Amendment to General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D/A 13D/A 21 86K
2: EX-8 Opinion re: Tax Matters 2 12K
3: EX-9 Voting Trust Agreement 68 208K
4: EX-10 Material Contract 22 80K
5: EX-11 Statement re: Computation of Earnings Per Share 2 8K
6: EX-12 Statement re: Computation of Ratios 3 12K
Exhibit 9
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CREDIT AGREEMENT
dated as of
October 25, 2000,
among
CAIS INTERNET, INC.,
as Borrower,
The Lenders Party Hereto
and
CII VENTURES II LLC,
as Administrative Agent
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Page
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS ......................................... 1
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. ............... 15
SECTION 1.03. TERMS GENERALLY. ...................................... 16
SECTION 1.04. ACCOUNTING TERMS; GAAP ................................ 16
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENT ............................................ 17
SECTION 2.02. LOANS AND BORROWINGS .................................. 17
SECTION 2.03. REQUESTS FOR BORROWINGS ............................... 18
SECTIONS 2.04-2.05. [Intentionally Omitted] ......................... 18
SECTION 2.06. FUNDING OF BORROWINGS ................................. 18
SECTION 2.07. INTEREST ELECTIONS .................................... 19
SECTION 2.08. TERMINATION AND REDUCTION OF COMMITMENTS .............. 21
SECTION 2.09. REPAYMENT OF LOANS; EVIDENCE OF DEBT .................. 22
SECTION 2.10. [Intentionally Omitted] ............................... 23
SECTION 2.11. PREPAYMENT OF LOANS ................................... 23
SECTION 2.12. [Intentionally deleted] ............................... 24
SECTION 2.13. INTEREST .............................................. 24
SECTION 2.14. ALTERNATE RATE OF INTEREST ............................ 25
SECTION 2.15. INCREASED COSTS ....................................... 26
SECTION 2.16. BREAK FUNDING PAYMENTS ................................ 27
SECTION 2.17. TAXES ................................................. 27
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS .............................................. 29
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS ........ 31
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. ORGANIZATION; POWERS .................................. 32
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY ......................... 32
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS .................. 33
SECTION 3.04. WARRANT AGREEMENT ..................................... 33
SECTIONS 3.05-3.06. [intentionally omitted] ......................... 34
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Page
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS ................... 34
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS ................. 35
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE ........................................ 35
SECTION 4.02. EACH CREDIT EVENT ..................................... 36
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION ............ 37
SECTIONS 5.02-5.03. [Intentionally Omitted]. ........................ 38
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS ........................ 38
SECTION 5.05. ASSET SALE PROCEEDS ................................... 38
SECTION 5.06. CONSENTS TO CAIS ASSUMPTION ........................... 38
SECTIONS 5.07-5.08. [Intentionally Omitted] ......................... 38
SECTION 5.09. BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS ........ 38
SECTION 5.10. COMPLIANCE WITH LAWS .................................. 39
SECTION 5.11. USE OF PROCEEDS ....................................... 39
SECTION 5.12. ADDITIONAL SUBSIDIARIES ............................... 39
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.03. RESTRICTED PAYMENTS ................................... 41
SECTION 6.04. CAPITAL EXPENDITURES .................................. 41
SECTION 6.05. INVESTMENTS ........................................... 42
ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
THE ADMINISTRATIVE AGENT
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Page
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES ............................................... 48
SECTION 9.02. WAIVERS; AMENDMENTS ................................... 49
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER .................... 50
SECTION 9.04. SUCCESSORS AND ASSIGNS ................................ 52
SECTION 9.05. SURVIVAL .............................................. 55
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS .............. 55
SECTION 9.07. SEVERABILITY .......................................... 56
SECTION 9.08. RIGHT OF SETOFF ....................................... 56
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS ............................................... 56
SECTION 9.10. WAIVER OF JURY TRIAL .................................. 57
SECTION 9.11. HEADINGS .............................................. 57
SECTION 9.12. CONFIDENTIALITY ....................................... 57
SECTION 9.13. INTEREST RATE LIMITATION .............................. 59
SECTION 9.14. ASSUMPTION BY CAIS, INC. .............................. 59
SECTION 9.15. WARRANTS .............................................. 59
SECTION 9.16. REPRESENTATIONS OF THE LENDERS ........................ 60
SCHEDULES:
Schedule 1.01 --Sale/Leaseback Transaction
Schedule 2.01 --Commitments
Schedule 6.01 --Existing Indebtedness
Schedule 6.01A --Agreed to Indebtedness
Schedule 6.02 --Existing Liens
Schedule 6.02A --Agreed to Liens
Schedule 6.03 --Restricted Payments
Schedule 6.04 --Capital Expenditures
Schedule 6.05 --Employee Advances
Schedule 6.05A --Other Investments
EXHIBITS:
Exhibit A -- Form of Opinion of Morrison & Foerster LLP
Exhibit B -- Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit C -- Form of Subsidiary Guarantee Agreement
Exhibit D -- Form of Parent Guarantee Agreement
Exhibit E -- Form of Warrant Agreement
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CREDIT AGREEMENT dated as of October 25, 2000, among
CAIS INTERNET, INC., the LENDERS party hereto, and CII
VENTURES II LLC, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means CII Ventures II LLC, in its capacity as
administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"ADVERSE EVENT" has the meaning set forth in Section
4.02(b)(ii)(B).
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and (c) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the
2
Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate or
the Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate, respectively.
"ASSESSMENT RATE" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R.
Part 327 (or any successor provision) to the Federal Deposit Insurance
Corporation for insurance by such Corporation of time deposits made in
dollars at the offices of such member in the United States; PROVIDED that
if, as a result of any change in any law, rule or regulation, it is no
longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined by the
Administrative Agent to be representative of the cost of such insurance to
the Lenders.
"ASSET SALE" means the sale by CAIS, Inc. and CAIS Software of the
assets described in the Asset Purchase Agreement (the "ASSET PURCHASE
AGREEMENT"), by and among Cisco Systems, Inc., Holdings, Cais Software and
CAIS Inc.
"ASSET SALE DATE" means the date on which the Asset Sale
closes.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party
whose consent is required by Section 9.04), and accepted by the
Administrative Agent, in any form approved by the Administrative Agent.
"BASE CD RATE" means the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment
Rate.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
"BORROWER" means, subject to Section 9.14, CAIS Internet, Inc., a
Delaware corporation.
"BORROWING" means Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to
which a single Interest Period is in effect.
3
"BORROWING REQUEST" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required
by law to remain closed; PROVIDED that, when used in connection with a
Eurodollar Loan, the term "BUSINESS DAY" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"CAIS ASSUMPTION" has the meaning set forth in Section 9.14.
"CAIS, INC." means Cais Inc., a Virginia corporation.
"CAIS SOFTWARE" means CAIS Software Solutions, Inc., a
California corporation.
"CAPITAL EXPENDITURES" means for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
subsidiaries for the acquisition or leasing (pursuant to a capital lease)
of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period)
that should be capitalized under GAAP on a consolidated balance sheet of
such Person and its subsidiaries.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interest, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other
than a corporation) and any and all warrants, rights or options to
purchase any of the foregoing.
"CASH EQUIVALENTS" means (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by an agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from
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the date of acquisition; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities of
six months or less from the date of acquisition issued by any Lender or by
any commercial bank organized under the laws of the United Stated or any
state thereof having combined capital and surplus of not less than
$500,000,000; (c) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Ratings Services ("S&P") or P-1 by Moody's Investors
Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally,
and maturing within six months from the date of acquisition; (d)
repurchase obligations of any Lender or any commercial bank satisfying the
requirement of clause (b) of this definition, having a term of not more
than 30 days, with respect to securities issued or fully guaranteed or
insured by the United States government; (e) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed
by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth
or territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A
by Moody's; (f) securities with maturities of six months or less from the
date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of
this definition; or (g) shares of money market mutual or similar funds
which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law,
rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance
by any Lender (or, for purposes of Section 2.14(b), by any lending office
of such Lender or by such Lender's holding company, if any) with any
request, guideline or directive (whether or not having the force of law)
of any Governmental Authority made or issued after the date of this
Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
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"COMMITMENT" means, with respect to each Lender, the commitment, if
any, of such Lender to make Loans hereunder, expressed as an amount
representing the maximum principal amount of such Lender's Loans to be
outstanding hereunder, as such Commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section
9.04. The initial amount of each Lender's Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $20,000,000.
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract
or otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative
thereto.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DOLLARS" or "$" refers to lawful money of the United States
of America.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"EQUITY INTERESTS" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO
Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in
Article VII.
"EXCLUDED TAXES" means, with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on
account of any obligation
6
of the Borrower hereunder, (a) income or franchise taxes imposed on (or
measured by) its net income, net profits or gross receipts by the United
States of America (or any State or other political subdivision thereof or
therein), or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of
any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any
similar tax imposed by any other jurisdiction described in clause (a)
above and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.19(b)), any
withholding tax that (i) is in effect and would apply to amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to
this Agreement (or designates a new lending office), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a), or (ii) is attributable to such Foreign
Lender's failure to comply with Section 2.17(e).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer, senior
vice-president - finance, principal accounting officer, treasurer or
controller of the Borrower.
"FINANCING TRANSACTIONS" means the execution, delivery and
performance by each Loan Party of the Loan Documents to which it is to be
a party, the borrowing of Loans and the use of the proceeds thereof.
"FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State
7
thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.
"FOREIGN SUBSIDIARY" means any Subsidiary that is organized under
the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States
of America, any other nation or any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other
obligation of any other Person (the "PRIMARY OBLIGOR") in any manner,
whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation; PROVIDED that the term
"Guarantee" shall not include endorsements for collection or deposit in
the ordinary course of business.
"GUARANTEE AGREEMENTS" means the Parent Guarantee Agreement
and the Subsidiary Guarantee Agreement.
"GUARANTEED PARTIES" has the meaning assigned to such term in
the Subsidiary Guarantee Agreement.
8
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement
or other interest or currency exchange rate or commodity price hedging
arrangement.
"HOLDINGS" means CAIS Internet, Inc., a Delaware corporation that,
as of the Effective Date, owns all the outstanding capital stock of CAIS,
Inc.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits
or advances of any kind, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obliga tions of
such Person upon which interest charges are customarily paid, (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA
and current accounts payable incurred in the ordinary course of business),
(f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not
the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations
of such Person, (i) all obligations, contingent or otherwise, of such
Person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such Person
in respect of bankers' acceptances. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is
liable therefor as a result of such Person's ownership interest in or
other relationship with such entity, except to the extent the terms of
such Indebtedness provide that such Person is not liable therefor. The
amount of any Indebtedness described in clause (g) above shall be limited
to the maximum amount payable under the applicable Guarantee of such
Person if such Guarantee contains limitations on the amount payable
thereunder.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREE MENT" means the
Indemnity, Subrogation and Contribution
9
Agreement, substantially in the form of Exhibit B, among Holdings, the
Borrower, the Subsidiary Loan Parties and the Administrative Agent.
"INTEREST ELECTION REQUEST" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.07.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the
last day of each calender month and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of
which such Loan is a part.
"INTEREST PERIOD" means with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one month
thereafter; PROVIDED that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the
last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.
"LENDER AFFILIATE" means, (a) with respect to any Lender, (i) an
Affiliate of such Lender or (ii) an entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of
credit in the ordinary course of its business and is administered or
managed by such Lender or an Affiliate of such Lender and (b) with respect
to any Lender that is a fund that invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and
similar extensions of credit and is managed by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.
"LENDERS" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance or pursuant to Section 9.02(c), other than any such Person
10
that ceases to be a party hereto pursuant to an Assignment and Acceptance
or Section 9.02(c).
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor
to or substitute for such Service, providing rate quotations comparable to
those currently provided on such page of such Service, as determined by
the Administrative Agent from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then
the "LIBO RATE" with respect to such Eurodollar Borrowing for such
Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately
available funds in the London interbank market at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic
effect as any of the foregoing) relating to such asset and (c) in the case
of securities, any purchase option, call or similar right of a third party
with respect to such securities.
"LOAN DOCUMENTS" means this Agreement, the Guarantee Agreements, the
Indemnity, Subrogation and Contribution Agreement, the promissory notes,
if any, executed and delivered pursuant to Section 2.09(e).
"LOAN PARTIES" means Holdings, CAIS, Inc. (at such times as it
is the Borrower hereunder in accordance with Section 9.14) and the
Subsidiary Loan Parties.
"LOANS" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations,
11
prospects or condition, financial or otherwise, of Holdings, CAIS, Inc.
and the Subsidiaries taken as a whole, (b) the ability of Holdings, CAIS,
Inc. or any Subsidiary Loan Party to perform any of its obligations under
any Loan Document or (c) the ability of the Lenders to enforce any Loan
Document.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans),
or obligations in respect of one or more Hedging Agreements, of any one or
more of Holdings, CAIS, Inc. and the Subsidiaries in an aggregate
principal amount exceeding $2,500,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of
Holdings, CAIS, Inc. or any Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any
netting agreements) that Holdings, CAIS, Inc. or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"MATURITY DATE" means the earlier of (a) March 31, 2001 and (b) the
Asset Sale Date.
"NET PROCEEDS" means, with respect to any event (a) the cash
proceeds received in respect of such event, including any cash received in
respect of any non-cash proceeds, but only as and when received, net of
(b) the sum of (i) all commissions, fees and out-of-pocket expenses paid
by Holdings, CAIS, Inc. and the Subsidiaries to third parties (other than
Affiliates) in connection with such event, (ii) in the case of a sale,
transfer or other disposition of an asset (including pursuant to a sale
and leaseback transaction), the amount of all payments required to be made
by Holdings, CAIS, Inc. and the Subsidiaries as a result of such event to
repay Indebtedness (other than Loans) secured by such asset or otherwise
subject to mandatory prepayment as a result of such event and (iii) the
amount of all Taxes paid (or reasonably estimated to be payable) by
Holdings, CAIS, Inc. and the Subsidiaries, and the amount of any reserves
established by Holdings, CAIS, Inc. and the Subsidiaries to fund (A)
retained liabilities relating to the assets sold or (B) contingent
liabilities reasonably estimated to be payable, in each case during the
year that such event occurred or the next succeeding year and that are
directly attributable to such event (as determined reasonably and in good
faith by the chief financial officer of the Borrower).
"NORTEL" means Nortel Networks Inc., a Delaware corporation.
12
"NORTEL CREDIT AGREEMENT" means the Credit Agreement dated as of
June 4, 1999 (as amended, supplemented or otherwise modified form time to
time) by and among CAIS, Inc. and Nortel.
"OTHER TAXES" means any and all current or future recording, stamp,
documentary, excise, transfer, sales, property or similar taxes, charges
or levies arising from any payment made under any Loan Document or from
the execution, delivery or enforcement of any Loan Document.
"PARENT GUARANTEE AGREEMENT" means the Parent Guarantee Agreement,
substantially in the form of Exhibit D, made by Holdings in favor of the
Administrative Agent for the benefit of the Guaranteed Parties.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in good faith by appropriate proceedings, PROVIDED that
Holdings, CAIS, Inc. or the applicable Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP, such
contest effectively suspends collection of the contested obligation and
the enforcement of any Lien securing such obligation and the failure to
make payment pending such contest would not reasonably be expected to
result in a Material Adverse Effect;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in good faith by appropriate
proceedings, PROVIDED that Holdings, CAIS, Inc. or the applicable
Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien
securing such obligation and the failure to make payment pending such
contest would not reasonably be expected to result in a Material Adverse
Effect;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other
13
obligations of a like nature, in each case in the ordinary course of
business;
(e) judgment liens in respect of judgments for payments of money in
an aggregate amount not greater than $1,000,000; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of Holdings, CAIS, Inc. or any
Subsidiary;
PROVIDED that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, associa tion, company, partnership,
Governmental Authority or other entity.
"PREPAYMENT EVENT" means:
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction (other than the sale-leaseback transaction
described on Schedule 1.01) but excluding any sale, transfer or other
disposition of collateral securing the obligations under the Nortel Credit
Agreement as in effect on the date hereof the net proceeds of which are
required to prepay such obligations) of any property or asset of Holdings,
CAIS, Inc. or any Subsidiary outside the ordinary course of business
including, without limitation, the Asset Sale; or
(b) the issuance by Holdings, CAIS, Inc. or any Subsidiary of any
Equity Interests, or the receipt by Holdings, CAIS, Inc. or any Subsidiary
of any capital contribution, other than any such issuance of Equity
Interests to, or receipt of any such capital contribution from, Holdings,
CAIS, Inc. or a Subsidiary Loan Party, PROVIDED that CAIS, Inc. and CAIS
Software shall only be permitted to receive funds in an amount sufficient
to satisfy their respective working capital requirements in the ordinary
course of business (as communicated to the Administrative Agent); or
14
(c) the incurrence by Holdings, CAIS, Inc. or any Subsidiary of any
Indebtedness, other than Indebtedness permitted by Section 6.01.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect
at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly
announced as being effective.
"REGISTER" has the meaning set forth in Section 9.04.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Loans and
unused Commitments representing more than 50% of the total outstanding
Loans and unused Commitments at such time.
"RESTRICTED PAYMENT" means (a) any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in Holdings, CAIS, Inc. or any Subsidiary or (b) any payment
(whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Equity
Interests in Holdings, CAIS, Inc. or any Subsidiary or any option, warrant
or other right to acquire any such Equity Interests in Holdings, CAIS,
Inc. or any Subsidiary.
"REVOLVING AVAILABILITY PERIOD" means the period from and including
the Effective Date to but excluding the earlier of the Maturity Date and
the date of termination of the Commitments.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the
Administrative Agent is subject (a) with respect to the Base CD Rate, for
new negotiable nonpersonal time deposits in dollars of over $100,000 with
maturities approximately equal to three months and (b) with respect to the
Adjusted LIBO Rate, for
15
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of
the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such
date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than
50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled,
by the parent or one or more subsidiaries of the parent or by the parent
and one or more subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of Holdings other than CAIS,
Inc.
"SUBSIDIARY GUARANTEE AGREEMENT" means the Subsi diary Guarantee
Agreement, substantially in the form of Exhibit C, made by the Subsidiary
Loan Parties in favor of the Administrative Agent for the benefit of the
Guaranteed Parties.
"SUBSIDIARY LOAN PARTY" means any Subsidiary other than any
Foreign Subsidiary.
"TAXES" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings imposed by any taxing authority.
"THREE-MONTH SECONDARY CD RATE" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day is not a Business Day, the next
preceding Business Day) by the Board through the public
16
information telephone line of the Federal Reserve Bank of New York (which
rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following
such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New
York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding
Business Day) by the Administrative Agent from three negotiable
certificate of deposit dealers of recognized standing selected by it.
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"WARRANT AGREEMENT" has the meaning set forth in Section 9.15.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes
of this Agreement, Loans may be classified and referred to by Type (I.E.,
a "Eurodollar Loan"). Borrowings also may be classified and referred to by
Type (I.E., a "Eurodollar Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person's
successors and assigns, (c) the words "herein", "hereof" and "hereunder",
and words of similar import, shall be construed to refer to this Agreement
in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and
17
Schedules to, this Agreement and (e) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time;
PROVIDED that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless
of whether any such notice is given before or after such change in GAAP or
in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change
shall have become effective until such notice shall have been withdrawn or
such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions set
forth herein, each Lender agrees to make Loans to the Borrower from time
to time during the Revolving Availability Period in an aggregate principal
amount that will not result in such Lender's Loans exceeding such Lender's
Commitment, PROVIDED that no more than $3,000,000 in Loans may be made in
any calendar week (except that the initial borrowing hereunder may be made
in any amount up to $5,000,000). Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Loans.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Loan shall be made as
part of a Borrowing consisting of Loans of the same Type made by the
Lenders ratably in accordance with their respective Commitments. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; PROVIDED that the
Commitments of the Lenders are several and no Lender shall be responsible
for any other Lender's failure to make Loans as required.
18
(b) Subject to Section 2.14, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of such Lender
to make such Loan; PROVIDED that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time
that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than
$1,000,000; PROVIDED that an ABR Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the total Commitments,
notwithstanding the foregoing. Borrowings of more than one Type may be
outstanding at the same time; PROVIDED that there shall not at any time be
more than a total of four Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00
a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
19
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements
of Section 2.06.
If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then the
Borrower shall be deemed to have selected an Interest Period of one
month's duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each
Lender of the details thereof and of the amount of such Lender's Loan to
be made as part of the requested Borrowing.
SECTIONS 2.04-2.05. [Intentionally Omitted]
SECTION 2.06. FUNDING OF BORROWINGS. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time,
to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders. The Administrative Agent will
make such Loans available to the Borrower by promptly (but in no event
later than 1:00 p.m., New York City time) transferring the amounts so
received, in like funds, to an account of the Borrower designated by the
Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from
a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in
fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower
severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day
20
from and including the date such amount is made available to the Borrower
to but excluding the date of payment to the Administrative Agent, at (i)
in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of
the Borrower, the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. INTEREST ELECTIONS. (a) Each Borrowing initially shall
be of the Type specified in the applicable Borrowing Request. Thereafter,
the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate
Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
21
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
the term "Interest Period".
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and
of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid
as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Lenders, so
notifies the Borrower, then, so long as an Event of Default is continuing
(i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing
shall be converted to an ABR Borrowing at the end of the Interest Period
applicable thereto.
SECTION 2.08. TERMINATION AND REDUCTION OF COMMITMENTS. (a)
Unless previously terminated, the Commitments shall terminate at
5:00 p.m., New York City time, on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments; PROVIDED that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $1,000,000 and (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any
concurrent prepayment of the Loans in accordance with this Agreement, the
outstanding principal amount of the Loans would exceed the total
Commitments.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of
any Prepayment Event, the Commitments shall be reduced in an aggregate
amount equal to 100% (or 50% in the case of a Prepayment Event pursuant to
paragraph (b) of the definition thereof) of such Net Proceeds.
22
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of
this Section, or any required reduction of the Commitments under paragraph
(c) of this Section, at least three Business Days prior to the effective
date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof.
Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; PROVIDED that a notice of termination of the Commitments
delivered by the Borrower may state that such notice is conditioned upon
the effectiveness of other credit facilities, in which case such notice
may be revoked by the Borrower (by notice to the Administrative Agent on
or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be
permanent. Except as provided in paragraph (e) below, each reduction of
the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
(e) In the event the Borrower is entitled to replace a
non-consenting Lender pursuant to Section 9.02(c), the Borrower shall have
the right, upon five Business Days' written notice to the Administrative
Agent (which notice the Administrative Agent shall promptly transmit to
each of the Lenders), to terminate the entire Commitment of such Lender,
so long as (i) all Loans, together with accrued and unpaid interest and
other amounts owing to such Lender are repaid pursuant to Section 2.11(e)
concurrently with the effectiveness of such termination and (ii) the
consents required by Section 9.02(c) in connection with the prepayment
shall have been obtained, and at such time, such Lender shall no longer
constitute a "Lender" for purposes of this Agreement, except with respect
to Sections 2.15, 2.16, 2.17 and 9.03 of this Agreement, which shall
survive as to such Lender.
SECTION 2.09. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan of
such Lender on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts
23
of principal and interest payable and paid to such Lender from time to
time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof
and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that
the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms
of this Agreement.
(e) The Borrower or any Lender may request that any Loan made by it
be evidenced by a promissory note. In such event, the Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender
and its registered assigns) and in a form approved by the Administrative
Agent. Thereafter, any Loan evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section
9.04) be represented by one or more promissory notes in such form payable
to the order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).
SECTION 2.10. [Intentionally Omitted]
SECTION 2.11. PREPAYMENT OF LOANS. (a) The Borrower shall
have the right at any time and from time to time to prepay any
Borrowing in whole or in part, subject to the requirements of this
Section.
(b) In the event and on each occasion that the outstanding principal
amount of the Loans exceeds the total Commitments then in effect, the
Borrower shall prepay Borrowings in an aggregate amount equal to such
excess.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower
24
or any Subsidiary in respect of any Prepayment Event, the Borrower shall
prepay Borrowings in an aggregate amount equal to 100% (or 50% in the case
of a Prepayment Event pursuant to paragraph (b) of the definition thereof)
of such Net Proceeds.
(d) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be
prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (e) of this Section.
(e) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment or (ii) in
the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid;
PROVIDED that, if a notice of optional prepayment is given in connection
with a conditional notice of termination of the Commitments as
contemplated by Section 2.08, then such notice of prepayment may be
revoked if such notice of termination is revoked in accordance with
Section 2.08. Promptly following receipt of any such notice, the
Administrative Agent shall advise the Lenders of the contents thereof.
Each partial prepayment of any Borrowing shall be in an amount that would
be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall
be accompanied by accrued interest to the extent required by Section 2.12.
(f) In the event the Borrower is entitled to replace a
non-consenting Lender pursuant to Section 9.02(c), the Borrower shall have
the right, upon five Business Days' prior written notice to the
Administrative Agent (which notice the Administrative Agent shall promptly
transmit to each of the Lenders), to prepay all Loans, together with
accrued and unpaid interest and other amounts, owing to such Lender in
accordance with Section 9.02(c) so long as (i) in the case of the
prepayment of the Loans of any Lender pursuant to this Section 2.11(f),
the Commitment of such Lender is terminated concurrently with such
prepayment pursuant to Section 2.08(b), and (ii) in the case of the
prepayment of the Loans of any Lender, the consents required by
25
Section 9.02(c) in connection with the prepayment pursuant to this Section
2.11(f) shall have been obtained, and at such time, such Lender shall no
longer constitute a "Lender" for purposes of this Agreement, except with
respect to Sections 2.15, 2.16, 2.17 and 9.03 of this Agreement, which
shall survive as to such Lender.
SECTION 2.12. [Intentionally deleted]
SECTION 2.13. INTEREST. (a) The Loans comprising each ABR
Borrowing shall bear interest at the Alternate Base Rate plus 5.00%.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus 6.00%.
(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a
rate per annum equal to (i) in the case of overDue principal of any Loan,
2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans as provided in paragraph
(a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and upon termination of the
Commitments; PROVIDED that (i) interest accrued pursuant to paragraph (c)
of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR
Loan prior to the end of the Revolving Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the
date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate
shall be computed on the basis of a year of 365 days (or 366 days in a
leap year), and in each case shall be payable for the actual number of
days elapsed (including
26
the first day but excluding the last day). The applicable Alternate Base
Rate or Adjusted LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.14. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining
their Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower
and the Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of
any Borrowing to, or continuation of any Borrowing as, a Eurodollar
Borrowing shall be ineffective and (ii) if any Borrowing Request requests
a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing
SECTION 2.15. INCREASED COSTS. (a) If any Change in Law
shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such
Lender or any participation therein;
and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan (or of
maintaining its obligation to
27
make any such Loan) or to increase the cost to such Lender of
participating in, or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional
amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by
such Lender to a level below that which such Lender or such Lender's
holding company could have achieved but for such Change in Law (taking
into consideration such Lender's policies and the policies of such
Lender's holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company
for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case
may be, as specified in paragraph (a) or (b) of this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error.
The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation; PROVIDED that the
Borrower shall not be required to compensate a Lender pursuant to this
Section for any increased costs or reductions incurred more than 180 days
prior to the date that such Lender notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender's
intention to claim compensation therefor; PROVIDED FURTHER that, if the
Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended
to include the period of retroactive effect thereof.
SECTION 2.16. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day
of an Interest Period applicable thereto (including as a result of an
Event of Default), (b) the conversion of any Eurodollar
28
Loan other than on the last day of the Interest Period applicable thereto,
(c) the failure to borrow, convert, continue or prepay any Loan on the
date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.11(e) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.19, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had
such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of
a failure to borrow, convert or continue, for the period that would have
been the Interest Period for such Loan), over (ii) the amount of interest
which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount
and period from other banks in the Eurodollar market. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section, shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such
Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.
SECTION 2.17. TAXES. (a) Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; PROVIDED that if the Borrower shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent or Lender (as the
case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.
29
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent
or such Lender, as the case may be, on or with respect to any payment by
or on account of any obligation of the Borrower hereunder or under any
other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender, or by the Administrative Agent on
its own behalf or on behalf of a Lender, shall be conclusive absent
manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Any Lender that is entitled to an exemption from or reduction of
the deduction, withholding or payment of an Indemnified Tax or Other Tax
under the law of the United States or the jurisdiction in which the
Borrower is located (or any political subdivision thereof), or any treaty
to which such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines in good
faith, but in its sole discretion, that it has received a refund (or a
reduction in Taxes attributable to foreign tax credits) in respect of any
Indemnified Taxes or Other Taxes as to which it has been indemnified by
the Borrower or with respect to which the
30
Borrower has paid additional amounts pursuant to this Section 2.17, it
shall pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under
this Section 2.17 with respect to the Indemnified Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund or reduction in Taxes); PROVIDED, HOWEVER, that the Borrower, upon
the request of the Administrative Agent or such Lender, agrees to repay
the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent
or such Lender is required to repay such refund to such Governmental
Authority. Nothing contained in this Section 2.17(f) shall require the
Administrative Agent or any Lender to make available its tax returns (or
any other information relating to its taxes which it deems confidential)
to the Borrower or any other Person.
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) The Borrower shall make each payment required to be made by
it hereunder or under any other Loan Document (whether of principal,
interest, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, New York City time, on the date when due,
in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at
[ ] except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03
shall be made directly to the Persons entitled thereto and payments
pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment under any
Loan Document shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. All payments under each Loan
Document shall be made in dollars.
31
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal and
interest then due hereunder, such funds shall be applied (i) first,
towards payment of interest then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest then due to
such parties, and (ii) second, towards payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of
or interest on any of its Loans resulting in such Lender receiving payment
of a greater proportion of the aggregate amount of its Loans and accrued
interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of
and accrued interest on their respective Loans; PROVIDED that (i) if any
such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed
to apply to any payment made by the Borrower pursuant to and in accordance
with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation
in any of its Loans other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall
apply). The Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against
the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may assume
that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such
32
assumption, distribute to the Lenders the amount due. In such event, if
the Borrower has not in fact made such payment, then the Lenders severally
agree to repay to the Administrative Agent forthwith on demand the amount
so distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.06(b), 2.18(d) or 9.03(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then
such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or
affiliates, if, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may
be, in the future and (ii) in the reasonable judgment of such Lender,
would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section
2.17, or if any Lender defaults in its obligation to fund Loans hereunder,
then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this
33
Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment);
PROVIDED that (i) the Borrower shall have received the prior written
consent of the Administrative Agent, which consent shall not be
unreasonably withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans accrued interest
thereon, and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest) or the
Borrower (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.15
or payments required to be made pursuant to Section 2.17, such assignment
will result in a material reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise,
the circumstances entitling the Borrower to require such assignment and
delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Holdings and CAIS, Inc. (at such time as it is the
Borrower hereunder) represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Each of Holdings, CAIS, Inc. and
the Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite
power and authority to carry on its business as now conducted and, except
where the failure to do so, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect, is
qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Financing
Transactions to be entered into by each Loan Party are within such Loan
Party's corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been
duly executed and delivered by each of Holdings and CAIS, Inc. and
constitutes, and each other Loan Document to which any Loan Party is to be
a party, when executed and delivered by such Loan Party, will constitute,
a legal, valid and binding obligation of Holdings, CAIS, Inc. or such Loan
Party (as the case may be), enforceable in
34
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Financing
Transactions (a) do not require any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except
(i) such as have been obtained or made and are in full force and effect or
(ii) routine corporate filings to maintain the good standing of Holdings,
CAIS, Inc. and the Subsidiaries, (b) will not violate any applicable law
or regulation or the charter, by-laws or other organizational documents of
Holdings, CAIS, Inc. or any of the Subsidiaries or any order of any
Governmental Authority and (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon Holdings,
CAIS, Inc. or any of the Subsidiaries or their assets, or give rise to a
right thereunder to require any payment (other than the payments required
to be made under the Loan Documents) to be made by Holdings, CAIS, Inc. or
any of the Subsidiaries.
SECTION 3.04. WARRANT AGREEMENT. (a) The Company has the
corporate power and authority to enter into each Warrant Agreement.
(b) Each Warrant Agreement has been duly and validly authorized by
Holdings and, when duly executed and delivered by Holdings, will be the
legal, valid and binding obligation of Holdings, enforceable against
Holdings in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity and limitations on the validity or enforceability of
provisions relating to rights of indemnity and contribution set forth
herein.
(c) The warrants to be issued under each Warrant Agreement
(collectively, the "WARRANTS") have been duly and validly authorized for
issuance and sale by Holdings and, when issued, delivered and paid for in
accordance with the respective Warrant Agreement, will be the legal, valid
and binding obligation of Holdings enforceable against Holdings in
accordance with their terms and entitled to the benefits of the applicable
Warrant Agreement, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws
35
affecting the rights of creditors generally and subject to general
principles of equity.
(d) The Warrants will be exercisable for common stock of Holdings in
accordance with the terms of the applicable Warrant Agreement. The common
stock to be issued upon the exercise of the Warrants has been duly
authorized for issuance by Holdings and, when issued upon exercise of the
Warrants in accordance with the terms thereof will be validly issued,
fully paid and non-assessable, free of any preemptive or similar rights,
Holdings has reserved sufficient shares of common stock for issuance upon
the exercise of the Warrants.
(e) None of (i) the execution, delivery or performance by Holdings
of either Warrant Agreement, (ii) the issuance and sale of the Warrants
and (iii) the consummation by Holdings of the transactions contemplated by
each Warrant Agreement violate, conflict with or constitute a breach of
any of the terms or provisions of, or a default under (or an event that
with notice or the lapse of time, or both, would constitute a default), or
require consent under, or resulting in the imposition of a lien on any
properties of Holdings, or an acceleration of any indebtedness of Holdings
pursuant to, (A) the charter or bylaws of Holdings, (B) any bond,
debenture, note, indenture, mortgage, deed of trust, contract or other
agreement or instrument to which Holdings is a party or by which it or its
properties is or may be bound, (C) any statute, rule or regulation
applicable to Holdings or any of its assets or properties or (D) any
judgment, order or decree of any court or governmental agency or authority
having jurisdiction over Holdings or any of its assets or properties,
except in the case of clauses (B), (C) and (D) for such violations,
conflicts, breaches, defaults, consents, impositions of liens or
accelerations that would not singly, or in the aggregate, have a Material
Adverse Effect. No consent, approval, authorization or order of, or
filing, registration, qualification, license or permit of or with, (i) any
court or governmental agency, body or administrative agency or (ii) any
other person is required for (A) the execution, delivery and performance
by Holdings of each Warrant Agreement, (B) the issuance of the Warrants
(or the issuance of the common stock upon exercise of the Warrants) and
(C) the consummation by Holdings of the transactions contemplated by each
Warrant Agreement.
SECTIONS 3.05-3.06. [intentionally omitted]
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of Holdings,
CAIS, Inc. and the
36
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material
Adverse Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS. Neither
Holdings, CAIS, Inc. nor any of the Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under,
the Investment Company Act of 1940 or (b) a "holding company" as
defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which each of
the following conditions is satisfied (or waived in accordance with
Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement
signed on behalf of such party or (ii) written evidence satisfactory
to the Administrative Agent (which may include telecopy transmission
of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.
(b) The Lenders shall have received favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Morrison & Foerster LLP, counsel for Holdings,
CAIS, Inc. and the other Loan Parties, substantially in the form of
Exhibit B, and covering such other matters relating to the Loan
Parties, the Loan Documents or the Financing Transactions as the
Required Lenders shall reasonably request. Holdings hereby requests
the counsel referred to in this paragraph to deliver such opinion.
(c) The Lenders shall have received such documents and certificates
as the Administrative Agent or its counsel may reasonably request
relating
37
to the organization, existence and good standing of each Loan Party,
the authorization of the Financing Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the
Financing Transactions, all in form and substance satisfactory to
the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice
President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b)
of Section 4.02.
(e) The Administrative Agent shall have received all amounts due and
payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by any Loan Party hereunder or
under any other Loan Document.
(f) The Administrative Agent shall have received (i) counterparts of
the Subsidiary Guarantee Agreement signed on behalf of each
Subsidiary Loan Party, (ii) counterparts of the Indemnity,
Subrogation and Contribution Agreement signed on behalf of the
Borrower and each Subsidiary Loan Party and (iii) counterparts of
the Warrant Agreement, signed on behalf of each of the parties
thereto.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make
Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 9.02) at or prior
to 5:00 p.m., New York City time, on October 25, 2000 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender to
make a Loan on the occasion of any Borrowing is subject to receipt of the
request therefor in accordance herewith and to the receipt of a
certificate from a Financial Officer:
(a) Certifying that the representations and warranties of each Loan
Party set forth in the Loan Documents shall be true and correct in
all material respects on and as of the date of such Borrowing.
38
(b) Certifying that (i) at the time of and immediately after giving
effect to such Borrowing, no Default or Event of Default shall have
occurred and be continuing and (ii) as of the date of such
Borrowing, (A) it is reasonably foreseeable that the Asset Sale will
be completed prior to January 31, 2001 and (B) such Financial
Officer, after reasonable investigation, has no knowledge of any
representation or warranty being untrue or covenant breached
(individually or collectively, an "ADVERSE EVENT") under the Asset
Purchase Agreement which is reasonably likely to prohibit any party
thereto from satisfying conditions precedent to closing the Asset
Sale in accordance with the Asset Purchase Agreement prior to
January 31, 2001.
(c) if the Borrowing, together with all other Borrowings made or to
be made on the same date, is for an amount in excess of $1,000,000,
specifying in reasonable detail the working capital requirements for
which the proceeds of such Borrowing will be used and the timing
thereof.
Each Borrowing shall be deemed to constitute a representation and warranty
by the Borrower on the date thereof as to the matters specified in
paragraphs (a) through (c) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan payable hereunder shall have been
paid in full, each of Holdings and CAIS, Inc. (at such times as it is the
Borrower hereunder) covenants and agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Borrower will furnish to the Administrative Agent and each Lender: (a)
promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by Holdings,
CAIS, Inc. or any Subsidiary with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
by Holdings or CAIS, Inc. to its shareholders generally, as the case may
be;
39
(b) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of
Holdings, CAIS, Inc. or any Subsidiary, or compliance with the terms of
any Loan Document, as the Administrative Agent or any Lender may
reasonably request, and
(c) promptly after the occurrence thereof, information describing
the occurrence of (i) any Default or Event of Default, (ii) any Adverse
Event or (iii) any other event or development that could delay or
materially interfere with the closing of the Asset Sale prior to January
1, 2001.
SECTIONS 5.02-5.03. [Intentionally Omitted].
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS. Each of Holdings and
CAIS, Inc. will, and will cause each of the Subsidiaries to, do or cause
to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names
material to the conduct of its business.
SECTION 5.05. ASSET SALE PROCEEDS. Holdings and its Subsidiaries
shall take all actions requested by the Administrative Agent to ensure
that the Net Proceeds of the Asset Sale are applied to prepay the Loans in
accordance with Section 2.11(c), including, if not prohibited by any
contract to which any Loan Party is a party, granting the Lenders a
security interest in such Net Proceeds (and related contract rights).
SECTION 5.06. CONSENTS TO CAIS ASSUMPTION. The Borrower will use
commercially reasonable efforts to obtain any and all consents necessary
or reasonably advisable to permit the CAIS Assumption (such that CAIS,
Inc. is not in violation or default under any indenture, agreement or
other instrument binding upon CAIS, Inc. or any Loan Party or result in
the imposition of any Lien or an acceleration of any indebtedness of CAIS,
Inc. or any Loan Party).
SECTIONS 5.07-5.08. [Intentionally Omitted]
SECTION 5.09. BOOKS AND RECORDS; INSPECTION AND AUDIT Rights. Each
of Holdings and CAIS, Inc. will, and will cause each of the Subsidiaries
to, keep proper books of record and account in which full, true and
correct entries in compliance with GAAP are made of all dealings and
transactions in relation to its business and
40
activities. Each of Holdings and CAIS, Inc. will, and will cause each of
the Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as
often as reasonably requested, PROVIDED that the Borrower shall be given
the opportunity to be present at any discussion with its independent
accountants.
SECTION 5.10. COMPLIANCE WITH LAWS. Each of Holdings and CAIS, Inc.
will, and will cause each of the Subsidiaries to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to
it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.11. USE OF PROCEEDS. The proceeds of the Loans will be
used solely for working capital requirements within five Business Days of
the borrowing of such Loans or such unspent amounts shall be repaid to the
Lenders. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of
the Regulations of the Board, including Regulations T, U and X.
SECTION 5.12. ADDITIONAL SUBSIDIARIES. If any additional Subsidiary
is formed or acquired after the Effective Date, Holdings will notify the
Administrative Agent and the Lenders thereof and (a) if such Subsidiary is
a Subsidiary Loan Party, (i) Holdings will cause such Subsidiary to
execute and deliver a Subsidiary Guarantee Agreement and (ii) Holdings
will cause such Subsidiary to become a party to the Indemnity, Subrogation
and Contribution Agreement, in each case within three Business Days after
such Subsidiary is formed or acquired.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan payable hereunder have been paid in full,
each of Holdings and CAIS, Inc. (at such times as it is the Borrower
hereunder) covenants and agrees with the Lenders that:
41
SECTION 6.01. INDEBTEDNESS. Holdings and CAIS, Inc. will
not, and Holdings will not permit any Subsidiary to, create, incur,
assume or permit to exist any Indebtedness, except:
(a) Indebtedness created under the Loan Documents;
(b) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted
average life thereof;
(c) Indebtedness of Holdings to CAIS, Inc. or any Subsidiary, and of
any Subsidiary Loan Party (other than CAIS Software) to Holdings,
CAIS, Inc. or any other Subsidiary and of CAIS, Inc. or CAIS
Software to Holdings or any Subsidiary in an amount not to exceed
that required to satisfy their respective working capital needs (as
communicated to the Administrative Agent hereunder) in the ordinary
course of business;
(d) Guarantees by Holdings of Indebtedness of CAIS, Inc. or any
Subsidiary Loan Party, by CAIS, Inc. of Indebtedness of Holdings or
any Subsidiary Loan Party and by any Subsidiary of Indebtedness of
Holdings or any Subsidiary Loan Party; provided that any such
Guarantees of Indebtedness of CAIS, Inc. or CAIS Software shall only
be to provide credit support in connection with their respective
working capital requirements (as communicated to the Administrative
Agent) in the ordinary course of business;
(e) other Indebtedness referred to on Schedule 6.01A (which shall be
subject to mutual agreement of the parties hereto); and
(f) other Indebtedness in an aggregate principal amount not
exceeding $10,000,000 at any time outstanding.
SECTION 6.02. LIENS. Holdings and CAIS, Inc. will not, and Holdings
will not permit any Subsidiary to, create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by
it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
42
(c) any Lien on any property or asset of Holdings, CAIS, Inc. or any
Subsidiary existing on the date hereof and set forth in Schedule
6.02; PROVIDED that (i) such Lien shall not apply to any other
property or asset of Holdings, CAIS, Inc. or any Subsidiary and (ii)
such Lien shall secure only those obligations that it secures on the
date hereof and extensions, renewals and replacements thereof that
do not increase the outstanding principal amount thereof;
(d) any Lien existing on any property or asset prior to the
acquisition thereof by CAIS, Inc. or any Subsidiary or existing on
any property or asset of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a Subsidiary;
PROVIDED that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a
Subsidiary , as the case may be, (ii) such Lien shall not apply to
any other property or assets of Holdings, CAIS, Inc. or any
Subsidiary and (iii) such Lien shall secure only those obligations
that it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be, and extensions,
renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(e) other Liens referred to on Schedule 6.02A (which shall be
subject to mutual agreement of the parties hereto); and
(f) other Liens securing obligations not exceeding $1,000,000 at any
time outstanding.
SECTION 6.03. RESTRICTED PAYMENTS. (a) Each of Holdings and
CAIS, Inc. will not, nor will Holdings permit any of the
Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment except:
(i) Holdings may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its common stock,
(ii) Subsidiaries may make Restricted Payments to Holdings or to any
wholly owned Subsidiary Loan Party, and
(iii) Holdings may declare and pay dividends on its Series C
Preferred Stock in cash to U.S. Telesource, Inc. to the extent required by
and in accordance with the terms thereof in effect on the date hereof
(including the
43
related escrow agreement) on the dates and in the amounts set forth on
Schedule 6.03.
SECTION 6.04. CAPITAL EXPENDITURES. Make or commit to make
any Capital Expenditure, except Capital Expenditures of CAIS, Inc.
and other Subsidiaries in the ordinary course of business not
exceeding an amount described on Schedule 6.04 hereto.
SECTION 6.05. INVESTMENTS. Make any advance, loan, extension of
credit (by way of guaranty or otherwise) or capital contribution to, or
purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting a business unit of, or make any
other investment in, any Person (all of the foregoing, "INVESTMENTS"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Guarantee obligations permitted by Section 6.01;
(d) loans and advances to employees of Holdings or any Subsidiary in
the ordinary course of business (including for travel, entertainment
and relocation expenses) in an aggregate amount not to exceed at any
one time outstanding an amount set forth on Schedule 6.05;
(e) Investments existing on the date hereof;
(f) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Subsidiaries in
an aggregate amount (valued at cost) not to exceed the amount set
forth on Schedule 6.05A during the term of this Agreement; and
(g) Investments in any Subsidiary Loan Party or CAIS, Inc., PROVIDED
that such Investments may be made in CAIS, Inc. or CAIS Software
solely to satisfy their respective working capital requirements in
the ordinary course of business (as communicated to the
Administrative Agent hereunder).
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ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when
and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three
Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of Holdings, CAIS, Inc. or any of the Subsidiaries in or in
connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate or other
document furnished pursuant to or in connection with any Loan
Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material
respect when made or deemed made;
(d) Holdings or CAIS, Inc. shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.04 (with
respect to the existence of Holdings or CAIS, Inc.) or 5.11 or in
Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than
those specified in clause (a), (b) or (d) of this Article), and such
failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Borrower (which
notice will be given at the request of any Lender);
(f) Holdings, CAIS, Inc. or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall
become due and payable;
45
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse
of time or both) the holder or holders of any Material Indebtedness
or any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; PROVIDED that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of Holdings, CAIS, Inc. or any Subsidiary or
its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for Holdings, CAIS, Inc. or any Subsidiary or for a
substantial part of its assets, and, in any such case, either (A)
there shall be a period of 60 days during which such proceeding or
petition shall not be dismissed, vacated or stayed pending appeal or
(B) an order or decree approving or ordering any of the foregoing
shall be entered;
(i) Holdings, CAIS, Inc. or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter
in effect, (ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, CAIS, Inc. or any
Subsidiary or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for
the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
46
(j) Holdings, CAIS, Inc. or any Subsidiary shall become unable,
admit in writing its inability or fail generally to pay its debts as
they come due; or
(k) any Loan Document shall, at any time, cease to be in full force
and effect (unless released by the Administrative Agent at the
direction of the Required Lenders or all Lenders (to the extent
required by subsection 9.02 of this Agreement) or as otherwise
permitted under this Agreement) or shall be declared null and void,
or the validity or enforceability thereof shall be contested by any
Loan Party,
then, and in every such event (other than an event with respect to the
Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent
may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and
all fees and other obligations of the Borrower accrued hereunder, shall
become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the
Borrower; and in case of any event with respect to the Borrower described
in clause (h) or (i) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms of the Loan Documents,
47
together with such actions and powers as are reasonably incidental
thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent,
and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with Holdings, CAIS, Inc. or
any Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting
the generality of the foregoing, (a) the Administrative Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly
set forth in the Loan Documents, the Administrative Agent shall not have
any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to Holdings, CAIS, Inc. or any of the
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own
gross negligence or wilful misconduct. The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until written
notice thereof is given to the Administrative Agent by Holdings, CAIS,
Inc. or a Lender, and the Administrative Agent shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity,
enforceability,
48
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth
in Article IV or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the Administrative
Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed or sent by the proper
Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel
for the Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any
such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent
and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well
as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative
Agent may resign at any time by notifying the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative
Agent may, in consultation with the Borrower and on behalf of the Lenders,
appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall
49
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while it was acting as Administrative
Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents
and information as it shall from time to time deem appropriate, continue
to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall
be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 1255 22nd Street N.W., Fourth
Floor, Washington, D.C. 20037, Attention of the President
(Telecopy No. 202-463-7190); with a copy to
Morrison & Foerster LLP, 1290 Avenue of the Americas, New York,
New York 10104-0050, Telephone: (212) 468-8000,
Facsimile: (212) 468-7900, Attention: Lorraine Massaro, Esq.;
(b) if to the Administrative Agent to it at c/o Kohlberg Kravis
Roberts & Co., 9 West 57th Street, Suite 4200, New York, New York
10019, Telephone: (212) 750-8300; Facsimile: (212) 750-0003,
Attention: Alexander Navab; with a copy to Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017,
Telephone: (212) 455-2000, Facsimile: (212) 455-2502,
Attention: Marni Lerner, Esq.
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
50
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given
on the date of receipt.
SECTION 9.02. WAIVERS; AMENDMENTS. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b)
of this Section, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of
such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in
the case of this Agreement, pursuant to an agreement or agreements in
writing entered into by Holdings, CAIS, Inc. and the Required Lenders or,
in the case of any other Loan Document, pursuant to an agreement or
agreements in writing entered into by the Administrative Agent and the
Loan Party or Loan Parties that are parties thereto, in each case with the
consent of the Required Lenders; PROVIDED that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby, (iii) postpone the
maturity of any Loan, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such scheduled
payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (iv) change
Section
51
2.18(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section or the definition of the term
"Required Lenders" or any other provision of any Loan Document specifying
the number or percentage of Lenders required to waive, amend or modify any
rights thereunder or make any determination or grant any consent
thereunder, or (vi) release Holdings from its Guarantee under the Parent
Guarantee Agreement (except as expressly provided in the Parent Guarantee
Agreement), or limit its liability in respect of such Guarantee or release
any Subsidiary Loan Party from its Guarantee under the Subsidiary
Guarantee Agreement (except as expressly provided in the applicable
Subsidiary Guarantee Agreement), or limit its liability in respect of such
Guarantee, in each case, without the written consent of each Lender;
PROVIDED FURTHER that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent without the prior
written consent of the Administrative Agent.
(c) If, in connection with any proposed amendment, modification,
termination or waiver of or to any of the provisions of this Agreement or
the other Loan Documents contemplated by the first proviso to Section
9.02(b) the consent of the Required Lenders is obtained but the consent of
one or more of such other Lenders whose consent is required is not
obtained, then the Borrower shall have the right to either (i) replace any
such non-consenting Lender or Lenders with one or more replacement Lenders
in the same manner as provided in Section 2.19(b) so long as at the time
of such replacement, each such replacement Lender consents to the proposed
amendment, modification, termination or waiver, or (ii) terminate any such
non-consenting Lender's Commitment and repay in full its outstanding Loans
in accordance with Sections 2.08(e) and 2.11(f); PROVIDED that unless the
Commitments that are terminated and the Loans that are repaid pursuant to
the preceding clause (ii) are immediately replaced in full at such time
through the addition of new Lenders or the increase of the Commitments
and/or outstanding Loans of existing Lenders (who in each case must
specifically consent thereto), then in the case of any action pursuant to
the preceding clause (ii), each Lender (other than the terminated Lender
or Lenders) must consent to such termination.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including charges and
disbursements of counsel and accountants (including,
52
without limitation, Deloitte & Touche) for the Administrative Agent, in
connection with the preparation and administration of, or decision to
enter into, the Loan Documents or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated) and (ii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, including the
reasonable fees, charges and disbursements of any counsel for the
Administrative Agent, in connection with the enforcement or protection of
its rights in connection with the Loan Documents, including its rights
under this Section, or in connection with the Loans made hereunder,
including all such reasonable out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "INDEMNITEE") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents
of their respective obligations thereunder or the consummation of the
Financing Transactions or any other transactions contemplated hereby, (ii)
any Loan or the use of the proceeds therefrom, (iii) any actual or
prospective claim, litigation, investigation or proceeding relating to any
of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; PROVIDED that
such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses
resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Administrative
Agent such Lender's pro rata share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; PROVIDED that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was
incurred by or asserted
53
against the Administrative Agent in its capacity as such. For purposes
hereof, a Lender's "pro rata share" shall be determined based upon its
share of the total outstanding Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, neither Holdings nor
CAIS, Inc. shall assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, (i) for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or
any agreement or instrument contemplated hereby, the Financing
Transactions, any Loan or the use of the proceeds thereof or (ii) arising
out of, in connection with, or as a result of the use by others of
information or other materials obtained through electronic,
telecommunications or other information transmission systems (PROVIDED
that, in the case of clause (ii), such Indemnitee utilized the same degree
of care in connection therewith as it uses for other confidential
information).
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); PROVIDED
that (i) except in the case of an assignment to a Lender or a Lender
Affiliate of a Lender, the Administrative Agent must give its prior
written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a
Lender or a Lender Affiliate of a Lender
54
or an assignment of the entire remaining amount of the assigning Lender's
Commitment or Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $2,500,000
unless each of the Borrower and the Administrative Agent otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement, (iv) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and (v) the
assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire; and PROVIDED FURTHER that any
consent of the Borrower otherwise required under this paragraph shall not
be required if an Event of Default under clause (h) or (i) of Article VII
has occurred and is continuing. Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all
of the assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (e) of this
Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York
a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The
entries in the Register shall be conclusive, and Holdings, CAIS, Inc., the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register
55
pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other
entities (a "PARTICIPANT") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); PROVIDED that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) Holdings, CAIS, Inc., the
Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan
Documents; PROVIDED that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (f) of
this Section, the Borrower agrees that each Participant shall be entitled
to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees
56
to be subject to Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A Participant that would
be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 2.17(e) as though it
were a Lender.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure
obligations to a Federal Reserve Bank, and with the consent of the
Borrower and Administrative Agent any Lender which is an investment fund
may pledge all or any portion of its loans to its trustee in support of
its obligations to such trustee, and this Section shall not apply to any
such pledge or assignment of a security interest; PROVIDED that no such
pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto and in no event shall such
Federal Reserve Bank or trustee be considered to be a "Lender" or be
entitled to require the assigning Lender to take or omit to take any
action hereunder.
SECTION 9.05. SURVIVAL. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant
to this Agreement or any other Loan Document shall be considered to have
been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans
regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue
in full force and effect as long as the principal of or any accrued
interest on any Loan or any other amount payable under this Agreement is
outstanding and unpaid and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and
Article VIII shall survive and remain in
57
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.
This Agreement, the other Loan Documents constitute the entire contract
among the parties relating to the subject matter hereof and supersede any
and all previous agreements and understandings, oral or written, relating
to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns. Delivery of an executed counterpart of a signature page of
this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. SEVERABILITY. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.
SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement
held by such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender
58
under this Section are in addition to other rights and remedies (including
other rights of setoff) which such Lender may have.
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS. (a) This Agreement shall be construed in accordance
with and governed by the law of the State of New York.
(b) Each of Holdings and CAIS, Inc. hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New
York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to any Loan Document, or
for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement or any other Loan Document shall affect any
right that the Administrative Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other
Loan Document against the Borrower or its properties in the courts of any
jurisdiction.
(c) Each of Holdings and CAIS, Inc. hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court
referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in
this Agreement or any other Loan Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by
law.
59
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. HEADINGS. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.
SECTION 9.12. CONFIDENTIALITY. Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below) in accordance with their customary procedures, except that
Information may be disclosed (a) to its and its Affiliates' directors,
officers, employees and agents, including accountants, legal counsel and
other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority, (c) to the extent
required by applicable laws or regulations or by any subpoena or similar
legal process, (d) to any other party to this Agreement, (e) in connection
with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g)
with the consent of the Borrower, (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent or any
Lender on a nonconfidential basis from a source other than Holdings or
CAIS, Inc. or any of its Affiliates or (i) to any actual or prospective
direct or indirect contractual counterparty with a Lender
60
or its affiliates in a swap or other derivative agreement or such
counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty
agrees to be bound by the provisions of this Section 9.12); PROVIDED that,
unless specifically prohibited by applicable law or court order, each
Lender shall notify the Borrower of any request by any regulatory
authority or representative thereof or pursuant to legal process (other
than any such request in connection with any examination of the financial
condition of such Lender by such regulatory authority) for disclosure of
any such nonpublic information prior to disclosure of such information.
For the purposes of this Section, "INFORMATION" means all information
received from Holdings or CAIS, Inc. or any of its Affiliates relating to
Holdings or CAIS, Inc. or any of the Subsidiaries or their respective
businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by Holdings or CAIS, Inc. or any of its Affiliates; PROVIDED
that, in the case of information received from Holdings or CAIS, Inc.
after the date hereof, such information is clearly identified at the time
of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of
such Information as such Person would accord to its own confidential
information.
SECTION 9.13. INTEREST RATE LIMITATION. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any
Loan, together with all fees, charges and other amounts which are treated
as interest on such Loan under applicable law (collectively, the
"CHARGES"), shall exceed the maximum lawful rate (the "MAXIMUM RATE")
which may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Effective Rate
to the date of repayment, shall have been received by such Lender.
61
SECTION 9.14. ASSUMPTION BY CAIS, INC. The parties hereto agree that
if Holdings or any other Loan Party shall obtain any necessary consents in
respect of the CAIS Assumption from Nortel and its Affiliates (or the CAIS
Assumption is otherwise not prohibited), CAIS, Inc. shall assume (the
"CAIS ASSUMPTION") Holdings' rights and obligations as Borrower under this
Agreement and the other Loan Documents pursuant to documentation
satisfactory to the Administrative Agent, Holdings shall simultaneously be
released from its obligations as Borrower hereunder and shall execute and
deliver the Parent Guarantee Agreement, and all references herein to the
Borrower shall be deemed to be references to CAIS, Inc. MUTATIS MUTANDIS.
SECTION 9.15. WARRANTS. (a) In the event that the CAIS Assumption
does not occur by November 15, 2000, then Holdings shall enter into a
warrant agreement, substantially in the form of Exhibit E hereto (the
"INITIAL WARRANT AGREEMENT"), with each Lender and issue warrants to
purchase 500,000 shares of common stock of Holdings, which warrants shall
be issued pro rata to the Lenders based on the amount of each of their
respective Commitments, Loans and other amounts owed hereunder as of such
date. In the event the CAIS Assumption does not occur by November 22,
2000, then Holdings shall issue additional warrants to purchase 500,000
shares of common stock of Holdings pursuant to the Initial Warrant
Agreement, which warrants shall be issued pro rata to the Lenders based on
the amount of each of their respective Commitments, Loans and other
amounts owed hereunder as of such date.
(b) In the event that the Commitments have not been terminated and
the principal of and the interest on each Loan and any fees hereunder have
not been paid in full on or before December 31, 2000, Holdings shall enter
into a warrant agreement, substantially in the form of Exhibit E hereto
(the "SECOND WARRANT AGREEMENT", together with the Initial Warrant
Agreement, the "WARRANT AGREEMENT"), with each Lender and issue warrants
to purchase a number of shares of common stock of Holdings equal to the
difference between (i) the number of shares of common stock of Holdings
equal to 19.9% of the number of outstanding shares of common stock on the
date hereof and (ii) the sum of (A) 2,000,000 and (B) the number of
warrants issued pursuant to Section 9.15(a).
SECTION 9.16. REPRESENTATIONS OF THE LENDERS. Each Lender represents
and acknowledges that the Loans are not registered under the Securities
Act of 1933, as amended (the "Securities Act") or under any state
securities laws, that the extension of the Loans are being
62
made in reliance on the exemption from registration under Section 4(2) of
the Securities Act and from similar exemptions under state securities laws
as not involving any public offering and that the Borrower's reliance on
such exemption is predicated in part on the representations made by each
Lender to and with the Borrower that such Lender (1) is acquiring the
Loans for investment for its own account, with no present intention of
reselling or otherwise distributing the same (other than a portion of its
Commitments, Loans and other obligations hereunder to R. Theodore Ammon),
(2) is an "accredited investor" as defined in Regulation D under the
Securities Act, and (3) has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
the investments made or to be made in connection with the extension of the
Loans. The Loans may not be transferred except (i) pursuant to an
effective registration statement under the Securities Act, (ii) pursuant
to Rule 144 under the Securities Act if the transferor delivers a
certificate, in form and substance reasonably satisfactory to the
Borrower, that such transfer complies with the requirements of Rule 144,
or (iii) pursuant to any other available exemption from registration if
such transferee makes the representations set forth in the preceding
sentence in writing to the Borrower and, in the case of any transfer
pursuant to clause (iii) other than to an affiliate of such Lender or R.
Theodore Ammon, with the delivery to the Borrower of an opinion of counsel
reasonably satisfactory to the Borrower by counsel reasonably satisfactory
to the Borrower (and the Borrower hereby acknowledges and agrees that
Simpson Thacher & Bartlett is reasonably satisfactory to the Borrower),
stating that no registration is required under the Securities Act.
63
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
CAIS INTERNET, INC.,
by
/s/ William M. Campbell IV
---------------------------------------
Name: William M. Campbell IV
Title: President
CII Ventures II LLC,
individually and as
Administrative Agent,
by
/s/ Alexander Navab
---------------------------------------
Name: Alexander Navab
Title: President
ULYSSES G. AUGER II
by
/s/ Ulysses G. Auger II
---------------------------------------
Name: Ulysses G. Auger
Title:
R. THEODORE AMMON
by:
/s/ R. Theodore Ammon
---------------------------------------
Name: R. Theodore Ammon
Title:
Dates Referenced Herein and Documents Incorporated by Reference
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