EXHIBIT 10.9
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SENIOR SUBORDINATED CREDIT AGREEMENT
dated as of
April 1, 1998
among
PRIMESTAR, INC.,
as Borrower,
THE GUARANTORS party hereto,
THE LENDERS party hereto,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.,
as Arranger and Syndication Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Administrative Agent,
and
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION,
as Documentation Agent
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TABLE OF CONTENTS/a/
Section Heading Page
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SECTION 1. DEFINITIONS................................................................................ 1
1.1 Certain Defined Terms...................................................................... 1
1.2 Accounting Terms........................................................................... 39
1.3 Rules of Construction...................................................................... 40
SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENT AND LOANS;
NOTES...................................................................................... 40
2.1 Initial Loan and Initial Note.............................................................. 40
A. Initial Loan Commitment........................................................... 40
B. Notice of Borrowing............................................................... 40
C. Disbursement of Funds............................................................. 41
D. Initial Notes..................................................................... 41
E. Scheduled Payment of Initial Loan................................................. 41
F. Termination of Initial Loan Commitments........................................... 41
G. Pro Rata Borrowings............................................................... 42
2.2 Term Loan and Term Note.................................................................... 42
A. Term Loan Commitment.............................................................. 42
B. Notice of Conversion/Borrowing.................................................... 42
C. Making of Term Loan............................................................... 42
D. Maturity Date of Term Loan........................................................ 42
E. Term Notes........................................................................ 42
2.3 Interest on the Loans...................................................................... 43
A. Rate of Interest.................................................................. 43
B. Interest Payments................................................................. 43
C. Post-Maturity Interest............................................................ 44
D. Computation of Interest........................................................... 44
2.4 Letter Agreements.......................................................................... 44
2.5 Prepayments; Mandatory Offers and Payments................................................. 44
A. Prepayments and Mandatory Offers.................................................. 44
B. Manner and Time of Payment........................................................ 48
C. Payments on Non-Business Days..................................................... 48
D. Notation of Payment............................................................... 48
2.6 Use of Proceeds............................................................................ 48
A. Initial Loan...................................................................... 48
B. Term Loan......................................................................... 48
C. Margin Regulations................................................................ 48
2.7 Breakage; Illegality....................................................................... 48
A. Breakage.......................................................................... 48
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a This Table of Contents is not a part of the Agreement to which it is
attached but is inserted for convenience of reference only.
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Section Heading Page
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B. Illegality........................................................................ 49
SECTION 3. CONDITIONS TO LOANS........................................................................ 49
3.1 Conditions to Initial Loan................................................................. 49
A. Corporate Proceedings, Documents, Resolutions, Etc................................ 49
B. New PRIMESTAR Senior Credit Facility.............................................. 51
C. Assumption Agreements............................................................. 51
D. Restructuring Agreements.......................................................... 51
E. No Other Debt..................................................................... 52
F. Consummation of Transactions...................................................... 52
G. Approvals......................................................................... 52
H. No Default Under This Agreement and Other Agreements.............................. 53
I. No Legal Bar...................................................................... 53
J. No Material Adverse Change........................................................ 53
K. No Dividends...................................................................... 53
L. No Violation of Law............................................................... 53
M. Fees and Expenses................................................................. 53
N. Accuracy of Representations and Warranties........................................ 53
O. Subordination Arrangements........................................................ 54
3.2 Conditions to Term Loan.................................................................... 54
A. Notice of Conversion.............................................................. 54
B. No Bankruptcy..................................................................... 54
C. No Payment Default................................................................ 54
D. No Acceleration of New PRIMESTAR Senior Credit Facility or Existing
Notes........................................................................... 54
E. Officers' Certificate............................................................. 54
F. Term Notes........................................................................ 54
G. Fees and Expenses................................................................. 54
H. Margin Rules...................................................................... 54
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................................. 54
4.1 Organization, Etc.......................................................................... 54
4.2 Due Authorization, Non-Contravention, Etc.................................................. 55
A. General........................................................................... 55
B. Subordinated Debt................................................................. 55
4.3 Government Approval, Regulation, Etc....................................................... 55
4.4 Validity, Etc.............................................................................. 55
4.5 Financial Information...................................................................... 56
4.6 No Material Adverse Change................................................................. 56
4.7 Litigation, Labor Controversies, Etc....................................................... 56
4.8 Compliance with Laws....................................................................... 56
4.9 Subsidiaries............................................................................... 56
4.10 Ownership of Properties.................................................................... 56
4.11 Taxes...................................................................................... 57
4.12 Pension and Welfare Plans.................................................................. 57
4.13 Environmental Matters...................................................................... 57
4.14 Intellectual Property...................................................................... 58
4.15 Regulations T, U and X..................................................................... 58
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Section Heading Page
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4.16 Accuracy of Information.................................................................... 58
SECTION 5. AFFIRMATIVE COVENANTS (INITIAL LOAN AND TERM LOAN)......................................... 59
5.1 Financial Information, Reports, Notices, Etc............................................... 59
5.2 Compliance with Laws, Etc.................................................................. 60
5.3 Maintenance of Properties.................................................................. 61
5.4 Insurance.................................................................................. 61
5.5 Books and Records.......................................................................... 61
5.6 Environmental Covenant..................................................................... 62
5.7 [Reserved]................................................................................. 62
5.8 Lenders Meeting............................................................................ 62
5.9 Use of Proceeds............................................................................ 62
5.10 Payments in U.S Dollars.................................................................... 62
5.11 Take-Out Financing......................................................................... 62
A. Refinancing of Loans, Initial Notes, Term Notes and Exchange Notes................ 62
B. Required Refinancing of Loans, Notes, Term Notes and Exchange
Notes......................................................................... 64
5.12 Exchange of Term Notes..................................................................... 64
5.13 Register................................................................................... 65
SECTION 6. NEGATIVE COVENANTS (INITIAL LOAN).......................................................... 65
6.1 Business Activities........................................................................ 65
6.2 Indebtedness............................................................................... 66
6.3 Liens...................................................................................... 67
6.4 Sale and Leaseback......................................................................... 68
6.5 Investments................................................................................ 68
6.6 Restricted Payments, Etc................................................................... 68
6.7 [Reserved]................................................................................. 69
6.8 Subsidiaries............................................................................... 69
6.9 Take or Pay Contracts...................................................................... 69
6.10 Consolidation, Merger, Etc................................................................. 69
6.11 Permitted Dispositions..................................................................... 69
6.12 Senior Subordinated Indebtedness........................................................... 70
6.13 Guarantees................................................................................. 70
6.14 Refinancing of Loans in Part............................................................... 70
6.15 Modification of Certain Agreements......................................................... 70
6.16 Transactions with Affiliates............................................................... 70
6.17 Negative Pledges, Restrictive Agreements, Etc.............................................. 71
6.18 Restrictions on Leases and ASkyB Transaction............................................... 71
6.19 Restrictions on TSAT Partners Holdings and Its Subsidiaries................................ 71
SECTION 6A. NEGATIVE COVENANTS (TERM LOAN)............................................................. 72
6A.1 Limitation on Restricted Payments.......................................................... 72
6A.2 Limitation on Indebtedness................................................................. 75
6A.3 Limitation on Transactions with Affiliates................................................. 78
6A.4 Limitation on Liens........................................................................ 79
6A.5 Limitation on Senior Subordinated Indebtedness............................................. 80
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Section Heading Page
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6A.6 Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries............................................................................. 80
6A.7 Guaranty of Notes by Subsidiaries.......................................................... 81
6A.8 Merger, Sale of Assets; Etc................................................................ 81
6A.9 Disposition of Proceeds of Asset Sales..................................................... 82
6A.10 Payments for Consent....................................................................... 84
6A.11 Tempo Satellites; Maintenance of Insurance................................................. 84
6A.12 Designation of Unrestricted Subsidiaries................................................... 85
6A.13 Refinancing of Loans in Part............................................................... 86
SECTION 7. EVENTS OF DEFAULT.......................................................................... 86
7.1 Failure To Make Payments When Due.......................................................... 86
7.2 Default in Other Agreements................................................................ 87
7.3 Change of Control; Breach of Certain Covenants............................................. 87
7.4 Breach of Warranty......................................................................... 87
7.5 Other Defaults Under Agreement or Loan Documents........................................... 87
7.6 Involuntary Bankruptcy; Appointment of Custodian, Etc...................................... 87
7.7 Voluntary Bankruptcy; Appointment of Custodian, Etc........................................ 88
7.8 Judgments and Attachments.................................................................. 88
7.9 Dissolution................................................................................ 88
7.10 Guarantee.................................................................................. 88
7.11 Foreclosure................................................................................ 88
SECTION 8. SUBORDINATION.............................................................................. 89
8.1 Loans and Notes Subordinated to Senior Indebtedness........................................ 89
8.2 No Payment on Loans and Notes in Certain Circumstances; Payments Held in
Trust.................................................................................... 89
A. No Payments in Certain Circumstances.............................................. 89
B. Payments Held in Trust............................................................ 90
8.3 Payment Over of Proceeds upon Dissolution, Etc............................................. 90
A. Payment Over...................................................................... 90
B. Payments Held in Trust............................................................ 91
8.4 Subrogation................................................................................ 91
8.5 Obligations of Borrower Unconditional...................................................... 92
8.6 Notice to Arranger......................................................................... 92
8.7 Reliance on Judicial Order or Certificate of Liquidating Agent............................. 93
8.8 Arranger's Relation to Senior Indebtedness................................................. 93
8.9 Subordination Rights not Impaired by Acts or Omissions of Borrower or Holders
of Senior Indebtedness................................................................... 93
8.10 Lenders Authorize Arranger To Effectuate Subordination of Loans and Notes.................. 94
8.11 This Section not To Prevent Events of Default.............................................. 94
8.12 Arranger's Compensation not Prejudiced..................................................... 94
8.13 No Waiver of Subordination Provisions...................................................... 94
8.14 Acceleration of Loans and Notes............................................................ 94
SECTION 9. THE AGENTS................................................................................. 94
9.1 General Provisions......................................................................... 94
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Section Heading Page
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9.2 Indemnification............................................................................ 96
9.3 Consents Under Other Loan Documents........................................................ 97
SECTION 10. GUARANTEE.................................................................................. 97
10.1 Unconditional Guarantee.................................................................... 97
10.2 Severability............................................................................... 97
10.3 Release of a Guarantor..................................................................... 97
10.4 Limitation of Guarantor's Liability........................................................ 98
10.5 Contribution............................................................................... 98
10.6 Subordination of Subrogation and Other Rights.............................................. 98
SECTION 11. SUBORDINATION OF GUARANTEE OBLIGATIONS..................................................... 98
11.1 Guarantee Obligations Subordinated to Guarantor Senior Indebtedness........................ 98
11.2 No Payment on Guarantees in Certain Circumstances; Payments Held in Trusts................. 99
A. No Payments in Certain Circumstances.............................................. 99
B. Payments Held in Trust............................................................ 99
11.3 Payment Over of Proceeds upon Dissolution, Etc............................................. 100
A. Payment Over...................................................................... 100
B. Payments Held in Trust............................................................ 100
11.4 Subrogation................................................................................ 101
11.5 Obligations of Guarantors Unconditional................................................... 101
11.6 Notice to Arranger........................................................................ 101
11.7 Reliance on Judicial Order or Certificate of Liquidating Agent............................ 102
11.8 Arranger's Relation to Guarantor Senior Indebtedness...................................... 102
11.9 Subordination Rights not Impaired by Acts or Omissions of the Guarantors or
Lenders of Guarantor Senior Indebtedness................................................ 103
11.10 Lenders Authorize Arranger To Effectuate Subordination of Guarantee....................... 103
11.11 This Article not To Prevent Events of Default............................................. 103
11.12 Arranger's Compensation not Prejudiced.................................................... 103
11.13 No Waiver of Guarantee Subordination Provisions........................................... 103
11.14 Payments May Be Paid Prior to Dissolution................................................. 104
SECTION 12. MISCELLANEOUS............................................................................. 104
12.1 Participations in and Assignments of Loans and Notes...................................... 104
A. Assignments...................................................................... 104
B. Participations................................................................... 104
C. Certain Assignments Permitted.................................................... 105
D. Information...................................................................... 105
E. No Assignment to Borrower........................................................ 105
12.2 Expenses.................................................................................. 105
12.3 Indemnity................................................................................. 106
12.4 Setoff.................................................................................... 107
12.5 Amendments and Waivers.................................................................... 107
12.6 Independence of Representations, Warranties and Covenants................................. 108
12.7 Entirety.................................................................................. 108
12.8 Notices................................................................................... 108
12.9 Survival of Warranties and Certain Agreements............................................. 108
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Section Heading Page
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12.10 Failure or Indulgence not Waiver; Remedies Cumulative..................................... 109
12.11 Severability.............................................................................. 109
12.12 Headings.................................................................................. 109
12.13 Applicable Law............................................................................ 109
12.14 Successors and Assigns; Subsequent Holders of Notes....................................... 109
12.15 Counterparts; Effectiveness............................................................... 109
12.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial...................................... 110
A. New York Jurisdiction............................................................ 110
B. Venue............................................................................ 110
C. Trial by Jury Waiver............................................................. 110
12.17 Payments Pro Rata......................................................................... 110
A. Pro Rata Payments................................................................ 110
B. Sharing of Payments.............................................................. 110
12.18 Taxes and Other Taxes..................................................................... 111
A. Covered Taxes.................................................................... 111
B. Other Taxes...................................................................... 113
C. Refunds.......................................................................... 113
D. Receipts......................................................................... 113
E. Survival......................................................................... 113
12.19 Waiver of Stay, Extension or Usury Laws................................................... 113
12.20 Additional Costs.......................................................................... 114
12.21 Confidentiality........................................................................... 115
12.22 Acknowledgments........................................................................... 115
Signatures............................................................................................... ▇-▇
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▇▇▇▇▇▇▇▇▇
SCHEDULE 3.1E Debt and Contingent Obligations at Closing Date
SCHEDULE 4.3 Approvals
SCHEDULE 4.7 Litigation
SCHEDULE 4.9 Subsidiaries
SCHEDULE 4.13 Environmental Matters
SCHEDULE 4.14 Intellectual Property
SCHEDULE 6.2 Ongoing Indebtedness
SCHEDULE 6.3 Ongoing Liens
SCHEDULE 6.5 Ongoing Investments
EXHIBITS
A FORM OF INITIAL NOTE
B FORM OF TERM NOTE
C [RESERVED]
D FORM OF NOTICE OF BORROWING
E FORM OF NOTICE OF CONVERSION
F [RESERVED]
G FORM OF REGISTRATION RIGHTS AGREEMENT
H FORM OF OPINION OF ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇
- SPECIAL COUNSEL FOR LOAN PARTIES
I FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
J FORM OF SECTION 12.18 CERTIFICATE
K FORM OF NOTATION OF GUARANTEE
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This Senior Subordinated Credit Agreement is dated as of April 1,
1998, and entered into by and among PRIMESTAR, Inc., a Delaware corporation
("Borrower" or "New PRIMESTAR"), the Guarantors party hereto, the Lenders party
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hereto (the "Lenders"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
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▇▇▇▇▇ Incorporated, as Arranger and Syndication Agent ("▇▇▇▇▇▇▇ ▇▇▇▇▇" or the
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"Arranger"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Administrative Agent (the
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"Administrative Agent"), and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
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Corporation, as Documentation Agent (the "Documentation Agent").
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R E C I T A L S :
WHEREAS, Borrower desires that the Lenders extend a senior
subordinated credit facility to Borrower in connection with the Restructuring
Transaction (as defined herein);
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms
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The following terms used in this Agreement shall have the following
meanings:
"Acquired Indebtedness" shall mean Indebtedness of a Person (a)
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assumed in connection with an Acquisition from such Person or (b) existing at
the time such Person becomes a Restricted Subsidiary or is merged or
consolidated with or into Borrower or any Restricted Subsidiary.
"Acquired Person" shall mean, with respect to any specified Person,
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any other Person which merges with or into or becomes a Subsidiary of such
specified Person.
"Acquisition" shall mean (i) any capital contribution (by means of
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transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by Borrower or any
Restricted Subsidiary to any other Person, or any acquisition or purchase of
Equity Interests of any other Person by Borrower or any Restricted Subsidiary,
in either case pursuant to which such Person shall become a Restricted
Subsidiary or shall be consolidated or merged with or into Borrower or any
Restricted Subsidiary or (ii) any acquisition by Borrower or any Restricted
Subsidiary of the assets of any Person which constitute substantially all of an
operating unit or line of business of such Person or which is otherwise outside
of the ordinary course of business.
"Administrative Agent" see the introduction to this Agreement.
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"Affiliate" shall mean
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(x) prior to the Conversion Date, any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding with respect to Borrower any (i) trustee under, or any
committee with responsibility for administering, any Plan, (ii) Lender and
(iii) Agent); a Person shall be deemed to be "controlled by" another Person
if such other Person possesses, directly or indirectly, power: (a) to vote
10% or more of the securities having ordinary
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voting power for the election of directors or managing general partners; or
(b) to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise, and
(y) on and after the Conversion Date, with respect to any specified
Person, any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such specified Person.
For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling", "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided,
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however, that (i) beneficial ownership of 10.0% or more of the voting power
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of the then outstanding voting securities of a Person shall be deemed to be
control; and (ii) no individual, other than a director of Borrower or an
officer of Borrower with a policymaking function, shall be deemed an
Affiliate of Borrower or any of its Subsidiaries, solely by reason of such
individual's employment, position or responsibilities by or with respect to
Borrower or any of its Subsidiaries; provided, however, that no Agent or
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any of their respective Affiliates shall be treated as an Affiliate of
Borrower or of any Subsidiary of Borrower.
"Affiliate Transaction" see Section 6A.3.
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"Agents" shall mean the Arranger, the Administrative Agent and the
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Documentation Agent.
"Agreement" shall mean this Senior Subordinated Credit Agreement dated
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as of April 1, 1998, as amended and in effect from time to time.
"Alternate Base Rate" shall mean for any day, a rate per annum that is
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equal to the higher of (i) the Prime Rate, or (ii) the Federal Funds Rate, plus
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0.50%.
"Annualized Cash Flow" shall mean, as of any date of determination,
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EBITDA for the Fiscal Quarter ending on or immediately prior to such date of
determination multiplied by four.
"Applicable Rate" shall mean for each Monthly Period and each Six
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Month Period, at the election of the Agents, either (i) the Alternate Base Rate,
or (ii) the LIBOR Rate then in effect.
"Applicable Spread" shall mean (x) with respect to the Initial Loans,
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from the Closing Date up to and including June 30, 1998, 475 basis points, and
thereafter according to the following schedule:
From To Spread
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July 1, 1998 July 31, 1998 525 bps
August 1, 1998 August 31, 1998 550 bps
September 1, 1998 September 30, 1998 575 bps
October 1, 1998 October 31, 1998 600 bps
November 1, 1998 November 30, 1998 625 bps
December 1, 1998 December 31, 1998 650 bps
January 1, 1999 January 31, 1999 675 bps
February 1, 1999 February 28, 1999 700 bps
March 1, 1999 March 31, 1999 725 bps
April 1, 1999 April 30, 1999 750 bps
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and (y) with respect to the Term Loans, 8.50%. In addition, during the
continuance of any Event of Default, the Applicable Spread will increase by
2.00% over the Applicable Spread then in effect.
"Arranger" see the introduction to this Agreement.
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"ASkyB Satellite" shall mean either of the high power communications
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satellites to be purchased by New PRIMESTAR in the ASkyB Transaction.
"ASkyB Transaction" shall mean the acquisition by New PRIMESTAR from
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MCI Telecommunications Corporation ("MCI"), The News Corporation Limited ("News
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Corp.") and American Sky Broadcasting LLC, a wholly owned Subsidiary of News
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Corp. ("ASkyB"), of the ASkyB Satellites, certain authorizations granted to MCI
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by the FCC and certain related contracts, all pursuant to an asset acquisition
agreement dated as of June 11, 1997 among Primestar Partnership, News Corp.,
MCI, ASkyB and, for certain purposes only, each Partner.
"Asset Sale" shall mean any direct or indirect sale, conveyance,
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transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than Borrower or a Wholly Owned Restricted
Subsidiary, in one transaction or a series of related transactions, of (i) any
Equity Interest of any Restricted Subsidiary; (ii) any material license,
franchise or other authorization of Borrower or any Restricted Subsidiary; (iii)
any assets of Borrower or any Restricted Subsidiary which constitute
substantially all of an operating unit or line of business of Borrower or any
Restricted Subsidiary; or (iv) any other property or asset of Borrower or any
Restricted Subsidiary outside of the ordinary course of business (including the
receipt of proceeds paid on account of the loss of or damage to any property or
asset (other than to the extent such proceeds are used to replace or repair such
assets or property) and awards of compensation for any asset taken by
condemnation, eminent domain or similar proceedings). The term "Asset Sale"
shall also include the receipt of any damages or other amounts due under the
Satellite Construction Agreement to Borrower or any Subsidiary (including,
without limitation, the refund of the full purchase price of any Tempo Satellite
which has not been delivered pursuant to the terms thereof) from a Person other
than Borrower or its Subsidiaries. The term "Asset Sale" shall not include (a)
any transaction consummated in compliance with Section 6A.8 and the creation of
any Lien not prohibited by Section 6A.4; provided, however, that any transaction
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consummated in compliance with Section 6A.8 involving a sale, conveyance,
assignment, transfer, lease or other disposal of less than all of the properties
or assets of Borrower and the Restricted Subsidiaries shall be deemed to be an
Asset Sale with respect to the properties or assets of Borrower and the
Restricted Subsidiaries that are not so sold, conveyed, assigned, transferred,
leased or otherwise disposed of in such transaction; (b) sales of property or
equipment that has become worn out, obsolete or damaged or otherwise unsuitable
for use in connection with the business of Borrower or any Restricted
Subsidiary, as the case may be; (c) any transaction consummated in compliance
with Section 6A.1; and (d) sales of accounts receivable for cash at fair market
value. In addition, solely for purposes of Section 6A.9, any sale, conveyance,
transfer, lease or other disposition of any property or asset, whether in one
transaction or a series of related transactions, involving assets with a Fair
Market Value not in excess of $10.0 million in any fiscal year shall be deemed
not to be an Asset Sale.
"Asset Transfer Agreements" shall mean the MediaOne Asset Transfer
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Agreement, the ▇▇▇▇▇▇▇▇ Asset Transfer Agreement and the TWE Asset Transfer
Agreement.
"Assignment and Assumption Agreement" shall mean an agreement
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substantially in the form of Exhibit I with respect to a proposed assignment.
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"Assumption Agreements" shall mean the TWE Assumption Agreement, the
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▇▇▇▇▇▇▇▇ Assumption Agreement, the New PRIMESTAR/TWE Assumption Agreement and
the New PRIMESTAR/▇▇▇▇▇▇▇▇ Assumption Agreement.
"Authorized Officer" shall mean, with respect to Borrower and any
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other Loan Party, those of its officers or managing members (in the case of a
limited liability company) whose signatures and incumbency shall have been
certified by Borrower to the Agents and the Lenders.
"Bankruptcy Law" shall mean Title 11 of the United States Code
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entitled "Bankruptcy", as now and hereafter in effect, or any successor statute
or any other United States federal, state or local law or the law of any other
jurisdiction relating to bankruptcy, insolvency, winding up, liquidation,
reorganization or relief of debtors, whether in effect on the date hereof or
hereafter.
"Bankruptcy Order" shall mean any court order made in a proceeding
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pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation, winding
up, dissolution or reorganization, or appointing a custodian of a debtor or of
all or any substantial part of a debtor's property, or providing for the
staying, arrangement, adjustment or composition of indebtedness or other relief
of a debtor.
"Basic Documents" shall mean the Reorganization Agreement, the
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Transition Services Agreement, the Tax Sharing Agreement, the Reimbursement
Agreements, the Trade Name and Service ▇▇▇▇ License Agreement, the Share
Purchase Agreement, the Partnership Agreement, the Partnership Credit Agreement,
the Tempo Option, the Tag-Along Agreement and the Tempo Letter Agreements.
"Board of Directors" shall mean, with respect to any Person, the Board
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of Directors of such Person, or any authorized committee of that Board of
Directors.
"Board Resolution" shall mean, with respect to any Person, a duly
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adopted resolution of the Board of Directors of such Person.
"Borrower" see the introduction to this Agreement.
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"Business Day" shall mean any day excluding Saturday, Sunday and any
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day which is a legal holiday under the laws of New York, New York or is a day on
which banking institutions therein located are authorized or required by law or
other governmental action to close.
"Capitalized Lease Liabilities" shall mean, all monetary obligations
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of Borrower or any of its Restricted Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as capitalized
leases, and, for purposes of this Agreement and each other Loan Document, the
amount of such obligations shall be the capitalized amount thereof.
"Capital Lease Obligation" shall mean, at the time any determination
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thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Cash Equivalent Investment" shall mean, at any time:
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(a) any direct obligation of (or guaranteed by) the United States
Government (or any agency or instrumentality thereof) maturing not more
than one year after such time;
(b) commercial paper, maturing not more than nine months from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any state of the United States or of the
District of Columbia and rated A-1 by S&P or P-1 by ▇▇▇▇▇'▇, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by either
(i) any bank organized under the laws of the United States (or
any State thereof) and which has (x) a credit rating of Aa or better
from ▇▇▇▇▇'▇ or a comparable rating from S&P and (y) a combined
capital and surplus greater than $500,000,000 (or the Dollar
equivalent thereof), or
(ii) any Lender;
(d) any repurchase agreement entered into with any Lender or any
commercial banking institution of the stature referred to in clause (c)(i)
which
(i) is secured by a fully perfected security interest in any
obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such commercial banking institution thereunder; or
(e) money market funds that invest substantially all of their assets
in the investments described in clauses (a) through (d) above.
"Cash Equivalents" shall mean (a) U.S. Dollars; (b) securities issued
----------------
or directly and fully guaranteed or insured by the U.S. government or any agency
or instrumentality thereof having maturities of not more than six months from
the date of acquisition; (c) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(b) and (c) entered into with any financial institution meeting the
qualifications specified in clause (c) above; (e) commercial paper rated A-1 or
better by S&P or P-1 or better by ▇▇▇▇▇'▇ maturing within six months after the
date of acquisition; and (f) money market funds that invest substantially all of
their assets in any of the investments described in clauses (a) through (e).
"C-Band Dividends" see Section 6A.1.
----------------
-6-
"C-Band Entity" see Section 6A.1.
-------------
"C-Band Investment" see Section 6A.1.
-----------------
"CERCLA" shall mean the Comprehensive Environmental Response,
------
Compensation and Liability Act of 1980, as amended.
"CERCLIS" shall mean the Comprehensive Environmental Response
-------
Compensation Liability Information System List.
"Change of Control" shall mean the occurrence of one or more of the
-----------------
following events:
(i) prior to the Conversion Date, (a) any "person" or "group" (as
such terms are used in Rule 13d-5 under the Exchange Act, and Sections
13(d) and 14(d) of the Exchange Act) of persons (other than ▇▇▇▇ ▇▇▇▇▇▇,
the legal heirs of ▇▇▇▇ ▇▇▇▇▇▇ or any Primestar Partner) becomes, directly
or indirectly, in a single transaction or in a related series of
transactions by way of merger, consolidation, or other business combination
or otherwise, the "beneficial owner" (as such term is used in Rule 13d-3 of
the Exchange Act) of 25% or more of the outstanding shares of Voting Equity
Interests of Borrower; or (b) during any consecutive two-year period
calculated in accordance with GAAP, individuals who at the beginning of
such period constituted the board of directors of Borrower (together with
any new directors whose election by such board of directors or whose
nomination for election by the stockholders of Borrower was approved by a
vote of at least a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
(other than by action of the Permitted Holders) to constitute a majority of
the board of directors of Borrower then in office; and
(ii) on and after the Conversion Date, the occurrence of any of the
following events (whether or not approved by the Board of Directors of
Borrower): (a) any "person" or "group" (as such terms are used in Section
13(d) and 14(d) of the Exchange Act or any successor provision to either of
the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act), excluding Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a Person shall be deemed to have "beneficial ownership" of
all securities that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time, upon
the happening of an event or otherwise), directly or indirectly, of more
than 35% of the total voting power of the then outstanding Voting Equity
Interests of Borrower; (b) Borrower consolidates with, or merges with or
into, another Person, or Borrower or the Restricted Subsidiaries sell,
assign, convey, transfer, lease or otherwise dispose of all or
substantially all of the assets of Borrower and the Restricted Subsidiaries
(determined on a consolidated basis) to any Person (other than a Wholly
Owned Restricted Subsidiary), or any Person consolidates with, or merges
with or into, Borrower, in any such event pursuant to a transaction in
which the outstanding Voting Equity Interests of Borrower are converted
into or exchanged for cash, notes or other property, other than any such
transaction where (i) the outstanding Voting Equity Interests of Borrower
are converted into or exchanged for (1) Qualified Equity Interests of the
surviving or transferee corporation or (2) cash, notes or other property in
an amount which could be paid by Borrower as a Restricted Payment under
this Agreement and (ii) immediately after such transaction the Person or
Persons that "beneficially owned" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the
-7-
right to acquire, whether such right is exercisable immediately or only
after the passage of time) immediately prior to such transaction, directly
or indirectly, a majority of the total voting power of the then outstanding
Voting Equity Interests of Borrower "beneficially own" (as so determined) a
majority of the total voting power of the then outstanding Voting Equity
Interests of the surviving or transferee Person; (c) during any consecutive
two-year period, individuals who at the beginning of such period
constituted the Board of Directors of Borrower (together with any new
directors whose election by the Board of Directors of Borrower or whose
nomination for election by the stockholders of Borrower was approved by a
vote of at least a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
(other than by action of the Permitted Holders) to constitute a majority of
the Board of Directors of Borrower then in office; or (d) the liquidation
or dissolution of Borrower.
"Change of Control Date" see Section 2.5A(iv)(a)(1).
----------------------
"Closing Date" shall mean the date on which the Initial Loan is made
------------
and the conditions set forth in Section 3.1 are satisfied or waived in
accordance with Section 12.5.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
----
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Comcast" shall mean Comcast Corporation, a Pennsylvania corporation.
-------
"Comcast DBS Merger Agreement" shall mean the agreement and plan of
----------------------------
merger dated as of February 6, 1998 between New PRIMESTAR and Comcast DBS, Inc.,
an affiliate of Comcast, pursuant to which Comcast DBS, Inc. will merge with and
into New PRIMESTAR.
"Comcast Satellite Merger Agreement" shall mean the agreement and plan
----------------------------------
of merger dated as of February 6, 1998 between New PRIMESTAR and Comcast
Satellite Communications, Inc., an affiliate of Comcast, pursuant to which
Comcast Satellite Communications, Inc. will merge with and into New PRIMESTAR.
"Commitment Letter" shall mean the Interim Loan Commitment Letter
-----------------
dated March 12, 1998 among New PRIMESTAR, TSAT, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge Fund, L.L.C. and DLJ Bridge Finance, Inc.
"Common Stock" shall mean, of any Person, any and all shares,
------------
interests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of, such Person's common stock, whether
outstanding on the Closing Date or issued after the Closing Date, and includes,
without limitation, all series and classes of such common stock.
"Consolidated Income Tax Expense" shall mean, with respect to Borrower
-------------------------------
for any period, the provision for federal, state, local and foreign income taxes
payable by Borrower and the Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP.
-8-
"Consolidated Interest Expense" shall mean, with respect to Borrower
-----------------------------
for any period, without duplication, the sum of (i) the interest expense of
Borrower and the Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP, including, without limitation, (a)
any amortization of debt discount; (b) the net cost under Interest Rate
Protection Obligations (including any amortization of discounts); (c) the
interest portion of any deferred payment obligation; (d) all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing; and (e) all capitalized interest and all accrued
interest; (ii) the interest component of Capital Lease Obligations paid, accrued
and/or scheduled to be paid or accrued by Borrower and the Restricted
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP; and (iii) dividends and distributions in respect of
Disqualified Equity Interests actually paid in cash by Borrower during such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" shall mean, with respect to any period, the
-----------------------
net income of Borrower and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, adjusted, to the
extent included in calculating such net income, by excluding, without
duplication, (a) all extraordinary gains or losses and all gains and losses from
the sales or other dispositions of assets out of the ordinary course of business
(net of taxes, fees and expenses relating to the transaction giving rise
thereto) for such period; (b) that portion of such net income derived from or in
respect of Investments in Persons other than Restricted Subsidiaries, except to
the extent actually received in cash by Borrower or any Restricted Subsidiary
(subject, in the case of any Restricted Subsidiary, to the provisions of clause
(e) of this definition); (c) the portion of such net income (or loss) allocable
to minority interests in any Person (other than a Restricted Subsidiary) for
such period, except to the extent actually received in cash by Borrower or any
Restricted Subsidiary (subject, in the case of any Restricted Subsidiary, to the
provisions of clause (e) of this definition); (d) net income (or loss) of any
other Person combined with Borrower or any Restricted Subsidiary on a "pooling
of interests" basis attributable to any period prior to the date of combination;
and (e) the net income of any Restricted Subsidiary to the extent that the
declaration of dividends or similar distributions by that Restricted Subsidiary
of that income is not at the time (regardless of any waiver) permitted, directly
or indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulations
applicable to that Restricted Subsidiary or its Equity Interest holders.
"Consolidated Operating Cash Flow" shall mean, with respect to any
--------------------------------
period, Consolidated Net Income for such period (i) increased (without
duplication) by the sum of (a) Consolidated Income Tax Expense for such period
to the extent deducted in determining Consolidated Net Income for such period;
(b) Consolidated Interest Expense for such period to the extent deducted in
determining Consolidated Net Income for such period; (c) all dividends on
Preferred Equity Interests to the extent not taken into account in computing
Consolidated Net Income for that period; (d) depreciation, amortization and any
other non-cash items for such period to the extent deducted in determining
Consolidated Net Income for such period (other than any non-cash item which
requires the accrual of, or a reserve for, cash charges for any future period)
of Borrower and the Restricted Subsidiaries, including, without limitation,
amortization of capitalized debt issuance costs for such period; and (e) solely
for purposes of determining the Debt to Operating Cash Flow Ratio, non-recurring
charges to the extent deducted in determining Consolidated Net Income, all of
the foregoing determined on a consolidated basis in accordance with GAAP, and
(ii) decreased by non-cash items (including non-recurring gains and non-
recurring items of income) to the extent they increase Consolidated Net Income
(including the partial or entire reversal of reserves taken in prior periods)
for such period. Consolidated Operating Cash Flow for Borrower for any period
shall be calculated by subtracting therefrom any dividends received from any C-
Band Entity in such period and the Consolidated Operating Cash Flow for such
period of each Restricted C-Band Subsidiary in each case to the extent that
Restricted Payments have been made pursu-
-9-
ant to clause (ix) of the second paragraph of Section 6A.1 with such dividends
or such Consolidated Operating Cash Flow.
"Contingent Liability" shall mean any agreement, undertaking or
--------------------
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
Indebtedness of any other Person (other than by endorsements of instruments in
the course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation set
forth therein) be deemed to be the outstanding amount of the debt, obligation or
other liability guaranteed thereby.
"Contractual Obligation" shall mean, as applied to any Person, any
----------------------
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Controlled Group" shall mean all members of a controlled group of
----------------
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Conversion Date" shall mean the one year anniversary of the Closing
---------------
Date.
"Covered Taxes" see Section 12.18A.
-------------
"Cox" shall mean ▇▇▇ Communications, Inc., a Delaware corporation.
---
"Cox Merger Agreement" shall mean the agreement and plan of merger
--------------------
dated as of February 6, 1998 between New PRIMESTAR and Cox Satellite, Inc., an
affiliate of Cox, pursuant to which Cox Satellite, Inc. will merge with and into
New PRIMESTAR.
"Credit Documents" shall mean this Agreement, the Notes, the Senior
----------------
Subordinated Indenture, the Exchange Notes and the Guarantees.
"Creditor" shall mean any Agent and any Lender.
--------
"Cumulative Operating Cash Flow" shall mean, as at any date of
------------------------------
determination, the positive cumulative Consolidated Operating Cash Flow realized
during the period commencing on the Closing Date and ending on the last day of
the most recent fiscal quarter immediately preceding the date of determination
for which consolidated financial information of Borrower is available or, if
such cumulative Consolidated Operating Cash Flow for such period is negative,
the negative amount by which cumulative Consolidated Operating Cash Flow is less
than zero.
"Custodian" shall mean any receiver, interim receiver, receiver and
---------
manager, trustee, assignee, liquidator, sequestrator or similar official charged
with maintaining possession or control over property for one or more creditors,
whether under any Bankruptcy Law or otherwise.
-10-
"DBS" shall mean direct broadcast satellite.
---
"Debt to Operating Cash Flow Ratio" shall mean the ratio of (a) the
---------------------------------
Total Consolidated Indebtedness (including all Permitted Indebtedness then
outstanding) as of the date of calculation (the "Determination Date") to (b)
------------------
four times the Consolidated Operating Cash Flow for the latest fiscal quarter
for which financial information is available immediately preceding such
Determination Date (the "Measurement Period"). For purposes of calculating
------------------
Consolidated Operating Cash Flow for the Measurement Period immediately prior to
the relevant Determination Date, (I) any Person that is a Restricted Subsidiary
on the Determination Date (or would become a Restricted Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed to have
been a Restricted Subsidiary at all times during such Measurement Period, (II)
any Person that is not a Restricted Subsidiary on such Determination Date (or
would cease to be a Restricted Subsidiary on such Determination Date in
connection with the transaction that requires the determination of such
Consolidated Operating Cash Flow) will be deemed not to have been a Restricted
Subsidiary at any time during such Measurement Period, and (III) if Borrower or
any Restricted Subsidiary shall have in any manner (x) acquired (including
through an Acquisition or the commencement of activities constituting such
operating business) or (y) disposed of (including by way of an Asset Sale or the
termination or discontinuance of activities constituting such operating
business) any operating business during such Measurement Period or after the end
of such period and on or prior to such Determination Date, such calculation will
be made on a pro forma basis in accordance with GAAP as if, in the case of an
---------
Acquisition or the commencement of activities constituting such operating
business, all such transactions had been consummated on the first day of such
Measurement Period and, in the case of an Asset Sale or termination or
discontinuance of activities constituting such operating business, all such
transactions had been consummated prior to the first day of such Measurement
Period; provided, however, that such pro forma adjustment shall not give effect
-------- ------- ---------
to the Operating Cash Flow of any Acquired Person to the extent that such
Person's net income would be excluded pursuant to clause (e) of the definition
of Consolidated Net Income. For purposes of determining Total Consolidated
Indebtedness as of any Determination Date, the sum of all Indebtedness
outstanding under the New PRIMESTAR Senior Credit Facility on such Determination
Date and all amounts that Borrower or any Restricted Subsidiary could borrow
under the New PRIMESTAR Senior Credit Facility on such Determination Date
(assuming the satisfaction of all conditions precedent under the New PRIMESTAR
Senior Credit Facility other than conditions relating solely to incremental
amounts being available under the New PRIMESTAR Senior Credit Facility) shall be
deemed to be outstanding and added to Total Consolidated Indebtedness on such
Determination Date (but without duplication).
"Designated Guarantor Senior Indebtedness" shall mean, with respect to
----------------------------------------
any Guarantor, (a) any Indebtedness of such Guarantor outstanding under the New
PRIMESTAR Senior Credit Facility and (b) any other Guarantor Senior Indebtedness
of such Guarantor which, at the time of determination, has an aggregate
outstanding principal amount outstanding, together with any commitments to lend
additional amounts, of at least $25.0 million if the instrument governing such
Guarantor Senior Indebtedness expressly states that such Indebtedness is
Guarantor Senior Indebtedness for purposes of this Agreement and a Board
Resolution setting forth such designation by the Company has been filed with the
Arranger.
"Designated Senior Indebtedness" shall mean (a) any Indebtedness
------------------------------
outstanding under the New PRIMESTAR Senior Credit Facility and (b) any other
Senior Indebtedness which, at the time of determination, has an aggregate
principal amount outstanding, together with any commitments to lend additional
amounts, of at least $25.0 million, if the instrument governing such Senior
Indebtedness expressly states that such Indebtedness is "Designated Senior
Indebtedness" for purposes of this Agreement and a Board Resolution setting
forth such designation by Borrower has been filed with the Arranger.
-11-
"Designation" see Section 6A.12A.
-----------
"Designation Amount" see Section 6A.12A.
------------------
"Determination Date" see the definition of "Debt to Operating Cash
------------------
Flow Ratio".
"Disposition" shall mean, with respect to any Person, any merger,
-----------
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Equity Interest" shall mean any Equity Interest which,
----------------------------
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable, at the option of the holder
thereof, in whole or in part, or exchangeable (other than at the option of
Borrower) into Indebtedness on or prior to the earlier of the maturity date of
the Term Notes or the date on which no Term Notes remain outstanding.
"Distribution" shall mean the distribution by TCI on December 4, 1996,
------------
in the form of a dividend, to the holders of record of Tele-Communications, Inc.
Series A TCI Group Common Stock and Tele-Communications, Inc. Series B TCI Group
Common Stock on November 12, 1996 (other than certain subsidiaries of TCI that
waived such dividend) of all the issued and outstanding shares of common stock
of the predecessor of TSAT.
"Documentation Agent" see the introduction to this Agreement.
-------------------
"EBITDA" shall mean, for Borrower and its Restricted Subsidiaries, for
------
any applicable period, the sum (without duplication) for such period of:
(a) Net Income,
plus
----
(b) the amount deducted in determining Net Income representing
amortization (including amortization with respect to goodwill, deferred
financing costs, other non-cash interest income and expense and all other
intangible assets),
plus
----
(c) the amount deducted in determining Net Income of all federal,
state and local income taxes (whether paid in cash or deferred),
plus
----
(d) Total Interest Expense plus, without duplication, any non-cash
interest expense,
plus
----
(e) the amount deducted in determining Net Income representing
depreciation of assets,
-12-
plus
----
(f) the amount deducted in determining Net Income representing other
non-cash expenses.
"Eligible Assignee" shall mean (A) (i) a commercial bank organized
-----------------
under the laws of the United States of America or any state thereof; (ii) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof; (iii) a commercial bank organized under the
laws of any other country or a political subdivision thereof; provided, however,
-------- -------
that (x) such bank is acting through a branch or agency located in the United
States or (y) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country; and (iv) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its businesses including, but not
limited to, insurance companies, mutual funds and lease financing companies, in
each case (under clauses (i) through (iv) above) that is reasonably acceptable
to the Arranger; and (B) any Lender and any Affiliate of any Lender.
"Engagement Letter" shall mean the Interim Loan Engagement Letter
-----------------
dated March 12, 1998 among New PRIMESTAR, TSAT, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation.
"Environmental Laws" shall mean all applicable federal, state or local
------------------
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"Equity Interests" in any Person shall mean any and all shares,
----------------
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership interests, whether general or
limited, in such Person, including any Preferred Equity Interests.
"ERISA" shall mean the United States Employee Retirement Income
-----
Security Act of 1974, as amended, and any successor statute thereto of similar
import, together with the regulations thereunder, in each case as in effect from
time to time. References to Sections of ERISA also refer to any successor
sections thereto.
"ERISA Affiliate" shall mean, with respect to any Loan Party, any
---------------
trade or business (whether or not incorporated) that, together with such Loan
Party, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.
"ERISA Entity" shall mean each Loan Party and each ERISA Affiliate of
------------
each Loan Party.
"Event of Default" see Section 7.
----------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended from time to time, and any successor statute, and all rules and
regulations of the SEC promulgated thereunder.
"exchange notes" see Section 5.11A(v)(a).
--------------
"Exchange Notes" see Section 5.12(ii).
--------------
-13-
"Exchange Offer" see Section 5.11A(v)(a).
--------------
"Exchange Request" see Section 5.12.
----------------
"Excluded Taxes" see Section 12.18A.
--------------
"Existing Facility Repayment" shall mean the repayment of all
---------------------------
indebtedness and permanent termination of all commitments by Borrower in respect
of the Partnership Working Capital Facility.
"Existing Indebtedness" shall mean any Indebtedness of Borrower and
---------------------
its Subsidiaries in existence on the Closing Date until such amounts are repaid
(including, without limitation, obligations pursuant to each Reimbursement
Agreement and the Reorganization Agreement) and identified on Schedule 6.2.
------------
"Existing Indentures" shall mean the Existing Senior Subordinated
-------------------
Notes Indenture and the Existing Senior Subordinated Discount Notes Indenture.
"Existing Note Assumption" shall mean the assumption by New PRIMESTAR
------------------------
of all obligations of TSAT under the Existing Indentures and the Existing Notes
and the release of TSAT from all such obligations.
"Existing Note Assumption Agreement" shall mean the agreement dated as
----------------------------------
of March 31, 1998 between TSAT and New PRIMESTAR pursuant to which the Existing
Note Assumption was effected.
"Existing Notes" shall mean the Existing Senior Subordinated Notes and
--------------
the Existing Senior Subordinated Discount Notes.
"Existing Senior Subordinated Discount Notes" shall mean the 12-1/4%
-------------------------------------------
Senior Subordinated Discount Notes issued by TSAT under an indenture dated as of
February 20, 1997 between TSAT and The Bank of New York, as trustee.
"Existing Senior Subordinated Discount Notes Indenture" shall mean the
-----------------------------------------------------
Indenture dated as of February 20, 1997, by and between TSAT and The Bank of New
York as trustee, under which the Existing Senior Subordinated Discount Notes
were issued.
"Existing Senior Subordinated Notes" shall mean the 10-7/8% Senior
----------------------------------
Subordinated Notes issued by TSAT under an indenture dated as of February 20,
1997 between TSAT and The Bank of New York, as trustee.
"Existing Senior Subordinated Notes Indenture" shall mean the
--------------------------------------------
Indenture dated as of February 20, 1997, by and between TSAT and the Bank of New
York as trustee, under which the Existing Senior Subordinated Notes were issued.
"Expiration Date" see the definition of "Offer to Purchase" below.
---------------
"Fair Market Value" shall mean with respect to any asset, the price
-----------------
(after taking into account any liabilities relating to such asset) which could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, however, that the Fair Market
-------- -------
Value of any such asset or assets shall be de-
-14-
termined conclusively by the Board of Directors of Borrower acting in good
faith, and shall be evidenced by resolutions of the Board of Directors of
Borrower delivered to the Arranger.
"FCC" shall mean the Federal Communications Commission.
---
"Federal Funds Rate" shall mean, for any period, a fluctuating
------------------
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Arranger from three Federal Funds brokers of
recognized standing selected by the Arranger.
"Fee Letter" shall mean the Interim Loan Fee Letter dated March 12,
----------
1998 among New PRIMESTAR, TSAT, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Bridge Fund, L.L.C. and DLJ Bridge Finance, Inc.
"Fiscal Quarter" shall mean a quarter ending on the last day of March,
--------------
June, September and December.
"Fiscal Year" shall mean any period of twelve consecutive calendar
-----------
months ending on December 31; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., the "1997 Fiscal Year") refer to the
---
Fiscal Year ending on December 31 of such calendar year.
"F.R.S. Board" shall mean the Board of Governors of the Federal
------------
Reserve System or any successor thereto.
"Funding Guarantor" see Section 10.5.
-----------------
"GAAP" shall mean United States generally accepted accounting
----
principles as in effect from time to time, which are applicable to the
circumstances as of the date of determination.
"GE Americom" shall mean GE American Communications, Inc., a Delaware
-----------
corporation.
"GE Americom Merger Agreement" shall mean the agreements and plan of
----------------------------
merger dated as of February 6, 1998 between New PRIMESTAR and GE Americom
Services, Inc., an affiliate of GE Americom, pursuant to which GE Americom
Services, Inc. will merge with and into New PRIMESTAR.
"GE-2 Agreement" shall mean the Amended and Restated Memorandum of
--------------
Agreement, effective as of October 18, 1996, between Primestar Partnership and
GE Americom and, upon the execution of the Service Agreement (as defined in the
GE-2 Agreement) between Primestar Partnership and GE Americom contemplated
therein, shall include such Service Agreement, as amended and in effect from
time to time.
"Governmental Approval" shall mean any action, authorization, consent,
---------------------
approval, license, lease, ruling, permit, tariff, rate, certification,
exemption, filing, variance, claim, order, judgment, decree, publication,
notices to, declarations of or with or registration by or with any Governmental
Authority.
-15-
"Governmental Authority" shall mean the government of the United
----------------------
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government, whether now or hereafter constituted and/or existing.
"Governmental Rule" shall mean any statute, law, regulation,
-----------------
ordinance, rule, judgment, order, decree, permit, concession, grant, franchise,
license, agreement, directive, guideline, policy, requirement, or other
governmental authorization including any conditions thereof, restriction or any
similar form of published or otherwise known decision of or determination by, or
any interpretation or administration of any of the foregoing by, any
Governmental Authority, whether now or hereafter in effect (including any
Environmental Law).
"Guarantees" shall mean, collectively, the guarantees delivered to the
----------
Lenders by the Guarantors pursuant to Section 10 which are evidenced by
notations of guarantee substantially in the form of Exhibit K.
---------
"Guarantors" shall mean each of the Subsidiaries of Borrower, if any,
----------
that guarantees Borrower's obligations under this Agreement pursuant to Section
6.13.
"Guarantor Blockage Period" see Section 11.2A.
-------------------------
"Guarantor Payment Blockage Notice" see Section 11.2A.
---------------------------------
"Guarantor Senior Indebtedness" shall mean, with respect to any
-----------------------------
Guarantor, at any date, (a) all Obligations of such Guarantor under the New
PRIMESTAR Senior Credit Facility; (b) all Interest Rate Protection Obligations
of such Guarantor; (c) all Obligations of such Guarantor under stand-by letters
of credit; and (d) all other Indebtedness of such Guarantor for borrowed money,
including principal, premium, if any, and interest (including Post-Petition
Interest) on such Indebtedness, unless the instrument under which such
Indebtedness of such Guarantor for money borrowed is Incurred expressly provides
that such Indebtedness for money borrowed is not senior or superior in right of
payment to such Guarantor's Guaranty of the Loans, and all renewals, extensions,
modifications, amendments or refinancings thereof. Notwithstanding the
foregoing, Guarantor Senior Indebtedness shall not include (a) to the extent
that it may constitute Indebtedness, any Obligation for federal, state, local or
other taxes; (b) any Indebtedness between such Guarantor, Borrower or any
Subsidiary of Borrower; (c) to the extent that it may constitute Indebtedness,
any obligation in respect of any trade payable incurred for the purchase of
goods or materials, or for services obtained, in the ordinary course of
business; (d) that portion of any Indebtedness that is Incurred in violation of
this Agreement; provided, however, that such Indebtedness shall be deemed not to
-------- -------
have been Incurred in violation of this Agreement for purposes of this clause
(d) if (i) the holder(s) of such Indebtedness or their representative or the
Company shall have furnished to the Arranger an opinion of independent legal
counsel, unqualified in all material respects, addressed to the Arranger (which
legal counsel may, as to matters of fact, rely upon an Officers' Certificate of
Borrower) to the effect that the Incurrence of such Indebtedness does not
violate the provisions of this Agreement or (ii) in the case of any obligations
under the New PRIMESTAR Senior Credit Facility, the holder(s) of such
obligations or their agent or representative shall have received a
representation from the Company to the effect that the Incurrence of such
Indebtedness does not violate the provisions of this Agreement; (e) Indebtedness
evidenced by such Guarantor's Guaranty of the Loans; (f) Indebtedness of such
Guarantor that is expressly subordinate or junior in right of payment to any
other Indebtedness of such Guarantor; (g) to the extent that it may constitute
Indebtedness, any obligation owing under leases (other than
-16-
Capital Lease Obligations) or management agreements; and (h) any obligation that
by operation of law is subordinated to any general unsecured obligations of such
Guarantor.
"Guaranty" see Section 6A.7.
--------
"Hazardous Materials" shall mean
-------------------
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) within
the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended.
"Hedging Obligations" shall mean, with respect to any Person, all
-------------------
liabilities of such Person under currency exchange agreements, interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.
"High Power Satellite Transmission Business" shall mean the business
------------------------------------------
of the acquisition, transmission and sale of programming in the high power
direct broadcast satellite business utilizing broadcast satellite service
operating in the Ku-band (including any provision of such services to cable
operators or other media providers) which may utilize all or part of satellites
owned or leased by Borrower or a Subsidiary and all other activities relating
thereto or arising therefrom other than the construction, sale or financing of
broadcast satellites.
"High Power Satellite Transmission Subsidiary" shall mean a Wholly-
--------------------------------------------
Owned Restricted Subsidiary of Borrower which engages in, or acts as a
distributor for, the High Power Satellite Transmission Business.
"Impermissible Qualification" shall mean, relative to the opinion or
---------------------------
certification of any independent public accountant as to any financial statement
of Borrower, any qualification or exception to such opinion or certification:
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
Borrower to be in default of any of its obligations under Section 6.4.
-17-
"Incur" shall mean, with respect to any Indebtedness, to incur,
-----
create, issue, assume, guarantee or otherwise become liable for or with respect
to, or become responsible for the payment of, contingently or otherwise, such
Indebtedness; provided, however, that the term "Incur" shall not include
-------- -------
conversions or continuations of Loans.
"Indebtedness" shall mean
------------
(x) prior to the Conversion Date, (a) all obligations of such Person
for borrowed money and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (b) all obligations,
contingent or otherwise, relative to the face amount of all letters of
credit, whether or not drawn, and banker's acceptances issued for the
account of such Person; (c) all obligations of such Person as lessee under
leases which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities; (d) net liabilities of such Person under all
Hedging Obligations; (e) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay the deferred
purchase price of property or services, and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being purchased by
such Person (including indebtedness arising under conditional sales or
other title retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in recourse; and (f) all
Contingent Liabilities of such Person in respect of any of the foregoing;
for all purposes of this Agreement, the Indebtedness of any Person shall
include the recourse Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer; and
(y) on and after the Conversion Date, (without duplication), with
respect to any Person, whether recourse is to all or a portion of the
assets of such Person and whether or not contingent, (a) every obligation
of such Person for money borrowed; (b) every obligation of such Person
evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of
property, assets or businesses; (c) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person; (d) every obligation of
such Person issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable incurred in the ordinary
course of business and payable in accordance with industry practices, or
other accrued liabilities arising in the ordinary course of business which
are not overdue or which are being contested in good faith); (e) every
Capital Lease Obligation of such Person; (f) every net obligation under
interest rate swap or similar agreements or foreign currency hedge,
exchange or similar agreements of such Person; (g) every obligation of the
type referred to in clauses (a) through (f) of another Person and all
dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or
indirectly, as obligor, guarantor or otherwise; and (h) any and all
deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any liability of the kind described in any
of the preceding clauses (a) through (g) above. Indebtedness (a) shall
never be calculated taking into account any cash and cash equivalents held
by such Person; (b) shall not include obligations of any Person (x) arising
from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn against insufficient funds
in the ordinary course of business, provided that such obligations are
extinguished within two Business Days of their incurrence unless covered by
an overdraft line, (y) resulting from the endorsement of negotiable
instruments for collection in the ordinary course of business and (z) under
stand-by letters of credit to the extent collateralized by cash or Cash
Equivalents; (c) which provides that an amount less than the principal
amount thereof shall be due upon any declaration of acceleration thereof
shall be deemed to be incurred or outstanding in an amount equal to the
accreted value thereof at the date of
-18-
determination; (d) shall include the liquidation preference and any
mandatory redemption payment obligations in respect of any Disqualified
Equity Interests of Borrower or any Restricted Subsidiary; and (e) shall
not include obligations under performance bonds, performance guarantees,
surety bonds and appeal bonds, letters of credit or similar obligations,
incurred in the ordinary course of business (other than under any such
agreement, to the extent relating to any obligation of an Unrestricted
Subsidiary).
"Indemnitee" see Section 12.3.
----------
"Independent Financial Advisor" shall mean a nationally recognized,
-----------------------------
accounting, appraisal, investment banking firm or consultant engaged in the
satellite business that is, in the judgment of the Board of Directors of
Borrower, qualified to perform the task for which it has been engaged (i) which
is not an Affiliate of, and whose directors, officers and employees are not
Affiliates of, Borrower and (ii) which, in the judgment of the Board of
Directors of Borrower, is independent and qualified to perform the task for
which it is to be engaged.
"Initial Loan Commitment" see Section 2.1A.
-----------------------
"Initial Loan" see Section 2.1A.
------------
"Initial Notes" see Section 2.1D.
-------------
"In-Orbit Insurance" shall mean, with respect to a Tempo Satellite (or
------------------
any replacement thereof), In-Orbit insurance providing coverage beginning not
earlier than 180 days after the launch of such Tempo Satellite (or any
replacement thereof) in an amount which is equal to or greater than the cost of
construction, launch and insurance of such Tempo Satellite (or any replacement
thereof), which insurance shall provide pro rata benefits to the insured upon a
--- ----
loss of more than 20% of the capacity of such Tempo Satellite (or any
replacement thereof) and shall compensate the insured for a total loss upon a
loss of more than 50% of the capacity of such Tempo Satellite (or any
replacement thereof).
"Insolvency or Liquidation Proceeding" shall mean, with respect to any
------------------------------------
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Interest Period" shall mean, with respect to the Initial Loans, 30
---------------
days, and with respect to the Term Loans, six months.
"Interest Rate Determination Date" shall mean (x) the second Business
--------------------------------
Day on which banks in New York and London are open prior to the Closing Date or
the Conversion Date, as the case may be, and (y) with respect to any Monthly
Period or Six Month Period, the second Business Day prior to the first Business
Day of such Monthly Period or Six Month Period, as the case may be, on which
banks in New York City and London are open.
"Interest Rate Protection Obligations" shall mean, with respect to any
------------------------------------
Person, the Senior Indebtedness Obligations of such Person under interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements, and other similar agreements or arrangements.
"Investment" shall mean, with respect to any Person,
----------
-19-
(x) prior to the Conversion Date, (a) any loan or advance made by
such Person to any other Person (excluding commission, travel, ▇▇▇▇▇ cash
and similar advances to officers and employees made in the ordinary course
of business); (b) any Contingent Liability of such Person incurred in
connection with loans or advances described in clause (a); and (c) any
ownership or similar interest held by such Person in any other Person; the
amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made
by the transfer or exchange of property other than cash, be deemed to have
been made in an original principal or capital amount equal to the fair
market value of such property at the time of such Investment; and
(y) on and after the Conversion Date, any direct or indirect loan,
advance, guarantee or other extension of credit or capital contribution to
(by means of transfers of cash or other property or assets to others or
payments for property or services for the account or use of others, or
otherwise), or purchase or acquisition of capital stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any
other Person. The amount of any Investment shall be the original cost of
such Investment, plus the cost of all additions thereto, and minus the
---- -----
amount of any portion of such Investment repaid to such Person in cash as a
repayment of principal or a return of capital, as the case may be, but
without any other adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment. In
determining the amount of any Investment involving a transfer of any
property or asset other than cash, such property shall be valued at its
fair market value at the time of such transfer, as determined in good faith
by the board of directors (or comparable body) of the Person making such
transfer.
"Lenders" see the introduction to this Agreement and shall include any
-------
assignee of any Loan, Note or Loan Commitment to the extent of such assignment.
"LIBOR Rate" shall mean, relative to any Interest Period, the rate of
----------
interest determined as follows:
(a) on the Interest Determination Date, the Arranger shall obtain the
offered quotation(s) that appear on the ▇▇▇▇▇▇'▇ Screen for Dollar deposits
for a period comparable to such Interest Period. If at least two such
offered quotations appear on the ▇▇▇▇▇▇'▇ Screen, the LIBOR Rate shall be
the arithmetic average (rounded upwards, if necessary, to the nearest
1/16th of 1%) of such offered quotations, as determined by the Arranger; or
(b) if the ▇▇▇▇▇▇'▇ Screen is not available or has been discontinued,
the LIBOR Rate shall be the rate per annum which the Arranger in good faith
determines to be the arithmetic average (rounded as aforesaid) of the
offered quotations for Dollar deposits in an amount comparable to the
Arranger's share of the relevant amount in respect of which the LIBOR Rate
is being determined for a period comparable to the relevant LIBOR Interest
Period that leading banks in New York City selected by the Arranger are
quoting at 11:00 A.M. on the Interest Determination Date in the New York
Interbank Market to major international banks.
"Lien" shall mean any lien, mortgage, charge, security interest,
----
hypothecation, assignment for security or encumbrance of any kind (including any
conditional sale or capital lease or other title retention agreement, any lease
in the nature thereof, and any agreement to give any security interest).
"Loan Commitment" shall mean the Initial Loan Commitment and the Term
---------------
Loan Commitment.
-20-
"Loan Documents" shall mean this Agreement, the Initial Notes, the
--------------
Term Notes, the Guarantees, the Senior Subordinated Indenture, the Exchange
Notes and the Registration Rights Agreement.
"Loan Party" shall mean Borrower and any Guarantor.
----------
"Loans" shall mean, collectively, the Initial Loan and the Term Loan.
-----
"Loral" shall mean Space Systems/Loral, Inc., a New York corporation.
-----
"Losses" of any Person shall mean the losses, liabilities, claims
------
(including those based upon negligence, strict or absolute liability and
liability in tort), damages, expenses, obligations, penalties, actions,
judgments, encumbrances, liens, penalties, fines, suits, reasonable costs or
disbursements of any kind or nature whatsoever (including reasonable fees and
expenses of counsel in connection with any Proceeding commenced or threatened in
writing, whether or not such Person shall be designated a party thereto) at any
time (including following the payment of the Obligations) incurred by, imposed
on or asserted against such Person.
"Margin Stock" shall mean margin stock within the meaning of
------------
Regulations T, U and X of the F.R.S. Board.
"Material Adverse Change" shall mean a material adverse change or any
-----------------------
condition or event that could be expected to result in a material adverse change
in the business, assets, liabilities (contingent or otherwise), operations,
condition (financial or otherwise), prospects, solvency, properties, regulatory
environment, licenses, programming or material agreements of Borrower and its
Subsidiaries, taken as a whole (except that for purposes of Section 4, the words
"prospects", "properties", "regulatory environment", "licenses", and
"programming or material agreements" shall not apply).
"Material Adverse Effect" shall mean (a) a material adverse effect
-----------------------
upon the business, assets, liabilities (contingent or otherwise), operations,
condition (financial or otherwise), prospects, solvency, properties, regulatory
environment, licenses, programming or material agreements of Borrower and its
Subsidiaries, taken as a whole (except that for purposes of Section 4, the words
"prospects", "properties", "regulatory environment", "licenses", and
"programming or material agreements" shall not apply), or (b) the impairment in
any material respect of the ability of any Loan Party to perform, or the
impairment in any material respect of the ability of the Agents or Lenders to
enforce, any Loan Document or any of the Obligations.
"Material Subsidiary" shall mean, with respect to any accounting
-------------------
period, any Restricted Subsidiary of Borrower (i) whose revenues constitute
greater than 5% of the aggregate dollar value of the revenues of Borrower and
its Subsidiaries, taken as a whole, for such accounting period or (ii) the fair
market value of whose assets at any time during such accounting period is
greater than 5% of the fair market value of all of the assets of Borrower and
its Restricted Subsidiaries at such time.
"Maturity Date" see Section 2.2D.
-------------
"Maximum Cash Interest Rate" shall mean an interest rate of 15% per
-------------------------- ---
annum; provided, however, that (x) in computing such interest rate there shall
----- -------- -------
be excluded any additional interest payable pursuant to Section 2.3C, and (y) in
computing such interest rate, fees paid to the Lenders shall not be deemed an
interest payment.
-21-
"Maximum Interest Rate" shall mean an interest rate of 16% per annum;
--------------------- --- -----
provided, however, that (x) in computing such interest rate there shall be
-------- -------
excluded any additional interest payable pursuant to Section 2.3C, and (y) in
computing such interest rate, fees paid to the Lenders shall not be deemed an
interest payment.
"MDUs" shall mean hotels, motels, bars, restaurants, businesses,
----
schools and other multiple dwelling units.
"Measurement Period" see the definition of "Debt to Operating Cash
------------------
Flow Ratio" above.
"MediaOne" shall mean MediaOne of Delaware, Inc., a Delaware
--------
corporation.
"MediaOne Asset Transfer Agreement" shall mean the asset transfer
---------------------------------
agreement among MediaOne, certain of its affiliates and New PRIMESTAR, pursuant
to which MediaOne and such affiliates will contribute certain assets to New
PRIMESTAR, and New PRIMESTAR will assume certain liabilities of MediaOne and
such affiliates.
"Merger Agreements" shall mean the Comcast DBS Merger Agreement, the
-----------------
Comcast Satellite Merger Agreement, the Cox Merger Agreement and the GE Americom
Merger Agreement.
"Merger and Contribution Agreement" shall mean the agreement dated as
---------------------------------
of February 6, 1998 (as amended by the side letter dated as of March 30, 1998)
among New PRIMESTAR and each of the Partners.
"▇▇▇▇▇▇▇ ▇▇▇▇▇" see the introduction to the Agreement.
-------------
"Monthly Period" shall mean the period commencing on the last calendar
--------------
day of each month, if such day is a Business Day, or the first Business Day
succeeding the last calendar day of each month and ending on the day next
preceding the first Business Day of the following Monthly Period; provided,
--------
however, that the first Monthly Period shall commence on the Closing Date.
-------
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Multiemployer Plan" shall mean a "multiemployer plan," as defined in
------------------
Section 4001(a)(3) of ERISA, (i) to which any ERISA Entity is contributing, or
at any time within the immediately preceding five calendar years has
contributed, (ii) to which any ERISA Entity has, or, at any time within the
immediately preceding five calendar years has had, an obligation to contribute
or (iii) with respect to which any ERISA Entity retains any liability.
"NAIC" shall mean the National Association of Insurance Commissioners.
----
"Net Cash Proceeds" shall mean the aggregate proceeds in the form of
-----------------
cash or Cash Equivalents received by Borrower or any Restricted Subsidiary in
respect of any Asset Sale, including all cash or Cash Equivalents received upon
any sale, liquidation or other exchange of proceeds of Asset Sales received in a
form other than cash or Cash Equivalents, net of (a) the direct costs relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof; (b) taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements); (c) amounts required to be applied to the
-22-
repayment of Indebtedness secured by a Lien on the asset or assets that were the
subject of such Asset Sale; (d) amounts deemed, in good faith, appropriate by
the Board of Directors of Borrower to be provided as a reserve, in accordance
with GAAP, against any liabilities associated with such assets which are the
subject of such Asset Sale (provided that the amount of any such reserves shall
be deemed to constitute Net Cash Proceeds at the time such reserves shall have
been released or are not otherwise required to be retained as a reserve); and
(e) with respect to Asset Sales by Subsidiaries, the portion of such cash
payments attributable to Persons holding a minority interest in such Subsidiary.
Net Cash Proceeds shall always be net of any actual application of any such
proceeds to the Loans.
"Net Income" shall mean, for any period, the aggregate of all amounts
----------
(exclusive of all amounts in respect of any non-cash extraordinary gains and any
non-cash extraordinary losses) which, in accordance with GAAP, would be included
as net income on the consolidated financial statements of Borrower and its
Restricted Subsidiaries for such period.
"New PRIMESTAR" see the introduction to this Agreement.
-------------
"New PRIMESTAR/▇▇▇▇▇▇▇▇ Assumption" shall mean the assumption by New
---------------------------------
PRIMESTAR of certain obligations of ▇▇▇▇▇▇▇▇ under the ▇▇▇▇▇▇▇▇ Assumption
Agreement, and the release of ▇▇▇▇▇▇▇▇ from such obligations.
"New PRIMESTAR/▇▇▇▇▇▇▇▇ Assumption Agreement" shall mean the
-------------------------------------------
assumption agreement dated as of the date hereof by and among ▇▇▇▇▇▇▇▇, New
PRIMESTAR and each of the other parties to the ▇▇▇▇▇▇▇▇ Assumption Agreement,
pursuant to which the New PRIMESTAR/▇▇▇▇▇▇▇▇ Assumption will be effected.
"New PRIMESTAR Senior Credit Facility" shall mean the senior credit
------------------------------------
agreement dated as of March 31, 1998 among New PRIMESTAR, the lenders party
thereto from time to time, and The Bank of Nova Scotia, NationsBank of Texas,
N.A. and Credit Lyonnais New York Branch, as Arranging Agents, including related
notes, guarantees, security agreements, pledge agreements, mortgages, other
collateral documents and note agreements and other instruments and agreements
executed in connection therewith, including any deferrals, renewals, waivers,
extensions, replacements, refinancings or refundings thereof, or amendments,
modifications or supplements thereto and any agreement providing therefor,
whether by or with the same or any other lender, creditor, group of lenders or
group of creditors, and including related notes, guarantees, security
agreements, pledge agreements, mortgages, other collateral documents (including
all Loan Documents (as defined in the New PRIMESTAR Senior Credit Facility)) and
note agreements and other instruments and agreements executed in connection
therewith.
"New PRIMESTAR/TWE Assumption" shall mean the assumption by New
----------------------------
PRIMESTAR of certain obligations of TWE under the TWE Senior Credit Agreement,
including without limitation those assumed pursuant to the TWE Assumption
Agreement, and the release of TWE from such obligations.
"New PRIMESTAR/TWE Assumption Agreement" shall mean the assumption
--------------------------------------
agreement dated as of the date hereof by and among TWE and New PRIMESTAR,
pursuant to which the New PRIMESTAR/TWE Assumption will be effected.
"▇▇▇▇▇▇▇▇" shall mean Advance/▇▇▇▇▇▇▇▇ Partnership, a New York general
--------
partnership.
-23-
"▇▇▇▇▇▇▇▇ Asset Transfer Agreement" shall mean the asset transfer
---------------------------------
agreement dated as of February 6, 1998, as amended, between ▇▇▇▇▇▇▇▇ and New
PRIMESTAR.
"▇▇▇▇▇▇▇▇ Assumption" shall mean the assumption by ▇▇▇▇▇▇▇▇ of certain
-------------------
obligations of TWE-A/N under the TWE-A/N Senior Credit Agreement and the release
of TWE-A/N from such obligations.
"▇▇▇▇▇▇▇▇ Assumption Agreement" shall mean the assumption agreement
-----------------------------
dated as of the date hereof by and among ▇▇▇▇▇▇▇▇ and TWE-A/N, pursuant to which
the ▇▇▇▇▇▇▇▇ Assumption was effected.
"Non-U.S. Lender" see Section 12.18A.
---------------
"Note Amount" see Section 2.5A(iv)(b).
-----------
"Note Portion of Unutilized Net Cash Proceeds" see Section
--------------------------------------------
2.5A(iv)(b).
"Notes" shall mean, collectively, the Initial Notes and the Term
-----
Notes.
"Notice of Borrowing" shall mean a notice substantially in the form of
-------------------
Exhibit D with respect to a proposed borrowing hereunder.
---------
"Notice of Conversion" shall mean a notice substantially in the form
--------------------
of Exhibit E with respect to a proposed conversion.
---------
"Notice Date" see Section 2.3A(ii).
-----------
"Obligations" shall mean all obligations of every nature of Borrower
-----------
and the Guarantors from time to time owed to the Lenders and the Agents under
the Loan Documents, whether for principal, reimbursements, interest, fees,
expenses, indemnities or otherwise, and whether primary, secondary, direct,
indirect, contingent, fixed or otherwise (including obligations of performance).
"Offering" see Section 5.11A(i).
--------
"Offer" see the definition of "Offer to Purchase" below.
-----
"Offer to Purchase" shall mean a written offer (the "Offer") sent by
----------------- -----
or on behalf of Borrower by first-class mail, postage prepaid, to each Lender at
his notice for address pursuant to Section 12.8 on the date of the Offer
offering to purchase up to the principal amount of Term Notes specified in such
Offer at the purchase price specified in such Offer. Unless otherwise required
by applicable law, the Offer shall specify an expiration date (the "Expiration
----------
Date") of the Offer to Purchase, which shall be not less than 20 Business Days
----
nor more than 60 days after the date of such Offer, and a settlement date (the
"Purchase Date") for purchase of Term Notes to occur no later than five Business
-------------
Days after the Expiration Date. Borrower shall notify the Arranger at least 15
Business Days (or such shorter period as is acceptable to the Arranger) prior to
the mailing of the Offer of Borrower's obligation to make an Offer to Purchase,
and the Offer shall be mailed by Borrower or, at Borrower's request, by the
Arranger in the name and at the expense of Borrower. The Offer shall contain
all the information required by applicable law to be included therein. The
Offer also shall contain information concerning the business of Borrower and its
Subsidiaries which Borrower in good faith believes will enable such Lenders to
make an informed decision with respect to the Offer to Purchase (which
-24-
at a minimum will include (i) the most recent annual and quarterly consolidated
financial statements of Borrower and a financial analysis substantially similar
to a "Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in a Form S-1 registration statement filed by an issuer on
its behalf with the SEC (which requirements may be satisfied by delivery of such
documents together with the Offer), (ii) a description of material developments
in Borrower's business subsequent to the date of the latest of such financial
statements referred to in clause (i) (including a description of the events
requiring Borrower to make the Offer to Purchase), (iii) if applicable,
appropriate pro forma financial information concerning the Offer to Purchase and
the events requiring Borrower to make the Offer to Purchase and (iv) any other
information required by applicable law to be included therein). The Offer shall
contain all instructions and materials necessary to enable such Lenders to
tender Term Notes pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this Agreement pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding Term Notes
offered to be purchased by Borrower pursuant to the Offer to
Purchase (including, if less than 100%, the manner by which such
amount has been determined pursuant to the Section of this
Agreement requiring the Offer to Purchase) (the "Purchase
--------
Amount");
------
(4) the purchase price to be paid by Borrower for each $1,000
aggregate principal amount of Term Notes accepted for payment
(the "Purchase Price");
--------------
(5) the place or places where Term Notes are to be surrendered for
tender pursuant to the Offer to Purchase;
(6) that interest on any Term Note not tendered or tendered but not
purchased by Borrower pursuant to the Offer to Purchase will
continue to accrue;
(7) that on the Purchase Date the Purchase Price will become due and
payable upon each Term Note being accepted for payment pursuant
to the Offer to Purchase and that interest thereon shall cease to
accrue on and after the Purchase Date;
(3) that each holder electing to tender all or any portion of a Term
Note pursuant to the Offer to Purchase will be required to
surrender such Term Note at the place or places specified in the
Offer prior to the close of business on the Expiration Date (such
Term Note being, if Borrower or the Arranger so requires, duly
endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to Borrower and the Arranger duly executed
by, the holder thereof or his attorney duly authorized in
writing);
(9) that Lenders will be entitled to withdraw all or any portion of
Term Notes tendered if Borrower receives, not later than the
close of business on the fifth Business Day next preceding the
Expiration Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the holder, the principal amount
of the Term Note the
-25-
holder tendered, the certificate number of the Term Note the
holder tendered and a statement that such holder is withdrawing
all or a portion of his tender;
(10) that (a) if Term Notes in an aggregate principal amount at
maturity less than or equal to the Purchase Amount are duly
tendered and not withdrawn pursuant to the Offer to Purchase,
Borrower shall purchase all such Term Notes and (b) if Term Notes
in an aggregate principal amount in excess of the Purchase Amount
are tendered and not withdrawn pursuant to the Offer to Purchase,
Borrower shall purchase Term Notes having an aggregate principal
amount equal to the Purchase Amount on a pro rata basis (with
--------
such adjustments as may be deemed appropriate so that only Term
Notes in denominations of $1,000 principal amount at maturity or
integral multiples thereof shall be purchased); and
(11) that in the case of any holder whose Term Note is purchased only
in part, Borrower shall execute and the Arranger shall
authenticate and deliver to the holder of such Term Note without
service charge, a new Term Note or Term Notes, of any authorized
denomination as requested by such holder, in an aggregate
principal amount equal to and in exchange for the unpurchased
portion of the Term Note so tendered.
An Offer to Purchase shall be governed by and effected in accordance
with the provisions above pertaining to any Offer. References above to
principal amount shall mean and refer to principal amount at maturity, unless
the context otherwise requires.
"Officer" shall mean the Chairman of the Board of Directors, the
-------
President, any Vice President, the Chief Financial Officer, the Controller, the
Treasurer or the Secretary of any Person.
"Officers' Certificate" shall mean, as applied to any corporation, a
---------------------
certificate executed on behalf of such corporation by at least one Officer.
"Organic Document" shall mean, relative to any Person, as applicable,
----------------
its certificate of incorporation, by-laws, certificate of partnership,
partnership agreement, certificate of formation limited liability agreement.
"Original Term Notes" see Section 2.2D.
-------------------
"Other Indebtedness" see Section 2.5A(iv)(b).
------------------
"Other Taxes" see Section 12.18B.
-----------
"Participant" see Section 12.1B.
-----------
"Partner" shall mean any of TSAT, TWE, ▇▇▇▇▇▇▇▇, Comcast, Cox,
-------
MediaOne and GE Americom.
"Partner Business" see Section 3.1J.
----------------
-26-
"Partner Entity" shall mean any Affiliate of any Partner that will
--------------
transfer assets to or merge with New PRIMESTAR pursuant to any Restructuring
Agreement.
"Partnership Agreement" shall mean the Limited Partnership Agreement
---------------------
of Primestar Partnership (then known as K Prime Partners, L.P.), dated as of
February 8, 1990, as amended and in effect from time to time.
"Partnership Credit Agreement" shall mean the bank credit facility
----------------------------
obtained by Primestar Partnership to finance advances to Tempo for payments due
in respect of the Tempo Satellites under the Satellite Construction Agreement,
and supported by letters of credit arranged for by affiliates of the partners of
the Partnership (other than GE Americom Services, Inc.).
"Partnership Working Capital Facility" shall mean the existing $50.0
------------------------------------
million working capital facility of Primestar Partnership.
"Payment Blockage Notice" see Section 8.2A.
-----------------------
"Payment Blockage Period" see Section 8.2A.
-----------------------
"Payment Office" shall mean the office of the Arranger located at 250
--------------
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Pension Plan" shall mean a "pension plan", as such term is defined in
------------
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which
Borrower or any corporation, trade or business that is, along with Borrower, a
member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
"Permitted Holder" shall mean any of (i) the estate or the heirs of
----------------
▇▇▇ ▇▇▇▇▇▇▇ (a shareholder of TSAT), (ii) ▇▇▇▇ ▇. ▇▇▇▇▇▇ (a shareholder of TSAT,
the Chief Executive Officer of TCI, and a director of TCI and of TSAT) or the
estate or heirs of ▇▇▇▇ ▇. ▇▇▇▇▇▇, (iii) any Restricted Subsidiary, (iv) Persons
who were partners of Primestar Partnership immediately prior to the
Restructuring Transaction and their respective controlled Affiliates, (v) TCI
and its Subsidiaries, (vi) any of the Permitted Transferees of the Persons
referred to in clauses (i) through (v), and (vii) any person or group controlled
by each or any of the Persons referred to in clauses (i) through (vi).
"Permitted Indebtedness" see Section 6A.2.
----------------------
"Permitted Investments" shall mean (a) Cash Equivalents; (b)
---------------------
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (c) loans and advances to employees made in the ordinary course of
business not to exceed $1.0 million in the aggregate at any one time
outstanding; (d) Interest Rate Protection Obligations; (e) bonds, notes,
debentures or other securities received as a result of Asset Sales permitted
under Section 6A.9 not to exceed 15% of the total consideration for such Asset
Sales; (f) transactions with officers, directors and employees of Borrower or
any Restricted Subsidiary entered into in the ordinary course of business
(including compensation or employee benefit arrangements with any such director
or employee); (g) Investments existing as of the Closing Date and any amendment,
extension, renewal or modification thereof to the extent that any
-27-
such amendment, extension, renewal or modification does not require Borrower or
any Restricted Subsidiary to make any additional cash or non-cash payments or
provide additional services in connection therewith; (h) any Investment to the
extent that the consideration therefor consists of Qualified Equity Interests of
Borrower; (i) any Investment consisting of a guarantee by a Restricted
Subsidiary of Senior Indebtedness or any guarantee permitted under clause (e) of
the second paragraph of Section 6A.2; (j) shares of Equity Interests of TCI
purchased pursuant to the Share Purchase Agreement; (k) shares of the common
stock of ResNet acquired pursuant to the conversion of the ResNet Subordinated
Loan; (l) warrants of ResNet acquired pursuant to the conversion of the ResNet
Subordinated Loan or the exercise of the ResNet Option; and (m) shares of the
common stock of ResNet acquired pursuant to any exercise of warrants at a de
--
minimis exercise price.
-------
"Permitted Junior Securities" shall mean any securities of Borrower or
---------------------------
any other Person that are (i) equity securities without special covenants or
(ii) subordinated in right of payment to all Senior Indebtedness that may at the
time be outstanding, to substantially the same extent as, or to a greater extent
than, the Loans and Notes are subordinated as provided in this Agreement, in any
event pursuant to a court order so providing and as to which (a) the rate of
interest on such securities shall not exceed the effective rate of interest on
the Loans and Notes on the date of this Agreement, (b) such securities shall not
be entitled to the benefits of covenants or defaults materially more beneficial
to the holders of such securities than those in effect with respect to the Loans
and Notes on the date of this Agreement and (c) such securities shall not
provide for amortization (including sinking fund and mandatory prepayment
provisions) commencing prior to the date six months following the final
scheduled maturity date of the Senior Indebtedness (as modified by the plan of
reorganization or readjustment pursuant to which such securities are issued).
"Permitted Liens" shall mean (a) Liens on property of a Person
---------------
existing at the time such Person is merged into or consolidated with Borrower or
any Restricted Subsidiary; provided, however, that such Liens were in existence
-------- -------
prior to the contemplation of such merger or consolidation and do not secure any
property or assets of Borrower or any Restricted Subsidiary other than the
property or assets subject to the Liens prior to such merger or consolidation;
(b) Liens imposed by law such as carriers', warehousemen's and mechanics' Liens
and other similar Liens arising in the ordinary course of business which secure
payment of obligations not more than 60 days past due or which are being
contested in good faith and by appropriate proceedings; (c) Liens existing on
the Closing Date; (d) Liens securing only this Agreement, the Loans and Notes;
(e) Liens in favor of Borrower or any Restricted Subsidiary so long as held by
Borrower or any Restricted Subsidiary; (f) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted; provided, however, that any reserve or other appropriate
-------- -------
provision as shall be required in conformity with GAAP shall have been made
therefor; (g) easements, reservation of rights of way, restrictions and other
similar easements, licenses, restrictions on the use of properties, or minor
imperfections of title that in the aggregate are not material in amount and do
not in any case materially detract from the properties subject thereto or
interfere with the ordinary conduct of the business of Borrower and the
Restricted Subsidiaries; (h) Liens resulting from the deposit of cash or notes
in connection with contracts, tenders or expropriation proceedings, or to secure
workers' compensation, surety or appeal bonds, costs of litigation when required
by law and public and statutory obligations or obligations under franchise
arrangements entered into in the ordinary course of business; (i) Liens securing
Indebtedness consisting of Capital Lease Obligations, Purchase Money
Indebtedness, mortgage financings, industrial revenue bonds or other monetary
obligations, in each case incurred solely for the purpose of financing all or
any part of the purchase price or cost of construction or installation of assets
used in the business of Borrower or the Restricted Subsidiaries, or repairs,
additions or improvements to such assets; provided, however, that (I) such Liens
-------- -------
secure Indebtedness in an amount not in excess of the original purchase price or
the original cost of any such assets or repair, addition or improvement thereto
(plus an amount equal to the reasonable fees and expenses in connection with the
incurrence of such
-28-
Indebtedness), (II) such Liens do not extend to any other assets of Borrower or
the Restricted Subsidiaries (and, in the case of repair, addition or
improvements to any such assets, such Lien extends only to the assets (and
improvements thereto or thereon) repaired, added to or improved), (III) the
Incurrence of such Indebtedness is permitted by Section 6A.2, and (IV) such
Liens attach within 90 days of such purchase, construction, installation,
repair, addition or improvement; (j) Liens to secure any refinancings, renewals,
extensions, modifications or replacements (collectively, "refinancing") (or
-----------
successive refinancings), in whole or in part, of any Indebtedness secured by
Liens referred to in the clauses above so long as such Lien does not extend to
any other property (other than improvements thereto); (k) Liens securing letters
of credit entered into in the ordinary course of business and consistent with
past business practice; (l) Liens on and pledges of the Equity Interests of any
Unrestricted Subsidiary securing any Indebtedness of such Unrestricted
Subsidiary; and (m) any calls or rights of first refusal with respect to any
partnership interests, and any rights of the Partnership to remove a partner's
representative from the partners committee of the Partnership, under the
Partnership Agreement as in effect on the Issue Date.
"Permitted Refinancing" shall mean, relative to any Indebtedness, any
---------------------
other Indebtedness which is incurred to repay and retire in full such refinanced
Indebtedness and all other monetary obligations in respect of such refinanced
Indebtedness; provided, however, that
-------- -------
(a) other than with respect to Subordinated Debt, such refinancing
Indebtedness shall not be incurred in an original principal amount which
exceeds the aggregate amount on the date of such refinancing of the
outstanding amount of such refinanced Indebtedness plus the then aggregate
amount of all such other monetary obligations in respect thereof;
(b) the weighted average life of such refinancing Indebtedness shall
not be less than the weighted average life on the date of such refinancing
of such refinanced Indebtedness;
(c) other than reasonable and customary fees, discounts and
commissions payable in connection with the refinancing Indebtedness, the
refinancing Indebtedness shall not impose on Borrower or any Restricted
Subsidiary rates of interest, prepayment changes or other fees or other
amounts that are more than 2% per annum higher that the highest respective
---------
amounts thereof payable in respect of such refinanced Indebtedness
excluding the effect of any equity security issued in connection with such
Indebtedness;
(d) the refinancing Indebtedness shall not contain terms and
conditions that, taken as a whole, make the refinancing Indebtedness
materially more burdensome to Borrower or the Restricted Subsidiaries, or,
except in the case of the refinancing of Indebtedness permitted under
clause (c) of Section 6.2, materially more beneficial to the holders of the
refinancing Indebtedness, than the terms in effect on the date of such
refinancing of the refinanced Indebtedness; and
(e) if such refinanced Indebtedness is Subordinated Debt, the
refinancing Indebtedness shall not contain rights and remedies that, taken
as a whole, are materially more detrimental to the Lenders or materially
more beneficial to the holders of the refinancing Indebtedness, than the
terms in effect on the date of such refinancing of the refinanced
Indebtedness.
"Permitted Transferee" shall mean, with respect to any Person: (a) in
--------------------
the case of any Person who is a natural person, such individual's spouse or
children, any trust for such individual's benefit or the benefit of such
individual's spouse or children, or any corporation or partnership in which the
direct and beneficial owner of all of the equity interest is such Person or such
individual's spouse or children or any trust for
-29-
the benefit of such persons; (b) in the case of any Person who is a natural
person, the heirs, executors, administrators or personal representatives upon
the death of such Person or upon the incompetency or disability of such Person
for purposes of the protection and management of such individual's assets; and
(c) in the case of any Person who is not a natural person, any Affiliate of such
Person.
"Person" shall mean and include natural persons, corporations, limited
------
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"PIK Interest Amount" see Section 2.3B.
-------------------
"Plan" shall mean any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and (i) which is maintained or
contributed to by any Loan Party or any of their respective ERISA Affiliates or
(ii) with respect to which any Loan Party retains any liability.
"Post-Petition Interest" shall mean, with respect to any Senior
----------------------
Indebtedness of any Person, all interest accrued or accruing on such
Indebtedness after the commencement of any Insolvency or Liquidation Proceeding
against such Person in accordance with and at the contract rate (including,
without limitation, any rate applicable upon default) specified in the agreement
or instrument creating, evidencing or governing such Indebtedness, whether or
not, pursuant to applicable law or otherwise, the claim for such interest is
allowed as a claim in such Insolvency or Liquidation Proceeding.
"Potential Event of Default" shall mean a condition or event which,
--------------------------
after notice or lapse of time or both, would constitute an Event of Default if
that condition or event were not cured or removed within any applicable grace or
cure period.
"Preferred Equity Interest" in any Person shall mean an Equity
-------------------------
Interest of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person.
"Prime Rate" shall mean for any day, a rate per annum that is equal to
---------- ---------
the corporate base rate of interest established by Arranger from time to time,
changing when and as said corporate base rate changes. The corporate base rate
is not necessarily the lowest rate charged by the Arranger to its customers.
"PRIMESTAR Distribution Service" shall mean the distribution of the
------------------------------
PRIMESTAR Programming as described in the Proxy.
"Primestar Partners" shall mean, collectively, TSAT, Time Warner
------------------
Entertainment Company, L.P., Advance/▇▇▇▇▇▇▇▇ Partnership, Comcast Corporation,
▇▇▇ Communications, Inc., MediaOne of Delaware, Inc. and GE American
Communications, Inc.
"Primestar Partnership" shall mean PRIMESTAR Partners, L.P., a
---------------------
Delaware limited partnership.
-30-
"Proceeding" shall mean any claim, counterclaim, action, judgment,
----------
suit, hearing, governmental investigation, arbitration or proceeding, including
by or before any Governmental Authority and whether judicial or administrative.
"Property" shall mean any right or interest in or to property or
--------
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible and including Equity Interests or other ownership
interests of any Person.
"Proxy" shall mean the definitive proxy statement/prospectus of TSAT
-----
dated as of February 9, 1998 mailed to the shareholders of TSAT in connection
with the Restructuring Transaction.
"Public Equity Offering" shall mean an underwritten public offering of
----------------------
Qualified Equity Interests of Borrower pursuant to an effective registration
statement filed under the Securities Act (excluding registration statements
filed on Form S-8).
"Purchase Amount" see the definition of "Offer to Purchase" above.
---------------
"Purchase Date" see the definition of "Offer to Purchase" above.
-------------
"Purchase Money Indebtedness" shall mean Indebtedness of Borrower or
---------------------------
any Restricted Subsidiary Incurred for the purpose of financing all or any part
of the purchase price or the cost of construction or improvement of any property
(other than integrated receiver/decoders or related equipment); provided,
--------
however, that the aggregate principal amount of such Indebtedness does not
-------
exceed the lesser of the Fair Market Value of such property or such purchase
price or cost, including any refinancing of such Indebtedness that does not
increase the aggregate principal amount (or accreted amount, if less) thereof as
of the date of refinancing.
"Purchase Price" see the definition of "Offer to Purchase" above.
--------------
"Qualified Equity Interest" in any Person shall mean any Equity
-------------------------
Interest in such Person other than any Disqualified Equity Interest.
"Quarterly Date" see Section 2.3B.
--------------
"Refinancing" shall mean the public offering or private placement and
-----------
sale by Borrower of the Refinancing Securities contemplated by Section 5.11, in
order to refinance, as applicable, the Loans, Notes, Term Notes, the Exchange
Notes and all Obligations owing in respect of this Agreement and the other Loan
Documents and all obligations under the Senior Subordinated Indenture.
"Refinancing Securities" shall mean the unsecured senior subordinated
----------------------
notes of Borrower or any of its Subsidiaries proposed to be sold in order to
consummate the Refinancing.
"Refinancing Securities Notice" see Section 5.11B.
-----------------------------
"Register" see Section 5.13.
--------
"Registration Rights Agreement" shall mean a registration rights
-----------------------------
agreement substantially in the form of Exhibit G (with such changes therein as
---------
the Agents and Borrower shall approve).
-31-
"Regulatory Authority" shall mean any national, state or local
--------------------
government, any political subdivision or any governmental, quasi-governmental,
judicial, public or statutory instrumentality, authority, body or entity, other
regulatory bureau, authority, body or entity, foreign or domestic, including the
Federal Deposit Insurance Corporation, the Comptroller of the Currency, the
F.R.S. Board, any central bank or any comparable authority.
"Reimbursement Agreement" shall mean each reimbursement agreement
-----------------------
dated as of the Closing Date between New PRIMESTAR, on the one hand, and each
Partner (other than TSAT) and/or their respective affiliates and affiliates of
TCI, respectively, on the other hand; and "Reimbursement Agreements" shall mean
all of them.
"Related Acquisition" see Section 6A.2(j).
-------------------
"Related Parties" see Section 9.1.
---------------
"Release" shall mean a "release", as such term is defined in CERCLA.
-------
"Reorganization Agreement" shall mean the agreement entered into on
------------------------
December 4, 1996 by TCI, TCIC and a number of other TCI subsidiaries, including
Borrower (as Successor in interest to TSAT) and its subsidiaries, which provided
for, among other things, the principal corporate transactions to effect the
Distribution, the conditions thereto and certain provisions governing the
relationship between Borrower and TCI with respect to and resulting from the
Distribution, as amended and in effect from time to time.
"Required Lenders" shall mean Lenders holding in the aggregate more
----------------
than 50% of (a) prior to the Closing Date, the Loan Commitments, and (b) on and
after the Closing Date, the outstanding principal amount of the Notes.
"Required Refinancing Securities" see Section 5.11B.
-------------------------------
"Requirement of Law" shall mean as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"ResNet" shall mean ResNet Communications, Inc., a Delaware
------
corporation.
"ResNet Option" shall mean the Option Agreement between TSAT and
-------------
ResNet dated October 21, 1996, as amended and in effect from time to time.
"ResNet Subordinated Loan" shall mean the subordinated loan in the
------------------------
principal amount of $36,604,000 made by TSAT to ResNet, as amended and in effect
from time to time.
"Resource Conservation and Recovery Act" shall mean the Resource
--------------------------------------
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
-- ---
"Restricted C-Band Subsidiary" see Section 6A.1.
----------------------------
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"Restricted Junior Payment" shall mean (a) any dividend or
-------------------------
distribution, direct or indirect, on account of any Equity Interests in Borrower
or any of its Subsidiaries now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock or in any junior class of stock
to the holders of that class, provided that the issuance of such stock or junior
class of stock is not an incurrence of Indebtedness, (b) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any Equity Interests in Borrower or any of its
Subsidiaries now or hereafter outstanding, (c) any payment or prepayment of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to, any
Subordinated Debt of Borrower or any of its Subsidiaries other than a Permitted
Refinancing, or (d) any payment made to redeem, purchase, repurchase or retire,
or to obtain the surrender of, any outstanding warrants, options or other rights
to acquire Equity Interests in Borrower or any of its Subsidiaries now or
hereafter outstanding.
"Restricted Payments" see Section 6A.1.
-------------------
"Restricted Subsidiary" shall mean (a) prior to the Conversion Date,
---------------------
each U.S. Subsidiary of Borrower, other than an Unrestricted Subsidiary, of
which Borrower owns directly or indirectly at least 80% of the outstanding
Voting Equity Interests, and (b) on and after the Conversion Date, any
Subsidiary of Borrower that has not been designated by the Board of Directors of
Borrower, by a resolution of the Board of Directors of Borrower delivered to the
Arranger, as an Unrestricted Subsidiary pursuant to Section 6A.12; provided,
--------
however, that, for the purposes of this clause (b), each Subsidiary which as of
-------
the Conversion Date has been and is designated as an Unrestricted Subsidiary
under the Existing Indentures is designated as an Unrestricted Subsidiary as of
the Conversion Date. Any such designation pursuant to clause (b) may be revoked
by a resolution of the Board of Directors of Borrower delivered to the Arranger,
subject to the provisions of Section 6A.12.
"Restructuring Agreements" shall mean each of the Asset Transfer
------------------------
Agreements, the Existing Note Assumption Agreement, the Merger Agreements, the
Merger and Contribution Agreement, the TSAT Merger Agreement, the TSAT Asset
Transfer Agreement, the Restructuring Registration Rights Agreement, the
Reimbursement Agreements, the Stockholders Agreement, the TWE-▇▇▇▇▇▇▇▇ Voting
Agreement, the TSAT Stockholders Agreement, the TSAT Tempo Agreement and the U S
West Guarantee Agreement.
"Restructuring Registration Rights Agreement" shall mean the
-------------------------------------------
registration rights agreement dated as of the Closing Date among New PRIMESTAR,
each of the Partners, Continental Satellite Company of Chicago, Inc.,
Continental Satellite of Minnesota, Inc., Continental Satellite Company of New
England, Inc., Continental Satellite Company of Ohio, Inc., Continental
Satellite Company of Michigan, Inc., Continental Satellite Company of Virginia,
Inc., MediaOne Satellite II, Inc., Paragon Communications and ▇▇▇▇ ▇. ▇▇▇▇▇▇.
"Restructuring Transaction" shall mean, collectively, the business
-------------------------
combination transactions contemplated by the Asset Transfer Agreements, the
Existing Note Assumption Agreement, the Merger Agreements, the Merger and
Contribution Agreement (excluding, however, the transactions contemplated by the
TSAT Merger Agreement and the TSAT Tempo Agreement) and the TSAT Asset Transfer
Agreement.
"▇▇▇▇▇▇'▇ Screen" shall mean the display designated at page "LIBO" on
---------------
the Reuter Monitor System or such other display on the Reuter Monitor System as
may replace such page displaying the London interbank offered rates as of 11:00
A.M., London time, on the day on which the relevant determination is made.
-33-
"Revocation" see Section 6A.12B.
----------
"Roll-Up Documents" shall mean, collectively, the TSAT Asset Transfer
-----------------
Agreement, the Restructuring Agreement, the TSAT Merger Agreement, and all
contracts, agreements and documents delivered in connection with each of the
foregoing.
"S&P" shall mean Standard & Poor's Corporation.
---
"Satellite Construction Agreement" shall mean the fixed price
--------------------------------
satellite construction agreement between Loral and Tempo dated as of February
22, 1990, as amended and in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission.
---
"Section 12.18 Certificate" see Section 12.18A.
-------------------------
"Securities" shall mean any limited, general or other partnership
----------
interest, or any stock, shares, voting trust certificates, bonds, debentures,
notes or other Equity Interests or evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or any certificates of
interest, shares, or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire
any of the foregoing, but shall not include any evidence of the Obligations.
"Securities Act" shall mean the Securities Act of 1933, as amended
--------------
from time to time, and any successor statute, and all rules and regulations of
the SEC promulgated thereunder.
"Senior Indebtedness" shall mean, at any date, (a) all obligations of
-------------------
Borrower under the New PRIMESTAR Senior Credit Facility; (b) all Interest Rate
Protection Obligations of Borrower; (c) all obligations of Borrower under stand
by letters of credit; and (d) all other Indebtedness of Borrower for borrowed
money, including principal, premium, if any, and interest (including Post-
Petition Interest) on such Indebtedness, unless the instrument under which such
Indebtedness of Borrower for money borrowed is Incurred expressly provides that
such Indebtedness for money borrowed is not senior or superior in right of
payment to the Notes, and all renewals, extensions, modifications, amendments or
refinancings thereof. Notwithstanding the foregoing, Senior Indebtedness shall
not include (a) to the extent that it may constitute Indebtedness, any
obligation for federal, state, local or other taxes; (b) any Indebtedness among
or between Borrower and any Subsidiary of Borrower; (c) to the extent that it
may constitute Indebtedness, any obligation in respect of any trade payable
Incurred for the purchase of goods or materials, or for services obtained, in
the ordinary course of business; (d) that portion of any Indebtedness that is
Incurred in violation of this Agreement; provided, however, that such
-------- -------
Indebtedness shall be deemed not to have been Incurred in violation of this
Agreement for purposes of this clause (d) if (I) the holder(s) of such
Indebtedness or their representative or Borrower shall have furnished to the
Arranger an opinion of independent legal counsel, unqualified in all material
respects, addressed to the Arranger (which legal counsel may, as to matters of
fact, rely upon an Officers' Certificate of Borrower) to the effect that the
Incurrence of such Indebtedness does not violate the provisions of this
Agreement or (II) in the case of any obligations under the New PRIMESTAR Senior
Credit Facility, the holder(s) of such obligations or their agent or
representative shall have received a representation from Borrower to the effect
that the Incurrence of such Indebtedness does not violate the provisions of this
Agreement; (e) Indebtedness evidenced by the Existing Notes or the Notes; (f)
Indebtedness of Borrower that is expressly subordinate or junior in right of
payment to any other Indebtedness of Borrower; (g) to the extent that it may
constitute Indebtedness, any obligation owing under leases (other than Capital
Lease Obligations) or manage-
-34-
ment agreements; and (h) any obligation that by operation of law is subordinate
to any general unsecured obligations of Borrower.
"Senior Management" shall mean the chief executive officer, chief
-----------------
financial officer, chief operating officer, treasurer, controller and corporate
counsel of Borrower, or any of them, as in effect from time to time.
"Senior Subordinated Indenture" shall mean an indenture between
-----------------------------
Borrower and a trustee substantially in the form of ▇▇▇▇▇▇▇ ▇▇▇▇▇'▇ customary
high yield indenture (which shall include guarantees by Subsidiaries of the
Exchange Notes if and to the extent that the Existing Notes are guaranteed by
Subsidiaries of Borrower), modified as appropriate for the Exchange Notes and
having principal negative covenants substantially identical to Section 6A and
principal events of default substantially identical to Section 7 (with such
changes therein as the Required Lenders (which consent shall be conclusively
deemed given if a Lender does not object to the draft thereof within five
Business Days of receipt thereof) and Borrower shall approve, and, at such time
as notes issued thereunder are sold in a public offering, with other appropriate
changes to reflect such public offering), as the same may at any time be
amended, modified and supplemented and in effect.
"Share Purchase Agreement" shall mean the share purchase agreement
------------------------
entered into by TCI and TSAT on December 4, 1996, as amended and in effect from
time to time.
"Six Month Period" shall mean the period commencing on the Conversion
----------------
Date and ending on the date which is the last calendar day of the month six
months after the Conversion Date (or if such last calendar day is not a Business
Day, the next Business Day) and each interval thereafter which begins on the
next day after the end of the prior period and ends on the date which is the
last calendar day of the month which is six months thereafter (or the next
Business Day if such last calendar day is not a Business Day).
"Stockholders Agreement" shall mean the stockholders agreement dated
----------------------
as of the Closing Date among New PRIMESTAR, each of the Partners, Paragon
Communications, certain affiliates of MediaOne and ▇▇▇▇ ▇. ▇▇▇▇▇▇, regarding
shares of capital stock of New PRIMESTAR.
"Strategic Equity Investor" shall mean a corporation or entity with an
-------------------------
equity market capitalization, a net asset value or annual revenues of at least
$1.5 billion that primarily owns and operates businesses in the
telecommunications, information systems, entertainment, cable television,
programming, electronics or similar or related industries.
"Subordinated Debt" shall mean (i) Indebtedness incurred under the
-----------------
Reimbursement Agreements, and (ii) other unsecured Indebtedness of Borrower
subordinated in right of payment to the Obligations pursuant to documentation
containing interest rates, maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms in form
and substance reasonably satisfactory to the Required Lenders.
"Subordinated Debt Document" shall mean, as the context may require,
--------------------------
each indenture, note, debenture or other agreement evidencing or relating to
Subordinated Debt, and each instrument, document or agreement prepared or
executed in connection therewith, in each case as the same may be amended,
supplemented, amended and restated or otherwise modified in accordance with
Section 6.15.
"Subordinated Indebtedness" shall mean any Indebtedness of Borrower
-------------------------
which is expressly subordinated in right of payment to the Loans.
-35-
"Subordination Arrangement" shall mean any agreement between Borrower
-------------------------
and/or its Subsidiaries, as applicable, Primestar Partnership and the Partners
providing for the subordination to the Loans and to the obligations under the
New PRIMESTAR Senior Credit Facility of the reimbursement obligations of
Borrower and its Subsidiaries to any Partner relating to letters of credit
issued on behalf of Primestar Partnership for which the Partners provide credit
support.
"Subsequent Initial Note" see Section 2.1D.
-----------------------
"Subsequent Term Note" see Section 2.2E.
--------------------
"Subsidiary" shall mean, with respect to any Person, (a) any
----------
corporation of which the outstanding Voting Equity Interests having at least a
majority of the votes entitled to be cast in the election of directors of such
entity shall at the time be owned, directly or indirectly, by such Person, or
(b) any other Person of which at least a majority of Voting Equity Interests are
at the time, directly or indirectly, owned by such first named Person.
"Surviving Person" shall mean with respect to any Person involved in
----------------
or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"Take-Out Banks" shall mean ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
--------------
Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. and ▇▇▇▇▇▇▇▇▇, Lufkin &
▇▇▇▇▇▇▇▇ Securities Corporation.
"Tag-Along Agreement" shall mean the agreement dated as of February 8,
-------------------
1990, originally entered into by and among ▇▇▇ Enterprises, Inc., Comcast,
Continental, ▇▇▇▇▇▇▇▇, Tempo, TCIC and TCI Development Corporation, a subsidiary
of TCI, as amended and in effect from time to time.
"Tax Sharing Agreement" shall mean the tax sharing agreement effective
---------------------
as of July 1, 1995 among TCI, TCIC and certain other consolidated subsidiaries
of TCI, as amended. In connection with the Distribution, the Tax Sharing
Agreement was amended on December 3, 1996 to provide that Borrower (as successor
in interest to TSAT) be treated as if it had been a party to the Tax Sharing
Agreement effective July 1, 1995, as amended and in effect from time to time.
"Tax Benefit" see Section 12.18C.
-----------
"Taxes" shall mean all taxes, assessments, fees, levies, imposts,
-----
duties, penalties, deductions, liabilities, withholdings or other charges of any
nature whatsoever, including interest penalties, from time to time or at any
time imposed by any law, rule or regulation or any Governmental Authority.
"TCI" shall mean Tele-Communications, Inc., a Delaware corporation.
---
"TCISE Partner 1" shall mean TCISE Partner 1, Inc., a Delaware
---------------
corporation.
"TCISE Partner 2" shall mean TCISE Partner 2, Inc., a Delaware
---------------
corporation.
"Tempo" shall mean Tempo Satellite, Inc., an Oklahoma corporation.
-----
"Tempo Option" shall mean Primestar Partnership's right and option,
------------
granted by Tempo under the option agreement entered into by Tempo and Primestar
Partnership in February 1991 to purchase or
-36-
lease 100% of the capacity of a DBS system to be built, launched, and operated
by Tempo pursuant to the FCC Permit, as amended and in effect from time to time.
"Tempo Letter Agreements" shall mean the two letter agreements, dated
-----------------------
as of July 1993, entered into by Tempo and Primestar in connection with the
Tempo Option and certain related matters and any refinancings thereof.
"Tempo Satellite" shall mean either of the two high power direct
---------------
broadcast satellites which Tempo has agreed to purchase from Loral pursuant to
the Satellite Construction Agreement.
"Term Loan Commitment" see Section 2.2A.
--------------------
"Term Loan" see Section 2.2A.
---------
"Term Notes" see Section 2.2E.
----------
"Total Consolidated Indebtedness" shall mean, as at any date of
-------------------------------
determination, an amount equal to the aggregate amount of all Indebtedness and
the aggregate liquidation preference of all Disqualified Equity Interests of
Borrower and the Restricted Subsidiaries outstanding as of such date of
determination (other than Indebtedness owing to and Disqualified Equity
Interests held by Borrower or any of its Restricted Subsidiaries not subject to
any lien in favor of any Person other than Borrower or any Restricted Subsidiary
of Borrower).
"Total Debt" shall mean, on any date of determination, with respect to
----------
Borrower and its Restricted Subsidiaries, an amount equal to the sum of (a) the
outstanding principal amount of all Indebtedness as of such date of the type
referred to in clause (x)(a) of the definition of "Indebtedness" (which, in the
case of the loans under the New PRIMESTAR Senior Credit Facility, shall be
deemed to equal the amount of loans under the New PRIMESTAR Senior Credit
Facility outstanding on the last day of the Fiscal Quarter ending on or
immediately preceding the date of determination), plus (b) the maximum aggregate
----
amount of Indebtedness as of such date of the type described in clause (x)(b) of
the definition of "Indebtedness" (which, in the case of Letter of Credit
Outstandings as defined in the New PRIMESTAR Senior Credit Facility, shall be
deemed to equal the amount of Letter of Credit Outstandings on the last day of
the Fiscal Quarter ending on or immediately preceding the date of
determination), plus (c) the aggregate amount as of such date of the
----
Indebtedness described in clause (x)(c) of the definition of "Indebtedness,"
plus (d) (without duplication) the aggregate amount on such date of the
----
Contingent Liabilities in respect of any of the foregoing (other than in
connection with the Reimbursement Agreements).
"Total Debt to Annualized Cash Flow Ratio" shall mean the ratio of (a)
----------------------------------------
Total Debt to (b) Annualized Cash Flow.
--
"Total Interest Expense" shall mean, for any period, the sum of (a)
----------------------
the aggregate cash interest expense (net of cash interest income) of Borrower
and its Restricted Subsidiaries (including, to the extent Borrower or any of its
Restricted Subsidiaries have any Contingent Liability in respect of such
interest expense, (i) in respect of any pro forma calculations, the interest
--- -----
expense of Unrestricted Subsidiaries, and (ii) in respect of any period which
does not include any pro forma calculation, the amount of such interest expense
--- -----
actually paid or payable by Borrower or any Restricted Subsidiary) for such
period, as determined in accordance with GAAP, including the portion of any
payments made in respect of Capitalized Lease Liabilities allocable to interest
expense plus (b) all commitment, letter of credit, guarantee, line of credit or
----
similar fees
-37-
(no matter how designated) paid or scheduled or required to be paid by Borrower
and its Restricted Subsidiaries to any lender in exchange for such lender's
commitment to lend to Borrower and its Restricted Subsidiaries, including,
without limitation, the commitment fee in respect of the loans and letters of
credit under the New PRIMESTAR Senior Credit Facility.
"Trade Name and Service ▇▇▇▇ License Agreement" shall mean the trade
---------------------------------------------
name and service ▇▇▇▇ license agreement between Borrower (as successor in
interest to TSAT) and TCI dated December 4, 1996, as amended and in effect from
time to time.
"Transaction Costs" shall mean the fees, costs and expenses payable by
-----------------
Borrower pursuant hereto and other fees, costs and expenses payable by Borrower
or a Subsidiary of Borrower in connection with the Transactions.
"Transaction Documents" shall mean the Roll-Up Documents, the
---------------------
Reimbursement Agreement, the Partnership Credit Agreement, the Primestar
Partnership Agreement and the TSAT Tempo Agreement.
"Transactions" shall mean, collectively, (i) the Restructuring
------------
Transaction, (ii) the extensions of credit under the New PRIMESTAR Senior Credit
Facility, (iii) the incurrence of the Interim Loan hereunder on the Closing
Date, (iv) the transactions contemplated by the Assumption Agreements, (v) the
Existing Note Assumption and (vi) any other transaction on the Closing Date
contemplated in relation to the foregoing.
"Transition Services Agreement" shall mean the agreement dated as of
-----------------------------
December 4, 1996 between TCI and Borrower (as successor in interest to TSAT),
pursuant to which TCI provides to Borrower certain services and other benefits,
including certain administrative and other services that were provided to TSAT
by TCI prior to the Distribution, as amended and in effect from time to time.
"Trigger Date" see Section 6A.9.
------------
"TSAT" shall mean TCI Satellite Entertainment, Inc., a Delaware
----
corporation.
"TSAT Asset Transfer Agreement" shall mean the asset transfer
-----------------------------
agreement dated as of February 6, 1998 between TSAT and New PRIMESTAR, pursuant
to which TSAT will contribute certain assets to New PRIMESTAR, and New PRIMESTAR
will assume certain liabilities of TSAT.
"TSAT Merger" shall mean the merger of TSAT with and into New
-----------
PRIMESTAR.
"TSAT Merger Agreement" shall mean the agreement dated as of February
---------------------
6, 1998 between New PRIMESTAR and TSAT, pursuant to which the TSAT Merger may be
effected.
"TSAT Partners Holdings" means TSAT Partners Holdings, Inc., a
----------------------
Delaware corporation.
"TSAT Stockholders Agreement" shall mean the agreement dated as of
---------------------------
February 6, 1998 among New PRIMESTAR, TSAT and ▇▇▇▇ ▇. ▇▇▇▇▇▇, regarding shares
of capital stock of TSAT.
"TSAT Tempo Agreement" shall mean the agreement dated as of February
--------------------
6, 1998 between New PRIMESTAR and TSAT, which provides, among other things, that
on the terms and conditions set forth
-38-
therein, upon receipt of FCC approval of the transfer of control of Tempo to
Borrower, TSAT will (at Borrower's election) either sell all the issued and
outstanding shares of Equity Interests of Tempo to Borrower or liquidate Tempo
and sell all of its rights, title and interests in, to and under Tempo's assets
to Borrower, as such agreement is amended, supplemented, amended and restated or
otherwise modified from time to time.
"TWE" shall mean Time Warner Entertainment Company, L.P., a Delaware
---
limited partnership.
"TWE Asset Transfer Agreement" shall mean the asset transfer agreement
----------------------------
dated as of February 6, 1998, as amended, among TWE, certain of its affiliates
and New PRIMESTAR, pursuant to which TWE and such affiliates contributed certain
assets to New PRIMESTAR, and New PRIMESTAR assumed certain liabilities of TWE
and such affiliates.
"TWE Assumption" shall mean the assumption by TWE of certain
--------------
obligations of TWE-A/N under the TWE-A/N Senior Credit Agreement and the release
of TWE-A/N from such obligations.
"TWE Assumption Agreement" shall mean the assumption agreement dated
------------------------
as of the date hereof by and among TWE, TWE-A/N and each of the other parties to
the TWE-A/N Senior Credit Agreement, pursuant to which the TWE Assumption was
effected.
"TWE Partner" shall mean each Person who shall from time to time be
-----------
admitted as a partner of TWE in accordance with the TWE Partnership Agreement.
"TWE Partnership Agreement" shall mean the agreement of limited
-------------------------
partnership of TWE dated as of October 29, 1991 by and among Time Warner Inc., U
S West, Inc. and certain of their respective subsidiaries.
"TWE Senior Credit Agreement" shall mean the senior credit agreement
---------------------------
dated as of April 1, 1998, by and among TWE, the lenders party thereto and the
agents party thereto.
"TWE-A/N" shall mean Time Warner Entertainment-Advance/▇▇▇▇▇▇▇▇
-------
Partnership, a New York general partnership.
"TWE-A/N Partner" shall mean TWE, ▇▇▇▇▇▇▇▇ and each other Person who
---------------
shall from time to time be admitted as a partner of TWE-A/N in accordance with
the TWE-A/N Partnership Agreement.
"TWE-A/N Partnership Agreement" shall mean the partnership agreement
-----------------------------
dated as of September 9, 1994 by and between TWE and ▇▇▇▇▇▇▇▇.
"TWE-A/N Senior Credit Agreement" shall mean the senior credit
-------------------------------
agreement dated as of April 1, 1998, by and among TWE-A/N, the lenders party
thereto and the agents party thereto.
"TWE-▇▇▇▇▇▇▇▇ Voting Agreement" shall mean the voting agreement dated
-----------------------------
as of February 6, 1998 between TWE and ▇▇▇▇▇▇▇▇ regarding shares of capital
stock of New PRIMESTAR.
"Unrestricted Subsidiary" shall mean
-----------------------
-39-
(a) prior to the Conversion Date, any U.S. Subsidiary formed or
acquired after the Closing Date and designated by Borrower as an
"Unrestricted Subsidiary" and accepted as such by the Required Lenders, and
(b) on and after the Conversion Date, any Subsidiary of Borrower
designated as such pursuant to Section 6A.12. Any such designation
pursuant to clause (b) may be revoked by a resolution of the Board of
Directors of Borrower delivered to the Arranger, subject to the provisions
of Section 6A.12.
"Unutilized Net Cash Proceeds" see Section 6A.9.
----------------------------
"U.S. Dollars" shall mean the lawful money of the United States of
------------
America.
"U.S. Subsidiary" shall mean any Subsidiary that is incorporated or
---------------
organized under the laws of the United States or a state thereof.
"U S West Guarantee Agreement" shall mean the guarantee agreement
----------------------------
dated as of February 6, 1998 by U S West Media Group, Inc. in favor of each of
TSAT, New PRIMESTAR, TWE, ▇▇▇▇▇▇▇▇, Comcast, Cox and GE Americom relating to the
Merger and Contribution Agreement.
"Voting Equity Interests" shall mean Equity Interests in a corporation
-----------------------
or other Person with voting power under ordinary circumstances entitling the
holders thereof to elect the Board of Directors or other governing body of such
corporation or Person.
"Weighted Average Life to Maturity" shall mean, when applied to any
---------------------------------
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" shall mean any Restricted
----------------------------------
Subsidiary all of the outstanding Voting Equity Interests (other than directors'
qualifying shares) of which are owned, directly or indirectly, by Borrower.
"wholly owned Subsidiary" shall mean, with respect to any Person, any
-----------------------
corporation, association or other entity of which 100% (other than directors'
qualifying shares) of the total voting power of shares of stock or other equity
interest entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other wholly owned Subsidiaries of that Person or a combination thereof.
1.2 Accounting Terms
----------------
For the purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to them in conformity with GAAP.
-40-
1.3 Rules of Construction
---------------------
In each Loan Document, unless the context clearly requires otherwise
(or such Loan Document clearly provides otherwise), references to (i) the plural
include the singular, the singular the plural and the part the whole; (ii)
Persons includes their respective permitted successors and assigns or, in the
case of governmental Persons, Persons succeeding to the relevant functions of
such Persons; (iii) statutes and related regulations include any amendments of
same and any successor statutes and regulations; and (iv) time shall be a
reference to New York City time.
In each Loan Document, unless the context clearly requires otherwise
(or such Loan Document clearly provides otherwise), (i) "amend" shall mean
-----
"amend, amend and restate, supplement or modify"; and "amended" and "amendment"
------- ---------
shall have meanings correlative to the foregoing; (ii) in the computation of
periods of time from a specified date to a later specified date, "from" shall
----
mean "from and including"; "to" and "until" shall mean "to but excluding"; and
-- -----
"through" shall mean "to and including"; (iii) "hereof," "herein" and
------- ------ ------
"hereunder" (and similar terms) in this Agreement or any other Loan Document
---------
refer to this Agreement or such other Loan Document, as the case may be, as a
whole and not to any particular provision of this Agreement or such other Loan
Document; (iv) "including" (and similar terms) shall mean "including without
---------
limitation" (and similarly for similar terms); (v) "or" has the inclusive
--
meaning represented by the phrase "and/or"; (vi) "satisfactory to" any Agent or
---------------
Lender shall mean in form, scope and substance and on terms and conditions
satisfactory to such Agent or Lender; and (vii) references to "the date hereof"
---------------
shall mean the date first set forth above.
A. In this Agreement unless the context clearly requires otherwise,
any reference to (i) an Annex, Exhibit or Schedule is to an Annex, Exhibit or
Schedule, as the case may be, attached to this Agreement and constituting a part
hereof, and (ii) a Section or other subdivision is to a Section or such other
subdivision of this Agreement.
B. No doctrine of construction of ambiguities in agreements or
instruments against the interests of the party controlling the drafting thereof
shall apply to any Loan Document.
SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENT AND LOANS; NOTES
2.1 Initial Loan and Initial Note
-----------------------------
A. Initial Loan Commitment. Subject to the terms and conditions of
-----------------------
this Agreement and in reliance upon the representations and warranties of
Borrower herein set forth, the Lenders hereby severally agree to lend to
Borrower on the Closing Date $115,186,966.90 in the aggregate (the "Initial
-------
Loan") (which Initial Loan shall, when taken together with the amounts assumed
----
by Borrower pursuant to the New PRIMESTAR/▇▇▇▇▇▇▇▇ Assumption Agreement and the
New PRIMESTAR/TWE Assumption Agreement equal an aggregate amount of
$350,000,000.00), each such Lender committing severally and not jointly to lend
the amount set forth next to such Lender's name on the signature pages hereto.
The Lenders' commitments to make the Initial Loan to Borrower pursuant to this
Section 2.1A are herein called individually, an "Initial Loan Commitment" and
-----------------------
collectively, the "Initial Loan Commitments".
------------------------
B. Notice of Borrowing. When Borrower desires to borrow under this
-------------------
Section 2.1, it shall deliver to the Arranger a Notice of Borrowing no later
than 11:00 A.M., at least one Business Day in advance of the Closing Date or
such later date as shall be agreed to by the Arranger. The Notice of Borrowing
shall
-41-
specify the applicable date of borrowing (which shall be a Business Day). Upon
receipt of such Notice of Borrowing, the Arranger shall promptly notify each
Lender of its share of the Initial Loan and the other matters covered by the
Notice of Borrowing.
C. Disbursement of Funds. (i) No later than 12:00 Noon on the
---------------------
Closing Date, each Lender will make available its pro rata share of the Initial
--- ----
Loan requested to be made on such date in the manner provided below. All
amounts shall be made available to the Arranger in U.S. Dollars and immediately
available funds at the Payment Office and the Arranger promptly will make
available to Borrower by depositing to its account at the Payment Office (or to
such other account or accounts or Persons as Borrower may designate) the
aggregate of the amounts so made available in the type of funds received.
Unless the Arranger shall have been notified by any Lender prior to the Closing
Date that such Lender does not intend to make available to the Arranger its
portion of the Initial Loan to be made on such date, the Arranger may assume
that such Lender has made such amount available to the Arranger on such date,
and the Arranger, in reliance upon such assumption, may (in its sole discretion
and without any obligation to do so) make available to Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Arranger by such Lender and the Arranger has made same available to Borrower,
the Arranger shall be entitled to recover such corresponding amount from such
Lender. If such Lender does not pay such corresponding amount forthwith upon
the Arranger's demand therefor, the Arranger shall promptly notify Borrower, and
Borrower shall immediately pay such corresponding amount to the Arranger. The
Arranger shall also be entitled to recover from such Lender or Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Arranger to
Borrower to the date such corresponding amount is recovered by the Arranger, at
a rate per annum equal to (x) if paid by such Lender, the overnight Federal
--- -----
Funds Rate or (y) if paid by Borrower, the then applicable rate of interest on
the Loans.
(ii) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Initial Loan Commitment hereunder or to prejudice any
rights which Borrower may have against any Lender as a result of any default by
such Lender hereunder.
D. Initial Notes. Borrower shall execute and deliver to each Lender
-------------
on the Closing Date which requests an Initial Note an Initial Note dated the
Closing Date substantially in the form of Exhibit A to evidence the portion of
---------
the Initial Loan made on such date by such Lender and with appropriate
insertions ("Original Initial Notes"). On each interest payment date prior to
----------------------
the Conversion Date on which Borrower elects to pay a PIK Interest Amount
pursuant to Section 2.3B (if and to the extent Borrower is permitted to pay a
PIK Interest Amount in lieu of cash), Borrower shall execute and deliver to each
Lender on such interest payment date a note dated such interest payment date
substantially in the form of Exhibit A in a principal amount equal to such
---------
Lender's pro rata portion of such PIK Interest Amount and with other appropriate
insertions (each a "Subsequent Initial Note" and, together with the Original
-----------------------
Initial Notes, the "Initial Notes"). A Subsequent Initial Note shall bear
-------------
interest at a rate per annum from the date of its issuance at the same rate per
--------- ---
annum borne by all Initial Notes.
-----
E. Scheduled Payment of Initial Loan. Subject to Section 2.2,
---------------------------------
Borrower shall pay in full the outstanding amount of the Initial Loan and all
other Obligations owing hereunder no later than the Conversion Date.
F. Termination of Initial Loan Commitments. The Initial Loan
---------------------------------------
Commitments hereunder shall terminate on the earliest of (i) the date on which
Borrower, TWE-A/N, or any Partner informs the Lenders that it has decided not to
proceed with the Restructuring Transaction, (ii) the date on which any
Restruc-
-42-
turing Agreement is terminated in accordance with its terms or (iii) April 15,
1998 if the Initial Loan is not made by such date. Borrower shall have the
right, without premium or penalty, to reduce or terminate the Initial Loan
Commitments of the Lenders hereunder at any time. Any such reduction or
termination shall be made pro rata among the Lenders based on their respective
--- ----
Initial Loan Commitments. The Initial Loan Commitments shall automatically and
permanently terminate in their entirety on the Closing Date immediately after
the making of the Initial Loan on such date.
G. Pro Rata Borrowings. The Initial Loan shall be made by the
-------------------
Lenders pro rata on the basis of their respective Initial Loan Commitments. It
--- ----
is understood that no Lender shall be responsible for any default by any other
Lender of its obligation to make its portion of the Initial Loan hereunder and
that each Lender shall be obligated to make its portion of the Initial Loan
hereunder regardless of the failure of any other Lender to fulfill its
commitments hereunder.
2.2 Term Loan and Term Note
-----------------------
A. Term Loan Commitment. Subject to the terms and conditions of this
--------------------
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, the Lenders hereby severally agree, on the Conversion Date, if
the Initial Loans have not been repaid, to convert the then outstanding
principal amount of the Initial Notes into a term loan (the "Term Loan"), such
---------
Term Loan to be in the aggregate principal amount of the then outstanding
principal amount of the Initial Notes. The Lenders' commitments to make the
Term Loan to Borrower pursuant to this Section 2.2A are herein called
individually, the "Term Loan Commitment" and collectively, the "Term Loan
-------------------- ---------
Commitments".
-----------
B. Notice of Conversion/Borrowing. If Borrower has not repaid the
------------------------------
Initial Loan in full on or prior to the Conversion Date, then Borrower shall
convert the then outstanding principal amount of the Initial Notes into a Term
Loan under this Section 2.2. Borrower shall deliver to the Lenders a Notice of
Conversion no later than 11:00 A.M., at least two Business Days in advance of
the Conversion Date. The Notice of Conversion shall specify the principal
amount of the Initial Notes outstanding on the Conversion Date to be converted
into a Term Loan.
C. Making of Term Loan. Upon satisfaction or waiver of the
-------------------
conditions precedent specified in Section 3.2 hereof, each Lender shall extend
to Borrower the Term Loan to be issued on the Conversion Date by such Lender by
cancelling on its records a corresponding principal amount of the Initial Notes
held by such Lender, which corresponding principal amount of the Initial Notes
shall be satisfied by the conversion into a Term Loan in accordance with this
Section 2.2.
D. Maturity Date of Term Loan. The Term Loan shall mature and
--------------------------
Borrower shall pay in full the outstanding principal amount thereof and accrued
interest thereon on April 1, 2008 (the "Maturity Date").
-------------
E. Term Notes. Borrower, as borrower, shall execute and deliver to
----------
each Lender on the Conversion Date which requests a Term Note, a Term Note dated
the Conversion Date substantially in the form of Exhibit B to evidence the Term
---------
Loan made on such date, in the principal amount of the Initial Notes held by
such Lender on such date and with other appropriate insertions (collectively,
the "Original Term Notes"). On or after the Conversion Date, on each interest
-------------------
payment date on which Borrower elects to pay a PIK Interest Amount pursuant to
Section 2.3B (if and to the extent Borrower is permitted to pay a PIK Interest
Amount in lieu of cash), Borrower shall execute and deliver to each Lender on
such interest payment date a note dated such interest payment date substantially
in the form of Exhibit B in a principal amount equal to such
---------
-43-
Lender's pro rata portion of such PIK Interest Amount and with other appropriate
--- ----
insertions (each a "Subsequent Term Note" and, together with the Original Term
--------------------
Notes, the "Term Notes"). A Subsequent Term Note shall bear interest at the same
---- -----
rate borne by all Term Notes.
2.3 Interest on the Loans
---------------------
A. Rate of Interest. (i) The Initial Loan shall bear interest on
----------------
the unpaid principal amount thereof from the Closing Date through maturity
(whether by prepayment, acceleration or otherwise) for each Monthly Period (or
part thereof) at a rate per annum equal to the lesser of (x) the greater of (1)
--- -----
the Applicable Rate for such period plus the Applicable Spread; or (2) 10% or
----
(y) the Maximum Interest Rate.
(ii) The Term Loan shall bear interest on the unpaid principal amount
thereof from the date made through maturity (whether by prepayment, acceleration
or otherwise) for each Six Month Period (or part thereof) at a rate per annum
--- -----
equal to the lesser of (x) the greater of (1) the Applicable Rate plus the
----
Applicable Spread or (2) 10% or (y) the Maximum Interest Rate. At any time
after the Conversion Date, at the request of any Lender, all or any portion of
the Term Loan owing to such Lender shall bear interest at a fixed rate per annum
--- -----
equal to the rate in effect as of the Notice Date, effective for such portion so
elected by such Lender from and after the first interest payment date with
respect to such Term Loan after such notice; provided, however, that no such
-------- -------
conversion shall be permitted in respect of amounts to be voluntarily prepaid
following receipt of a notice of prepayment pursuant to Section 2.5A. In order
to request the conversion of such portion of the Term Loan to a fixed rate loan,
the Lender shall notify the Arranger in writing (the date of such notice, the
"Notice Date") of its intention to do so at least five Business Days and not
-----------
greater than 10 Business Days prior to the next succeeding interest payment date
indicating the amount of the Term Loan for which it is requesting conversion to
a fixed rate Term Loan, and the Arranger shall so notify Borrower at least two
Business Days prior to such next succeeding interest payment date. Upon the
conversion of a portion of a Term Loan to a fixed rate Term Loan an appropriate
notation will be made on the Term Note and, on and after the first interest
payment date following the receipt by Borrower of a notice hereunder, such
portion of the Term Loan which is converted to a fixed rate Term Loan (and any
Exchange Note issued in respect thereof) shall bear interest at the rate in
effect on the applicable Notice Date until repaid.
B. Interest Payments. Interest shall be payable (i) with respect to
-----------------
the Initial Loan, monthly in arrears on the last day of each month beginning
April 30, 1998, and ending on the Conversion Date, upon any prepayment of the
Initial Loan (to the extent accrued on the amount being prepaid) and at maturity
of the Initial Loan in respect of any amounts paid on such date and not
converted to Term Loans and (ii) with respect to the Term Loan, quarterly in
arrears on each March 31, June 30, September 30 and December 31 of each year
(each, a "Quarterly Date"), commencing on the first of such dates to follow the
--------------
Conversion Date, upon any prepayment of the Term Loan (to the extent accrued on
the amount being prepaid) and at maturity of the Term Loan. If any Term Loan is
converted to a fixed rate Term Loan pursuant to Section 2.3A(ii), the interest
payment dates with respect thereto shall be each March 31 and September 30 of
each year, beginning with the first of such dates to occur after the first
Quarterly Date after the applicable Notice Date, and upon prepayment (to the
extent of the amount being prepaid) and at the maturity thereof.
If, on any interest payment date, the interest accrued for the period
prior to such interest payment date exceeds the amount that would have accrued
at the Maximum Cash Interest Rate, Borrower may pay all or a portion of the
interest payable in excess of the amount of interest that would be payable on
such date at the Maximum Cash Interest Rate by issuance of Subsequent Initial
Notes or Subsequent Term Notes, as the case may be, in an aggregate principal
amount equal to the amount of such interest being so paid in Subsequent Initial
Notes or Subsequent Term Notes (the "PIK Interest Amount"); provided, however,
------------------- -------- -------
that any ac-
-44-
crued interest unpaid on the due date of the payment of principal of any Loan
shall be paid solely in cash on the principal so due.
C. Post-Maturity Interest. Any principal payments on the Loans not
-----------------------
paid when due and, to the extent permitted by applicable law, any interest
payment on the Loans not paid when due, in each case whether at stated maturity,
by acceleration or otherwise, shall thereafter bear interest payable upon demand
at a rate which is 2.00% per annum in excess of the rate of interest otherwise
--- -----
payable under this Agreement for the Loans.
D. Computation of Interest. Interest on the Loans shall be computed
-----------------------
on the basis of a 360-day year and the actual number of days elapsed in the
period during which it accrues (and with respect to any Term Loan converted to a
fixed rate Term Loan pursuant to Section 2.3A(ii), 12 months, each consisting of
30 days). In computing interest on the Loans, the date of the making of the
Loans shall be included and the date of payment shall be excluded; provided,
--------
however, that if a Loan is repaid on the same day on which it is made, one day's
-------
interest shall be paid on that Loan.
2.4 Letter Agreements
-----------------
Borrower agrees to pay to the Agents and certain of their respective
Affiliates the fees set forth in the Commitment Letter and Fee Letter.
2.5 Prepayments; Mandatory Offers and Payments
------------------------------------------
A. Prepayments and Mandatory Offers.
--------------------------------
(i) Voluntary Prepayments of Loans.
------------------------------
(a) Voluntary Prepayments of Initial Loan. Borrower may, upon not
-------------------------------------
less than three Business Days' prior written or telephonic notice confirmed
in writing to the Arranger, at any time and from time to time, prepay the
Initial Loan without penalty or premium and in whole or in part in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 in
excess of that amount.
Amounts of the Initial Loan so prepaid may not be reborrowed.
(b) Voluntary Prepayments of Term Loan.
----------------------------------
(1) Voluntary Prepayment. Except as provided in this Section
--------------------
2.5A(i)(b), Borrower may not prepay the Term Loan prior to April 1, 2003.
Borrower may, upon not less than 20 Business Days' prior written or
telephonic notice confirmed in writing to the Arranger at any time and from
time to time, on and after April 1, 2003, prepay the Term Loan, in whole or
in part, in an aggregate minimum amount of $500,000 and integral multiples
of $100,000 in excess of such amount, at 100% of the principal amount
thereof, plus a premium equal to, for each Lender, the interest rate in
effect on such Lender's portion of the Term Loan on the date notice of
prepayment is given multiplied by the following factor plus accrued and
unpaid interest thereon, if any, to the date of prepayment if prepaid
during the twelve-month period commencing on April 1 of the year set forth
below:
-45-
YEAR PREMIUM FACTOR
2003.................................................. 1/2
2004.................................................. 1/3
2005.................................................. 1/6
2006 and thereafter................................... 0
(2) Voluntary Prepayment upon Public Equity Offering or ASkyB
---------------------------------------------------------
Transaction. Prior to April 1, 2001, Borrower may, other than in any
-----------
circumstance resulting in a Change of Control, prepay up to an aggregate
principal amount of the Term Loan equal to 35% of the aggregate principal
amount of the Term Loan outstanding on the Conversion Date at a prepayment
price equal to the principal amount of the Term Loan so prepaid, plus a
premium equal to, for each Lender, the rate of interest in effect on such
Lender's portion of the Term Loan on the date notice of prepayment is
given, plus accrued and unpaid interest thereon, if any, to the prepayment
date with the net cash proceeds of (a) one or more Public Equity Offerings
of common equity of Borrower and/or (b) a sale or series of related sales
of Qualified Equity Interests of Borrower to Strategic Equity Investors, in
any such case resulting in gross cash proceeds to Borrower of at least
$100.0 million in the aggregate; provided, however, that at least an
-------- -------
aggregate principal amount of the Term Loan equal to 65% of the aggregate
principal amount of the Term Loan outstanding on the Conversion Date would
remain outstanding immediately after giving effect to any such prepayment
(excluding any Term Loan owned by Borrower or any of its Affiliates).
Notice of any such prepayment must be given within 60 days after date of
the last Public Equity Offering or sale of Qualified Equity Interests of
Borrower to Strategic Equity Investors resulting in gross cash proceeds to
Borrower, when aggregated with all prior Public Equity Offerings and sales
of Qualified Equity Interests of Borrower to Strategic Equity Investors, of
at least $100.0 million.
In addition, prior to April 1, 2001, Borrower may prepay up to an
aggregate principal amount of the Term Loan equal to 25% of the aggregate
principal amount of the Term Loan outstanding on the Conversion Date at a
prepayment price equal to the principal amount of the Term Loan so prepaid,
plus a premium equal to, for each Lender, the rate of interest in effect on
such Lender's portion of the Term Loan on the date notice of prepayment is
given, plus accrued and unpaid interest thereon, if any, to the prepayment
date upon the consummation of the ASkyB Transaction; provided, however,
-------- -------
that at least an aggregate principal amount of the Term Loan equal to 65%
of the aggregate principal amount of the Term Loan outstanding on the
Conversion Date would remain outstanding immediately after giving effect to
any such prepayment (excluding any Term Loan owned by Borrower or any of
its Affiliates). Notice of prepayment must be given within 60 days after
the consummation of the ASkyB Transaction.
(3) Pro Rata Prepayment Under Senior Subordinated Indenture. If any
-------------------------------------------------------
Exchange Notes are outstanding, any prepayment pursuant to Section
2.5A(i)(b)(1), or (2) shall be made pro rata with an optional redemption of
--- ----
Exchange Notes under the Senior Subordinated Indenture.
(4) No Reborrowing. Amounts of the Term Loan so prepaid may not be
--------------
reborrowed.
(ii) Mandatory Prepayments of Initial Loan.
-------------------------------------
(a) Mandatory Prepayments of Initial Loan from Asset Sales and
----------------------------------------------------------
Dispositions of Tempo Satellites. To the extent permitted by all other
--------------------------------
agreements governing any Indebtedness (including the
-46-
New PRIMESTAR Senior Credit Facility and the Partnership Credit Facility)
and after application required to such Indebtedness (or if no such
Indebtedness or any commitment in respect thereof is then outstanding),
Borrower shall, or shall cause its Subsidiaries to, prepay the Initial Loan
(without penalty or premium) with (1) the Net Cash Proceeds received from
any Asset Sale in excess of $5.0 million since the Closing Date, and (2)
the net amount of cash received by Borrower or any of its Subsidiaries
pursuant to any agreement or arrangement upon the sale or other disposition
by TSAT of any Tempo Satellite in excess of $5.0 million since the Closing
Date, in each case on a date not later than five (5) Business Days after
the date of the application to all other Indebtedness so required as a
result of the consummation of such Asset Sale or sale or disposition of a
Tempo Satellite.
(b) Mandatory Prepayments of Initial Loan from Capital Contributions
----------------------------------------------------------------
or Issuances of Securities. Concurrently with the receipt by Borrower or
--------------------------
any Subsidiary of proceeds from the issuance of Securities or from any
capital contribution (other than proceeds received from Securities issued
by Borrower or any Subsidiary to Borrower or any Subsidiary and other than
to the extent no cash proceeds are received (such as where the
consideration provided to the seller in an acquisition is Securities and
other than proceeds of any capital contribution by Borrower or any
Restricted Subsidiaries to Borrower or any Restricted Subsidiaries and
other than capital contributions or payments contemplated by the
Restructuring Agreements as in effect on the Closing Date)), Borrower shall
prepay the Initial Loan in a principal amount equal to the lesser of the
cash proceeds thereof (net of expenses payable by Borrower in connection
with the issuance thereof and net of accrued interest due pursuant to
Section 2.5A(iii) as a result of such prepayment) or the aggregate
principal amount of the Initial Notes then outstanding.
(c) Notice. Borrower shall notify the Arranger of any prepayment to
------
be made pursuant to this Section 2.5A(ii) at least two Business Days prior
to such prepayment date (unless shorter notice is satisfactory to the
Required Lenders).
(iii) Borrower's Mandatory Prepayment Obligation; Application of
----------------------------------------------------------
Prepayments. All prepayments shall include payment of accrued interest on
-----------
the principal amount so prepaid and shall be applied to payment of interest
before application to principal.
(iv) Mandatory Offer to Purchase Initial Notes and Term Notes.
--------------------------------------------------------
(a) Mandatory Offer to Purchase Term Notes on Change of Control. (1)
-----------------------------------------------------------
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), Borrower shall notify the
----------------------
Arranger and the Lenders of such occurrence in the manner prescribed by
this Agreement and shall, within 20 days after the Change of Control Date,
make an Offer to Purchase all Term Notes then outstanding at a purchase
price in cash equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the Purchase Date.
Borrower's obligations may be satisfied if a third party makes the Offer to
Purchase in the manner, at the times and otherwise in compliance with the
requirements of this Agreement applicable to an Offer to Purchase made by
Borrower and purchases all Term Notes validly tendered and not withdrawn
under such Offer to Purchase. Each Lender shall be entitled to tender all
or any portion of the Term Notes owned by such Lender pursuant to the Offer
to Purchase, subject to the requirement that any portion of a Term Note
tendered must be tendered in an integral multiple of $1,000 principal
amount.
(2) On or prior to the Purchase Date specified in the Offer to
Purchase, Borrower shall (i) accept for payment all Term Notes or portions
thereof validly tendered pursuant to the Offer, (ii)
-47-
deposit with the Arranger money sufficient to pay the Purchase Price of all
Term Notes or portions thereof so accepted and (iii) deliver or cause to be
delivered to the Arranger for cancellation all Term Notes so accepted
together with an Officers' Certificate stating the Term Notes or portions
thereof accepted for payment by Borrower. The Arranger shall promptly mail
or deliver to Lenders whose Term Notes are so accepted payment in an amount
equal to the Purchase Price for such Term Notes, and the Arranger shall
promptly authenticate and mail or deliver to each Lender a new Term Note or
Term Notes equal in principal amount to any unpurchased portion of the Term
Note surrendered as requested by the Lender. Any Term Note not accepted for
payment shall be promptly mailed or delivered by Borrower to the Lender
thereof. Borrower shall publicly announce the results of the Offer on or as
soon as practicable after the Purchase Date.
(b) Mandatory Offer to Purchase Initial Notes and Term Notes on Asset
-----------------------------------------------------------------
Sale. Borrower shall, within 20 days after each Trigger Date, make an
----
Offer to Purchase all outstanding Notes up to a maximum principal amount
(expressed as a multiple of $1,000) of Notes equal to the Note Portion of
Unutilized Net Cash Proceeds. Such Offer to Purchase shall be made at a
purchase price in cash equal to 100% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the Purchase Date;
provided, however, that the Offer to Purchase may be deferred until there
-------- -------
are aggregate Unutilized Net Cash Proceeds equal to or in excess of $15.0
million, at which time the entire amount of such Unutilized Net Cash
Proceeds, and not just the amount in excess of $15.0 million, shall be
applied as required pursuant to this paragraph.
In the event that any other Indebtedness of Borrower which ranks pari
----
passu with the Securities (including the Senior Subordinated Discount
-----
Notes) (the "Other Indebtedness") requires that an offer to purchase to be
------------------
made to repurchase such Other Indebtedness upon the consummation of any
Asset Sale, Borrower may apply the Unutilized Net Cash Proceeds otherwise
required to be applied to an Offer to Purchase to offer to purchase such
Other Indebtedness and to an Offer to Purchase so long as the amount of
such Unutilized Net Cash Proceeds applied to repurchase the Notes is not
less than the Note Portion of Unutilized Net Cash Proceeds. With respect
to any Unutilized Net Cash Proceeds, Borrower shall make the Offer to
Purchase in respect thereof at the same time as the analogous offer to
purchase is made under the Senior Subordinated Indenture and pursuant to
any Other Indebtedness and the Purchase Date in respect thereof shall be
the same as the purchase date in respect thereof pursuant to the Senior
Subordinated Indenture and pursuant to any Other Indebtedness.
For purposes of this Section 2.5A(iv)(b), "Note Portion of Unutilized
--------------------------
Net Cash Proceeds" means the amount of the Unutilized Net Cash Proceeds
-----------------
equal to the product of (x) the Unutilized Net Cash Proceeds and (y) a
fraction the numerator of which is the principal amount of all Notes
tendered pursuant to the Offer to Purchase related to such Unutilized Net
Cash Proceeds (the "Note Amount") and the denominator of which is the sum
-----------
of the Note Amount and the lesser of the aggregate principal face amount or
accreted value as of the relevant purchase date of all Other Indebtedness
tendered pursuant to a concurrent offer to purchase such Other Indebtedness
made at the time of such Offer to Purchase.
With respect to any Offer to Purchase effected pursuant to this
Section 2.5A(iv)(b), as among the Term Notes, to the extent that the
principal amount of the Notes tendered pursuant to such Offer to Purchase
exceeds the Note Portion of Unutilized Net Cash Proceeds with respect
thereto, such Notes shall be purchased pro rata based on the principal
--- ----
amount of such Term Notes tendered by each Lender.
-48-
Each Lender shall be entitled to tender all or any portion of the
Notes owned by such Lender pursuant to the Offer to Purchase, subject to
the requirement that any portion of a Note tendered must be tendered in an
integral multiple of $1,000 principal amount and subject to any proration
among tendering Lenders as described above.
B. Manner and Time of Payment. All payments of principal and
--------------------------
interest and fees hereunder and under the Notes by Borrower shall be made
without defense, set-off or counterclaim and in same-day funds and delivered to
the Arranger, unless otherwise specified, not later than 12:00 Noon (New York
time) on the date due at the Payment Office for the account of the Lenders;
funds received by the Arranger after that time shall be deemed to have been paid
by Borrower on the next succeeding Business Day. Borrower hereby authorizes the
Arranger to charge its account with the Arranger in order to cause timely
payment to be made of all principal, interest and fees due hereunder (subject to
sufficient funds being available in its account for that purpose).
C. Payments on Non-Business Days. Whenever any payment to be made
-----------------------------
hereunder or under the Notes shall be stated to be due on a day which is not a
Business Day, the payment shall be due on the next succeeding Business Day and
such extension of time shall be included in the computation of the payment of
interest hereunder or under the Notes or of the commitment and other fees
hereunder, as the case may be.
D. Notation of Payment. Each Lender agrees that before disposing of
-------------------
any Note held by it, or any part thereof (other than by granting participations
therein), such Lender will make a notation thereon of all principal payments
previously made thereon and of the date to which interest thereon has been paid
and will notify Borrower of the name and address of the transferee of that Note;
provided, however, that the failure to make (or any error in the making of) such
-------- -------
a notation or to notify Borrower of the name and address of such transferee
shall not limit or otherwise affect the obligation of Borrower hereunder or
under such Notes with respect to the Loans and payments of principal or interest
on any such Note.
2.6 Use of Proceeds
---------------
A. Initial Loan. The proceeds of the Initial Loan shall be applied
------------
by Borrower, together with borrowings under the New PRIMESTAR Senior Credit
Facility, to pay Transaction Costs and to consummate the Restructuring
Transaction and the Existing Facility Repayment.
B. Term Loan. The proceeds of the Term Loan shall be used to cancel
---------
any outstanding amount of Initial Notes converted to Term Notes on such date.
C. Margin Regulations. No portion of the proceeds of any borrowing
------------------
under this Agreement shall be used by Borrower in any manner to purchase or
carry Margin Stock within the meaning of the applicable requirements of
Regulation T, U, or X or any other regulation of the F.R.S. Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.7 Breakage; Illegality
--------------------
A. Breakage. Upon (i) failure to make any Loan upon receipt of
--------
Notice of Borrowing, (ii) failure to make any Conversion upon receipt of Notice
of Conversion, or (iii) any prepayment of principal of any Loan under Section
2.5 or acceleration of maturity of the Loans or Notes pursuant to Section 7 or
for any other reason, other than on the last day of the applicable Interest
Period therefor, Borrower shall pay upon demand by any Lender the amount
required to compensate such Lender for any losses, costs or expenses
-49-
which it may reasonably incur as a result of such failure, payment or
acceleration, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain any Loan.
B. Illegality. Notwithstanding any other provision of this
----------
Agreement, if the introduction of or any change in any law or regulation or in
the interpretation of any law or regulation shall make it unlawful, or any
central bank or other Governmental Authority shall assert that it is unlawful,
for any Lender or its lending office to perform its obligations hereunder to
make available LIBOR Loans or to continue to fund or maintain LIBOR Loans
hereunder, then, on notice thereof and demand therefor by such Lender to
Borrower through the Arranger, such Lender's Loans will automatically, upon such
demand, Convert into an Alternate Base Rate Loan until the Arranger shall notify
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist.
SECTION 3. CONDITIONS TO LOANS
3.1 Conditions to Initial Loan
--------------------------
The effectiveness of the Loan Documents and the obligations of the
Lenders to make the Initial Loan are subject to prior or concurrent satisfaction
of each of the following conditions:
A. Corporate Proceedings, Documents, Resolutions, Etc. On or before
--------------------------------------------------
the Closing Date, all corporate and other proceedings taken or to be taken by
each Loan Party, each Partner and each Affiliate of each Partner in connection
with the Transactions and all documents incidental thereto not previously found
acceptable by the Required Lenders and Agents shall be reasonably satisfactory
in form and substance to the Required Lenders and the Agents, and the Agents
shall have received on behalf of the Lenders the following items, each of which
shall be in form and substance reasonably satisfactory to the Required Lenders
and the Agents and, unless otherwise noted, dated the Closing Date:
1. Charter. A certified copy of each Loan Party's charter, together
-------
with a certificate of status, compliance, good standing or the like with
respect to each Loan Party issued by the appropriate government officials
of the jurisdiction of its organization, each to be dated a recent date
prior to the Closing Date;
2. Bylaws. A copy of each Loan Party's bylaws, certified as of the
------
Closing Date by its Secretary or one of its Assistant Secretaries;
3. Resolutions. Resolutions of the Board of Directors of each Loan
-----------
Party, approving and authorizing the execution, delivery and performance of
each Loan Document to which it is a party, and any other documents,
instruments and certificates required to be executed by such Loan Party in
connection herewith and with the Transactions and approving and authorizing
the execution, delivery and payment of the Notes, each such resolution
certified as of the Closing Date by its Secretary or one of its Assistant
Secretaries as being in full force and effect without modification or
amendment;
4. Incumbency Certificates. Signature and incumbency certificates of
-----------------------
each officer of any Loan Party executing any Loan Document;
-50-
5. Executed Agreement and Notes. Executed copies of this Agreement
----------------------------
and, for each Lender that requests an Initial Note prior to the Closing
Date, the Initial Notes substantially in the form of Exhibit A executed in
---------
accordance with Section 2.1D, drawn to the order of the Lenders and with
appropriate insertions;
6. Notice of Borrowing. An originally executed Notice of Borrowing
-------------------
substantially in the form of Exhibit D, signed by the President or a Vice
---------
President of Borrower on behalf of Borrower;
7. Legal Opinions. Originally executed copies of one or more
--------------
favorable written opinions of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel for the
Loan Parties, substantially in the form of Exhibit H and addressed to the
---------
Agents on behalf of the Lenders;
8. Restructuring Agreements and Closing Documents. (i) Executed or
----------------------------------------------
conformed copies of each Restructuring Agreement and any amendments thereto
made on or prior to the Closing Date, (ii) an Officers' Certificate from
Borrower stating that each Restructuring Agreement is on the Closing Date
in full force and effect with respect to Borrower and, to Borrower's
knowledge, with respect to each other party thereto and no material term or
condition thereof has been amended, modified or waived from the form most
recently provided to the Lenders and the Agents a reasonable time prior to
the Closing Date except with the prior written consent of the Required
Lenders and the Agents, (iii) an Officers' Certificate from Borrower
stating that Borrower and each of its Subsidiaries party thereto has
performed or complied with all agreements and conditions contained in each
Restructuring Agreement and any agreements or documents referred to therein
required to be performed or complied with by such party on or before the
Closing Date, and neither Borrower nor any of its Subsidiaries is in
default in the performance or compliance with any of the terms or
provisions thereof, and (iv) all closing documents relating to the
Restructuring Transaction and all such counterpart originals or certified
copies of such documents, instruments, certificates and opinions as the
Required Lenders or the Agents may reasonably request;
9. New PRIMESTAR Senior Credit Facility. (i) Executed or conformed
------------------------------------
copies of the New PRIMESTAR Senior Credit Facility and any amendments
thereto made on or prior to the Closing Date, (ii) an Officers' Certificate
from Borrower stating that the New PRIMESTAR Senior Credit Facility is in
full force and effect on the Closing Date and no material term or condition
thereof has been amended, modified or waived from the form most recently
provided to the Lenders and the Agents a reasonable time prior to the
Closing Date except with the prior written consent of the Required Lenders
and the Agents, (iii) an Officers' Certificate from Borrower stating that
Borrower and each of its Subsidiaries party thereto has performed or
complied with all agreements and conditions contained in the New PRIMESTAR
Senior Credit Facility and any agreements or documents referred to therein
required to be performed or complied with by such party on or before the
Closing Date, and neither Borrower nor any of its Subsidiaries is in
default in the performance or compliance with any of the terms or
provisions thereof and (iv) all closing documents relating to the New
PRIMESTAR Senior Credit Facility and all such counterpart originals or
certified copies of such documents, instruments, certificates and opinions
as the Required Lenders or the Agents may reasonably request;
10. Public Documents. Copies of all documents and materials filed
----------------
publicly by Borrower and TSAT in connection with the Restructuring
Transaction and the other Transactions;
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11. Pro Forma Balance Sheet. A primary condensed pro forma combined
-----------------------
balance sheet which meets the requirements of Regulation S-X under the
Securities Act of Borrower and its Subsidiaries dated as of September 30,
1997, immediately after giving effect to the Transactions and the
incurrence of all obligations contemplated herein, which pro forma combined
balance sheet shall be in form and substance satisfactory to the Agents and
the Required Lenders and consistent in all material respects with the
proposed legal and capital structure (both debt and equity) and the
forecast previously provided to the Lenders, which shall be satisfactory in
all respects to the Agents.
12. Solvency Certificate. An Officers' Certificate from the chief
--------------------
financial officer of Borrower, in form and substance satisfactory to the
Arranger, together with such other evidence reasonably requested by the
Agents or the Lenders with respect to the solvency of Borrower immediately
after giving effect to the Transactions and the other transactions
contemplated hereby;
13. Officers' Certificates. An Officers' Certificate from Borrower
----------------------
in form and substance satisfactory to the Arranger stating that (i) the
representations and warranties in Section 4 are true, correct and complete
on and as of the Closing Date to the same extent as though made on and as
of that date (or if such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date), (ii) all
conditions to the consummation of the Restructuring Transaction have been
satisfied (or provisions satisfactory to the Agents have been made for the
satisfaction thereof) substantially on the terms set forth in the
Restructuring Agreements and have not been waived or amended without the
prior written consent of the Required Lenders and the Agents, and (iii) all
conditions precedent set forth herein to the making of the Initial Loan
have been satisfied (to the best knowledge of Borrower with respect to
Section 3.1K to the extent relating to Persons other than Borrower and
TSAT);
14. Other Documents. Executed or conformed copies of all other
---------------
material agreements executed in connection with the Transactions including
all such other legal opinions, corporate documents and other documents
and/or certificates as the Lenders or the Agents may reasonably request.
B. New PRIMESTAR Senior Credit Facility. The New PRIMESTAR Senior
------------------------------------
Credit Facility shall have been entered into by each of the parties thereto and
shall be in full force and effect with commitments thereunder for not less than
$650.0 million, of which not less than $100 million shall be drawn on the
Closing Date to effect the Restructuring Transaction, and the Required Lenders
and the Agents shall be satisfied (i) with all terms and conditions of the New
PRIMESTAR Senior Credit Facility and all other agreements to be entered into in
connection therewith, and (ii) that no term thereof has been amended, modified
or waived since the draft most recently delivered to the Lenders a reasonable
period of time prior to the Closing Date. All conditions precedent to the
extensions of credit under the New PRIMESTAR Senior Credit Facility shall have
been satisfied (or provisions satisfactory to the Agents have been made for the
satisfaction thereof) (without waiver or amendment thereof) other than the
consummation of the Restructuring Transaction and delivery of opinion letters
(but which shall have been negotiated), and the Agents and the Lenders shall
have received satisfactory evidence of the same.
C. Assumption Agreements. The Assumption Agreements shall each have
---------------------
been duly authorized, executed and delivered by each of the parties thereto and
shall be in full force and effect. All conditions precedent to the assignments
and releases under each Assumption Agreement shall have been satisfied.
D. Restructuring Agreements. Each Restructuring Agreement and other
------------------------
agreement (including debt assumption agreements) to be entered into in
connection with the Transactions and the TSAT
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Merger shall have been entered into by each of the parties thereto and shall be
in full force and effect, and the Required Lenders and the Agents shall be
satisfied (a) with all the terms and conditions of each Restructuring Agreement
and all other agreements to be entered into in connection therewith, and (b)
that no term thereof has been amended, modified or waived since the draft most
recently delivered to and approved by the Lenders, a reasonable period of time
prior to the Closing Date. All conditions precedent to the consummation of the
Restructuring Transaction under each Restructuring Agreement shall have been
satisfied (or provisions satisfactory to the Agents have been made for the
satisfaction thereof) (without waiver or amendment thereof) and delivery of
opinion letters (but which shall have been negotiated) the Agents and the
Lenders shall have received satisfactory evidence of the same.
E. No Other Debt. After giving effect to the Transactions and the
-------------
other transactions contemplated hereby, Borrower and its Subsidiaries shall have
outstanding no Indebtedness or Preferred Stock (or guarantee or other contingent
obligation in respect thereof) other than (a) the loans and other obligations
under the New PRIMESTAR Senior Credit Facility and the Partnership Credit
Facility, (b) the Existing Notes, (c) the Initial Loan, and (d) such other
Indebtedness and contingent obligations (including the Reimbursement Agreements)
as are on terms and conditions and in amounts reasonably acceptable to the
Required Lenders, and are set forth in Schedule 3.1E, and in no event are
-------------
materially different from the Indebtedness and contingent obligations of New
PRIMESTAR to be in place upon consummation of the Transactions as described in
the pro forma financial statements included in the Proxy.
--- -----
F. Consummation of Transactions. Each of the Transactions (other
----------------------------
than extensions of credit under this Agreement) shall have been consummated
prior to, or shall be consummated contemporaneously with, the making of the
Initial Loans in all material respects in accordance with the terms hereof and
in accordance with terms of documentation (without the waiver of any material
condition unless consented to by the Required Lenders) that are in form and
substance reasonably satisfactory to the Lenders. The Existing Facility
Repayment shall have been consummated prior to, or shall be consummated
contemporaneously with the making of the Initial Loan in accordance with the
terms of documentation (without the waiver of any material condition unless
consented to by the Required Lenders) that is in form and substance reasonably
satisfactory to the Lenders. All security interests relating to the Partnership
Working Capital Facility shall have been released (with appropriate evidence
thereof provided to the Arranger).
G. Approvals. On or before the Closing Date all requisite
---------
Governmental Authorities and third parties shall have approved or consented to
the Transactions and the other transactions contemplated hereby and by the
Restructuring Agreements (other than the TSAT Merger and the TSAT Tempo
Agreement) and the New PRIMESTAR Senior Credit Facility to the extent required
without the imposition of any material adverse condition, and such approval or
consent shall be in full force and effect (and the Agents shall have received
satisfactory evidence of the same); there shall be no governmental or judicial
action, actual or threatened, that has or could reasonably be expected to have
the effect of restraining, preventing or imposing materially adverse conditions
on any of the Transactions or the other transactions contemplated hereby or by
any Restructuring Agreement or the New PRIMESTAR Senior Credit Facility and with
respect to any pending governmental or judicial action, all appeal periods have
expired. Each of the transactions contemplated by the Restructuring Agreements
that the shareholders of TSAT were solicited by the Proxy to approve shall have
been approved by holders of not less than 66-2/3% of the outstanding voting
power of the Voting Equity Interests of TSAT entitled to vote on the
Restructuring Transaction (and the Agents shall have received satisfactory
evidence of the same from TSAT).
H. No Default Under This Agreement and Other Agreements. No Event of
----------------------------------------------------
Default or Potential Event of Default shall have occurred and be continuing or
would result from the Initial Loan or the No-
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▇▇▇▇ of Borrowing or the Transactions, or from the application of the proceeds
therefrom under this Agreement, the New PRIMESTAR Senior Credit Facility or the
Existing Notes or Existing Indebtedness; all conditions to borrowing under the
New PRIMESTAR Senior Credit Facility shall have been satisfied (or provisions
have been made for satisfaction thereof). No party to any Restructuring
Agreement shall be in breach or default of any material provision of such
Restructuring Agreement.
I. No Legal Bar. The Initial Loan and the use of proceeds thereof
------------
shall not contravene, violate or conflict with, nor involve any Lender in a
violation of, any law, rule, injunction, or regulation or determination of any
Governmental Authority.
J. No Material Adverse Change. There shall not have occurred or
--------------------------
become known in the judgment of the Lenders any condition or event that has
resulted in a Material Adverse Change or that could reasonably be expected to
result in any Material Adverse Change with respect to Borrower, TSAT, Primestar
Partnership or the business (or related properties, assets or affiliates) of any
Partner relating to the distribution of the PRIMESTAR(R) programming service
(each, a "Partner Business"), together with their respective subsidiaries taken
----------------
as a whole, as the case may be (both before and after giving effect to the
Transactions) since December 31, 1996.
K. No Dividends. There shall not have been any dividend or
------------
distribution of any kind declared or paid by Borrower, TSAT or any Partner
Business on its Equity Interests since the date of the latest financial
statements of such entity, respectively, included in the Proxy (other than any
assets (including cash) of any Partner Business not required to be contributed
pursuant to the Restructuring Agreements).
L. No Violation of Law. The Lenders and their counsel shall be
-------------------
satisfied that the consummation of the Transactions and the related financings,
including the funding of the Initial Loan hereunder and the transactions
contemplated by the New PRIMESTAR Senior Credit Facility, shall be in compliance
with all applicable laws, rules and regulations of all Governmental Authorities.
There shall not have been any statute, rule, regulation, injunction or order
applicable to the Transactions or the transactions contemplated by the New
PRIMESTAR Senior Credit Facility, promulgated, enacted, entered or enforced by
any Governmental Authority, nor shall there be pending any Proceeding involving
a substantial likelihood of an order, decree, ruling or finding that would
prohibit, restrict, delay, impose adverse or burdensome restrictions upon or
otherwise materially adversely affect terms and conditions of or the
consummation of the Restructuring Transaction or the transactions contemplated
by the New PRIMESTAR Senior Credit Facility.
M. Fees and Expenses. All accrued fees and expenses (including the
-----------------
reasonable fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, legal counsel to the
Arranger and Lenders) of the Agents and Lenders in connection herewith and with
the Engagement Letter, the Fee Letter and the Commitment Letter shall have been
paid or provisions have been made for payment thereof on the Closing Date.
N. Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties made by Borrower in Section 4, and by each Loan Party in each of
the other Loan Documents to which it is a party, shall be true, complete and
correct on and as of the Closing Date with the same force and effect as if made
on and as of such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific date).
O. Subordination Arrangements. The Required Lenders shall be
--------------------------
satisfied with all terms and conditions (and the documentation therefor) of the
Subordination Arrangements.
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3.2 Conditions to Term Loan
-----------------------
The obligation of the Lenders to make the Term Loan on the Conversion
Date is subject to the prior or concurrent satisfaction or waiver of the
following conditions precedent:
A. Notice of Conversion. The Agents shall have received in
--------------------
accordance with the provisions of Section 2.2B an originally executed Notice of
Conversion.
B. No Bankruptcy. None of Borrower or any of its Material
-------------
Subsidiaries shall be subject to a Bankruptcy Order or a bankruptcy or other
insolvency proceeding and no Event of Default or Potential Event of Default
shall have occurred under Section 7.6, 7.7 or 7.9.
C. No Payment Default. No Event of Default or Potential Event of
------------------
Default (whether matured or not) shall have occurred under Section 7.1.
D. No Acceleration of New PRIMESTAR Senior Credit Facility or
----------------------------------------------------------
Existing Notes. No Event of Default shall have occurred under Section 7.2 with
--------------
respect to the New PRIMESTAR Senior Credit Facility or the Existing Notes.
E. Officers' Certificate. On the Conversion Date, the Agents shall
---------------------
have received an Officers' Certificate from Borrower dated the Conversion Date
and satisfactory in form and substance to the Agents, to the effect that the
conditions in this Section 3.2 are satisfied on and as of the Conversion Date.
F. Term Notes. Borrower shall have executed and delivered to the
----------
Agents on the Conversion Date for delivery to the Lenders Term Notes dated the
Conversion Date substantially in the form of Exhibit B to evidence the Term
---------
Loan, in the principal amount of (which principal amount shall be the aggregate
principal amount of the Initial Loan outstanding on the Conversion Date) the
Term Loan and with other appropriate insertions.
G. Fees and Expenses. All accrued fees and expenses owing to the
-----------------
Agents and the Lenders (including the reasonable fees and expenses of a law firm
serving as counsel to the Agents and Lenders) shall have been paid.
H. Margin Rules. The making of the Term Loan shall not violate
------------
Regulation T, U or X or any other regulation of the F.R.S. Board.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans, Borrower represents and warrants to the Lenders that, at the
time of execution hereof and immediately after giving effect to the consummation
of the Transactions and on the Conversion Date, the following statements are
true, correct and complete:
4.1 Organization, Etc.
-----------------
Borrower and each of its Subsidiaries is a corporation validly
organized and existing and in good standing under the laws of the state or
jurisdiction of its incorporation, is duly qualified to do business
-55-
and is in good standing as a foreign corporation in each jurisdiction where the
nature of its business requires such qualification, and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its Obligations under this Agreement, the
Notes, each other Credit Document and each Restructuring Agreement to which it
is a party and to own and hold under lease its property and to conduct its
business substantially as currently conducted by it.
4.2 Due Authorization, Non-Contravention, Etc.
-----------------------------------------
A. General. The execution, delivery and performance by Borrower of
-------
this Agreement, the Notes, each other Credit Document and each Restructuring
Agreement executed or to be executed by it and the execution, delivery and
performance by each Guarantor of each Credit Document and Restructuring
Agreement executed or to be executed by it are in each case within each such
Person's corporate powers, have been duly authorized by all necessary corporate
action, and do not
(a) contravene any such Person's Organic Documents;
(b) contravene any Contractual Obligation binding on or affecting any
such Person;
(c) contravene any Governmental Approval or Governmental Rule binding
on or affecting any such Person; or
(d) result in, or require the creation or imposition of, any Lien on
any of such Person's Properties (except as expressly permitted by this
Agreement).
B. Subordinated Debt. The making of the Credit Extensions, and the
-----------------
acceptance thereof by Borrower, do not violate the provisions of any
Subordinated Debt Document or of the Existing Indentures.
4.3 Government Approval, Regulation, Etc.
------------------------------------
Except as disclosed in Schedule 4.3 ("Approvals"), no authorization or
------------
approval or other action by, and no notice to or filing with, any Governmental
Authority or other Person (other than those that have been, or on the Closing
Date will be, duly obtained or made and which are, or on the Closing Date will
be, in full force and effect) is required for the due execution, delivery or
performance by Borrower of this Agreement or the Notes or by Borrower or any
Guarantor of any other Credit Document or Restructuring Agreement to which it is
a party. Neither Borrower nor any of its Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
4.4 Validity, Etc.
-------------
This Agreement constitutes, and the Notes, each other Credit Document
and each Restructuring Agreement executed by Borrower or any of its Subsidiaries
will, on the due execution and delivery thereof, constitute, the legal, valid
and binding obligations of Borrower or such Subsidiary, enforceable against
Borrower or such Subsidiary in accordance with their respective terms; and each
Credit Document and Restructuring Agreement executed by each Guarantor will, on
the due execution and delivery thereof by such Guarantor, constitute the legal,
valid and binding obligation of such Guarantor enforceable against such
Guar-
-56-
antor in accordance with its terms (except, in any case above, as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and by
principles of equity).
4.5 Financial Information
---------------------
The financial statements of Borrower and its Subsidiaries heretofore
furnished to the Agents and each Lender have been prepared in accordance with
GAAP. All balance sheets, all statements of operations, shareholders' equity
and cash flows and all other financial information of each of Borrower and its
Subsidiaries furnished pursuant to Section 5.1 have been and will for periods
following the Closing Date be prepared in accordance with GAAP consistently
applied, and do or will present fairly the consolidated financial position of
the corporations covered thereby as at the date thereof and the results of their
operations for the periods then ended, except that quarterly financial
statements need not include footnote disclosure and may be subject to ordinary
year-end adjustment.
4.6 No Material Adverse Change
--------------------------
There has been no Material Adverse Change since December 31, 1996.
4.7 Litigation, Labor Controversies, Etc.
------------------------------------
Except as disclosed in Schedule 4.7 ("Litigation"), there is no
------------
pending or, to the knowledge of Borrower, threatened litigation, action,
proceeding, or labor controversy affecting Borrower or any of its Subsidiaries,
or any of their respective Properties, businesses, assets or revenues, which (a)
could have a Material Adverse Effect or (b) could adversely affect the legality,
validity or enforceability of this Agreement, the Notes, any other Credit
Document or any Restructuring Agreement.
4.8 Compliance with Laws
--------------------
Borrower and its Subsidiaries have complied in all material respects
with all applicable Governmental Approvals and Governmental Rules of any
Governmental Authority having jurisdiction over the conduct of its businesses or
the ownership of its properties.
4.9 Subsidiaries
------------
Borrower has no Subsidiaries, except those Subsidiaries
(a) which are identified in Schedule 4.9 ("Existing Subsidiaries") of
------------
the Disclosure Schedule; or
(b) which are permitted to have been organized or acquired in
accordance with Section 6.5 or Section 6.10.
4.10 Ownership of Properties
-----------------------
Except as permitted pursuant to Section 4.14 or Section 6.3, Borrower
and each of its Subsidiaries owns (a) in the case of owned real property, good
and marketable fee title to, and (b) in the case of owned personal property,
good and valid title to, or, in the case of leased real or personal property,
valid and
-57-
enforceable leasehold interests (as the case may be) in, all of its properties
and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims, except for Liens
permitted pursuant to Section 6.3.
4.11 Taxes
-----
Borrower and each of its Subsidiaries has filed all tax returns and
reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be due and owing, except any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
4.12 Pension and Welfare Plans
-------------------------
During the twelve-consecutive-month period prior to the date of the
execution and delivery of this Agreement and prior to the date of any extension
of credit hereunder, no steps have been taken to terminate any Plan (other than
a standard termination under Section 4041(b) of ERISA), and no contribution
failure has occurred with respect to any Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Plan which might result in the incurrence by
Borrower or any member of the Controlled Group of any material liability, fine
or penalty.
4.13 Environmental Matters
---------------------
Except as set forth in Schedule 4.13 ("Environmental Matters")
-------------
(a) all facilities and property (including underlying groundwater)
owned or leased by Borrower or any of its Subsidiaries have been, and
continue to be, owned or leased by Borrower and its Subsidiaries in
material compliance with all Environmental Laws;
(b) there are no pending or threatened and, to the best of Borrower's
knowledge, there have been not past
(i) claims, complaints, notices or requests for information
received by Borrower or any of its Subsidiaries with respect to any
alleged violation of any Environmental Law, or
(ii) complaints, notices or inquiries to Borrower or any of its
Subsidiaries regarding potential liability under any Environmental
Law;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by Borrower or any of
its Subsidiaries that, singly or in the aggregate, have, or could
reasonably be expected to have, a Material Adverse Effect;
(d) Borrower and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and necessary or
desirable for their businesses;
(e) no property now or previously owned or leased by Borrower or any
of its Subsidiaries is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state
list of sites requiring investigation or clean-up;
-58-
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by Borrower or any of its Subsidiaries that,
singly or in the aggregate, have, or could reasonably be expected to have,
a Material Adverse Effect;
(g) neither Borrower nor any Subsidiary of Borrower has directly
transported or directly arranged for the transportation of any Hazardous
Material to any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material
claims against Borrower or such Subsidiary thereof for any remedial work,
damage to natural resources or personal injury, including claims under
CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by Borrower or
any Subsidiary of Borrower that, singly or in the aggregate, have, or could
reasonably be expected to have, a Material Adverse Effect; and
(i) no conditions exist at, on or under any property now or
previously owned or leased by Borrower which, with the passage of time, or
the giving of notice or both, would give rise to liability under any
Environmental Law.
4.14 Intellectual Property
---------------------
Each of Borrower and its Subsidiaries owns and possesses or licenses
(as the case may be) all such patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service ▇▇▇▇ rights and
copyrights necessary for the conduct of the businesses of Borrower and its
Subsidiaries as now conducted without, individually or in the aggregate, any
infringement upon rights of other Persons, in each case except as could not
reasonably be expected to result in a Material Adverse Effect, and there is no
individual patent, patent right, trademark, trademark right, trade name, trade
name right, service ▇▇▇▇, service ▇▇▇▇ right or copyright the loss of which
could reasonably be expected to have a Material Adverse Effect, except as may be
disclosed in Schedule 4.14 ("Intellectual Property").
-------------
4.15 Regulations T, U and X
----------------------
Neither Borrower nor any of its Subsidiaries is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loan will be used to purchase or carry margin
stock or otherwise for a purpose which violates, or would be inconsistent with,
F.R.S. Board Regulation T, U or X. Terms for which meanings are provided in
F.R.S. Board Regulation T, U or X or any regulations substituted therefor, as
from time to time in effect, are used in this Section with such meanings.
4.16 Accuracy of Information
-----------------------
None of the factual information heretofore or contemporaneously
furnished by or on behalf of Borrower in writing to any Agent, or any Lender for
purposes of or in connection with this Agreement or any transaction contemplated
hereby (true and complete copies of which were furnished to the Agents and each
Lender in connection with its execution and delivery hereof), contains any
untrue statement of a material fact on the date as of which such information is
dated or certified, and none of the other factual information hereafter
furnished in connection with this Agreement or any other Credit Document or any
Restructuring Agreement by Borrower or any Guarantor to any Agent or any Lender
will contain any untrue statement of a mate-
-59-
rial fact on the date as of which such information is dated or certified and, as
of the date of the execution and delivery of this Agreement by the Agents and
each Lender, the information delivered prior to the date of execution and
delivery of this Agreement (unless such information specifically relates to a
prior date) does not, and the factual information hereafter furnished shall not
on the date as of which such information is dated or certified, omit to state
any material fact necessary to make any information not misleading under the
circumstances.
SECTION 5. AFFIRMATIVE COVENANTS (INITIAL LOAN AND TERM LOAN)
Borrower covenants and agrees that, until the Loans and the Notes and
all other amounts due under this Agreement have been indefeasibly paid in full
it shall, and shall cause each of its Subsidiaries to, fully and timely perform
all covenants in this Section 5 required to be performed by any of them.
5.1 Financial Information, Reports, Notices, Etc.
--------------------------------------------
Borrower will furnish, or will cause to be furnished, to each Lender
and each Agent copies of the following financial statements, reports, notices
and information:
A. as soon as available and in any event within 45 days (and 60 days,
in the case of Borrower and its Restricted Subsidiaries) after the end of each
of the first three Fiscal Quarters of each Fiscal Year of Borrower, a
consolidated balance sheet of Borrower and its Restricted Subsidiaries and a
consolidated balance sheet of Borrower and its Subsidiaries, in each case as of
the end of such Fiscal Quarter and consolidated statements of earnings and cash
flows of Borrower and its Restricted Subsidiaries and consolidated statements of
earnings and cash flows of Borrower and its Subsidiaries and consolidated
statements of earnings and cash flows of Borrower and its Subsidiaries, in each
case of the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter and a profit and loss statement for such
Fiscal Quarter, certified as complete and correct by the chief financial
Authorized Officer of Borrower;
B. as soon as available and in any event within 90 days (and 105
days, in the case of Borrower and its Restricted Subsidiaries) after the end of
each Fiscal Year of Borrower, a copy of the annual audited financial statements
for such Fiscal Year for Borrower and its consolidated Subsidiaries, including
therein a consolidated balance sheet of Borrower and its Restricted Subsidiaries
as of the end of such Fiscal Year and consolidated statements of earnings and
cash flows of Borrower and its Restricted Subsidiaries for such Fiscal Year, in
each case as audited (without any Impermissible Qualification) by KPMG Peat
Marwick or independent public accountants of national standing acceptable to the
Agents;
C. Borrower shall deliver to the Lenders within 45 days after the end
of each of the first three Fiscal Quarters of Borrower and within 90 days after
the close of each Fiscal Year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of Borrower has been made under the supervision
of the signing officers with a view to determining whether a Potential Event of
Default or Event of Default has occurred and whether or not the signers know of
any Potential Event of Default or Event of Default by Borrower that occurred
during such Fiscal Quarter or Fiscal Year. If they do know of such a Potential
Event of Default or Event of Default, the certificate shall describe all such
Potential Events of Defaults or Events of Default, their status and the action
Borrower is taking or proposes to take with respect thereto. The first
certificate to be delivered by Borrower pursuant to this Section 5.1C shall be
for the Fiscal Quarter ending June 30, 1998.
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D. as soon as possible and in any event within three Business Days
after Borrower or any of its Subsidiaries obtains knowledge of the occurrence of
a Potential Event of Default, a statement of the chief executive, financial or
accounting Authorized Officer of Borrower setting forth details of such
Potential Event of Default and the action which Borrower has taken and proposes
to take with respect thereto;
E. as soon as possible and in any event within three Business Days
after Borrower or any of its Subsidiaries obtains knowledge of (x) the
occurrence of any material adverse development with respect to any litigation,
action, proceeding or labor controversy of the type and materiality described in
Schedule 6.7 ("Litigation"), or (y) the commencement of any litigation, action,
proceeding or labor controversy of the type and materiality described in
Schedule 6.7 ("Litigation"), notice thereof and, to the extent the Agents
reasonably request, copies of all documentation relating thereto;
F. promptly after the sending or filing thereof, copies of all
reports and registration statements which Borrower or any of its Subsidiaries
files with the SEC or any national securities exchange;
G. immediately upon becoming aware of (i) the institution of any
steps by Borrower or any other Person to terminate any Pension Plan (other than
a standard termination under Section 4041(b) of ERISA), (ii) the failure to make
a required contribution to any Pension Plan if such failure is sufficient to
give rise to a Lien under Section 302(f) of ERISA, (iii) the taking of any
action with respect to a Pension Plan which would result in the requirement that
Borrower furnish a bond or other security to the PBGC or such Pension Plan, or
(iv) the occurrence of any event with respect to any Pension Plan which could
reasonably be expected to result in the incurrence by Borrower of any material
liability, fine or penalty, notice thereof and copies of all documentation
relating thereto;
H. promptly when available and in any event within 15 Business Days
after the last day of each Fiscal Year of Borrower (commencing after the Closing
Date), a budget for the then current Fiscal Year of Borrower, which budget shall
contain on a quarterly basis a projected statement of earnings and sources and
uses of funds of Borrower and its Restricted Subsidiaries, prepared in
reasonable detail by the chief accounting, financial or executive Authorized
Officer of Borrower; and
I. such other information respecting the condition or operations,
financial or otherwise, of Borrower or any of its Subsidiaries as any Lender may
from time to time reasonably request (including information and reports from the
chief accounting, financial or executive Authorized Officer of Borrower, in such
detail as any Agent or any Lender may reasonably request, with respect to the
terms of and information provided pursuant to Section 5.1C).
5.2 Compliance with Laws, Etc.
-------------------------
Borrower will, and will cause each of its Subsidiaries to, comply in
all material respects with all applicable Governmental Rules and Governmental
Approvals of all Regulatory Authorities, such compliance to include:
A. the maintenance and preservation of Borrower's and its
Subsidiaries' corporate existence; and
B. the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being diligently contested in
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good faith by appropriate proceedings and for which adequate reserves, if
any, in accordance with GAAP shall have been set aside on its books.
5.3 Maintenance of Properties
-------------------------
Borrower will, and will cause each of its Subsidiaries to, maintain,
preserve, protect and keep its properties in good repair, working order and
condition (ordinary wear and tear excepted), and make necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times unless Borrower determines in
good faith that the continued maintenance of any of its properties is no longer
economically desirable.
5.4 Insurance
---------
Borrower shall maintain, and shall cause each of its Subsidiaries to
maintain:
(i) physical damage insurance on all real and personal property on
an all-risk basis (including, loss in transit, flood and earthquake
insurance) and public liability insurance against claims for personal
injury, death or property damage suffered by others upon, in or about any
premises occupied by it or occurring as a result of its ownership,
maintenance or operation of any airplanes, automobiles, trucks or other
vehicles or other facilities (including any machinery used therein or
thereupon) or as the result of the use of products manufactured,
constructed or sold by it or services rendered by it in an amount as is
usually carried by Persons of comparable size engaged in the same or a
similar business and similarly situated;
(ii) such other types of insurance with respect to its business as is
usually carried by Persons of comparable size engaged in the same or a
similar business and similarly situated, and, in any event, all insurance
otherwise required under any Subordinated Debt Document; and
(iii) all worker's compensation or similar insurance as may be
required under the laws of any state or jurisdiction in which it may be
engaged in business.
All insurance shall be provided (1) by insurers authorized by Lloyds of London
to underwrite such risks, (2) by insurers having an A.M. Best policyholders
rating of not less than A- (except with respect to insurers providing insurance
of the type described in clause (iii), in which case such insurers shall have an
A.M. Best policyholders rating of not less than B+) or (3) by such other
insurers as the Agents may approve in writing; provided, however, that if the
-------- -------
rating of any of such insurers is downgraded, Borrower and each of its
Subsidiaries, as the case may be, shall only be required to obtain replacement
insurance with an insurer satisfying the requirements of this clause at the
stated expiration of the insurance policy maintained with the insurer whose
rating was so downgraded.
5.5 Books and Records
-----------------
Borrower will, and will cause each of its Subsidiaries to, keep books
and records which accurately reflect all of its business affairs and
transactions and permit the Agents and each Lender or any of their respective
representatives, at reasonable times and intervals, to visit all of its offices,
to discuss its financial matters with its officers and independent public
accountant (and Borrower hereby authorizes such independent public accountant to
discuss Borrower's financial matters with each Lender or any of their respective
representatives whether or not any representative of Borrower is present) and to
examine (and, at the expense
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of Borrower, photocopy extracts from) any of its books or other corporate
records. Borrower shall pay any fees of such independent public accountant
incurred in connection with any Agent's or any Lender's exercise of its rights
pursuant to this Section 5.5.
5.6 Environmental Covenant
----------------------
Borrower will, and will cause each of its Subsidiaries to:
(i) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with
all applicable Environmental Laws;
(ii) promptly notify the Agents and provide copies upon receipt of
all written claims, complaints, notices or inquiries relating to the
condition of its facilities and properties in respect of, or as to
compliance with, Environmental Laws, and shall promptly resolve any non-
compliance with Environmental Laws and keep its property free of any Lien
imposed by any Environmental Law; and
(iii) provide such information and certifications which the Arranging
Agents may reasonably request from time to time to evidence compliance with
this Section 5.6.
5.7 [Reserved]
----------
5.8 Lenders Meeting
---------------
Borrower will participate in a meeting with the Lenders once during
each fiscal year to be held at a location and a time selected by Borrower and
reasonably satisfactory to the Lenders.
5.9 Use of Proceeds
---------------
Borrower shall apply the proceeds of the Loans solely to finance the
Restructuring Transaction and the Existing Facility Repayment and to pay related
fees and expenses.
5.10 Payments in U.S. Dollars
------------------------
All payments of any Obligations to be made hereunder or under the
Notes by Borrower or any other obligor with respect thereto shall be made solely
in U.S. Dollars or such other currency as is then legal tender for public and
private debts in the United States of America.
5.11 Take-Out Financing
------------------
A. Refinancing of Loans, Initial Notes, Term Notes and Exchange
------------------------------------------------------------
Notes. As soon as practicable after the Closing Date, Borrower will use its
reasonable best efforts to effectuate an offering and sale of the Refinancing
Securities or other debt or equity securities to Persons other than Borrower or
any of its Subsidiaries or such other financing transactions, in each case
reasonably acceptable in form and substance to the Agents after consultation
with Borrower, for the purpose of refinancing the principal amount, as
applicable, of the Loans, Initial Notes, Term Notes and the Exchange Notes and
paying interest accrued thereon and all fees, expenses, commissions and other
amounts payable under the Loan Documents and in connection with the Refi-
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nancing, which will yield an amount sufficient to refinance the principal
amount, as applicable, of the Loans, Initial Notes, Term Notes and the Exchange
Notes and pay interest accrued thereon and all fees, expenses, commissions and
all other amounts payable under the Loan Documents and in connection with the
Refinancing, including, but not limited to:
(i) preparing an offering memorandum for a private offering (the
"Offering") of the Refinancing Securities;
---------
(ii) in the event that the Offering is not consummated, in
connection with any other public offering or private placement of debt
securities, promptly preparing a registration statement or offering
memorandum containing such disclosures as may be appropriate and customary
for such documents, and using its best efforts to cause any such
registration statement to become effective under the Securities Act;
(iii) executing underwriting or placement agreements, to reflect
the terms of the refinancing, and containing covenants, representations and
warranties, indemnities and delivery of legal opinions, officers'
certificates and accountants' comfort letters, all in form and substance
satisfactory to the Agents in their reasonable judgment;
(iv) in connection with any public offering or private placement
of debt or equity securities (including the Refinancing Securities),
offering such securities on terms and conditions, including, but not
limited to, interest rates, yields, maturities, covenants and redemption
dates and prices, as the Agents consider appropriate, in consultation with
Borrower, in light of market conditions and Borrower's financial condition
and prospects at the time of sale, in an amount to be agreed upon by
Borrower and the Agents, but in no event less than an amount which will
provide to Borrower net proceeds sufficient to refinance the indebtedness
under this Agreement and the Senior Subordinated Indenture, and containing
such disclosures as may be appropriate and customary for such documents;
(v) (a) in connection with any private placement of debt
securities (including the Offering), filing and causing to become effective
a registration statement (within such periods of time as the Agents may
reasonably request prior to such private placement) with respect to a
registered offer to exchange (an "Exchange Offer") any such privately
--------------
placed debt securities for notes of Borrower with terms identical in all
material respects (the "exchange notes") to such privately placed debt
--------------
securities (except that the exchange notes will not contain terms with
respect to transfer restrictions or interest rate increases), and causing
such Exchange Offer to be consummated within such period of time as the
Agents may reasonably request prior to such period of time; and (b) in the
event any debt securities are sold in a private placement, causing the debt
or equity securities held by the purchasers (including the Agents or their
Affiliates) in such a private placement to be registered pursuant to such
number of registration statements over such period of time as the Agents
may reasonably request prior to such private placement;
(vi) paying all reasonable costs and expenses of engaging a
qualified independent underwriter in connection with any public offering
and, to the extent necessary, a private placement of debt or equity
securities;
(vii) assisting the Agents or their Affiliates in connection with
the marketing of any debt or equity securities to be offered publicly or
placed privately; and
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(viii) providing such other cooperation and assistance as is
customarily provided by issuers in connection with the private placement
and/or public sale of securities.
B. Required Refinancing of Loans, Notes, Term Notes and Exchange
-------------------------------------------------------------
Notes. Following the Closing Date and upon notice (a "Refinancing Securities
----- ----------------------
Notice") by the Take-Out Banks, Borrower will issue and sell unsecured senior
------
subordinated debt securities (any such securities, the "Required Refinancing
--------------------
Securities") after a full marketing thereof in an amount of up to the lesser of
----------
(a) the aggregate outstanding principal amount, as applicable, of the Loans,
Notes, Term Notes and Exchange Notes (but in no event less than $75 million), or
(b) $500 million upon such terms and conditions as are specified by the Take-Out
Banks in the Refinancing Securities Notice; provided, however, that: (i) the
-------- -------
Take-Out Banks, in their reasonable discretion, shall determine whether the
Required Refinancing Securities issued to refinance the Loans, Notes, Term Notes
and Exchange Notes shall be issued through a registered public offering or a
private placement; (ii) such Required Refinancing Securities will contain such
terms (including registration rights, in the event of a private placement),
conditions and covenants as are customary for similar financings and are
reasonably satisfactory in all respects to the Take-Out Banks; and (iii) all
other arrangements with respect to such Required Refinancing Securities shall be
reasonably satisfactory in all respects to the Take-Out Banks in light of then
prevailing market conditions.
Subject to the foregoing, the Required Refinancing Securities will
have such terms, including interest rates, yields, and redemption prices, as the
Take-Out Banks consider appropriate, in consultation with Borrower, in light of
market conditions, and Borrower's financial condition and prospects at the time
of sale.
5.12 Exchange of Term Notes
----------------------
Borrower will, on the fifth Business Day following the written request
(the "Exchange Request") of the holder of any Term Note (or beneficial owner of
----------------
a portion thereof):
(i) Execute and deliver, cause each Guarantor to execute and
deliver, and cause a bank or trust company acting as trustee thereunder to
execute and deliver, the Senior Subordinated Indenture, if such Senior
Subordinated Indenture has not previously been executed and delivered;
(ii) Execute and deliver to such holder or beneficial owner in
accordance with the Senior Subordinated Indenture a note in the form
attached to the Senior Subordinated Indenture (the "Exchange Notes")
--------------
bearing interest as set forth therein in exchange for such Term Note dated
the date of the issuance of such Exchange Note, payable to the order of
such holder or owner, as the case may be, in the same principal amount as
such Term Note (or portion thereof) being exchanged, and cause each
Guarantor to endorse its guarantee thereon; and
(iii) Execute and deliver, and cause each Guarantor to execute and
deliver, to such holder or owner, as the case may be, a Registration Rights
Agreement in the form of Exhibit G, if such Registration Rights Agreement
---------
has not previously been executed and delivered or, if such Registration
Rights Agreement has previously been executed and delivered and such holder
or owner is not already a party thereto, permit such holder or owner to
become a party thereto.
The Exchange Request shall specify the principal amount of the Term
Notes to be exchanged pursuant to this Section 5.12 which shall be at least
$5,000,000 and integral multiples of $500,000 in excess thereof. Term Notes
delivered to Borrower under this Section 5.12 in exchange for Exchange Notes
shall be cancelled by Borrower and the corresponding amount of the Term Loan
shall be deemed repaid and the Ex-
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change Notes shall be governed by and construed in accordance with the terms of
the Senior Subordinated Indenture.
The bank or trust company acting as trustee under the Senior
Subordinated Indenture shall at all times be a corporation organized and doing
business under the laws of the United States of America or the State of New
York, in good standing and having its principal offices in the Borough of
Manhattan, in The City of New York, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal or State authority and which has a combined capital and surplus of not
less than $50,000,000.
5.13 Register
--------
Borrower hereby designates the Arranger to serve as Borrower's agent,
solely for purposes of this Section 5.13, to maintain a register (the
"Register") on which it will record the Loans made by each of the Lenders and
--------
each repayment in respect of the principal amount of the Loans of each Lender.
Failure to make any such recordation, or any error in such recordation shall not
affect Borrower's obligations in respect of such Loans. With respect to any
Lender, the transfer of the Loan Commitments of such Lender and the rights to
the principal of, and interest on, any Loan made pursuant to such Loan
Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Arranger with respect to ownership of such Loan
Commitments and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Loan Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of
any Loan Commitments and Loans shall be recorded by the Arranger on the Register
only upon the receipt by the Agents of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 12.1A. Coincident with
the delivery of such an Assignment and Assumption Agreement to the Arranger for
acceptance and registration of assignment or transfer of all or part of a Loan,
or as soon thereafter as practicable, the assigning or transferor Lender shall
surrender the Note evidencing such Loan, and thereupon one or more new Notes of
the same type and in the same aggregate principal amount shall be issued to the
assigning or transferor Lender and/or the new Lender.
SECTION 6. NEGATIVE COVENANTS (INITIAL LOAN)
Borrower covenants and agrees that until the earlier of (x) the
satisfaction in full of the Initial Loans and the Initial Notes and all other
Obligations due under this Agreement or (y) the Conversion Date, it shall, and
shall cause each of its Subsidiaries to, fully and timely perform all covenants
in this Section 6 required to be performed by any of them.
6.1 Business Activities
-------------------
Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, engage in any business activity, except
the business of providing satellite broadcasting service to residential and
commercial customers and such activities as are reasonably incidental or
substantially similar thereto.
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6.2 Indebtedness
------------
Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist or otherwise become or be liable in respect of any Indebtedness, other
than, without duplication, the following:
(a) Indebtedness under the New PRIMESTAR Senior Credit Facility in an
aggregate principal amount not to exceed $750 million and other obligations
(including Hedging Obligations in respect of credit extensions thereunder);
(b) Indebtedness identified in Schedule 6.2 ("Ongoing Indebtedness")
------------
of the Disclosure Schedule;
(c) Indebtedness of Borrower in respect of (i) Capitalized Lease
Liabilities, (ii) Indebtedness the proceeds of which are used to acquire an
asset by Borrower (or used to acquire such an asset within 60 days of the
incurrence thereof) and (iii) unsecured Indebtedness; provided, however,
-------- -------
that the aggregate amount of all Indebtedness outstanding pursuant to this
clause (c) at the time any of the same is created, assumed or incurred
(together with the principal amount of all other Indebtedness permitted
under this clause (c)) shall not at any time exceed $200,000,000 at such
time after giving effect thereto and any Permitted Refinancings thereof;
(d) Indebtedness of any Restricted Subsidiary owing to Borrower or
any other Restricted Subsidiary or of Borrower to any Restricted
Subsidiary, which Indebtedness shall not be forgiven or otherwise
discharged for any consideration other than payment in full or in part
(provided that only the amount repaid in part shall be discharged) in cash;
---------
(e) (i) Subordinated Debt of Borrower and (ii) any Permitted
Refinancing thereof; provided, however, that any Permitted Refinancing of
-------- -------
Subordinated Debt must be on terms substantially similar to those in the
Subordinated Debt Documents existing on the Effective Date; and
(f) the Loans, the Guarantees, the Exchange Notes and any Refinancing
Securities, and any guarantee of the Existing Notes by any Guarantor;
provided, however, that no Indebtedness otherwise permitted by clause (d) or (e)
-------- -------
shall be permitted to be incurred if a Potential Event of Default or an Event of
Default has occurred and is continuing or would result therefrom; provided,
--------
further, however, that (1) no Indebtedness permitted under clauses (b) through
------- -------
(e) of this Section 6.2 shall be (i) permitted if such Indebtedness is incurred
in reliance upon a general exception for permitted Indebtedness under any
Subordinated Debt Document unless all other available exceptions for
Indebtedness of such type under such an agreement have been fully utilized by
Borrower or its Subsidiary, as applicable or (ii) designated as "Designated
Senior Indebtedness" (as defined in any Subordinated Debt Document) without the
prior written consent of the Required Lenders, and (2) no Indebtedness may be
incurred pursuant to clauses (a), (c), or (e) if after giving pro forma effect
thereto the Total Debt to Annualized Cash Flow Ratio would be greater than
7.25:1.0.
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6.3 Liens
-----
Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien upon any of its property, revenues or assets, whether now owned
or hereafter acquired, except:
(a) Liens securing payment of Senior Indebtedness and Guarantor
Senior Indebtedness, granted pursuant to any document entered into in
connection therewith;
(b) until the Closing Date, Liens securing payment of Indebtedness of
the type permitted and described in Section 6.2(b);
(c) Liens securing Capitalized Lease Liability Indebtedness and
purchase money Indebtedness of the type permitted and described in Section
6.2(c) (and securing only the assets that are financed with the proceeds of
such Indebtedness);
(d) Liens existing as of the Closing Date and disclosed in Schedule
--------
6.3 ("Ongoing Liens");
---
(e) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves, if any, in accordance with GAAP shall have been
set aside on its books;
(f) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being diligently contested in good faith by appropriate proceedings and
for which adequate reserves, if any, in accordance with GAAP shall have
been set aside on its books;
(g) Liens incurred or deposits made in the ordinary course of
business in connection with workmen's compensation, unemployment insurance
or other forms of governmental insurance or benefits, or to secure
performance of tenders, statutory and regulatory obligations, bids, leases
and contracts or other similar obligations (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds or performance or return-of-money bonds;
(h) judgment Liens in existence less than 45 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies or which do not
otherwise result in an Event of Default under Section 7.8; and
(i) easements, rights-of-way, municipal and zoning ordinances or
similar restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect
with the ordinary conduct of the business of Borrower or its Subsidiaries
or the value or utility of the property to which such Lien is attached.
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6.4 Sale and Leaseback
------------------
Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any agreement or arrangement
with any other Person providing for the leasing by Borrower or any of its
Restricted Subsidiaries of real or personal property which has been or is to be
sold or transferred by Borrower or any of its Restricted Subsidiaries to such
other Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations
of Borrower or any of its Restricted Subsidiaries.
6.5 Investments
-----------
Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make, incur, assume or suffer to exist
any Investment in any other Person, except:
(a) Investments existing on the Effective Date and Investments to be
existing immediately after giving effect to the Restructuring Transaction,
each identified in Schedule 6.5 ("Ongoing Investments");
------------
(b) Cash Equivalent Investments;
(c) without duplication, Investments by Borrower to the extent
permitted as Indebtedness pursuant to Section 6.2;
(d) Investments constituting (i) accounts receivable arising, (ii)
trade debt granted, or (iii) deposits made in connection with the purchase
price of goods or services, in each case in the ordinary course of
business;
(e) other Investments by Borrower not to exceed $200,000,000 in the
aggregate; and
(f) Investments in Persons which are Restricted Subsidiaries so long
as, before and after giving effect to such Investment, no Potential Event
of Default has occurred and is continuing or is caused thereby;
provided, however, that
--------- -------
(g) any Investment which when made complies with the requirements of
clause (a), (b) or (c) of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such Investment if
made thereafter would not comply with such requirements; and
(h) no Investment otherwise permitted by clause (c), (d), (e) or (f)
shall be permitted to be made if any Potential Event of Default or Event of
Default has occurred and is continuing or would result therefrom.
6.6 Restricted Payments, Etc.
------------------------
Borrower shall not, and shall not permit any Subsidiary to, make any
Restricted Junior Payment, except that:
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(a) dividends or distributions to Borrower in respect of its Equity
Interests in any of its Subsidiaries;
(b) so long as no (x) Event of Default or (y) Potential Event of
Default of which Senior Management was aware or should have been aware has
occurred and is continuing (or would result therefrom), (i) payments by
Borrower of interest accrued on the Subordinated Debt when due and (ii) any
Restricted Junior Payment of the type set forth in clause (c) of the
definition thereof to the extent that such Restricted Junior Payment arises
from the issuance of common stock of Borrower and is otherwise on terms
satisfactory to the Agents; and
(c) Unrestricted Subsidiaries may refinance in whole or in part from
time to time any of its Indebtedness so long as any such refinancing is not
recourse in any manner to Borrower or any other Subsidiary and does not
require the imposition (contingently or otherwise) of any Lien on the
assets of Borrower or any Restricted Subsidiary.
6.7 [Reserved]
6.8 Subsidiaries
------------
Borrower will not have any Subsidiaries other than Restricted
Subsidiaries and Unrestricted Subsidiaries. Borrower will not permit any
Subsidiary to issue any Capital Stock (whether for value or otherwise) to any
Person other than Borrower.
6.9 Take or Pay Contracts
---------------------
Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or be a party to any
arrangement for the purchase of materials, supplies, other property or services
if such arrangement by its express terms requires that payment be made by
Borrower or such Restricted Subsidiary regardless of whether such materials,
supplies, other property or services are in fact or can be required to be
delivered or furnished to it.
6.10 Consolidation, Merger, Etc.
--------------------------
Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, liquidate or dissolve, consolidate with, or merge into
or with, any other corporation, or purchase or otherwise acquire all or
substantially all of the assets of any Person (or of any division thereof)
except that (i) TSAT may merge with and into Borrower pursuant to the TSAT
Merger and on terms and conditions satisfactory to a majority of Lenders, (ii)
the transactions contemplated by the Restructuring Transaction may be made in
accordance with the terms of the Restructuring Agreements and (iii) any
Restricted Subsidiary may liquidate or dissolve voluntarily into, and may merge
with and into, Borrower or any other Restricted Subsidiary; provided, however,
-------- -------
that, in the case of the merger of any Subsidiary into Borrower, Borrower shall
be the surviving corporation and continue to be incorporated under the laws of a
State of the United States.
6.11 Permitted Dispositions
----------------------
Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, sell, transfer, lease, contribute or otherwise convey
(including by way of merger), or grant options, warrants or other rights with
respect to, any of Borrower's or such Subsidiaries' assets (including accounts
receivable or
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Equity Interests of Subsidiaries) to any Person unless such sale, transfer,
lease, contribution or conveyance of such assets is (i) in the ordinary course
of its business (and does not constitute a sale, transfer, lease, contribution
or other conveyance of all or a substantial part of Borrower's or such
Subsidiary's assets) or is of obsolete or worn out property, (ii) permitted by
Section 6.10, (iii) between Restricted Subsidiaries or from a Subsidiary to
Borrower or (iv) of other assets of Borrower having a value (determined based on
the higher of book and fair market value) not to exceed $30,000,000 for the term
of this Agreement.
6.12 Senior Subordinated Indebtedness
--------------------------------
Neither Borrower nor any of the Guarantors shall, directly or
indirectly, Incur any Indebtedness (other than the Notes, the Exchange Notes,
the Required Refinancing Securities and the Guarantees, as the case may be) that
by its terms (or by the terms of any agreement governing such Indebtedness)
would expressly rank senior in right of payment to the Loans, Notes and
Guarantees and expressly rank subordinate in right of payment to any Senior
Indebtedness.
6.13 Guarantees
----------
Borrower will not permit any of its domestic Subsidiaries to, directly
or indirectly, incur any guarantee of any Senior Indebtedness of the Company
which has registration rights (including the requirement to effect an exchange
offer registered under the Securities Act) or which is registered under the
Securities Act, in each case unless such Subsidiary executes a Guarantee of the
Obligations of Borrower under this Agreement. Thereafter, such Subsidiary shall
be a Guarantor for all purposes of this Agreement.
6.14 Refinancing of Loans in Part
----------------------------
Borrower shall not, nor shall Borrower cause or permit any of its
Subsidiaries to, Incur any Indebtedness to Refinance the Loans in part other
than the Refinancing Securities, the Required Refinancing Securities or the
Exchange Notes, unless the terms, conditions, covenants, events of default and
other provisions in respect of the events of default and other provisions in
respect of the instruments evidencing the Indebtedness Incurred to Refinance the
Loans in part shall have been approved in writing by the Required Lenders (which
consent shall be conclusively deemed given if a Lender does not object to the
draft thereof within five Business Days of receipt thereof) (which approval
shall not be unreasonably withheld) prior to the Incurrence of any such
Indebtedness.
6.15 Modification of Certain Agreements
----------------------------------
Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, consent to any amendment, supplement, amendment and
restatement, waiver or other modification of any of, or enter into any
forbearance from exercising any rights with respect to, the terms or provisions
contained in, or applicable to, (i) any Transaction Document, if the effect of
such amendment, supplement, amendment and restatement, waiver or modification or
forbearance might individually or in the aggregate have a Material Adverse
Effect, or (ii) any Subordinated Debt Document.
6.16 Transactions with Affiliates
----------------------------
Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, or cause, suffer or permit
to exist any arrangement or contract with any of its other Affiliates or any
Unrestricted Subsidiary, other than in connection with the Roll-up Plan unless
such arrangement or
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contract is on fair and reasonable terms and is an arrangement or contract of
the kind which would be entered into by a prudent Person in the position of
Borrower or such Subsidiary with a Person which is not one of its Affiliates.
6.17 Negative Pledges, Restrictive Agreements, Etc.
---------------------------------------------
Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any agreement (excluding the
New PRIMESTAR Senior Credit Facility (and any agreements or instruments defined
in the New PRIMESTAR Senior Credit Facility as "Loan Documents), this Agreement
and any other Loan Document or any document pursuant to which any Indebtedness
permitted by clause (c) of Section 6.2 is permitted but solely with respect to
any asset acquired solely with the proceeds of such Indebtedness and no other
asset of Borrower or any Subsidiary) prohibiting:
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired, to the extent
that any such negative pledge would prohibit the creation or first priority
perfection of any Liens of the type described in clause (a) of Section 6.3
(other than in the case of Capitalized Leases to the extent of Liens solely
in the assets subject to such Capitalized Lease);
(b) the ability of Borrower or any other Obligor to amend or
otherwise modify this Agreement or any other Loan Document; or
(c) the ability of any Restricted Subsidiary to make any payments,
directly or indirectly, to Borrower by way of dividends, advances,
repayments of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on
Investments, or any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly or indirectly,
to Borrower.
6.18 Restrictions on Leases and ASkyB Transaction
--------------------------------------------
Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, (a) enter into any agreement or
arrangement with Tempo or any other Person providing for the leasing by Borrower
or any of its Restricted Subsidiaries of high power satellite transmission
capacity unless (i) such agreement or arrangement is on fair and reasonable
terms and is an agreement or arrangement of the kind which would be entered into
by a prudent Person in the position of Borrower or such Restricted Subsidiary
with such Person, and (ii) the Agents consent in writing (such consent not to be
unreasonably withheld or delayed), or (b) consummate the ASkyB Transaction (as
defined in the Proxy) without the consent of all Lenders.
6.19 Restrictions on TSAT Partners Holdings and Its Subsidiaries
-----------------------------------------------------------
Borrower shall not permit TSAT Partners Holdings, nor any of TSAT
Partners Holdings' Subsidiaries to, directly or indirectly, (i) engage in any
business activity other than, in the case of TSAT Partners Holdings, in
connection with the continuing ownership of the issued and outstanding shares of
Equity Interests of TCISE Partner 1 and TCISE Partner 2, and in the case of TSAT
Partners Holdings' Subsidiaries, in connection with the continuing ownership of
partnership interest in the Primestar Partnership; (ii) create, incur, assume,
suffer to exist or otherwise become liable in respect of any Indebtedness other
than in respect of the New Primestar Senior Credit Facility; (iii) create,
incur, assume or enter into any agreement which by its terms creates, incurs or
assumes any Lien upon any of its assets, whether now owned or hereafter acquired
-72-
other than in respect of the New Primestar Senior Credit Facility; (iv) make,
incur, assume or suffer to exist any Investment in any other Person other than,
in the case of TSAT Partners Holdings, in connection with the continuing
ownership of the issued and outstanding shares of Equity Interests of TCISE
Partner 1 and TCISE Partner 2, and in the case of TSAT Partners Holdings'
Subsidiaries in connection with the continuing ownership of partnership interest
in the Primestar Partnership; (v) make or commit to make any capital expenditure
or enter into any arrangement which would give rise to any Capitalized Lease
Liability; (vi) enter into any arrangement which involves the leasing by such
Person from any lessor of any real or personal property (or any interest
therein) other than the lease of office space incidental to its ordinary course
of business; (vii) wind-up, liquidate or dissolve, consolidate or amalgamate
with, or merge into or with any other corporation or purchase or otherwise
acquire all or any part of the assets of any Person (or division thereof); or
(viii) sell, transfer, lease or otherwise dispose of, or grant to any Person
options, warrants or other rights with respect to any of its assets, unless
otherwise permitted by this Agreement and except as set forth in the Primestar
Partnership Agreement.
SECTION 6A. NEGATIVE COVENANTS (TERM LOAN)
Borrower covenants and agrees that from and after issuance of the Term
Loan and the Term Notes until the satisfaction in full of the Term Loan and the
Term Notes and all other Obligations due under this Agreement it shall, and
shall cause each of its Restricted Subsidiaries to, fully and timely perform all
covenants in this Section 6A required to be performed by any of them.
6A.1 Limitation on Restricted Payments
---------------------------------
Borrower shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or any other distribution on any
Equity Interests of Borrower or any Restricted Subsidiary or make any
payment or distribution to the direct or indirect holders (in their
capacities as such) of Equity Interests of Borrower or any Restricted
Subsidiary (other than any dividends, distributions and payments made to
Borrower or any Restricted Subsidiary and dividends or distributions
payable to any Person solely in Qualified Equity Interests of Borrower or
in options, warrants or other rights to purchase Qualified Equity Interests
of Borrower);
(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of Borrower or any Restricted Subsidiary (other than any
such Equity Interests owned by Borrower or any Restricted Subsidiary);
(iii) purchase, redeem, defease or retire for value, or make any
principal payment on, prior to any scheduled maturity, scheduled repayment
or scheduled sinking fund payment, any Subordinated Indebtedness (other
than any Subordinated Indebtedness held by any Restricted Subsidiary); or
(iv) make any Investment (other than Permitted Investments) in any
Person (other than in Borrower, any Restricted Subsidiary or a Person that
becomes a Restricted Subsidiary, or is merged with or into or consolidated
with Borrower or a Restricted Subsidiary (provided Borrower or a Restricted
Subsidiary is the survivor) as a result of or in connection with such
Investment)
-73-
(such payments or any other actions (other than the exceptions thereto)
described in (i), (ii), (iii) and (iv) collectively, "Restricted Payments"),
-------------------
unless
(a) no Potential Event of Default or Event of Default shall have
occurred and be continuing at the time or after giving effect to such
Restricted Payment;
(b) immediately after giving effect to such Restricted Payment,
Borrower would be able to Incur $1.00 of Indebtedness (other than Permitted
Indebtedness) under the Debt to Operating Cash Flow Ratio of the first
paragraph of Section 6A.2; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate amount of all Restricted Payments declared or made on or after
the Closing Date does not exceed an amount equal to the sum of (1) the
difference between (x) the Cumulative Operating Cash Flow determined at the
time of such Restricted Payment and (y) 150% of cumulative Consolidated
Interest Expense of Borrower determined for the period commencing on the
Closing Date and ending on the last day of the most recent fiscal quarter
immediately preceding the date of such Restricted Payment for which
consolidated financial information of Borrower is available, plus (2) the
----
aggregate net cash proceeds received by Borrower either (x) as capital
contributions to Borrower after the Closing Date or (y) from the issue and
sale (other than to a Restricted Subsidiary) of its Qualified Equity
Interests after the Closing Date (excluding the net proceeds from any
issuance and sale of Qualified Equity Interests (I) in connection with the
ASkyB Transaction (except that in calculating the ability to make a
Restricted Payment under clause (iv) of the previous paragraph, 25% thereof
may be included) or (II) to the extent financed, directly or indirectly,
using funds borrowed from Borrower or any Restricted Subsidiary until and
to the extent such borrowing is repaid), plus (3) the principal amount (or
----
accrued or accreted amount, if less) of any Indebtedness of Borrower or any
Restricted Subsidiary Incurred after the Closing Date which has been
converted into or exchanged for Qualified Equity Interests of Borrower,
plus (4) in the case of the disposition or repayment of any Investment
----
constituting a Restricted Payment made after the Closing Date, an amount
(to the extent not included in the computation of Cumulative Operating Cash
Flow) equal to the lesser of: (i) the return of capital with respect to
such Investment and (ii) the amount of such Investment which was treated as
a Restricted Payment, in either case, less the cost of the disposition of
such Investment and net of taxes, plus (5) so long as the Designation
----
thereof was treated as a Restricted Payment made after the Closing Date,
with respect to any Unrestricted Subsidiary that has been redesignated as a
Restricted Subsidiary after the Closing Date in accordance with Section
6A.12, Borrower's proportionate interest in an amount equal to the excess
of (x) the total assets of such Subsidiary, valued on an aggregate basis at
Fair Market Value, over (y) the total liabilities of such Subsidiary,
determined in accordance with GAAP (and provided that such amount shall not
in any case exceed the Designation Amount with respect to such Restricted
Subsidiary upon its Designation), plus (6) (to the extent not included in
----
the computation of Cumulative Operating Cash Flow) the amount of cash
dividends or cash distributions (other than to pay taxes) received from any
Unrestricted Subsidiary since the Closing Date, minus (7) the greater of
-----
(i) $0 and (ii) the Designation Amount (measured as of the date of
Designation) with respect to any Subsidiary of Borrower which has been
designated as an Unrestricted Subsidiary after the Closing Date in
accordance with Section 6A.12. For purposes of this clause (c), in the
event that any Person in whom an Investment was made on or after the
Closing Date that was included in the aggregate amount of Restricted
Payments made on or after the Closing Date becomes a Restricted Subsidiary,
so long as such Person remains a Restricted Subsidiary, the aggregate
amount of Restricted Payments declared or made on or after the Closing Date
shall be reduced by an amount equal to the lesser of (A) the amount of
Investments made in such Person that was treated as a Restricted Payment
and
-74-
(B) Borrower's proportionate interest in an amount equal to the excess of
(x) the total assets of such Subsidiary at the date it became a Restricted
Subsidiary, valued on such date on an aggregate basis at Fair Market Value,
over (y) the total liabilities on such date of such Subsidiary, determined
in accordance with GAAP.
The foregoing provisions will not prevent (i) the payment of any
dividend or distribution on, or redemption of, Equity Interests within 60 days
after the date of declaration of such dividend or distribution or the giving of
formal notice of such redemption, if at the date of such declaration or giving
of formal notice such payment or redemption would comply with the provisions of
this Agreement; (ii) the purchase, redemption, retirement or other acquisition
of any Equity Interests of Borrower in exchange for, or out of the net cash
proceeds of the substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of, Qualified Equity Interests of Borrower; provided,
--------
however, that any such net cash proceeds and the value of any Equity Interests
-------
issued in exchange for such retired Equity Interests are excluded from clause
(c)(2) of the preceding paragraph (and were not included therein at any time);
(iii) the purchase, redemption, retirement, defeasance or other acquisition of
Subordinated Indebtedness, or any other payment thereon, made in exchange for,
or out of the net cash proceeds of, a substantially concurrent issue and sale
(other than to a Restricted Subsidiary) of (x) Qualified Equity Interests of
Borrower; provided, however, that any such net cash proceeds and the value of
-------- -------
any Equity Interests issued in exchange for Subordinated Indebtedness are
excluded from clauses (c)(2) and (c)(3) of the preceding paragraph (and were not
included therein at any time) or (y) other Subordinated Indebtedness having no
stated maturity for the payment of principal thereof prior to the final stated
maturity of the Notes; (iv) Investments made within three years of the Closing
Date in Persons engaged in the provision of C-band direct-to-home television
programming services (any such person, a "C-Band Entity"); provided, however,
------------- -------- -------
that (x) immediately after giving effect to such Investment Borrower or a
Restricted Subsidiary owns not less than 50.0% of the voting power of the
outstanding Voting Equity Interests in such C-Band Entity and not less than
50.0% of the outstanding economic Equity Interests in such C-Band Entity and (y)
the aggregate amount of such Investments made since the Closing Date shall not
exceed $90.0 million (any such Investment made pursuant to this clause (iv) a
"C-Band Investment"); (v) Investments in ResNet so long as ResNet is engaged in
-----------------
whole or in substantial part in the business of providing entertainment, data,
information and/or telecommunications services to MDUs and other commercial
markets, not to exceed $45.0 million in the aggregate since the Closing Date;
(vi) any Investment to the extent that the consideration therefor consists of
the net cash proceeds of the substantially concurrent issue and sale (other than
to a Restricted Subsidiary) of Qualified Equity Interests of Borrower; provided,
--------
however, that any such net cash proceeds are excluded from clause (c)(2) of the
-------
preceding paragraph (and were not included therein at any time); (vii) the
purchase, redemption or other acquisition, cancellation or retirement for value
of Equity Interests of Borrower or any Restricted Subsidiary held by officers or
employees or former officers or employees of Borrower or any Restricted
Subsidiary (or their estates or beneficiaries under their estates), upon death,
disability, retirement or termination of employment, not to exceed $3.0 million
in any calendar year and $15.0 million in the aggregate since the Closing Date;
plus, in each case, the amount of net cash proceeds received by Borrower or a
----
Restricted Subsidiary on account of life insurance policies relating to the
officer or employee whose Equity Interest is being purchased, redeemed,
acquired, cancelled or retired; (viii) Investments in any other Person engaged
in the satellite, telecommunications, entertainment, electronics or any related
industry, not to exceed $50.0 million in the aggregate outstanding at any time;
(ix) the payment of dividends in any period (I) on preferred stock of Borrower
issued in connection with any C-Band Investment in a C-Band Entity, but only up
to the amount of cash dividends ("C-Band Dividends") received by Borrower from
----------------
such C-Band Entity in the same period (to the extent that such cash dividends
have not otherwise been expended by Borrower) or (II) issued in connection with
any C-Band Investment which results in any C-Band Entity becoming a Restricted
Subsidiary (such Restricted Subsidiary, a "Restricted C-Band Subsidiary"), but
----------------------------
only up to the amount of Consolidated Operating Cash Flow received as cash
dividends by Borrower from the Restricted C-Band Subsidiaries in the same period
(to the extent that
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such cash dividends have not otherwise been expended by Borrower); provided,
--------
however, that no such dividends pursuant to this clause (ix) shall be permitted
-------
to the extent that C-Band Dividends or the Consolidated Operating Cash Flow of
any Restricted C-Band Subsidiary to be utilized to effect any such dividends was
included in the calculation of Cumulative Operating Cash Flow at any time prior
to the payment of such dividends; or (x) the repurchase of Equity Interests of
Borrower in an amount not to exceed $10.0 million in the aggregate since the
Closing Date; provided, however, that in the case of each of clauses (ii),
-------- --------
(iii), (iv), (v), (vi), (viii), (ix) and (x) no Potential Event of Default or
Event of Default shall have occurred and be continuing or would arise therefrom.
For purposes of this paragraph, any Investment made in any Person that
subsequently becomes a Restricted Subsidiary shall be deemed not to be
outstanding so long as such Person is a Restricted Subsidiary.
For purposes of clause (ix) of the preceding paragraph, in determining
Consolidated Operating Cash Flow of any Restricted C-Band Subsidiary, the
definition of "Consolidated Operating Cash Flow" shall be used, but references
in such definition to Borrower and the Restricted Subsidiaries shall be deemed
to refer to the Restricted C-Band Subsidiary and its Subsidiaries. Borrower
shall not calculate such Consolidated Operating Cash Flow of any Restricted C-
Band Subsidiary in any manner, or take any other action, that would result in
such Consolidated Operating Cash Flow being greater than what it would have been
if such Restricted C-Band Subsidiary were an Affiliate of Borrower that was not
a Restricted Subsidiary.
In determining the amount of Restricted Payments permissible under
this Section 6A.1, amounts expended pursuant to clauses (i), (vii) and (x) of
the second preceding paragraph shall be included as Restricted Payments and
amounts expended pursuant to clauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) shall be excluded. The amount of any non-cash Restricted Payment shall be
deemed to be equal to the Fair Market Value thereof at the date of the making of
such Restricted Payment. If after the date of making any Investment made in
compliance with this Section 6A.1 which is a guarantee, letter of credit or
other credit support any payments are made in respect of such Investment, such
payment shall not be deemed an additional Restricted Payment to the extent the
amount thereof, when added together with all other payments made in respect of
such Investment since the date such Investment was made, is not in excess of the
amount of the Investment.
6A.2 Limitation on Indebtedness
--------------------------
Borrower shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness) or issue any Disqualified Equity Interests, except for
Permitted Indebtedness; provided, however, that Borrower may Incur Indebtedness
-------- -------
(including Acquired Indebtedness) and Borrower may issue Disqualified Equity
Interests if, at the time of and immediately after giving pro forma effect to
---------
such Incurrence of Indebtedness or issuance of Disqualified Equity Interests and
the application of the proceeds therefrom, the Debt to Operating Cash Flow Ratio
would be less than or equal to (i) 7.25 to 1.0 if the date of such Incurrence is
on or before December 31, 1999, (ii) 6.50 to 1.0 if the date of such Incurrence
is after December 31, 1999 and on or prior to December 31, 2001, and (iii) 5.75
to 1.0 if the date of such Incurrence is after December 31, 2001.
The foregoing limitations will not apply to the Incurrence by Borrower
(or any Restricted Subsidiary with respect to clauses (b), (c), (d), (e), (g),
(h), (i), (j), (l) and (m) below of this paragraph) of any of the following
(collectively, "Permitted Indebtedness"), each of which shall be given
----------------------
independent effect:
(a) Indebtedness under the Term Notes, this Agreement, the Exchange
Notes and the Senior Subordinated Indenture;
-76-
(b) the Existing Notes and other Existing Indebtedness;
(c) Indebtedness under the New PRIMESTAR Senior Credit Facility in an
aggregate principal amount at any one time outstanding not to exceed the
sum of (A) $750.0 million, plus (B) any amounts outstanding under the New
----
PRIMESTAR Senior Credit Facility that utilize subparagraph (n) of this
paragraph of this Section 6A.2;
(d) (x) Indebtedness or Disqualified Equity Interests of any
Restricted Subsidiary owed or issued to and held by Borrower or any
Restricted Subsidiary and (y) Indebtedness or Disqualified Equity Interests
of Borrower owed or issued to and held by any Restricted Subsidiary which
is unsecured and subordinated in right of payment to the payment and
performance of Borrower's obligations under any Senior Indebtedness, the
Notes, this Agreement, the Senior Subordinated Indenture and the Exchange
Notes (or pledged to secure any Senior Indebtedness); provided, however,
-------- -------
that an Incurrence of Indebtedness or issuance of Disqualified Equity
Interests that is not permitted by this clause (d) shall be deemed to have
occurred upon (i) any sale or other disposition of any Indebtedness or
Disqualified Equity Interests of Borrower or any Restricted Subsidiary
referred to in this clause (d) to a Person (other than Borrower or any
Restricted Subsidiary), (ii) any sale or other disposition of Equity
Interests of any Restricted Subsidiary which holds Indebtedness or
Disqualified Equity Interests of Borrower or another Restricted Subsidiary
such that such Restricted Subsidiary ceases to be a Restricted Subsidiary,
or (iii) the designation of a Restricted Subsidiary which holds
Indebtedness or Disqualified Equity Interests of Borrower or any other
Restricted Subsidiary as an Unrestricted Subsidiary;
(e) guarantees by any Restricted Subsidiary of Senior Indebtedness of
Borrower; provided, however, that if any such guarantee shall be Incurred
-------- -------
in respect of any Senior Indebtedness of Borrower which has registration
rights (including the requirement to effect an exchange offer registered
under the Securities Act) or which is registered under the Securities Act,
such Restricted Subsidiary shall guarantee the Notes on a senior
subordinated basis as provided in this Agreement;
(f) Interest Rate Protection Obligations of Borrower or any
Restricted Subsidiary relating to Indebtedness of Borrower or any
Restricted Subsidiary (which Indebtedness is otherwise permitted to be
Incurred under this Section 6A.2); provided, however, that the notional
-------- -------
principal amount of such Interest Rate Protection Obligations does not
exceed the principal amount of the Indebtedness to which such Interest Rate
Protection Obligations relate;
(g) Purchase Money Indebtedness and Capital Lease Obligations which
do not exceed $35.0 million in the aggregate at any one time outstanding;
(h) Indebtedness or Disqualified Equity Interests to the extent
representing a replacement, renewal, refinancing or extension
(collectively, a "refinancing") of outstanding Indebtedness or Disqualified
-----------
Equity Interests Incurred in compliance with the Debt to Operating Cash
Flow Ratio of the first paragraph of this Section 6A.2 or clause (a), (b),
(i), (j), (k), (l) or (n) of this paragraph of this Section 6A.2; provided,
--------
however, that (i) any such refinancing shall not exceed the sum of the
-------
principal amount (or, if such Indebtedness or Disqualified Equity Interests
provide for a lesser amount to be due and payable upon a declaration of
acceleration thereof at the time of such refinancing, an amount no greater
than such lesser amount) of the Indebtedness or Disqualified Equity
Interests being refinanced, plus the amount of accrued interest or
----
dividends thereon, plus the amount of any reasonably determined prepayment
----
premium necessary to accomplish such refinancing and such reasonable fees
-77-
and expenses incurred in connection therewith, (ii) Indebtedness
representing a refinancing of Indebtedness other than Senior Indebtedness
shall have a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of the Indebtedness being refinanced,
(iii) Indebtedness that is pari passu with the Notes may only be refinanced
----------
with Indebtedness that is made pari passu with or subordinate in right of
----------
payment to the Notes and Subordinated Indebtedness or Disqualified Equity
Interests may only be refinanced with Subordinated Indebtedness or
Disqualified Equity Interests, (iv) no Restricted Subsidiary may Incur
Indebtedness to refinance Indebtedness of Borrower (except that if the
Indebtedness being refinanced is guaranteed by a Restricted Subsidiary,
such Restricted Subsidiary may guarantee such refinanced Indebtedness) and
(v) with respect to any refinancing of Indebtedness Incurred pursuant to
clause (i), (j), (k), (l) or (n) of this paragraph, such refinancing
pursuant to this clause (h) shall also be deemed to be Incurred pursuant to
clause (i), (j), (k), (l) or (n), as the case may be, of this paragraph
(for the avoidance of doubt, the result of which is that a refinancing does
not create new debt Incurrence capacity under such clauses);
(i) Indebtedness to fund purchases of inventory of integrated
receiver decoders and other related subscriber equipment to be used in the
business of Borrower and the Restricted Subsidiaries not to exceed in the
aggregate at any time outstanding the lesser of (x) 50% of the aggregate
cost of such decoders and equipment and (y) $150.0 million;
(j) Indebtedness (including Acquired Indebtedness) Incurred to effect
the acquisition of other satellite communications businesses (or Persons
engaged in such business) (a "Related Acquisition") or to make C-Band
-------------------
Investments (so long as such C-Band Investment results in the ownership by
Borrower or any Restricted Subsidiary of not less than 50% of the economic
Equity Interests and 50% of the Voting Equity Interests in the subject
Person or is made to fund the acquisition of other satellite communications
businesses by such Person in whom the C-Band Investment is being made (so
long as such acquisition is effected by such Person or one of its
Subsidiaries)); provided, however, that (i) the aggregate amount of any
-------- --------
such Indebtedness Incurred to effect any such Related Acquisition shall not
exceed (x) $750.00 per subscriber acquired in such Related Acquisition if
such Related Acquisition is in the medium or high power segment of the
satellite communications industry or (y) $500.00 per subscriber acquired in
such Related Acquisition if such Related Acquisition is in the C-Band
segment of the satellite communications industry; (ii) such Related
Acquisition is effected through Borrower or any Restricted Subsidiary or a
Person that becomes a Restricted Subsidiary; (iii) the aggregate amount of
any such Indebtedness Incurred to effect any C-Band Investments shall not
exceed (x) if such C-Band Investment is the initial Investment in the
Person in whom the C-Band Investment is being made, $250.00 per subscriber
existing at the time thereof of such Person in whom such C-Band Investment
is being made and (y) $250.00 per subscriber acquired if such C-Band
Investment is made to fund the acquisition by the Person in whom such C-
Band Investment is being made of other satellite communications businesses;
and (iv) any such Indebtedness Incurred by any Restricted Subsidiary shall
only be permitted to be Incurred if it is Acquired Indebtedness and shall
not be Incurred if such Acquired Indebtedness was Incurred in connection
with, in contemplation of or with a view to such transaction;
(k) Indebtedness under the Partnership Credit Agreement (or any
refinancing thereof) to the extent such obligation was Incurred by
Primestar Partnership to finance any Tempo Satellite or under any agreement
by Borrower or any Restricted Subsidiary to indemnify the Persons who were
partners of Primestar Partnership prior to the Closing Date or their
Affiliates for any obligation of any such Person or Affiliate under any
guarantee, letter of credit or other credit support with respect to any
obligations of Primestar Partnership under the Partnership Credit Agreement
or the GE-2 Agreement;
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(l) Indebtedness Incurred in connection with the business objective
of migrating Borrower's (or any Restricted Subsidiary's) medium power
customers to Borrower's (or any Restricted Subsidiary's) high power
satellite transmission service in an aggregate amount not to exceed $150.0
million at any time outstanding;
(m) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations
Incurred in connection with the disposition of any business, assets or
Restricted Subsidiary of Borrower in an amount not to exceed the gross
proceeds actually received by Borrower or any Restricted Subsidiary in
connection with such disposition; and
(n) in addition to the items referred to in clauses (a) through (m)
above, Indebtedness of Borrower (including any Indebtedness under the
Senior Credit Facility that utilizes this subparagraph (n)) in an aggregate
amount at any time outstanding not to exceed $75.00 per subscriber of
Borrower and the Restricted Subsidiaries at the date of Incurrence thereof.
Indebtedness of any Person or any of its Subsidiaries existing at the
time such Person becomes a Restricted Subsidiary (or is merged into or
consolidated with Borrower or any Restricted Subsidiary), whether or not such
Indebtedness was incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary (or being merged into or consolidated
with Borrower or any Restricted Subsidiary), shall be deemed Incurred at the
time any such Person becomes a Restricted Subsidiary or merges into or
consolidates with Borrower or any Restricted Subsidiary.
If Borrower Incurs any Indebtedness pursuant to the Debt to Operating
Cash Flow Ratio of the first paragraph of this Section 6A.2 and includes in the
calculation thereof C-Band Dividends or the Consolidated Operating Cash Flow of
any Restricted C-Band Subsidiary, then such Indebtedness will be deemed to not
have been Incurred in compliance with this Section 6A.2 (unless otherwise
incurrable at such time under any of subparagraphs (a) through (o) of the second
paragraph of this Section 6A.2) if Borrower or any Restricted Subsidiary
thereafter makes any Restricted Payment pursuant to clause (ix) of the second
paragraph of Section 6A.1 and such Indebtedness could not have been Incurred at
the time of its Incurrence if any such Restricted Payment were made immediately
prior to such Incurrence.
For purposes of determining any particular amount of Indebtedness
under this Section 6A.2, guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included.
For purposes of determining compliance with this Section 6A.2, in the
event that an item of Indebtedness may be Incurred through the first paragraph
of this Section 6A.2 or by meeting the criteria of one or more of the types of
Indebtedness described in the second paragraph of this Section 6A.2 (or the
definitions of the terms used therein), Borrower, in its sole discretion, may,
at the time of such Incurrence, (i) classify such item of Indebtedness under and
comply with either of such paragraphs (or any of such definitions), as
applicable, (ii) classify and divide such item of Indebtedness into more than
one of such paragraphs (or definitions), as applicable, and (iii) elect to
comply with such paragraphs (or definitions), as applicable, in any order.
6A.3 Limitation on Transactions with Affiliates
------------------------------------------
Borrower shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, conduct any business or enter into any
transaction (or series of related transactions) with or for the
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benefit of any of their respective Affiliates or any beneficial holder of 10% or
more of the Equity Interests of Borrower or any officer or director of Borrower
or any Restricted Subsidiary (each an "Affiliate Transaction"), unless such
---------------------
Affiliate Transaction is on terms which are no less favorable to Borrower or
such Restricted Subsidiary, as the case may be, than would be available in a
comparable transaction with an unaffiliated third party. If such Affiliate
Transaction (or series of related Affiliate Transactions) involves aggregate
payments or other consideration having a Fair Market Value in excess of $15.0
million, Borrower shall not, and shall not cause or permit any Restricted
Subsidiary to, enter into such Affiliate Transaction, unless a majority of the
disinterested members of the Board of Directors of Borrower shall have approved
such Affiliate Transaction and determined that such Affiliate Transaction
complies with the foregoing provisions; provided, however, that if such
-------- -------
Affiliate Transaction is in the ordinary course of business consistent with the
past practice of any business of Borrower or a Restricted Subsidiary, including
the High Power Satellite Transmission Business, then there shall be no need to
comply with this sentence. In the event that Borrower obtains a written opinion
from an Independent Financial Advisor stating that the terms of an Affiliate
Transaction are fair, from a financial point of view, to Borrower or the
Restricted Subsidiary involved in such Affiliate Transaction, as the case may
be, such opinion will conclusively meet the requirements of the first sentence
of this paragraph and there shall be no need to comply with the second sentence
of this paragraph.
Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) transactions with or among Borrower and any
Restricted Subsidiary or between or among Restricted Subsidiaries; (ii)
customary directors' fees, indemnification and similar arrangements, consulting
fees, employee salaries, bonuses or employment agreements, compensation or
employee benefit arrangements and incentive arrangements with any officer,
director or employee of Borrower or any Restricted Subsidiary entered into in
the ordinary course of business (including customary benefits thereunder) and
payments under any indemnification arrangements permitted by applicable law;
(iii) the Basic Documents and the Restructuring Agreements, each as in effect on
the Closing Date, including any amendment or extension thereof that does not
otherwise violate any other covenant set forth in this Agreement, and any
transactions undertaken pursuant to any other contractual obligations in
existence on the Closing Date (as in effect on the Closing Date); (iv) the issue
and sale by Borrower to its stockholders of Qualified Equity Interests; (v) any
Restricted Payments made in compliance with Section 6A.1; (vi) loans and
advances to officers, directors and employees of Borrower and the Restricted
Subsidiaries for travel, entertainment, moving and other relocation expenses, in
each case made in the ordinary course of business and consistent with past
business practices; (vii) the Incurrence of intercompany Indebtedness permitted
pursuant to clause (d) of the second paragraph of Section 6A.2; (viii) the
pledge of Equity Interests of Unrestricted Subsidiaries to support the
Indebtedness thereof; and (ix) the Restructuring Transactions.
6A.4 Limitation on Liens
-------------------
Borrower shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur any Liens of any kind against or
upon any of their respective properties or assets now owned or hereafter
acquired, or any proceeds therefrom or any income or profits therefrom, to
secure any Indebtedness unless contemporaneously therewith effective provision
is made to secure the Notes equally and ratably with such Indebtedness with a
Lien on the same properties and assets securing Indebtedness for so long as such
Indebtedness is secured by such Lien, except for (i) Liens on securing any
Senior Indebtedness or any guarantee of Senior Indebtedness by any Restricted
Subsidiary and (ii) Permitted Liens.
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6A.5 Limitation on Senior Subordinated Indebtedness
----------------------------------------------
Borrower shall not, directly or indirectly, Incur any Indebtedness
that by its terms would expressly rank senior in right of payment to the Notes
and expressly rank junior in right of payment to any Senior Indebtedness.
6A.6 Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries
---------------------------------------------------------------
Borrower shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary to (a) pay dividends or make any
other distributions to Borrower or any other Restricted Subsidiary on its Equity
Interests or with respect to any other interest or participation in, or measured
by, its profits, or pay any Indebtedness owed to Borrower or any other
Restricted Subsidiary, (b) make loans or advances to, or guarantee any
Indebtedness or other obligations of, Borrower or any other Restricted
Subsidiary or (c) transfer any of its properties or assets to Borrower or any
other Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) the New PRIMESTAR Senior Credit Facility, the
Existing Indentures, any Basic Document, any Restructuring Agreement, the Senior
Subordinated Indenture or any other agreement of Borrower or the Restricted
Subsidiaries outstanding on the Closing Date, in each case as in effect on the
Closing Date, and any amendments, restatements, renewals, replacements or
refinancings thereof; provided, however, that any such amendment, restatement,
-------- -------
renewal, replacement or refinancing is no more restrictive in the aggregate with
respect to such encumbrances or restrictions than those contained in the New
PRIMESTAR Senior Credit Facility as in effect on the Closing Date; (ii)
applicable law; (iii) any instrument governing Indebtedness or Equity Interests
of an Acquired Person acquired by Borrower or any Restricted Subsidiary as in
effect at the time of such acquisition (except to the extent such Indebtedness
was incurred by such Acquired Person in connection with, as a result of or in
contemplation of such acquisition); provided, however, that such encumbrances
-------- -------
and restrictions are not applicable to Borrower or any Restricted Subsidiary, or
the properties or assets of Borrower or any Restricted Subsidiary, other than
the Acquired Person; (iv) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past practices; (v)
Purchase Money Indebtedness for property acquired in the ordinary course of
business that imposes encumbrances and restrictions only on the property so
acquired; (vi) any agreement for the sale or disposition of the Equity Interests
or assets of any Restricted Subsidiary; provided, however, that such
-------- -------
encumbrances and restrictions described in this clause (vi) are only applicable
to such Restricted Subsidiary or assets, as applicable, and any such sale or
disposition is made in compliance with Section 6A.9 to the extent applicable
thereto; (vii) refinancing Indebtedness permitted under clause (h) of the second
paragraph of Section 6A.2; provided, however, that the encumbrances and
-------- -------
restrictions contained in the agreements governing such Indebtedness are no more
restrictive in the aggregate than those contained in the agreements governing
the Indebtedness being refinanced immediately prior to such refinancing; (viii)
this Agreement or the Senior Subordinated Indenture; or (ix) any such customary
encumbrance or restriction existing under any other security agreement,
instrument or document hereafter in effect; provided, however, that the terms
-------- -------
and conditions of any such encumbrance or restriction are not more restrictive
than those contained in the New PRIMESTAR Senior Credit Facility as in effect on
the Closing Date. Anything contained herein to the contrary notwithstanding,
Borrower and its Subsidiaries shall in no event be prohibited or restrained from
granting, and causing to be effective, any lien or security interest securing
the obligations of Borrower and the Restricted Subsidiaries under the New
PRIMESTAR Senior Credit Facility.
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6A.7 Guaranty of Notes by Subsidiaries
---------------------------------
In the event that any Restricted Subsidiary (other than a Guarantor),
directly or indirectly, guarantees any Indebtedness of Borrower pursuant to
clause (e) of the second paragraph of Section 6A.2, Borrower shall cause such
Restricted Subsidiary to concurrently guarantee (a "Guaranty") Borrower's
--------
Obligations under this Agreement and the Loans and Notes to the same extent that
such Restricted Subsidiary guaranteed Borrower's Obligations under such other
Indebtedness (including waiver of subrogation, if any); provided, however, that
-------- -------
the Guaranty shall be subordinated in right of payment to all Guarantor Senior
Indebtedness (which shall include such guarantee of such other Indebtedness)
pursuant to the subordination provisions of Section 11, provided, further,
-------- -------
however, that each Subsidiary issuing a Guaranty will be automatically and
-------
unconditionally released and discharged from its obligations under such Guaranty
upon the release or discharge of the guarantee of the Indebtedness that resulted
in the creation of such Guaranty, except a discharge or release by, or as a
result of, any payment under the guarantee of such Other Indebtedness by such
Guarantor. Borrower shall cause each Restricted Subsidiary issuing a Guaranty
to (i) execute and deliver to the Arranger a supplemental indenture in form
reasonably satisfactory to the Arranger pursuant to which such Restricted
Subsidiary shall become a party to this Agreement and thereby unconditionally
guarantee all of Borrower's Obligations under the Loans and Notes and this
Agreement on the terms set forth in Section 10 and Section 11 hereof and (ii)
deliver to the Arranger an opinion of counsel that such supplemental agreement
has been duly authorized, executed and delivered by such Restricted Subsidiary
and constitutes a legal, valid, binding and enforceable obligation of such
Restricted Subsidiary (which opinion may be subject to customary assumptions and
qualifications). Thereafter, such Restricted Subsidiary shall (unless released
in accordance with the terms of this Agreement) be a Guarantor for all purposes
of this Agreement.
6A.8 Merger, Sale of Assets; Etc.
---------------------------
A. Borrower shall not consolidate with or merge with or into (whether
or not Borrower is the Surviving Person) any other entity and Borrower shall not
and shall not cause or permit any Restricted Subsidiary to, sell, convey,
assign, transfer, lease or otherwise dispose of all or substantially all of
Borrower's properties and assets (determined on a consolidated basis for
Borrower and the Restricted Subsidiaries) to any entity in a single transaction
or series of related transactions, unless: (i) either (x) Borrower shall be the
Surviving Person or (y) the Surviving Person (if other than Borrower) shall be a
corporation organized and validly existing under the laws of the United States
of America or any State thereof or the District of Columbia, and shall, in any
such case, expressly assume by an assumption agreement or a supplemental
indenture, as the case may be, the due and punctual payment of the principal of,
premium, if any, and interest on all the Term Notes and the performance and
observance of every covenant of the Loan Documents or to be performed or
observed on the part of Borrower; (ii) immediately thereafter, no Potential
Event of Default or Event of Default shall have occurred and be continuing; and
(iii) immediately after giving effect to any such transaction involving the
Incurrence by Borrower or any Restricted Subsidiary, directly or indirectly, of
additional Indebtedness (and treating any Indebtedness not previously an
obligation of Borrower or any Restricted Subsidiary in connection with or as a
result of such transaction as having been Incurred at the time of such
transaction), the Surviving Person could Incur, on a pro forma basis after
---------
giving effect to such transaction as if it had occurred at the beginning of the
latest fiscal quarter for which consolidated financial statements of Borrower
are available, at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the Debt to Operating Cash Flow Ratio of the first paragraph
of Section 6A.2. Notwithstanding the foregoing, the TSAT Merger shall be
permitted so long as it is consummated pursuant to the terms and conditions
contained in the TSAT Merger Agreement as in effect on the Closing Date or as
amended thereafter, which amendment, if material, must be approved by the
Required Lenders.
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For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all the properties and assets of one or more Restricted
Subsidiaries the Equity Interest of which constitutes all or substantially all
the properties and assets of Borrower shall be deemed to be the transfer of all
or substantially all the properties and assets of Borrower.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the second immediately preceding
paragraph in which Borrower is not the Surviving Person and the Surviving Person
is to assume all the Obligations of Borrower under the Loan Documents pursuant
to an agreement in form and substance satisfactory to the Arranger, such
Surviving Person shall succeed to, and be substituted for, and may exercise
every right and power of, Borrower and Borrower shall be discharged from its
Obligations under the Loan Documents.
B. Subject to the requirements of subparagraph A of this Section
6A.8, in the event of a sale of all or substantially all the assets of any
Guarantor or all of the Equity Interests of any Guarantor, by way of merger,
consolidation or otherwise, then the Surviving Person of any such merger
consolidation, or such Guarantor, if all of its Equity Interests are sold, shall
be released and relieved of any and all obligations under the Guarantee of such
Guarantor if (i) the Person or entity surviving such merger or consolidation or
acquiring the Equity Interests of such Guarantor is not a Restricted Subsidiary,
and (ii) the Net Cash Proceeds from such sale are used after such sale in a
manner that complies with the provisions of Section 6A.9. Except as provided in
the preceding sentence, no Guarantor shall consolidate with or merge with or
into another Person, whether or not such Person is affiliated with such
Guarantor and whether or not such Guarantor is the Surviving Person, unless (i)
the Surviving Person (if other than such Guarantor) is a corporation organized
and validly existing under the laws of the United States, any State thereof or
the District of Columbia, (ii) the Surviving Person (if other than such
Guarantor) expressly assumes all the obligations of such Guarantor under the
Guarantee and this Agreement pursuant to an assumption agreement or a
supplemental indenture in a form reasonably satisfactory to the Agents, (iii) at
the time of and immediately after such Disposition, no Default or Event of
Default shall have occurred and be continuing, and (iv) immediately after giving
effect to any such transaction involving the Incurrence by Borrower or any
Guarantor, directly or indirectly, of additional Indebtedness (and treating any
Indebtedness not previously an obligation of Borrower or any Guarantor in
connection with or as a result of such transaction as having been Incurred at
the time of such transaction), the Surviving Person could Incur, on a pro forma
basis after giving effect to such transaction as if it had occurred at the
beginning of the latest fiscal quarter for which consolidated financial
statements of Borrower are available, at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the Debt to Operating Cash Flow Ratio
of the first paragraph of Section 6A.2; provided, however, that clause (iv) of
this paragraph shall not be a condition to a merger or consolidation of a
Guarantor if such merger or consolidation only involves Borrower and/or one or
more Wholly Owned Restricted Subsidiaries.
6A.9 Disposition of Proceeds of Asset Sales
--------------------------------------
A. Borrower shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, make any Asset Sale, unless (i) Borrower
or such Restricted Subsidiary, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the Fair Market Value of the assets
sold or otherwise disposed of and (ii) at least 85% of such consideration
consists of (A) cash or Cash Equivalents, (B) properties and capital assets to
be used in the same or related lines of business being conducted by Borrower or
any Restricted Subsidiary at such time or (C) Equity Interests in one or more
Persons which thereby become Restricted Subsidiaries whose assets consist
primarily of properties and capital assets used in the same or related lines of
business being conducted by Borrower or any Restricted Subsidiary at such time.
The amount of any (i) Indebtedness (other than any Subordinated Indebtedness) of
Borrower or any Restricted Sub-
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sidiary that is actually assumed by the transferee in such Asset Sale and
from which Borrower and the Restricted Subsidiaries are fully released shall be
deemed to be cash for purposes of determining the percentage of cash
consideration received by Borrower or the Restricted Subsidiaries and (ii) notes
or other similar obligations received by Borrower or the Restricted Subsidiaries
from such transferee that are converted, sold or exchanged within thirty days of
the related Asset Sale by Borrower or the Restricted Subsidiaries into cash
shall be deemed to be cash, in an amount equal to the net cash proceeds realized
upon such conversion, sale or exchange for purposes of determining the
percentage of cash consideration received by Borrower or the Restricted
Subsidiaries.
Borrower or such Restricted Subsidiary, as the case may be, may (i)
apply the Net Cash Proceeds of any Asset Sale within 375 days of receipt thereof
to repay Senior Indebtedness and permanently reduce any related commitment, (ii)
commit in writing to acquire, construct or improve properties and capital assets
to be used in the same or related lines of business being conducted by Borrower
or any Restricted Subsidiary at such time and so apply such Net Cash Proceeds
within 375 days after the receipt thereof, or (iii) apply the Net Cash Proceeds
of any Asset Sale within 375 days after receipt thereof to the making of any
Investment which is permitted to be made under Section 6A.1.
To the extent all or part of the Net Cash Proceeds of any Asset Sale
are not applied within 375 days of such Asset Sale (each such 375th day, a
"Trigger Date") as described in clause (i), (ii) or (iii) of the immediately
------------
preceding paragraph (such Net Cash Proceeds, the "Unutilized Net Cash
-------------------
Proceeds"), Borrower shall comply with Section 2.5A(iv)(b).
--------
B. So long as Borrower or any Restricted Subsidiary is directly or
indirectly obligated, contingently or otherwise, for any obligations under the
Partnership Credit Agreement (pursuant to any letter of credit, guarantee or
other credit support or otherwise) or has any obligation under any Permitted
Indebtedness under clause (k) of Section 6A.2 above, for purposes of the
foregoing covenant, the sale or lease of either or both Tempo Satellites
(whether or not the Person owning such Tempo Satellite is a Restricted
Subsidiary), or any transponder thereon or capacity thereof, to any Person
(other than Borrower or any Restricted Subsidiary) shall be considered an Asset
Sale (to the extent of the interest of Borrower and its Subsidiaries in such
Tempo Satellite, transponder thereon or capacity thereof) unless if such sale or
lease is to any other Person, the net proceeds thereof are applied to the
balance due under the Partnership Credit Agreement until the Partnership Credit
Agreement is permanently repaid in full and all commitments to extend credit
thereunder are permanently terminated. Borrower shall not and shall not cause
or permit any Subsidiary to enter into or suffer to exist any agreement,
instrument, encumbrance or restriction which would, directly or indirectly,
limit, prohibit or restrict the compliance by Borrower and its Subsidiaries with
the foregoing sentence.
C. If Borrower or any Restricted Subsidiary is engaged in the High
Power Satellite Transmission Business, Borrower shall not, and shall not cause
or permit any such High Power Satellite Transmission Subsidiary to, sell,
convey, transfer, lease, assign, or otherwise encumber (except for Permitted
Liens and except for Liens and other encumbrances permitted under the New
PRIMESTAR Senior Credit Facility) (i) any Tempo Satellite (or any contract
rights related to the construction, launch or insurance thereof), to the extent
of the interest of Borrower and its Subsidiaries in such Tempo Satellite, (ii)
any orbital slot owned by Borrower or any Subsidiary, (iii) the Equity Interests
of any Subsidiary which owns any Tempo Satellite or any orbital slot or any
right, license, authorization or permit with respect to any such orbital slot
owned by such Subsidiary, or any other interest in an orbital slot which may be
sold or otherwise disposed of in compliance with all applicable law (including
the Communications Act and the rules and regulations promulgated thereunder) or
(iv) the income or profits of any of the foregoing, unless in any such case
immediately after such a transaction Borrower or such High Power Satellite
Transmission Subsidiary has in place dedicated sat-
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ellite capacity, or a binding agreement providing for dedicated satellite
capacity, sufficient to serve its High Power Satellite Transmission Business at
least until the stated maturity of the Term Notes and files such agreement with
the Arranger together with an Officers' Certificate certifying that such
agreement meets the foregoing criteria; provided, however, that in no event
-------- -------
shall the covenant be construed to prevent Borrower from discontinuing its High
Power Satellite Transmission Business.
6A.10 Payments for Consent
--------------------
Neither Borrower nor any of its Subsidiaries may, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Lender for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Agreement
or the Notes unless such consideration is offered to be paid or agreed to be
paid to all Lenders that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
6A.11 Tempo Satellites; Maintenance of Insurance
------------------------------------------
A. Prior to 180 days following the successful launch of any Tempo
Satellite launched on or before December 31, 1997, Borrower shall not terminate
the Satellite Construction Agreement or amend, modify or refrain from enforcing
any provision thereof in any manner adverse to Borrower or any of its
Subsidiaries or the holders of the Term Notes in any material respect, as
determined by the Board of Directors of Borrower, and shall not amend, modify or
refrain from enforcing any provision thereof regarding the rights of Borrower
under the Satellite Construction Agreement (if any) with respect to any failure
of any Tempo Satellite that may occur in connection with the launch thereof or
during the 180 day period immediately thereafter.
B. Upon the earliest to occur of (x) the TSAT Merger, (y) the
exercise by Borrower or one of its Restricted Subsidiaries of the Tempo Option
and (z) failure of either Loral or TSAT to comply with the terms of any
agreement with respect to maintenance of In-Orbit Insurance as such agreements
are in effect on the date hereof, with respect to the Tempo Satellite (or any
permanent replacement thereof), if Borrower or any Subsidiary is engaged in the
High Power Satellite Transmission Business, so long as (i) Borrower or such
Subsidiary engaged in the High Power Satellite Transmission Business does not
have in place other dedicated in-orbit satellite capacity or (ii) a ground spare
satellite of comparable or superior quality and capacity has not been completely
constructed and available to be launched (pursuant to a binding agreement, a
copy of which has been filed with the Arranger) in each case sufficient capacity
to permit Borrower or the Subsidiary conducting the High Power Satellite
Transmission Business to conduct such business on a competitive basis and
service its subscribers, then within 30 days after the acceptance of any Tempo
Satellite by Borrower or any Subsidiary after completion of in-orbit testing by
the builder thereof, Borrower shall, or shall cause a Restricted Subsidiary to,
obtain (to the extent commercially available upon reasonable terms), and
thereafter maintain, In-Orbit Insurance with respect to the Tempo Satellite (or
any permanent replacement thereof) providing the servicing capacity with respect
to such High Power Satellite Transmission Business. Borrower or such Restricted
Subsidiary shall be named as the insured under such In-Orbit Insurance
(provided, however, that only a senior secured creditor of Borrower or a
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Restricted Subsidiary may also be designated as a named insured under such In-
Orbit Insurance).
C. Immediately upon consummation of the ASkyB Transaction, so long as
(i) Borrower or such Subsidiary engaged in the High Power Satellite Transmission
Business does not have in place other dedicated in-orbit satellite capacity or
(ii) a ground spare satellite of comparable or superior quality and capacity has
not been completely constructed and available to be launched, in each case
sufficient capacity to permit Borrower or the Restricted Subsidiary engaged in
the High Power Satellite Transmission Business to conduct
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such business on a competitive basis and service its subscribers, then within 30
days after the consummation of the ASkyB Transaction, Borrower shall, or shall
cause a Restricted Subsidiary to, obtain (to the extent commercially available
upon reasonable terms), and thereafter to maintain, In-Orbit Insurance with
respect to the ASkyB Satellite (or any permanent replacement thereof).
D. In the event that Borrower or any of its Subsidiaries receives any
damages or other amounts due under the Satellite Construction Agreement
(including, without limitation, the refund of the full purchase price of any
Tempo Satellite which has not been delivered pursuant to the terms thereof) all
such amounts shall be deemed to be Net Cash Proceeds from an Asset Sale and
Borrower shall apply such proceeds as required by the second and third full
paragraphs under Section 6A.9A, except as provided by Section 6A.9B.
6A.12 Designation of Unrestricted Subsidiaries
----------------------------------------
A. Each Subsidiary of Borrower that has been designated as of the
Closing Date under the Existing Indentures as an Unrestricted Subsidiary
pursuant to the terms thereof (and which designation as of the Closing Date has
not been revoked thereunder) is initially designated by Borrower as an
Unrestricted Subsidiary as of the Closing Date. Borrower may designate after
the Closing Date any other Subsidiary of Borrower as an "Unrestricted
Subsidiary" under this Agreement (a "Designation") so long as such Subsidiary is
-----------
also on the same date designated as an Unrestricted Subsidiary pursuant to the
Existing Indentures and the Senior Subordinated Indenture (if in effect) and
only if:
(i) no Potential Event of Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to
such Designation;
(ii) at the time of and after giving effect to such Designation,
Borrower could Incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the Debt to Operating Cash Flow Ratio of the first
paragraph of Section 6A.2; and
(iii) Borrower would be permitted to make an Investment (other
than a Permitted Investment) at the time of Designation (assuming the
effectiveness of such Designation) pursuant to the first paragraph of
Section 6A.1 in an amount (the "Designation Amount") equal to the Fair
------------------
Market Value of Borrower's proportionate interest in the net worth of such
Subsidiary on such date calculated in accordance with GAAP.
Notwithstanding the above, no Subsidiary of Borrower shall be
designated an Unrestricted Subsidiary which (i) holds the partnership interest
in (or any debt or equity interest in) Primestar Partnership or distributes,
directly or indirectly, PRIMESTAR(R) television programming service or has any
right, title or interest in the revenue or profits in, or holds any Lien in
respect of, such partnership interests or such distribution; (ii) conducts,
directly or indirectly, the High Power Satellite Transmission Business or the
business of distributing high power DBS services to subscribers (or, if the
proposed wholesale strategy is implemented, the business of distributing the
wholesale service to cable system operators), or has any interest in any such
business or the right to receive the income or profits therefrom; or (iii) holds
any right, title or interest in the assets transferred to Borrower pursuant to
the ASkyB Transaction.
Neither Borrower nor any Restricted Subsidiary shall at any time (x)
provide credit support for, subject any of its property or assets (other than
the Equity Interests of any Unrestricted Subsidiary) to the satisfaction of, or
guarantee, any Indebtedness of any Unrestricted Subsidiary (including any
undertaking,
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agreement or instrument evidencing such Indebtedness), (y) be directly or
indirectly liable for any Indebtedness of any Unrestricted Subsidiary, or (z) be
directly or indirectly liable for any Indebtedness which provides that the
holder thereof may (upon notice, lapse of time or both) declare a default
thereon or cause the payment thereof to be accelerated or payable prior to its
final scheduled maturity upon the occurrence of a default with respect to any
Indebtedness of any Unrestricted Subsidiary, except, in the case of clause (x)
or (y), to the extent otherwise permitted under the terms of this Agreement,
including, without limitation, pursuant to Section 6A.1 and Section 6A.9, and
except for any non-recourse guarantee given solely to support the pledge by
Borrower or any Restricted Subsidiary of the Equity Interests of any
Unrestricted Subsidiary.
B. Borrower may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
----------
(i) no Potential Event of Default or Event of Default shall have
occurred and be continuing at the time of and after giving effect to such
Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of this
Agreement.
All Designations and Revocations must be evidenced by resolutions of
the Board of Directors of Borrower delivered to the Arranger certifying
compliance with the foregoing provisions.
6A.13 Refinancing of Loans in Part.
----------------------------
Borrower shall not, nor shall Borrower cause or permit any of it
Subsidiaries to, Incur any Indebtedness to Refinance the Loans in part other
than the Refinancing Securities, the Required Refinancing Securities or the
Exchange Notes, unless the terms, conditions, covenants, events of default and
other provisions in respect of the events of default and other provisions in
respect of the instruments evidencing the Indebtedness Incurred to Refinance the
Loans in part shall have been approved in writing by the Agents (which approval
shall not be unreasonably withheld) prior to the Incurrence of any such
Indebtedness.
SECTION 7. EVENTS OF DEFAULT
If any of the following conditions or events (each, an "Event of
--------
Default") shall occur and be continuing:
-------
7.1 Failure To Make Payments When Due
---------------------------------
Failure to pay any installment of principal of the Loans when due,
whether at stated maturity, by acceleration, by notice of prepayment or
otherwise (whether or not such payment is prohibited by Section 8); or failure
to pay any interest on the Loans or any other amount due under this Agreement
(i) prior to the Conversion Date, within five days or more after the date due,
or (ii) on and after the Conversion Date, within 30 days or more after the date
due (in any case whether or not such payment is prohibited by Section 8); or
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7.2 Default in Other Agreements
---------------------------
Failure of Borrower or any of its Material Subsidiaries to pay at
final maturity any principal on one or more issues of Indebtedness of Borrower
or of any of its Subsidiaries (other than Indebtedness referred to in Section
7.1) or breach or default by Borrower or any of its Material Subsidiaries with
respect to any other term of any one or more issues of Indebtedness of Borrower
or of any of its Material Subsidiaries or any agreement or instrument evidencing
or securing such Indebtedness and such default or breach results in the
acceleration of that Indebtedness prior to its stated maturity and, in either
case, the principal amount of such Indebtedness and all other such Indebtedness
of Borrower and its Subsidiaries in respect of which there is a failure to pay
principal or interest or which has been so accelerated equals $15,000,000 or
more; or
7.3 Change of Control; Breach of Certain Covenants
----------------------------------------------
A. The occurrence of a Change of Control prior to the Conversion
Date.
B. Failure of Borrower to perform or comply with any covenant, term
or condition contained in Section 2.5A(iv); or
7.4 Breach of Warranty
------------------
Any representation, warranty or certification made by Borrower or any
other Loan Party in any Loan Document or in any statement or certificate at any
time given by Borrower in writing pursuant hereto or thereto or in connection
herewith or therewith shall be false or incorrect in any material respect on the
date as of which made or deemed made; or
7.5 Other Defaults Under Agreement or Loan Documents
------------------------------------------------
Borrower shall (x) default in the performance of or compliance with
any covenant, term or condition contained in Section 6 of this Agreement, or (y)
default in the performance of or compliance with any covenant, term or condition
contained in this Agreement or the other Loan Documents (other than those
covered by Sections 7.1, 7.3, 7.4, 7.5(x), or 7.10) and, with respect to this
Section 7.5(y), such default shall not have been remedied or waived in
accordance with this Agreement within 30 days after the date of written notice
from the holder or holders of not less than 25% in aggregate principal amount of
the Loans then outstanding of such default; or
7.6 Involuntary Bankruptcy; Appointment of Custodian, Etc.
------------------------------------------------------
A court of competent jurisdiction enters a Bankruptcy Order under any
Bankruptcy Law that:
(A) is for relief against Borrower or any Material Subsidiary in an
involuntary case or proceeding, or
(B) appoints a Custodian of Borrower or any Material Subsidiary for
all or substantially all of its properties, or
(C) orders the liquidation of Borrower or any Material Subsidiary,
and in each case the order or decree remains unstayed and in effect for 60 days;
or
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7.7 Voluntary Bankruptcy; Appointment of Custodian, Etc.
----------------------------------------------------
Borrower or any Material Subsidiary pursuant to or within the meaning
of any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of a Bankruptcy Order for relief against it
in an involuntary case or proceeding, or
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors or
files a proposal or scheme of arrangement involving the rescheduling or
composition of its indebtedness, or
(E) consents to the filing of a petition in bankruptcy against it, or
(F) shall generally not pay its debts when such debts become due or
shall admit in writing its inability to pay its debts generally; or
7.8 Judgments and Attachments
-------------------------
Any money judgment, writ or warrant of attachment, or similar process
involving in any individual case or in the aggregate at any time an amount in
excess of $15,000,000 (to the extent not covered by third-party insurance as to
which the insurance company has acknowledged responsibility) shall be entered or
filed against Borrower or any of its Material Subsidiaries or any of their
respective properties or assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days or in any event later than five
days prior to the date of any proposed sale thereunder; or
7.9 Dissolution
-----------
Any order, judgment or decree shall be entered against Borrower or any
Material Subsidiary decreeing the dissolution or split-up of Borrower or that
Material Subsidiary and such order shall remain undischarged or unstayed for a
period in excess of 30 days; or
7.10 Guarantee
---------
(i) Any Guarantee or any material provision thereof shall cease
to be in full force or effect (other than in accordance with its express terms),
or (ii) any Guarantor or any Person acting by or on behalf of such Guarantor
shall deny or disaffirm such Guarantor's obligations under its Guarantee, or
(iii) any Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed, after
giving effect to any applicable grace periods, pursuant to its Guarantee; or
7.11 Foreclosure
-----------
The agent under the New PRIMESTAR Senior Credit Facility or any other
party entitled to act thereunder commences judicial proceedings to foreclose on
the collateral securing the Indebtedness or ex-
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ercises any right under applicable law or any instrument evidencing a security
interest or other encumbrance in respect of such collateral to take ownership or
effect the transfer of such collateral in lieu of foreclosure;
THEN (i) upon the occurrence of any Event of Default described in the
foregoing Sections 7.6 or 7.7 with respect to Borrower, all of the unpaid
principal amount of and accrued interest on the Loans and all other outstanding
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by Borrower, and the commitments of the Lenders
hereunder shall thereupon automatically terminate, and (ii) upon the occurrence
of any other Event of Default, the Agents shall, upon written notice of the
holder or holders of at least 25% in aggregate principal amount of the Loans
then outstanding, by written notice to Borrower, declare all of the unpaid
principal amount of and accrued interest on the Loans and all other outstanding
Obligations to be, and the same shall forthwith become, due and payable, and the
obligations of the Lenders hereunder shall thereupon terminate; provided,
--------
however, that so long as the New PRIMESTAR Senior Credit Facility shall be in
-------
full force and effect, if an Event of Default shall have occurred and be
continuing (other than an Event of Default with respect to Borrower described in
Section 7.6 or Section 7.7), the Loans shall not become due and payable until
the earlier to occur of (x) five Business Days following delivery of written
notice of such acceleration of the Loans to the agent under the New PRIMESTAR
Senior Credit Facility and (y) the acceleration (ipso facto or otherwise) of any
---- -----
Indebtedness under the New PRIMESTAR Senior Credit Facility. Nevertheless, if
at any time after acceleration of the maturity of the Loans, Borrower shall pay
all arrears of interest and all payments on account of the principal thereof
which shall have become due otherwise than by acceleration (with interest on
principal and, to the extent permitted by law, on overdue interest, at the rates
specified in this Agreement or the Notes) and all Events of Default and
Potential Events of Default (other than non-payment of principal of and accrued
interest on the Loans and the Notes due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 12.5, then the
Agents shall, upon written notice of the holders of a majority in aggregate
principal amount of the Loans then outstanding, by written notice to Borrower
rescind and annul the acceleration and its consequences; but such action shall
not affect any subsequent Event of Default or Potential Event of Default or
impair any right consequent thereon.
SECTION 8. SUBORDINATION
8.1 Loans and Notes Subordinated to Senior Indebtedness
---------------------------------------------------
Borrower covenants and agrees, and the Arranger and each Lender by its
acceptance thereof likewise covenant and agree, that all Loans and Notes shall
be issued subject to the provisions of this Section 8; and each person holding
any Loan or Note, whether upon original issue or upon transfer, assignment or
exchange thereof, accepts and agrees that all payments of the principal of and
interest on the Loans and Notes by Borrower shall, to the extent and in the
manner set forth in this Section 8, be subordinated and junior in right of
payment to the prior payment in full in cash of all amounts payable under Senior
Indebtedness.
8.2 No Payment on Loans and Notes in Certain Circumstances;
Payments Held in Trust
----------------------
A. No Payments in Certain Circumstances. No direct or indirect
------------------------------------
payment (excluding any payment or distribution of Permitted Junior Securities)
by or on behalf of Borrower of principal of or interest on the Loans and Notes,
whether pursuant to the terms of the Loans or Notes, upon acceleration, pursuant
to an Offer to Purchase or otherwise, shall be made if, at the time of such
payment, there exists a default in the
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payment of all or any portion of the obligations on any Designated Senior
Indebtedness, whether at maturity, on account of mandatory redemption or
prepayment, acceleration or otherwise, and such default shall not have been
cured or waived or the benefits of this sentence waived by or on behalf of the
holders of such Designated Senior Indebtedness. In addition, during the
continuance of any non-payment event of default with respect to any Designated
Senior Indebtedness pursuant to which the maturity thereof may be immediately
accelerated, and upon receipt by the Arranger of written notice (a "Payment
-------
Blockage Notice") from the holder or holders of such Designated Senior
---------------
Indebtedness or the trustee or agent acting on behalf of such Designated Senior
Indebtedness, then, unless and until such event of default has been cured or
waived or has ceased to exist or such Designated Senior Indebtedness has been
discharged or repaid in full in cash or the benefits of these provisions have
been waived by the holders of such Designated Senior Indebtedness, no direct or
indirect payment (excluding any payment or distribution of Permitted Junior
Securities) shall be made by or on behalf of Borrower of principal of or
interest on the Loans or Notes, except from those funds held in trust for the
benefit of Holders of any Securities pursuant to the procedures set forth in
Article Nine hereof, to such Holders, during a period (a "Payment Blockage
Period") commencing on the date of receipt of such notice by the Arranger and
ending 179 days thereafter.
Notwithstanding anything herein or in the Securities to the contrary,
(x) in no event shall a Payment Blockage Period extend beyond 179 days from the
date the Payment Blockage Notice in respect thereof was given, (y) there shall
be a period of at least 181 consecutive days in each 360-day period when no
Payment Blockage Period is in effect and (z) not more than one Payment Blockage
Period may be commenced with respect to the Loans or Notes during any period of
360 consecutive days. No event of default that existed or was continuing on the
date of commencement of any Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Payment Blockage Period (to the
extent the holder of Designated Senior Indebtedness, or trustee or agent, giving
notice commencing such Payment Blockage Period had knowledge of such existing or
continuing event of default) may be, or be made, the basis for the commencement
of any other Payment Blockage Period by the holder or holders of such Designated
Senior Indebtedness or the trustee or agent acting on behalf of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such event of default has been cured or waived for a period of not less
than 90 consecutive days.
B. Payments Held in Trust. In the event that, notwithstanding the
----------------------
foregoing, any payment shall be received by the Arranger or any Lender when such
payment is prohibited by Section 8.2A, such payment shall be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of
Designated Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Designated
Senior Indebtedness may have been issued, as their respective interests may
appear, but only to the extent that, upon notice from the Arranger to the
holders of Designated Senior Indebtedness that such prohibited payment has been
made, the holders of the Designated Senior Indebtedness (or their representative
or representatives or a trustee) notify the Arranger in writing of the amounts
then due and owing on the Designated Senior Indebtedness, if any, and only the
amounts specified in such notice to the Arranger shall be paid to the holders of
Designated Senior Indebtedness.
8.3 Payment Over of Proceeds upon Dissolution, Etc.
----------------------------------------------
A. Payment Over. Upon any payment or distribution of assets or
------------
securities of Borrower of any kind or character, whether in cash, property or
securities (excluding any payment or distribution of Permitted Junior
Securities), upon any dissolution or winding-up or liquidation or reorganization
of Borrower, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Senior Indebtedness shall first be paid
in full in cash before the Lenders or the Arranger on behalf of such Lenders
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shall be entitled to receive any payment by Borrower of the principal of or
interest on the Loans or Notes, or any payment by Borrower to acquire any of the
Loans or Notes for cash, property or securities, or any distribution with
respect to the Loans or Notes of any cash, property or securities (excluding any
payment or distribution of Permitted Junior Securities). Before any payment may
be made by, or on behalf of, Borrower of the principal of or interest on the
Loans or Notes upon any such dissolution or winding-up or liquidation or
reorganization, any payment or distribution of assets or securities of Borrower
of any kind or character, whether in cash, property or securities (excluding any
payment or distribution of Permitted Junior Securities), to which the Lenders or
the Arranger on their behalf would be entitled, but for the subordination
provisions of this Agreement, shall be made by Borrower or by any receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, directly to the holders of the Senior Indebtedness (pro
---
rata to such holders on the basis of the respective amounts of Senior
----
Indebtedness held by such holders) or their representatives or to the trustee or
trustees or agent or agents under any agreement or indenture pursuant to which
any of such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Senior
Indebtedness in full in cash after giving effect to any prior or concurrent
payment, distribution or provision therefor to or for the holders of such Senior
Indebtedness.
B. Payments Held in Trust. In the event that, notwithstanding the
----------------------
foregoing provision prohibiting such payment or distribution, any payment or
distribution of assets or securities of Borrower of any kind or character,
whether in cash, property or securities (excluding any payment or distribution
of Permitted Junior Securities), shall be received by the Arranger or any Lender
at a time when such payment or distribution is prohibited by Section 8.3A and
before all obligations in respect of Senior Indebtedness are paid in full in
cash, or payment provided for, such payment or distribution shall be received
and held in trust for the benefit of, and shall be paid over or delivered to,
the holders of Senior Indebtedness (pro rata to such holders on the basis of the
--------
respective amounts of Senior Indebtedness held by such holders) or their
respective representatives, or to the trustee or trustees or agent or agents
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of Senior Indebtedness remaining unpaid until all such Senior
Indebtedness has been paid in full in cash after giving effect to any prior or
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
The consolidation of Borrower with, or the merger of Borrower with or
into, another corporation or the liquidation or dissolution of Borrower
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Section 6A.8 shall not be deemed a dissolution, winding-
up, liquidation or reorganization for the purposes of this Section 8.3 if such
other corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Section 6A.8.
8.4 Subrogation
-----------
Upon the payment in full in cash of all Senior Indebtedness, or
provision for payment, the Lenders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of Borrower made on such Senior Indebtedness until the
principal of and interest on the Loans and Notes shall be paid in full in cash;
and, for the purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Lenders or the Arranger on their behalf would be entitled except for the
provisions of this Section 8, and no payment over pursuant to the provisions of
this Section 8 to the holders of Senior Indebtedness by Lenders or the Arranger
on their behalf shall, as between Borrower, its creditors other than holders of
Senior Indebtedness, and the Lenders, be deemed to be a payment by Borrower to
or on account of the Senior Indebtedness.
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It is understood that the provisions of this Section 8 are and are intended
solely for the purpose of defining the relative rights of the Lenders, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
If any payment or distribution to which the Lenders would otherwise
have been entitled but for the provisions of this Section 8 shall have been
applied, pursuant to the provisions of this Section 8, to the payment of all
amounts payable under Senior Indebtedness, then and in such case, the Lenders
shall be entitled to receive from the holders of such Senior Indebtedness any
payments or distributions received by such holders of Senior Indebtedness in
excess of the amount required to make payment in full, or provision for payment,
of such Senior Indebtedness.
8.5 Obligations of Borrower Unconditional
-------------------------------------
Nothing contained in this Section 8 or elsewhere in this Agreement or
in the Notes is intended to or shall impair, as among Borrower and the Lenders,
the obligation of Borrower, which is absolute and unconditional, to pay to the
Lenders the principal of and interest on the Loans and Notes as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Lenders and creditors of Borrower
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Lenders or the Arranger on their behalf from exercising all
remedies otherwise permitted by applicable law upon default under this
Agreement, subject to the rights, if any, under this Section 8 of the holders of
the Senior Indebtedness in respect of cash, property or securities of Borrower
received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Section 8 shall restrict the right of the Arranger or the Lenders to take
any action to declare the Securities to be due and payable prior to their stated
maturity pursuant to Section 7 or to pursue any rights or remedies hereunder;
provided, however, that all Senior Indebtedness then due and payable shall first
-------- -------
be paid in full before the Lenders or the Arranger are entitled to receive any
direct or indirect payment from Borrower of principal of or interest on the
Loans and Notes.
8.6 Notice to Arranger
------------------
Borrower shall give prompt written notice to the Arranger of any fact
known to Borrower which would prohibit the making of any payment to or by the
Arranger in respect of the Loans or Notes pursuant to the provisions of this
Section 8. The Arranger shall not be charged with knowledge of the existence of
any event of default with respect to any Senior Indebtedness or of any other
facts which would prohibit the making of any payment to or by the Arranger
unless and until the Arranger shall have received notice in writing to that
effect signed by an Officer of Borrower, or by a holder of Senior Indebtedness
or trustee or agent therefor; and prior to the receipt of any such written
notice, the Arranger shall be entitled to assume that no such facts exist;
provided, however, that if the Arranger shall not have received the notice
-------- -------
provided for in this Section 8.6 at least two Business Days prior to the date
upon which by the terms of this Agreement any moneys shall become payable for
any purpose (including, without limitation, the payment of the principal of or
interest on any Loan or Note), then, regardless of anything herein to the
contrary, the Arranger shall have full power and authority to receive any moneys
from Borrower and to apply the same to the purpose for which they were received,
and shall not be affected by any notice to the contrary which may be received by
it on or after such prior date. Nothing contained in this Section 8.6 shall
limit the right of the holders of Senior Indebtedness to recover payments as
contemplated by Section 8.3. The Arranger shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a holder of any Senior Indebt-
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edness (or a trustee on behalf of, or other representative of, such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder.
In the event that the Arranger determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Section 8, the Arranger may request such Person to furnish evidence to the
reasonable satisfaction of the Arranger as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Section 8, and if such evidence is not furnished, the
Arranger may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
8.7 Reliance on Judicial Order or Certificate of Liquidating Agent
--------------------------------------------------------------
Upon any payment or distribution of assets or securities referred to
in this Section 8, the Arranger and the Lenders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings
are pending, or upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
delivered to the Arranger or to the Lenders for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of Borrower, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section 8.
8.8 Arranger's Relation to Senior Indebtedness
------------------------------------------
The Arranger shall be entitled to all the rights set forth in this
Section 8 with respect to any Senior Indebtedness which may at any time be held
by it in its individual or any other capacity to the same extent as any other
holder of Senior Indebtedness, and nothing in this Agreement shall deprive the
Arranger of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Arranger
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Section 8, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Agreement or the Notes against the Arranger. The Arranger shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness
(except as provided in Section 8.3B). The Arranger shall not be liable to any
such holders if the Arranger shall in good faith mistakenly pay over or
distribute to Lenders or to Borrower or to any other person cash, property or
securities to which any holders of Senior Indebtedness shall be entitled by
virtue of this Section 8 or otherwise.
8.9 Subordination Rights not Impaired by Acts or Omissions of
Borrower or Holders of Senior Indebtedness
---------------------------------------------------------
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of Borrower or
by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by Borrower with the terms of this Agreement, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
The provisions of this Section 8 are intended to be for the benefit of, and
shall be enforceable directly by, the holders of Senior Indebtedness.
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8.10 Lenders Authorize Arranger To Effectuate Subordination of Loans
and Notes
---------------------------------------------------------------
Each Lender by his acceptance of Loans and Notes authorizes and
expressly directs the Arranger on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Section 8, and appoints the Arranger his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of Borrower (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of Borrower, the filing of a claim for the unpaid balance of its Loans and Notes
in the form required in those proceedings.
8.11 This Section not To Prevent Events of Default
---------------------------------------------
The failure to make a payment on account of principal of or interest
on the Loans or Notes by reason of any provision of this Section 8 shall not be
construed as preventing the occurrence of an Event of Default specified in
Section 7.1.
8.12 Arranger's Compensation not Prejudiced
--------------------------------------
Nothing in this Section 8 shall apply to amounts due to the Arranger
pursuant to other sections in this Agreement.
8.13 No Waiver of Subordination Provisions
-------------------------------------
Without in any way limiting the generality of Section 8.9, the holders
of Senior Indebtedness may, at any time and from time to time, without the
consent of or notice to the Arranger or the Lenders, without incurring
responsibility to the Lenders and without impairing or releasing the
subordination provided in this Section 8 or the obligations hereunder of the
Lenders to the holders of Senior Indebtedness, do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding or secured; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against
Borrower and any other Person.
8.14 Acceleration of Loans and Notes
-------------------------------
If payment of the Loans or Notes is accelerated because of an Event of
Default, Borrower shall promptly notify holders of the Senior Indebtedness of
the acceleration.
SECTION 9. THE AGENTS
9.1 General Provisions
------------------
Each of the Lenders hereby irrevocably appoints the Arranger as its
agent and authorizes the Arranger to take such actions on its behalf and to
exercise such powers as are delegated to the Arranger by the
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terms hereof, together with such actions and powers as are reasonably incidental
thereto. Each Lender authorizes the Agents to enter into the Assumption
Agreements on behalf of itself and all of the Lenders.
The Lender or other financial institution serving as any 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 such Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Borrower or any Subsidiary or
other Affiliate thereof as if it were not such Agent hereunder.
No Agent shall have any duties or obligations except those expressly
set forth herein. Without limiting the generality of the foregoing, (a) no
Agent shall be subject to any fiduciary or other implied duties, regardless of
whether an Event of Default or Potential Event of Default has occurred and is
continuing, (b) no Agent shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that such 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 12.5), and (c)
except as expressly set forth herein, no Agent shall have any duty to disclose,
and shall not be liable for the failure to disclose, any information relating to
Borrower or any Subsidiary that is communicated to or obtained by the financial
institution serving as such Agent or any of its Affiliates in any capacity. No
Agent shall 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
12.5) or in the absence of its own gross negligence or willful misconduct. No
Agent shall be deemed to have knowledge of any Event of Default or Potential
Event of Default unless and until written notice thereof is given to the
Arranger and such Agent by Borrower or a Lender, and no Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or any
other Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or under any other Loan Document or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other Loan
Document or any other agreement, instrument or document, or (v) the satisfaction
of any condition set forth in Section 3 or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to such Agent.
Each 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. Each 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. Each Agent may consult with legal counsel (who may be counsel for
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.
Each 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 such Agent.
Each Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Affiliates, directors,
officers, employees, agents and advisors ("Related Parties"). The exculpatory
---------------
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each 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 such Agent.
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Any Agent may resign at any time by notifying the Lenders and
Borrower. Upon any such resignation, the Required Lenders shall have the right,
in consultation with 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 Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor 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 Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by Borrower to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between Borrower and such
successor. After the Agent's resignation hereunder, the provisions of this
Section 9 shall continue in effect for the benefit of such retiring 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 such Agent.
Each Lender acknowledges that it has, independently and without
reliance upon any 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 any 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 related agreement or any document
furnished hereunder or thereunder. No Agent shall be deemed a trustee or other
fiduciary on behalf of any party.
9.2 Indemnification
---------------
Each Lender agrees to indemnify and hold harmless each Agent (to the
extent not promptly reimbursed under Section 12.3, but without limiting the
obligations of Borrower under Section 12.3), ratably in accordance with the
aggregate principal amount of the Loans held by the Lenders (or, if no Loans are
at the time outstanding, ratably in accordance with their respective Loan
Commitments), for any and all liabilities (including pursuant to any
Environmental Law), obligations, losses, damages, penalties, actions, judgments,
deficiencies, suits, costs, expenses (including reasonable attorney's fees) or
disbursements of any kind and nature whatsoever that may be imposed on, incurred
by or asserted against such Agent (including by any Lender) arising out of or by
reason of any investigation in or in any way relating to or arising out of any
Loan Document or any other documents contemplated by or referred to therein for
any action taken or omitted to be taken by such Agent under or in respect of any
of the Loan Documents or other such documents or the transactions contemplated
thereby (including the costs and expenses that Borrower is obligated to pay
under Section 12.3, but excluding, unless a Potential Event of Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents; provided, however, that
-------- -------
no Lender shall be liable for any of the foregoing to the extent they are
determined by a court of competent jurisdiction in a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of the
party to be indemnified. The agreements set forth in this Section 9.2 shall
survive the payment of all Loans and other obligations hereunder and shall be in
addition to and not in lieu of any other indemnification agreements contained in
any other Loan Document.
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9.3 Consents Under Other Loan Documents
-----------------------------------
Except as otherwise provided in this Agreement and the other Loan
Documents, the Arranger may, with the prior consent of the Required Lenders (but
not otherwise), consent to any modification, supplement or waiver under any of
the other Loan Documents.
SECTION 10. GUARANTEE
10.1 Unconditional Guarantee
-----------------------
Each Guarantor hereby unconditionally, jointly and severally,
guarantees to each Lender and to the Arranger and its successors and assigns
that: the principal of and interest on the Loans and Notes will be promptly paid
in full when due, subject to any applicable grace period, whether at maturity,
by acceleration or otherwise, and interest on the overdue principal and interest
on any overdue interest on the Loans and Notes and all other obligations of
Borrower to the Lenders or the Arranger hereunder or under the Loans and Notes
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; subject, however, to the limitations set forth in Section
10.4. Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Loans and Notes, the absence of any action to enforce the same, any waiver or
consent by any Lender with respect to any provisions hereof or thereof, the
recovery of any judgment against Borrower, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of Borrower, any right to require a proceeding first
against Borrower, protest, notice and all demands whatsoever and covenants that
the Guarantee will not be discharged except by complete performance of the
obligations contained in the Loan Documents, and this Guarantee. If any Lender
or the Arranger is required by any court or otherwise to return to Borrower, any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to Borrower or any Guarantor, any amount paid by Borrower or
any Guarantor to the Arranger or such Lender, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor further agrees that, as between each Guarantor, on the one hand, and
the Lenders and the Arranger, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 7 for
the purpose of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Section 7, such obligations (whether or not due and payable)
shall forth become due and payable by each Guarantor for the purpose of this
Guarantee.
10.2 Severability
------------
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
10.3 Release of a Guarantor
----------------------
If Section 6A.8B is complied with, or if Section 6A.7 provides for any
Person who becomes a Guarantor after the Issue Date to be released from its
Guarantee then the applicable Guarantor shall be deemed released from all
obligations under this Section 10 without any further action required on the
part of the Arranger or any Lender. The Arranger shall, at the sole cost and
expense of Borrower and upon receipt at
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the reasonable request of the Arranger of an opinion of counsel that the
provisions of this Section 10.3 have been complied with, deliver an appropriate
instrument evidencing such release upon receipt of a request by Borrower
accompanied by an Officers' Certificate certifying as to the compliance with
this Section 10.03. Any Guarantor not so released remains liable for the full
amount of principal of and interest on the Loans and Notes and the other
obligations of Borrower hereunder as provided in this Section 10.
10.4 Limitation of Guarantor's Liability
-----------------------------------
Each Guarantor, and by its acceptance hereof each Lender and the
Arranger, hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of title 11 of the United States
Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar U.S. Federal or state or other applicable law. To
effectuate the foregoing intention, the Lenders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 10.4, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
10.5 Contribution
------------
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
-----------------
Guaranty, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each Guarantor
--- ----
(including the Funding Guarantor), determined in accordance with GAAP, subject
to Section 10.4, for all payments, damages and expenses incurred by that Funding
Guarantor in discharging Borrower's obligations with respect to the Loans or
Notes or any other Guarantor's obligations with respect to the Guarantee.
10.6 Subordination of Subrogation and Other Rights
---------------------------------------------
Each Guarantor hereby agrees that any claim against Borrower that
arises from the payment, performance or enforcement of such Guarantor's
obligations under its Guarantee or any Loan Document, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Loans and Notes in
accordance with the provisions provided therefor in this Agreement.
SECTION 11. SUBORDINATION OF GUARANTEE OBLIGATIONS
11.1 Guarantee Obligations Subordinated to Guarantor Senior
------------------------------------------------------
Indebtedness
------------
Each Guarantor covenants and agrees, and the Arranger and each Lender
by its acceptance thereof likewise covenant and agree, that the Guarantee shall
be issued subject to the provisions of this Section 11; and each Person holding
any Loan or Note, whether upon original issue or upon transfer, assignment or
exchange thereof, accepts and agrees that all payments of the principal of and
interest on the Loans or Notes pursuant to the Guarantee made by or on behalf of
any Guarantor shall, to the extent and in the manner set forth in this Section
11, be subordinated and junior in right of payment to the prior payment in full
in cash of all amounts payable under Guarantor Senior Indebtedness of such
Guarantor.
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11.2 No Payment on Guarantees in Certain Circumstances; Payments Held
----------------------------------------------------------------
in Trusts
---------
A. No Payments in Certain Circumstances. No direct or indirect
------------------------------------
payment (excluding any payment or distribution of Permitted Junior Securities)
by or on behalf of any Guarantor of principal of or interest on the Loans or
Notes pursuant to such Guarantor's Guarantee, whether pursuant to the terms of
the Loans or Notes, upon acceleration or otherwise, shall be made if, at the
time of such payment, there exists a default in the payment of all or any
portion of the obligations on any Designated Guarantor Senior Indebtedness of
such Guarantor, whether at maturity, on account of mandatory redemption or
prepayment, acceleration or otherwise, and such default shall not have been
cured or waived or the benefits of this sentence waived by or on behalf of the
Lenders of such Designated Guarantor Senior Indebtedness. In addition, during
the continuance of any non-payment event of default with respect to any
Designated Guarantor Senior Indebtedness pursuant to which the maturity thereof
may be immediately accelerated, and upon receipt by the Arranger of written
notice (the "Guarantor Payment Blockage Notice") from the Lender or Lenders of
---------------------------------
such Designated Guarantor Senior Indebtedness or the Arranger or agent acting on
behalf of such Designated Guarantor Senior Indebtedness, then, unless and until
such event of default has been cured or waived or has ceased to exist or such
Designated Guarantor Senior Indebtedness has been discharged or paid in full in
cash or the benefits of these provisions have been waived by the Lenders of such
Designated Guarantor Senior Indebtedness, no direct or indirect payment
(excluding any payment or distribution of Permitted Junior Securities) shall be
made by or on behalf of such Guarantor of principal or interest on the during a
period (a "Guarantor Blockage Period") commencing on the date of receipt of such
-------------------------
notice by the Arranger and ending 179 days thereafter.
Notwithstanding anything herein or in the Loans or Notes to the
contrary, (x) in no event shall a Guarantor Blockage Period extend beyond 179
days from the date the Guarantor Payment Blockage Notice in respect thereof was
given, (y) there shall be a period of at least 181 consecutive days in each 360-
day period when no Guarantor Blockage Period is in effect and (z) not more than
one Guarantor Blockage Period may be commenced with respect to any Guarantor
during any period of 360 consecutive days. No event of default that existed or
was continuing on the date of commencement of any other Guarantor Blockage
Period with respect to the Designated Guarantor Senior Indebtedness initiating
such Guarantor Blockage Period (to the extent the Lender of Designated Guarantor
Senior Indebtedness, or the trustee or agent acting on behalf of such Designated
Guarantor Senior Indebtedness, giving notice commencing such Guarantor Blockage
Period had knowledge of such existing or continuing event of default) may be, or
be made, the basis for the commencement of any other Guarantor Blockage Period
by the Lender or Lenders of such Designated Guarantor Senior Indebtedness or the
Arranger or agent acting on behalf of such Designated Guarantor Senior
Indebtedness, whether or not within a period of 360 consecutive days, unless
such event of default has been cured or waived for a period of not less than 90
consecutive days.
B. Payments Held in Trust. In the event that, notwithstanding the
----------------------
foregoing, any payment shall be received by the Arranger or any Lender when such
payment is prohibited by Section 11.2A, such payment shall be held in trust for
the benefit of, and shall be paid over or delivered to, the Lenders of such
Designated Guarantor Senior Indebtedness or their respective representatives, or
to the trustee under any agreement pursuant to which any of such Designated
Guarantor Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that, upon notice from the Arranger
to the Lenders of such Designated Guarantor Senior Indebtedness that such
prohibited payment has been made, the Lenders of such Designated Guarantor
Senior Indebtedness (or their representative or representatives or a trustee)
notify the Arranger in writing of the amounts then due and owing on such
Designated Guarantor Senior Indebtedness, if any, and only the amounts specified
in such notice to the Arranger shall be paid to the Lenders of such Designated
Guarantor Senior Indebtedness.
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11.3 Payment Over of Proceeds upon Dissolution, Etc.
----------------------------------------------
A. Payment Over. Upon any payment or distribution of assets or
------------
securities of any Guarantor of any kind or character, whether in cash, property
or securities (excluding any payment or distribution of Permitted Junior
Securities), upon any dissolution or winding-up or liquidation or reorganization
of such Guarantor, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all Guarantor Senior Indebtedness
of such Guarantor shall first be paid in full before the Lenders or the Arranger
on behalf of such Lenders shall be entitled to receive any payment by such
Guarantor of the principal of or interest on the Loans or Notes pursuant to such
Guarantor's Guarantee, or any payment to acquire any of the Loans or Notes for
cash, property or securities, or any distribution with respect to the Loans or
Notes of any cash, property or Loans or Notes (excluding any payment or
distribution of Permitted Junior Securities). Before any payment may be made
by, or on behalf of, any Guarantor of the principal of or interest on the Loans
and Notes upon any such dissolution or winding-up or liquidation or
reorganization, any payment or distribution of assets or securities of such
Guarantor of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities), to which
the Lenders or the Arranger on their behalf would be entitled, but for the
subordination provisions of this Agreement, shall be made by such Guarantor or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, directly to the Lenders of the
Guarantor Senior Indebtedness of such Guarantor (pro rata to such Lenders on the
--------
basis of the respective amounts of such Guarantor Senior Indebtedness held by
such Lenders) or their representatives or to the trustee or agent or agents
under any agreement pursuant to which any of such Guarantor Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all such Guarantor Senior Indebtedness in full in cash after
giving effect to any prior or concurrent payment, distribution or provision
therefor to or for the Lenders of such Guarantor Senior Indebtedness.
B. Payments Held in Trust. In the event that, notwithstanding the
----------------------
foregoing provision prohibiting such payment or distribution, any payment or
distribution of assets or securities of any Guarantor of any kind or character,
whether in cash, property or securities (excluding any payment or distribution
of Permitted Junior Securities), shall be received by the Arranger or any Lender
at a time when such payment or distribution is prohibited by Section 11.3A and
before all obligations in respect of the Guarantor Senior Indebtedness of such
Guarantor are paid in full in cash, or payment provided for, such payment or
distribution shall be received and held in trust for the benefit of, and shall
be paid over or delivered to, the Lenders of such Guarantor Senior Indebtedness
(pro rata to such Lenders on the basis of the respective amounts of such
--- ----
Guarantor Senior Indebtedness held by such Lenders) or their respective
representatives, or to the trustee or agent or agents under any agreement
pursuant to which any of such Guarantor Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of such Guarantor Senior Indebtedness remaining unpaid until all such Guarantor
Senior Indebtedness has been paid in full in cash after giving effect to any
prior or concurrent payment, distribution or provision therefor to or for the
Lenders of such Guarantor Senior Indebtedness.
The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided in Section 6A.8 shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 11.3
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
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11.4 Subrogation
-----------
Upon the payment in full in cash of all Guarantor Senior Indebtedness
of a Guarantor, or provision for payment, the Lenders shall be subrogated to the
rights of the Lenders of such Guarantor Senior Indebtedness to receive payments
or distributions of cash, property or securities of such Guarantor made on such
Guarantor Senior Indebtedness until the principal of and interest on the Loans
and Notes shall be paid in full in cash; and, for the purposes of such
subrogation, no payments or distributions to the Lenders of such Guarantor
Senior Indebtedness of any cash, property or securities to which the Lenders or
the Arranger on their behalf would be entitled except for the provisions of this
Section 11, and no payment over pursuant to the provisions of this Section 11 to
the Lenders of such Guarantor Senior Indebtedness by Lenders or the Arranger on
their behalf shall, as between such Guarantor, its creditors other than Lenders
of such Guarantor Senior Indebtedness, and the Lenders, be deemed to be a
payment by such Guarantor to or on account of such Guarantor Senior
Indebtedness. It is understood that the provisions of this Section 11 are and
are intended solely for the purpose of defining the relative rights of the
Lenders, on the one hand, and the Lenders of Guarantor Senior Indebtedness of
each Guarantor, on the other hand.
If any payment or distribution to which the Lenders would otherwise
have been entitled but for the provisions of this Section 11 shall have been
applied, pursuant to the provisions of this Section 11, to the payment of all
amounts payable under Guarantor Senior Indebtedness, then and in such case, the
Lenders shall be entitled to receive from the Lenders of such Guarantor Senior
Indebtedness any payments or distributions received by such Lenders of Guarantor
Senior Indebtedness in excess of the amount required to make payment in full, or
provision for payment, of such Guarantor Senior Indebtedness.
11.5 Obligations of Guarantors Unconditional
---------------------------------------
Nothing contained in this Section 11 or elsewhere in this Agreement or
in the Loans, Notes or the Guarantees is intended to or shall impair, as among
the Guarantors and the Lenders, the obligation of each Guarantor, which is
absolute and unconditional, to pay to the Lenders the principal of and interest
on the Loans and Notes as and when the same shall become due and payable in
accordance with the terms of the Guarantee of such Guarantor, or is intended to
or shall affect the relative rights of the Lenders and creditors of any
Guarantor other than the Lenders of Guarantor Senior Indebtedness of such
Guarantor, nor shall anything herein or therein prevent the Lender or the
Arranger on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Agreement, subject to the rights, if any,
under this Section 11 of the Lenders of Guarantor Senior Indebtedness in respect
of cash, property or securities of any Guarantor received upon the exercise of
any such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Section 11 shall restrict the right of the Lenders or the Arranger to take
any action to declare the Loans and Notes to be due and payable prior to their
stated maturity pursuant to Section 7 or to pursue any rights or remedies
hereunder; provided, however, that all Guarantor Senior Indebtedness of any
-------- -------
Guarantor then due and payable shall first be paid in full before the Lenders or
the Arranger are entitled to receive any direct or indirect payment from such
Guarantor of principal of or interest on the Loans and Notes pursuant to such
Guarantor's Guarantee.
11.6 Notice to Arranger
------------------
Borrower and each Guarantor shall give prompt written notice to the
Arranger of any fact known to Borrower or such Guarantor which would prohibit
the making of any payment to or by the Arranger in respect of the Securities
pursuant to the provisions of this Section 11. The Arranger shall not be charged
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with knowledge of the existence of any event of default with respect to any
Guarantor Senior Indebtedness or of any other facts which would prohibit the
making of any payment to or by the Arranger unless and until the Arranger shall
have received notice in writing to that effect signed by an Officer of Borrower
or such Guarantor, or by a Lender of Guarantor Senior Indebtedness or the
trustee or agent therefor; and prior to the receipt of any such written notice,
the Arranger shall be entitled to assume that no such facts exist; provided,
--------
however, that if the Arranger shall not have received the notice provided for in
-------
this Section 11.6 at least two Business Days prior to the date upon which by the
terms of this Agreement any moneys shall become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Loan or Note), then, regardless of anything herein to the contrary, the
Arranger shall have full power and authority to receive any moneys from any
Guarantor and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such prior date. Nothing contained in this Section 11.6 shall limit
the right of the Lenders of Guarantor Senior Indebtedness to recover payments as
contemplated by Section 11.3. The Arranger shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a Lender of any Guarantor Senior Indebtedness (or a trustee on behalf of, or
other representative of, such Lender) to establish that such notice has been
given by a Lender of such Guarantor Senior Indebtedness or a trustee or
representative on behalf of any such Lender.
In the event that the Arranger determines in good faith that any
evidence is required with respect to the right of any Person as a Lender of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Section 11, the Arranger may request such Person to furnish
evidence to the reasonable satisfaction of the Arranger as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Section 11, and if such
evidence is not furnished, the Arranger may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
11.7 Reliance on Judicial Order or Certificate of Liquidating Agent
--------------------------------------------------------------
Upon any payment or distribution of assets or securities of a
Guarantor referred to in this Section 11, the Arranger and the Lenders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Arranger or to the Lenders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the Lenders of Guarantor Senior Indebtedness of such Guarantor and
other indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 11.
11.8 Arranger's Relation to Guarantor Senior Indebtedness
----------------------------------------------------
The Arranger shall be entitled to all the rights set forth in this
Section 11 with respect to any Guarantor Senior Indebtedness which may at any
time be held by it in its individual or any other capacity to the same extent as
any other Lender of Guarantor Senior Indebtedness, and nothing in this Agreement
shall deprive the Arranger of any of its rights as such Lender.
With respect to the Lenders of Guarantor Senior Indebtedness, the
Arranger undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Section 11, and no implied
covenants or obligations with respect to the Lenders of Guarantor Senior
Indebtedness shall be
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read into this Agreement against the Arranger. The Arranger shall not be deemed
to owe any fiduciary duty to the Lenders of Guarantor Senior Indebtedness
(except as provided in Section 11.3B). The Arranger shall not be liable to any
such Lenders if the Arranger shall in good faith mistakenly pay over or
distribute to Lenders or to Borrower or to any other person cash, property or
securities to which any Lenders of Guarantor Senior Indebtedness shall be
entitled by virtue of this Section 11 or otherwise.
11.9 Subordination Rights not Impaired by Acts or Omissions of the
Guarantors or Lenders of Guarantor Senior Indebtedness
-------------------------------------------------------------
No right of any present or future Lenders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by any act or failure to act, in good faith, by any such
Lender, or by any noncompliance by any Guarantor with the terms of this
Agreement, regardless of any knowledge thereof which any such Lender may have or
otherwise be charged with. The provisions of this Section 11 are intended to be
for the benefit of, and shall be enforceable directly by, the Lenders of
Guarantor Senior Indebtedness.
11.10 Lenders Authorize Arranger To Effectuate Subordination of
---------------------------------------------------------
Guarantee
---------
Each Lender by its acceptance of Loans and Notes authorizes and
expressly directs the Arranger on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Section 11, and appoints the Arranger its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of such Guarantor, the filing of a claim for the unpaid
balance of its Loans and Notes in the form required in those proceedings.
11.11 This Article not To Prevent Events of Default
---------------------------------------------
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Section 11 shall not be
construed as preventing the occurrence of an Event of Default specified in
Section 7.1.
11.12 Arranger's Compensation not Prejudiced
--------------------------------------
Nothing in this Section 11 shall apply to amounts due to the Arranger
pursuant to other sections in this Agreement.
11.13 No Waiver of Guarantee Subordination Provisions
-----------------------------------------------
Without in any way limiting the generality of Section 11.9, the
Lenders of Guarantor Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Arranger or the Lenders, without
incurring responsibility to the Lenders and without impairing or releasing the
subordination provided in this Section 11 or the obligations hereunder of the
Lenders to the Lenders of Guarantor Senior Indebtedness, do any one or more of
the following: (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Guarantor Senior Indebtedness or any
instrument evidencing the same or any agreement under which Guarantor Senior
Indebtedness is outstanding or secured; (b) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Guarantor
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Senior Indebtedness; (c) release any Person liable in any manner for the
collection of Guarantor Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against any Guarantor and any other Person.
11.14 Payments May Be Paid Prior to Dissolution
-----------------------------------------
Nothing contained in this Section 11 or elsewhere in this Agreement
shall prevent (i) a Guarantor, except under the conditions described in Section
11.2, from making payments of principal of and interest on the Loans or Notes,
or from depositing with the Arranger any moneys for such payments, or (ii) the
application by the Arranger of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Loans or Notes, to the
Lenders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Arranger shall have
received the written notice provided for in Section 11.2B or in Section 11.6. A
Guarantor shall give prompt written notice to the Arranger of any dissolution,
winding-up, liquidation or reorganization of such Guarantor.
SECTION 12. MISCELLANEOUS
12.1 Participations in and Assignments of Loans and Notes
----------------------------------------------------
A. Assignments. Each Lender shall have the right at any time to
-----------
sell, assign, transfer or negotiate all or any portion of its Notes or its Loan
Commitment only to one or more Eligible Assignees; provided, however, that no
-------- -------
Lender shall be entitled at any time to sell, assign, transfer or negotiate all
or any portion of its Notes or its Loan Commitment to an Eligible Assignee
(other than any Lender or any Affiliate of any Lender) without the consent of
Borrower (not to be unreasonably withheld, delayed or conditioned). In the case
of any sale, transfer or negotiation of all or part of the Notes or any Loan
Commitment authorized under this Section 12.1A, the assignee, transferee or
recipient shall become a party to this Agreement as a Lender by execution of an
Assignment and Assumption Agreement substantially in the form of Exhibit I;
---------
provided, however, that (i) at such time Section 2.1A or 2.2A, as the case may
-------- -------
be, shall be deemed modified to reflect the Loan Commitment of such new Lender
and of the existing Lenders, (ii) upon surrender of the Notes of the assigning
Lender, new Notes will be issued, at Borrower's expense, to such new Lender and
to the assigning Lender, such new Notes to be in conformity with the
requirements of Section 2.1D or 2.2E as the case may be (with appropriate
modifications) to the extent needed to reflect the revised Loan Commitment,
(iii) the Arranger shall receive at the time of each such assignment (other than
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation and other than any assignment to a Lender
or any Affiliate of a Lender), from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $3,500, and (iv) such transfer or
assignment will not be effective until recorded by the Arranger on the Register
pursuant to Section 5.14. To the extent of any assignment pursuant to this
Section 12.1A, the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Loan Commitment, and the assignee,
transferee or recipient shall have, to the extent of such sale, assignment,
transfer or negotiation, the same rights, benefits and obligations as it would
if it were a Lender with respect to such Notes or Loan Commitment, including,
without limitation, the right to approve or disapprove actions which, in
accordance with the terms hereof, require the approval of a Lender.
B. Participations. A Lender may sell or agree to sell to one or more
--------------
other Eligible Assignees a participation in all or any part of its Loans held by
it, or in its Loan Commitment, in which event each purchaser of a participation
(a "Participant") shall be entitled to the rights and benefits of the provisions
-----------
of Section 12.18 and Section 12.20 (provided, however, that no Participant shall
-------- -------
be entitled to receive any greater amount pursuant to Section 12.18 and Section
12.20 than the transferor Lender would have been entitled to receive in respect
of the participation effected by such transferor Lender had no participation
occurred) with
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respect to its participation in such Loans and Loan Commitment as Loan if such
Participant were a "Lender" for purposes of said Section, but, except as
otherwise provided in Section 12.4, shall not have any other rights or benefits
under this Agreement or any Note or any other Loan Document (the Participant's
rights against such Lender in respect of such participation to be those set
forth in the agreements executed by such Lender in favor of the Participant).
All amounts payable by Borrower to any Lender under Section 12.18 and Section
12.20 in respect of Loans and its Loan Commitment shall be no greater than the
amount that would have applied if such Lender had not sold or agreed to sell any
participation in such Loans and Loan Commitment, and as if such Lender were
funding each of such Loan and Loan Commitment in the same way that it is funding
the portion of such Loan and Loan Commitment in which no participations have
been sold. In no event shall a Lender that sells a participation agree with the
Participant to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with the Participant that
it will not, without the consent of the Participant, agree to any modification
or amendment set forth in subclauses (ii), (iii) or (iv) of the proviso to
Section 12.5.
C. Certain Assignments Permitted. In addition to the assignments and
-----------------------------
participations permitted under the foregoing provisions of this Section 12.1,
any Lender may assign and pledge all or any portion of its Loans and its Notes
to any Federal Reserve Bank as collateral security pursuant to Regulation A and
any Operating Circular issued by such Federal Reserve Bank and, in the case of a
Lender that is an investment fund, any such Lender may assign or pledge any
portion of its Loans and its Notes to its trustee in support of its obligations
to its trustee, without notice to or consent of Borrower and the Agents. No
such assignment shall release the assigning Lender from its obligations
hereunder.
D. Information. A Lender may furnish any information concerning
-----------
Borrower or any Subsidiary in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants)
subject, however, to the provisions of Section 12.21. In addition, each of the
Agents may furnish any information concerning Borrower or any of its Affiliates
in such Agent's possession to any Affiliate of such Agent subject to the
provisions of Section 12.21.
E. No Assignment to Borrower. Anything in this Section 12.1 to the
-------------------------
contrary notwithstanding, no Lender may assign or participate any interest in
any Loan held by it hereunder to Borrower or any of its Subsidiaries without the
prior written consent of each Lender.
12.2 Expenses
--------
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to promptly pay (i) all the actual and reasonable
out-of-pocket costs and expenses of preparation of the Loan Documents and all
the costs of furnishing all opinions by counsel for Borrower (including without
limitation any opinions requested by the Lender as to any legal matters arising
hereunder), and of Borrower's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or complied with;
(ii) the fees, expenses and disbursements of one law firm serving as counsel to
the Lenders in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loans hereunder, and any
amendments, modifications and waivers hereto or thereto and consents to
departures from the terms hereof and thereof (whether or not effective or
consummated); and (iii) after the occurrence of an Event of Default, all
reasonable out-of-pocket costs and expenses (including reasonable attorneys fees
and expenses, and costs of settlement) actually incurred by the Lenders or the
Agents in enforcing any Obligations of or in collecting any payments due from
Borrower hereunder or under the Notes by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or of any insolvency
or bankruptcy proceedings.
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Notwithstanding anything to the contrary in this Agreement or any
other Loan Document, Borrower and its Subsidiaries shall have no obligation to
pay, or to indemnify the Agents or Lenders in respect of, any amounts arising
from any disputes between or among Agents and/or Lenders not arising out of
action by Borrower or any other Loan Party.
12.3 Indemnity
---------
Borrower hereby agrees to indemnify each Creditor and their respective
Affiliates, directors, trustees, officers, employees and agents (each, an
"Indemnitee") from, and hold each of them harmless against, and that no
----------
Indemnitee will have any liability for, any and all Losses incurred by any of
them (including any and all Losses incurred by any Agent to any Lender, whether
or not any Creditor is a party thereto) directly or indirectly arising out of or
by reason of or relating to the negotiation, execution, delivery, performance,
administration or enforcement of any Loan Document, any of the transactions
contemplated by the Loan Documents, any breach by any Loan Party of any
representation, warranty, covenant or other agreement contained in any Loan
Document in connection with any of the Transactions, the use or proposed use of
any of the Loans or the use of any collateral security for the Loans (including
the exercise by any Creditor of the rights and remedies or any power of attorney
with respect thereto and any action or inaction in respect thereof), but
excluding any such Losses to the extent finally determined by a court of
competent jurisdiction in a final and nonappealable judgment to have arisen from
the gross negligence or bad faith of the Indemnitee.
Without limiting the generality of the foregoing, Borrower will
indemnify each Creditor and each other Indemnitee from, and hold each Creditor
and each other Indemnitee harmless against, any Losses described in the
preceding sentence arising under any Environmental Law as a result of (a) the
past, present or future operations of Borrower or any Subsidiary (or any
predecessor in interest to Borrower or any Subsidiary), (b) the past, present or
future condition of any site or facility owned, operated, leased or used at any
time by Borrower or any Subsidiary (or any such predecessor in interest), or (c)
any Release or threatened Release of any Hazardous Materials at, on, under or
from any such site or facility; provided, however, that the indemnity hereunder
-------- -------
shall be subject to the exclusions from indemnification set forth in the
preceding sentence.
To the extent that the undertaking to indemnify and hold harmless set
forth in this Section 12.3 or any other provision of any Loan Document providing
for indemnification is unenforceable because it is violative of any law or
public policy or otherwise, Borrower shall contribute the maximum portion that
it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by any of the Persons
indemnified hereunder.
Borrower also agrees that no Indemnitee shall have any liability
(whether direct or indirect, in contract or tort or otherwise) for any Losses to
any Loan Party or any Loan Party's security holders or creditors resulting from,
arising out of, in any way related to or by reason of any matter referred to in
any indemnification or expense reimbursement provisions set forth in this
Agreement or any other Loan Document, except to the extent that any Loss is
determined by a court of competent jurisdiction in a final nonappealable
judgment to have resulted from the gross negligence or bad faith of such
Indemnitee.
Borrower agrees that, without the prior written consent of the Agents,
which consent shall not be unreasonably withheld, no Loan Party will settle,
compromise or consent to the entry of any judgment in any pending or threatened
Proceeding in respect of which indemnification is reasonably likely to be sought
under the indemnification provisions of this Section 12.3 (whether or not any
Indemnitee is an actual or poten-
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tial party to such Proceeding), unless such settlement, compromise or consent
includes an unconditional written release of each Indemnitee from all liability
arising out of such Proceeding and does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of any
Indemnitee and does not involve any payment of money or other value by any
Indemnitee or any injunctive relief or factual findings or stipulations binding
on any Indemnitee.
12.4 Setoff
------
Subject to Section 8, in addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default, each
Lender, the Agents, each Participant and each subsequent holder of any Note is
hereby authorized by Borrower at any time or from time to time, without notice
to Borrower, or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, including, but not limited to, Indebtedness evidenced by
certificates of deposit, whether matured or unmatured but not including trust
accounts or any other accounts held for the benefit of another Person) and any
other Indebtedness at any time held or owing by such Person or that subsequent
holder to or for the credit or the account of Borrower against and on account of
the obligations and liabilities of Borrower to such Person or that subsequent
holder under this Agreement and the Notes, including, but not limited to, all
claims of any nature or description arising out of or connected with this
Agreement or the Notes, irrespective of whether or not (a) such Person or that
subsequent holder shall have made any demand hereunder or (b) such Person or
that subsequent holder shall have declared the principal of or the interest on
its portion of the Loans and its Notes and other amounts due hereunder to be due
and payable as permitted by Section 7 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
12.5 Amendments and Waivers
----------------------
No amendment, modification, termination or waiver of any term or
provision of this Agreement, of the Notes, any Guarantee or, prior to the
execution and delivery thereof, of the form of the Registration Rights Agreement
or consent to any departure by Borrower or any Guarantor therefrom, shall in any
event be effective without the prior written concurrence of Borrower or such
Guarantor, as the case may be, and the Required Lenders; provided, however,
-------- -------
that, (x) without the prior written consent of each Lender affected, an
amendment, modification, termination or waiver of this Agreement, any Notes, any
Guarantee, and, prior to the execution and delivery thereof, of the form of
Registration Rights Agreement or consent to departure from a term or provision
hereof or thereof may not: (i) reduce the principal amount of Notes whose
holders must consent to any such amendment, modification, termination, waiver or
consent; (ii) reduce the amount of or reduce the rate of or extend the time for
payment of principal or interest on any Note; (iii) reduce the principal amount
of any Note; (iv) make any Note payable in money other than that stated in the
Note; (v) make any change in Section 2.5A(iv) or in the definition of Change of
Control, in the last paragraph of Section 7 or in this Section 12.5; (vi) reduce
the rate or extend the time of payment of fees or other compensation payable to
the Lenders hereunder; (vii) modify the provisions of Sections 8 or 11 or any of
the defined terms related thereto in any manner adverse to the Lenders; (viii)
add conditions to Section 3.2 or 5.12; (ix) release any Guarantor that is a
Material Subsidiary from its Guarantee or (x) waive performance by Borrower of
its obligations under, or consent to any departure from any of the terms and
provisions of, Section 2.5A(iv), and (b) without the consent of the Agents, no
such amendment, modification, termination or waiver may amend, modify, terminate
or waive any provision of Section 9 as the same applies to the Agents or any
other provision of this Agreement as it relates to the rights of the Agents. No
amendment, modification or waiver of any provision of this Agreement, the Notes,
any Guarantee shall adversely affect the rights of the holders of Senior
Indebtedness or the holders of Guarantor Senior Indebtedness without their
consent. Any
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waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on Borrower in
any case shall entitle Borrower to any further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 12.5A shall be binding upon each holder
of the Notes at the time outstanding, each further holder of the Notes, and, if
signed by Borrower or a Guarantor, on Borrower and such Guarantor.
12.6 Independence of Representations, Warranties and Covenants
---------------------------------------------------------
The representations, warranties and covenants contained herein shall
be independent of each other and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exception be deemed to permit any action or omission that would be in
contravention of applicable law.
12.7 Entirety
--------
The Loan Documents embody the entire agreement of the parties and
supersede all prior agreements and understandings, if any, relating to the
subject matter hereof and thereof, except that the syndication provisions of the
Commitment Letter shall survive.
12.8 Notices
-------
Unless otherwise provided herein, any notice or other communications
herein required or permitted to be given shall be in writing and may be
personally served, telecopied, telexed or sent by mail and shall be deemed to
have been given when delivered in person, upon receipt of telecopy or telex
against receipt of answer back or four Business Days after depositing it in the
mail, registered or certified, with postage prepaid and properly addressed;
provided, however, that notices shall not be effective until received. For the
-------- -------
purposes hereof, the addresses of the parties hereto (until notice of a change
thereof is delivered as provided in this Section 12.8) shall be set forth under
each party's name on the signature pages hereto and any additional Guarantors
shall (until notice of a change thereof is delivered as provided in this Section
12.8) have the address set forth under Borrower's name on the signature page
hereto.
12.9 Survival of Warranties and Certain Agreements
---------------------------------------------
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the making of the Loans
hereunder and the execution and delivery of the Notes and, notwithstanding the
making of the Loans, the execution and delivery of the Notes or any
investigation made by or on behalf of any party, shall continue in full force
and effect. The closing of the transactions herein contemplated shall not
prejudice any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or other
remedies.
Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Borrower set forth in Sections 12.2, 12.3 and 12.20
and the agreements of the Lenders set forth in Section 12.20 shall survive the
payment of the Loans and the Notes and the termination of this Agreement.
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12.10 Failure or Indulgence not Waiver; Remedies Cumulative
-----------------------------------------------------
No failure or delay on the part of the Agents or any Lender or any
holder of any Note in the exercise of any power, right or privilege hereunder,
under a Guarantee or under the Notes shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.
All rights and remedies existing under this Agreement, under a Guarantee or the
Notes are cumulative to and not exclusive of any rights or remedies otherwise
available.
12.11 Severability
------------
In case any provision in or obligation under this Agreement, under a
Guarantee or the Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
12.12 Headings
--------
Sections and Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
12.13 Applicable Law
--------------
THIS AGREEMENT, EACH GUARANTEE AND THE NOTES SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
12.14 Successors and Assigns; Subsequent Holders of Notes
---------------------------------------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Lenders. The terms and provisions
of this Agreement and each Guarantee shall inure to the benefit of any assignee
or transferee of the Notes pursuant to Section 12.1A, and in the event of such
transfer or assignment, the rights and privileges herein conferred upon the
Lenders shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. In determining
whether the holders of a sufficient aggregate principal amount of the Loans
shall have consented to any action under this Agreement, any amount of the Loans
owned or held by Borrower, any Guarantor or any of its Affiliates shall be
disregarded. Borrower's rights or any interest therein hereunder may not be
assigned without the prior express written consent of each of the Lenders.
12.15 Counterparts; Effectiveness
---------------------------
This Agreement and any amendments, waivers, consents or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof
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by each of the parties hereto, and delivery thereof to the Agents or, in the
case of the Lenders, written telex or facsimile notice or telephonic
notification (confirmed in writing) of such execution and delivery. The Agents
will give Borrower and each Lender prompt notice of the effectiveness of this
Agreement.
12.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial
----------------------------------------------------
A. New York Jurisdiction. Any legal action or proceeding with
---------------------
respect to this Agreement, any Note or any Guarantee may be brought in the
Supreme Court of the State of New York sitting in New York County and the
appellate courts thereof, the courts of the United States for the Southern
District of New York and the appellate courts thereof, and, by execution and
delivery of this Agreement, each of the parties to this Agreement hereby
irrevocably accepts for itself and in respect of its respective property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each
of the parties to this Agreement hereby further irrevocably waives any claim
that any such courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement, the
Notes or the Guarantees brought in any of the aforesaid courts, that any such
court lacks jurisdiction over such party. Each of the parties to this Agreement
irrevocably consents to the service of process in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to such party, at its respective address for notices pursuant to
Section 12.8, such service to become effective 30 days after such mailing. To
the extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any Note or any Guarantee that service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of
any party to this Agreement to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against any party in
any other jurisdiction.
B. Venue. Each of the parties to this Agreement hereby irrevocably
-----
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement, the Notes or the Guarantees brought in the courts referred
to in clause A above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
C. Trial by Jury Waiver. Each of the parties to this Agreement
--------------------
hereby irrevocably waives all right to a trial by jury in any action, proceeding
or counterclaim arising out of or relating to this Agreement, the Notes or the
Guarantees or the transactions contemplated hereby or thereby.
12.17 Payments Pro Rata
-----------------
A. Pro Rata Payments. The Arranger agrees that promptly after its
-----------------
receipt of each payment of any interest or premium on or principal of the Notes
from or on behalf of Borrower or any Guarantor, it shall, except as otherwise
provided in this Agreement, distribute such payment to the Lenders (other than
any Lender that has consented in writing to waive its pro rata share of such
--- ----
payment) pro rata based upon their respective pro rata shares, if any, of such
--- ---- --- ----
payment.
B. Sharing of Payments. Each of the Lenders agrees that, if it
-------------------
should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents, or otherwise) which is applicable to the payment of the
principal of, or interest on, the Loans of a sum which with respect to the
related sum or sums received by other Lenders is in a greater proportion than
the total of
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such Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of Borrower to such Lenders in such amount as shall result in a
proportional participation by all of the Lenders in such amount; provided,
--------
however, that if all or any portion of such excess amount is thereafter
-------
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest. Borrower
consents to the foregoing.
12.18 Taxes and Other Taxes
---------------------
A. Covered Taxes. So long as such Lender has complied in all
-------------
material respects with this Section 12.18A, any and all payments by any Loan
Party hereunder or under any other Loan Document shall be made free and clear of
and without deduction or withholding for any and all present or future Taxes
(other than Excluded Taxes), unless such Taxes are required by law or the
administration thereof to be deducted or withheld (all such nonexcluded Taxes
being hereinafter referred to as "Covered Taxes"). If Borrower or any other
-------------
Loan Party shall be required by any applicable law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum payable
hereunder or under any other Loan Document, (a) the sum payable shall be
increased as may be necessary so that after making all required deductions or
withholdings (including deductions or withholdings applicable to additional
amounts paid under this paragraph), the Lender receives an amount equal to the
sum it would have received if no such deduction or withholding had been made;
(b) Borrower or such Loan Party shall make such deductions or withholdings; and
(c) Borrower or such Loan Party forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance with
applicable law. If any amounts are payable in respect of Covered Taxes pursuant
to the preceding sentence, Borrower and each other Loan Party agrees jointly and
severally to reimburse each Agent and Lender, upon the written request of such
Agent or Lender, for taxes imposed on or measured by the net income or net
profits of such Agent or Lender pursuant to the laws of the jurisdiction in
which such Agent or Lender is organized or in which the principal office lending
office or of such Agent or Lender is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction by reason of the making
of payments in respect of Covered Taxes pursuant to this Section 12.18
(including pursuant to this sentence). Borrower will furnish to the Arranger
within 45 days after the date the payment of any Covered Taxes is due pursuant
to applicable law certified copies of tax receipts evidencing such payment by
Borrower or another Loan Party. Borrower and each other Loan Party jointly and
severally agrees to indemnify and hold harmless each Agent and Lender, and to
reimburse such Agent or Lender, upon its written request, for the amount of any
Covered Taxes so levied or imposed and paid by such Agent or Lender and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto whether or not correctly or legally asserted.
Payment under this indemnification shall be made within 30 days from the date
the Agents or such Lender makes written demand therefor. A certificate as to
the amount of such Covered Taxes or Other Taxes and evidence of payment thereof
submitted to Borrower shall be prima facie evidence, absent manifest error, of
-----------
the amount due from Borrower to the Agents or such Lender.
"Excluded Taxes" shall mean, except as provided in the third sentence
--------------
of the immediately preceding paragraph, any tax imposed on or measured by the
net income or net profits of a Lender and all franchise taxes, taxes on doing
business or taxes measured by or in respect of capital or net worth imposed on
any Lender or its lending office, or any branch or affiliate thereof, in each
case, imposed, levied, collected, withheld or assessed (A) pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or lending office of such Lender is located or any subdivision
thereof or therein or (B) as a result of a present or former connection between
such Lender and the Governmental Authority imposing such net income or net
profits tax (other than any such connection arising solely from such Lender
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having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement, the Guarantees or any Note).
Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) (a "Non-U.S. Lender") agrees to
---------------
deliver to Borrower and the Arranger on or prior to the Closing Date, or in the
case of a Lender that is an assignee or transferee of an interest under this
Agreement pursuant to Section 12.2 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Lender, (i) two accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor forms) certifying to such Lender's entitlement to a complete exemption
from, or reduction in rate of, United States withholding tax with respect to
payments to be made under this Agreement and under any Note (or, with respect to
any assignee Lender, at least as extensive as the assigning Lender), or (ii) if
the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit J (any such certificate, a "Section 12.18 Certificate") and (y) two
--------- -------------------------
accurate and complete original signed copies of Internal Revenue Service Form W-
8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from, or reduction in rate of, United States withholding tax with
respect to payments to be made under this Agreement and under any Note (or, with
respect to any assignee Lender, at least as extensive as the assigning Lender).
In addition, each Lender agrees that from time to time after the Closing Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
Borrower and the Arranger two new accurate and complete original signed copies
of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section 12.18
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify
Borrower and the Arranger of its inability to deliver any such Form or
Certificate, in which case such Lender shall not be required to deliver any such
form or certificate pursuant to this Section 12.18. Notwithstanding the
foregoing, no Lender shall be required to deliver any such form or certificate
if a change in treaty, law or regulation has occurred prior to the date on which
such delivery would otherwise be required that renders any such form or
certificate inapplicable or would prevent the Lender from duly completing and
delivering any such form or certificate with respect to it and such Lender so
advises Borrower. Each Person that shall become a participant pursuant to
Section 12.1 shall, upon the effectiveness of the related transfer, be required
to provide all the forms and statements required pursuant to this Section 12.18;
provided, however, that in the case of a participant such participant shall
-------- -------
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased. Borrower shall not be required
to indemnify any Non-U.S. Lender, or to pay any additional amounts to any Non-
U.S. Lender, in respect of U.S. Federal withholding tax pursuant to paragraph
(a) above to the extent that (i) the obligation to withhold amounts with respect
to U.S. Federal withholding tax existed on the date such Non-U.S. Lender became
a party to this Agreement (or, in the case of a Non-U.S. participant, on the
date such participant became a participant hereunder); provided, however, that
-------- -------
this clause (i) shall not apply to the extent that (x) the indemnity payments or
additional amounts any Lender (or participant) would be entitled to receive
(without regard to this clause (i)) do not exceed the indemnity payment or
additional amounts that the Person making the assignment, participation or
transfer to such Lender (or participant) would have been entitled to receive in
the absence of such assignment, participation or transfer, or (y) such
assignment, participation or transfer had been requested by Borrower, (ii) the
obligation to pay such additional amounts would not have arisen but for a
failure by such Non-U.S. Lender or Non-U.S. participant to comply with the
provisions of this Section 12.18 or (iii) any of the representations or
certifications made by a Non-U.S. Lender or Non-U.S. participant pursuant to
this Section 12.18 are incorrect at the time a payment hereunder is made, other
than by reason of any change in treaty, law or regulation having effect after
the date
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such representations or certifications were made. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
12.18, Borrower and each other Loan Party agrees jointly and severally to pay
additional amounts and to indemnify each Lender in the manner set forth in this
Section 12.18 (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the Closing Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of income or similar Covered Taxes.
B. Other Taxes. Borrower and each other Loan Party agrees jointly
-----------
and severally to pay forthwith any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies (all such
taxes, charges and levies being herein referred to as "Other Taxes") imposed by
-----------
any jurisdiction (or any political subdivision or taxing authority thereof or
therein) which arise from any payment made by Borrower or any other Loan Party
hereunder or under any of the other Loan Documents or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. Refunds. If Borrower or any other Loan Party pays any additional
-------
amount under this Section 12.18 to a Lender and such Lender determines in its
sole discretion that it has actually received or realized in connection
therewith any refund or any reduction of, or credit against, its tax liabilities
in or with respect to the taxable year in which the additional amount is paid (a
"Tax Benefit"), such Lender shall pay to Borrower or such Loan Party an amount
-----------
that the Lender shall, in its sole discretion, determine is equal to the net
benefit, after tax, which was obtained by the Lender in such year as a
consequence of such Tax Benefit; provided, however, that (i) such Lender shall
-------- -------
not be required to make any payment under this paragraph of this Section 12.18
if an Event of Default shall have occurred and be continuing; (ii) any taxes
that are imposed on a Lender as a result of a disallowance or reduction
(including through the expiration of any tax credit carryover or carryback of
such Lender that otherwise would not have expired) of any Tax Benefit with
respect to which such Lender has made a payment to Borrower or such Loan Party
pursuant to this paragraph of this Section 12.18 shall be treated as a tax for
which Borrower and the other Loan Parties are obligated to indemnify such Lender
pursuant to this Section 12.18 without any exclusions or defenses; (iii) such
Lender shall not be required to make any payment under this paragraph of this
Section 12.18 in excess of such additional amounts received by such Lender; and
(iv) nothing in this paragraph of this Section 12.18 shall require the Lender to
disclose to Borrower or any other Loan Party any information determined by such
Lender in its sole discretion to be confidential (including its tax returns).
D. Receipts. Borrower and each other Loan Party shall furnish to the
--------
Agents and each of the Lenders the original or a certified copy of a receipt
evidencing any payment of Taxes or Other Taxes made by Borrower or such Loan
Party as soon as such receipt becomes available.
E. Survival. The provisions of this Section 12.18 shall survive the
--------
termination of the Agreement and repayment of all Obligations.
12.19 Waiver of Stay, Extension or Usury Laws
---------------------------------------
Borrower and the Guarantors covenant (to the extent that they may
lawfully do so) that they will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive
Borrower or the Guarantors from paying all or any portion of the principal of or
interest on the Loans as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the perform-
-114-
ance of this Agreement; and (to the extent that they may lawfully do so)
Borrower and the Guarantors hereby expressly waive all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Agents, but will suffer and permit
the execution of every such power as though no such law had been enacted.
12.20 Additional Costs
----------------
If the adoption of, or any change in, any Requirement of Law or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority or the NAIC made subsequent to the date
hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note or any Loan made by it or change
the basis of taxation of payments to such Lender in respect thereof by any
Governmental Authority (except for Covered Taxes and Other Taxes and
changes in the rate of tax on the overall net income of such Lender or its
applicable lending office, or any affiliate thereof or franchise tax by any
Governmental Authority);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other condition (excluding
Taxes);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making or maintaining
Loans or to reduce any amount receivable hereunder in respect thereof then, in
any such case, Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall promptly notify
Borrower, through the Arranger, of the event by reason of which it has become so
entitled.
In the event that any Lender shall have determined that the adoption
of any law, rule, regulation or guideline regarding capital adequacy (or any
change therein or in the interpretation or application thereof) or compliance by
any Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law)
from any central bank or Governmental Authority or the NAIC, in each case, made
subsequent to the date hereof including, without limitation, the issuance of any
final rule, regulation or guideline, does or shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to Borrower
(with a copy to the Arranger) of a written request therefor, Borrower shall
promptly pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
A certificate as to any additional amounts setting forth the
calculation of such additional amounts pursuant to this Section 12.20 submitted
by such Lender, through the Arranger, to Borrower shall be conclusive in the
absence of clearly demonstrable error. Without limiting the survival of any
other covenant
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hereunder, this Section 12.20 shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable hereunder.
12.21 Confidentiality
---------------
Each Lender shall hold all non-public information obtained pursuant to
the requirements of or in connection with this Agreement in accordance with such
Lender's customary procedures (which shall be reasonably prudent for purposes of
maintaining confidentiality) for handling confidential information of this
nature and in accordance with safe and sound banking practices; provided,
--------
however, that (x) unless specifically prohibited by applicable law or court
-------
order, each Lender shall notify Borrower of any request by any governmental
agency or representative thereof (other than any such request in connection with
any examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and (y) in no event shall any Lender be obligated or required
to return any materials furnished by Borrower or any of its Subsidiaries.
12.22 Acknowledgments
---------------
Borrower hereby acknowledges that: (a) it has been advised by counsel
in connection with the negotiation, execution and delivery of the Loan
Documents; (b) no Agent or Lender has any fiduciary or similar relationships to
Borrower and the relationship between the Agents and Lenders on the one hand,
and Borrower, on the other hand, is solely that of debtor and creditor; and (c)
no joint venture exists among the Agents and Lenders or among Borrower and the
Agents and Lenders.
[Signature Pages Follow]
S-1
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWER:
PRIMESTAR, INC.
By:________________________________________________
Name:
Title:
Notice Address:
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (303)
Attention: Chief Financial Officer
S-2
AGENTS:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED,
as Arranger and Syndication Agent
By:__________________________________________________
Name:
Title:
Notice Address:
World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
S-3
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Administrative Agent
By:_____________________________________________
Name:
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
S-4
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES
CORPORATION, as Documentation Agent
By:___________________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, III
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
S-5
LENDERS:
Commitment: $ ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORPORATION
By:__________________________________________
Name:
Title:
Notice Address:
World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
S-6
Commitment: $ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.
By:______________________________________
Name:
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
S-7
Commitment: $ DLJ BRIDGE FINANCE, INC.
By:_________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, III
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
