EXHIBIT 4.12
PLEDGE AGREEMENT
Dated as of April 3, 2001
Among
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EARTHWATCH INCORPORATED
as pledgor
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THE BANK OF NEW YORK
as trustee
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and
THE BANK OF NEW YORK
as securities intermediary
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PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Agreement") is made and entered into as
of April 3, 2001 by EARTHWATCH INCORPORATED, a Delaware corporation (the
"Pledgor"), THE BANK OF NEW YORK, a New York banking corporation, having an
office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 21 West, New York, New York 10286, as
trustee (the "Trustee") for the benefit of the holders from time to time (the
"Holders") of the 13% Notes (as defined herein) issued by the Pledgor under the
13% Notes Indenture (as defined below) and THE BANK OF NEW YORK, as securities
intermediary (the "EarthWatch Securities Intermediary").
W I T N E S S E T H
WHEREAS, the Pledgor has issued 13% Senior Discount Notes due 2007
(the "13% Notes") pursuant to the terms of the Indenture, dated as of July 12,
1999 (as supplemented by the Supplemental Indenture (as defined in the
Recapitalization Agreement referred to below) and as further amended, amended
and restated, supplemented or otherwise modified from time to time, the "13%
Notes Indenture"), between the Pledgor and The Bank of New York, as trustee for
the Holders;
WHEREAS, on February 28, 2001, the Pledgor, pursuant to an Offer to
Purchase for Cash dated February 28, 2001, launched an Offer to Purchase (as
defined in the 13% Notes Indenture) for up to all of the 13% Notes (the "Tender
Offer").
WHEREAS, in order to finance the future operations of the Pledgor, on
April 2, 2001 the Pledgor entered into the Recapitalization Agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Recapitalization Agreement") with certain holders of the 13% Notes
(the "Remaining Holders"), under which the Pledgor agreed to enter into certain
transactions in order to induce the Remaining Holders to not tender their 13%
Notes in the Tender Offer, all as more particularly described therein;
WHEREAS, the Pledgor has purchased all of the Notes tendered in the
Tender Offer;
WHEREAS, the Remaining Holders hold 100% of the outstanding 13% Notes;
WHEREAS, the Pledgor has agreed to (i) purchase or cause to be
purchased United States Treasury securities in an amount at maturity equal to
the aggregate Accreted Value as of August 1, 2001 of the 13% Notes that remain
outstanding immediately following the consummation of the Tender Offer and with
an initial maturity not later than June 15, 2001 and (ii) place such securities
(or cause them to be placed) in an account maintained by the Trustee with the
EarthWatch Securities Intermediary for the benefit of Holders; and
WHEREAS, the Pledgor has agreed to (i) pledge to the Trustee for the
benefit of the Trustee and for the ratable benefit of the Holders a security
interest in such securities and related collateral and (ii) execute and deliver
this Agreement in order to secure the payment and performance by the Pledgor of
the Obligations (as defined below);
WHEREAS, the Trustee has security entitlements with respect to all
financial assets credited from time to time to the Pledgor's account, Account
No. 103278 (the "Pledge Account II") with the EarthWatch Securities
Intermediary, at its office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 21 West, New York, New
York 10286, as trustee for the benefit of the Holders; and
WHEREAS, capitalized terms used herein and not otherwise defined
herein shall have the meanings given to such terms in the 13% Notes Indenture
and the Recapitalization Agreement; provided, however, that if such a term is
defined in both such documents, the definition contained in the Recapitalization
Agreement shall govern. Unless otherwise defined herein or in either such
document, terms used in Articles 8 or 9 of the Uniform Commercial Code as in
effect from time to time in the State of New York (the "UCC") (including,
without limitation, "financial asset", "securities account", "securities
entitlement", "securities intermediary" and "entitlement order") and/or the
Federal Book Entry Regulations (as defined herein) are used herein as they are
defined in the UCC and/or the Federal Book Entry Regulations, as applicable. The
"Federal Book Entry Regulations" means (a) the federal regulations contained in
Subpart B ("Treasury/Reserve Automated Debt Entry System (TRADES)") governing
book-entry securities consisting of United States Treasury bonds, notes and
bills and Subpart D ("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R.
(S)357.2, (S)357.10 through (S)357.14 and (S)357.41 through (S)357.44 and (b) to
the extent substantially identical to the federal regulations referred to in
clause (a) above (as in effect from time to time), the federal regulations
governing other book-entry securities.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Pledgor hereby agrees with the Trustee, for the benefit of the
Trustee and for the ratable benefit of the Holders, as follows:
SECTION 1. Pledge and Grant of Security Interest. As security for
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the prompt and complete payment and performance when due of the Obligations (as
defined below), the Pledgor hereby pledges and grants to the Trustee for its
benefit and for the ratable benefit of the Holders, a continuing first priority
security interest in and to all of the Pledgor's right, title and interest in,
to and under the following (collectively, the "Pledged Collateral"): (a) the
Pledge Account II, (b) all financial assets credited to the Pledge Account II
from time to time, including, without limitation, the United States Treasury
securities identified by CUSIP Number in Exhibit A to this Agreement, and any
financial assets purchased after the date hereof and credited to the Pledge
Account II, including, without limitation, any United States Treasury securities
acquired pursuant to Section 10(f) (such financial assets, the "Pledged
Securities"), (c) any and all security entitlements of the Pledgor with respect
to the Pledged Securities, (d) all dividends, interest, cash, instruments or
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the foregoing, and (e) all
proceeds of any and all of the Pledged Collateral (including, without
limitation, proceeds that constitute property of the types described in clauses
(a) through (d) of this Section 1) and, to the extent not otherwise included,
cash.
SECTION 2. Security for Obligations. This Agreement secures the
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prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of all obligations of the Pledgor now or
hereafter existing under the 13% Notes Indenture and all obligations of the
Pledgor to the Holders under Section 5.6 of the
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Recapitalization Agreement, whether direct or indirect, absolute or contingent,
and whether for principal, reimbursement obligations, interest, fees, premiums,
penalties, indemnifications, contract causes of action, costs, expenses or
otherwise (all such obligations, the "Obligations").
SECTION 3. Delivery of Pledged Securities; Pledge Account II;
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Interest. (a) The Pledged Securities shall be pledged and transferred to the
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Trustee and the Trustee shall become the holder of a security entitlement to the
Pledged Securities through action by the EarthWatch Securities Intermediary, as
confirmed (in writing or electronically or otherwise in accordance with standard
industry practice) to the Trustee by the EarthWatch Securities Intermediary (i)
indicating by book-entry that the Pledged Securities and all security
entitlements with respect thereto have been credited to the Pledge Account II,
or (ii) acquiring the Pledged Securities or a security entitlement for the
Trustee and accepting the same for credit to the Pledge Account II.
(b) Prior to or concurrently with the execution and delivery hereof
and prior to the transfer to the Trustee of the Pledged Securities (or
acquisition by the Trustee of any security entitlement with respect thereto) as
provided in subsection (a) of this Section 3, the Trustee shall establish with
the EarthWatch Securities Intermediary the Pledge Account II on the books of the
EarthWatch Securities Intermediary as a securities account segregated from all
other custodial or collateral accounts, such Pledge Account II to be maintained
at the offices of the EarthWatch Securities Intermediary at The Bank of New
York, and the EarthWatch Securities Intermediary shall maintain a securities
account at the Federal Reserve Bank of New York ("FRBNY"). Upon transfer of the
Pledged Securities to the EarthWatch Securities Intermediary (or the EarthWatch
Securities Intermediary's acquisition of the security entitlements with respect
thereto), as confirmed to the EarthWatch Securities Intermediary by FRBNY or
another securities intermediary, the EarthWatch Securities Intermediary shall
make appropriate book entries indicating that the Pledged Securities and/or such
security entitlements have been credited to the Trustee and the Pledge Account
II. Subject to the other terms and conditions of this Agreement, all funds or
other property held by the Trustee pursuant to this Agreement shall be held in
the Pledge Account II (except as expressly provided in Section 10) subject to
the exclusive dominion and control (including "control" as defined in (S) 9-
115(1)(e) of the UCC) of the Trustee and exclusively for the benefit of the
Trustee and for the ratable benefit of the Holders and segregated from all other
funds or other property otherwise held by the Trustee.
(c) The Trustee shall, in accordance with all applicable laws, have
sole dominion and control (including "control" as defined in UCC (S) 9-
115(1)(e)) over the Pledge Account II, and it shall be a term and condition of
the Pledge Account II and the Pledgor irrevocably instructs the Trustee,
notwithstanding any other term or condition to the contrary in any other
agreement, that no Pledged Collateral shall be released to or for the account
of, or withdrawn by or for the account of, the Pledgor or any other Person
except as expressly provided in this Agreement.
(d) The Trustee shall, in accordance with and subject to all
applicable laws, be the sole entitlement holder of, and have the sole power to
originate entitlement orders with respect to, the Pledge Account II and all
assets and properties carried in the Pledge Account II, and it shall be a term
and condition of the Pledge Account II that the Trustee shall have the right to
issue such entitlement orders with respect to the Pledge Account II and all
assets and
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properties from time to time carried in the Pledge Account II without the
consent of the Pledgor or any other Person, and that no Pledged Collateral shall
be released to or for the account of, or withdrawn by or for the account of, the
Pledgor or any other Person except as expressly provided in this Agreement.
(e) All Pledged Collateral shall be retained in the Pledge Account II
pending disbursement pursuant to the terms hereof.
(f) Concurrently with the execution and delivery of this Agreement
the Trustee and the EarthWatch Securities Intermediary shall deliver to the
Pledgor and the Pledgor shall forward to the Remaining Holders a duly executed
certificate, in the form of Exhibit B hereto, of an officer of the Trustee,
confirming the Trustee's establishment and maintenance of the Pledge Account II
and its receipt and holding of the Pledged Securities or a security entitlement
thereto and the crediting of the Pledged Securities or such security entitlement
to the Pledge Account II, all in accordance with this Agreement.
(g) Concurrently with the execution and delivery of this Agreement,
the Pledgor shall deliver to the Trustee acknowledgment copies or stamped
receipt copies of proper financing statements, duly filed under the UCC of the
State of New York, the State of Colorado and the State of Delaware, covering the
Pledged Collateral described in this Agreement.
SECTION 4. Representations and Warranties. The Pledgor hereby
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represents and warrants that, as of the date hereof:
(a) The execution and delivery by the Pledgor of, and the performance
by the Pledgor of its obligations under, this Agreement will not contravene
any provision of applicable law or statute or the organizational documents
of the Pledgor or any material agreement or other material instrument
binding upon the Pledgor or any of its subsidiaries or any judgment, order
or decree of any governmental body, agency or court having jurisdiction
over the Pledgor or any of its subsidiaries, or result in the creation or
imposition of any Lien on any assets of the Pledgor, except for the
security interests granted under this Agreement; no consent, approval,
authorization or order of, or qualification with, or other action by, any
governmental or regulatory body or agency or any third party is required
(i) for the execution, delivery or performance by the Pledgor of this
Agreement, (ii) for the grant by the Pledgor of the security interest
granted hereby, for the pledge by the Pledgor of the Pledged Collateral
pursuant to this Agreement, (iii) for the perfection and maintenance of the
pledge and security interest created hereby (including the first-priority
nature of such pledge and security interest), assuming compliance by the
EarthWatch Securities Intermediary with all obligations contained in this
Agreement or (iv) except for any such consents, approvals, authorizations
or orders required to be obtained by the Trustee (or the Holders) for
reasons other than the consummation of the transactions contemplated by the
Recapitalization Agreement, for the exercise by the Trustee of the rights
provided for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement.
(b) Immediately before depositing the Pledged Securities into the
Pledge Account II, the Pledgor is the legal and beneficial owner of the
Pledged Collateral free
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and clear of any Lien or claims of any person or entity (except for the
security interests granted under this Agreement). No financing statement or
other instrument similar in effect covering the Pledgor's interest in the
Pledged Securities is on file in any public office, other than any
financing statements filed pursuant to this Agreement.
(c) This Agreement has been duly authorized, validly executed and
delivered by the Pledgor and assuming the due authorization, execution and
delivery thereof by the Trustee and the EarthWatch Securities Intermediary,
constitutes a valid and binding agreement of the Pledgor, enforceable
against the Pledgor in accordance with its terms, except as (i) the
enforceability hereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, preference, reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting creditors' rights or remedies
generally, (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability, (iii) the exculpation
provisions and rights to indemnification hereunder may be limited by public
policy considerations and (iv) the waiver of rights and defenses contained
in Section 11(b), Section 15.11 and Section 15.15 hereof may be limited by
applicable law.
(d) Upon the transfer to the Trustee of the Pledged Securities and
the acquisition by the Trustee of a security entitlement thereto in
accordance with Section 3, and the compliance by the EarthWatch Securities
Intermediary with the provisions of this Agreement, the pledge of and grant
of a security interest in the Pledged Collateral securing the payment of
the Obligations for the benefit of the Trustee and the Holders will
constitute a valid first priority perfected security interest in such
Pledged Collateral, enforceable as such against all creditors of the
Pledgor (and any persons purporting to purchase any of the Pledged
Collateral from the Pledgor) and all filings and actions (other than the
transfer to the Trustee of the Pledged Securities) necessary or desirable
to perfect and protect such security interest have been duly taken.
(e) There are no legal or governmental proceedings pending or, to the
best of the Pledgor's knowledge, threatened to which the Pledgor or any of
its subsidiaries is a party or to which any of the properties of the
Pledgor or any such subsidiary is subject that would materially adversely
affect the power or ability of the Pledgor to perform its obligations under
this Agreement or to consummate the transactions contemplated hereby.
(f) The pledge of the Pledged Collateral pursuant to this Agreement
is not prohibited by law or governmental regulation (including, without
limitation, Regulations T, U and X of the Board of Governors of the Federal
Reserve System) applicable to the Pledgor.
(g) No Event of Default (as defined herein) exists.
(h) The chief place of business and chief executive office of the
Pledgor are located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and the Pledgor
keeps its records concerning the Pledged Collateral at such location.
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SECTION 5. Further Assurances. (a) The Pledgor agrees that it will
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from time to time execute and deliver or cause to be executed and delivered, or
use its reasonable best efforts to procure, all assignments, instruments and
other documents, all in form and substance reasonably satisfactory to the
Trustee, and take any other actions that are necessary or desirable, to perfect,
continue the perfection of, or protect the first priority nature of the
Trustee's security interest in and to the Pledged Collateral, to protect the
Pledged Collateral against the rights, claims, or interests of third persons
(other than any such rights, claims or interests created by or arising through
the Trustee), to enable the Trustee to enforce its rights and remedies
hereunder, or to give effect to the purposes of this Agreement.
(b) The Pledgor hereby agrees to file one or more financing or
continuation statements, and amendments thereto, relating to all or any part of
the Pledged Collateral and provide proof to the Trustee of such filing. A
photocopy or other reproduction of this Agreement or any financing statement
covering the Pledged Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(c) The Pledgor will promptly pay all reasonable costs incurred in
connection with any of the foregoing.
SECTION 6. Covenants. The Pledgor covenants and agrees with the
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Trustee and the Holders that from and after the date of this Agreement until the
payment in full in cash of the Obligations:
(a) that (i) it will not (and will not purport to) sell or otherwise
dispose of, or grant any option or warrant with respect to, any of the
Pledged Collateral or its beneficial interest therein, and (ii) it will not
create or permit to exist any Lien or other adverse interest in or with
respect to its beneficial interest in any of the Pledged Collateral (except
for the security interests granted under this Agreement) and at all times
will be the sole beneficial owner of the Pledged Collateral;
(b) that it will not (i) enter into any agreement or understanding
that restricts or inhibits or purports to restrict or inhibit the Trustee's
rights or remedies hereunder, including, without limitation, the Trustee's
right to sell or otherwise dispose of the Pledged Collateral or (ii) fail
to pay or discharge any tax, assessment or levy of any nature with respect
to its beneficial interest in the Pledged Collateral not later than five
days prior to the date of any proposed sale under any judgment, writ or
warrant of attachment with respect to such beneficial interest; and
(c) that it will keep its chief place of business, chief executive
office and the place where it keeps its records concerning the Pledged
Collateral at the location therefor specified in Section 4(h), or upon 30
days' prior written notice to the Trustee, at such other locations in a
jurisdiction where all actions required by Section 5 have been taken with
respect to the Collateral.
SECTION 7. Power of Attorney. Upon the occurrence of a failure to
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pay an Obligation when due and payable or upon the occurrence of a default
hereunder, the Pledgor hereby appoints and constitutes the Trustee as the
Pledgor's attorney-in-fact, with full authority
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in the place and stead of the Pledgor and in the name of the Pledgor or
otherwise, from time to time in the Trustee's discretion, to take any action and
to execute any instrument that the Trustee may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, the
following powers: (a) collection of proceeds of any Pledged Collateral; (b)
conveyance of any item of Pledged Collateral to any purchaser thereof; (c)
giving of any notices or recording of any Liens under Section 5 hereof; and (d)
paying or discharging taxes or Liens levied or placed upon the Pledged
Collateral and paying the premiums under the QuickBird 2 Insurance, the legality
or validity thereof and the amounts necessary to pay or discharge the same to be
determined by the Trustee in its sole reasonable discretion, and such payments
made by the Trustee to become part of the Obligations of the Pledgor to the
Trustee, due and payable immediately upon demand. The Trustee's authority under
this Section 7 shall include, without limitation, the authority to endorse and
negotiate any checks or instruments representing proceeds of Pledged Collateral
in the name of the Pledgor, execute and give receipt for any certificate of
ownership or any document constituting Pledged Collateral, transfer title to any
item of Pledged Collateral, sign the Pledgor's name on all financing statements
(to the extent permitted by applicable law) or any other documents deemed
necessary or appropriate by the Trustee to preserve, protect or perfect the
security interest in the Pledged Collateral and to file the same, prepare, file
and sign the Pledgor's name on any notice of Lien, and to take any other actions
arising from or incident to the powers granted to the Trustee in this Agreement.
This power of attorney is coupled with an interest and is irrevocable by the
Pledgor. Notwithstanding anything to the contrary stated herein, the Trustee has
no duty or obligation to exercise any of the powers stated in this Section 7.
SECTION 8. No Assumption of Duties; Reasonable Care. The rights and
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powers granted to the Trustee hereunder are being granted in order to preserve
and protect the security interest of the Trustee and the Holders in and to the
Pledged Collateral granted hereby and shall not be interpreted to, and shall not
impose any duties on the Trustee in connection therewith other than those
expressly provided herein or imposed under applicable law. Except as provided
by applicable law, the Trustee shall be deemed to have exercised reasonable care
in the custody and preservation of the Pledged Collateral in its possession if
the Pledged Collateral is accorded treatment substantially equal to that which
the Trustee accords similar property held by the Trustee for similar accounts,
it being understood that the Trustee in its capacity as such shall not have any
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities or other matters relative to any Pledged
Collateral, whether or not the Trustee has or is deemed to have knowledge of
such matters or (b) investing or reinvesting any of the Pledged Collateral or
any loss on any investment; provided, however, that nothing contained in this
Agreement shall relieve the Trustee of any responsibilities as a securities
intermediary under applicable law. The Trustee shall be entitled to all of the
benefits, privileges and immunities accorded to it under the 13% Notes
Indenture.
SECTION 9. Indemnity. The Pledgor shall indemnify, hold harmless and
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defend the Trustee and the EarthWatch Securities Intermediary and its directors,
officers, agents and employees from and against any and all claims, actions,
obligations, liabilities and expenses, including reasonable defense costs,
reasonable investigative fees and costs and reasonable legal fees and expenses
and damages arising from the Trustee's performance as Trustee under this
Agreement or the EarthWatch Securities Intermediary's performance under this
Agreement, except to the extent that such claim, action, obligation, liability
or expense is directly attributable
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to the gross negligence or willful misconduct of such indemnified person. This
indemnification shall survive the termination of this Agreement.
SECTION 10. Release of Collateral. (a) Failure to Amend the 13%
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Notes Indenture. If on or before the close of business on April 25, 2001:
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(i) the 13% Notes Indenture shall not have been amended by the
Supplemental Indenture;
(ii) the Pledgor shall have commenced an Offer to Purchase the 13%
Notes in accordance with Section 5.6 of the Recapitalization Agreement;
(iii) no Event of Default shall have occurred and shall be
continuing; and
(iv) the Pledgor shall have delivered to the Trustee an Officer's
Certificate in form and substance satisfactory to the Trustee certifying
(x) that no Event of Default has occurred and is then continuing and (y)
the aggregate purchase price payable by the Pledgor to the holders of 13%
Notes validly tendered in such Offer to Purchase and (z) the date on which
such purchase price is payable to such Holders,
then the Trustee shall on such stated purchase date release from the
Pledge Account II and pay to the Paying Agent under the 13% Notes Indenture
(free from any Lien hereunder) for further payment to the Holders an amount
equal to the lesser of (A) such purchase price and (B) the aggregate balance in
the Pledge Account II at that time. On consummation of the Offer to Purchase,
after all 13% Notes validly tendered have been repurchased by the Pledgor, the
Trustee shall release from the Pledge Account II and pay to the Pledgor (free
from any Lien hereunder) the balance of any proceeds then remaining in the
Pledge Account II.
(b) Satisfactory Fulfillment of Conditions. If on or before the
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close of business on June 15, 2001:
(i) the Charter Amendments shall have been approved and shall be in
full force and effect;
(ii) the Pledgor shall have issued the shares of Series C Preferred
Stock as set forth under Section 5.2 of the Recapitalization Agreement and,
prior to such issuance, shall have obtained the waiver required to be
obtained by the last sentence of Section 3.5 of the Recapitalization
Agreement;
(iii) the Pledgor shall have obtained the Vendor Financing;
(iv) the Pledgor shall have, or contemporaneously with the payment of
the initial deposit therefor pursuant to Section 10(c) below, will have,
purchased (by paying the initial deposit therefor) the QuickBird 2
Insurance and the terms of such insurance shall comply with the
requirements set forth in Section 4.10(b) of the 13% Notes Indenture (as
amended by the Supplemental Indenture);
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(v) the Pledgor shall have satisfied the obligations set forth in
Section 5.4(b) of the Recapitalization Agreement;
(vi) no Event of Default shall have occurred and shall be continuing;
and
(vi) the Pledgor shall have delivered to the Trustee an Officer's
Certificate in form and substance satisfactory to the Trustee certifying
(w) that the conditions set forth in clauses (i) through (v) above have
been satisfied, (x) that no Event of Default has occurred and is then
continuing, (y) the aggregate amount of the insurance premiums payable in
respect of the purchase of the QuickBird 2 Insurance prior to the launch of
QuickBird 2 (the "Pre-Launch Insurance Premiums") and (z) a payment
schedule (the "Payment Schedule") setting forth the scheduled payment dates
and installment amounts for the payment of the Pre-Launch Insurance
Premiums in full,
then the Pledgor may, by written notice to the Trustee, (A) instruct
the Trustee to sell and liquidate all of the Pledged Securities on the next
Business Day following the receipt of such written notice (such next following
Business Day, the "Determination Date") and deposit the proceeds from such sale
to the Pledge Account II, and (B) direct the Trustee to release from the Pledge
Account II and pay to the Pledgor (free from any Lien hereunder) on the
Determination Date an amount equal to the excess (the "Excess") of the aggregate
balance in the Pledge Account II on the Determination Date over such amount of
principal necessary to pay the Pre-Launch Insurance Premiums in full in
accordance with the Payment Schedule. The proceeds from the sale and
liquidation of the Pledged Securities shall not be reinvested in additional
United States Treasury securities pursuant to Section 10(f) until the payment
pursuant to clause (B) above has been made.
(c) Payment of Pre-Launch Insurance Premiums. The Trustee shall, on
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or after receipt of the Officer's Certificate described in Section 10(b)(vi), on
each payment date referred to in the Payment Schedule, release from the Pledge
Account II and pay to the insurance companies providing the QuickBird 2
Insurance designated by the Pledgor (free from any Lien hereunder), the amount
of the installment or installments due on such payment date as set forth in the
Payment Schedule.
(d) Unsatisfactory Fulfillment of Conditions; Offer to Purchase. If:
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(i) the Pledgor fails to satisfy any condition set forth in Sections
10(b)(i) through Section 10(b)(v) on or before the close of business on
June 15, 2001;
(ii) the Pledgor commences an Offer to Purchase the 13% Notes in
accordance with Section 4.17 of the 13% Notes Indenture (as amended by the
Supplemental Indenture) or Section 5.6(iii) of the Recapitalization
Agreement;
(iii) no Event of Default shall have occurred and shall be continuing;
and
(iv) the Pledgor has delivered to the Trustee an Officer's
Certificate in form and substance satisfactory to the Trustee certifying
(x) that no Event of Default has occurred and is then continuing and (y)
the aggregate purchase price payable by the
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Pledgor to the holders of 13% Notes validly tendered in such Offer to
Purchase and (z) the date on which such purchase price is payable to such
Holders,
then the Trustee shall on such stated purchase date release from the
Pledge Account II and pay to the Paying Agent under the 13% Notes Indenture
(free from any Lien hereunder) for further payment to the Holders an amount
equal to the lesser of (A) such purchase price and (B) the aggregate balance in
the Pledge Account II at that time. On consummation of the Offer to Purchase,
after all 13% Notes validly tendered have been repurchased by the Pledgor, the
Trustee shall release from the Pledge Account II and pay to the Pledgor (free
from any Lien hereunder) the balance of any proceeds then remaining in the
Pledge Account II.
(e) Procedures. The Trustee shall liquidate Pledged Collateral in the
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Pledge Account II (pursuant to written instructions of the Pledgor) in order to
make any payment pursuant to this Section 10 unless there are sufficient funds
in the Pledge Account II to make such payment. Upon the making of any payment
by the Trustee pursuant to and in accordance with the provisions of this Section
10, the security interest created by this Agreement in the proceeds of such
payment shall be released and shall automatically terminate and be of no further
force and effect. The Trustee shall take all actions necessary to release the
security interest created by this Agreement in the proceeds of such payment in
order to enable the Trustee to make such payment.
(f) Reinvestment of Proceeds. Immediately following the sale and
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liquidation of the Pledged Securities pursuant to Section 10(b)(A) and payment
to the Pledgor of the Excess pursuant to Section 10(b)(B), the Pledgor shall
direct the Trustee to invest the proceeds remaining in the Pledge Account in
United States Treasury securities which shall constitute Pledged Securities for
the purposes of this Agreement, provided, however, that such United States
Treasury securities shall be in amounts and with maturities that match the
amounts of and payment dates for the installments of the Pre-Launch Insurance
Premiums, as set forth in the Payment Schedule.
SECTION 11. Remedies Upon Event of Default. If any Event of Default
------------------------------
under the 13% Notes Indenture or default hereunder (any such Event of Default or
default being referred to in this Agreement as an "Event of Default") shall have
occurred and be continuing:
(a) The Trustee and the Holders shall have, in addition to all other
rights given by law or by this Agreement, the 13% Note Indenture or the
Recapitalization Agreement, all of the rights and remedies with respect to
the Pledged Collateral of a secured party under the UCC. In addition, with
respect to any Pledged Collateral that shall then be in or shall thereafter
come into the possession or custody of the Trustee, the Trustee may sell or
cause the same to be sold at any broker's board or at public or private
sale, in one or more sales or lots, at such price or prices as the Trustee
may deem best, for cash or on credit or for future delivery, without
assumption of any credit risk. The purchaser of any or all Pledged
Collateral so sold shall thereafter hold the same absolutely, free from any
claim, encumbrance or right of any kind whatsoever created by or through
the Pledgor. If after enforcement of the pledge and security interest
created hereby, in the reasonable judgment of the Trustee, there is a
threat that the Pledged Collateral will decline speedily in value, or if
the Pledged Collateral is or becomes of a
10
type sold on a recognized market, the Trustee will give the Pledgor
reasonable notice of the time and place of any public sale thereof, or of
the time after which any private sale or other intended disposition is to
be made. To the extent permitted by applicable law, any sale of the Pledged
Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, commercial finance companies, or other
financial institutions disposing of property similar to the Pledged
Collateral shall be deemed to be commercially reasonable. Any requirements
of reasonable notice shall be met if such notice is mailed to the Pledgor
as provided in Section 15.1 hereof at least 10 days before the time of the
sale or disposition. The Trustee or any Holder may, in its own name or in
the name of a designee or nominee, buy any of the Pledged Collateral at any
public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees, expenses
and disbursements) of, or incident to, the enforcement of any of the
provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Pledged Collateral.
(b) The Pledgor further agrees to use its reasonable best efforts to
do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Pledged Collateral pursuant to
this Section 11 valid and binding and in compliance with any and all other
applicable requirements of law. The Pledgor further agrees that a breach
of any of the covenants contained in this Section 11 will cause irreparable
injury to the Trustee and the Holders, that the Trustee and the Holders
have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 11
shall be specifically enforceable against the Pledgor, and the Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event
of Default under the 13% Notes Indenture has occurred.
(c) The Trustee may, without notice to the Pledgor except as required
by law and at any time or from time to time, charge, set-off and otherwise
apply all or any part of the Obligations against the Pledge Account II or
any part thereof.
(d) Any cash held by or on behalf of the Trustee and all cash
proceeds received by or on behalf of the Trustee in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral shall be held by the Trustee as collateral for, and/or then or
at any time thereafter applied (after payment of any amounts payable to the
Trustee pursuant to the last sentence of Section 9, Section 11(a) and
Section 12) in whole or in part by the Trustee for itself and the ratable
benefit of the Holders against, all or any part of the Obligations in such
order as the Trustee shall elect consistent with the 13% Notes Indenture
and this Agreement. Any surplus of such cash or cash proceeds held by the
Trustee and remaining after payment in full of all of the Obligations in
cash shall be paid over to the Pledgor or to whomsoever may be lawfully
entitled to receive such surplus, upon receipt of written instructions from
the Pledgor.
SECTION 12. Expenses. The Pledgor shall upon demand pay to the
--------
Trustee the amount of any and all reasonable expenses, including, without
limitation, the reasonable fees, expenses and disbursements of its counsel,
experts and agents retained by the Trustee that the Trustee may incur in
connection with (a) the review, negotiation and administration of this
11
Agreement (as more specifically described in Exhibit C hereto), (b) the custody
or preservation of, or the sale of, collection from, or other realization upon,
any of the Pledged Collateral, (c) the exercise or enforcement of any of the
rights of the Trustee and the Holders hereunder or (d) the failure by the
Pledgor to perform or observe any of the provisions hereof.
SECTION 13. Security Interest Absolute. All rights of the Trustee
--------------------------
and the Holders and security interests hereunder, and all obligations of the
Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations;
(b) any taking, exchange, surrender, release or non-perfection of any
other collateral or any taking, release or amendment or waiver from any
guaranty for all or any of the Obligations;
(c) any change, restructuring or termination of the corporate
structure or the existence of the Pledgor or any of its subsidiaries; or
(d) to the extent permitted by applicable law, any other circumstance
which might otherwise constitute a defense available to, or a discharge of,
the Pledgor in respect of the Obligations or of this Agreement.
SECTION 14. EarthWatch Securities Intermediary's Representations,
-----------------------------------------------------
Warranties and Covenants. The EarthWatch Securities Intermediary represents and
------------------------
warrants that it is as of the date hereof, and it agrees that for so long as it
maintains the Pledge Account II and acts as securities intermediary pursuant to
this Agreement it shall be a "securities intermediary" (as defined in the UCC
and in 31 C.F.R. (S)357.2) and shall be eligible to maintain, and does maintain,
a Participant's Securities Account (as defined in 31 C.F.R. (S)357.2) in the
name of the EarthWatch Securities Intermediary with the FRBNY (a "FRBNY Member
Securities Account"). In furtherance of the foregoing, the EarthWatch
Securities Intermediary hereby:
(a) represents and warrants that it is a corporation that in the
ordinary course of its business maintains Securities Accounts for others
and is acting in that capacity hereunder and with respect to the Pledge
Account II;
(b) represents and warrants that it maintains the FRBNY Member
Securities Account with the FRBNY and that the United Stated Treasury
securities constituting the Pledged Securities transferred to the
EarthWatch Securities Intermediary pursuant to Section 3(b) have been
credited to the FRBNY Member Securities Account;
(c) agrees that the Pledge Account II shall be an account to which
financial assets may be credited, and the EarthWatch Securities
Intermediary undertakes to treat the Trustee as the sole person entitled to
exercise rights that comprise (and entitled to the benefits of) such
financial assets, and entitled to exercise the rights of an entitlement
holder and control in the manner contemplated by the UCC, further agrees
that it has identified (and will continue to identify) the Trustee in the
records of the EarthWatch Securities Intermediary as the sole person having
a securities entitlement against the
12
EarthWatch Securities Intermediary with respect to the Pledge Account II
and all assets, property and items from time to time carried in or credited
to the Pledge Account II;
(d) hereby represents that it has not granted, and covenants that so
long as it acts as EarthWatch Securities Intermediary hereunder it shall
not grant, control (including without limitation, "control" as defined in
UCC (S) 9 -115(1)(e)) over or with respect to any Pledged Collateral
credited to the Pledge Account II from time to time to any other Person
other than the Trustee;
(e) covenants that in its capacity as EarthWatch Securities
Intermediary hereunder and with respect to the Pledge Account II, it shall
not take any action inconsistent with, and represents and covenants that it
is not and so long as this Agreement remains in effect will not become
party to any agreement, the terms of which are inconsistent with the
provisions of this Agreement;
(f) to the maximum extent permitted by applicable law, all assets,
property and items from time to time credited to the Pledge Account II
shall constitute financial assets under Article 8 of the UCC, and the
EarthWatch Securities Intermediary shall treat all such assets, property
and items as financial assets;
(g) agrees to comply with entitlement orders and other directions
concerning the Pledge Account II originated by, and only by, the Trustee;
(h) agrees that the EarthWatch Securities Intermediary is and shall
remain the sole Person having dominion and control over the Pledge Account
II;
(i) agrees, with the other parties to this Agreement, so long as it
serves as EarthWatch Securities Intermediary pursuant to this Agreement, to
maintain the Pledge Account II as a securities account and maintain
appropriate books and records in respect thereof in accordance with its
usual procedures and subject to the terms of this Agreement; and
(j) agrees, with the other parties to this Agreement, that the
EarthWatch Securities Intermediary's jurisdiction, for purposes of UCC (S)
8-110(e) and 31 C.F.R. 357.11(b) as it pertains to this Agreement, the
Pledge Account II and security entitlements relating thereto, shall be the
State of New York.
SECTION 15. Miscellaneous Provisions.
Section 15.1. Notices. Any notice or communication given hereunder
-------
shall be sufficiently given if in writing and delivered in person or mailed by
first class mail, commercial courier service or telecopier communication,
addressed as follows:
if to the Pledgor:
EarthWatch Incorporated
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
13
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
2300 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
if to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Corporate Trust Trustee Administration
Section 15.2. No Adverse Interpretation of Other Agreements. This
---------------------------------------------
Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the 13% Notes Indenture and the Recapitalization
Agreement) may be used to interpret this Agreement.
Section 15.3 Severability. The provisions of this Agreement are
------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
Section 15.4. Headings. The headings in this Agreement have been
--------
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 15.5. Counterpart Originals. This Agreement may be signed in
---------------------
two or more counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement.
Section 15.6. Benefits of Agreement. Nothing in this Agreement,
---------------------
express or implied, shall give to any person, other than the parties hereto and
their successors hereunder, and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 15.7. Amendments, Waivers and Consents. Any amendment or
--------------------------------
waiver of any provision of this Agreement and any consent to any departure by
the Pledgor from any provision of this Agreement shall be effective only if made
or duly given in compliance with all
14
of the terms and provisions of the 13% Note Indenture, and neither the Trustee
nor any Holder shall be deemed, by any act, delay, indulgence, omission or
otherwise, to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default (as defined in the herein) or in any breach of
any of the terms and conditions hereof. Consistent with the foregoing, this
Agreement may be amended, its provisions may be waived and departures from its
provisions may be consented to by action of the Pledgor and the Trustee, and (if
applicable) the Holders, as provided in the 13% Note Indenture. Failure of the
Trustee or any Holder to exercise, or delay in exercising, any right, power or
privilege hereunder shall not preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Trustee or
any Holder of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy that the Trustee or such Holder would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.
Section 15.8. Interpretation of Agreement. Acceptance of or
---------------------------
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
Section 15.9. Continuing Security Interest; Termination. (a) This
-----------------------------------------
Agreement shall create a continuing security interest in and to the Pledged
Collateral and shall, unless otherwise provided in this Agreement, remain in
full force and effect until the payment in full in cash of the Obligations or
release and termination of the security interests created hereby pursuant to
Section 10. This Agreement shall be binding upon the Pledgor, its transferees,
successors and assigns, and shall inure, together with the rights and remedies
of the Trustee hereunder, to the benefit of the Trustee, the Holders and their
respective successors, transferees and assigns.
(b) Unless the security interests created hereby are released and
terminated pursuant to Section 10, this Agreement (other than the Pledgor's
obligations under Sections 9 and 12) shall terminate upon the payment in full in
cash of the Obligations. At such time, the Trustee shall reassign and redeliver
to the Pledgor all of the Pledged Collateral hereunder that has not been sold,
disposed of, retained or applied by the Trustee in accordance with the terms of
this Agreement and take all actions that are necessary to release the security
interest created by this Agreement in and to the Pledged Collateral, including
the execution and delivery of all termination statements necessary to terminate
any financing or continuation statements filed with respect to the Pledged
Collateral. Such reassignment and redelivery shall be without warranty by or
recourse to the Trustee in its capacity as such, except as to the absence of any
Liens on the Pledged Collateral created by or arising through the Trustee, and
shall be at the reasonable expense of the Pledgor.
Section 15.10. Survival of Representations and Covenants. All
-----------------------------------------
representations, warranties and covenants of the Pledgor contained herein shall
survive the execution and delivery of this Agreement, and shall terminate only
upon the termination of this Agreement.
Section 15.11. Waivers. The Pledgor waives presentment and demand
-------
for payment of any of the Obligations, protest and notice of dishonor or default
with respect to any
15
of the Obligations, and all other notices to which the Pledgor might otherwise
be entitled, except as otherwise expressly provided herein.
Section 15.12. Authority of the Trustee. (a) The Trustee shall have
------------------------
the right to exercise all powers hereunder that are specifically granted to the
Trustee by the terms hereof, together with such powers as are reasonably
incidental hereto. The Trustee may perform any of its duties hereunder or in
connection with the Pledged Collateral by or through agents or employees and
shall be entitled to retain counsel and to act in reliance upon the advice of
counsel concerning all such matters. Except as otherwise expressly provided in
this Agreement, neither the Trustee nor any director, officer, employee,
attorney or agent of the Trustee shall be liable to the Pledgor for any action
taken or omitted to be taken by the Trustee, in its capacity as Trustee,
hereunder, except for its own gross negligence or willful misconduct, and the
Trustee shall not be responsible for the validity, effectiveness or sufficiency
hereof or of any document or security furnished pursuant hereto. The Trustee
and its directors, officers, employees, attorneys and agents may conclusively
rely on any communication, instrument or document believed by it or them to be
genuine and correct and to have been signed or sent by the proper person or
persons.
(b) The Pledgor acknowledges that the rights and responsibilities of
the Trustee under this Agreement with respect to any action taken by the Trustee
or the exercise or non-exercise by the Trustee of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Trustee and the Holders, be governed
by the 13% Note Indenture and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Trustee and the
Pledgor, the Trustee shall be conclusively presumed to be acting as agent for
the Holders with full and valid authority so to act or refrain from acting, and
the Pledgor shall not be obligated or entitled to make any inquiry respecting
such authority.
(c) Each of the Trustee and the EarthWatch Securities Intermediary
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement, and no implied covenants or obligations shall be read
into this Agreement against the Trustee or the EarthWatch Securities
Intermediary.
(d) No provision of this Agreement shall require the Trustee or the
EarthWatch Securities Intermediary to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights and powers.
(e) The Trustee and the EarthWatch Securities Intermediary may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(f) The Trustee and the EarthWatch Securities Intermediary may
execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys and the Trustee and the
EarthWatch Securities Intermediary shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder.
16
Section 15.13. Final Expression. This Agreement, together with the
----------------
13% Note Indenture, the Recapitalization Agreement and any other agreement
executed in connection herewith, is intended by the parties as a final
expression of this Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
Section 15.14. Rights of Holders. No Holder shall have any
-----------------
independent rights hereunder other than those rights granted to individual
Holders pursuant to Section 5.7 of the 13% Note Indenture; provided that nothing
in this subsection shall limit any rights granted to the Trustee under the 13%
Notes or the 13% Note Indenture.
Section 15.15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
----------------------------------------------------
JURY TRIAL; WAIVER OF DAMAGES. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND
-----------------------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. ANY DISPUTE
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO, THE RELATIONSHIP
ESTABLISHED BETWEEN THE PLEDGOR, THE TRUSTEE AND THE HOLDERS IN CONNECTION WITH
THIS AGREEMENT AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. NOTWITHSTANDING THE FOREGOING, THE MATTERS IDENTIFIED IN 31 C.F.R. PART
357, 61 FED. REG. 43626 (AUG. 23, 1996) SHALL BE GOVERNED SOLELY BY THE LAWS
SPECIFIED THEREIN.
(b) THE PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS
TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR THE
PLEDGED COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH
(AND HAVING PERSONAL OR IN REM JURISDICTION OVER THE PLEDGOR OR THE PLEDGED
COLLATERAL, AS THE CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH PLEDGED
COLLATERAL, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE TRUSTEE. THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS, SET
OFFS OR CROSSCLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH
PROPERTY OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE TRUSTEE,
EXCEPT FOR SUCH COUNTERCLAIMS, SET OFFS OR CROSSCLAIMS WHICH, IF NOT ASSERTED IN
ANY SUCH PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED. THE PLEDGOR
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN THE CITY
OF NEW YORK ONCE THE TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) THE PLEDGOR AGREES THAT NEITHER ANY HOLDER NOR (EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT OR THE INDENTURES) THE TRUSTEE IN ITS
CAPACITY AS TRUSTEE SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER ARISING IN
TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY
17
WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED
BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A
COURT THAT IS BINDING ON THE TRUSTEE OR SUCH HOLDER, AS THE CASE MAY BE, THAT
SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE TRUSTEE OR
SUCH HOLDERS, AS THE CASE MAY BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
(d) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR WAIVES THE
POSTING OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY JUDGMENT OR
OTHER COURT ORDER PERTAINING TO THIS AGREEMENT OR ANY RELATED AGREEMENT OR
DOCUMENT ENTERED IN FAVOR OF THE TRUSTEE OR ANY HOLDER, OR TO ENFORCE BY
SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT
INJUNCTION, THIS AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT BETWEEN THE
PLEDGOR ON THE ONE HAND AND THE TRUSTEE AND/OR THE HOLDERS ON THE OTHER HAND.
18
IN WITNESS WHEREOF, the Pledgor, the Trustee and the EarthWatch
Securities Intermediary have each caused this Agreement to be duly executed and
delivered as of the date first above written.
EARTHWATCH INCORPORATED
(as Pledgor)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer,
President and Director
THE BANK OF NEW YORK
(as Trustee)
By: /s/ Van ▇. ▇▇▇▇▇
---------------------------------------------
Name: Van ▇. ▇▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK
(as EarthWatch Securities Intermediary)
By: /s/ Van ▇. ▇▇▇▇▇
---------------------------------------------
Name: Van ▇. ▇▇▇▇▇
Title: Vice President
19
EXHIBIT A
PLEDGED SECURITIES
------------------------------------------------------------------------------------------------------------------------
Description of Security CUSIP Number Final Maturity Original Principal Amount Cost at Closing
------------------------------------------------------------------------------------------------------------------------
United States Treasury Note ▇▇▇▇▇▇▇▇▇ 5/31/01 $31,534,000 $32,156,341.69
------------------------------------------------------------------------------------------------------------------------
United States Treasury Note ▇▇▇▇▇▇▇▇▇ 4/30/01 $27,106,000 $27,701,493.62
------------------------------------------------------------------------------------------------------------------------
United States Fidelity Treasury Note Not applicable No maturity $3,737,761.21 $ 3,737,761.21
------------------------------------------------------------------------------------------------------------------------
EXHIBIT B
CERTIFICATE
Pursuant to Section 3(f) of the Pledge Agreement (the "Agreement")
dated as of April 3, 2001 between EarthWatch Incorporated (the "Pledgor") and
The Bank of New York, as trustee (the "Trustee") for the Holders, and The Bank
of New York, as securities intermediary (the "EarthWatch Securities
Intermediary"), the undersigned officer of the Trustee, on behalf of the
Trustee, and the undersigned officer of the EarthWatch Securities Intermediary,
on behalf of the EarthWatch Securities Intermediary, make the following
certifications to the Pledgor and the Holders of the 13% Notes on the date of
this Certificate. Capitalized terms used and not defined in this Certificate
have the meanings set forth or referred to in the Agreement.
1. Substantially contemporaneously with the execution and delivery of
this Certificate, the Trustee has established with the EarthWatch Securities
Intermediary, as securities intermediary, the Pledge Account II. The EarthWatch
Securities Intermediary has acquired a security entitlement to the United States
Treasury securities identified in Annex 1 to this Certificate (the "Pledged
Securities") from the FRBNY and holds a security entitlement with respect
thereto in the FRBNY's security account. The EarthWatch Securities Intermediary
has made appropriate book entries in its records establishing that the Pledged
Securities and the Trustee's securities entitlement with respect thereto have
been credited to and are held in the Pledge Account II.
2. The Trustee has established and maintained and will maintain the
Pledge Account II and all securities entitlements and other positions carried in
the Pledge Account II solely in its capacity as Trustee and has not asserted and
will not assert any claim to or interest in the Pledge Account II or any such
securities entitlements or other positions except in such capacity.
3. The Trustee and the EarthWatch Securities Intermediary have
acquired their security entitlements to the Pledged Securities for value and
without notice of any adverse claim thereto. Without limiting the generality of
the foregoing, the Pledged Securities are not and the EarthWatch Securities
Intermediary's and the Trustee's security entitlements to the Pledged Securities
are not, to their knowledge, subject to any Lien granted by either of them in
favor of any securities intermediary (including, without limitation, NFSC or the
FRBNY) through which the Trustee derives its security entitlement to the Pledged
Securities.
4. Neither the EarthWatch Securities Intermediary nor the Trustee has
caused or permitted the Pledged Securities or any security entitlement thereto
to become subject to any Lien created by or arising through either of the
Trustee or the EarthWatch Securities Intermediary.
IN WITNESS WHEREOF, the undersigned officers have executed this
Certificate on behalf of the Trustee, and on behalf of the EarthWatch Securities
Intermediary, respectively, this 3/rd/ day of April, 2001.
THE BANK OF NEW YORK
(as Trustee)
By: ____________________________________________
Name:
Title:
THE BANK OF NEW YORK
(as EarthWatch Securities Intermediary)
By: ____________________________________________
Name:
Name:
Title:
EXHIBIT C
Trustee's Expenses
For administration: $5,000 per annum, payable annually in advance, together
with reasonable fees, expenses and disbursements of counsel, experts and agents
retained by the Trustee, as more specifically set forth in Section 12.
Exhibit 4.13
EARTHWATCH INCORPORATED
______________
FIRST SUPPLEMENTAL INDENTURE TO THE
INDENTURE
Dated as of April 16, 2001
______________
THE BANK OF NEW YORK,
Trustee
______________
13% Senior Discount Notes due 2007
2
This First Supplemental Indenture (the "Supplemental Indenture"), dated as
of April 16, 2001, between EarthWatch Incorporated, a corporation organized
under the laws of the State of Delaware, and The Bank of New York, as Trustee
(the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, pursuant to the Indenture, dated as of July 12, 1999, between the
Company and the Trustee (the "Indenture"), the Company issued $199,000,000
principal amount at maturity of 13% Senior Discount Notes Due 2007 (the
"Notes");
WHEREAS, on February 28, 2001, the Company, pursuant to an Offer to
Purchase for Cash dated February 28, 2001, launched an Offer to Purchase (as
defined in the Indenture) up to all of the Notes (the "Tender Offer");
WHEREAS, in order to finance the future operations of the Company, on April
2, 2001, the Company entered into a Recapitalization Agreement and Consent (the
"Agreement") with certain holders of the Notes (the "Remaining Holders"), under
which the Company agreed to enter into certain transactions in order to induce
the Remaining Holders to not tender their Notes in the Tender Offer, including
amending the Indenture as provided in this Supplemental Indenture (the
"Amendments") after consummation of the Tender Offer and the Remaining Holders
agreed to the Amendments;
WHEREAS, the Company purchased all of the Notes tendered in the Tender
Offer;
WHEREAS, the Remaining Holders hold 100% of the outstanding Notes;
WHEREAS, all things necessary to make this Supplemental Indenture a valid
supplement to the Indenture according to the terms of this Supplemental
Indenture and the Indenture have been done;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Company
and the Trustee mutually covenant and agree as follows:
ARTICLE ONE
DEFINED TERMS
Section 1.1. Defined Terms. All capitalized terms used herein
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without definition shall have the meaning ascribed thereto in the Indenture,
except as amended hereby. The words "herein," "hereof" and "hereby" and other
words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section of the
Supplemental Indenture.
ARTICLE TWO
AMENDMENT
Section 2.1. Definitions. The following definitions in Section 1.01
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of the Indenture are hereby amended as follows:
(a) The definition of "Collateral" in Section 1.01 of the Indenture is
hereby deleted in its entirety and replaced with the following:
""Collateral" means, (i) with respect to the Pledge Agreement, the
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Government Securities and the other collateral described in the Pledge
Agreement and (ii) with respect to the Pledge and Security Agreement, the
QuickBird 2 Launch Insurance and the other collateral described in the
Pledge and Security Agreement."
(b) The definition of "Collateral Trustee" in Section 1.01 of the
Indenture is hereby deleted in its entirety and replaced with the following:
""Collateral Trustee" means, (i) with respect to the Pledge Agreement,
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the Trustee or any successor or substitute collateral trustee for the
Collateral under the Pledge Agreement acting as such for itself and the
Holders of the Notes and (ii) with respect to the Pledge and Security
Agreement, the Trustee or any successor or substitute collateral trustee
for the Collateral under the Pledge and Security Agreement acting as such
for itself, the Holders of the Notes and the holder(s) of the Vendor
Financing."
(c) The definition of "First QuickBird Launch Insurance" in Section 1.01
of the Indenture is hereby deleted in its entirety.
(d) The definition of "Insurance Proceeds Payment Amount" in Section 1.01
of the Indenture is hereby deleted in its entirety and replaced with the
following:
""Insurance Proceeds Payment Amount" means the amount of proceeds, if
---------------------------------
any, under the QuickBird 2 Launch Insurance received by the Collateral
Trustee under the Pledge and Security Agreement."
(e) The proviso in clause (xxiii) of the definition of "Permitted Liens"
in Section 1.01 of the Indenture is hereby deleted in its entirety and replaced
with the following:
"provided, however, that notwithstanding any of the foregoing or
otherwise, Permitted Liens shall not include any Liens on the QuickBird 2
Satellite or the QuickBird 2 Launch Insurance except (1) in the case of
Liens on the QuickBird 2 Launch Insurance, Liens thereon in favor of the
Collateral Trustee under the Pledge and Security Agreement or otherwise
securing the Notes or the Vendor Financing, and Liens in favor of the
collateral trustee under the Junior Pledge and Security Agreement for the
benefit of the holders of the Series A Preferred Stock and Series B
Preferred Stock, provided such Liens shall be junior to the Liens in favor
of the Collateral Trustee under the Pledge and Security Agreement and (2)
with respect to the QuickBird 2 Satellite, (A) Liens described in clause
(ii) of this definition, (B) until the attachment of risk under the
QuickBird 2 Launch Insurance, the retention or reservation of title to the
QuickBird 2 Satellite by Ball
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Aerospace & Technologies Corp. under the terms of the Vendor Financing, (C)
following the attachment of risk under the QuickBird 2 Launch Insurance,
Liens to secure up to $9,000,000 principal amount (plus accrued interest
thereon) of Vendor Financing and (D) Liens in the proceeds (as defined in
Section 9-306(1) of the New York Uniform Commercial Code) from the
disposition of the QuickBird 2 Satellite, other than proceeds under the
QuickBird 2 Launch Insurance, to secure up to $9,000,000 million principal
amount (plus accrued interest) of Vendor Financing."
(f) The definition of "Registration Rights Agreement" is hereby deleted in
its entirety and replaced with the following:
""Registration Rights Agreement" means either (i) the Registration
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Rights Agreement, dated July 12, 1999, between the Company and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated and certain permitted assigns specified therein
or (ii) the Notes Registration Rights Agreement dated as of April 3, 2001,
among the Company, the Trustee and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, as
applicable."
(g) The definition of "Security Documents" in Section 1.01 of the
Indenture is hereby deleted in its entirety and replaced with the following:
""Security Documents" means the Pledge Agreement and the Pledge and
------------------
Security Agreement."
(h) The definition of "12 1/2% Notes" in Section 1.01 of the Indenture is
hereby deleted in its entirety.
Section 2.2. New Defined Terms. The Indenture is hereby amended by adding
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the following defined terms to Section 1.01 of the Indenture thereto in the
appropriate alphabetical order:
""Charter Amendments" means the amendment of the Company's Certificate
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of Incorporation, substantially in the form attached to the
Recapitalization Agreement as Exhibit G."
""Junior Pledge and Security Agreement" means the Junior Pledge and
------------------------------------
Security Agreement to be entered into between the Company and the Trustee,
as collateral trustee, pursuant to Section 5.4(b) of the Recapitalization
Agreement, substantially in the Form of Exhibit H-2 to the Recapitalization
Agreement.
""Pledge Agreement" means the Pledge Agreement, dated as of April 3,
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2001, among the Company, the Collateral Trustee and The Bank of New York,
as securities intermediary, under which the Company will pledge to the
Collateral Trustee certain Government Securities and/or cash to secure
payment in respect of the Company's obligation to repurchase the Notes
pursuant to Section 4.17."
""Pledge and Security Agreement" means the Senior Pledge and Security
-----------------------------
Agreement to be entered into by the Company in favor of the Collateral
Trustee pursuant to Section 5.4(b) of the Recapitalization Agreement,
substantially in the form of Exhibit
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H-1 attached to the Recapitalization Agreement, under which the Company
will pledge to the Collateral Trustee the QuickBird 2 Launch Insurance for
the benefit of the Holders of the Notes and the holder(s) of the Vendor
Financing."
""QuickBird 2 Launch Insurance" means launch and in-orbit operations
----------------------------
insurance in respect of the QuickBird 2 Satellite, having the terms and
provisions described in Section 4.10(b) and being in form and substance
satisfactory to the Collateral Trustee under the Pledge and Security
Agreement."
""QuickBird 2 Satellite" means the QuickBird 2 spacecraft manufactured
---------------------
pursuant to the contract dated June 9, 1998, as amended from time to time,
between Ball Aerospace & Technologies Corp. and the Company, for QuickBird
Spacecraft number SE.1M.PRJ.0004.A."
""Recapitalization Agreement" means the Recapitalization Agreement and
---------------------------
Consent, dated as of April 2, 2001, among the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated and the other parties thereto."
""Vendor Financing" means the financing to be provided by Ball
----------------
Technologies & Aerospace Corp. to the Company in a principal amount not
less than $9,000,000, for the construction and launch of the QuickBird 2
Satellite on substantially the terms set forth on Exhibit A to the
Recapitalization Agreement."
Section 2.3. Amendment to Section 4.3. Section 4.3 of the Indenture
------------------------
is hereby amended by adding the following new clause (viii) at the end of the
second paragraph thereof:
"or (viii) the repurchase of shares of Series A Preferred Stock or
Series B Preferred Stock with any Insurance Proceeds Payment Amount,
provided the Company has previously repurchased all Notes required to be
repurchased and repaid the Vendor Financing with the Insurance Proceeds
Payment Amount, in each case as required pursuant to Section 4.12."
Section 2.4. Amendment to Section 4.4. Section 4.4 of the Indenture
------------------------
is hereby amended by deleting the last sentence thereof in its entirety and
replacing it with the following:
"The Company shall not, and shall not permit any Subsidiary to,
create, incur, assume or suffer to exist any Lien on the QuickBird 2
Satellite or the QuickBird 2 Launch Insurance except (i) in the case of the
QuickBird 2 Launch Insurance, Liens thereon in favor of the Collateral
Trustee under the Pledge and Security Agreement or otherwise securing the
Notes or the Vendor Financing and Liens thereon in favor of the collateral
trustee under the Junior Pledge and Security Agreement for the benefit of
the holders of the Series A Preferred Stock and Series B Preferred Stock,
provided such Liens are junior to the Liens in favor of the Collateral
Trustee under the Pledge and Security Agreement and (ii) with respect to
the QuickBird 2 Satellite, (A) Liens described in clause (ii) of the
definition of Permitted Liens, (B) until the attachment of risk under the
QuickBird 2 Launch Insurance, the retention or reservation of title to the
QuickBird 2 Satellite by Ball Aerospace & Technologies Corp. under the
terms of the Vendor Financing, (C) following the attachment of risk under
the QuickBird 2 Launch Insurance,
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Liens to secure up to $9,000,000 principal amount (plus accrued interest
thereon) of Vendor Financing and (D) Liens in the proceeds (as defined in
Section 9-306(1) of the New York Uniform Commercial Code) from the
disposition of the QuickBird 2 Satellite, other than proceeds under the
QuickBird 2 Launch Insurance, to secure up to $9,000,000 million principal
amount (plus accrued interest) of Vendor Financing."
Section 2.5. Amendment to Section 4.5. Section 4.5 of the Indenture
------------------------
is hereby amended by deleting the term "First QuickBird Satellite" in the last
paragraph of Section 4.5 of the Indenture and replacing it with the term
"QuickBird 2 Satellite."
Section 2.6. Amendment to Section 4.10. Section 4.10 of the Indenture
-------------------------
is hereby amended by:
(a) deleting the term "First QuickBird Satellite" in the first and
second sentence thereof and, in each case, replacing it with the term "QuickBird
2 Satellite;" and
(b) deleting clause (b) in its entirety and replacing it with the
following:
"(b) Special Provisions Relating to QuickBird 2 Satellite.
Notwithstanding the generality of Section 4.10(a), with respect to the
intentional ignition of the launch vehicle for, and any operation following
such ignition of, the QuickBird 2 Satellite, the provisions of this Section
4.10(b) shall apply. The Company shall use its best efforts to obtain (by
paying the initial deposit therefor), no later than June 15, 2001, and upon
obtainment shall maintain in full force and effect, launch insurance with
respect to the QuickBird 2 Satellite, for a period which the Company deems
reasonable by comparison with other companies in a similar industry but in
no event for a period less than one year commencing on the date of
intentional ignition of the launch vehicle; the Company shall pay the
remaining insurance premiums in accordance with the payment schedule under
the terms of the QuickBird 2 Launch Insurance. The insurance policy
required to be obtained pursuant to this Section 4.10(b) shall have
substantially the same terms as the launch and in-orbit operations
insurance with respect to the First QuickBird Satellite, except (i) for
such differences in terms as may be required due to the differences in
construction, launch or in-orbit operations between the First QuickBird
Satellite and the QuickBird 2 Satellite, (ii) that the QuickBird 2 Launch
Insurance shall only be required to cover one year of operations after
launch for the QuickBird 2 Satellite, (iii) as is acceptable to the Holders
of a majority of the Notes in their absolute discretion and (iv) for such
differences that do not adversely affect the Holders. Such insurance shall
name the Collateral Trustee under the Pledge and Security Agreement as sole
loss payee thereof and must be in an amount of at least $155,000,000;
provided that in the event premiums are not at any time fully paid for in
respect of such launch insurance solely by reason of the fact that premiums
previously paid have been returned by the relevant insurance companies, the
Company shall not thereby be in default of its obligations under this
sentence, provided that all such returned premiums have been distributed to
the Collateral Trustee under the Pledge and Security Agreement in
accordance with the provisions of the Pledge and Security Agreement and any
amounts subsequently made available to the Company by the Collateral
Trustee in accordance with the Pledge and
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Security Agreement are immediately used for the purchase of launch
insurance complying with this sentence. Except as is acceptable to the
Holders of a majority of the Notes in their absolute discretion, the
insurance policy required to be obtained pursuant to this Section 4.10(b)
shall provide that if 66% or more of a satellite's capacity is lost, the
full amount of insurance shall become due and payable, and that if a
satellite is able to maintain more than 34% but less than 85% of its
capacity, a portion of such insurance based on the lost capacity shall
become due and payable.
The QuickBird 2 Launch Insurance shall name the Collateral Trustee
under the Pledge and Security Agreement as the sole loss payee thereon, and
the entire Insurance Proceeds Payment Amount, if any, shall be paid
directly to the Collateral Trustee for application (i) first to the Notes
and up to $9,000,000 principal amount of Vendor Financing, on a pro rata
basis, in accordance with the provisions of the Pledge and Security
Agreement and (ii) second to the collateral trustee under the Junior Pledge
and Security Agreement for the benefit of the Series A Preferred Stock and
Series B Preferred Stock in accordance with the provisions of the Junior
Pledge and Security Agreement. In the event that, notwithstanding the fact
that the Collateral Trustee under the Pledge and Security Agreement shall
be the sole loss payee with respect to the QuickBird 2 Launch Insurance,
the Company or any Subsidiary at any time shall receive any proceeds
relating to the QuickBird 2 Launch Insurance from the relevant insurance
company or from any source other than the Collateral Trustee in accordance
with the Pledge and Security Agreement, the Company shall cause such
proceeds to be held in trust for the benefit of the Collateral Trustee
under the Pledge and Security Agreement and immediately turned over to the
Collateral Trustee under the Pledge and Security Agreement in the same form
received with appropriate endorsements."
Section 2.7. Amendment to Section 4.11. Section 4.11 of the
-------------------------
Indenture is hereby amended by deleting the term "First QuickBird Satellite" in
clause (ii) of Section 4.11 of the Indenture and replacing it with the term
"QuickBird 2 Satellite."
Section 2.8. Amendment to Section 4.12. Section 4.12 of the
-------------------------
Indenture is hereby amended by deleting Section 4.12 of the Indenture in its
entirety and replacing it with the following:
"Section 4.12. Repurchase of Notes upon an Insurance Proceeds
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Payment. The Company shall, within 30 days of receipt by the Collateral
Trustee under the Pledge and Security Agreement of any proceeds under the
QuickBird 2 Launch Insurance, commence (and consummate within 60 days
thereafter) an Offer to Purchase the Notes then outstanding and offer to
repay the Vendor Financing, including any interest accrued and payable
thereon, on a pro rata basis, in an aggregate amount equal to the Insurance
Proceeds Payment Amount not previously subject to an Offer to Purchase or
repayment of the Vendor Financing under this Section 4.12; provided that
the aggregate principal amount of Vendor Financing that may be repaid with
any Insurance Proceeds Payment Amount shall not exceed $9,000,000. The
purchase price for the Notes in connection with any such Offer to Purchase
shall be equal to 100% of the Accreted Value thereof on the Payment Date,
plus accrued and unpaid interest, if any, to such Payment Date, and the
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purchase price for the Vendor Financing to be so repaid shall be equal to
the principal amount thereof plus accrued interest thereon. If the sum of
the aggregate purchase price of the Notes tendered in connection with such
Offer to Purchase and the amount of Vendor Financing repaid pursuant to the
first sentence of this Section 4.12 is less than the Insurance Proceeds
Payment Amount, the remaining insurance proceeds shall be paid over to the
collateral trustee under the Junior Pledge and Security Agreement, to the
extent required under the Junior Pledge and Security Agreement, and
otherwise to the Company, or as the Company may direct."
Section 2.9. Amendment to Section 4.17. Section 4.17 of the
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Indenture is hereby amended by deleting Section 4.17 of the Indenture in its
entirety and replacing it with the following:
"Section 4.17. Repurchase of Notes upon Failure to Meet Certain
------------------------------------------------
Conditions. If, as of the close of business on June 15, 2001, (i) the
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Company has not obtained QuickBird 2 Launch Insurance as required by
Section 4.10(b), or (ii) the Charter Amendments shall have not been
approved and be in full force and effect, or (iii) the Company has not
obtained the Vendor Financing, or (iv) the Company has not issued the
shares of Series C Preferred Stock as required under Section 5.2 of the
Recapitalization Agreement, or (v) the Company has not complied with all of
its obligations under Section 5.4(b) under the Recapitalization Agreement,
then the Company shall commence and consummate on or prior to August 1,
2001, an Offer to Purchase the Notes. The purchase price for the Notes in
connection with such Offer to Purchase shall be equal to 100% of the
Accreted Value of the Notes as of the Payment Date."
Section 2.10. Amendments to Section 6.1. Section 6.1 of the
-------------------------
Indenture is hereby amended by:
(a) deleting clause (c) in its entirety and replacing it with the
following:
"(c) the failure to make or consummate an Offer to Purchase in
accordance with Sections 4.7, 4.12 or 4.17 hereof;"
(b) deleting clause (III) of clause (e) in its entirety and replacing
it with the following:
"(III) with respect to any Indebtedness under the Vendor
Financing, there shall occur any default in the performance or observance
of any term, condition, covenant or agreement contained therein or in any
agreement relating thereto, or any other event specified in any such
Indebtedness or agreement, if the effect thereof is to cause, or permit the
holder of holders of such Indebtedness (or any trustee or other
representative of any such holder(s)) to cause, such Indebtedness to become
due prior to its Stated Maturity;"
(c) deleting clause (i) in its entirety and replacing it with the
following:
"(i) with respect to the QuickBird 2 Satellite, there shall occur
(1) the loss of more than 5% of such satellite's capacity or (2) any other
event that permits or requires
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the payment of proceeds of the QuickBird 2 Launch Insurance by an insurance
company thereunder and, in either such case, such proceeds are not paid
over to the Collateral Trustee within 90 days of demand being made under
the applicable QuickBird 2 Launch Insurance policy."
(d) adding the following new clause (j):
"the Collateral Trustee under the Pledge Agreement does not have at
all times a first priority perfected security interest in the Collateral
under the Pledge Agreement, or the Collateral Trustee under the Pledge and
Security Agreement does not have at all times a first priority perfected
security interest in the Collateral under the Pledge and Security
Agreement."
Section 2.11. Amendment to Section 9.1. Section 9.1 of the Indenture
------------------------
is hereby amended by deleting the parenthetical in clause (b) of Section 9.1 in
its entirety and replacing it with the following:
"(including amendments, modifications and supplements for the purpose
of securing up to $9,000,000 principal amount of Vendor Financing with the
Collateral under the Pledge and Security Agreement)"
Section 2.12. Amendments to Section 9.2. Section 9.2 of the
-------------------------
Indenture is hereby amended by:
(a) deleting the period at the end of clause (viii) of the second
paragraph of Section 9.1 and replacing it with the following:
"; or"
(b) adding the following new clause (ix) at the end of the second
paragraph of Section 9.1:
"(ix) alter the obligation of the Company to purchase the Notes under
Section 4.12 or 4.17 or waive any default in the performance thereof."
Section 2.13. Amendment to Section 10.1. The Indenture is hereby
-------------------------
amended by deleting clause (a) of Section 10.1 in its entirety and replacing it
with the following:
"(a) The Company shall enter into the Pledge Agreement and, promptly
following the obtainment of QuickBird 2 Insurance, into the Pledge and
Security Agreement and comply with the respective terms and provisions
thereof. The purpose of the Pledge Agreement is to provide the Trustee with
an interest in the Government Securities described in the Pledge Agreement
and any and all proceeds thereof. It is the intent that the interest of
the Trustee (through the Collateral Trustee under the Pledge Agreement) in
such Government Securities not be less than the aggregate Accreted Value on
August 1, 2001 for all Notes outstanding on the date hereof. The purpose
of the Pledge and Security Agreement is to provide the Trustee with an
interest in the QuickBird 2 Launch Insurance and any and all proceeds
thereof which will be shared, pro
8
rata, with the interest therein of the holder(s) of up to $9,000,000
principal amount of Vendor Financing. The Trustee and the Collateral
Trustee under the Pledge and Security Agreement are authorized to enter
into such modifications, amendments and supplements to the Pledge and
Security Agreement for the purpose of effectively securing up to $9,000,000
principal amount of Vendor Financing on a pro rata basis with the Notes as
provided in this Section 10.1."
ARTICLE THREE
MISCELLANEOUS
Section 3.1. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
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BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 3.2. Severability Clause. In case any provision in this
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Supplemental Indenture 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.
Section 3.3. Entire Agreement. This Supplemental Indenture is intended by
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the parties to be a final expression of their agreement in respect of the
subject matter contained herein and, together with the Indenture, as amended
hereby, supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
Section 3.4. Ratification; Supplemental Indentures Part of Indenture.
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Except as expressly amended hereby, the Indenture is in all respects ratified
and confirmed and all the terms, conditions and provisions thereof shall remain
in full force and effect. This Supplemental Indenture shall form a part of the
Indenture for all purposes, and every Holder heretofore or hereafter
authenticated and delivered shall be bound hereby. The Trustee makes no
representation or warranty as to the validity or sufficiency of this
Supplemental Indenture.
Section 3.5. Effectiveness. This Supplemental Indenture shall become
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effective upon due execution.
Section 3.6. Counterparts. The parties may sign any number of copies of
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this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
Section 3.7. Headings. The headings of the Articles and Sections of this
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Supplemental Indenture have been inserted for convenience of reference only, are
not to be considered a part hereof and shall in no way modify or restrict any of
the terms and provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
EARTHWATCH INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer/
Chief Operations Officer
THE BANK OF NEW YORK
By: /s/ Van ▇. ▇▇▇▇▇
--------------------------------------
Name: Van ▇. ▇▇▇▇▇
Title: Vice President
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