through (c) of this Section.
SECTION 4.03. Second Credit Event. The obligation of each
---------------------------------
Lender to make the second Borrowing is subject (in addition to the satisfaction
of the requirements of Section 4.02) to (a) receipt by the Administrative Agent
of a good standing certificate from the Commonwealth of Virginia in respect of
CAIS, Inc. and (b) the satisfaction of any conditions precedent set forth in
Section 4.01 that were not satisfied prior to the initial Borrowing (with the
consent of the Administrative Agent).
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan payable hereunder shall have been paid in
full, each of Holdings and CAIS, Inc., covenants and agrees with the Lenders
that:
SECTION 5.01. Financial Statements and Other Information. The
--------------------------------------------------------
Borrower will furnish to the Administrative Agent and each Lender:
(a) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed by
Holdings, CAIS, Inc. or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by Holdings or CAIS, Inc. to its shareholders generally, as the case
may be;
(b) promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of Holdings, CAIS, Inc. or any Subsidiary, or compliance with the terms of any
Loan Document, as the Administrative Agent or any Lender may reasonably request,
and
(c) promptly after the occurrence thereof, information
describing the occurrence of any Default or Event of Default.
SECTION 5.02. Existence; Conduct of Business. Each of Holdings
--------------------------------------------
and CAIS, Inc. will, and will cause each of the Subsidiaries to, do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its business.
SECTION 5.03. Books and Records; Inspection and Audit Rights.
------------------------------------------------------------
Each of Holdings and CAIS, Inc., will, and will cause each of the Subsidiaries
to, keep proper books of record and account in which full, true and correct
entries in compliance with GAAP are made of all dealings and transactions in
relation to its business and activities. Each of Holdings and CAIS, Inc. will,
and will cause each of the Subsidiaries to, permit any representatives
designated by the Administrative Agent or any Lender, upon reasonable prior
notice, to visit and inspect its
24
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested,
provided that the Borrower shall be given the opportunity to be present at any
--------
discussion with its independent accountants.
SECTION 5.04. Compliance with Laws. Each of Holdings and CAIS,
----------------------------------
Inc. will, and will cause each of the Subsidiaries to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.05. Use of Proceeds. The proceeds of the Loans will
-----------------------------
be used solely for working capital requirements within ten Business Days of the
borrowing of such Loans or such unspent amounts shall be repaid to the Lenders.
No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations T, U and X.
SECTION 5.06. Additional Subsidiaries. If any additional
-------------------------------------
Subsidiary is formed or acquired after the Effective Date, Holdings will notify
the Administrative Agent and the Lenders thereof and (a) if such Subsidiary is a
Subsidiary Loan Party, (i) Holdings will cause such Subsidiary to execute and
deliver a Subsidiary Guarantee Agreement and (ii) Holdings will cause such
Subsidiary to become a party to the Indemnity, Subrogation and Contribution
Agreement, in each case within three Business Days after such Subsidiary is
formed or acquired.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the
principal of and interest on each Loan payable hereunder have been paid in full,
each of Holdings and CAIS, Inc. covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness. Holdings and CAIS, Inc. will not,
--------------------------
and Holdings will not permit any Subsidiary to, create, incur, assume or permit
to exist any Indebtedness, except:
(a) Indebtedness created under the Loan Documents;
(b) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 (including Indebtedness owed to vendors) and extensions, renewals
and replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof or result in an earlier maturity date or decreased
weighted average life thereof;
(c) Indebtedness of Holdings to CAIS, Inc. or any Subsidiary,
and of any Subsidiary Loan Party to Holdings, CAIS, Inc. or any other
Subsidiary, and of CAIS, Inc. to Holdings or any Subsidiary;
25
(d) Guarantees by Holdings of Indebtedness of CAIS, Inc. or
any Subsidiary Loan Party, by CAIS, Inc. of Indebtedness of Holdings or any
Subsidiary Loan Party and by any Subsidiary of Indebtedness of Holdings or any
Subsidiary Loan Party;
(e) other Indebtedness referred to on Schedule 6.01A (which
shall be subject to mutual agreement of the parties hereto), including
Indebtedness owed to vendors; and
(f) other Indebtedness in an aggregate principal amount not
exceeding $10,000,000 at any time outstanding.
SECTION 6.02. Liens. Holdings and CAIS, Inc. will not, and
-------------------
Holdings will not permit any Subsidiary to, create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of Holdings, CAIS, Inc.
or any Subsidiary existing on the date hereof and set forth in Schedule 6.02;
provided that (i) such Lien shall not apply to any other property or asset of
--------
Holdings, CAIS, Inc. or any Subsidiary and (ii) such Lien shall secure only
those obligations that it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount
thereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by CAIS, Inc. or any Subsidiary or existing on any property
or asset of any Person that becomes a Subsidiary after the date hereof prior to
the time such Person becomes a Subsidiary; provided that (i) such Lien is not
--------
created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary , as the case may be, (ii) such Lien shall not
apply to any other property or assets of Holdings, CAIS, Inc. or any Subsidiary
and (iii) such Lien shall secure only those obligations that it secures on the
date of such acquisition or the date such Person becomes a Subsidiary, as the
case may be, and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
(d) other Liens referred to on Schedule 6.02A (which shall be
subject to mutual agreement of the parties hereto); and
(e) other Liens securing obligations not exceeding $1,000,000
at any time outstanding.
SECTION 6.03. Restricted Payments. Each of Holdings and CAIS,
---------------------------------
Inc. will not, nor will Holdings permit any of the Subsidiaries to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment
except:
(a) Holdings may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its common stock;
(b) Subsidiaries may make Restricted Payments to Holdings or
to any wholly owned Subsidiary Loan Party or to CAIS, Inc.; and
26
(c) Holdings may declare and pay dividends on (i) its Series C
Preferred Stock in cash to U.S. Telesource, Inc., (ii) its Series D Preferred
Stock in additional shares of Series D Preferred Stock to CI Ventures LLC, (iii)
its Series F Preferred Stock in cash to Microsoft Corporation and (iv) its
Series G Preferred Stock in additional shares of Series G Preferred Stock to
3Com Corporation in each case, to the extent required by and in accordance with
the terms thereof in effect on the date hereof (including the related escrow
agreement) on the dates and in the amounts set forth on Schedule 6.03.
SECTION 6.04. Capital Expenditures. Make or commit to make any
----------------------------------
Capital Expenditure, except Capital Expenditures of CAIS, Inc. and other
Subsidiaries in the ordinary course of business not exceeding an amount
described on Schedule 6.04 hereto.
SECTION 6.05. Investments. Make any advance, loan, extension
-------------------------
of credit (by way of guaranty or otherwise) or capital contribution to, or
purchase any Capital Stock, bonds, notes, debentures or other debt securities
of, or any assets constituting a business unit of, or make any other investment
in, any Person (all of the foregoing, "Investments"), except:
-----------
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Guarantee obligations permitted by Section 6.01;
(d) loans and advances to employees of Holdings or any
Subsidiary in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount not to exceed at
any one time outstanding an amount set forth on Schedule 6.05;
(e) Investments existing on the date hereof;
(f) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost) not to exceed the amount set forth on Schedule
6.05A during the term of this Agreement; and
(g) Investments in any Subsidiary Loan Party or CAIS, Inc.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall
-----------------
occur:
(a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this
27
Agreement or any other Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of Holdings, CAIS, Inc. or any of the Subsidiaries in or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate or other document furnished pursuant
to or in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been incorrect in any material
respect when made or deemed made;
(d) Holdings or CAIS, Inc. shall fail to observe or perform
any covenant, condition or agreement contained in Section 5.02 (with respect to
the existence of Holdings or CAIS, Inc.) or 5.05 or in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days;
(f) Holdings, CAIS, Inc. or any Subsidiary shall fail to make
any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
--------
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of Holdings, CAIS, Inc. or any Subsidiary or its debts,
or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, CAIS, Inc. or any Subsidiary or
for a substantial part of its assets, and, in any such case, either (A) there
shall be a period of 60 days during which such proceeding or petition shall not
be dismissed, vacated or stayed pending appeal or (B) an order or decree
approving or ordering any of the foregoing shall be entered;
(i) Holdings, CAIS, Inc. or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Holdings, CAIS, Inc. or any
Subsidiary or for a substantial part of its assets, (iv) file an answer
28
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or (vi)
take any action for the purpose of effecting any of the foregoing;
(j) Holdings, CAIS, Inc. or any Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts as
they come due; or
(k) any Loan Document shall, at any time, cease to be in full
force and effect (unless released by the Administrative Agent at the direction
of the Required Lenders or all Lenders (to the extent required by subsection
9.02 of this Agreement) or as otherwise permitted under this Agreement) or shall
be declared null and void, or the validity or enforceability thereof shall be
contested by any Loan Party,
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
The Person serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such Person and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Holdings, CAIS, Inc. or any
Subsidiary or other Affiliate thereof as if it were not the Administrative Agent
hereunder.
29
The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Loan Documents that the Administrative Agent is required to exercise in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Loan Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to Holdings, CAIS, Inc. or any of the
Subsidiaries that is communicated to or obtained by the Person serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by Holdings, CAIS, Inc. or a Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with any
Loan Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
30
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, in consultation with the Borrower and on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, or an Affiliate of any such bank.
Upon the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent's resignation hereunder,
the provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative 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 the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Except in the case of notices and other
---------------------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 0000 Xxxx Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx, Attention of the President (Telecopy No. 202-463-7190);
with a copy to Sidley Xxxxxx Xxxxx & Xxxx, 0000 X Xxxxxx, X.X., Xxxxxxxxxx,
X.X., 00000 (Telephone: 000-000-0000, Telecopy: 202-533-1399), Attention: Xxxx
Xxxxxx;
(b) if to the Administrative Agent to it at x/x Xxxxxxxx
Xxxxxx Xxxxxxx & Co., 0 Xxxx 00/xx/ Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000, Telephone: (000) 000-0000, Facsimile: (000) 000-0000, Attention:
Xxxxxxxxx Xxxxx; with a copy to Xxxxxxx Xxxxxxx and Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telephone: (000) 000-0000, Facsimile: (212)
455-2502, Attention Xxxxx Xxxxxx; and
31
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by
---------------------------------
the Administrative Agent or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, CAIS, Inc. and the Required Lenders or, in the case of
any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, in each case with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
--------
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the maturity of any Loan, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such scheduled payment,
or postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) change Section 2.12(b) or
(c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section or the definition of the term "Required Lenders" or
any other provision of any Loan Document specifying the number or percentage of
Lenders required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, or (vi) release Holdings from its
Guarantee under the Parent Guarantee Agreement (except as expressly provided in
the Parent Guarantee Agreement), or limit its liability in respect of such
Guarantee or release any Subsidiary Loan Party from its Guarantee under the
Subsidiary Guarantee Agreement (except as expressly provided in the applicable
Subsidiary Guarantee Agreement), or limit its liability in respect of such
Guarantee, in each case, without the written consent of each Lender; provided
--------
further that no such agreement shall
-------
32
amend, modify or otherwise affect the rights or duties of the Administrative
Agent without the prior written consent of the Administrative Agent.
(c) If, in connection with any proposed amendment,
modification, termination or waiver of or to any of the provisions of this
Agreement or the other Loan Documents contemplated by the first proviso to
Section 9.02(b) the consent of the Required Lenders is obtained but the consent
of one or more of such other Lenders whose consent is required is not obtained,
then the Borrower shall have the right to either (i) replace any such
non-consenting Lender or Lenders with one or more replacement Lenders in the
same manner as provided in Section 2.13(b) so long as at the time of such
replacement, each such replacement Lender consents to the proposed amendment,
modification, termination or waiver, or (ii) terminate any such non-consenting
Lender's Commitment and repay in full its outstanding Loans in accordance with
Sections 2.05(e) and 2.07(f); provided that unless the Commitments that are
--------
terminated and the Loans that are repaid pursuant to the preceding clause (ii)
are immediately replaced in full at such time through the addition of new
Lenders or the increase of the Commitments and/or outstanding Loans of existing
Lenders (who in each case must specifically consent thereto), then in the case
of any action pursuant to the preceding clause (ii), each Lender (other than the
terminated Lender or Lenders) must consent to such termination.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
------------------------------------------------
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including charges and disbursements of
counsel and accountants (including, without limitation, Deloitte & Touche) for
the Administrative Agent, in connection with the preparation and administration
of, or decision to enter into, the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable fees and expenses of legal counsel to each Lender in connection with
the negotiation, execution and delivery of the Loan Documents and any amendments
thereto and (iii) all out-of-pocket expenses incurred by the Administrative
Agent, including the fees, charges and disbursements of any counsel for the
Administrative Agent, in connection with the enforcement or protection of its
rights in connection with the Loan Documents, including its rights under this
Section, or in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
----------
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Financing Transactions or any other transactions
contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
--------
that such indemnity shall not,
33
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses resulted from the gross negligence or
wilful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or (b)
of this Section or if the Administrative Agent otherwise incurs any cost or
liability as a result of its capacity as Administrative Agent hereunder
(including as a result of making any payments on behalf of the Lenders to the
Borrower after a Default or Event of Default), each Lender severally agrees to
pay to the Administrative Agent such Lender's pro rata share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
--------
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent in its capacity
as such. For purposes hereof, a Lender's "pro rata share" shall be determined
based upon its share of the total outstanding Loans and unused Commitments at
the time.
(d) To the extent permitted by applicable law, neither
Holdings nor CAIS, Inc. shall assert, and each hereby waives, any claim against
any Indemnitee, on any theory of liability, (i) for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Financing Transactions, any
Loan or the use of the proceeds thereof or (ii) arising out of, in connection
with, or as a result of the use by others of information or other materials
obtained through electronic, telecommunications or other information
transmission systems (provided that, in the case of clause (ii), such Indemnitee
--------
utilized the same degree of care in connection therewith as it uses for other
confidential information).
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of
------------------------------------
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
--------
(i) except in the case of an assignment to a Lender or a Lender Affiliate of a
Lender, the Administrative Agent must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or a Lender Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Commitment
or Loans, the amount of the
34
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$1,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, (iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire, and (vi) Xxxxx may not assign his rights and obligations
hereunder prior to the TA Funding Date, and provided further that any consent of
----------------
the Borrower otherwise required under this paragraph shall not be required if an
Event of Default under clause (h) or (i) of Article VII has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.09, 2.10, 2.11 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
--------
shall be conclusive, and Holdings, CAIS, Inc., the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph. On or prior
to such effective date, the assigning Lender shall surrender any outstanding
notes held by it all or a portion of which are being assigned, and the Borrower,
at its own expense, shall, upon the request to the Administrative Agent made at
the time of such assignment by the assigning Lender or the assignee, as
applicable, execute and
35
deliver to the Administrative Agent (in exchange for the outstanding notes of
the assigning Lender) a new note to the order of such assignee in an amount
equal to the amount of such assignee's Loan. Any such new notes shall be dated
the Effective Date and shall otherwise be in the form of the note replaced
thereby. Any notes surrendered by the assigning Lender shall be returned by the
Administrative Agent to the Borrower marked "cancelled".
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
-----------
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
--------
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) Holdings,
CAIS, Inc., the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
--------
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.09,
2.10 and 2.11 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.12(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.09 or 2.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.11 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.11(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations to a Federal Reserve Bank, and with the consent of the Borrower and
Administrative Agent any Lender which is an investment fund may pledge all or
any portion of its loans to its trustee in support of its obligations to such
trustee, and this Section shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a security
--------
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto and in
no event shall such Federal Reserve Bank or trustee be considered to be a
"Lender" or be entitled to require the assigning Lender to take or omit to take
any action hereunder.
SECTION 9.05. Survival. All covenants, agreements,
----------------------
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other
36
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any other amount payable
under this Agreement is outstanding and unpaid and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.09, 2.10, 2.11 and
9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
------------------------------------------------------
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement
--------------------------
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall
-----------------------------
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
-------------------------------------------------------------
of Process.
----------
37
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each of Holdings and CAIS, Inc. hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement or any other Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.
(c) Each of Holdings and CAIS, Inc. hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
----------------------------------
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
38
SECTION 9.11. Headings. Article and Section headings and the
----------------------
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative
-----------------------------
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below) in accordance with their customary procedures, except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower, (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent or any Lender on a nonconfidential basis from a source
other than Holdings or CAIS, Inc. or any of its Affiliates or (i) to any actual
or prospective direct or indirect contractual counterparty with a Lender or its
affiliates in a swap or other derivative agreement or such counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section 9.12); provided that, unless specifically prohibited by applicable
--------
law or court order, each Lender shall notify the Borrower of any request by any
regulatory authority or representative thereof or pursuant to legal process
(other than any such request in connection with any examination of the financial
condition of such Lender by such regulatory authority) for disclosure of any
such nonpublic information prior to disclosure of such information. For the
purposes of this Section, "Information" means all information received from
-----------
Holdings or CAIS, Inc. or any of its Affiliates relating to Holdings or CAIS,
Inc. or any of the Subsidiaries or their respective businesses, other than any
such information that is available to the Administrative Agent or any Lender on
a nonconfidential basis prior to disclosure by Holdings or CAIS, Inc. or any of
its Affiliates; provided that, in the case of information received from Holdings
--------
or CAIS, Inc. after the date hereof, such information is clearly identified at
the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding
--------------------------------------
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively, the "Charges"), shall
-------
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
------------
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and,
39
to the extent lawful, the interest and Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges payable to such Lender
in respect of other Loans or periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.
SECTION 9.14. Representations of the Lenders. Each Lender
--------------------------------------------
represents and acknowledges that the Loans are not registered under the
Securities Act of 1933, as amended (the "Securities Act") or under any state
--------------
securities laws, that the extension of the Loans are being made in reliance on
the exemption from registration under Section 4(2) of the Securities Act and
from similar exemptions under state securities laws as not involving any public
offering and that the Borrower's reliance on such exemption is predicated in
part on the representations made by each Lender to and with the Borrower that
such Lender (1) is acquiring the Loans for investment for its own account, with
no present intention of reselling or otherwise distributing the same (other than
a portion of its Commitments, Loans and other obligations hereunder to R.
Xxxxxxxx Xxxxx), (2) is an "accredited investor" as defined in Regulation D
under the Securities Act, and (3) has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
the investments made or to be made in connection with the extension of the
Loans. The Loans may not be transferred except (i) pursuant to an effective
registration statement under the Securities Act, (ii) pursuant to Rule 144 under
the Securities Act if the transferor delivers a certificate, in form and
substance reasonably satisfactory to the Borrower, that such transfer complies
with the requirements of Rule 144, or (iii) pursuant to any other available
exemption from registration if such transferee makes the representations set
forth in the preceding sentence in writing to the Borrower and, in the case of
any transfer pursuant to clause (iii) other than to an affiliate of such Lender
or R. Xxxxxxxx Xxxxx, with the delivery to the Borrower of an opinion of counsel
reasonably satisfactory to the Borrower by counsel reasonably satisfactory to
the Borrower (and the Borrower hereby acknowledges and agrees that (x) Xxxxxxx
Xxxxxxx & Xxxxxxxx and (y) Xxxxx X. Xxxxxx, Esq., is each reasonably
satisfactory to the Borrower), stating that no registration is required under
the Securities Act.
SECTION 9.15. Subordination Agreement. Notwithstanding
-------------------------------------
anything to the contrary contained in this Agreement, the Indebtedness and
certain related obligations created by or arising under this Agreement are
subject to the terms of the Subordination Agreement so long as the Subordination
Agreement is in effect.
SECTION 9.16. Consent to Nortel Sixth Amendment.
-----------------------------------------------
Notwithstanding anything to the contrary contained in this Agreement, the
parties hereto consent to the terms of the Sixth Amendment to Credit Agreement
(the "Sixth Amendment"), made and entered into effective as of July 3, 2001, by
---------------
and among CAIS, Inc., the lenders party thereto and Nortel, as administrative
agent, and the Lenders and the Administrative Agent acknowledge and agree that
none of the terms agreed to in the Sixth Amendment will or will be deemed to
conflict with or result in a breach of the terms of the Loan Documents in any
manner whatsoever.
2
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
CAIS, INC.
By: ________________________
Name:
Title:
CAIS INTERNET, INC.
By: ________________________
Name:
Title:
CII VENTURES II LLC, as Administrative
Agent and as a Lender
By: ________________________
Name:
Title:
XXXXXXX X. XXXXX XX, as a Lender
By: ________________________
Name:
Title:
R. XXXXXXXX XXXXX, as a Lender
By: ________________________
Name:
Title:
