[LETTERHEAD OF CISCO SYSTEMS CAPITAL]
EXECUTION COPY
June 30, 1999
CAIS, Inc.
0000 00xx Xxxxxx XX
Xxxxxx Xxxxx
Xxxxxxxxxx X.X. 20037
Attn: Xxxxxxx X. Xxxxx, XX
Ladies and Gentlemen:
Cisco Systems Capital Corporation ("Lender"), a corporation organized and
existing under the laws of the State of Nevada, is pleased to make a credit
facility available to CAIS, Inc. ("Borrower"), a corporation organized and
existing under the laws of the State of Virginia, on the following terms and
conditions:
SECTION 1. DEFINITIONS.
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1.1 As used in this agreement (this "Agreement"), the following terms
shall have the following meanings:
"Availability Period" has the meaning set forth in the Schedule.
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"Banking Day" has the meaning set forth in the Note(s).
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"Bankruptcy Code" means Title 11 of the United States Code entitled
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"Bankruptcy".
"Borrower" has the meaning set forth in the recital of parties to this
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Agreement.
"Borrowing Date" means any date on which a Loan is made to Borrower.
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"CAIS Internet" means CAIS Internet, Inc., a Delaware corporation.
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"Cisco Systems" means Cisco Systems, Inc. or any subsidiary or
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affiliate thereof.
"Cisco Service Agreement" means any service agreement, license
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agreement, or other agreement relating to any hotel property, multiple dwelling
unit property or other property at which Financed Products are utilized by
Borrower.
"Cisco Service Agreement Revenues" means the revenues, payments,
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accounts receivable, proceeds, monies or other amounts received by or payable to
the Borrower under any Cisco Service Agreement.
"Cisco Products" means information systems networking equipment and
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other goods, spare parts and accessories which Cisco Systems manufactures,
assembles or sells.
"Change of Control" means the occurrence of any of the following
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events: (a) any "person" or "group" (as such terms are used in Sections 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
excluding Xxxxxxx X. Xxxxx, Xx., Xxxxxxx X. Xxxxx, XX and/or their affiliates,
is or becomes the "beneficial owner" (as defined in Rules 13d-3 or 13d-5 under
the Exchange Act), directly or indirectly, of more than 30% of the total voting
power of all voting stock of CAIS Internet (except that the person or group
shall not be deemed the "beneficial owner" of shares tendered pursuant to a
tender or exchange offer made by that person or group or any of their affiliates
until the tendered shares are accepted for purchase or exchange) or (b) during
any consecutive two-year period, individuals who at the beginning of such period
constituted CAIS Internet's Board of Directors (together with any new directors
whose election by the Board or whose nomination for election by the stockholders
of CAIS Internet was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board then in office.
"Closing Date" has the meaning set forth in Section 3.1.
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"Closing Deadline" has the meaning set forth in the Schedule.
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"Collateral" means the property described in the Collateral
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Documents, and all other property now existing or hereafter acquired which may
at any time be or become subject to a Lien in favor of Lender pursuant to the
Collateral Documents or otherwise, securing the payment and performance of the
Obligations. Notwithstanding the foregoing, the term "Collateral" shall not
include any assets or property of Borrower specifically excluded in the term
"Collateral" pursuant to the Collateral Documents.
"Collateral Documents" means each Collateral Document identified in
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the Schedule, any security agreement provided under Section 5.1(l) and any other
agreement pursuant to which Borrower, any Guarantor or any other Person
provides a Lien on its assets in favor of Lender and all filings, documents and
agreements made or delivered pursuant thereto.
"Commencement Date of Tranche A2" has the meaning set forth in the
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Schedule.
"Commitment" means the Dollar amount set forth in the Schedule or
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where the context so requires, the obligation of Lender to make Loans up to such
aggregate principal amount on the terms and conditions set forth in this
Agreement.
"Compliance Certificate" means a certificate of CAIS Internet, in
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substantially the form of Exhibit D, with such changes thereto as Lender may
from time to time reasonably request.
"Creditor" has the meaning set forth in the Schedule.
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"Default" means an Event of Default or an event or condition which
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with notice or lapse of time or both would constitute an Event of Default.
"Dollars" and the sign "$" each means lawful money of the United
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States.
"Event of Default" has the meaning set forth in Section 6.1.
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"Financed Products" means the Cisco Products and other goods the
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acquisition of which is financed by Xxxxxx xxxxxxxxx.
"GAAP" means generally accepted accounting principles as in effect
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from time to time.
"Governmental Authority" means any national government, or any
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state, province or other political subdivision thereof or therein, or any
governmental ministry, department, body, commission, board, bureau, agency,
central bank, court, tribunal or other instrumentality or authority exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantor" means CAIS Internet and any Subsidiary of Borrower
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becoming a guarantor as provided under Section 5.1(l) and any guarantor
identified in the Schedule.
"Guarantor Documents" means any Guaranty and all other documents,
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agreements and instruments delivered to Lender under or in connection with any
Guaranty.
"Guaranty" means the guaranty of any Guarantor, as provided under
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Section 5.1(l), and any guaranty of any Guarantor identified in the Schedule.
"Indebtedness" means, for any Person, (i) all indebtedness or other
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obligations of such Person for borrowed money, or for the deferred purchase
price of property or services (acquired or obtained other than on normal trade
credit terms); (ii) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (iii) all non-contingent
reimbursement and other obligations of such Person in respect of letters of
credit and bankers acceptances and all net obligations in respect of interest
rate swaps, caps, floors and collars, currency swaps, or other similar financial
products (collectively, "Swap Agreements"); (iv) all obligations under leases
which shall have been or should be, in accordance with GAAP, recorded as capital
leases; and (v) all indebtedness of another Person of the types referred to in
clauses (i) through (iv) guaranteed directly or indirectly in any manner by the
Person for whom Indebtedness is being determined.
"Insolvency Proceeding" means (i) any case, action or proceeding
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before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (ii) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, in each case undertaken under U.S. federal, state or foreign law,
including the Bankruptcy Code.
"Landlord Agreement" has the meaning set forth in the Schedule.
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"Lien" means any mortgage, pledge, security interest, assignment,
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deposit arrangement, charge or encumbrance, lien or other type of preferential
arrangement (other than a financing statement filed by a lessor in respect of an
operating lease not intended as security).
"Loan Documents" means this Agreement, the Notes, any Collateral
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Documents, any Guaranty, any Guarantor Documents and all other certificates,
documents, agreements and instruments delivered to Lender under or in connection
with this Agreement.
"Loans" has the meaning set forth in Section 2.1.
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"Material Adverse Change" means (i) a material adverse change in the
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business, operations or financial condition of Borrower and its Subsidiaries
taken as a whole or any Guarantor and its Subsidiaries taken as a whole, or (ii)
any event, matter, condition or circumstance which (A) would materially impair
the ability of Borrower or any Guarantor to perform or observe its
obligations under or in respect of the Loan Documents, or (B) affects the
legality, validity, binding effect or enforceability of any of the Loan
Documents.
"Nortel" means Nortel Networks Inc., a Delaware corporation.
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"Nortel Credit Agreement" means that certain Credit Agreement dated as
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of June 4, 1999 by and among Borrower, Nortel, as administrative agent, and the
Lender named therein.
"Nortel Collateral" means certain collateral as described in Section
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5.1 of the Nortel Credit Agreement and Section 2.1 of the Nortel Security
Agreement.
"Nortel Networks Equipment" has the meaning set forth in Section 1.1
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of the Nortel Credit Agreement.
"Nortel Networks Software" has the meaning set forth in Section 1.1 of
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the Nortel Credit Agreement.
"Nortel Security Agreement" means that certain Security Agreement
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dated as of June 4, 1999 by and between Borrower and Nortel.
"Note" means each Promissory Note referred to in the Schedule.
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"Obligations" means the indebtedness, liabilities and other
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obligations of Borrower and any Guarantor to Lender under or in connection with
the Loan Documents, including all Loans, all interest accrued thereon, all fees
due under this Agreement and all other amounts payable by Borrower and any
Guarantor to Lender thereunder or in connection therewith.
"Permitted Acquisitions" means any transaction or series of related
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transactions for the purpose of or resulting, directly or indirectly, in (i) the
acquisition of all or substantially all of the assets of a Person, or of any
business or division of a Person, (ii) the acquisition of all or any of the
capital stock, partnership interests, membership interests or equity of any
Person, or otherwise causing any Person to become a Subsidiary, or (iii) a
merger or consolidation or any other combination with another Person (other than
a Person that is a Subsidiary), provided that Borrower, or its Subsidiary, is
the surviving Person (an "Acquisition"); and provided further that the
Acquisition conforms to the following requirements: (a) Lender shall have
received promptly, and in any event no less than 15 Banking Days prior to
the consummation of such Acquisition, financial information regarding the
assets, Person or business to be acquired, including the most recent audited
financial statements, if available, but in any case the most recently prepared
balance sheet, statement of income and statement of cash flows for the assets,
Person or business to be acquired and pro forma projected financial statements
showing the effect of the Acquisition of the assets, Person or business on CAIS
Internet, including a balance sheet for CAIS Internet and its Subsidiaries as of
the time of the Acquisition and projected statements of income and cash flows
for CAIS Internet and its Subsidiaries through at least the maturity date of the
Loans, (b) all transactions related to such Acquisition shall be consummated in
accordance with applicable Requirements of Law, and (c) immediately after giving
effect to such Acquisition no Default or Event of Default shall have occurred
and be continuing or would result therefrom.
"Permitted Liens" means: (i) Liens in favor of Lender, (ii) the
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existing Liens disclosed in writing to Lender or incurred in connection with the
extension, renewal or refinancing of the Indebtedness secured by such existing
Liens, provided that any extension, renewal or replacement Lien shall
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be limited to the property encumbered by the existing Lien and the principal
amount of the Indebtedness being extended, renewed or refinanced does not
increase; (iii) Liens for taxes, fees, assessments or other governmental charges
or levies, either not delinquent or being contested in good faith by appropriate
proceedings and which are adequately reserved for in accordance with GAAP,
provided the same does not have priority over any of Lender's Liens
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and no notice of tax lien has been filed of record; (iv) Liens of materialmen,
mechanics, warehousemen, carriers or employees or other similar Liens provided
for by mandatory provisions of law and securing obligations either not
delinquent or being contested in good faith by appropriate proceedings and which
do not in the aggregate materially impair the use or value of the property or
risk the loss or forfeiture thereof; (v) Liens consisting of deposits or pledges
to secure the performance of bids, trade contracts, leases, public or statutory
obligations, or other obligations of a like nature incurred in the ordinary
course of business (other than for Indebtedness); (vi) Liens upon or in any
property acquired or held by any Person or any of its Subsidiaries to secure the
purchase price of such property or Indebtedness incurred solely for the purpose
of financing the acquisition of such property, provided that (A) any such Lien
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attaches to such property concurrently with or within 30 days after the
acquisition thereof, (B) such Lien attaches solely to the property so acquired
in such transaction, (C) the principal amount of the Indebtedness secured
thereby does not exceed 100% of the cost of such property, and (D) such
Indebtedness is permitted hereunder; (vii) restrictions and other minor
encumbrances on real property which do not in the aggregate materially impair
the use or value of such property or risk the loss or forfeiture thereof; and
(viii) Liens upon or in the Nortel Collateral pursuant to the Nortel Credit
Agreement and the Nortel Security Agreement; provided
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that the term "Permitted Liens" shall not include any Liens on any Collateral
consisting of Financed Products or any identifiable proceeds thereof or any
Cisco Service Agreements.
"Person" means an individual, corporation, partnership, joint venture,
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trust, unincorporated organization or any other entity of whatever nature or
any Governmental Authority.
"Requirement of Law" means, as to any Person, any law, treaty, rule or
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regulation or determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.
"Responsible Officer" means, as to any Person, the chief financial
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officer or treasurer of such Person(or any other senior officer of such Person
involved principally in the financial administration or controllership function
of such Person).
"Schedule" means the Schedule of Information attached hereto.
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"Subordinated Debt" has the meaning set forth in Section 5.1(j).
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"Subsidiary" means any corporation, association, partnership, joint
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venture or other business entity of which more than 50% of the voting stock or
other equity interest is owned directly or indirectly by any Person or one or
more of the other Subsidiaries of such Person or a combination thereof.
"Town & Country" means Town and Country Trust and any Person controlled
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by or under common control with Town and Country Trust.
"Tranche A1" has the meaning set forth in the Schedule.
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"Tranche A2" has the meaning set forth in the Schedule.
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"United States" and "U.S." each means the United States of America.
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"Vendor" means Cisco Systems, or any distributor or other reseller of
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Cisco Products.
"Wholly-Owned Subsidiary" means any corporation in which (other than
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directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by CAIS Internet, or by one or more of the
other Wholly-Owned Subsidiaries, or both.
1.2 Interpretation. In the Loan Documents, except to the
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extent the context otherwise requires: (i) any reference to an Article, a
Section, a Schedule or an Exhibit is a reference to an article or section
thereof, or a schedule or an exhibit thereto, respectively, and to a subsection
or a clause is, unless otherwise stated, a reference to a subsection or a clause
of the Section or subsection in which the reference appears; (ii) the words
"hereof," "herein," "hereto," "hereunder" and the like mean and refer to this
Agreement or any other Loan Document as a whole and not
merely to the specific Article, Section, subsection, paragraph or clause in
which the respective word appears; (iii) the meaning of defined terms shall be
equally applicable to both the singular and plural forms of the terms defined;
(iv) the words "including," "includes" and "include" shall be deemed to be
followed by the words "without limitation;" (v) references to agreements and
other contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto; (vi) references to statutes or
regulations are to be construed as including all statutory and regulatory
provisions consolidating, amending or replacing the statute or regulation
referred to; (vii) any table of contents, captions and headings are for
convenience of reference only and shall not affect the construction of this
Agreement or any other Loan Document; and (viii) in the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding";
and the word "through" means "to and including."
SECTION 2. THE LOAN FACILITY.
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2.1 The Loans. Subject to compliance with the conditions precedent
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set forth in Sections 3.1 and 3.2, Xxxxxx agrees, on the terms and conditions
hereinafter set forth, to make loans (each a "Loan" and, collectively, the
"Loans") to Borrower during the Availability Period, in an aggregate principal
amount up to but not exceeding the Commitment. Any amount of the Loans repaid
may not be reborrowed.
2.2 Use of Proceeds. Xxxxxxxx agrees to use the proceeds of any Loans
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made hereunder solely for the purposes described in the Schedule.
2.3 Borrowing Procedure. Except to the extent otherwise provided in
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the Schedule, each Loan to be made hereunder shall be in such minimum
principal amount and subject to such advance written notice, or telephonic
notice (confirmed immediately in writing), as shall be mutually agreed by
Xxxxxxxx and Lender. Each such written notice of borrowing shall be in
substantially the form of Exhibit A (with appropriate completions). Upon
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fulfillment of the applicable conditions set forth in Section 3.1 and 3.2,
Lender shall make the proceeds of the Loan available to Borrower in accordance
with its payment instructions. In the case of any Loan made hereunder for the
purpose of paying the purchase price of Cisco Products, (i) Lender shall make
the Loan available directly to the Vendor on the Borrowing Date (which date
shall not be earlier than the date such Loan is deemed to be outstanding in
accordance with clause (ii)), and Borrower hereby authorizes and directs Lender
to make direct payment to the Vendor of all such Loan proceeds, and
(ii) each such Loan shall be deemed to be outstanding hereunder and under the
Note evidencing such Loan effective as of the date 30 days after the invoice
date of the Cisco Products which are being financed by such Loan. Promptly
following each Loan funding Lender shall send Borrower a written confirmation of
the Loan funding, provided that any failure to send, or delay in sending, such
confirmation shall not limit or otherwise affect the obligation of Borrower to
pay any amount owing with respect to the Loans.
2.4 Evidence of Indebtedness. As additional evidence of the
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Indebtedness of Borrower to Lender resulting from the Loans made by Xxxxxx,
Borrower shall execute and deliver the Note (or Notes) required pursuant to the
Schedule.
2.5 Interest and Fees.
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(a) Interest. Borrower shall pay interest on the unpaid
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principal amount of each Loan at the interest rate and on the dates set forth in
the Note evidencing such Loan.
(b) Fees. Xxxxxxxx agrees to pay to Lender such fee as may be
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specified in the Schedule, payable on the date set forth in the Schedule. All
fees payable under this Section 2.5 shall be nonrefundable.
(c) Determinations. Each determination by Lender of any
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applicable rate of interest, and of any change therein, in the absence of
manifest error shall be conclusive and binding on the parties hereto.
2.6 Computations. All computations of fees and interest hereunder
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shall be made on the basis of a year of 360 days for the actual number of days
occurring in the period for which any such interest or fee is payable.
2.7 Highest Lawful Rate. Anything herein to the contrary
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notwithstanding, if during any period for which interest is computed hereunder,
the applicable interest rate, together with all fees, charges and other payments
which are treated as interest under applicable law, as provided for herein or in
any other Loan Document, would exceed the maximum rate of interest which may be
charged, contracted for, reserved, received or collected by Lender in connection
with this Agreement under applicable law (the "Maximum Rate"), Borrower shall
not be obligated to pay, and Lender shall not be entitled to charge, collect,
receive, reserve or take, interest in excess of the Maximum Rate, and during any
such period the interest payable hereunder shall be limited to the Maximum Rate.
2.8 Repayment of the Loans. Borrower shall repay to Lender the
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principal amount of each Loan in accordance with the terms and conditions of the
Note evidencing such Loan.
2.9 Prepayments. Borrower may, upon prior notice to Lender,
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prepay the outstanding amount of the Loans in whole or in part. If any mandatory
prepayments are required under the Schedule, Borrower shall prepay the
outstanding Loans in the amounts and at the times specified in the Schedule. Any
such prepayments shall not be subject to any fee, premium or penalty except to
the extent a prepayment fee is required under the Schedule. The notice given of
any prepayment shall identify the Loan to be prepaid and specify the date and
amount of the prepayment. Partial prepayments of a Loan shall be applied to the
installments of principal thereof in the inverse order
of maturity. Accrued interest on any such Loan prepaid shall be due on the
prepayment date as to the principal amount of such Loan prepaid.
2.10 Reduction or Termination of the Commitment. Borrower may, upon
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prior notice to Lender, terminate in whole or reduce in part, as of the date
specified by Borrower in such notice, any then unused portion of the Commitment.
From the effective date of any reduction or termination, any commitment fee
payable pursuant to the Schedule shall be computed on the basis of the
Commitment as so reduced or terminated. Once reduced or terminated, the
Commitment may not be increased or otherwise reinstated.
2.11 Increased Costs. If, due to either (i) the adoption of, or any
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change in, any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (a "Regulatory Change"), or
(ii) compliance by Lender with any request, guideline or directive (whether or
not having the force of law) of any such Governmental Authority, there shall be
any increase in the cost to Lender of agreeing to make or making, or funding or
maintaining, any Loan, or any reduction of any amount received or receivable by
Lender under this Agreement or the Note with respect thereto, then from time to
time, within 15 days after demand by Xxxxxx, Borrower shall pay to Lender such
additional amounts as shall compensate Lender for such increased cost or
reduction. Any such request for compensation by Lender under this Section 2.11
shall set forth the basis of calculation thereof and shall, in the absence of
manifest error, be conclusive and binding for all purposes. In determining the
amount of such compensation, Lender may use any reasonable averaging and
attribution methods.
2.12 Payments. Borrower shall make each payment under the Loan
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Documents unconditionally in full and free and clear of, and without reduction
for or on account of, any present and future taxes or withholdings, and all
liabilities with respect thereto. Each such payment shall be made without
set-off, counterclaim or, to the extent permitted by applicable law, other
defense, including without any deduction or setoff arising out of or in
connection with the purchase of the Cisco Products, all of which rights of
Borrower are hereby expressly waived by Borrower; provided, however, that no
payment hereunder shall be deemed to be a waiver of any right or claim that
Borrower may have against Cisco Systems or other Vendor with respect to the
Cisco Products. Each such payment shall be made on the day when due to Lender in
Dollars and in immediately available funds, to Lender's account specified in the
Schedule or to such other bank and/or account of Lender as it from time to time
shall designate in a written notice to Borrower.
SECTION 3. CONDITIONS PRECEDENT.
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3.1 Conditions Precedent to the Initial Loan. The obligation of
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Lender to make its Loan on the initial Borrowing Date (the "Closing Date") shall
be subject to the satisfaction on or before the Closing Deadline of each of the
following conditions precedent before or concurrently with the initial Loan:
(a) Documents. Lender shall have received the following, in form and
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substance reasonably satisfactory to it: (i) the Note (or Notes) required under
the Schedule, executed by Borrower; (ii) any required Guaranty and any
additional Loan Documents specified in the Schedule, executed by each of the
respective parties thereto, and (iii) any other documents and information
reasonably requested by Xxxxxx and specified in the Schedule.
(b) Additional Closing Documents. Lender shall have received the
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following, in form and substance reasonably satisfactory to it: (i) evidence
that all approvals or consents of any other Person, required in connection with
the execution, delivery and performance of the Loan Documents shall have been
obtained; (ii) a certificate of the Secretary or other appropriate officer of
Xxxxxxxx, dated the Closing Date, or a date not more than five Banking Days
prior to the Closing Date, certifying (A) copies of the certificate or articles
of incorporation and bylaws of Borrower and the resolutions adopted by Xxxxxxxx
and other actions taken or adopted by Xxxxxxxx (or any shareholders of Borrower)
authorizing the execution, delivery and performance of the Loan Documents, and
(B) the incumbency, authority and signatures of each officer of Xxxxxxxx
authorized to execute and deliver the Loan Documents and act with respect
thereto; and (iii) a certificate of the Secretary or other appropriate officer
of any Guarantor, dated the Closing Date, or a date not more than five Banking
Days prior to the Closing Date, certifying (A) copies of the certificate or
articles of incorporation and bylaws of any Guarantor and the resolutions and
other actions taken or adopted by any Guarantor authorizing the execution,
delivery and performance of any Guarantor Documents, and (B) the incumbency,
authority and signatures of each officer of any Guarantor authorized to execute
and deliver any Guarantor Documents and act with respect thereto.
(c) Legal Opinion. Lender shall have received a legal opinion of
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legal counsel to Borrower and any Guarantor, dated the Closing Date, or a date
not more than five Banking Days prior to the Closing Date, in form and substance
reasonably satisfactory to Lender.
(d) Collateral. If any Collateral Documents are referred to in the
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Schedule, Lender shall have received the following, in form and substance
reasonably satisfactory to it: (i) executed copies of all UCC-1 financing
statements necessary or appropriate in the reasonable opinion of Lender to
perfect the security interests of Lender created under the Collateral Documents;
(ii) written advice relating to such Lien and judgment searches as Lender shall
have requested, and such termination statements or other documents, as may be
necessary to confirm that the Collateral described in the Collateral Documents
is subject to no other Liens in favor of any Persons (other than Permitted
Liens); (iii) evidence that all other actions necessary or appropriate in the
reasonable opinion of Lender to perfect and protect the security interest
created by the Collateral Documents have been taken; and (iv) evidence that
Lender has been named as loss payee under all policies of property insurance,
and as additional insured under all policies of liability insurance, as required
by the Collateral Documents.
(e) Fees, Costs and Expenses. Borrower shall have paid (i) all
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fees then due in accordance with the Schedule, and (ii) all invoiced costs and
expenses then due in accordance with Section 7.4.
(f) Compliance Certificate. Lender shall have received a
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completed Compliance Certificate of a Responsible Officer of Xxxxxxxx, as of the
end of the fiscal quarter immediately preceding the Closing Date.
3.2 Conditions Precedent to All Loans. The obligation of
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Lender to make each Loan shall be subject to the satisfaction of each of the
following conditions precedent:
(a) Use of Proceeds. Lender shall have received details with
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respect to the use of proceeds of the Loan (in the form of a schedule or other
listing of the Financed Products or otherwise in a form as shall be reasonably
specified by Lender or in the Schedule).
(b) Representations and Warranties; No Default. On and as of
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the date of such Loan, both before and after giving effect thereto and to the
application of proceeds therefrom: (i) the representations and warranties
contained in Section 4.1 and in the other Loan Documents shall be true, correct
and complete as though made on and as of such date; and (ii) no Default shall
have occurred and be continuing or shall result from the making of such Loan.
For purposes of this Section 3.2, clause (i) shall take into account any
amendments to any disclosures made in writing by Borrower and any Guarantor to
Lender after the Closing Date and approved by Xxxxxx. The giving of any notice
of borrowing and the acceptance by Borrower of the proceeds of each Loan made
following the Closing Date shall each be deemed a certification to Lender that
on and as of the date of such Loan such statements are true.
(c) Material Adverse Change. On and as of the date of such
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Loan, there shall have occurred no Material Adverse Change since the date of the
financial statements furnished to Lender prior to the Closing Date.
(d) Additional Documents and Conditions. Lender shall have
-----------------------------------
received, in form and substance reasonably satisfactory to it, such additional
approvals, opinions, documents and other information as Lender may reasonably
request, including any specified in the Schedule, and any additional conditions
precedent set forth in the Schedule shall have been satisfied.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
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4.1 Representations and Warranties of Borrower. Borrower
represents and warrants to Lender that:
(a) Organization and Powers. Borrower (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) has all requisite power and authority to
own its assets and carry on its business and to execute, deliver and
perform its obligations under the Loan Documents, (iii) is qualified to do
business and is in good standing in each jurisdiction in which the failure so to
qualify or be in good standing would result in a Material Adverse Change, and
(iv) is in compliance with all Requirements of Law, except to the extent that
such noncompliance could not reasonably be expected to result in a Material
Adverse Change.
(b) Authorization; No Conflict. The execution, delivery and
--------------------------
performance by Borrower of the Loan Documents have been duly authorized by all
necessary corporate action of Borrower and do not and will not (i) contravene
the terms of the articles or certificate of incorporation, or bylaws, of
Borrower; or (ii) result in a breach of or constitute a default under any
material lease, instrument, contract or other agreement to which Borrower is a
party or by which it or its properties may be bound or affected; or (iii)
violate any provision of any law, rule, regulation, order, judgment, decree or
the like binding on or affecting Borrower except as to clauses (ii) and (iii),
to the extent any such breach, default or violation could not reasonably be
expected to result in a Material Adverse Change.
(c) Binding Obligations. The Loan Documents constitute, or
-------------------
when delivered under this Agreement will constitute, legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms except as may be limited by bankruptcy, insolvency, fraudulent
conveyances, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally and general principles of equity,
including, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
(d) Consents. No authorization, consent, approval, license,
--------
exemption of, or filing or registration with, any Governmental Authority, or
approval or consent of any other Person, is required for the due execution,
delivery or performance by Borrower or any Guarantor of any of the Loan
Documents or the purchase of the Cisco Products, except (1) as may be set forth
in the Schedule or (2) where the failure to obtain the foregoing could not
reasonably be expected to result in a Material Adverse Change. (e) Litigation.
There are no actions, suits or proceedings pending or, to the best of Borrower's
knowledge, threatened against or affecting Borrower or any of its Subsidiaries
before any Governmental Authority or arbitrator which if determined adversely to
Borrower or any such Subsidiary would result in a Material Adverse Change.
(f) Financial Statements. All financial statements of
--------------------
Borrower and its Subsidiaries delivered to Lender are complete and correct and
fairly present the financial condition of Borrower and its Subsidiaries as at
the times and for the periods covered by such statements, in each case in
accordance with GAAP, consistently applied, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any absence
of notes. Since the date of the most recent financial statements furnished to
Lender prior to the Closing Date, there has not been, nor is it reasonably
likely that there will be, any Material Adverse Change.
(g) Purchase Transaction. Each purchase transaction to be financed
---------------------
with any Loan represents a bona fide and undisputed transaction between Borrower
and the Vendor (or other applicable vendor of Financed Products) entered into in
compliance in all material respects with all applicable laws and regulations.
(h) Subsidiaries. Except as set forth in the Schedule, on the date
-------------
of this Agreement Borrower has no Subsidiaries.
(i) Patents and Other Rights. Each of Borrower and its Subsidiaries
-------------------------
possesses all approvals, authorizations, permits, franchises, licenses, patents,
trademarks, trade names, service marks, copyrights, leases and all rights with
respect thereto, free from burdensome restrictions, that are reasonably
necessary for the ownership, maintenance and operation of its business, except
to the extent the failure to possess the foregoing could not reasonably be
expected to result in a Material Adverse Change, and neither Borrower nor any
such Subsidiary is in material violation of any rights of others with respect to
the foregoing except for violations which could not reasonably be expected to
result in a Material Adverse Change.
(j) Insurance. The properties of Borrower and its Subsidiaries are
----------
insured, with financially sound and reputable insurance companies, in such
amounts, with such deductibles and covering such risks as is customarily carried
by companies engaged in similar businesses and owning similar properties in the
localities where Borrower or such Subsidiary operates.
(k) Year 2000 Compliance. On the basis of a comprehensive review and
---------------------
assessment of Borrower's and its Subsidiaries' systems and equipment and inquiry
made of Borrower's and its Subsidiaries' material suppliers, vendors and
customers, Borrower reasonably believes that the "Year 2000 problem" (that is,
the inability of computers, as well as embedded microchips in non-computing
devices, to perform properly date-sensitive functions with respect to certain
dates prior to and after December 31, 1999), including costs of remediation,
will not result in a Material Adverse Change.
(l) Disclosure. None of the representations or warranties made by
-----------
Borrower in the Loan Documents as of the date of such representations and
warranties, and none of the statements contained in any other information with
respect to Borrower and its Subsidiaries, including each exhibit or report,
furnished by or on behalf of Borrower to Lender in connection with the Loan
Documents, contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they are made, not
misleading.
(m) Location of Financed Products. As of the date hereof, Borrower
-----------------------------
does not anticipate locating Financed Products within the multiple dwelling
units owned by Town & Country other than those locations listed on Exhibit E
attached hereto and the value of such Financed Products at such locations will
not, in the aggregate, exceed $500,000. As of the date hereof, Xxxxxxxx does
not anticipate maintaining points of presence where Financed Products will be
located, except for those locations listed on Exhibit E attached hereto.
4.2 Representations and Warranties of Lender. Lender represents
-----------------------------------------
and warrants to Borrower that Lender: (i) will acquire each Note for its own
account for investment and (subject to the disposition of its property being at
all times within its control) not with a view to any resale or other
distribution of such Note in a transaction constituting a public offering or
otherwise requiring registration under the Securities Act of 1933, as amended
(the "Securities Act") or in a transaction that would result in noncompliance
with applicable state securities laws; (ii) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and the
risks of its acquisition of any Note and credit extensions to Borrower, (iii) is
an accredited investor as such term is defined in Rule 501 of Regulation D under
the Securities Act, and (iv) understands that such Note has not been, and will
not be, registered under the Securities Act or any state securities laws.
SECTION 5. COVENANTS.
-----------
5.1 Covenants. So long as any of the Obligations shall remain
----------
unpaid or Lender shall have any Commitment, Xxxxxxxx agrees that:
(a) Financial Statements and Other Information. Borrower shall
-------------------------------------------
furnish to Lender: (i) as soon as available and in any event within 45 days
after the end of the first three fiscal quarters of each fiscal year of CAIS
Internet or 90 days (in the case of the fourth fiscal quarter), the quarterly
consolidated financial statements of CAIS Internet, prepared in accordance with
GAAP, and, if requested by Xxxxxx, the quarterly consolidating financial
statements of CAIS Internet, accompanied by a certificate of a Responsible
Officer of CAIS Internet stating that such financial statements fairly present
the financial condition of CAIS Internet and its Subsidiaries as at such date
and the results of operations of CAIS Internet and its Subsidiaries for the
period ended on such date and have been prepared in accordance with GAAP
consistently applied, subject to changes from normal, year-end adjustments and
except for the absence of notes, (ii) as soon as available and in any event
within 90 days after the end of each fiscal year of CAIS Internet, the
consolidated annual financial statements of CAIS Internet, prepared in
accordance with GAAP and, if requested by Xxxxxx, consolidating annual financial
statements of CAIS Internet, and in the case of consolidated financial
statements, accompanied by an unqualified report thereon of independent
certified public accountants of recognized standing; (iii) as soon as available
and in any event not more than 90 days after the commencement of each fiscal
year, the business plan and financial projections of CAIS Internet and its
Subsidiaries for such fiscal year; (iv) promptly after Borrower has knowledge or
becomes aware thereof, notice of the occurrence of any Default hereunder; (v)
prompt written notice of any condition or event known to Borrower which has
resulted, or that could reasonably be expected to result, in a Material Adverse
Change; (vi) together with the financial statements required pursuant to clauses
(i) and (ii), a Compliance Certificate of a
Responsible Officer of CAIS Internet as of the end of the applicable accounting
period; and (vii) and (vi) such other information respecting the operations,
properties, business or financial condition of Borrower, its Subsidiaries and
any Guarantor as Lender may from time to time reasonably request.
(b) Preservation of Existence, Etc. Borrower shall, and shall cause
-------------------------------
each of its Subsidiaries to, maintain and preserve (i) its corporate existence,
and (ii) all material copyrights, patents, trademarks, trade names and service
marks and other intellectual property rights, and all other material rights,
qualifications, permits, licenses, franchises and privileges, necessary or
desirable in the normal course of its business and operations and the ownership
of its properties, except in connection with any transactions expressly
permitted by this Section 5.1.
(c) Licenses. Borrower shall, and shall cause each of its
---------
Subsidiaries to, obtain and maintain all licenses, authorizations, consents,
filings, exemptions, registrations and other governmental approvals of any
Government Authority necessary or desirable (i) in connection with the
execution, delivery and performance of the Loan Documents, the purchase of the
Cisco Products or the consummation of the transactions therein contemplated, or
(ii) in the normal course of its business and operations and the ownership of
its properties, except, in the case of this clause (ii), to the extent that the
failure to do so could not reasonably be expected to result in a Material
Adverse Change.
(d) Compliance with Laws. Borrower shall comply, and shall cause
---------------------
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business,
except such as may be contested in good faith or as to which a bona fide dispute
may exist or where noncompliance could not reasonably be expected to result in a
Material Adverse Change.
(e) Insurance. Borrower shall, and shall cause each of its
---------
Subsidiaries to, carry and maintain in full force and effect, at its own expense
and with financially sound and reputable insurance companies, insurance in such
amounts, with such deductibles and covering such risks as is customarily carried
by companies engaged in the same or similar businesses and owning similar
properties in the localities where Borrower or such Subsidiary operates. Without
limiting the generality of the foregoing, Borrower shall, and shall cause each
of its Subsidiaries to, comply with all requirements of the Collateral Documents
pertaining to maintenance of insurance.
(f) Change in Nature of Business. Borrower shall not, and shall not
-----------------------------
permit any of its Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it at the
date hereof, provided, however, that Borrower shall be permitted to engage in a
line of business that is reasonably related to its lines of business on the date
hereof including internet content solutions and voice communications.
(g) Restrictions on Fundamental Changes. Borrower shall not, and
shall not suffer or permit any Subsidiary to, merge, consolidate with or into,
or convey, transfer, lease or otherwise dispose of (whether in one transaction
or in a series of transactions all or substantially all of its assets (whether
now owned or hereafter acquired) to or in favor of any Person), except:
a. any of Borrower's Subsidiaries may merge with, consolidate into
or transfer all or substantially all of its assets to Borrower or to any
Subsidiary of Borrower (provided that the surviving or transferee entity is
Borrower or a Wholly-Owned Subsidiary of Borrower) and in connection therewith
such Subsidiary may be liquidated or dissolved, provided that no Material
Adverse Change would result therefrom;
b. Borrower or any of its Subsidiaries may sell or dispose of
assets in accordance with the provisions of Section 5.1(h);
c. Borrower or any of its Subsidiaries may make any investment
permitted by Section 5.1(k); and
d. Borrower or any of its Subsidiaries may merge with or
consolidate into any other Person (other than CAIS Internet), provided that (i)
(in the case of Borrower, Borrower is the surviving Person, (ii) no such merger
or consolidation shall be made while there exists a Default or if a Default
would occur as a result thereof and (iii) all actions have been taken (to the
satisfaction of the Lender) under Section 5.1(n) to protect and continue
perfected the Liens of the Lender under this Agreement.
(h) Sales of Assets. Borrower shall not, and shall not permit any of
---------------
its Subsidiaries to, sell, lease, transfer, or otherwise dispose of, or part
with control of (whether in one transaction or a series of transactions) any
assets (including any shares of stock in any Subsidiary or other Person) outside
the ordinary course of business (each a "Transfer") or enter into or consummate
any Transfer: (i) involving Financed Products (other than in the ordinary course
of business to a Wholly-Owned Subsidiary that is a Guarantor hereunder), (ii)
that could reasonably be expected to result in a Material Adverse Change or
(iii) that would violate the terms of any other Loan Document; provided that as
a condition to consummating any Transfer to any such Wholly-Owned Subsidiary of
Financed Products, Borrower shall provide ten Banking Days' prior written notice
to Lender of the proposed Transfer. Notwithstanding the foregoing, Borrower
and/or its Subsidiaries may effect a Transfer of any assets, other than the
Financed Products, provided that all such Transfers, in the aggregate, do not
have a fair market value greater than $10,000,000.
(i) Negative Pledge. Borrower shall not, and shall not permit any of
---------------
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any of its properties, revenues or assets, whether now owned or
hereafter acquired, other than Permitted Liens.
(j) Indebtedness. Borrower shall not, and shall not permit any of
------------
its Subsidiaries to, create, incur, assume or otherwise become liable for or
suffer to exist any Indebtedness, other than: (i) Indebtedness of Borrower to
Lender hereunder; (ii) Indebtedness of Borrower and its Subsidiaries existing on
the date hereof and disclosed to Lender or extensions, renewals and refinancings
of such Indebtedness, provided that the principal amount of such
Indebtedness being extended, renewed or refinanced does not increase; (iii)
accounts payable to trade creditors for goods and services and current operating
liabilities (not the result of the borrowing of money) incurred in the ordinary
course of Borrower's or such Subsidiary's business in accordance with customary
terms and paid within the specified time, unless contested in good faith by
appropriate proceedings and reserved for in accordance with GAAP; (iv)
Indebtedness consisting of guarantees resulting from endorsement of negotiable
instruments for collection by Borrower or any such Subsidiary in the ordinary
course of business; (v) Indebtedness of Borrower and its Subsidiaries under
capital leases or otherwise incurred under or in connection with any Liens of
the type referred to in clause (vi) or (viii) (or any extension, refinancing or
replacement thereof) of the definition of Permitted Liens in Section 1.1,
provided that the aggregate principal amount outstanding of Indebtedness under
the Nortel Credit Agreement does not exceed $30,000,000; (vi) Indebtedness of
Borrower to CAIS Internet or any other Person subordinated to the payment of the
Obligations of Borrower (the "Subordinated Debt") on terms satisfactory to
Lender; (vii) Indebtedness of Borrower to any of its Wholly-Owned Subsidiaries
or of any of its Wholly-Owned Subsidiaries to another of its Wholly-Owned
Subsidiaries; and (viii) Indebtedness incurred under any Swap Agreements or
under one or more secured or unsecured term loans and/or revolving credit
facilities (including any letter of credit subfacility), and any refinancing,
replacements, renewals or extensions thereof, in an aggregate principal amount
not to exceed 200% of paid in equity capital of CAIS Internet minus the sum of
(x) the Indebtedness described in clause (i) of this paragraph and (y) the
purchase money Indebtedness described in clause (v) of this paragraph.
(k) Loans and Investments. Borrower shall not, and shall not permit
----------------------
any of its Subsidiaries to, purchase or otherwise acquire the capital stock,
assets (constituting a business unit), obligations or other securities of or any
interest in any Person, or otherwise extend any credit to or make any additional
investments in any Person (an "Investment"), other than in connection with: (i)
extensions of credit in the nature of accounts receivable or notes receivable
arising from the sales of goods or services in the ordinary course of business;
(ii) extensions of credit by Borrower to any of its Wholly-Owned Subsidiaries or
by any of its Wholly-Owned Subsidiaries to another of its Wholly-Owned
Subsidiaries or Borrower; (iii) employee loans in an amount not to exceed
$2,000,000; (iv) short term, investment grade money market instruments, in
accordance with Borrower's usual and customary treasury management policies
(including, without limitation, the Investments described in Section 9.5 (c)
through (f) of the Nortel Credit Agreement). Notwithstanding the foregoing,
Borrower or any of its Subsidiaries, shall be permitted to engage in one or more
Permitted Acquisitions provided that any such Permitted Acquisition is funded by
the proceeds from any equity offering of CAIS Internet or Borrower in excess of
$68,000,000, in the aggregate, and provided further that the amount of such
proceeds resulting in any Permitted Acquisition that is not a Wholly- Owned
Subsidiary shall not be, in the aggregate, in excess of $20,000,000 of such
proceeds.
(l) Additional Subsidiaries. (A) If Borrower proposes to incorporate,
-----------------------
create or acquire any additional Wholly- Owned Subsidiary, Borrower shall notify
Lender thereof, and, if required hereby, obtain Xxxxxx's consent thereto. After
the incorporation, creation or acquisition of any such Wholly-Owned Subsidiary
(subject to obtaining any necessary Lender consent), within five Banking Days
following receipt by Borrower from Lender of a security agreement, in form and
substance reasonably satisfactory to Lender,
and a guaranty of the Obligations in form and substance reasonably satisfactory
to Lender, Borrower shall cause such Wholly-Owned Subsidiary to execute and
deliver such guaranty and security agreement to Lender. Lender may elect in its
sole discretion to waive any such requirement in the case of any non-U.S.
Wholly-Owned Subsidiary and any Wholly-Owned Subsidiary that will remain a
dormant or shell Wholly-Owned Subsidiary. (B) Within five Banking Days after
receipt from Lender of any request to do so, Borrower shall cause such
Wholly-Owned Subsidiary to have executed and filed any UCC-1 financing
statements furnished by Lender in each jurisdiction in which such filing is
necessary to perfect the security interest of Lender in the Collateral of such
Wholly-Owned Subsidiary and in which Lender requests that such filing be made.
(C) Additionally, Borrower and such Wholly-Owned Subsidiary shall have executed
and delivered to Lender such other items as reasonably requested by Xxxxxx in
connection with the foregoing, including resolutions, incumbency and officers'
certificates, opinions of counsel, search reports and other certificates and
documents.
(m) Books and Records; Inspections. Borrower shall, and shall cause
-------------------------------
each of its Subsidiaries to, keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP. Borrower shall
provide Lender and its agents access to the premises of Borrower and its
Subsidiaries at any time and from time to time, during normal business hours and
upon reasonable notice under the circumstances, and at any time on and after the
occurrence of a Default or Event of Default, for the purposes of (i) inspecting
and verifying the Collateral, (ii) inspecting and copying any and all records
pertaining thereto, and (iii) discussing the affairs, finances and business of
Borrower and its Subsidiaries with any officer, employee or director of Borrower
or with its accountants.
(n) Collateral. While any Loans are outstanding, Borrower shall use
----------
its best efforts to ensure that such Loans are secured by a perfected security
interest in the Collateral.
(o) Distributions. Borrower shall not declare or pay any dividends in
-------------
respect of Borrower's capital stock, or purchase, redeem, retire or otherwise
acquire for value any of its capital stock now or hereafter outstanding, return
any capital to its shareholders as such, or make any distribution of
assets to its shareholders as such, or permit any of its Subsidiaries to
purchase, redeem, retire, or otherwise acquire for value any stock of Borrower,
except that Borrower may: (A) declare and deliver dividends and distributions
payable only in common stock of Borrower; and (B) purchase, redeem, retire, or
otherwise acquire shares of its capital stock with the proceeds received from a
substantially concurrent issue of new shares of its capital stock.
(p) Location of Financed Products. Borrower shall not locate, and
------------------------------
shall not permit any of its Subsidiaries to locate, any Financed Products on the
same premises where Nortel Networks Equipment and/or Nortel Networks Software
are located.
(q) Service Agreement Revenues. Borrower shall, on and after August
---------------------------
1, 1999, ensure that all cash proceeds of Cisco Service Agreement Revenues are
(a) deposited directly, as received, into a lockbox or collection account of
Borrower as Lender may require from time to time and (b) on a daily basis after
such deposit, transferred into a lockbox or concentration account of Borrower as
Lender may require from time to time. Borrower shall maintain in effect an
agreement governing each of its lockbox accounts, collection accounts and/or
concentration accounts in form and substance approved by Lender with Bank of
America, N.A. or another depositary bank located in the state of California and
reasonably satisfactory to Lender. (r) Further Assurances and Additional Acts.
Borrower shall execute, acknowledge, deliver, file, notarize and register at its
own expense all such further agreements, instruments, certificates, documents
and assurances and perform such acts as Lender shall deem necessary or
appropriate to effectuate the purposes of the Loan Documents, and promptly
provide Lender with evidence of the foregoing reasonably satisfactory in form
and substance to Lender.
SECTION 6. EVENTS OF DEFAULT.
6.1 Events of Default. Any of the following events which shall occur
-----------------
shall constitute an "Event of Default":
(a) Payments. Borrower shall fail to pay when due (i) any amount
---------
of principal of any Loan or Note, or (ii) any amount of interest on any Loan or
Note, or any fee or other amount payable under any of the Loan Documents, and in
the cases of clauses (i) and (ii) any such default shall remain unremedied for
five days.
(b) Representations and Warranties. Any representation or
-------------------------------
warranty by Borrower under or in connection with the Loan Documents shall prove
to have been incorrect in any material respect when made or deemed made.
(c) Failure by Borrower to Perform Certain Covenants. Borrower
-------------------------------------------------
shall fail to perform or observe any term, covenant or agreement contained in
subsections (b)(i)or (f) through (l) or (n) through (q) of Section 5.1.
(d) Failure by Borrower to Perform Other Covenants. Borrower
----------------------------------------------
shall fail to perform or observe any other term, covenant or agreement contained
in any Loan Document on its part to be performed or observed and any such
failure shall remain unremedied for a period of 20 days from the occurrence
thereof (unless Lender reasonably determines that such failure is not capable of
remedy).
(e) Insolvency. (i) Borrower, any Guarantor or any of their
-----------
respective Subsidiaries shall be dissolved, liquidated, wound up or cease its
corporate existence; or (ii) Borrower, the Guarantor or any such Subsidiary (A)
shall make a general assignment for the benefit of creditors, or shall generally
fail to pay, or admit in writing its inability to pay, its debts as they become
due, subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (B) shall voluntarily cease to conduct its business in the ordinary
course; (C) shall commence any Insolvency Proceeding with respect to itself; or
(D) shall take any action to effectuate or authorize any of the foregoing.
(f) Involuntary Proceedings. (i) Any involuntary Insolvency
------------------------
Proceeding is commenced or filed against Borrower, any Guarantor or any or their
respective Subsidiaries, or any writ, judgment, warrant of attachment, execution
or similar process, is issued or levied against a substantial part of
Borrower's, any Guarantor's or any such Subsidiary's properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) Borrower,
any Guarantor or any such Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) Borrower, any Guarantor or any such Subsidiary acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its property or business.
(g) Defaults Under Other Indebtedness. Borrower, any Guarantor or
----------------------------------
any of their respective Subsidiaries shall fail (i) to make any payment of any
Indebtedness in an aggregate principal amount outstanding of at least $250,000
(or its equivalent in another currency) when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace or notice period, if any, specified in the
agreement or instrument relating to such Indebtedness as of the date of such
failure, or (ii) to perform or observe any term, covenant or condition on its
part to be performed or observed under any agreement, note or instrument
relating to any such Indebtedness, when required to be performed or observed, or
any other event shall occur or condition shall exist thereunder, and such
failure, event or condition shall continue after the applicable grace or notice
period, if any, specified in such agreement, note or instrument, if the effect
of such failure, event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated maturity
thereof.
(h) Cisco Defaults. Borrower or any Guarantor (i) shall fail to
---------------
pay any Indebtedness owing under any other agreement with Cisco Systems, Lender
or any of their respective Subsidiaries or under any note or instrument in favor
of Cisco Systems, Lender or any of their respective Subsidiaries, when due
(whether at scheduled maturity or by required prepayment, acceleration, demand
or otherwise), or (ii) shall otherwise be in breach of or default in any of its
obligations under any such agreement, note or instrument, and such failure,
breach or default shall continue after the applicable grace period, if any,
specified in such agreement, note or instrument.
(i) Material Adverse Change. Any Material Adverse Change shall
-----------------------
occur that gives Lender reasonable grounds to conclude that Borrower may not, or
will be unable to, perform or observe in any material respect in the normal
course its obligations under the Loan Documents.
(j) Failure by Guarantor to Perform Covenants; Invalidity of
---------------------------------------------------------
Guaranty. Any Guarantor shall fail to perform or observe any term, covenant
--------
or agreement contained in any Guaranty on its part to be performed or observed,
or any default shall occur under any Guaranty, and any such failure or default
shall continue after the applicable grace period, if any, specified in any
Guaranty as of the date of such failure, or any defined "Event of Default" as
defined in any Guaranty shall have occurred and is continuing; or any Guaranty
or any other Guarantor Document shall for any reason be revoked or invalidated,
or otherwise cease to be in full force and effect, or any Guarantor or any other
Person shall contest in any manner the validity or enforceability thereof or
deny that it has any further liability or obligation thereunder.
(k) Default under Other Loan Documents. Any defined "Event of
----------------------------------
Default" (as defined in any other Loan Document) shall have occurred. (l)
Consents, Etc. Any law, decree, license, consent, authorization,
registration or approval now or hereafter necessary to enable Borrower or any
Guarantor to comply with its obligations incurred in the Loan Documents or in
connection with the purchase of Cisco Products shall be modified in a materially
adverse manner, or shall be revoked, withdrawn or withheld or shall cease to
remain in full force and effect.
(m) Judgments. A final judgment or order for the payment of
----------
money in excess of $500,000 (or its equivalent in another currency) which is not
fully covered by third-party insurance shall be rendered against Borrower or any
Guarantor or any of their respective Subsidiaries; or (ii) any non-monetary
judgment or order shall be rendered against Borrower, any Guarantor or any such
Subsidiary which has resulted in or would reasonably be expected to result in a
Material Adverse Change; and in each case there shall be any period of 30
consecutive days during which such judgment continues unsatisfied or during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
(n) Change of Control. There shall occur a Change of Control.
-----------------
(o) Subordination. Borrower or any Guarantor makes any payment
-------------
on account of any Indebtedness which has been subordinated to the Obligations
("Subordinated Debt") other than as permitted in the applicable subordination
agreement, or if any Person who has subordinated such Subordinated Debt
terminates or in any way limits its subordination agreement.
6.2 Effect of Event of Default. If any Event of Default shall
--------------------------
occur and is continuing, Lender may by notice to Borrower, (i) declare its
Commitment to be terminated, whereupon the same shall forthwith terminate, and
(ii) declare the entire unpaid principal amount of the Loans and the Note(s),
all interest accrued and unpaid thereon and all other Obligations to be
forthwith due and payable, whereupon the Loans and the Note(s), all such accrued
interest and all such other Obligations shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by Xxxxxxxx, provided that if an
event described in Section 6.1(e) or 6.1(f) shall occur, the result which would
otherwise occur only upon giving of notice by Xxxxxx to Borrower as specified in
this Section 6.2 shall occur automatically, without the giving of any such
notice.
SECTION 7. MISCELLANEOUS.
7.1 Amendments. No amendment to any provision of the Loan Documents
-----------
shall be effective unless it is in writing and has been signed by Xxxxxx and
Borrower, and no waiver of any provision of any Loan Document, or consent to any
departure by Borrower therefrom, shall be effective unless it is in writing and
has been signed by Xxxxxx. Any such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
7.2 Notices. All notices and other communications provided for
-------
hereunder and under the other Loan Documents shall, unless otherwise stated
herein, be in writing (including by facsimile transmission) and mailed, sent or
delivered to the respective parties hereto at or to their respective addresses
or facsimile numbers set forth in the Schedule, or at or to such other address
or facsimile number as shall be designated by any party in a written notice to
the other party hereto. All such notices and communications shall be effective
(i) if delivered by hand, when delivered; (ii) if sent by courier service, when
delivered; (iii) if sent by mail, upon the earlier of the date of receipt or
five Banking Days after deposit in the mail, first class (or air mail, with
respect to communications to be sent to or from the United States), postage
prepaid; and (iv) if sent by facsimile transmission, when sent; provided,
however, that notices and communications to Lender pursuant to Section 2 shall
not be effective until received.
7.3 No Waiver; Cumulative Remedies. No failure on the part of Lender
------------------------------
to exercise, and no delay in exercising, any right, remedy, power or privilege
under any Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under the Loan Documents are
cumulative and not exclusive of any rights, remedies, powers and privileges that
may otherwise be available to Lender.
7.4 Costs and Expenses; Indemnification. Borrower agrees to pay on
------------------------------------
demand (i) the reasonable out-of-pocket costs and expenses of Lender and any of
its affiliates, and the reasonable fees and disbursements of counsel to Lender
(including allocated costs and expenses for internal legal services), in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents, in an aggregate amount not to exceed $100,000; and (ii) all costs and
expenses of Lender and its affiliates, and fees and disbursements of counsel
(including allocated costs and expenses for internal legal services), in
connection with any amendments, modifications or waivers of the terms of any
Loan Documents, any Default, the enforcement or attempted enforcement of, and
preservation of any rights or interests under, the Loan Documents, and any
out-of-court workout or other refinancing or restructuring or any bankruptcy or
insolvency case or proceeding. In addition, whether or not the
transactions contemplated hereby shall be consummated, Borrower hereby agrees to
indemnify Lender, any affiliate thereof and their respective directors,
officers, employees, agents, counsel and other advisors (each an "Indemnified
Person") against, and hold each of them harmless from, any and all liabilities,
obligations, losses, claims, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel to an Indemnified Person (including
allocated costs and expenses for internal legal services), which may be imposed
on, incurred by, or asserted against any Indemnified Person, in any way relating
to or arising out of any of the Loan Documents, the use or intended use of the
proceeds of the Loans or the transactions contemplated hereby or thereby,
including with respect to any investigation, litigation or other proceeding
relating to any of the foregoing, irrespective of whether the Indemnified Person
shall be designated a party thereto (the "Indemnified Liabilities"); provided
that Borrower shall not be liable to any Indemnified Person for any portion of
such Indemnified Liabilities to the extent they are found by a final decision of
a court of competent jurisdiction to have resulted from such Indemnified
Person's gross negligence or willful misconduct. If and to the extent that the
foregoing indemnification is for any reason held unenforceable, Xxxxxxxx agrees
to make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
7.5 Survival. All covenants, agreements, representations
--------
and warranties made in any Loan Documents shall, except to the extent otherwise
provided therein, survive the execution and delivery of this Agreement, the
making of the Loans and the execution and delivery of any Note, and shall
continue in full force and effect so long as Lender has any Commitment, any
Loans remain outstanding or any other Obligations remain unpaid or any
obligation to perform any other act hereunder or under any other Loan Document
remains unsatisfied. Without limiting the generality of the foregoing, the
obligations of Borrower under Section 7.4, and all similar obligations under the
other Loan Documents (including all obligations to pay costs and expenses and
all indemnity obligations), shall survive the repayment of the Loans and the
termination of the Commitment.
7.6 Benefits of Agreement. The Loan Documents are entered
---------------------
into for the sole protection and benefit of the parties hereto and their
successors and permitted assigns and the Indemnified Persons referred to in
Section 7.5, and no other Person shall be a direct or indirect beneficiary of,
or shall have any direct or indirect cause of action or claim in connection
with, any Loan Document.
7.7 Binding Effect; Successors and Assigns. This Agreement
---------------------------------------
shall become effective when it shall have been executed by Xxxxxxxx and Lender
and thereafter shall be binding upon and shall inure to the benefit of Xxxxxx
and Borrower and their respective successors and permitted assigns, except as
otherwise provided herein. Borrower may not assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any other Loan Document without the prior express written consent of Lender. Any
such purported assignment, transfer, hypothecation or other conveyance by
Borrower without the prior express written consent of Xxxxxx
shall be void. Xxxxxxxx acknowledges and agrees that Xxxxxx may assign, or grant
participations in, all or a portion of its rights and obligations hereunder and
under the other Loan Documents, including the benefit of Section 7.4. Upon any
assignment of Xxxxxx's rights hereunder and under the other Loan Documents, such
assignee shall have, to the extent of such assignment, all rights of Xxxxxx
xxxxxxxxx and thereunder and may in turn assign such rights. Upon any assignment
and delegation of Xxxxxx's obligations hereunder and under the other Loan
Documents, such assignee shall have, to the extent of such assignment, all
obligations of Xxxxxx hereunder and thereunder and may in turn assign such
obligations, and, if any such assignee has expressly assumed Xxxxxx's
obligations hereunder and thereunder, Lender shall be relieved of its
obligations hereunder and thereunder to the extent of such assignment and
assumption. Xxxxxxxx agrees that, upon any such assignment, such assignee may
enforce directly, without joinder of Lender, the rights of Lender set forth in
this Agreement and in the other Loan Documents. Any such assignee shall be
entitled to enforce Xxxxxx's rights and remedies under this Agreement and under
any other Loan Document to the same extent as if it were the "Lender" party
hereto or thereto.
7.8 Customer Information. Xxxxxx agrees to take normal and
---------------------
reasonable precautions and exercise due care to maintain the confidentiality of
all information respecting Borrower and its business ("Customer Information").
Xxxxxxxx agrees that Lender may disclose from time to time all Customer
Information in its possession to Lender's other offices, to its subsidiaries and
affiliates, to any potential assignees or participants of the rights and/or
obligations of the Lender hereunder, to any underwriters or placement agents for
any securities to be issued by the Lender or any of its affiliates (or any
transferee of any such affiliates) and to any rating agency such rating such
securities and to their respective legal counsel, agents and other professional
advisors. Borrower also consents to the disclosure of Customer Information by
Lender, or any of its subsidiaries or affiliates, (i) at the request of any
Governmental Authority having jurisdiction over Lender or such subsidiary or
affiliate, (ii) pursuant to subpoena or other court process, or to the extent
required in connection with any litigation between Lender, any of its
subsidiaries or affiliates and Borrower, (iii) when otherwise required to do so
in accordance with applicable law, (iv) to any prospective assignee or
participant in connection with this Agreement, and (v)(A) to the extent such
information is made available by any Guarantor or was or becomes generally
available to the public other than as a result of disclosure by Lender, or (B)
was or becomes available on a non-confidential basis from a source other than
Borrower, provided that such source is not bound by a confidentiality agreement
with Borrower known to Lender.
7.9 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
7.10 Submission to Jurisdiction. Borrower hereby (i) submits to
--------------------------
the non-exclusive jurisdiction of the courts of the State of New York and the
Federal courts of the United States sitting in the Borough of Manhattan
(collectively, the "New York Courts"), for the purpose of any action or
proceeding arising out of or relating to the Loan Documents, (ii) irrevocably
waives (to the extent permitted by applicable law) any objection which it now or
hereafter may have to the laying of venue of any such action or proceeding
brought in any of the New York Courts, and any objection on the ground that
any such action or proceeding in any New York Court has been brought in an
inconvenient forum, and (iii) agrees that (to the extent permitted by applicable
law) a final judgment in any such action or proceeding brought in a New York
Court shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner permitted by law. Nothing in this Section
7.10 shall limit the right of Lender to bring any action or proceeding against
Borrower or its property in the courts of other jurisdictions.
7.11 Waiver of Jury Trial. Each of Lender and Borrower hereby
--------------------
knowingly, voluntarily and intentionally waives any rights it may have to a
trial by jury in respect of any litigation in connection with any Loan Document.
7.12 Entire Agreement. The Loan Documents reflect the entire
-----------------
agreement between Borrower and Lender with respect to the matters set forth
therein and supersede any prior agreements, commitments, drafts, communication,
discussions and understandings, oral or written, with respect thereto.
7.13 Severability. Whenever possible, each provision of the Loan
-------------
Documents shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of any of the
Loan Documents shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of such Loan Document, or the validity or effectiveness
of such provision in any other jurisdiction.
7.14 Counterparts. This Agreement may be executed in any number of
-------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
7.15 Joint and Several Liability. If Borrower consists of more than
---------------------------
one Person, the liability of each Person comprising Borrower shall be joint and
several, and each reference herein to "Borrower" shall mean and be a reference
to each such Person comprising Borrower. The Borrowers agree that any and all of
the Obligations shall be the joint and several responsibility of each of them
notwithstanding any absence herein or in any other Loan Document of a reference
such as "jointly and severally" with respect to such Obligation. The compromise
of any claim with, or the release of, any Borrower shall not constitute a
compromise with, or a release of, any other Borrower.
[remainder of page intentionally left blank]
Please indicate Xxxxxxxx's agreement and acceptance below and return a copy of
this Agreement to Lender. Upon the signature of Borrower below, this Agreement
shall become a binding agreement of Lender and Borrower as of the date first
written above.
Very truly yours,
Cisco Systems Capital Corporation
By: /s/ Xxxxx X. Xxxxxxxx
Title: Manager, Worldwide Financial Services
Acknowledged and Agreed:
CAIS, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx, XX
Title: President
June 30, 1999
SCHEDULE OF INFORMATION
This Schedule of Information (this "Schedule") is an integral part of
the Agreement dated as of June 30, 1999 (as amended, modified, renewed or
extended from time to time, the "Credit Agreement") between CAIS, Inc.
("Borrower") and Cisco Systems Capital Corporation ("Lender"). Capitalized terms
used herein shall have the respective meanings assigned to them in the Credit
Agreement.
1. Information Relating to the Loans and Borrower:
Availability Period: Tranche A1 (as defined below), for the twelve month
period from the Closing Date; and Tranche A2 (as defined below), for the twelve
month period beginning on the first day of the thirteenth month from the Closing
Date ("Commencement Date of Tranche A2"). The "Commitment Expiry Date" shall be
the last day of the twelfth month following the Commencement Date of Tranche A2.
Commitment: $50,000,000 to be made available as follows: (i) up to
$25,000,000 of term Loans ("Tranche A1"), in multiple drawdowns, in minimum
drawings of $100,000 or a multiple of $100,000 in excess thereof; and (ii) up to
$25,000,000 of term Loans ("Tranche A2"), in multiple drawdowns, in minimum
drawings of $100,000 or a multiple of $100,000 in excess thereof, provided
however that no more than three Loan requests may be made by Borrower per month
during the Availability Period.
Fee(s):
(i) Closing Fee: 1.50% of the Commitment as of the Closing Date,
payable in two parts: (1) 1.50% of Tranche A1 is payable on
the Closing Date and (2) 1.50% of Tranche A2 is payable on the
Commencement Date of Tranche A2.
(ii) Commitment Fee: 0.50% per annum on the average daily unused
portion of the Commitment, computed on a monthly basis in
arrears on the last Banking Day of each month based on the daily
utilization for that month as calculated by Xxxxxx. Such
Commitment Fee shall accrue from the Closing Date to the
Commitment Expiry Date and shall be due and payable monthly in
arrears on the last Banking Day of each calendar month, with
the final payment to be made on the Commitment Expiry Date;
provided that, in connection with any reduction or termination
of the Commitment, the accrued Commitment Fee calculated for the
period ending on such reduction or termination date shall also
be paid on the date thereof. The Commitment Fee provided for
herein shall accrue at all times after the abovementioned
commencement date, including at any time during which one or
more conditions precedent in Section 3.2 are not satisfied.
(iii) Facility Fee: $20,000 per quarter. Such Facility Fee shall
accrue from the Closing Date until the date upon which all
Obligations due under the Credit Agreement shall have been
paid in full and shall be due and payable quarterly in arrears
on the last Banking Day of each calendar quarter, with a final
payment to be made on the date upon which such final payment
of Obligations is made. Any payment of Facility Fee
for a partial quarter shall be calculated on a prorated basis.
(iv) Prepayment Fee: 2% of the outstanding amount of the Loans as of
the date of such prepayment for the first twelve months after
the Closing Date; 1% of the outstanding amount of the Loans as
of the date of such prepayment for the second twelve month
period after the Closing Date; and 0.50% of the outstanding
amount of the Loans as of the date of such prepayment for the
third twelve month period after the Closing Date. Borrower
shall provide Lender with at least 30 days written notice in the
event of any prepayment.
Closing Deadline: July 21, 1999.
Additional documents and information: Completion of additional due
diligence satisfactory to Lender including satisfactory analysis validating
underlying industry and market assumptions with regard to Borrower's business
plan and pro forma financials.
Other conditions:
The following condition(s) precedent shall be satisfied on or prior to
each Borrowing Date: (A) Borrower shall provide to Lender a detailed schedule or
other listing of the Financed Products at least five Banking Days prior to the
funding of such Loan, and, if any Subsidiary is the intended recipient of the
Financed Products, designation of the Loan proceeds being borrowed for the
benefit of such Subsidiary and identification of such Subsidiary; (B) Borrower
shall designate whether a proposed Loan is a utilization of Tranche A1 or
Tranche A2; and (C) Each Loan request under Tranche A1 or Tranche A2 must be in
principal amounts of at least $100,000 provided that Borrower shall not request
more than three Loans per month.
Subsidiaries: None.
2. Additional Terms and Conditions:
Use of Proceeds: Financing of Borrower's purchase of Cisco Products
and related Cisco Systems' services from the Vendor thereof.
Note(s): The execution and delivery of a Promissory Note in
substantially the form of Exhibit B evidencing the Loans under Tranche A1 and a
Promissory Note in the form of Exhibit C, evidencing the Loans under Tranche A2.
Guaranty: The execution and delivery of a Guaranty, made by CAIS
Internet, in favor of Xxxxxx in form and substance reasonably satisfactory to
the Lender.
Collateral Documents: The execution and delivery of a security agreement
between Lender and Borrower in form and substance reasonably satisfactory to the
Lender and a security agreement between Lender and each Guarantor referred to
above in form and substance reasonably satisfactory to the Lender.
Additional Loan Documents: The execution and delivery of landlord
agreements and/or collateral access agreements pursuant to the Collateral
Documents (each a "Landlord Agreement").
Mandatory Prepayment: Upon the occurrence of any event or circumstance
which results in a mandatory prepayment under Section 2.7(b) of the Nortel
Credit Agreement (the "Nortel Prepayment Provision"), Borrower shall, as a
condition to such prepayment, prepay a "Pro Rata Amount" of the outstanding
Loans hereunder to Lender. For the purposes hereof, "Pro Rata Amount" shall mean
an amount of the outstanding Loans prior to such prepayment determined by
multiplying (i) the total outstanding amount of Loans prior to such prepayment
by (ii) the quotient of (y) the amount of Indebtedness to be prepaid to Nortel
pursuant to the Nortel Prepayment Provision by (z) the total amount of
Indebtedness owed to Nortel under the Nortel Credit Agreement. Borrower shall
promptly notify Lender of the occurrence of prepayment under the Nortel
Prepayment Provision and the amount of any prepayment to be made hereunder. When
such notice is given, Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Any prepayment made by Borrower hereunder shall be applied first to the
outstanding principal of the Tranche A1 Loans first and second to the
outstanding principal of the Tranche A2 Loans.
3. Addresses for Notices:
(a) Borrower:
CAIS, Inc.
0000 00xx Xxxxxx, XX
Xxxxxx Xxxxx
Xxxxxxxxxx, X.X. 20037
Attn: Xxxxxxx X. Xxxxx, XX
Fax No.: (000) 000-0000
(b) Lender:
Cisco Systems Capital Corporation
Mailstop SJC2 3rd Floor
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Loan Administration, Worldwide Financial Services
Fax No.: (000) 000-0000
4. Xxxxxx's Account for Payments:
Account no.: 1233124070
Ref "CAIS, Inc."
ABA no.: 000000000
Account maintained with:
Bank of America
Concord, California
[remainder of page intentionally left blank]
Acknowledged and agreed:
------------------------
Cisco Systems Capital Corporation
By:
-------------------------------
Title:
CAIS, Inc.
By:
-------------------------------
Title:
EXHIBIT A
Notice of Borrowing
-------------------
Date:
-------------
To: Cisco Systems Capital Corporation
Mailstop SJC2 3rd Floor
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Loan Administration, Worldwide Financial Services
Fax No.: (000) 000-0000
Re: CAIS, Inc.
----------
Ladies and Gentlemen:
The undersigned, CAIS, Inc. ("Borrower"), refers to the Agreement dated as of
June 30, 1999 (as amended, modified, renewed or extended from time to time, the
"Credit Agreement"), between Borrower and Cisco Systems Capital Corporation
("Lender"), the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.3 of the Credit
Agreement, of the borrowing of the Loan specified herein:
1. The date of the proposed borrowing is [the Closing Date]
[_____________].
--------------
2. The amount of the proposed borrowing is $ .
----------
3. The borrowing is a utilization of Tranche .
--
4. The purpose of the borrowing is . Detailed
-------------------
information on any purchase transaction being financed by the proposed
borrowing is attached hereto.
5. The payment instructions with respect to the funds to be made
available to Borrower are as follows: [Lender shall make payment directly to the
Vendor.] [Lender shall make payment directly to [insert
--------------
payment instructions for a vendor other than Cisco Systems.]] [Xxxxxx may retain
the proceeds and apply them against the amounts owing to Xxxxxx described
above.]
CAIS, Inc.
By:
------------------------
Title:
------------------------
EXHIBIT B
Promissory Note
---------------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS. IT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNDER CIRCUMSTANCES THAT WOULD RESULT IN A VIOLATION
OF THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 OR SUCH
OTHER LAWS.
U.S.$25,000,000 June 30, 1999
FOR VALUE RECEIVED, the undersigned, CAIS, Inc. ("Borrower"), a corporation
organized and existing under the laws of the State of Virginia, HEREBY
UNCONDITIONALLY PROMISES TO PAY to the order of Cisco Systems Capital
Corporation ("Lender"), a corporation organized and existing under the laws of
the State of Nevada, the principal sum of twenty-five million United States
Dollars (U.S.$25,000,000), or such greater or lesser amount as represents the
aggregate principal amount of the Loans made by Lender to Borrower pursuant to
the Credit Agreement referred to below, in twelve substantially equal
consecutive quarterly installments, commencing on the last day of the first
calendar quarterly period from the initial Loan, with subsequent installments
payable on the last day of each calendar quarter thereafter, and with the last
such installment to be due and payable on July 31, 2002 (the "Maturity Date")
and in the amount necessary to repay in full the unpaid principal balance
hereof.
If any Loans are made to Borrower after the commencement of the foregoing
amortization, such amortization schedule shall be adjusted to ensure that the
increased principal amount hereof will amortize in substantially equal
consecutive quarterly installments, as provided above.
Xxxxxxxx further promises to pay interest on the principal amount of each
Loan outstanding hereunder on each Interest Payment Date (as defined below)
until the Maturity Date, at a rate per annum equal at all times during each
Interest Period for such Loan to LIBOR for such Interest Period plus 6.00% per
annum (the "Interest Rate").
The period between the date of a Loan and the Maturity Date shall be
divided into successive periods, each such period being an "Interest Period" for
purposes of this Promissory Note.
The initial Interest Period for a Loan shall begin on the date such Loan
is made and end on the next succeeding Interest Payment Date. Each subsequent
Interest Period shall begin on the last day of the immediately preceding
Interest Period and shall end on the next succeeding Interest Payment Date. As
used herein, "LIBOR" means for any Interest Period the rate of interest per
annum determined by Lender to be the average (rounded upward, if necessary, to
the nearest 1/16 of 1%) of the offered rates for deposits in Dollars for three
months appearing on the display page designated as "3750" in the Dow Xxxxx
Market Service (formerly known as the Telerate Service), or any replacement page
thereof in the Dow Xxxxx Market Service displaying London interbank offered
rates of major banks for Dollar deposits, at or about 11:00 a.m. (London time)
on the second Banking Day preceding the first day of the
applicable Interest Period, provided that if no, or only one, such offered
quotation appears on such Telerate display page (or such other replacement
page), "LIBOR" shall be determined by reference to the Reuters Screen LIBO Page
of the Reuters Monitor Money Rates Service (or any replacement page thereof or
other applicable Reuters display page) or other comparable source of interest
quotations for such interbank rates selected by Lender. Interest on each Loan
shall be payable in arrears to Lender on the last day of each calendar quarter
and on the Maturity Date (each such date, an "Interest Payment Date"); provided
that if any prepayment hereof is effected other than on an Interest Payment
Date, accrued interest hereon shall be due on such prepayment date as to the
principal amount prepaid.
In the event that any amount of principal hereof or interest thereon, or
any other amount payable hereunder or under the Credit Agreement, shall not be
paid in full when due (whether at stated maturity, by acceleration or
otherwise), Borrower shall pay interest on such unpaid amount to Lender, from
the date such amount becomes due until the date such amount is paid in full,
payable on demand of Lender, a fluctuating rate per annum equal at all times to
the Reference Rate (as defined below) plus 8% per annum. As used herein,
"Reference Rate" means for any day the rate of interest in effect for such day
as publicly announced from time to time by Bank of America National Trust and
Savings Association in San Francisco, California, as its "reference rate". Each
change in the interest rate hereon based on a change in the Reference Rate shall
be effective at the opening of business on the day specified in the public
announcement of such change.
All computations of interest hereunder shall be made on the basis of a
year of 360 days for the actual number of days occurring in the period for which
any such interest or fee is payable.
Whenever any payment hereunder shall be stated to be due, or whenever any
Interest Payment Date or any other date specified hereunder would otherwise
occur, on a day other than a Banking Day, then, except to the extent otherwise
provided hereunder, such payment shall be made, and such Interest Payment Date
or other date shall occur, on the next succeeding Banking Day, and such
extension of time shall in such case be included in the computation of payment
of interest hereunder; provided, however, that if such extension would cause
such payment to be made, or such Interest Payment Date or other date to occur,
in the next following calendar month, such payment shall be made and such
Interest Payment Date or other date shall occur on the next preceding Banking
Day. As used herein, "Banking Day" means a day other than a Saturday or Sunday
on which commercial banks are not required or authorized by law to close in San
Jose, California, except that if the applicable Banking Day relates to any
determination of LIBOR, "Banking Day" means such a day on which dealings are
carried out in the applicable offshore U.S. Dollar interbank market.
Each such payment shall be made on the date when due, in immediately
available funds, to Xxxxxx's account at Bank of America, N.T.&S.A., Concord,
California, ABA no. 00000000, to account number 1233124070, ref. "CAIS, Inc.,"
or to such other account of Lender as it from time to time shall designate in a
written notice to Borrower.
All payments of principal, interest and other amounts made on or in
respect to this Promissory Note shall be made in freely transferable United
States Dollars for value received on the date of payment, without setoff,
counterclaim or, to the extent permitted by applicable law, defense, and free
and clear of and without deduction for any present and future taxes or charges
whatsoever.
Lender shall record the date and amount of each Loan made to Borrower,
the amount of principal and interest due and payable from time to time
hereunder, each payment thereof, and the resulting unpaid principal balance
hereof, in Lender's internal records, and any such records shall be conclusive
evidence absent manifest error of the amount of the Loans made by Xxxxxx and the
interest and payments thereon; provided, however, that Xxxxxx's failure so to
record shall not limit or otherwise affect the obligations of Borrower hereunder
and under the Credit Agreement to repay the principal of and interest on the
Loans.
This Promissory Note is a Note referred to in, and is subject to and
entitled to the benefits of, the Agreement dated as of June 30, 1999 (as
amended, modified, renewed or extended from time to time, the "Credit
Agreement") between Borrower and Lender. Capitalized terms used herein shall
have the respective meanings assigned to them in the Credit Agreement. The
Credit Agreement provides, among other things, for acceleration (which in
certain cases shall be automatic) of the maturity hereof upon the occurrence of
certain stated events, in each case without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived. This
Promissory Note is subject to prepayment in whole or in part as provided in the
Credit Agreement.
Borrower hereby waives diligence, presentment, protest or notice of
total or partial nonpayment or dishonor with respect to this Promissory Note.
Failure by the holder hereof to exercise any of its rights hereunder in any
instance shall not constitute a waiver thereof in that or any other instance.
Borrower agrees to pay on demand all costs and expenses of Lender and its
affiliates, and fees and disbursements of counsel (including allocated costs and
expenses for internal legal services), in connection with the enforcement or
attempted enforcement of, and preservation of any rights or interests under, (i)
this Promissory Note, and (ii) any out-of-court workout or other refinancing or
restructuring or any bankruptcy or insolvency case or proceeding, including any
losses, costs and expenses sustained by Lender as a result of any failure by
Borrower to perform or observe its respective obligations contained herein.
This Promissory Note shall be governed by, and construed in accordance
with, the law of the State of New York. Borrower hereby (a) submits to the
non-exclusive jurisdiction of the courts of the State of New York and the
Federal courts of the United States sitting in the Borough of Manhattan
(collectively, the "New York Courts"), for the purpose of any action or
proceeding arising out of or relating to this Promissory Note, (b) irrevocably
waives (to the extent permitted by applicable law) any objection which it now or
hereafter may have to the laying of venue of any such action or proceeding
brought in any of the New York Courts, and any objection on the ground that any
such action or proceeding in any New York Court has been brought in an
inconvenient forum, and (c) agrees that (to the extent permitted by applicable
law) a final judgment in any such action or proceeding brought in a New York
Court shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner permitted by law.
IN WITNESS WHEREOF, Borrower by its duly authorized legal representatives
has executed this Promissory Note on the date and in the year first above
mentioned.
CAIS, Inc.
By:
Title:
EXHIBIT C
Promissory Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS. IT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNDER CIRCUMSTANCES THAT WOULD RESULT IN A VIOLATION
OF THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 OR SUCH
OTHER LAWS.
U.S.$25,000,000 June 30, 1999
FOR VALUE RECEIVED, the undersigned, CAIS, Inc. ("Borrower"), a
corporation organized and existing under the laws of the State of Virginia,
HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of Cisco Systems Capital
Corporation ("Lender"), a corporation organized and existing under the laws of
the State of Nevada, the principal sum of twenty-five million United States
Dollars (U.S.$25,000,000), or such greater or lesser amount as represents the
aggregate principal amount of the Loans made by Lender to Borrower pursuant to
the Credit Agreement referred to below, in twelve substantially equal
consecutive quarterly installments, commencing on the last day of the first
calendar quarterly period from the initial Loan, with subsequent installments
payable on the last day of each calendar quarter thereafter, and with the last
such installment to be due and payable on July 31, 2002 (the "Maturity Date")
and in the amount necessary to repay in full the unpaid principal balance
hereof.
If any Loans are made to Borrower after the commencement of the foregoing
amortization, such amortization schedule shall be adjusted to ensure that the
increased principal amount hereof will amortize in substantially equal
consecutive quarterly installments, as provided above.
Xxxxxxxx further promises to pay interest on the principal amount of each
Loan outstanding hereunder on each Interest Payment Date (as defined below)
until the Maturity Date, at a rate per annum equal at all times during each
Interest Period for such Loan to LIBOR for such Interest Period plus 6.00% per
annum (the "Interest Rate").
The period between the date of a Loan and the Maturity Date shall be
divided into successive periods, each such period being an "Interest Period" for
purposes of this Promissory Note.
The initial Interest Period for a Loan shall begin on the date such Loan is
made and end on the next succeeding Interest Payment Date. Each subsequent
Interest Period shall begin on the last day of the immediately preceding
Interest Period and shall end on the next succeeding Interest Payment Date. As
used herein, "LIBOR" means for any Interest Period the rate of interest per
annum determined by Lender to be the average (rounded upward, if necessary, to
the nearest 1/16 of 1%) of the offered rates for deposits in Dollars for three
months appearing on the display page designated as "3750" in the Dow Xxxxx
Market Service (formerly known as the Telerate Service), or any replacement page
thereof in the Dow Xxxxx Market Service displaying London interbank offered
rates of major banks for Dollar deposits, at or about 11:00 a.m. (London time)
on the second Banking Day preceding the first day of the applicable Interest
Period, provided that if no, or only one, such offered quotation appears on such
Telerate display page (or such other replacement page), "LIBOR" shall be
determined by reference to the Reuters Screen LIBO Page of the Reuters Monitor
Money Rates Service (or any replacement page
thereof or other applicable Reuters display page) or other comparable source of
interest quotations for such interbank rates selected by Xxxxxx. Interest on
each Loan shall be payable in arrears to Lender on the last day of each calendar
quarter and on the Maturity Date (each such date, an "Interest Payment Date");
provided that if any prepayment hereof is effected other than on an Interest
Payment Date, accrued interest hereon shall be due on such prepayment date as to
the principal amount prepaid.
In the event that any amount of principal hereof or interest thereon, or any
other amount payable hereunder or under the Credit Agreement, shall not be paid
in full when due (whether at stated maturity, by acceleration or otherwise),
Borrower shall pay interest on such unpaid amount to Lender, from the date such
amount becomes due until the date such amount is paid in full, payable on demand
of Lender, a fluctuating rate per annum equal at all times to the Reference Rate
(as defined below) plus 8% per annum.
As used herein, "Reference Rate" means for any day the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
National Trust and Savings Association in San Francisco, California, as its
"reference rate". Each change in the interest rate hereon based on a change in
the Reference Rate shall be effective at the opening of business on the day
specified in the public announcement of such change.
All computations of interest hereunder shall be made on the basis of a year
of 360 days for the actual number of days occurring in the period for which any
such interest or fee is payable.
Whenever any payment hereunder shall be stated to be due, or whenever any
Interest Payment Date or any other date specified hereunder would otherwise
occur, on a day other than a Banking Day, then, except to the extent otherwise
provided hereunder, such payment shall be made, and such Interest Payment Date
or other date shall occur, on the next succeeding Banking Day, and such
extension of time shall in such case be included in the computation of payment
of interest hereunder; provided, however, that if such extension would cause
such payment to be made, or such Interest Payment Date or other date to occur,
in the next following calendar month, such payment shall be made and such
Interest Payment Date or other date shall occur on the next preceding Banking
Day. As used herein, "Banking Day" means a day other than a Saturday or Sunday
on which commercial banks are not required or authorized by law to close in San
Jose, California, except that if the applicable Banking Day relates to any
determination of LIBOR, "Banking Day" means such a day on which dealings are
carried out in the applicable offshore U.S. Dollar interbank market.
Each such payment shall be made on the date when due, in immediately
available funds, to Xxxxxx's account at Bank of America, N.T.&S.A., Concord,
California, ABA no. 00000000, to account number 1233124070, ref. "CAIS, Inc.,"
or to such other account of Lender as it from time to time shall designate in a
written notice to Borrower.
All payments of principal, interest and other amounts made on or in respect
to this Promissory Note shall be made in freely transferable United States
Dollars for value received on the date of payment, without setoff, counterclaim
or, to the extent permitted by applicable law, defense, and free and clear of
and without deduction for any present and future taxes or charges whatsoever.
Lender shall record the date and amount of each Loan made to Borrower, the
amount of principal and interest due and payable from time to time hereunder,
each payment thereof, and the resulting unpaid principal balance hereof, in
Lender's internal records, and any such records shall be conclusive evidence
absent manifest error of the amount of the Loans made by Xxxxxx and the interest
and payments thereon; provided, however, that Xxxxxx's failure so to record
shall not limit or otherwise affect the obligations of Borrower hereunder and
under the Credit Agreement to repay the principal of and interest on the Loans.
This Promissory Note is a Note referred to in, and is subject to and
entitled to the benefits of, the Agreement dated as of June 30, 1999 (as
amended, modified, renewed or extended from time to time, the "Credit
Agreement") between Borrower and Lender. Capitalized terms used herein shall
have the respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides, among other things, for acceleration
(which in certain cases shall be automatic) of the maturity hereof upon the
occurrence of certain stated events, in each case without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived.
This Promissory Note is subject to prepayment in whole or in part as provided in
the Credit Agreement. Borrower hereby waives diligence, presentment, protest or
notice of total or partial nonpayment or dishonor with respect to this
Promissory Note. Failure by the holder hereof to exercise any of its rights
hereunder in any instance shall not constitute a waiver thereof in that or any
other instance. Borrower agrees to pay on demand all costs and expenses of
Lender and its affiliates, and fees and disbursements of counsel (including
allocated costs and expenses for internal legal services), in connection with
the enforcement or attempted enforcement of, and preservation of any rights or
interests under, (i) this Promissory Note, and (ii) any out-of-court workout or
other refinancing or restructuring or any bankruptcy or insolvency case or
proceeding, including any losses, costs and expenses sustained by Lender as a
result of any failure by Borrower to perform or observe its respective
obligations contained herein.
This Promissory Note shall be governed by, and construed in accordance
with, the law of the State of New York.
Borrower hereby (a) submits to the non-exclusive jurisdiction of the courts of
the State of New York and the Federal courts of the United States sitting in the
Borough of Manhattan (collectively, the "New York Courts"), for the purpose of
any action or proceeding arising out of or relating to this Promissory Note, (b)
irrevocably waives (to the extent permitted by applicable law) any objection
which it now or hereafter may have to the laying of venue of any such action or
proceeding brought in any of the New York Courts, and any objection on the
ground that any such action or proceeding in any New York Court has been brought
in an inconvenient forum, and (c) agrees that (to the extent permitted by
applicable law) a final judgment in any such action or proceeding brought in a
New York Court shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner permitted by law.
IN WITNESS WHEREOF, Borrower by its duly authorized legal representatives has
executed this Promissory Note on the date and in the year first above mentioned.
CAIS, Inc.
By:
-----------------------------
Title:
EXHIBIT D
Compliance Certificate
Date: __________, ___
To: Cisco Systems Capital Corporation
Mailstop SJC2 3rd Floor
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Loan Administration, Worldwide Financial Services
Re: CAIS Internet, Inc.
Ladies and Gentlemen:
This Compliance Certificate is made and delivered pursuant to the
Agreement dated as of June 30, 1999 (as amended, modified, renewed or extended
from time to time, the "Credit Agreement"), between CAIS, Inc. ("Borrower")
and Cisco Systems Capital Corporation ("Lender"), and reference is made
thereto for full particulars of the matters described therein. All
capitalized terms used in this Compliance Certificate and not otherwise
defined herein shall have the meanings assigned to them in the Credit
Agreement. This Compliance Certificate relates to the accounting
period ending , .
------- -----
I am the of CAIS Internet. I have reviewed the terms of the
--------
Credit Agreement and I have made, or caused to be made under my supervision, a
detailed review of the transactions and conditions of CAIS Internet and its
Subsidiaries during such accounting period. I hereby certify that the
information set forth on Schedule 1 hereto (and on any additional schedules
hereto setting forth further supporting detail) is true, accurate and complete
as of the end of such accounting period.
I hereby further certify that (i) as of the date hereof that no Default
has occurred and is continuing, and (ii) on and as of the date hereof, there has
occurred no Material Adverse Change since the date of the financial statements
furnished to Lender prior to the Closing Date, except in each case as may be set
forth in a separate attachment hereto describing in detail the nature of each
condition or event constituting an exception to the foregoing statements, the
period during which it has existed and the action which CAIS Internet or
Borrower is taking or proposes to take with respect to each such condition or
event.
IN WITNESS WHEREOF, the undersigned officer has signed this Compliance
Certificate this ____ day of ______________, ____.
CAIS, Inc.
Title:
SCHEDULE 1
to the Compliance Certificate
Dated
--------------
For the fiscal quarter ended
-------
Actual Required/Permitted
Section 9(k) Minimum Total Revenues
-------------------------------------
Consolidated total revenues $ $
-------- ----------
[See Table in Section
9(k) of Guaranty]
Section 9(l) Minimum EBITDA
-----------------------------
(A) Guarantor consolidated EBITDA calculation (measured for the fiscal
quarter most recently ended)
consolidated net income $
plus consolidated interest expense
plus consolidated income tax expense
plus consolidated depreciation expense
____ plus consolidated amortization expense
plus losses and gains upon dispositions of properties
____ minus extraordinary gains
plus extraordinary losses
Guarantor consolidated EBITDA (for the fiscal quarter most
recently ended)
Not less than $ .
See Table in Section 9(1)
of Guaranty]
Actual Required/Permitted
Section 9(m) Maximum Funded Debt to
-------------------------------------
Capitalization
---------------
(A) Guarantor Consolidated Funded Debt
-------
(B) Capitalization
Guarantor Consolidated Funded Debt
$------
plus consolidated capital stock
------
plus consolidated paid in capital
------ ---------
Capitalization
(C) Ratio of (A) to (B) -----% Shall not exceed
75% at any
time
EXHIBIT E
List of Locations of Financed Products
--------------------------------------
Please see attached list for locations of Financed Products as of the date
hereof.
