Exhibit 10.1
================================================================================
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
---------------------------
================================================================================
TABLE OF CONTENTS
ARTICLE I
Definitions
-----------
Page
----
SECTION 1.01 Defined Terms............................................... 1
-------------
SECTION 1.02 Classification of Loans and Borrowings...................... 15
--------------------------------------
SECTION 1.03 Terms Generally............................................. 15
---------------
SECTION 1.04 Accounting Terms; GAAP...................................... 16
----------------------
ARTICLE II
The Credits
------------
SECTION 2.01. Commitment.................................................. 16
----------
SECTION 2.02. Loans and Borrowings........................................ 17
--------------------
SECTION 2.03. Requests for Borrowings..................................... 17
-----------------------
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.................... 20
----------------------------------------
SECTION 2.09. Repayment of Loans; Evidence of Debt........................ 21
------------------------------------
SECTION 2.10. [Intentionally Omitted]..................................... 22
SECTION 2.11. Prepayment of Loans......................................... 22
-------------------
SECTION 2.12. [Intentionally deleted]..................................... 24
SECTION 2.13. Interest.................................................... 24
--------
SECTION 2.14. Alternate Rate of Interest.................................. 25
--------------------------
SECTION 2.15. Increased Costs............................................. 25
---------------
SECTION 2.16. Break Funding Payments...................................... 26
----------------------
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........................ 32
------------------------------------
SECTION 3.04. Warrant Agreement........................................... 33
-----------------
SECTIONS 3.05-3.06. [intentionally omitted]................................ 34
ii
Page
----
SECTION 3.07. Compliance with Laws and Agreements........................ 34
-----------------------------------
SECTION 3.08. Investment and Holding Company Status...................... 34
-------------------------------------
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date............................................. 34
--------------
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].............................. 37
SECTION 5.04. Existence; Conduct of Business............................. 37
-------------------------------
SECTION 5.05. Asset Sale Proceeds........................................ 37
-------------------
SECTION 5.06. Consents to CAIS Assumption................................ 37
---------------------------
SECTIONS 5.07-5.08. [Intentionally Omitted].............................. 37
SECTION 5.09. Books and Records; Inspection and Audit Rights............. 38
----------------------------------------------
SECTION 5.10. Compliance with Laws....................................... 38
--------------------
SECTION 5.11. Use of Proceeds............................................ 38
---------------
SECTION 5.12. Additional Subsidiaries.................................... 38
-----------------------
ARTICLE VI
Negative Covenants
-------------------
SECTION 6.03. Restricted Payments......................................... 40
-------------------
SECTION 6.04. Capital Expenditures........................................ 40
--------------------
SECTION 6.05. Investments................................................. 41
-----------
ARTICLE VII
Events of Default
-----------------
ARTICLE VIII
The Administrative Agent
------------------------
iii
ARTICLE IX
Miscellaneous
-------------
Page
----
SECTION 9.01 Notices...................................................... 46
-------
SECTION 9.02 Waivers; Amendments.......................................... 47
-------------------
SECTION 9.03 Expenses; Indemnity; Damage Waiver........................... 48
----------------------------------
SECTION 9.04 Successors and Assigns....................................... 50
----------------------
SECTION 9.05 Survival..................................................... 53
--------
SECTION 9.06 Counterparts; Integration; Effectiveness..................... 53
----------------------------------------
SECTION 9.07 Severability................................................. 53
------------
SECTION 9.08 Right of Setoff.............................................. 54
---------------
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process... 54
----------------------------------------------------------
SECTION 9.10 WAIVER OF JURY TRIAL......................................... 55
--------------------
SECTION 9.11 Headings..................................................... 55
--------
SECTION 9.12 Confidentiality.............................................. 55
---------------
SECTION 9.13 Interest Rate Limitation..................................... 56
------------------------
SECTION 9.14 Assumption by CAIS, Inc...................................... 57
------------------------
SECTION 9.15 Warrants..................................................... 57
--------
SECTION 9.16 Representations of the Lenders............................... 57
------------------------------
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 ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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
iv
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 Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
2
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.
"Borrowing Request" means a request by the Borrower for a Borrowing in
-----------------
accordance with Section 2.03.
3
"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 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
4
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 ▇▇▇▇▇'▇ 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.
"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
5
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 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
6
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 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
7
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.
"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 obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all
8
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 Agreement" means the Indemnity,
-------------------------------------------------
Subrogation and Contribution Agreement, substantially in the form of Exhibit B,
among Holdings, the Borrower, the Subsidiary Loan Parties and the Administrative
Agent.
"Interest 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
9
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 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.,
10
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, 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
11
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.
------
"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;
12
(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 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, association, 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
13
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
(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
14
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 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 Subsidiary Guarantee
------------------------------
Agreement, substantially in the form of Exhibit C, made by the Subsidiary Loan
Parties in favor of
15
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 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
16
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.04. 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.
17
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.
(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:
18
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(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
19
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, 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 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;
20
(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.
21
(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 of principal
and interest payable and paid to such Lender from time to time hereunder.
22
(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 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.
23
(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 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.
24
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 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.
25
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 Euro-dollar Loan (or of maintaining its
obligation to 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.
26
(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 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
27
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.
(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
28
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender, or by the Administrative Agent
on its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Lender that is entitled to an exemption from or reduction of the
deduction, withholding or payment of an Indemnified Tax or Other Tax under the
law of the United States or the jurisdiction in which the Borrower is located
(or any political subdivision thereof), or any treaty to which such jurisdiction
is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines in good faith,
but in its sole discretion, that it has received a refund (or a reduction in
Taxes attributable to foreign tax credits) in respect of any Indemnified Taxes
or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section 2.17, 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
29
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 ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ 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.
(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
30
the Loans of other Lenders to the extent necessary so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans;
provided that (i) if any such participations are purchased and all or any
--------
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute 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.
31
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 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.
32
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 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.
33
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 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
34
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 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
35
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
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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 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
36
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.
(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:
37
SECTION 5.01. Financial Statements and Other Information. The Borrower will
------------------------------------------
furnish to the Administrative Agent and each Lender: (a) promptly after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by Holdings, CAIS, Inc. or any Subsidiary
with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any
national securities exchange, or distributed by Holdings or CAIS, Inc. to its
shareholders generally, as the case may be;
(b) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of Holdings,
CAIS, Inc. or any Subsidiary, or compliance with the terms of any Loan Document,
as the Administrative Agent or any Lender may reasonably request, and
(c) promptly after the occurrence thereof, information describing the
occurrence of (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]
38
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 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:
39
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;
(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
--------
40
(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
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.
41
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).
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
42
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;
(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
43
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;
(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
44
other obligations of the Borrower accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower; and in case of any event
with respect to the Borrower described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
------------------------
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
The 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
45
shall not be liable for any action taken or not taken by it with the consent or
at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or wilful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by
Holdings, CAIS, Inc. or a Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
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
46
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, in consultation with the Borrower and on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, or an Affiliate of any such bank.
Upon the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent's resignation hereunder,
the provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices. Except in the case of notices and other
-------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention of the President (Telecopy No. 202-463-
7190); with a copy to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇,
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.;
47
(b) if to the Administrative Agent to it at ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co., ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇; with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Facsimile: (212) 455-
2502; and
(c) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
-------------------
Administrative Agent or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, CAIS, Inc. and the Required Lenders or, in the case of
any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, in each case with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
--------
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written
48
consent of each Lender affected thereby, (iii) postpone the maturity of any
Loan, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such scheduled payment, or postpone the scheduled
date of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(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
49
Affiliates, including charges and disbursements of counsel and accountants
(including, without limitation, Deloitte & Touche) for the Administrative Agent,
in connection with the preparation and administration of, or decision to enter
into, the Loan Documents or any amendments, modifications or waivers of the
provisions thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated) 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
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.
50
(d) To the extent permitted by applicable law, neither
Holdings nor CAIS, Inc. shall assert, and each hereby waives, any claim against
any Indemnitee, on any theory of liability, (i) for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Financing Transactions, any
Loan or the use of the proceeds thereof or (ii) arising out of, in connection
with, or as a result of the use by others of information or other materials
obtained through electronic, telecommunications or other information
transmission systems (provided that, in the case of clause (ii), such Indemnitee
--------
utilized the same degree of care in connection therewith as it uses for other
confidential information).
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of
-----------------------
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
--------
(i) except in the case of an assignment to a Lender or a Lender Affiliate of a
Lender, the Administrative Agent must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or a Lender Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Commitment
or Loans, the amount of the 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
51
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 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
52
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 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
53
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 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
54
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability without affecting the
validity, legality and enforceability of the remaining provisions hereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall
----------------
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
-----------------------------------------------
of Process. (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
55
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
---------------------
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
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,
56
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Borrower, (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent or any Lender on a nonconfidential
basis from a source other than Holdings or CAIS, Inc. or any of its Affiliates
or (i) to any actual or prospective direct or indirect contractual counterparty
with a Lender or its affiliates in a swap or other derivative agreement or such
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this Section 9.12); provided that, unless specifically prohibited
--------
by applicable law or court order, each Lender shall notify the Borrower of any
request by any regulatory authority or representative thereof or pursuant to
legal process (other than any such request in connection with any examination of
the financial condition of such Lender by such regulatory authority) for
disclosure of any such nonpublic information prior to disclosure of such
information. For the purposes of this Section, "Information" means all
-----------
information received from Holdings or CAIS, Inc. or any of its Affiliates
relating to Holdings or CAIS, Inc. or any of the Subsidiaries or their
respective businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by Holdings or CAIS, Inc. or any of its Affiliates; provided that, in
--------
the case of information received from Holdings or CAIS, Inc. after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding
-------------------------
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively, the "Charges"), shall
-------
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
------------
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, 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
57
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.14. 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 made in reliance
58
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.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇), (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. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ is reasonably satisfactory to the Borrower), stating that no
registration is required under the Securities Act.
59
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇
Title: President
CII Ventures II LLC,
individually and as
Administrative Agent,
by
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
60
R. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
by:
/s/ R. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------
Name: R. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: