Execution copy
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$100,000,000
PURCHASE MONEY CREDIT AGREEMENT
Dated as of February 5, 2008,
among
TERRESTAR NETWORKS INC.,
as Borrower,
THE GUARANTORS PARTY HERETO,
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent,
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD., as a Lender,
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P., as a Lender,
ECHOSTAR CORPORATION, as a Lender,
and
THE OTHER LENDERS PARTY HERETO,
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS.......................................................1
SECTION 1.01. DEFINED TERMS.............................................1
SECTION 1.02. TERMS GENERALLY..........................................25
SECTION 1.03. ACCOUNTING TERMS; GAAP...................................25
ARTICLE II LOAN PROVISIONS..................................................26
SECTION 2.01. THE COMMITMENT...........................................26
SECTION 2.02. SECURITY.................................................26
SECTION 2.03. REQUEST FOR A LOAN.......................................27
SECTION 2.04. RECORDS; PROMISSORY NOTES................................27
SECTION 2.05. REPAYMENT OF THE LOANS...................................27
SECTION 2.06. PREPAYMENT OF THE LOANS AND COMMITMENT REDUCTIONS........27
SECTION 2.07. INTEREST.................................................29
SECTION 2.08. TAXES....................................................30
SECTION 2.09. PAYMENTS GENERALLY.......................................32
ARTICLE III REPRESENTATIONS AND WARRANTIES...................................33
SECTION 3.01. ORGANIZATION; POWERS.....................................33
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY............................33
SECTION 3.03. COMPLIANCE WITH LAWS AND AGREEMENTS......................34
SECTION 3.04. ERISA....................................................34
SECTION 3.05. LITIGATION, ENVIRONMENTAL AND OTHER MATTERS..............34
SECTION 3.06. COLLATERAL...............................................35
SECTION 3.07. SECURITY DOCUMENTS.......................................35
SECTION 3.08. TAXES....................................................35
SECTION 3.09. USE OF PROCEEDS..........................................35
SECTION 3.10. MATERIAL CONTRACTS.......................................35
SECTION 3.11. GOVERNMENTAL APPROVALS; NO CONFLICTS.....................36
SECTION 3.12. NO DEFAULT...............................................36
SECTION 3.13. LICENSES.................................................36
ARTICLE IV CONDITIONS.......................................................36
SECTION 4.01. EFFECTIVE DATE...........................................36
SECTION 4.02. ADDITIONAL CONDITIONS TO EFFECTIVE DATE AND EACH LOAN....39
SECTION 4.03. ADDITIONAL CONDITION TO INITIAL LOAN.....................40
ARTICLE V AFFIRMATIVE COVENANTS............................................40
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION...............40
SECTION 5.02. NOTICES OF MATERIAL EVENTS...............................41
SECTION 5.03. EXISTENCE; CONDUCT OF BUSINESS...........................42
SECTION 5.04. BOOKS AND RECORDS; INSPECTION RIGHTS.....................42
SECTION 5.05. MAINTENANCE OF PROPERTIES................................42
SECTION 5.06. COMPLIANCE WITH LAWS.....................................42
SECTION 5.07. PAYMENT OF OBLIGATIONS...................................42
SECTION 5.08. RECOVERY EVENTS..........................................43
SECTION 5.09. FURTHER ASSURANCES.......................................43
SECTION 5.10. USE OF PROCEEDS..........................................43
SECTION 5.11. MAINTENANCE OF APPROVALS.................................43
SECTION 5.12. LICENSES.................................................44
SECTION 5.13. DESIGNATION OF UNRESTRICTED SUBSIDIARIES.................44
SECTION 5.14. MAINTENANCE OF INSURANCE.................................45
SECTION 5.15. COMPLIANCE CERTIFICATES..................................45
SECTION 5.16. ADDITIONAL GUARANTEES....................................46
ARTICLE VI NEGATIVE COVENANTS...............................................47
SECTION 6.01. INDEBTEDNESS.............................................47
SECTION 6.02. LIMITATION ON LIENS......................................50
SECTION 6.03. MERGER, CONSOLIDATION AND SALE OF ALL OR SUBSTANTIALLY
ALL ASSETS...............................................50
SECTION 6.04. RESTRICTED PAYMENTS......................................50
SECTION 6.05. TRANSACTIONS WITH AFFILIATES.............................53
SECTION 6.06. LIMITATION ON LINES OF BUSINESS..........................55
SECTION 6.07. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES..................................55
SECTION 6.08. LIMITATION ON ASSET SALES OF THE COLLATERAL..............57
SECTION 6.09. LIMITATION ON TRANSFER OF THE COLLATERAL.................57
SECTION 6.10. LIMITATION ON AMENDMENTS TO PAYMENTS UNDER THE
TERRESTAR-2 CONSTRUCTION AGREEMENT.......................57
ARTICLE VII EVENTS OF DEFAULT................................................57
SECTION 7.01. EVENTS OF DEFAULT........................................57
SECTION 7.02. ACCELERATION.............................................60
SECTION 7.03. WAIVER OF DEFAULTS.......................................61
SECTION 7.04. RIGHTS AND REMEDIES CUMULATIVE...........................61
SECTION 7.05. DELAY OR OMISSION NOT WAIVER.............................61
ARTICLE VIII GUARANTEES.......................................................61
SECTION 8.01. GUARANTEES...............................................61
SECTION 8.02. LIMITATION ON LIABILITY..................................63
SECTION 8.03. SUCCESSORS AND ASSIGNS...................................63
SECTION 8.04. EXECUTION AND DELIVERY OF THE GUARANTEE..................63
ARTICLE IX THE COLLATERAL AGENT.............................................64
SECTION 9.01. APPOINTMENT..............................................64
SECTION 9.02. DELEGATION OF DUTIES.....................................64
SECTION 9.03. EXCULPATORY PROVISIONS...................................64
SECTION 9.04. RELIANCE BY THE COLLATERAL AGENT.........................64
SECTION 9.05. NOTICE OF DEFAULT........................................65
SECTION 9.06. NON-RELIANCE ON THE COLLATERAL AGENTS AND OTHER LENDERS..65
SECTION 9.07. INDEMNIFICATION..........................................66
SECTION 9.08. SUCCESSOR COLLATERAL AGENTS..............................66
SECTION 9.09. THE COLLATERAL AGENT GENERALLY...........................67
SECTION 9.10. AGENCY FOR PERFECTION....................................67
ARTICLE X MISCELLANEOUS....................................................67
SECTION 10.01. NOTICES..................................................67
SECTION 10.02. WAIVERS; AMENDMENTS......................................69
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER; COMMITMENT FEE.......70
SECTION 10.04. SUCCESSORS AND ASSIGNS...................................71
SECTION 10.05. THE BUY OUT..............................................73
SECTION 10.06. SURVIVAL.................................................73
SECTION 10.07. COUNTERPARTS; INTEGRATION; EFFECTIVENESS.................73
SECTION 10.08. SEVERABILITY.............................................74
SECTION 10.09. GOVERNING LAW; JURISDICTION; ETC.........................74
SECTION 10.10. WAIVER OF JURY TRIAL.....................................75
SECTION 10.11. HEADINGS.................................................75
SECTION 10.12. CONFIDENTIALITY..........................................75
SECTION 10.13. USA PATRIOT ACT..........................................76
APPENDIX A-1 Commitments
SCHEDULE I Material Contracts
SCHEDULE II Milestone Payments and Payment Dates
SCHEDULE 2.09(a) Lender Payment Accounts
SCHEDULE 3.05(c) Material Adverse Effect Exceptions
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Opinions of New York, Delaware and FCC regulatory counsel to
the Borrower
EXHIBIT C Form of Security Agreement
EXHIBIT D Form of Note
EXHIBIT E Form of Joinder to Guarantee
This PURCHASE MONEY CREDIT AGREEMENT dated as of February 5, 2008 (this
"AGREEMENT") is entered into among TERRESTAR NETWORKS INC., a Delaware
corporation (the "BORROWER"), the guarantors party hereto from time to time,
U.S. BANK NATIONAL ASSOCIATION, as collateral agent for the lenders referred to
below (in such capacity, the "COLLATERAL AGENT"), HARBINGER CAPITAL PARTNERS
MASTER FUND I, LTD. ("HARBINGER"), HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS
FUND, L.P. ("HARBINGER SITUATIONS"), ECHOSTAR CORPORATION, ("ECHOSTAR"), and the
other lenders party hereto from time to time (together with Harbinger, Harbinger
Situations, EchoStar and their respective successors and assigns, collectively,
the "LENDERS").
WHEREAS, the Borrower is party to the satellite construction contract,
dated as of December 12, 2007 ("TERRESTAR-2 CONSTRUCTION AGREEMENT") with Space
Systems/Loral, Inc., a Delaware corporation (the "SATELLITE MANUFACTURER") which
provides for the construction and delivery of the TerreStar-2 Satellite;
WHEREAS, under the terms of the TerreStar-2 Construction Agreement, the
Borrower is obligated to make at least $100,000,000 in remaining purchase price
payments to the Satellite Manufacturer;
WHEREAS, the Borrower has requested that the Lenders make credit extensions
to it in order to enable the Borrower to make the remaining purchase price
payments to the Satellite Manufacturer pursuant to the TerreStar-2 Construction
Agreement to enable the Borrower to complete the acquisition of, and rights to
use, the TerreStar-2 Satellite and the other Collateral; and
WHEREAS, the Lenders are prepared to make loans to the Borrower for the
purposes described herein and upon the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following terms
have the meanings specified below:
"1.4 GHZ SPECTRUM" means any spectrum between 1390 to 1395 MHz and 1432 to
1435 MHz bands.
"15% NOTES" means the Borrower's outstanding 15% Senior Secured PIK Notes
due 2014.
"15% NOTES INDENTURE" means the Indenture for the 15% Notes, dated as of
the 15% Notes Issue Date, between the Borrower and U.S. Bank National
Association, as trustee, as supplemented on or before the Effective Date
(including, as applicable, the supplemental indenture relating to the issuance
of an additional $50,000,000 principal amount of 15% Notes on or about the
Effective Date).
"15% NOTES ISSUE DATE" means February 14, 2007.
"ACQUIRED DEBT" means, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and (b) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"AFFILIATE" means 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," as used with respect to any Person, means 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, that beneficial ownership of 10% or more of
the Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"AGREEMENT" has the meaning assigned to such term in the Preamble.
"ASSET SALE" means:
(i) the sale, lease, conveyance or other disposition of any
assets or rights; provided that the sale, lease, conveyance or other disposition
of all or substantially all of the assets of the Borrower and its Restricted
Subsidiaries taken as a whole will be governed by Sections 6.03 and not by
Section 6.08; and
(ii) the issuance of Equity Interests in any of the Borrower's
Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted
Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed
to be an Asset Sale:
(a) except in the case of the Collateral, any single transaction or
series of related transactions that involves assets having a fair market value
of less than $10,000,000;
(b) a disposition of assets between or among the Borrower and any
Guarantors; provided, that in the case of a sale of Collateral, the transferee
will cause such amendments, supplements or other instruments to be executed,
filed, and recorded in such jurisdictions as may be required by applicable law
to preserve and protect the Lien on the Collateral owned by or transferred to
the transferee, together with such financing statements or comparable documents
as may be required to perfect any security interests in such Collateral which
may be perfected by the filing of a financing statement or a similar document
under the Uniform Commercial Code or other similar statute or regulation of the
relevant states or jurisdictions;
(c) a transfer of assets between or among Restricted Subsidiaries that
are not Guarantors or from a Restricted Subsidiary that is not a Guarantor to
the Borrower or a Guarantor;
(d) an issuance of Equity Interests by a Restricted Subsidiary of the
Borrower to the Borrower or to another Restricted Subsidiary of the Borrower;
(e) the sale, lease or other disposition of equipment, inventory or
products in the ordinary course of business and any sale or other disposition of
damaged, worn-out, uneconomic or obsolete assets in the ordinary course of
business;
(f) with respect to assets that are Collateral, the creation of a
Collateral Permitted Lien and dispositions in connection with Collateral
Permitted Liens, and with respect to assets that are not Collateral, the
creation of any "Permitted Lien" as such term is defined in the 15% Notes and
dispositions in connection with such Permitted Liens;
(g) the licensing or sublicensing of intellectual property or other
general intangibles and licenses, leases or subleases of other property;
(h) except in the case of Collateral, foreclosure on assets, except to
the extent that the value of the assets exceeds the amount of the obligation
secured;
(i) the sale or other disposition of cash or Cash Equivalents;
provided that, if such cash or Cash Equivalents arise as the result of an Asset
Sale or Recovery Event, such sale or disposition is in accordance with the
provisions of this Agreement;
(j) the sale or other disposition of Equity Interests in Unrestricted
Subsidiaries; and
(k) a Restricted Payment that is permitted by Section 6.04 or a
Permitted Investment.
"ATC" means Ancillary Terrestrial Component as defined by the FCC.
"ATC OPERATIONAL DATE" means the date that is three months after Borrower's
certification to the FCC that the TerreStar-1 Satellite system is operational
and that Borrower has satisfied the final FCC milestone conditioning the FCC MSS
S-Band Spectrum reservation held by Borrower.
"ATTRIBUTABLE DEBT" means in respect of a Sale/Leaseback Transaction, at
the time of determination, the present value of the obligation of the lessee for
net rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
will be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP; provided that if such
Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of
Indebtedness represented thereby will be determined in accordance with the
definition of "CAPITAL LEASE OBLIGATION."
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BENEFICIAL OWNER" has the meaning in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating the beneficial ownership of any
particular "person" (as that term is used in Section 13(d)(3) of the Exchange
Act), such "person" will be deemed to have beneficial ownership of all
securities that such "person" has the right to acquire by conversion or exercise
of other securities, whether such right is currently exercisable, or is
exercisable only upon the occurrence of a subsequent condition. The term
"Beneficially Own" has a corresponding meaning.
"BOARD OF GOVERNORS" means the Board of Governors of the Federal Reserve
System of the United States of America.
"BOARD OF DIRECTORS" means:
(a) with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such
Person;
(b) with respect to a partnership, the board of directors of the
general partner of the partnership;
(c) with respect to a limited liability company, the managing member
or members or any controlling committee of managing members thereof; and
(d) with respect to any other Person, the board of directors or
committee of such Person serving a similar function.
"BORROWER" has the meaning assigned to such term in the Preamble.
"BUSINESS DAY" means each day that is not a Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
law to close.
"BUYING LENDERS" has the meaning assigned to such term in Section 10.05(a).
"CANADIAN ENTITIES" means TerreStar Canada Holdings and TerreStar Canada.
"CAPITAL LEASE OBLIGATION" means at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet prepared in
accordance with GAAP, and the Stated Maturity thereof will be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be prepaid by the lessee without payment of a
penalty.
"CAPITAL STOCK" means:
(a) in the case of a corporation, corporate stock;
(b) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(d) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person, but excluding from all of the foregoing any debt
securities convertible into Capital Stock, whether or not such debt securities
include any right of participation with Capital Stock.
"CASH EQUIVALENTS" means any of the following:
(a) United States dollars and in the case of any Foreign Subsidiary
that is a Restricted Subsidiary, such local currencies held by them from time to
time in the ordinary course of business;
(b) securities issued or directly and fully guaranteed or insured by
the United States or the Canadian government or any agency or instrumentality of
the United States or the Canadian government (provided that the full faith and
credit of the United States or Canada, as applicable, is pledged in support of
those securities) having maturities of not more than twelve months from the date
of acquisition;
(c) marketable general obligations issued by any state of the United
States or province of Canada, or any political subdivision of any such state or
province or any public instrumentality thereof maturing within one year from the
date of acquisition (provided that the full faith and credit of the United
States or Canada, as applicable, is pledged in support thereof) and, at the time
of acquisition, having a credit rating of "A" or better from either S&P or
▇▇▇▇▇'▇;
(d) certificates of deposit and eurodollar time deposits with
maturities of twelve months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding twelve months and overnight bank
deposits with any U.S. domestic or Canadian commercial bank having capital and
surplus in excess of $500,000,000 and a Thomson Bank Watch Rating of "B" or
better;
(e) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (b), (c) and (d) above
entered into with any financial institution meeting the qualifications specified
in clause (d) above;
(f) commercial paper having a rating of at least A-3 from ▇▇▇▇▇'▇ or
P-3 from S&P and in each case maturing within nine months after the date of
acquisition; and
(g) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (a) through (f) of this
definition.
"CCTV" means CCTV Wireless, Inc., a Delaware corporation.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(a) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of TerreStar Parent, Borrower or any of its Restricted Subsidiaries taken as a
whole to any "person" (as that term is used in Section 13(d)(3) of the Exchange
Act) other than a Permitted Holder;
(b) the adoption of a plan relating to the liquidation or dissolution
of the TerreStar Parent or Borrower;
(c) any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) becomes the Beneficial Owner, directly or indirectly, of more than
50% of the Voting Stock of TerreStar Parent or Borrower, other than a Permitted
Holder, measured by voting power rather than number of shares; or
(d) the first day on which a majority of the members of the Board of
Directors of TerreStar Parent or Borrower are not Continuing Directors.
"CODE" means the Internal Revenue Code of 1986.
"COLLATERAL" has the meaning in the U.S. Security Agreement.
"COLLATERAL AGENT" has the meaning assigned to such term in the Preamble.
"COLLATERAL PERMITTED LIENS" means all of the following:
(a) Liens to secure the performance of statutory obligations or other
obligations of a like nature incurred in the ordinary course of business;
(b) Statutory Liens or mechanics', suppliers', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business;
(c) 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 and if a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor;
(d) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security, in connection with the TerreStar-2 Construction Agreement
and the related escrow agreements;
(e) Liens created for the benefit of Collateral Agent or the Lenders
to secure the Obligations under this Agreement or the other Loan Documents;
(f) rights of banks to set off deposits against debts owed to said
bank;
(g) all right, title and interest of the Satellite Manufacturer in the
Collateral pursuant to the TerreStar-2 Construction Agreement; and
(h) the Lien evidenced by the Uniform Commercial Code financing
statement filed in connection with the 15% Notes Indenture naming the Borrower,
as debtor, and U.S. Bank National Association, as secured party, on the
Collateral, until such Lien is terminated on or prior to the borrowing date of
the initial Loan hereunder in accordance with Section 4.03.
"COMMISSION" means the Securities and Exchange Commission or any successor
agency.
"COMMITMENT" means the commitment of a Lender to make or otherwise fund a
Loan hereunder, expressed as an amount representing the maximum aggregate amount
of the Loans to be made by the Lenders hereunder, and "COMMITMENTS" means such
commitments of all Lenders in the aggregate to make or otherwise fund a Loan
hereunder. The amount of each Lender's Commitment, if any, is set forth on
▇▇▇▇▇▇▇▇ ▇-▇, subject to any adjustment or reduction pursuant to the terms and
conditions hereof. The total amount of the Commitment is $100,000,000, as such
amount may be reduced as provided in the definition of the term "UNUSED
COMMITMENT".
"CONTINUING DIRECTORS" means, as of any date of determination, any member
of the Board of Directors of TerreStar Parent or the Borrower who:
(a) was a member of such Board of Directors on the Effective Date; or
(b) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election or by the
Permitted Holders.
"DEFAULT" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DEPOSIT ACCOUNT" means the account of the Borrower or the Satellite
Manufacturer (as the case may be) designated by the Borrower to the Lenders in
the most recent Notice of Borrowing delivered by the Borrower to each of the
Lenders pursuant to Section 4.02(e), subject to approval by the Required Lenders
(which approval shall not be unreasonably withheld or delayed).
"DISQUALIFIED STOCK" means, any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), 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 of the Capital Stock, in whole or in part, prior to the date that is 91
days after Maturity Date. Notwithstanding the preceding sentence, any Capital
Stock that would constitute Disqualified Stock solely because the holders of the
Capital Stock have the right to require the Borrower to repurchase such Capital
Stock upon the occurrence of a Change of Control or an Asset Sale will not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Borrower may not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption complies with Section 6.04.
"DOLLARS" or "$" refers to lawful money of the United States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary that is not a Foreign
Subsidiary.
"ECHOSTAR" has the meaning assigned to such term in the Preamble.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 and Section 4.02 are satisfied (or waived in accordance with
Section 10.02).
"ELECTING LENDERS" means, at any time, any Lender holding at least 30% of
the aggregate unpaid principal amount of the Loans and the Unused Commitment;
provided, that on and after the date that no Lender holds at least 30% of the
aggregate unpaid principal amount of the Loans and the Unused Commitment,
"ELECTING LENDERS" means, at any time, Lenders holding more than 30% of the then
aggregate unpaid principal amount of the Loans and the Unused Commitment. A
defaulting Lender shall be excluded for the purpose of this determination.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise, of
the Borrower or any Subsidiary directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code, or, solely for purposes of the Pension Funding Rules
and Withdrawal, is treated as a single employer under Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan (other
than an event for which the 30-day notice period is waived), (b) prior to the
effectiveness of the applicable provisions of the Pension Act with respect to a
Plan, the existence with respect to the Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA) or,
on and after the effectiveness of the applicable provisions of the Pension Act
with respect to such Plan, any failure by the Plan to satisfy the minimum
funding standard (within the meaning of Section 412 of the Code or Section 302
of ERISA) applicable to such Plan, in each case whether or not waived, (c) the
filing pursuant to, prior to the effectiveness of the applicable provisions of
the Pension Act with respect to a Plan, Section 412(d) of the Code or Section
303(d) of ERISA or, on and after the effectiveness of the applicable provisions
of the Pension Act with respect to the Plan, Section 412(c) of the Code or
Section 302(c) of ERISA, of an application for a waiver of the minimum funding
standard with respect to any Plan, (d) on and after the effectiveness of the
applicable provisions of the Pension Act, a determination that any Plan is, or
is expected to be, in "at-risk" status (as defined in Section 303(i)(4) of ERISA
or Section 430(i)(4) of the Code), (e) the incurrence by the Borrower or any
ERISA Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Plan, (f) the receipt by the Borrower or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or to appoint a trustee to administer any Plan,
(g) the incurrence by the Borrower or any ERISA Affiliate of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan pursuant to its terms or pursuant to Title IV of ERISA, or (h) the receipt
by the Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA or, on and after the effectiveness of
the applicable provisions of the Pension Act, in endangered or critical status,
within the meaning of Section 305 of ERISA or Section 432 of the Code.
"EVENT OF DEFAULT" means any of the events specified Article VII; provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"EXCHANGEABLE NOTES" means Borrower's 6 1/2% Senior Exchangeable PIK Notes
due 2014, exchangeable for certain Capital Stock of TerreStar Parent.
"EXCHANGEABLE NOTES INDENTURE" means the Indenture for the Exchangeable
Notes, dated as of the date hereof, between the Borrower, certain affiliates of
the Borrower, as guarantors, and U.S. Bank National Association, as trustee.
"EXCLUDED TAXES" means, with respect to Collateral Agent, any Lender or any
other recipient of any payment to be made by or on account of any obligation of
the Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America (including any subdivision
thereof), or by the jurisdiction (including any subdivision thereof) under the
laws of which such recipient (or, if the recipient is treated as a disregarded
entity for U.S. federal income tax purposes, the beneficial owners thereof) is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located, (c) any Taxes that
would not have been imposed but for the activities of the recipient (or, if the
recipient is treated as a disregarded entity for U.S. federal income tax
purposes, the beneficial owners thereof) in the jurisdiction imposing such Tax
which are not related to this Agreement or any of the other Loan Documents or
the transactions contemplated by the Loan Documents, including the execution and
delivery of the Loan Documents and the administration of the provisions or
exercise of rights and remedies under the Loan Documents; (d) United States
withholding taxes imposed on amounts payable to a Lender, including a Buying
Lender at the time such Lender becomes a party to this Agreement, except to the
extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to
Indemnified Taxes; and (e) any Taxes that are attributable to Collateral Agent
or such Lender's, including any Buying Lender's, failure to comply with the
requirements of Section 2.08(e) of this Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of Borrower and the Restricted
Subsidiaries in existence on the Effective Date, until such amounts are repaid.
"FCC" means the U.S. Federal Communications Commission, or any successor
thereto.
"FCC ATC AUTHORIZATION" means the FCC authorization (FCC Application File
No. SES-AMD-20070907-01253 still pending) permitting Borrower to provide ATC in
the United States as additional authority pursuant to call sign E060430.
"FCC LICENSES" means any license, authorization, approval, or permit
granted by the FCC pursuant to the Communications Act of 1934 to the Borrower or
its Subsidiaries.
"FCC LICENSE SUBSIDIARY" means TerreStar License Inc., a Delaware
corporation.
"FCC MOBILE EARTH STATION LICENSE" means the FCC license (FCC Application
File No. SES-LIC-20061206-02100, as amended, still pending) authorizing Borrower
to provide service to mobile earth terminals in the United States pursuant to
call sign E060430.
"FCC SPECTRUM RESERVATION" means the FCC authorization permitting the
Borrower to operate a MSS S-Band system in the United States pursuant to call
sign S2633.
"FOREIGN SUBSIDIARY" means any (i) Subsidiary that is treated as a
corporation for United States federal income tax purposes that is formed or
incorporated outside of the United States, (ii) Subsidiary substantially all of
the assets of which consist, directly or indirectly, of Subsidiaries described
in clause (i) of this definition, (iii) entity treated as disregarded for United
States federal income tax purposes that owns more than 65% of the voting stock
of a Subsidiary described in clause (i) or (ii) of this definition or (iv)
Subsidiary that was not formed under the laws of the United States or the
District of Columbia.
"FULL IN-ORBIT INSURANCE" means insurance coverage of satellites following
the period of time that is customarily covered by launch insurance that provides
coverage against partial losses, constructive total losses and complete losses.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board of the Public Company Accounting
Oversight Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession in the United
States, which are in effect from time to time.
"GOVERNMENTAL AUTHORITY" means any international body or any nation or
government, any state or political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation or other entity owned or
controlled, through stock or capital or otherwise, by any of the foregoing.
"GUARANTEE" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness (whether arising by virtue of partnership arrangements,
or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or
otherwise).
Unless the context otherwise indicates, "Guarantee" shall mean a guarantee
by a Guarantor of the Borrower's payment Obligations pursuant to the terms of
this Agreement.
"GUARANTEED OBLIGATIONS" has the meaning assigned to such term in Section
8.01.
"GUARANTOR" means any Person that guarantees the Obligations of the
Borrower hereunder and under the other Loan Documents; provided that upon the
release or discharge of such Person from its Guarantee in accordance with the
provisions of the Loan Documents, such Person shall cease to be a Guarantor.
"HARBINGER" has the meaning assigned to such term in the Preamble.
"HARBINGER SITUATIONS" has the meaning assigned to such term in the
Preamble.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGING OBLIGATIONS" means with respect to any specified Person, the
obligations of such Person incurred in the ordinary course of business and not
for speculative purposes under:
(a) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements and interest rate collar
agreements;
(b) foreign exchange contracts and currency protection agreements
entered into with one of more financial institutions and designed to protect the
person or entity entering into the agreement against fluctuations in currency
exchanges rates with respect to Indebtedness incurred; and
(c) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates or currency exchange rates.
"INDEBTEDNESS" means (without duplication) with respect to any specified
Person, any indebtedness of such Person (excluding accrued expenses and trade
payables), whether or not contingent:
(a) in respect of borrowed money;
(b) evidenced by bonds, notes, debentures or similar instruments;
(c) in respect of letters of credit, banker's acceptances or other
similar instruments;
(d) representing Capital Lease Obligations and Attributable Debt;
(e) representing the balance deferred and unpaid of the purchase price
of any property or services due more than 12 months after such property is
acquired or such services are completed;
(f) all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with respect to any
Subsidiary that is not a Guarantor, any preferred stock (but excluding, in each
case, any accrued dividends); or
(g) representing any Hedging Obligations;
provided, that Indebtedness shall be deemed not to include (1) Guarantees
incurred in the ordinary course of business and not in respect of borrowed
money; (2) obligations to make payments to one or more insurers under satellite
insurance policies in respect of premiums or the requirement to remit to such
insurer(s) a portion of the future revenues generated by a satellite which has
been declared a constructive total loss, in each case in accordance with the
terms of the insurance policies relating thereto; (3) any obligations to make
progress or incentive payments under any satellite manufacturing contract or to
make payments under satellite launch contracts in respect of launch services
provided thereunder, in each case, to the extent not overdue by more than 90
days; (4) obligations of such Person arising from agreements of such Person
providing for indemnities, guarantees of performance, adjustments of purchase
price, contingency payment obligations based on the performance of acquired or
disposed assets or similar obligations, in each case, incurred or assumed in
connection with the acquisition or disposition of any business, assets or
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Subsidiary for the
purpose of financing such acquisition; or (5) purchase price holdbacks in
connection with purchasing in the ordinary course of business of such Person;
provided, further, that: (A) in the case of clauses (1) and (4), such
obligations are not reflected on the balance sheet of such Person (contingent
obligations referred to in a footnote to financial statements and not otherwise
reflected on the balance sheet will not be deemed to be reflected on such
balance sheet for purposes of this definition); (B) in the case of clauses (2)
and (3), such amounts are not required by GAAP to be treated as indebtedness on
the balance sheet of such Person; and (C) in the case of clause (4), the maximum
assumable liability in respect of all such obligations shall at no time exceed
the gross proceeds including non-cash proceeds (the fair market value of such
non-cash proceeds being measured at the time received and without giving effect
to any subsequent changes in value) actually received by such Person in
connection with such disposition.
In addition, the term "INDEBTEDNESS" of a Person shall be deemed to include
all Indebtedness secured by a Lien on any asset of the specified Person (whether
or not such Indebtedness is assumed by the specified Person) and, to the extent
not otherwise included, the Guarantee by the specified Person of any
Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(b) in the case of any Disqualified Stock of the specified Person or
any Guarantor or preferred stock of a Restricted Subsidiary that is not a
Guarantor, the repurchase price calculated in accordance with the terms of such
Disqualified Stock or preferred stock as if such Disqualified Stock or preferred
stock were repurchased on the date on which Indebtedness is required to be
determined pursuant to this Agreement; provided that if such Disqualified Stock
or preferred stock is not then permitted to be repurchased, the greater of the
liquidation preference and the book value of such Disqualified Stock or
preferred stock;
(c) in the case of Indebtedness of others secured by a Lien on any
asset of the specified Person, the lesser of (i) the fair market value of such
asset on the date on which Indebtedness is required to be determined pursuant to
this Agreement and (ii) the amount of the Indebtedness so secured;
(d) in the case of the Guarantee by the specified Person of any
Indebtedness of any other Person, the maximum liability to which the specified
Person may be subject upon the occurrence of the contingency giving rise to the
obligation (whether or not such contingency has occurred or is likely to occur);
(e) in the case of any Hedging Obligations, the net amount payable if
such Hedging Obligations were terminated at that time due to default by such
Person (after giving effect to any contractually permitted set-off); and
(f) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in the case of
any other Indebtedness.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITEE" has the meaning assigned to such term in Section 10.03(b).
"INDUSTRY CANADA" means the Canadian Federal Department of Industry or any
successor thereto.
"INDUSTRY CANADA LICENSE" means the Approval in Principle issued by
Industry Canada to TMI Communications and Company, Limited Partnership, dated
May 6, 2002, as amended from time to time, which was transferred to TerreStar
Canada and which authorizes TerreStar Canada to operate a 2 GHz MSS satellite in
a Canadian orbital position, and in addition, to use associated service, feeder
link and telemetry, telecommand and control radio spectrum for the purposes of
providing MSS services in Canada.
"INFORMATION" has the meaning assigned to such term in Section 10.12.
"INFORMATION STATEMENT" shall mean the Information Statement required to be
filed with the Commission with respect to the Spectrum Contribution.
"INTEREST PAYMENT DATE" has the meaning assigned to such term in Section
2.07(d).
"INTEREST RATE" means a percentage per annum equal to fourteen (14)
percentage points, as such percentage may be modified from time to time by the
terms of this Agreement, including, without limitation, Sections 2.07(b) and
(c).
"INVESTED CAPITAL" means, at any time of determination, the sum of, without
duplication, (a) total consolidated Indebtedness of the Borrower, its Restricted
Subsidiaries and, to the extent they are required to be consolidated with the
Borrower under GAAP, the Canadian Entities, in each case determined in
accordance with GAAP; (b) cash capital contributions in the aggregate amount of
$307,000,000 made by TerreStar Parent and its Subsidiaries other than the
Borrower or any Subsidiaries of the Borrower to the Borrower prior to the
Effective Date; (c) Net Proceeds received by the Borrower since the Effective
Date from the sale of Equity Interests of the Borrower (other than proceeds of
Disqualified Stock) or capital contributions by TerreStar Parent or any
Subsidiary of TerreStar Parent other than the Borrower or any Subsidiary of the
Borrower or any other Person other than the Borrower or any Subsidiary of the
Borrower; and (d) in respect of the TerreStar Parent Funding Agreement, the
greater of $95,000,000 and (x) the sum of the amount of cash contributed plus
(y) the net value (determined as of the date of contribution after deducting
estimated expenses of sale) of shares of SkyTerra common stock contributed to
the Borrower pursuant thereto.
"INVESTMENT AGREEMENTS" means (a) the Master Investment Agreement, dated on
or about the date hereof, by and among TerreStar Parent, the Borrower and
EchoStar and (b) the Master Investment Agreement, dated on or about the date
hereof, by and among TerreStar Parent, the Borrower, Harbinger and Harbinger
Situations.
"INVESTMENTS" means with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (excluding Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Borrower
or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests
of any direct or indirect Subsidiary of the Borrower such that, after giving
effect to any such sale or disposition, such Person is no longer a Restricted
Subsidiary, the Borrower will be deemed to have made an Investment on the date
of any such sale or disposition in an amount equal to the fair market value of
the Equity Interests of such Subsidiary not sold or disposed of in an amount
determined as provided in Section 6.04(c). The acquisition by the Borrower or
any Restricted Subsidiary of a Person that holds an Investment in a third Person
will be deemed to be an Investment made by the Borrower or such Restricted
Subsidiary in such third Person in an amount equal to the fair market value of
the Investment held by the acquired Person in such third Person on the date of
any such acquisition in an amount determined as provided in Section 6.04(c).
Except as otherwise provided in this Agreement, the amount of an Investment will
be determined at the time the Investment is made and without giving effect to
subsequent changes in value.
"IRU AGREEMENT" means the Indefeasible Right of Use Agreement between the
Borrower and TerreStar Canada, as such agreement may be modified from time to
time in accordance with its terms.
"LENDER" has the meaning assigned to such term in the Preamble.
"LIEN" means, with respect to any asset, any mortgage, lien, hypothecation,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement or any
lease in the nature thereof.
"LOAN" has the meaning assigned to such term in Section 2.01.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Security Documents and any other agreement entered into, now or hereafter
executed by or on behalf of the Borrower or any Guarantor, and delivered to the
Collateral Agent or any Lender in connection with this Agreement or the
transactions contemplated hereby.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, financial condition or results of operations of TerreStar
Parent, the Borrower and its Restricted Subsidiaries taken as a whole, (b) the
rights of TerreStar Parent, the Borrower or any of the respective Restricted
Subsidiaries in respect of any Material License, (c) the ability of the Borrower
or of the Guarantors to perform any of their respective payment obligations
under any Material Contract, this Agreement or any of the other Loan Documents
to which they are party, (d) the validity, enforceability or priority of the
Liens contemplated under the Security Documents, or (e) the ability of
Collateral Agent or any Lender to exercise any of its rights and/or remedies
available under this Agreement or any of the other Loan Documents, except for
any change, event, occurrence, fact, condition, development or effect resulting
from or arising in connection with (i) the taking of any action required by the
terms of the Investment Agreements, or (ii) any actions required to be taken (or
required to not be taken) at the request of any Lender or any Purchaser.
"MATERIAL CONTRACTS" shall mean the agreements set forth in Schedule I, in
each case, including all amendments, modifications and supplements thereto.
"MATERIAL LICENSE" means the FCC ATC Authorization, the Industry Canada
License, the FCC Spectrum Reservation, or the FCC Mobile Earth Station License.
"MATURITY DATE" means the earliest to occur of (a) February 5, 2013 and (b)
July 23, 2008, if the Spectrum Contribution Approval shall not have occurred on
or prior to such date.
"MAXIMUM AMOUNT" means, as of any date of calculation, the lesser of (a)
the Unused Commitment as of such date and (b) the Milestone Payment required to
be made by the Borrower and remaining unpaid as of such date.
"MILESTONE PAYMENT" means each payment in respect of the TerreStar-2
Satellite set forth in Schedule II required to be made by the Borrower to the
Satellite Manufacturer under the TerreStar-2 Construction Agreement.
"MILESTONE PAYMENT DATE" means each date set forth in Schedule II on which
a Milestone Payment is due under the TerreStar-2 Construction Agreement.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor to the
rating agency business thereof.
"MSS" means mobile satellite service.
"MSS S-BAND SPECTRUM" means the spectrum bands 2000-2020 MHz and 2180-2200
MHz.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET AWARD" means any awards or proceeds in respect of any condemnation or
other eminent domain proceeding.
"NET INSURANCE PROCEEDS" means any awards or proceeds in respect of any
casualty insurance or title insurance claim.
"NET PROCEEDS" means (i) with respect to any Asset Sale or Recovery Event,
the aggregate cash proceeds received by the Borrower or any of the Restricted
Subsidiaries in respect of such Asset Sale (including any cash received upon the
sale or other disposition of any non-cash consideration received in any such
Asset Sale) or any such Recovery Event (including any Net Insurance Proceeds in
respect thereof), net of the direct costs relating to such Asset Sale or
Recovery Event, including legal, accounting and investment banking fees, and
sales commissions, and any relocation expenses incurred as a result of the Asset
Sale or Recovery Event, taxes paid or payable as a result of the Asset Sale or
Recovery Event, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, amounts required to be
applied to the repayment of Indebtedness, and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP, and any deduction of appropriate amounts to be provided by the Borrower or
any Restricted Subsidiary as a reserve in accordance with GAAP against any
liabilities associated with the asset disposed of in such Asset Sale and
retained by the Borrower and/or any Restricted Subsidiary and (ii) with respect
to any issuance or sale of Capital Stock or Indebtedness, or any capital
contribution, the proceeds of such issuance, sale or capital contribution, net
of attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant or other fees actually
incurred in connection with such issuance, sale or capital contribution, and net
of taxes paid or payable as a result thereof.
"NON-RECOURSE DEBT" means Indebtedness,
(a) as to which neither the Borrower nor any of its Restricted
Subsidiaries (i) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (ii) is directly or
indirectly liable as a guarantor or otherwise, or (iii) is the lender;
(b) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both any
holder of any other Indebtedness of the Borrower or any Restricted Subsidiary to
declare a default on such other Indebtedness or to cause the payment of the
Indebtedness to be accelerated or payable prior to its Stated Maturity; and
(c) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Borrower or any of its
Restricted Subsidiaries.
"NOTES" means one or more promissory notes issued by the Borrower pursuant
to Section 2.04(c).
"NOTICE OF BORROWING" means a notice substantially in the form of EXHIBIT
A.
"OBLIGATIONS" means, any principal, premium, if any, interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization, whether or not a claim for post-filing interest is allowed in
such proceeding), penalties, fees, charges, expenses, indemnifications,
reimbursement obligations, damages, guarantees, and other liabilities or amounts
payable under the documentation governing any Indebtedness or in respect
thereto.
"OECD" means the Organization for Economic Co-operation and Development.
"OFFICER" means, as to TerreStar Parent, Borrower or any Subsidiary
Guarantor, as the case may be, the Chairman, President, Chief Executive Officer,
Treasurer, Chief Financial Officer, Executive Vice President, Senior Vice
President, Vice President, Assistant Vice President, Secretary or Assistant
Secretary.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers or by
one Officer and any Assistant Treasurer or Assistant Secretary of TerreStar
Parent, Borrower or any Guarantor, as the case may be, and which complies with
the provisions of this Agreement.
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"PARTICIPANT" has the meaning assigned to such term in Section 10.04(e).
"PATRIOT ACT" has the meaning set forth in Section 10.13.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"PENSION ACT" means the Pension Protection Act of 2006.
"PENSION FUNDING RULES AND WITHDRAWAL" means the rules of the Code and
ERISA regarding minimum required contributions (including any installment
payment thereof) to Plans subject to Title IV of ERISA and set forth in, with
respect to plan years ending prior to the effective date as to such plan of the
Pension Act, Section 412 of the Code and Section 302 of ERISA each as in effect
prior to the Pension Act and, thereafter, Sections 412 and 430 of the Code and
Sections 302 and 303 of ERISA.
"PERMITTED BUSINESS" means the lines of business conducted by the Borrower
and the Restricted Subsidiaries on the Effective Date and any business
incidental or reasonably related thereto or which is a reasonable extension
thereof as determined in good faith by the Borrower's Board of Directors and set
forth in an Officers' Certificate delivered to the Lenders.
"PERMITTED HOLDER" means, (a) with respect to the Borrower, each of
TerreStar Parent, Motient Ventures Holding Inc., MVH Holdings Inc., Harbinger
(or any Affiliate thereof) and Echostar (or any Affiliate thereof) and (b) with
respect to TerreStar Parent, each of Motient Ventures Holding Inc., MVH Holdings
Inc., Harbinger (or any Affiliate thereof) and Echostar (or any Affiliate
thereof).
"PERMITTED INVESTMENT" means:
(a) any Investment in the Borrower or any Restricted Subsidiary of the
Borrower;
(b) any Investment in cash and Cash Equivalents;
(c) any Investment by the Borrower or any Restricted Subsidiary in a
Person, if as a result of such Investment:
(i) such Person becomes a Restricted Subsidiary of the Borrower;
or
(ii) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Borrower or a
Restricted Subsidiary of the Borrower;
(d) any Investment made as a result of the receipt of any non-cash
consideration received in connection with a disposition of assets excluded from
the definitions of "Asset Sale" and "Recovery Event";
(e) workers' compensation, utility, lease and similar deposits and
prepaid expenses in the ordinary course of business and endorsements of
negotiable instruments and documents in the ordinary course of business;
(f) loans or advances to employees (other than executive officers)
made in the ordinary course of business of the Borrower or such Restricted
Subsidiary in an aggregate amount not to exceed $2,500,000 at any one time
outstanding;
(g) any Investments received in compromise or resolution of (i)
obligations of trade creditors or customers that were incurred in the ordinary
course of business of the Borrower or any of its Restricted Subsidiaries,
including pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer, or (ii) litigation,
arbitration or other disputes with Persons who are not Affiliates;
(h) Hedging Obligations;
(i) advances or extensions of credit on terms customary in the
industry in the form of accounts or other receivables incurred, and loans and
advances made in settlement of such accounts receivable, all in the ordinary
course of business;
(j) Investments existing on the Effective Date;
(k) advances, loans or extensions of credit to suppliers and vendors
in the ordinary course of business;
(l) Investments in the Canadian Entities that have been made, or are
required to be made, by the Borrower under the (i) Transfer Agreements and (ii)
the TerreStar Canada Credit Facility; and
(m) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (m) during the relevant period that are
at the time outstanding, not to exceed $10,000,000 in any calendar year and
$60,000,000 in the aggregate since the Effective Date.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Borrower
or any Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease, refund or
discharge other Indebtedness of the Borrower or any of its Subsidiaries (other
than intercompany Indebtedness); provided that:
(a) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased, refunded or discharged (plus all accrued interest
on the Indebtedness and the amount of all fees and expenses and premiums
incurred in connection therewith);
(b) if the Stated Maturity of the Indebtedness being refinanced is the
same as or earlier than the Stated Maturity of the Loans, such Permitted
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of
the Indebtedness being refinanced is later than the Stated Maturity of the
Notes, such Permitted Refinancing Indebtedness has a Stated Maturity at least 91
days later than the Stated Maturity of the Loans;
(c) such Permitted Refinancing Indebtedness has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased,
refunded or discharged;
(d) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased, refunded or discharged is subordinated in right of payment to the
Loans or any Subsidiary Guarantee, such Permitted Refinancing Indebtedness is
subordinated in right of payment to the Loans or the Subsidiary Guarantees, as
the case may be, on terms at least as favorable to the Lenders as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased, refunded or discharged; and
(e) such Indebtedness is incurred either by the Borrower or a
Guarantor that is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased, refunded or discharged.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"PIK INTEREST" has the meaning assigned to such term in Section 2.07(d).
"PLAN" means 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 in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness:
(a) consisting of the deferred purchase price of an asset, conditional
sale obligations, obligations under any title retention agreement and other
purchase money obligations, in each case where the maturity of such Indebtedness
does not exceed the anticipated useful life of the asset being financed, and
(b) incurred to finance the acquisition or construction by the
Borrower or a Restricted Subsidiary of such asset, including additions and
improvements;
provided, that such Indebtedness is incurred within 180 days after the
acquisition, or the completion of construction or improvement by the Borrower or
such Restricted Subsidiary of such asset.
"RECOVERY EVENT" means any event, occurrence, claim or proceeding that
results in any Net Award or Net Insurance Proceeds of $10,000,000 or more.
"REGISTERED LENDER" means, as of any date of determination, each Person
that, to the Borrower's knowledge, is a Lender.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers and employees of such
Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having more than 70% of the
aggregate amount of the sum of (a) the Unused Commitment and (b) the then
aggregate unpaid principal amount of the Loans. A defaulting lender shall be
excluded for the purpose of this determination.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED PAYMENT" has the meaning assigned to such term in Section 6.04.
"RESTRICTED SUBSIDIARY" means with respect to a Person, any Subsidiary of
the specified Person that is not an Unrestricted Subsidiary. Unless otherwise
specified, "Restricted Subsidiary" refers to a Restricted Subsidiary of the
Borrower.
"S&P" means Standard and Poor's Ratings Group, Inc., or any successor to
the rating agency business thereof.
"SALE/LEASEBACK TRANSACTION" means arrangement relating to property or
assets owned by the Borrower or a Restricted Subsidiary on the Effective Date or
thereafter acquired by the Borrower or a Restricted Subsidiary whereby the
Borrower or a Restricted Subsidiary transfers such property or assets to a
Person (other than the Borrower or a Restricted Subsidiary of the Borrower) and
the Borrower or a Restricted Subsidiary leases such property or assets from such
Person.
"SATELLITE MANUFACTURER" has the meaning assigned to such term in the
Preamble.
"SECURITY AGREEMENT" means the Security Agreement between the Borrower and
the Collateral Agent for the benefit of the Lenders dated as of even date
herewith, in the form attached hereto as EXHIBIT C.
"SECURITY DOCUMENTS" means, collectively, the Security Agreement and all
Uniform Commercial Code financing statements or comparable instruments as may be
required or desirable pursuant to the terms of applicable law, required by the
Security Agreement to be filed with respect to the security interests created
pursuant to the Security Agreement and such other agreements and documents as
shall be necessary to provide the Collateral Agent with valid, enforceable and
perfected first priority security interests (subject only to Collateral
Permitted Liens) in the Collateral and in each case all amendments,
modifications and supplements thereto.
"SELLING LENDERS" has the meaning assigned to such term in Section
10.05(a).
"SKYTERRA" means SkyTerra Communications, Inc.
"SPECTRUM CONTRIBUTION" means the transactions contemplated by the Spectrum
Contribution Agreement.
"SPECTRUM CONTRIBUTION AGREEMENT" means each of the Spectrum Contribution
Agreements dated on or about the date hereof among (i) TerreStar Parent,
Harbinger and Harbinger Situations and (ii) TerreStar Parent and EchoStar.
"SPECTRUM CONTRIBUTION APPROVAL" means the approval of each of the Spectrum
Contribution Transactions by all necessary action of the shareholders of
TerreStar Parent, which shall be evidenced in form and substance reasonably
satisfactory to the Lenders.
"SPECTRUM CONTRIBUTION TRANSACTIONS" means, collectively, (a) the Spectrum
Contribution, (b) the provision to EchoStar of TerreStar Parent's
satellite/terrestrial network capacity for a set-top box return path, and (c)
the non-exclusive, royalty-free license to TerreStar Parent for the use of
CCTV's intellectual property with respect to use of 1.4 GHz Spectrum in North
America.
"STATED MATURITY" means with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the Effective Date, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any specified Person:
(a) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency and after giving effect to
any voting agreement or stockholders' agreement that effectively transfers
voting power) to vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(b) any partnership (i) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (ii)
the only general partners of which are that Person or one or more Subsidiaries
of that Person (or any combination thereof).
Unless otherwise specified, "Subsidiary" refers to a Subsidiary of
Borrower.
"SUBSIDIARY GUARANTEE" means any Guarantee by a Subsidiary of the
Obligations under this Agreement and the other Loan Documents.
"SUBSIDIARY GUARANTOR" means any Restricted Subsidiary of the Borrower that
is a Guarantor.
"TAXES" means any and all present or future taxes, fees, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority, including any interest, penalties, or additions thereto.
"TERRESTAR-1 SATELLITE" means "TERRESTAR-1", as such term is defined in the
15% Notes Indenture.
"TERRESTAR-2 CONSTRUCTION AGREEMENT" has the meaning assigned to such term
in the Preamble.
"TERRESTAR-2 SATELLITE" means "TERRESTAR-2", as such term is defined in the
TerreStar-2 Construction Agreement.
"TERRESTAR CANADA" means TerreStar Networks (Canada) Inc., a corporation
incorporated under the laws of the province of Ontario.
"TERRESTAR CANADA CREDIT FACILITY" means (i) the Amended and Restated
Credit Facility Agreement dated December 20, 2007 between the Borrower and
TerreStar Canada; and (ii) the Amended and Restated Promissory Note dated
December 20, 2007 between the Borrower and TerreStar Canada.
"TERRESTAR CANADA HOLDINGS" means TerreStar Networks Holdings (Canada)
Inc., a corporation incorporated under the laws of the province of Ontario.
"TERRESTAR PARENT" means TerreStar Corporation, a Delaware corporation
(f/k/a Motient Corporation).
"TERRESTAR PARENT FUNDING AGREEMENT" means the agreement entered into in
connection with the offering of the 15% Notes among TerreStar Parent and Motient
Ventures Holding Inc. in favor of the Borrower relating to certain funding
commitments to the Borrower.
"TERRESTAR SHAREHOLDERS AGREEMENT" means the Amended and Restated
Shareholders Agreement dated as of May 6, 2006 between 437158 Canada Inc. (the
transferee of TMI's shares in the capital of TerreStar Canada Holdings), the
Borrower, TerreStar Canada Holdings and TerreStar Canada, as amended from time
to time in a manner not materially disadvantageous to the Lenders.
"TMI" means TMI Communications and Company, Limited Partnership, a limited
partnership formed under, and governed by, the laws of the Province of Quebec,
or any successor thereto.
"TRANSACTIONS" means the execution, delivery and performance by the
Borrower of this Agreement and by the Borrower and the Guarantors of the other
Loan Documents to which they are a party, the borrowing of the Loan, the use of
the proceeds thereof and the granting of the Liens on the Collateral by the
Borrower to the Collateral Agent.
"TRANSFER AGREEMENTS" means the Master Agreement dated as of October 24,
2006 by and among Telesat Canada, BCE Inc., the Borrower, TerreStar Canada
Holdings, TerreStar Canada, TMI and TerreStar Parent, along with the series of
agreements attached thereto that the parties thereto have subsequently entered
into or will hereafter enter into, including a Shareholders Agreement of
TerreStar Canada Holdings, a Rights and Services Agreement, a Tax Indemnity
Agreement, a TerreStar Canada Guarantee in favor of Loral, a TerreStar Canada
Guarantee in favor of the Borrower, a security agreement, a Release and
Indemnity Agreement, a Guarantee and Share Pledge Agreement in favor of the
Borrower, a Satellite Delivery Agreement, an Indefeasible Right of Use Agreement
and an Intellectual Property License Agreement, in each case, as such agreements
may have been or may hereafter be modified from time to time in a manner not
materially disadvantageous to the Lenders.
"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code and
the Uniform Commercial Code of each other state as may be applicable, in the
reasonable judgment of the Lenders, for the purpose of creating, maintaining and
perfecting the Collateral Agent's first priority security interest (subject only
to Collateral Permitted Liens) in the Collateral.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Borrower that is
designated by the Board of Directors of the Borrower as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors, but only to the
extent that such Subsidiary:
(a) has no Indebtedness other than Non-Recourse Debt;
(b) except as permitted by Section 6.05, is not party to any
agreement, contract, arrangement or understanding with the Borrower or any
Restricted Subsidiary of the Borrower unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Borrower or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Borrower;
(c) is a Person with respect to which neither the Borrower nor any of
its Restricted Subsidiaries has any direct or indirect obligation (i) to
subscribe for additional Equity Interests or (ii) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and
(d) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Borrower or any of its Restricted
Subsidiaries.
"UNUSED COMMITMENT" means, as of any date of calculation, the amount by
which the Commitment in effect at the time exceeds the aggregate outstanding
principal amount of all Loans; provided, that the Commitment shall be
permanently reduced (a) at the time of and by the amount of each Milestone
Payment required to be made, regardless of whether a Loan has been made with
respect thereto and (b) as otherwise provided in Section 2.06.
"VOTING STOCK" of any specified Person as of any date, means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means 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
payments of principal, including payment at final maturity, in respect of the
Indebtedness, 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 principal amount of such Indebtedness.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as
the word "shall". Unless the context requires otherwise (a) (i) any definition
of or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to compliance
with any restrictions on or conditions to such amendments, supplements or
modifications set forth herein), and (ii) references to any statute or
regulation shall be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation, (b) any reference herein to any Person shall be construed
to include such Person's permitted successors and assigns, (c) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights and (f) unless otherwise expressly provided herein,
any reference to any action of Collateral Agent or any Lender by way of consent,
approval or waiver shall be deemed modified by the phrase "in its/their sole
discretion".
SECTION 1.03. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP; provided that, if the Borrower notifies the
Lenders that the Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in
the application thereof on the operation of such provision (or if the Lenders
notify the Borrower that the Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then the Collateral
Agent, the Lenders and the Borrower shall negotiate in good faith to effect such
amendment and such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
LOAN PROVISIONS
SECTION 2.01. THE COMMITMENT.
(a) THE LOANS. The Lenders agree, subject to the terms hereof and
satisfaction of the conditions precedent contained herein, from the Effective
Date through the Maturity Date to make extensions of credit to the Borrower
(each such extension of credit, a "LOAN" and, collectively, the "LOANS") upon
the request of the Borrower in accordance with Section 2.03, on any Milestone
Payment Date for the TerreStar-2 Satellite in order for the Borrower to make the
related Milestone Payment to the Satellite Manufacturer as provided below;
provided that no Loan shall exceed the Maximum Amount, and provided, further,
that each Loan shall be in an amount at least equal to the full Milestone
Payment (or, if less than the full Milestone Payment, $500,000 and whole number
multiples of $100,000 in excess thereof). The Lenders are authorized to make
Loans under this Agreement based on written instructions received from an
Officer of the Borrower, and the Borrower shall indemnify and hold Collateral
Agent and the Lenders harmless for any damages or losses suffered by Collateral
Agent or such Lender as a result of reliance on such instructions. To the extent
permitted by applicable law, the Lenders shall disburse funds to the Borrower by
wiring the amount of each Loan made by such Lender under this Section 2.01 to
the Deposit Account or in such other manner and otherwise in accordance with the
Borrower's instructions. Each Loan under this Agreement shall be granted by the
Lenders pro rata on the basis of their then-applicable Commitments. It is
understood that no Lender shall be responsible for any default by any other
Lender in its obligation to make Loans hereunder and that each Lender shall be
obligated to make the Loans provided to be made by it hereunder, regardless of
the failure of any other Lender to fulfill its commitments hereunder. Under no
circumstances shall any Lender be obligated to make any Loan if, after making
such Loan, the aggregate principal amount of the Loans made by such Lender would
exceed the Commitment of such Lender then in effect. Amounts prepaid or repaid
in respect of the Loans may not be reborrowed.
(b) PURPOSE. The Borrower shall, subject to the terms and conditions
hereof, use each Loan solely to pay the applicable Milestone Payment owed to the
Satellite Manufacturer pursuant to the TerreStar-2 Construction Agreement.
SECTION 2.02. SECURITY. All obligations of the Borrower under this
Agreement and the other Loan Documents shall be secured by the Collateral as set
forth in the Security Documents, subject to the condition that if the Loans
(together with accrued and unpaid interest thereon, fees and all other amounts
due and payable under the Loan Documents) to be so secured shall be repaid in
full, and the Commitment shall have terminated or expired, Collateral Agent
shall release the Collateral from the security interest created therein. The
Borrower shall enter into on or before the Effective Date the Security
Documents, including the Security Agreement, granting to Collateral Agent a
valid Lien in or on all Collateral, which Lien shall be subject to no prior
Liens (provided that the Collateral may be subject to Collateral Permitted
Liens), shall be perfected at all times on and after the Effective Date and
shall be otherwise in accordance with the terms hereof, and, as a condition to
the Effective Date, the Lenders shall be satisfied by receipt of legal opinions
that such grant is not void or subject to avoidance if the Borrower becomes the
subject of an insolvency proceeding.
SECTION 2.03. REQUEST FOR A LOAN. To request a Loan, the Borrower shall
notify the Lenders of such request by delivery of a Notice of Borrowing, in
substantially the form of Exhibit A or otherwise in a form approved by the
Required Lenders and signed by the Borrower, not later than 10 Business Days
before the date of the proposed Loan.
SECTION 2.04. RECORDS; PROMISSORY NOTES.
(a) MAINTENANCE OF RECORDS BY THE LENDERS. Each Lender shall maintain
records evidencing the indebtedness of the Borrower to such Lender resulting
from the Loans in which it shall record (i) the amount of any principal or
interest due and payable or to become due and payable from the Borrower
hereunder and (ii) the amount of any sum received by such Lender hereunder.
(b) EFFECT OF ENTRIES. The entries made in the respective records
maintained pursuant to paragraph (a) of this Section shall be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender to maintain such records or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(c) PROMISSORY NOTES. Any Lender may request that a Loan be evidenced
by a Note substantially in the form of EXHIBIT D. In such event, the Borrower
shall prepare, execute and deliver to the requesting Lender a Note payable to
such Lender. Thereafter, the Loan evidenced by such Note and interest thereon
shall at all times (including after assignment pursuant to Section 10.04) be
represented by a Note in such form payable to the payee named therein (or, if
such Note is a registered note, to such payee and its registered assigns).
SECTION 2.05. REPAYMENT OF THE LOANS. The Borrower hereby unconditionally
promises to pay to the Lenders the unpaid principal amount of the Loans,
together with accrued and unpaid interest thereon, on the Maturity Date.
SECTION 2.06. PREPAYMENT OF THE LOANS AND COMMITMENT REDUCTIONS.
(a) OPTIONAL PREPAYMENTS. The Borrower may, upon three Business Days
prior written notice to the Lenders, prepay Loans, in whole or in part, in
amounts of at least $5,000,000 or any whole number multiple of $1,000,000 in
excess thereof and at the following prepayment prices (expressed as a percentage
of the principal amount of the Loans being prepaid), if prepaid during the
twelve-month period ending on the anniversary of the Effective Date set forth
below:
Anniversary Prepayment Price
----------- ----------------
First 104%
Second 103%
Third 102%
Fourth 101%
Thereafter 100%
; provided, that such prepayment shall be accompanied by (i) interest on the
amount of such prepayment, accrued and unpaid to the date of prepayment and (ii)
all accrued and unpaid fees, if any, and all other amounts due and payable under
this Agreement and the other Loan Documents in respect of such Loans. Loans (or
portions thereof) prepaid in accordance with this Section 2.06(a) may not be
reborrowed.
(b) MANDATORY PREPAYMENTS. The Commitment shall terminate immediately
and the Borrower shall prepay all Loans in full, together with (i) interest
thereon accrued to the date of prepayment and (ii) all accrued and unpaid fees
and other amounts due and payable under this Agreement and the other Loan
Documents, within 10 Business Days after the occurrence of any of the following
events:
(i) a revocation, cancellation or relinquishment of any Material
License held by the Borrower, a Restricted Subsidiary or
TerreStar Canada to operate satellite or ancillary terrestrial
component facilities, unless the revocation, cancellation or
relinquishment (1) remains subject to reconsideration, review, or
appeal at the FCC or Industry Canada or any court, as applicable
if, but only if, during the pendency of such reconsideration,
review or appeal the Borrower, a Restricted Subsidiary or
TerreStar Canada, as applicable, is permitted to exercise its
rights under the applicable Material License and continues to
conduct its business in the ordinary course, or (2) is
accompanied by the issuance of a substitute or successor license,
permit, or authorization of substantially equivalent utility, as
reasonably determined by the Required Lenders or Borrower or a
Restricted Subsidiary of Borrower already holds a license,
permit, or authorization of substantially equivalent utility;
(ii) termination of the TerreStar-2 Construction Agreement, including
a partial termination by the Borrower that includes the
cancellation of the manufacture of the TerreStar-2 Satellite; and
(iii) a Change of Control.
The Loans (or portions thereof) prepaid in accordance with this Section
2.06(b) may not be reborrowed.
(c) TERMINATION/EXPIRATION OF THE COMMITMENT. The Commitment or a
portion thereof shall terminate upon the earliest to occur of the following: (i)
in whole upon satisfaction of the last scheduled payment with respect to the
TerreStar-2 Satellite set forth in Schedule II, (ii) the occurrence of any of
the events set forth in Section 2.06(a) or (b) to the extent of the applicable
prepayment, (iii) the date on which the aggregate outstanding principal amount
of the Loans shall equal the Commitment then in effect and (iv) in whole, upon
termination in accordance with Section 7.02.
(d) NOTICES, ETC. The Borrower shall notify the Lenders by telephone
(confirmed by telecopy) of any prepayment hereunder not later than 11:00 a.m.,
New York City time, three Business Days before the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date, the principal
amount of the Loans or the portion thereof to be prepaid and a reasonably
detailed calculation of the amount of such prepayment. Each partial prepayment
of the Loans shall be in an amount that would be permitted as provided in
Section 2.06(a), except as necessary to apply fully the required amount of a
mandatory prepayment. Prepayments shall be accompanied by the applicable unpaid
fees and all other amounts owing under this Agreement and the other Loan
Documents and accrued and unpaid interest to the extent required by Section 2.07
and shall be made in the manner specified in Section 2.09.
SECTION 2.07. INTEREST.
(a) RATE. The unpaid principal amount of each Loan shall bear interest
from the date such Loan is made under Section 2.01 until paid in full at a rate
per annum that shall at all times be equal to the Interest Rate.
(b) ADDITIONAL INTEREST. Notwithstanding Section 2.07(a):
(i) if the Information Statement shall not have been submitted to
the Commission on or prior to February 29, 2008, the Interest Rate then in
effect shall be increased from March 1, 2008 to the date of the Spectrum
Contribution Approval by one (1) percentage point per annum;
(ii) if the Information Statement shall not have been submitted
to the shareholders of TerreStar Parent on or prior to April 30, 2008, the
Interest Rate then in effect shall be increased from May 1, 2008 to the date of
the Spectrum Contribution Approval by one (1) percentage point per annum;
(iii) if the Borrower fails to secure the FCC ATC Authorization
on or prior to the ATC Operational Date, the Interest Rate then in effect shall
be increased by one (1) percentage point per annum on each of (A) the ATC
Operational Date and (B) until Borrower secures the FCC ATC Authorization, (x)
the date that is one (1) month after the ATC Operational Date and (y) the date
that is two (2) months after the ATC Operational Date; provided that all
additional interest pursuant to this clause (iii) shall cease to apply as of the
date that the Borrower has secured the FCC ATC Authorization; and
(iv) the aggregate amount of all such additional interest shall
be payable in cash on demand by the Lenders.
(c) DEFAULT INTEREST. From and after the occurrence and during the
continuance of any Event of Default, upon notice by the Required Lenders to the
Borrower, the Borrower shall pay interest on the principal amount of all Loans
and all other due and unpaid Obligations under this Agreement and the other Loan
Documents, to the extent permitted by applicable law, at the Interest Rate then
in effect plus two (2) percentage points per annum. All such interest shall be
payable in cash on demand by the Lenders.
(d) PAYMENT OF INTEREST. Interest on each Loan shall accrue from and
including the date such Loan is made under Section 2.01 to but excluding the
date of any repayment thereof and shall be payable quarterly in arrears on the
last day of each March, June, September and December (each an "INTEREST PAYMENT
DATE"), beginning with the fiscal quarter ending March 31, 2008, and on any
prepayment (on the amount prepaid), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand by the Lenders. On each Interest
Payment Date the Borrower shall (i) pay in cash all interest which shall have
accrued at the Interest Rate on the Loans through such Interest Payment Date or
(ii) solely during the period from the Effective Date to, but not including, the
fourth anniversary thereof, at the election of the Borrower, (A) defer payment
in cash of all interest which shall have accrued at the Interest Rate on the
Loans through such Interest Payment Date or (B) make a cash payment of an amount
and defer payment of an amount so that the combined amount of the payment and
the deferral is equal to all interest accrued at the Interest Rate on the Loans
through such Interest Payment Date. Upon any such deferral of an interest
payment in accordance with this Section 2.07(d)(ii), the amount of the deferred
payment shall become and be deemed to be additional outstanding principal of the
Loans, on which interest shall begin accruing hereunder on the date of any such
deferral. Such additional outstanding principal amount of the Loans is sometimes
referred to in this Agreement as "PIK INTEREST". To the extent requested from
time to time by the Lenders, the Borrower shall issue additional or replacement
Notes to evidence the increased principal amount of Loans resulting from the
deferral of interest payments hereunder; provided that the absence of or failure
to request or issue such additional or replacement Notes shall not affect the
validity of such obligation, its character as principal or the Borrower's
obligations with respect thereto. Interest accrued on Loans and other monetary
Obligations of the Borrower and the Guarantors hereunder and under the other
Loan Documents after the date such amount is due and payable (whether on the
Maturity Date, upon acceleration or otherwise) shall be payable upon demand by
the Lenders.
(e) COMPUTATION. All interest hereunder shall be computed on the basis
of a year of 360 days, and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
SECTION 2.08. TAXES.
(a) PAYMENTS TO BE FREE OF TAXES. Any and all payments by or on
account of any obligation of the Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes. In furtherance of the foregoing, if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Lenders receive an amount equal
to the sum they would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) PAYMENT OF OTHER TAXES BY THE BORROWER. In addition, the Borrower
shall pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.
(c) INDEMNIFICATION BY THE BORROWER. The Borrower shall indemnify
Collateral Agent and the Lenders, within 10 Business Days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by Collateral Agent or such Lender and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by Collateral Agent or such Lender shall be conclusive absent manifest
error.
(d) EVIDENCE OF PAYMENTS. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Lenders the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Lenders.
(e) TAXATION OF LENDERS. Notwithstanding any provision of this
Agreement to the contrary, each Lender shall be either (a) a United States
person under Section 7701(a)(30) of the Code for United States federal income
purposes and shall deliver to the Borrower a properly completed and executed
Internal Revenue Service Form W-9 (or any subsequent versions thereof or
successors thereto), or (b) entitled to an exemption from withholding tax under
the laws of the United States of America, or any treaty with the United States
of America, or any treaty to which the United States of America is a party, with
respect to payments under any Loan Documents and shall deliver to the Borrower,
at the time or times prescribed by applicable law or reasonably requested by the
Borrower, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding.
(f) REFUNDS. If any Lender determines, in its sole discretion, that it
has received a refund of any Indemnified Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.08, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.08 with respect to
the Indemnified Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Borrower, upon the request of such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to such Lender in
the event such Lender is required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require any Lender to make
available its tax returns (or any other information relating to its taxes which
it deems confidential) to the Borrower or any other Person.
SECTION 2.09. PAYMENTS GENERALLY.
(a) PAYMENTS BY THE BORROWER. The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest or fees, or
under Section 2.08, or otherwise) or under any other Loan Document (except to
the extent otherwise provided therein) prior to 11:00 a.m., New York City time,
on the date when due, in immediately available funds, without set-off,
recoupment or counterclaim (it being understood and agreed that the Borrower
shall not at any time offset amounts owed to it by the Satellite Manufacturer
under the TerreStar-2 Construction Agreement or otherwise against amounts due
and owing to Collateral Agent or any Lender hereunder or under the other Loan
Documents). Any amounts received after such time on any date may, in the
discretion of the Lender, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Lenders by wire transfer to the account specified for such
purpose below such Lender's name in Schedule 2.09(a), or at such other account
as such Lender may specify by prior written notice to the Borrower, except as
otherwise expressly provided in the relevant Loan Document. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder or under any other Loan Document shall be
made in Dollars.
(b) APPLICATION OF PAYMENTS. Upon the occurrence, and during the
continuance of an Event of Default, all payments or proceeds received by Lenders
hereunder or under any Loan Document in respect of any of the Obligations of the
Borrower and the Guarantors hereunder and under the other Loan Documents,
including, but not limited to all proceeds received by any Lender in respect of
any sale, any collection from, or other realization upon all or any part of the
Collateral, shall be applied in full or in part as follows: first, to the
payment of all costs and expenses of such sale, collection or other realization,
including reasonable compensation to Collateral Agent and its agents and
counsel, and all other expenses, liabilities and advances made or incurred by
Collateral Agent in connection therewith, and all amounts for which Collateral
Agent is entitled to indemnification hereunder or under any Loan Document (in
its capacity as Collateral Agent) and to the payment of all costs and expenses
paid or incurred by Collateral Agent in connection with the exercise of any
right or remedy hereunder or under any Loan Document, all in accordance with the
terms hereof or thereof; and second, to the extent of any excess of such
proceeds, to the payment of all other Obligations of the Borrower and the
Guarantors hereunder and under the other Loan Documents for the ratable benefit
of the Lenders.
(c) RATABLE SHARING. Lenders hereby agree among themselves that,
except as otherwise provided in the other Loan Documents, if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms hereof), through the exercise of any
right of set off or banker's lien, by counterclaim or cross action or by the
enforcement of any right under the Loan Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code,
receive payment or reduction of a proportion of the aggregate amount of
principal, interest, amounts payable in respect of fees and other amounts then
due and owing to such Lender hereunder or under the other Loan Documents
(collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (i) notify each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided, that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Borrower or otherwise,
those purchases to that extent shall be rescinded and the purchase prices paid
for such participations shall be returned to such purchasing Lender ratably to
the extent of such recovery, but without interest. Borrower expressly consents
to the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set off or
counterclaim with respect to any and all monies owing by Borrower to that holder
with respect thereto as fully as if that holder were owed the amount of the
participation held by that holder.
(d) APPLICATION OF INSUFFICIENT PAYMENTS. If at any time insufficient
funds are received by and available to the Lenders to pay fully all amounts of
principal, interest and fees then due hereunder and under the other Loan
Documents, such funds shall be applied (i) first, to pay interest and fees then
due and (ii) second, to pay principal then due.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower and each Guarantor represents and warrants to the Collateral
Agent and the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. The Borrower and each Guarantor is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted, and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except in any jurisdiction where the failure to be so qualified or in good
standing has not had, and would not reasonably be expected to have, a Material
Adverse Effect.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions are within
the Borrower's and each Guarantor's organizational powers and have been duly
authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by the Borrower and constitutes, and each of the Security
Documents when executed and delivered will constitute, a legal, valid and
binding agreement of the Borrower and each Guarantor, and each Note when
executed and delivered will constitute the legal, valid and binding obligation
of the Borrower, in each case, enforceable in accordance with its terms, except
as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 3.03. COMPLIANCE WITH LAWS AND AGREEMENTS.
(a) The Borrower and each Guarantor is in compliance in all respects
with all laws, regulations and orders of any Governmental Authority applicable
to it or its property and all indentures, agreements and other instruments
binding upon it or its property, except any non-compliance that, individually or
in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect.
(b) The Satellite Manufacturer has received notice of the security
interests in the Collateral granted to the Collateral Agent under the Security
Agreement in accordance with the terms of the TerreStar-2 Construction
Agreement.
SECTION 3.04. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $100,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $100,000 the fair market value of
the assets of all such underfunded Plans.
SECTION 3.05. LITIGATION, ENVIRONMENTAL AND OTHER MATTERS.
(a) ACTIONS, SUITS AND PROCEEDINGS. There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of the Borrower and each Guarantor, threatened
against or affecting the Borrower or its Subsidiaries or any of their respective
properties (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect or (ii)
that involve this Agreement, any other Loan Document or the Transactions. No
injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the Transactions not be consummated as herein
or therein provided.
(b) ENVIRONMENTAL MATTERS. Except with respect to any matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, the Borrower and each Guarantor (i) has not failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
not become subject to any Environmental Liability, (iii) has not received notice
of any claim with respect to any Environmental Liability or (iv) does not know
of any basis for any Environmental Liability.
(c) DISCLOSED MATTERS. Other than as set forth on Schedule 3.05(c),
since September 30, 2007, there has been no event or condition which has had or
is reasonably likely to have a Material Adverse Effect.
SECTION 3.06. COLLATERAL. All representations of the Borrower and each
Guarantor contained in the Security Documents are true and correct.
SECTION 3.07. SECURITY DOCUMENTS. From and after the Effective Date, the
Security Documents shall create in favor of Collateral Agent, for the benefit of
the Lenders, a legal, valid and enforceable Liens on or in all of the Collateral
and shall constitute at all times a perfected Lien on or in all right, title,
estate and interest of the Borrower and each Guarantor in the Collateral covered
thereby having the perfection and priority required by Section 2.02, and all
necessary and appropriate consents to such creation and perfection of such Liens
of each of the parties to the Security Documents have been obtained on or before
the date of execution of the Security Documents.
SECTION 3.08. TAXES. The Borrower and each Guarantor has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings and
for which such Person has set aside on its books adequate reserves in accordance
with GAAP or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.09. USE OF PROCEEDS. The proceeds of the Loan are being used
solely for the purposes set forth in Section 5.10.
SECTION 3.10. MATERIAL CONTRACTS.
(a) Other than as listed on Schedule I, except to the extent that (i)
such contract has expired in accordance with its terms (other than by reason of
default of any party thereto) or (ii) such Material Contract has been replaced
with a substitute Contract reasonably acceptable to the Required Lenders, each
Material Contract is in full force and effect, and neither the Borrower nor any
of its Affiliates is in default in the performance of any of their respective
covenants or obligations set out therein.
(b) No Indebtedness or other obligations of TerreStar Parent,
Borrower, any Guarantor or any of their respective Affiliates has been incurred
for the purpose of financing all or part of the purchase price of the
TerreStar-2 Satellite (other than the Loan Documents), and no value has been
given by any Person other than Borrower to enable TerreStar Parent, Borrower,
any Guarantor or any Affiliate thereof to acquire rights in or the use of the
TerreStar-2 Satellite.
(c) Schedule II describes each payment and payment date in respect of
the TerreStar-2 Satellite required to be made by the Borrower to the Satellite
Manufacturer under Exhibit E and Exhibit F of the TerreStar-2 Construction
Agreement (other than changes made to such schedules with the consent of the
Lenders pursuant to Section 6.10).
SECTION 3.11. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except for (i) such as have been
obtained or made and are in full force and effect or will be obtained in the
ordinary course of business before the time required under applicable laws and
regulations and (ii) filings and recordings in respect of the Liens created
pursuant to the Security Documents, (b) will not violate any applicable law or
regulation or the organizational documents of the Borrower or any Guarantor or
any order of any Governmental Authority, (c) will not violate or result in a
default under any indenture, agreement or any other instrument binding upon the
Borrower or any Guarantor or their respective assets, or give rise to a right
thereunder to require any payment to be made by any such Person, and (d) except
for the Liens created pursuant to the Security Documents, will not result in the
creation or imposition of any Lien on any asset of the Borrower or any
Guarantor, except, in the case of clauses (a), (b) and (c) above, such
violations, conflicts and/or absence of approvals and consents that,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect.
SECTION 3.12. NO DEFAULT. No Default or Event of Default exists or would
result from the incurring of any obligations by the Borrower or any Guarantor
under any Loan Document or from the grant or perfection of the Liens of the
Lenders or Collateral Agent, as the case may be, on the Collateral.
SECTION 3.13. LICENSES. Each Material License either (a) has been issued to
the Borrower, a Restricted Subsidiary or TerreStar Canada, (b) has been applied
for by Restricted Subsidiary or TerreStar Canada, or (c) will be applied for by
Restricted Subsidiary or TerreStar Canada. All of the Material Licenses that
have been issued are in full force and effect. Such Material Licenses are all
the authorization necessary from all applicable Governmental Authorities for the
Borrower and its Restricted Subsidiaries to operate the TerreStar-1 Satellite as
part of their MSS and ATC system in the United States. The administration of
Canada has advance published and requested coordination at the International
Telecommunications Union with respect to the service link and feeder link
frequencies on TerreStar-1. There are no proceedings before any Governmental
Authority now pending against or, to the knowledge of the Borrower or its
Restricted Subsidiaries, threatened against or affecting any Material License or
its use by the Borrower or any Restricted Subsidiary, as applicable for the
purposes contemplated hereby.
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligation of the Lenders to make the
Loans hereunder shall not become effective until the date on which the Lenders
shall have received each of the following documents, each of which shall be
satisfactory to the Lenders in form and substance (or such condition shall have
been waived in accordance with Section 10.02) and each of the other conditions
in Sections 4.01 and 4.02 have been satisfied (or waived in accordance with
Section 10.02):
(a) PURCHASE MONEY CREDIT AGREEMENT, ETC. From the Borrower, a duly
executed counterpart of this Agreement and any Notes signed on behalf of the
Borrower, together with all schedules and exhibits hereto.
(b) SECURITY DOCUMENTS. From the Borrower, a duly executed counterpart
of the Security Agreement and duly executed copies of any filings required to be
made in accordance with the terms thereof or such other evidence satisfactory to
Collateral Agent and the Lenders that such filings shall have been duly made in
the appropriate filing offices to perfect the security interests contemplated
thereby in accordance with the priority contemplated in Section 2.02 (subject to
Collateral Permitted Liens).
(c) SEARCH RESULTS.
(i) The results of a search of the Uniform Commercial Code
filings (or equivalent filings), in addition to tax Lien, judgment Lien,
bankruptcy and litigation searches made with respect to the Borrower and each
Guarantor, together with copies of the financing statements and other filings
(or similar documents) disclosed by such searches, and accompanied by evidence
satisfactory to the Collateral Agent and the Lenders that the Liens indicated in
any such financing statement and other filings (or similar document) are
Collateral Permitted Liens.
(ii) Evidence that appropriate Uniform Commercial Code (or
equivalent) financing statements have been duly filed in such office or offices
as may be necessary or, in the opinion of the Lenders, desirable, to perfect the
Collateral Agent's Liens in and to the Collateral and certified searches
reflecting the filing of all such financing statements.
(d) INSURANCE. Evidence that all insurance, if any, required to be
maintained pursuant to the Loan Documents has been obtained and is in effect,
together with the certificates of insurance, naming the Collateral Agent, on
behalf of the Lenders, as an additional insured or loss payee, as the case may
be, under all insurance policies maintained with respect to the assets and
properties of the Loan Parties that constitutes Collateral.
(e) OPINION OF COUNSEL. One or more opinions, each dated the Effective
Date and addressed to the Lenders, of counsel (including New York, Delaware, FCC
and Industry Canada regulatory counsel) to the Borrower and the Guarantors
acceptable to the Lenders covering the matters set forth in EXHIBIT B and such
other matters as the Lenders may reasonably request.
(f) ORGANIZATIONAL DOCUMENTS. Certified copies of
(i) the certificate of incorporation or other organizational
documents and by-laws (or equivalent) of the Borrower and each Guarantor, and
(ii) good standing certificates.
(g) SECRETARY'S CERTIFICATE. An original certificate, dated the
Effective Date, for the Borrower and each Guarantor, dated the Effective Date,
duly executed and delivered by the secretary or assistant secretary, managing
member or general partner thereof, as applicable, as to:
(i) resolutions of each such Person's board of managers/directors
(or other managing body, in the case of a Person that is not a corporation) then
in full force and effect expressly and specifically authorizing, to the extent
relevant, all aspects of the Loan Documents applicable to such Person, and the
execution, delivery and performance of each Loan Document, in each case, to be
executed by such Person;
(ii) the incumbency and signatures of its Officers and any other
of its officers, managing member or general partner, as applicable, authorized
to act with respect to each Loan Document to be executed by such Person; and
(iii) each such Person's certificate of incorporation or other
organizational documents and by-laws (or equivalent), as amended, modified or
supplemented as of the Effective Date, certified by the appropriate officer or
official body of the jurisdiction of organization of such Person,
which certificates shall provide that Collateral Agent and the Lenders may
conclusively rely thereon until it shall have received a further certificate of
the secretary, assistant secretary, managing member or general partner, as
applicable, of any such Person canceling or amending the prior certificate of
such Person as provided in this Agreement.
(h) OFFICER'S CERTIFICATE. Certificates, dated the Effective Date and
except as otherwise provided below signed by an Officer of the Borrower and each
Guarantor, confirming the following:
(i) the receipt of all required approvals and consents of all
Governmental Authorities and other third parties with respect to the
consummation of the transactions contemplated by the Loan Documents (other than
(A) the Spectrum Contribution Approval and (B) FCC approval with respect to the
Spectrum Contribution), each of which shall be attached thereto and certified as
being true, complete and correct copies thereof;
(ii) that each of the representations and warranties set out in
the Loan Documents is true and correct and each of the conditions specified in
Article IV have been fulfilled;
(iii) from the chief financial officer of the Borrower,
certifying as to the solvency of the Borrower and the Restricted Subsidiaries on
a consolidated basis after giving effect to the Transactions;
(iv) the receipt of a fairness opinion, dated as of the Effective
Date and addressed to the Board of Directors of TerreStar Parent from ▇▇▇▇▇▇▇▇ &
Company, Inc. covering the Transactions and the Spectrum Contribution
Transactions, which shall be attached thereto and certified as being a true,
complete and correct copy thereof; and
(v) that the Satellite Manufacturer has received notice of the
security interests in the Collateral granted to the Collateral Agent under the
Security Agreement in accordance with the terms of the TerreStar-2 Construction
Agreement.
(i) MATERIAL CONTRACTS. Copies of each Material Contract (other than
Material Contracts that are subject to confidentiality restrictions), together
with a certificate of an Officer of the Borrower certifying each such document
as being a true, correct, and complete copy thereof.
(j) FEES AND EXPENSES.
(i) All fees required to be paid to Collateral Agent and the
Lenders, respectively, on or before the Effective Date shall have been paid.
(ii) All reasonable fees, charges and disbursements of respective
counsel and agents, including accountants and other advisors, to Collateral
Agent and the Lenders shall have been paid (directly to such Persons if
requested) to the extent invoiced prior to or on the Effective Date, plus such
additional amounts of such fees, charges and disbursements as shall constitute
its reasonable estimate of such fees, charges and disbursements incurred or to
be incurred by such Persons through the closing proceedings (provided that such
estimate shall not thereafter preclude a final settling of accounts between the
Borrower and the Lenders).
SECTION 4.02. ADDITIONAL CONDITIONS TO EFFECTIVE DATE AND EACH LOAN. The
obligation of the Lenders to make each Loan hereunder is subject to satisfaction
(or waiver in accordance with Section 10.02) of the following additional
conditions on such borrowing date:
(a) NO DEFAULT OR EVENT OF DEFAULT; NO FUTURE ADVANCE NOTICE. No
Default or Event of Default shall have occurred and be continuing. Collateral
Agent and the Lenders shall not have received from the Borrower any notice that
any Security Document will no longer secure on a first priority basis (subject
only to Collateral Permitted Liens) future Loans to be made under this
Agreement.
(b) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Borrower and each Guarantor set out in the Loan Documents
shall be true and correct.
(c) MATERIAL ADVERSE EFFECT. Other than as set forth on Schedule
3.05(c), there has been no event, change, occurrence or development since
September 30, 2007 that, either individually or in the aggregate, has had or
could reasonably be expected to have a Material Adverse Effect.
(d) NO ADVERSE ACTIONS. The Lenders shall be satisfied that there is
no (a) litigation, investigation or proceeding (judicial or administrative)
pending or threatened in writing against the Borrower or any Guarantor, or any
of their respective Subsidiaries by any Governmental Authority or other Person
except to the extent as would not give rise to a Material Adverse Effect or (b)
injunction, writ or restraining order restraining or prohibiting the
Transactions.
(e) NOTICE OF BORROWING. The Notice of Borrowing shall have been
timely delivered by the Borrower to each of the Lenders.
SECTION 4.03. ADDITIONAL CONDITION TO INITIAL LOAN. The obligation of the
Lenders to make the initial Loan hereunder is subject to receipt by the Lenders
on or prior to the borrowing date of such Loan of evidence of filed Uniform
Commercial Code termination statements relating to each of the Uniform
Commercial Code financing statements filed in connection with the 15% Notes
Indenture naming the Borrower, as debtor, and U.S. Bank National Association, as
secured party, releasing all Liens of such secured party on the Collateral, in
form and substance reasonably satisfactory to the Lenders (or the waiver of such
condition in accordance with Section 10.02).
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitment has expired or terminated and the principal of and
interest on the Loans and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full, Borrower and each
Guarantor covenant and agree that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower will
furnish a copy of all of the information and reports referred to in clauses (a)
through (c) below:
(a) to each of the Registered Lenders within 120 days after the end of
each fiscal year, annual audited financial statements of assets, liabilities and
stockholders' equity and cash flows of the Borrower and its consolidated
Subsidiaries for such fiscal year (along with customary comparative results) and
(b) within 60 days of the end of each of the first three fiscal quarters of
every fiscal year, unaudited financial statements of assets, liabilities and
stockholders' equity and cash flows of the Borrower and its consolidated
Subsidiaries for the interim period as of, and for the period ending on, the end
of such fiscal quarter (along with comparative results for the corresponding
interim period in the prior year), in each case, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" with
respect to the periods presented and, with respect to the annual information
only, a report on the annual financial statements by the Borrower's certified
independent accountants (all of the foregoing financial information to be
prepared on a basis substantially consistent with the corresponding financial
information included in the then applicable Commission requirements); and
(b) to each of the Registered Lenders within 5 Business Days of the
occurrence of an event required to be therein reported, such other reports
containing substantially the same information required to be contained in a
Current Report on Form 8-K under the Exchange Act (other than Items 3.01 (Notice
of delisting or failure to satisfy a continued listing rule or standard;
transfer of listing), 3.02 (Unregistered sales of equity securities), 3.03
(Modification of rights of security holders), and 5.04 (Temporary suspension of
trading under registrant's employee benefit plans) thereof); provided that if
the Borrower becomes subject to the reporting requirements of Section 13 or
Section 15(d) of the Exchange Act, the Borrower may satisfy the foregoing
requirements, by timely filing all reports within the periods specified in the
Commission's rules and regulations and otherwise complying with the Commission's
rules and regulations regarding public availability of such reports.
If the Borrower has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
this Section 5.01 shall include a reasonably detailed presentation, either on
the face of the financial statements or in the footnotes thereto, and in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the financial condition and results of operations of the
Borrower and its Restricted Subsidiaries separate from the financial condition
and results of operations of its Unrestricted Subsidiaries to the extent such
information would be required if the Borrower was subject to the periodic
reporting requirements of the Exchange Act.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. The Borrower will furnish to the
Lenders prompt written notice of the following:
(a) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any of its Affiliates that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(b) a Change of Control or potential Change of Control;
(c) a revocation, cancellation or relinquishment of any Material
License held by the Borrower or any Restricted Subsidiary to operate satellite
component facilities,
(d) the occurrence of any Default or Event of Default;
(e) the occurrence of any default under (i) any Material Contract,
(ii) the 15% Notes Indenture, or (iii) the Exchangeable Notes Indenture, in each
case, whether or not the applicable non-defaulting party, has exercised, or is
permitted to exercise, any of its rights and remedies on account thereof;
(f) any material notices and other material communications from any
shareholder of TerreStar Parent with respect to any of (i) the Transactions,
(ii) the Spectrum Contribution Transactions, (iii) the Exchangeable Notes issued
on or about the Effective Date, and (iv) the additional 15% Notes issued on or
about the Effective Date;
(g) any material change in accounting policies or financial reporting
practices by the Borrower or any Restricted Subsidiary thereof; and
(h) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect;
provided, that each notice delivered under this Section shall be accompanied by
a statement of an Officer of the Borrower (x) alerting the Lenders whether the
details of the event or development requiring such notice include any material,
non-public information relating to the Borrower or its business, (y) describing
such details, and (z) setting forth any action taken or proposed to be taken
with respect thereto. Upon receipt of such statement, any Lender may, in its
sole discretion, disregard the details provided with such Officer's statement
and waive its rights to notice under this Section of such event or development.
SECTION 5.03. EXISTENCE; CONDUCT OF BUSINESS. Except as otherwise permitted
in this Agreement, the Borrower and the Guarantors shall do or cause to be done
all things necessary to preserve and keep in full force and effect their
corporate existences and the corporate, partnership, limited liability company
or other existence of any Restricted Subsidiary in accordance with their
respective organizational documents (as the same may be amended from time to
time).
SECTION 5.04. BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower will, and
will cause each Restricted Subsidiary to, keep proper books of record and
account in which all entries are made of all dealings and transactions in
relation to its business and activities to the extent required by GAAP. The
Borrower will, and will cause each Restricted Subsidiary to, permit any
representatives designated by the Collateral Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested. Without limiting the
generality of the foregoing sentence, the Borrower will, and will cause each
Restricted Subsidiary, upon reasonable prior notice, to, provide access to
representatives designated by the Collateral Agent or any Lender for the
purposes of reviewing licenses, approvals and authorizations where such access
is applicable and available under applicable laws and regulations.
SECTION 5.05. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause
each Restricted Subsidiary to, keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
SECTION 5.06. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Restricted Subsidiary to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.07. PAYMENT OF OBLIGATIONS. The Borrower will, and will cause
each of its Restricted Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges levied or imposed upon the Borrower or any
Restricted Subsidiary or upon the income, profits or property of the Borrower or
any Restricted Subsidiary and (ii) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a material liability or Lien
upon the property of the Borrower or any Restricted Subsidiary; provided, that
the Borrower shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim the amount, applicability
or validity of which is being contested in good faith by appropriate proceedings
and for which appropriate reserves, if necessary (in the good faith judgment of
management of the Borrower), are being maintained in accordance with GAAP or
where the failure to effect such payment will not be materially disadvantageous
to the Lenders.
SECTION 5.08. RECOVERY EVENTS. All of the Net Proceeds received by the
Borrower or such Restricted Subsidiary, as the case may be, from any Recovery
Event relating to Collateral shall be applied in accordance with the provisions
of Section 2.09 to the payment in full of the Loans and all amounts required to
be paid by the Borrower to Collateral Agent or any Lender under the Loan
Documents.
SECTION 5.09. FURTHER ASSURANCES.
(a) At any time or from time to time, the Borrower will, and will
cause each Subsidiary Guarantor to, execute, acknowledge and deliver such
further documents as the Collateral Agent or any Lender may reasonably request
to effect fully the purposes and objectives of this Agreement.
(b) The Borrower shall ensure that all written information, exhibits
and reports furnished to Collateral Agent and/or any Lender do not and will not
contain any untrue statement by the Borrower or any Affiliate thereof of a
material fact and do not and will not omit, on the part of the Borrower or any
such Affiliate, to state any material fact or any fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which made, and the Borrower will promptly disclose to the Lenders and correct
any defect or error that may be discovered therein by the Borrower or any
Affiliate or in any of the Loan Documents, including the Security Documents, or
in the execution, acknowledgment or recordation thereof.
(c) The Borrower shall as of and at all times after the date of
execution of the Security Documents take or cause to be taken all action
reasonably requested by Collateral Agent or any Lender to maintain and preserve
the Liens of the Security Documents and the perfection and priority thereof
required by the terms of this Agreement.
(d) The Borrower will furnish to the Lenders prompt written notice in
the event that any Collateral is generated, used, handled, transported, stored,
or located at any time outside of the United States and will, and will cause
each Subsidiary Guarantor to, execute, acknowledge and deliver such further
documents as the Collateral Agent or any Lender may reasonably request to
preserve and protect the Collateral Agent's Lien on such Collateral, together
with such financing statements or comparable documents as may be required to
perfect any security interests in such Collateral under the Uniform Commercial
Code or other similar statute or regulation of the relevant jurisdiction.
SECTION 5.10. USE OF PROCEEDS. Subject to the terms and conditions hereof,
the proceeds of each Loan will be used solely to pay Milestone Payments owed by
the Borrower pursuant to the TerreStar-2 Construction Agreement. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board of
Governors, including Regulations U and X.
SECTION 5.11. MAINTENANCE OF APPROVALS. The Borrower will maintain, and
cause each Restricted Subsidiary to maintain, all licenses, satellite
concessions and governmental and third-party consents and approvals necessary to
its business as currently conducted or as proposed to be conducted in its
business plan, except where the failure to so maintain such licenses, consents
and approvals has not had, and would not be reasonably expected to have, a
Material Adverse Effect.
SECTION 5.12. LICENSES.
(a) All FCC Licenses in existence on the Effective Date or acquired
after the Effective Date shall be held by the FCC License Subsidiary, except as
required by law or administrative action. All Industry Canada Licenses in
existence on the Effective Date or acquired after the Effective Date shall be
held by TerreStar Canada or another entity designated by the Borrower and
reasonably acceptable to the Lenders, except as required by law or
administrative action. The Borrower shall not transfer or dispose of any Capital
Stock it directly or indirectly owns in each of the Canadian Entities; provided,
that the Borrower may dispose of its Capital Stock of any of the Canadian
Entities if such disposition does not adversely affect the rights of the
Borrower under the IRU Agreement or result in the loss of the orbital slot
granted by Industry Canada for the TerreStar-1 Satellite.
(b) The Borrower shall maintain direct ownership of all of the Capital
Stock of the FCC License Subsidiary.
SECTION 5.13. DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
(a) The Board of Directors of the Borrower may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would
not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the Borrower and its Restricted Subsidiaries in the Subsidiary properly
designated as an Unrestricted Subsidiary will be deemed to be an Investment made
as of the time of the designation and will reduce the amount available for
Restricted Payments under clause (viii) of Section 6.04(b) or one or more
clauses of the definition of Permitted Investments, as determined by the
Borrower). Such designation will only be permitted if the Investment would be
permitted at that time and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors of the Borrower
may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the
redesignation would not cause a Default or an Event of Default.
All Subsidiaries of Unrestricted Subsidiaries shall be automatically deemed
to be Unrestricted Subsidiaries.
(b) Any designation of a Subsidiary of the Borrower as an Unrestricted
Subsidiary shall evidenced to the Lenders by filing with the Lenders a certified
copy of a resolution of the Board of Directors of the Borrower giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with clause (a) of this Section 5.13 and was permitted under Section
6.04. If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding requirements as an Unrestricted Subsidiary, it will thereafter cease
to be an Unrestricted Subsidiary for purposes of this Agreement and any
Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted
Subsidiary of the Borrower as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 6.01, the Borrower will
be in default of such covenant. The Board of Directors of the Borrower may at
any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of
the Borrower; provided that such designation will be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Borrower of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (i) such Indebtedness is permitted under Section 6.01, calculated
on a pro forma basis as if such designation had occurred at the beginning of the
applicable quarterly reference period; and (ii) no Default or Event of Default
would be in existence following such designation.
SECTION 5.14. MAINTENANCE OF INSURANCE.
(a) The Borrower shall obtain, or cause to be obtained, prior to the
launch of the TerreStar-1 Satellite and the TerreStar-2 Satellite (as
applicable) and shall maintain, or cause to be maintained, launch insurance with
respect to the launch of the TerreStar-1 Satellite and the TerreStar-2 Satellite
(as applicable) covering the period from the launch to 180 days or more
following the launch thereof on such terms (including coverage period,
exclusions, limitations on coverage, co-insurance, deductibles and coverage
amount) as is customary in the industry for similar persons at the time of such
launch.
(b) The Borrower shall procure and maintain, or cause to be procured
and maintained, Full In-Orbit Insurance for the TerreStar-1 Satellite and the
TerreStar-2 Satellite (as applicable); provided that such Full In-Orbit
Insurance shall only be required if, and to the extent and on such terms
(including coverage period, exclusions, limitations on coverage, co-insurance,
deductibles and coverage amount) as is determined by the Board of Directors of
the Borrower to be in the best interests of the Borrower as evidenced by a
resolution of the Board of Directors.
(c) Insurance policies required by the foregoing paragraphs obtained
or renewed after the Effective Date shall:
(i) contain no exclusions other than customary exclusions and
such specific exclusions applicable to the performance of the satellite (or
portion thereof, or the type of satellite or portion thereof, as applicable)
being insured as are acceptable to the Board of Directors of the Borrower in
order to obtain insurance for a price that is, and on other terms and conditions
that are, commercially reasonable; and
(ii) subject to the proviso in clause (b) of this Section 5.14,
provide coverage for all risks of loss and damage to the TerreStar-1 Satellite
and the TerreStar-2 Satellite.
(a) In the event that the Borrower or any Guarantor receives Net
Insurance Proceeds relating to the TerreStar-2 Satellite, the Borrower or such
Guarantor shall apply such Net Insurance Proceeds in the manner provided under
Section 5.08.
SECTION 5.15. COMPLIANCE CERTIFICATES.
(a) The Borrower shall deliver to the Lenders, together with the
delivery of financial information under Section 5.01(a), an Officers'
Certificate of the chief executive officer and the chief financial officer of
the Borrower as to the signers' knowledge of the Borrower's compliance with all
conditions and covenants on its part contained in this Agreement and stating
whether or not the signer knows of any Default or Event of Default that is then
continuing and demonstrating compliance with such covenants in reasonable
detail. For the purposes of this Section 5.15, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Agreement.
(b) The Borrower shall promptly deliver to the Lenders and in any
event within five Business Days of any Officer of the Borrower becoming aware of
the occurrence of any Default or Event of Default, an Officers' Certificate
setting forth the details of such Default or Event of Default and the action
which the Borrower is taking or proposes to take to remedy the same.
(c) Concurrently with the delivery of the financial information
referred to in Section 5.01(a), a certificate of Borrower's registered
independent public accounting firm certifying such financial statements and
(unless such accountants are prohibited by law or the Public Company Accounting
Oversight Board or the Financial Accounting Standards Board (or any successor to
either of such bodies) from providing such statement or such accountants are not
then providing such statements to their clients as a matter of general policy)
stating that in the course of the audit upon which their opinion on such
financial statements was based (but without any special or additional audit
procedures for the purpose), they obtained knowledge of no condition or event
relating to financial matters which constitutes a Default or an Event of Default
or, if such accountants shall have obtained in the course of such audit
knowledge of any such Default or Event of Default, disclosing in such written
statement the nature and period of existence thereof, it being understood that
such accountants shall be under no liability, directly or indirectly, to the
Lenders for failure to obtain knowledge of any such condition or event.
SECTION 5.16. ADDITIONAL GUARANTEES.
(a) If at any time the Borrower or any Restricted Subsidiary acquires
or creates another Domestic Subsidiary (other than a Domestic Subsidiary that is
a Subsidiary, directly or indirectly, of a Foreign Subsidiary) that owns any
assets that constitute or may constitute Collateral, such newly acquired or
created Domestic Subsidiary shall, on the date on which it is acquired or
created, become a Guarantor by executing and delivering to the Lenders a joinder
agreement substantially in form of Exhibit E attached hereto and there shall be
no need to re-execute, amend or restate this Agreement in connection therewith,
and pursuant to which such Domestic Subsidiary will guarantee, on a joint and
several basis, the full and prompt payment of the principal of, premium, if any,
and interest on the Loans on a senior secured basis. Upon delivery of any such
joinder agreement to the Lenders, notice of which is hereby waived by the
Guarantors, each such Domestic Subsidiary shall be a Guarantor and shall be as
fully a party hereto as if such Domestic Subsidiary were an original signatory
hereto as a Guarantor. Each Guarantor expressly agrees that its obligations
arising hereunder shall not be affected or diminished by the addition or release
of any other Guarantor hereunder nor by any election of the Collateral Agent not
to cause any Person to become an Guarantor hereunder. This Guaranty shall be
fully effective as to any Guarantor that is or becomes a party hereto regardless
of whether any other Person becomes or fails to become or ceases to be a
Guarantor hereunder.
(b) The Borrower may elect to make any Foreign Subsidiary or any
Affiliate a Guarantor, with the consent of any such party, by causing such
Person to execute and deliver to the Lenders a joinder agreement substantially
in form of Exhibit E attached hereto subject to the terms of this Agreement.
(c) Each Guarantor shall become a party to the Loan Documents
applicable to it. The Borrower (i) shall cause each Subsidiary Guarantor to
become a party to the Loan Documents and (ii) shall, or shall cause each
Subsidiary Guarantor to, file any financing statement necessary to grant to the
Collateral Agent, for the benefit of itself and the Lenders, perfected first
priority security interest (subject only to Collateral Permitted Liens) in any
Collateral held by such Guarantor, to the extent a security interest therein can
be perfected by the filing of a financing statement.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitment has expired or terminated and the principal of and
interest on the Loans and all fees payable hereunder and all other amounts
payable under the Loan Documents have been paid in full, Borrower and each
Guarantor covenant and agree that:
SECTION 6.01. INDEBTEDNESS.
(a) The Borrower shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt);
(b) The provisions of clause (a) of this Section 6.01 will not apply
to any of the following items of Indebtedness:
(i) the incurrence by the Borrower and the Restricted
Subsidiaries of (A) Existing Indebtedness (including Indebtedness represented by
the $500,000,000 principal amount 15% Notes and any additional 15% Notes issued
under the 15% Notes Indenture prior to the Effective Date in payment of interest
(including interest on interest) thereon), (B) the $150,000,000 principal amount
of Exchangeable Notes issued on or about the Effective Date, (C) the $50,000,000
principal amount of additional 15% Notes issued on or about the Effective Date,
and (D) without limitation of Section 6.01(d)(i), Indebtedness represented by
additional 15% Notes or Exchangeable Notes issued in payment of interest
(including interest on interest) on the 15% Notes or Exchangeable Notes referred
to in Section 6.01(b)(i)(A), (B) and (C) to be issued on or after the Effective
Date;
(ii) the incurrence by the Borrower and the Restricted
Subsidiaries of Indebtedness represented by the Loans and Notes and interest
(including interest on interest) on the Loans and Notes;
(iii) the incurrence by the Borrower or any Restricted Subsidiary
of Indebtedness represented by Capital Lease Obligations, mortgage financings or
Purchase Money Indebtedness with respect to assets other than Capital Stock or
other Investments, including the incurrence of Indebtedness representing the
financing of installments of Full In-Orbit Insurance, launch insurance premiums
or launch services, in each case, incurred for the purpose of financing all or
any part of the purchase price or cost of design, construction, installation or
improvement of property, plant or equipment used in a Permitted Business, and
Attributable Debt, in an aggregate principal amount not to exceed $50,000,000 at
any time outstanding;
(iv) the incurrence by the Borrower or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to renew, refund, refinance, discharge, defease or
replace, Indebtedness permitted under any other clause of this Section 6.01(b)
(excluding clause (v)), provided that for purposes of any limit contained in any
such other clause the aggregate amount of Indebtedness incurred pursuant to this
clause (iv) outstanding at any one time shall be treated as outstanding pursuant
to such other clause;
(v) the incurrence by the Borrower or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Borrower and any
of its Restricted Subsidiaries; provided that:
(A) if the Borrower or any Restricted Subsidiary is the
obligor on such Indebtedness and the payee is not the Borrower or a
Restricted Subsidiary, such Indebtedness shall be expressly
subordinated to the prior payment in full in cash of all Obligations
of the Borrower and the Restricted Subsidiaries hereunder and under
the other Loan Documents; and
(B) (1) any subsequent issuance or transfer of Equity
Interests or any other event that results in any such Indebtedness
being beneficially held by a Person other than the Borrower or a
Restricted Subsidiary, (2) any sale or other transfer of any such
Indebtedness to a Person that is neither the Borrower nor a Restricted
Subsidiary or (3) the designation of a Restricted Subsidiary which
holds Indebtedness as an Unrestricted Subsidiary will be deemed, in
each case, to constitute an incurrence of such Indebtedness by the
Borrower or such Restricted Subsidiary, as the case may be, that was
not permitted by this clause (v);
(vi) the incurrence by the Borrower or any of its Restricted
Subsidiaries of Hedging Obligations;
(vii) the Guarantee by the Borrower or any of the Restricted
Subsidiaries of Indebtedness of any Restricted Subsidiary that was permitted to
be incurred by another provision of this Section 6.01(b); provided that in the
case of any such Guarantee by the Borrower, if the Indebtedness being guaranteed
is (A) pari passu in right of payment to the Loans, then the Guarantee related
to such Indebtedness shall rank equally in right of payment to the Loans, or (B)
subordinated in right of payment to the Loans, then the Guarantee of such
Indebtedness shall be subordinated in right of payment to the same extent to the
Loans;
(viii) the incurrence of Indebtedness by the Borrower or any of
its Restricted Subsidiaries arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument (except in the
case of daylight overdrafts) in the ordinary course of business inadvertently
drawn against insufficient funds, provided, that such Indebtedness is
extinguished within five (5) Business Days of incurrence;
(ix) the incurrence of Indebtedness by the Borrower or any of its
Restricted Subsidiaries incurred in respect of workers' compensation claims,
self-insurance obligations, bankers' acceptances, performance, surety and
similar bonds and completion guarantees provided by the Borrower or any
Restricted Subsidiary, in each case, in the ordinary course of business; and
(x) the incurrence of Indebtedness by the Borrower or any
Restricted Subsidiary to finance the purchase or construction of property (real
or personal) or equipment that is used for the construction of the Borrower's
terrestrial network so long as, at the time of incurrence thereof, the ratio of
total consolidated Indebtedness of the Borrower and its Restricted Subsidiaries
determined in accordance with GAAP (including Indebtedness under all financings
under this clause (x)) to Invested Capital does not exceed 75%.
(c) The Borrower shall not permit any of the Unrestricted Subsidiaries
to incur any Indebtedness other than Non-Recourse Debt. If any Non-Recourse Debt
of an Unrestricted Subsidiary shall at any time cease to constitute Non-Recourse
Debt or such Unrestricted Subsidiary shall be redesignated a Restricted
Subsidiary, such event will be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary.
(d) For purposes of determining compliance with this Section 6.01:
(i) in the event that any Indebtedness meets the criteria of more
than one of the categories described in clauses (i) through (iv) of Section
6.01(d), the Borrower in its sole discretion, will be permitted to classify such
item of Indebtedness at the time of such incurrence in any manner that complies
with this Section 6.01;
(ii) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same, or less onerous, terms, the
reclassification of preferred stock of the Borrower or any Restricted Subsidiary
as Indebtedness due to a change in accounting principles, and the payment of
dividends on Disqualified Stock or preferred stock in the form of additional
shares of the same class of Disqualified Stock or preferred stock, the accrual
of dividends on Disqualified Stock or preferred stock and the accretion of the
liquidation preference of Disqualified Stock or preferred stock will not be
deemed to be an incurrence of Indebtedness for purposes of this Section 6.01;
(iii) Indebtedness permitted by this Section 6.01 need not be
permitted solely by reference to one provision permitting such Indebtedness, but
may be permitted in part by one such provision and in part by one or more other
provisions of this Section 6.01 permitting such Indebtedness; and
(iv) for the purposes of determining compliance with any U.S.
dollar-denominated restriction on the incurrence of Indebtedness denominated in
a foreign currency, the dollar-equivalent principal amount of such Indebtedness
incurred pursuant thereto shall be calculated based on the relevant currency
exchange rate in effect on the earlier of the date that such Indebtedness was
incurred, in the case of term Indebtedness, or first committed, in the case of
revolving credit Indebtedness; provided that if such Indebtedness is incurred to
refinance other Indebtedness denominated in a foreign currency, and such
refinancing would cause the applicable U.S. dollar-dominated restriction to be
exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such U.S. dollar-dominated restriction shall be deemed
not to have been exceeded so long as the principal amount of such refinancing
Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced. Notwithstanding any other provision of this Section 6.01, the
maximum amount of Indebtedness that the Borrower or any Restricted Subsidiary
may incur pursuant to this Section 6.01 shall not be deemed to be exceeded
solely as a result of fluctuations in the exchange rate of currencies. The
principal amount of any Indebtedness incurred to refinance other Indebtedness,
if incurred in a different currency from the Indebtedness being refinanced,
shall be calculated based on the currency exchange rate applicable to the
currencies in which such refinancing Indebtedness is denominated that is in
effect on the date of such refinancing.
SECTION 6.02. LIMITATION ON LIENS. The Borrower and the Restricted
Subsidiaries shall not directly or indirectly, create, incur, assume or
otherwise cause or suffer to exist or become effective any Lien of any kind on
the Collateral (other than Collateral Permitted Liens). SECTION 6.03. MERGER,
CONSOLIDATION AND SALE OF ALL OR SUBSTANTIALLY ALL ASSETS. The Borrower and the
Restricted Subsidiaries shall not, directly or indirectly: (a) consolidate or
merge with or into another Person (whether or not the Borrower or such
Restricted Subsidiary is the surviving corporation); or (b) sell, assign,
transfer, convey, lease or otherwise dispose of all or substantially all of the
properties or assets of the Borrower and the Restricted Subsidiaries taken as a
whole, in one or more related transactions, to another Person; provided that,
any Restricted Subsidiary may consolidate with, merge into, sell, assign,
convey, lease or otherwise transfer all or part of its properties and assets to
the Borrower or another Restricted Subsidiary.
SECTION 6.04. RESTRICTED PAYMENTS.
(a) The Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on or in respect of the Borrower's or any of its Restricted
Subsidiaries' Equity Interests or to the direct or indirect holders of the
Borrower's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Borrower and other than
dividends or distributions payable to the Borrower or a Restricted Subsidiary of
the Borrower);
(ii) purchase, redeem or otherwise acquire or retire for value
(including in connection with any merger or consolidation involving the
Borrower) any Equity Interests of the Borrower or any direct or indirect parent
of the Borrower;
(iii) make any principal payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness of the Borrower or any Guarantor (other than intercompany
Indebtedness among the Borrower and the Guarantors) that is contractually
subordinated to the Obligations of the Borrower and the Guarantors hereunder and
under the other Loan Documents, except a payment of principal at the Stated
Maturity thereof, or within one year prior to such Stated Maturity; or
(iv) make any Restricted Investment (all such payments and other
actions set forth in these clauses (i) through (iv) above being collectively
referred to as "RESTRICTED PAYMENTS").
(b) So long as no Default has occurred and is continuing or would be
caused thereby, the preceding provisions will not prohibit:
(i) the making of any Restricted Payment in exchange for, or out
of the net cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Borrower) of, Equity Interests of the Borrower (other than
Disqualified Stock and other than Equity Interests issued or sold to an employee
stock ownership plan or similar trust to the extent such sale to an employee
stock ownership plan or similar trust is financed by loans from or guaranteed by
the Borrower or any Restricted Subsidiary unless such loans have been repaid
with cash on or prior to the date of determination) or from the substantially
concurrent contribution of common equity capital to the Borrower; provided that
payments of amounts pursuant to this clause shall be excluded from subsequent
calculations of the amount of Restricted Payments;
(ii) the defeasance, redemption, repurchase or other acquisition
or retirement for value of Indebtedness of the Borrower or any Guarantor that is
contractually subordinated to the Obligations of the Borrower and the Guarantors
hereunder and under the other Loan Documents in exchange for, or out of the net
cash proceeds of the substantially concurrent incurrence of, Permitted
Refinancing Indebtedness (other than to a Subsidiary of the Borrower); provided
that payments of amounts pursuant to this clause shall be excluded from
subsequent calculations of the amount of Restricted Payments;
(iii) the payment of any dividend or distribution by a Restricted
Subsidiary of the Borrower to the holders of its Equity Interests on a pro rata
basis; provided that payments of amounts to the Borrower or any of its
Restricted Subsidiaries pursuant to this clause (iii) shall be excluded from
subsequent calculations of the amount of Restricted Payments;
(iv) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Borrower or any Restricted
Subsidiary of the Borrower or any direct or indirect parent of the Borrower held
by any current or former officer, director or employee of the Borrower or any of
its Restricted Subsidiaries or their estates or heirs pursuant to any equity
subscription agreement, stock option agreement, shareholders' agreement or
similar agreement; provided that the aggregate price paid for all such Equity
Interests repurchased, redeemed, acquired or retired pursuant to this clause on
and after the 15% Notes Issue Date may not exceed $2,500,000 in the aggregate;
provided further that cancellation in connection with a repurchase of Equity
Interests of the Borrower of Indebtedness owing to the Borrower from employees,
directors, officers or consultants of the Borrower or any of its Subsidiaries
incurred to finance the acquisition of such Equity Interests by such individuals
shall not be deemed to constitute a Restricted Payment; provided further that
payments of amounts pursuant to this clause (iv) shall be excluded from
subsequent calculations of the amount of Restricted Payments;
(v) repurchases of Equity Interests deemed to occur upon the
exercise of stock options, warrants or other convertible securities to the
extent such Equity Interests represent a portion of the exercise price thereof;
provided that payments of amounts pursuant to this clause shall be excluded from
subsequent calculations of the amount of Restricted Payments;
(vi) the declaration and payment of regularly scheduled or
accrued dividends to holders of any class or series of Disqualified Stock of the
Borrower or any Restricted Subsidiary of the Borrower issued on or after the 15%
Notes Issue Date in accordance with the terms of the 15% Notes Indenture;
provided that payments pursuant to this clause shall be excluded from subsequent
calculations of Restricted Payments;
(vii) the declaration and payment of dividends by the Borrower
to, or the making of loans to, any direct or indirect parent in amounts required
for any direct or indirect parent to pay:
(A) franchise taxes and other fees, taxes and expenses
required to maintain their corporate existence; provided that payments
of amounts pursuant to this clause (A) shall be excluded from
subsequent calculations of the amount of Restricted Payments;
(B) federal, state and local income taxes, to the extent
such income taxes are attributable to the income of the Borrower and
its Subsidiaries; provided that payments of amounts pursuant to this
clause (B) shall be excluded from subsequent calculations of the
amount of Restricted Payments;
(C) (1) reasonable salary, bonus and other benefits payable
to directors, officers and employees of any direct or indirect parent
company of the Borrower to the extent such salaries, bonuses and other
benefits payable in cash and are substantially attributable to the
ownership or operation of the Borrower and its Restricted Subsidiaries
and (2) general corporate overhead expenses of any direct or indirect
parent company of the Borrower to the extent such expenses payable in
cash and are substantially attributable to the ownership or operation
of the Borrower and its Restricted Subsidiaries; provided that
payments of amounts pursuant to this clause (C) may not exceed
$5,000,000 for any fiscal year of the Borrower;
(D) costs, fees and expenses incident to a private placement
or public offering of any securities of such parent, so long as all of
the net proceeds of such offering (if it is completed) are contributed
to the Borrower; provided that payments of amounts pursuant to this
clause (D) shall be excluded from subsequent calculations of the
amount of Restricted Payments; and
(E) taxes payable by any direct or indirect parent in
connection with a contribution of shares of SkyTerra common stock to
the Borrower pursuant to the TerreStar Parent Funding Agreement;
provided that such taxes relate to increases in the value of such
shares after their issuance to Motient Ventures Holding Inc., and
provided, further that payments of amounts pursuant to this clause (E)
shall be excluded from subsequent calculations of the amount of
Restricted Payments; and
(viii) other Restricted Payments in an aggregate amount since the
Effective Date not to exceed $2,000,000; and
(ix) Restricted Payments made pursuant to the Transfer
Agreements.
(c) The amount of all Restricted Payments (other than cash) will be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Borrower or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment that is required to be
valued by this covenant shall be determined by the Board of Directors of the
Borrower acting in good faith, whose resolution with respect thereto will be
delivered to the Lenders. The Board of Directors' determination must be based
upon an opinion or appraisal issued by an accounting, appraisal or investment
banking firm of national standing if the fair market value exceeds $10,000,000.
SECTION 6.05. TRANSACTIONS WITH AFFILIATES.
(a) The Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Borrower (each, an "AFFILIATE TRANSACTION").
(b) Notwithstanding the foregoing, none of the following shall be
prohibited by Section 6.05(a) or be deemed to be Affiliate Transactions:
(i) reasonable and customary (A) directors' fees and
indemnification and similar arrangements, (B) consulting fees in an amount not
to exceed $250,000 per fiscal year, (C) employee salaries, bonuses and
employment agreements (including indemnification arrangements) and (D)
compensation or employee benefit arrangements and incentive arrangements with
any officer, director or employee entered into in the ordinary course of
business (including customary benefits thereunder) and payments pursuant
thereto;
(ii) transactions between or among the Borrower and/or any of its
Restricted Subsidiaries and Guarantees issued by and other transactions of the
Borrower or any of its Restricted Subsidiaries for the benefit of the Borrower
or any of its Restricted Subsidiaries, as the case may be;
(iii) transactions with a Person (other than an Unrestricted
Subsidiary of the Borrower) that is an Affiliate of the Borrower or any
Restricted Subsidiary solely because the Borrower or any Restricted Subsidiary
owns an Equity Interest in, or controls, such Person;
(iv) the pledge of Equity Interests of Unrestricted Subsidiaries
to support the Indebtedness thereof;
(v) issuances and sales of Equity Interests (other than
Disqualified Stock) of the Borrower to Affiliates of the Borrower and the
granting of registration and other customary rights in connection therewith, or
the receipt of capital contributions from Affiliates of the Borrower that are
not Restricted Subsidiaries of the Borrower solely in exchange for Equity
Interests (other than Disqualified Stock) of the Borrower;
(vi) Restricted Payments that are permitted by Section 6.04 and
Permitted Investments (other than pursuant to clauses (a) or (c) of the
definition of "PERMITTED INVESTMENTS");
(vii) the performance of obligations of the Borrower or any of
its Restricted Subsidiaries under the terms of any agreement to which the
Borrower or any Restricted Subsidiaries is a party as of or on the Effective
Date, substantially as described therein, as these agreements may be amended,
modified, supplemented, extended or renewed from time to time; provided that any
future amendment, modification, supplement, extension or renewal entered into
after the Effective Date will be permitted to the extent that its terms are not
materially more disadvantageous to the Lenders than the terms of the agreements
in effect on the Effective Date;
(viii) the performance of obligations of the Borrower or any of
its Subsidiaries under the terms of (i) the Investment Agreements (and any other
agreement contemplated thereby), the Transfer Agreements, the TerreStar Parent
Funding Agreement and the TerreStar Shareholders Agreement, as these agreements
may be amended, modified, supplemented, extended or renewed from time to time;
provided, that any future amendment, modification, supplement extension or
renewal entered into after the Effective Date will be permitted to the extent
that its terms are not more disadvantageous in any material respect to the
Lenders than the terms of the agreements in effect on the Effective Date and
(ii) the TerreStar Canada Credit Facility, as amended, modified, supplemented,
extended or renewed from time to time; provided, that any future amendment,
modification, supplement extension or renewal entered into after the Effective
Date will be subject to prior written consent of the Required Lenders;
(ix) any transaction in which the Borrower or any of its
Restricted Subsidiaries delivers to the Lenders a letter issued by an investment
banking, appraisal or accounting firm of national standing stating that such
transaction is fair from a financial point of view; and
(x) transactions with customers, clients, suppliers, or
purchasers or sellers of goods or services, in each case in the ordinary course
of business and otherwise in compliance with the terms of this Agreement which
are fair to the Borrower and its Restricted Subsidiaries, in the reasonable
determination of the Board of Directors or the senior management of the
Borrower, or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party.
SECTION 6.06. LIMITATION ON LINES OF BUSINESS. The Borrower shall not, and
shall not permit any Restricted Subsidiary to, engage in any business other than
Permitted Businesses.
SECTION 6.07. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
(a) The Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its Capital
Stock to the Borrower or any of its Restricted Subsidiaries (it being understood
that the priority of any preferred stock in receiving dividends or liquidating
distributions prior to dividends or liquidating distributions being paid on
common stock shall not be deemed a restriction on the ability to make
distributions on Capital Stock) or pay any Indebtedness owed to the Borrower or
any of its Restricted Subsidiaries;
(ii) make loans or advances to the Borrower or any of its
Restricted Subsidiaries (it being understood that the subordination of loans or
advances made to the Borrower or any of its Restricted Subsidiaries to other
Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries
shall not be deemed a restriction on the ability to make loans or advances); or
(iii) sell, lease or transfer any of its properties or assets to
the Borrower or any of its Restricted Subsidiaries.
(b) The preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(i) agreements governing Existing Indebtedness as in effect on
the Effective Date (including the 15% Notes Indenture and the Exchangeable Notes
Indenture) and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of those agreements;
provided that the amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are no more restrictive in
any material respect, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the Effective
Date;
(ii) this Agreement and the other Loan Documents;
(iii) the Transfer Agreements;
(iv) applicable law or any applicable rule, regulation or order;
(v) any instrument government Indebtedness or Capital Stock of a
Person acquired by the Borrower or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
or Capital Stock was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, including any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of any such agreements or instruments; provided
that the amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are no more restrictive in
any material respect, taken as a whole, than those contained in the agreements
governing such original agreement or instrument; provided, further, that, in the
case of Indebtedness, such Indebtedness was permitted by Section 6.01;
(vi) in the case of Section 6.07(a)(iii):
(A) a lease, license or similar contract that restricts in a
customary manner the subletting, assignment or transfer of any subject
property or asset, or the assignment or transfer of any such lease,
license or other contract;
(B) mortgages, pledges or other security agreements
otherwise permitted under this Agreement securing Indebtedness of the
Borrower or any of its Restricted Subsidiaries to the extent such
encumbrances or restrictions restrict the transfer of the property
subject to such mortgages, pledges or other security agreements; or
(C) reciprocal easement agreements of the Borrower or any of
its Restricted Subsidiaries containing customary provisions
restricting dispositions of the subject real property interests;
(vii) leases and other agreements containing net worth provisions
entered into by the Borrower or any Restricted Subsidiary in the ordinary course
of business;
(viii) Purchase Money Indebtedness for property acquired in the
ordinary course of business and Capital Lease Obligations permitted under this
Agreement that, in each case, impose restrictions on the property purchased or
leased of the nature described in Section 6.07(a)(iii);
(ix) any agreement for the sale or other disposition of assets or
Capital Stock of a Restricted Subsidiary permitted under this Agreement that
restricts the sale of assets, distributions or loans by that Restricted
Subsidiary pending its sale or other disposition;
(x) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive in any material respect, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;
(xi) Liens securing Indebtedness otherwise permitted to be incurred
under the 15% Notes Indenture that limit the right of the debtor to dispose of
the assets subject to such Liens;
(xii) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business; provided that such restrictions
apply only to the assets or property subject to such agreements;
(xiii) any agreement or instrument entered into after the Effective
Date; provided that the encumbrances or restrictions in such agreement or
instrument are not materially more restrictive, taken as a whole, than those
contained in this Agreement or the other Loan Documents; and
(xiv) restrictions on cash or other deposits or net worth under
contracts or leases entered into in the ordinary course of business.
SECTION 6.08. LIMITATION ON ASSET SALES OF THE COLLATERAL. The Borrower
shall not, and shall not permit any of the Guarantor Subsidiaries to, consummate
an Asset Sale of all or any part of the Collateral.
SECTION 6.09. LIMITATION ON TRANSFER OF THE COLLATERAL. The Borrower shall
not assign, transfer, or otherwise convey any of the Collateral to any Person
other than a Guarantor in compliance with clause (b) of the definition of "Asset
Sale".
SECTION 6.10. LIMITATION ON AMENDMENTS TO PAYMENTS UNDER THE TERRESTAR-2
CONSTRUCTION AGREEMENT. The Borrower shall not amend any payment date or the
amount of any payment in respect of the TerreStar-2 Satellite required to be
made by the Borrower to the Satellite Manufacturer under Exhibit E of the
TerreStar-2 Construction Agreement without the prior written consent of the
Required Lenders.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. Each of the following is an "EVENT OF
DEFAULT" under this Agreement:
(a) default in the payment when due (at maturity, at a date fixed for
prepayment thereof or otherwise) of the principal of or premium, if any, on, the
Loans;
(b) default in the payment when due of interest on the Loans, any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or under any other Loan Document for more
than five (5) Business Days;
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower in or in connection with this Agreement or any other Loan
Document or any amendment or modification hereof or thereof, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any other Loan Document or any amendment or
modification hereof or thereof, shall prove to have been materially inaccurate
or false when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02(a), 5.03, or Article VI of this
Agreement;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement or any other Loan Document or
any Guarantor shall fail to observe or perform any covenant, condition or
agreement contained in a Guarantee (other than those specified in clause (a),
(b), (c) or (d) of this Article, as applicable) and such failure shall continue
unremedied for a period of thirty (30) or more days after the earlier of (i) an
Officer of such Person obtaining actual knowledge thereof and (ii) such Person
receiving notice thereof from any Lender;
(f) (i) TerreStar Parent, the Borrower, the FCC License Subsidiary or
any other Restricted Subsidiary shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors
seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or TerreStar Parent, the Borrower, the FCC
License Subsidiary or any other Restricted Subsidiary shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against TerreStar Parent, the Borrower, the FCC License Subsidiary or any other
Restricted Subsidiary any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
TerreStar Parent, the Borrower, the FCC License Subsidiary or any Restricted
Subsidiary any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) TerreStar Parent,
the Borrower, the FCC License Subsidiary or any Restricted Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due;
(g) either (i) the Lien created by the Security Documents shall at any
time not constitute a valid and perfected first priority Lien (subject to other
Liens permitted under Section 6.02) under the laws of the jurisdiction where the
Collateral is located on the Collateral in favor of Collateral Agent, on behalf
of the Lenders, free and clear of all other Liens (other than Liens permitted
under Section 6.02); provided, that the foregoing event shall not constitute an
Event of Default if such event occurs solely as a result of any action taken by
the Collateral Agent, any Lender or their respective representatives or (ii)
with respect to any Collateral, the Borrower or any Guarantor asserts, in any
pleading in any court of competent jurisdiction, that such Lien is invalid or
unenforceable;
(h) except as permitted by this Agreement, any material provision of
any Guarantee, shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect, or the
Borrower, any Guarantor, or any Person acting on behalf of the Borrower or any
such Guarantor, shall deny or disaffirm its obligations under its Guarantee;
(i) either (i) any of the Loan Documents at any time for any reason is
declared null and void, or (ii) there occurs any enforcement action against the
Collateral;
(j) failure by the Borrower or any Restricted Subsidiary to pay final
judgments entered by a court or courts of competent jurisdiction (not subject to
appeal) aggregating in excess of $10,000,000 (net of any amounts covered by
insurance from a reputable and creditworthy insurance company), which judgments
are not paid, discharged or stayed for a period of 60 days after the date on
which the right to appeal has expired;
(k) the occurrence of any ERISA Event that when taken together with
all other ERISA Events that have occurred, could be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$10,000,000;
(l) the occurrence of any Change of Control;
(m) TerreStar Parent, the Borrower or any Restricted Subsidiary is
enjoined, restrained, or in any way prevented by court order or any Governmental
Authority from continuing to conduct all or any material part of its business
affairs;
(n) the occurrence of any uninsured loss to any material portion of
the Collateral;
(o) (i) a denial, revocation, cancellation or relinquishment, as
applicable, of any Material License held by the Borrower, TerreStar Canada or a
Guarantor to operate satellite component or ATC facilities, unless the
revocation, cancellation or relinquishment (1) remains subject to
reconsideration, review, or appeal at the FCC, Industry Canada, or any court, as
applicable; provided that during the pendency of such reconsideration, review or
appeal the Borrower, TerreStar Canada or Guarantor, as applicable, is permitted
to exercise its rights under the applicable Material License and continues to
conduct its business in the ordinary course, or (2) is accompanied by the
issuance of a substitute or successor license, permit, or authorization of
substantially equivalent utility or the Borrower, TerreStar Canada or a
Restricted Subsidiary of the Borrower already holds a license, permit, or
authorization of substantially equivalent utility; (ii) Borrower's failure to
secure the FCC ATC Authorization by the ATC Operational Date; provided, that,
with respect to this clause (ii), such date shall be extended for up to three
(3) additional one (1) month periods, so long as (A) the Borrower is engaged in
good faith efforts to secure the FCC ATC Authorization and (B) the Interest Rate
then in effect increases as provided in Section 2.07(b)(iii).
(p) failure to satisfy (i) (x) the FCC's implementation milestone to
launch the TerreStar-1 Satellite on or prior to September 30, 2008, (y) the
FCC's implementation milestone to certify that the satellite system is
operational on or prior to November 30, 2008, or (z) Industry Canada's
implementation milestone to place the TerreStar-1 Satellite into its assigned
orbital position on or prior to November 30, 2008, unless in the case of (x),
(y) or (z), such milestone has been waived by the applicable Governmental
Authority, or (ii) any extended deadline issued by the applicable Governmental
Authority of the respective implementation milestones listed in (i) above
(whichever is later), unless in the case of (i)(x), (y) or (z) or (ii), the
Borrower has filed an appropriate application for waiver or extension of such
milestone or deadline which application has not been denied;
(q) failure to obtain Spectrum Contribution Approval on or prior to
July 23, 2008; and
(r) (i) a default shall occur in the payment of any amount when due
(beyond any applicable grace period), whether by acceleration or otherwise, of
any principal or stated amount of, or interest or fees on, any Indebtedness
(other than the Obligations under this Agreement or the other Loan Documents) of
TerreStar Parent, the Borrower, the FCC License Subsidiary or any other
Restricted Subsidiary having a principal or stated amount, individually or in
the aggregate, in excess of $10,000,000, or a default shall occur in the
performance or observance of any obligation or condition with respect to any
such Indebtedness if the effect of such default is to accelerate the maturity of
such Indebtedness or to permit the holder or holders of such Indebtedness, or
any trustee or agent for such holders, to cause or declare such Indebtedness to
become immediately due and payable, (ii) a default shall occur (after expiration
of any available grace or cure periods) in the performance or observance of any
obligation or condition with respect to any Indebtedness which has been
subordinated (whether as to payment or Lien priority) to the Obligations under
this Agreement or the other Loan Documents or the Collateral Agent's Liens in
the Collateral or any such Indebtedness shall be required to be or prepaid,
redeemed, purchased or defeased, or require an offer to purchase or defease such
Indebtedness to be made, prior to its expressed maturity or (iii) any
Indebtedness of TerreStar Parent, the Borrower, the FCC License Subsidiary or
any other Restricted Subsidiary having a principal or stated amount,
individually or in the aggregate, in excess of $10,000,000 shall otherwise be
required to be prepaid, redeemed, purchased or defeased, or require an offer to
purchase or defease such Indebtedness to be made, prior to its expressed
maturity.
The foregoing shall constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
SECTION 7.02. ACCELERATION.
(a) In the case of an Event of Default specified in clause (f) of
Section 7.01, the Commitment shall automatically terminate, and the principal of
the Loans then unpaid, together with accrued and unpaid interest thereon and all
fees and other Obligations of the Borrower and the Guarantors accrued hereunder
and under the other Loan Documents, shall automatically become due and payable
in cash, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower and the Guarantors.
(b) If any other Event of Default occurs and is continuing, any
Electing Lender may, by notice to the Borrower, take either or both of the
following actions, at the same or different times: terminate the Commitment of
such Electing Lender and declare the portion of the Loans owed to such Electing
Lender then unpaid to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of such Loans so declared to be
due and payable, together with accrued and unpaid interest thereon and all fees
and other Obligations of the Borrower and the Guarantors owed to such Electing
Lender and accrued hereunder and under the other Loan Documents, shall become
due and payable in cash immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower and the
Guarantors. In the case of an Event of Default specified in clause (f) of
Section 7.01 or any declaration specified in clause (b) of this Section 7.02,
the Lenders or any Electing Lender (as the case may be) may pursue any available
remedy to collect the payment of principal of or interest on the Loans or to
enforce the performance of any provision of this Agreement and any other Loan
Document.
SECTION 7.03. WAIVER OF DEFAULTS. At any time prior to the date of any
acceleration pursuant to Section 7.02(a) or (b), the Required Lenders may, on
behalf of the Lenders, waive any existing Default or Event of Default and its
consequences under this Agreement or any other Loan Document. When a Default or
Event of Default is waived, it is deemed cured and ceases to exist and shall be
deemed to have been cured and waived for every purpose under this Agreement and
the other Loan Documents, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any consequent right of any Lender
or the Collateral Agent.
SECTION 7.04. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy conferred
or reserved to Collateral Agent or any Lender under this Agreement or any other
Loan Document is intended to be exclusive of any other right or remedy, and all
such rights and remedies are, to the extent permitted by law, cumulative and in
addition to every other right and remedy hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or exercise of any right or
remedy hereunder, or otherwise, will not prevent the concurrent or subsequent
assertion or exercise of any other right or remedy.
SECTION 7.05. DELAY OR OMISSION NOT WAIVER. No delay or omission of any
Lender to exercise any right or remedy accruing upon any Event of Default will
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
VII or by law to the Electing Lenders or to the Lenders, as the case may be, may
be exercised from time to time, and as often as may be deemed expedient, by the
Electing Lenders, the Required Lenders or by the Lenders, as the case may be.
ARTICLE VIII
GUARANTEES
SECTION 8.01. GUARANTEES.
(a) Each Guarantor hereby jointly and severally unconditionally and
irrevocably guarantees, as a primary obligor and not merely as a surety, to each
Lender and to the Collateral Agent and their respective successors and assigns
(i) the full and punctual payment of principal of, premium, if any, and interest
on all Obligations of the Borrower arising under this Agreement, the Notes and
the other Loan Documents, when due, whether at maturity, by acceleration, by
required pre-payment or otherwise, subject to any applicable grace period and
(ii) the full and punctual performance and observance within applicable grace
periods of all other obligations, covenants, agreements and conditions of the
Borrower, whether for expenses, indemnification or otherwise under this
Agreement (all of the foregoing being hereinafter collectively referred to as
the "GUARANTEED OBLIGATIONS"). Each Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from each such Guarantor, and that each such Guarantor shall
remain bound under this Article VIII notwithstanding any extension or renewal of
any Guaranteed Obligation.
(b) Each Guarantor waives presentation to, demand of, payment from and
protest to the Borrower of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Loans or the Guaranteed Obligations. The obligations of each Guarantor
hereunder shall not be affected by (i) the failure of any Lender or the
Collateral Agent to assert any claim or demand or to enforce any right or remedy
against the Borrower or any other Person under this Agreement, any of the other
Loan Documents or any other agreement or otherwise; (ii) any extension or
renewal of any Guaranteed Obligations; (iii) any rescission, waiver, amendment
or modification of any of the terms or provisions of this Agreement, any of the
other Loan Documents or any other agreement; (iv) the release of any security
held by any Lender or the Collateral Agent for the Guaranteed Obligations or any
of them; (v) the failure of any Lender or the Collateral Agent to exercise any
right or remedy against any other guarantor of the Guaranteed Obligations; or
(vi) any change in the ownership of such Guarantor, except as provided in
Section 6.03.
(c) Each Guarantor further agrees that its Guarantee herein
constitutes a Guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Lender or the Collateral Agent to any security held for payment of
the Guaranteed Obligations. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against the
Borrower or any other Person. The obligations of each Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of any Lender
or the Collateral Agent to assert any claim or demand or to enforce any remedy
under this Agreement, any of the other Loan Documents or any other agreement, by
any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Guaranteed Obligations, or by
any other act or thing or omission or delay to do any other act or thing which
may or might in any manner or to any extent vary the risk of any Guarantor or
would otherwise operate as a discharge of any Guarantor as a matter of law or
equity.
(d) Each Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Lender or the
Collateral Agent upon the bankruptcy or reorganization of the Borrower or
otherwise.
(e) In furtherance of the foregoing and not in limitation of any other
right which any Lender or the Collateral Agent has at law or in equity against
any Guarantor by virtue hereof, upon the failure of the Borrower to pay the
principal of or premium, if any, or interest on any Guaranteed Obligation when
and as the same shall become due, whether at maturity, by acceleration, by
required pre-payment or otherwise, or to perform or comply with any other
Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt
of written demand by the Collateral Agent, forthwith pay, or cause to be paid,
in cash, to the Lenders or the Collateral Agent an amount equal to the sum of
(i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and
unpaid interest or premium, if any, on such Guaranteed Obligations (but only to
the extent not prohibited by law) and (iii) all other monetary Guaranteed
Obligations of the Borrower to the Lenders and the Collateral Agent.
(f) Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Lenders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations. Each Guarantor further agrees that, as between it, on the one hand,
and the Lenders and the Collateral Agent, on the other hand, (x) the maturity of
the Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article VII for the purposes of any Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article VII, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section.
SECTION 8.02. LIMITATION ON LIABILITY. Any term or provision of this
Agreement to the contrary notwithstanding, the maximum aggregate amount of the
obligations guaranteed hereunder by any Guarantor shall not exceed the maximum
amount that can be guaranteed without rendering this Agreement and the
respective Guarantee, as it relates to such Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 8.03. SUCCESSORS AND ASSIGNS. This Article VIII shall be binding
upon each Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Collateral Agent and the Lender
and, in the event of any transfer or assignment of rights by any Lender or the
Collateral, the rights and privileges conferred upon such party in this
Agreement and the other Loan Documents shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
of this Agreement.
SECTION 8.04. EXECUTION AND DELIVERY OF THE GUARANTEE. The execution by
each Guarantor of this Agreement (or a joinder agreement substantially in form
of Exhibit E attached hereto in accordance with Section 5.16(a)) evidences the
Guarantee of such Guarantor.
ARTICLE IX
THE COLLATERAL AGENT
SECTION 9.01. APPOINTMENT. Each Lender hereby appoints U.S. Bank National
Association as its Collateral Agent under and for purposes of each Loan
Document, and hereby authorizes the Collateral Agent to act on behalf of such
Lender under each Loan Document and, in the absence of other written
instructions from the Lenders pursuant to the terms of the Loan Documents
received from time to time by the Collateral Agent, to exercise such powers
hereunder and thereunder as are specifically delegated to or required of the
Collateral Agent by the terms hereof and thereof, together with such powers as
may be incidental thereto. Each Lender hereby irrevocably designates and
appoints the Collateral Agent as the agent of such Lender. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Collateral Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Collateral Agent.
SECTION 9.02. DELEGATION OF DUTIES. The Collateral Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Collateral Agent shall not
be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
SECTION 9.03. EXCULPATORY PROVISIONS. Neither the Collateral Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by TerreStar Parent, the
Borrower, the FCC License Subsidiary or any other Guarantor or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Collateral Agent under or in connection with, this Agreement
or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of TerreStar Parent, the Borrower, the FCC License
Subsidiary or any other Guarantor or other Person to perform its obligations
hereunder or thereunder. The Collateral Agent shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of TerreStar
Parent, the Borrower, the FCC License Subsidiary or any other Guarantor.
SECTION 9.04. RELIANCE BY THE COLLATERAL AGENT. The Collateral Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower and the
Guarantors), independent accountants and other experts selected by the
Collateral Agent. The Collateral Agent may deem and treat the payee of any note
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Collateral Agent.
The Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all or other requisite Lenders) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Collateral Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.
SECTION 9.05. NOTICE OF DEFAULT. The Collateral Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Collateral Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Collateral Agent receives such a notice, the Collateral Agent shall give
notice thereof to the other Lenders. The Collateral Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders (or, if so specified by this Agreement, all Lenders or
any other instructing group of Lenders specified by this Agreement); provided,
that unless and until the Collateral Agent shall have received such directions,
the Collateral Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as the Collateral Agent shall deem advisable in the best interests of
the Lenders.
SECTION 9.06. NON-RELIANCE ON THE COLLATERAL AGENTS AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Collateral Agent nor any of its
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates have made any representations or warranties to it and that no act by
the Collateral Agent hereafter taken, including any review of the affairs of the
Borrower, any Guarantor or any their Affiliates, shall be deemed to constitute
any representation or warranty by the Collateral Agent to any Lender. Each
Lender represents to the Collateral Agent that it has, independently and without
reliance upon the Collateral Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Borrower, the Guarantors and their
Affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Collateral Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower, the Guarantors and their Affiliates. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Collateral Agent hereunder, the Collateral Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower, any Guarantor, or any
their Affiliates that may come into the possession of the Collateral Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
SECTION 9.07. INDEMNIFICATION. The Lenders agree to indemnify the
Collateral Agent in its capacity as such (to the extent not reimbursed by the
Borrower and the Guarantors and without limiting the obligation of the Borrower
and the Guarantors to do so), ratably according to their respective Commitments
in effect on the date on which indemnification is sought under this Section
9.07, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against the Collateral Agent in
any way relating to or arising out of, the Commitments, this Agreement, any of
the other Loan Documents, or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by the Collateral Agent under or in connection with any of the
foregoing; provided, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the Collateral Agent's gross negligence or willful misconduct. The
agreements in this Section 9.07 shall survive the payment of the Loans and all
other amounts payable hereunder.
SECTION 9.08. SUCCESSOR COLLATERAL AGENTS. The Collateral Agent may resign
as Collateral Agent upon twenty (20) days' notice to the Lenders and the
Borrower. If the Collateral Agent shall resign as the Collateral Agent in such
capacity under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor collateral agent, which
successor collateral agent shall (unless an Event of Default shall have occurred
and be continuing) be subject to approval by the Borrower (which approval shall
not be unreasonably withheld or delayed), whereupon such successor collateral
agent shall succeed to the rights, powers and duties of the Collateral Agent in
its applicable capacity, and the term "Collateral Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Collateral Agent's rights, powers and duties as Collateral Agent in its
applicable capacity shall be terminated, without any other or further act or
deed on the part of such former Collateral Agent or any of the parties to this
Agreement or any holders of the Loans. If no applicable successor collateral
agent has accepted appointment as the Collateral Agent in its applicable
capacity by the date that is twenty (20) days following such retiring Collateral
Agent's notice of resignation, such retiring Collateral Agent's resignation
shall nevertheless thereupon become effective and the Lenders shall assume and
perform all of the duties of the Collateral Agent hereunder until such time, if
any, as the Required Lenders appoint a successor agent as provided for above.
After the retiring Collateral Agent's resignation as the Collateral Agent or the
Collateral Agent, as applicable, the provisions of this Article IX shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
the Collateral Agent under this Agreement and the other Loan Documents.
SECTION 9.09. THE COLLATERAL AGENT GENERALLY. Except as expressly set forth
herein, the Collateral Agent shall not have any duties or responsibilities
hereunder in its capacity as such.
SECTION 9.10. AGENCY FOR PERFECTION. Collateral Agent hereby appoints each
other Lender as its agent (and each Lender hereby accepts such appointment) for
the purpose of perfecting the Collateral Agent's Liens in assets which, in
accordance with Article 8 or Article 9, as applicable, of the Uniform Commercial
Code of any applicable state can be perfected only by possession or control.
Should any Lender obtain possession or control of any such Collateral, such
Lender shall notify Collateral Agent thereof, and, promptly upon Collateral
Agent's request therefor shall deliver possession or control of such Collateral
to Collateral Agent or in accordance with Collateral Agent's instructions.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower or any Restricted Subsidiary, to:
TerreStar Networks Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(b) if to Collateral Agent, to:
U.S. Bank National Association
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇-▇▇-▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Lender, to:
Harbinger Capital Partners Master Fund I, Ltd.
Harbinger Capital Partners Special Situations Fund, L.P.
c/o Harbinger Capital Partners Funds
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with copies to (such copies not constituting notice hereunder):
▇▇▇▇▇▇▇ Management Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
EchoStar Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Tel: ▇-▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Fax: (___) ___-____
with copies to (such copies not constituting notice hereunder):
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given when delivered in person or
by courier service and signed for against receipt thereof, upon receipt of
telefacsimile or telex, or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed.
SECTION 10.02. WAIVERS; AMENDMENTS.
(a) NO DEEMED WAIVERS; REMEDIES CUMULATIVE. No failure or delay by
Collateral Agent or any Lender in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of Collateral
Agent and the Lenders hereunder are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by the Borrower therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default or Event of Default, regardless of whether Collateral
Agent or any Lender may have had notice or knowledge of such Default or Event of
Default at the time.
(b) AMENDMENTS.
(i) Subject to the provisions of Section 10.05, neither this
Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower
and the Required Lenders; provided that no such amendment or waiver shall (A)
increase any Commitment of any Lender without the prior written consent of such
Lender, (B) reduce the principal of, or rate of interest on, any Loan or any
fees specified herein, due to a Lender without the prior written consent of each
Lender directly affected thereby, (C) postpone or otherwise change the date
fixed for any payment of principal of, or interest on, any Loan or any fees
hereunder due to a Lender or for any termination of any Commitment of a Lender,
without the prior written consent of each Lender directly affected thereby, (D)
decrease any amount payable to a Lender pursuant to the provisions of Article II
hereof, without the prior written consent of each Lender directly affected
thereby, (E) release the Borrower from its obligations hereunder or release a
Guarantor from its obligations under the Subsidiary Guarantee (except as
expressly permitted hereby or thereby), without the prior written consent of all
of the Lenders, (F) release Collateral from the Liens created by the Security
Documents (except as expressly permitted hereby or thereby), without the prior
written consent of all of the Lenders, (G) amend or modify the provisions of
this Section 10.02(b), without the prior written consent of all of the Lenders,
or (H) amend the definition of "Required Lenders," without the prior written
consent of all of the Lenders. No such amendment, modification, waiver or
consent shall adversely affect the rights and obligations of the Collateral
Agent, if any, without their prior written consent. Collateral Agent, each
Lender and Participant shall be bound by any amendment, modification, waiver or
consent authorized as provided herein (whether or not any applicable Note shall
have been marked to indicate such amendment, modification, waiver or consent);
and any consent by any holder of a Loan, a Commitment or a Note shall bind any
Person subsequently acquiring such Loan, Commitment or Note (whether or not any
applicable Note is so marked).
(ii) Notwithstanding the foregoing provisions of this Section
10.02(b), in connection with any issue arising under this Agreement or any Loan
Document, any Lender may, in its sole discretion, request to receive material,
non-public information relating to the Borrower or its business and (A) use such
information in connection with such issue, (B) disregard such information and
use only Information in connection with such issue or (C) waive its rights with
respect to such issue, in which case, such Lender will agree to vote and will be
deemed to have voted its Commitment under this Agreement pro rata in accordance
with the percentage of the Commitment voted in favor of, and the percentage of
the Commitment voted against, any such issue.
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER; COMMITMENT FEE.
(a) COSTS AND EXPENSES. The Borrower shall pay (i) all reasonable
expenses incurred by Collateral Agent, any Lender and their respective
Affiliates (including the fees, charges and disbursements of their counsel) in
connection with the preparation of this Agreement and the other Loan Documents,
(ii) all reasonable expenses incurred by Collateral Agent, any Lender and their
respective Affiliates, including the reasonable fees, charges and disbursements
of their counsel, in connection with the administration of this Agreement and
the other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof, (iii) all reasonable expenses incurred by
Collateral Agent, any Lender and their respective Affiliates, including the
fees, charges and disbursements of any counsel therefor, in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents, including its rights under this Section, or in
connection with the Loans made hereunder, including in connection with any
workout, restructuring or negotiations in respect thereof and (iv) all taxes,
assessments and other charges and reasonable costs and expenses incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated by any Loan Document or any other document
referred to therein.
(b) INDEMNIFICATION BY THE BORROWER. The Borrower shall indemnify
Collateral Agent, each Lender and each Related Party of the Lender (each such
Person being called an "INDEMNITEE") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or the
use of the proceeds therefrom, (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by the Borrower
or any Environmental Liability related in any way to the Borrower, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or the
use of the proceeds thereof.
(d) PAYMENTS. All amounts due under this Section shall be payable upon
written demand therefor.
SECTION 10.04. SUCCESSORS AND ASSIGNS.
(a) ASSIGNMENTS GENERALLY. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder or under the
other Loan Documents without the prior written consent of the Lenders (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
permitted successors and assigns and, to the extent expressly contemplated
hereby, the Related Parties of any Lender) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
(b) ASSIGNMENT BY THE LENDERS. Any Lender may assign all or a portion
of the Loans and of its rights, duties and obligations under this Agreement
(including all or a portion of the Commitment) and the other Loan Documents to
any other Person without the prior written consent of the Borrower, provided
that (i) the aggregate outstanding principal amount of the Loans (or the
Commitment) subject to any such assignment shall be $5,000,000 or a whole
multiple thereof, unless such assignment is of such Lender's entire interest and
(ii) as long as no Default of the type described in clauses (i) or (ii) of
Section 7.01 or Event of Default of the type described in clause (f) of Section
7.01 shall have occurred and be continuing at such time, no such assignment
shall be made to any Person other than an Eligible Assignee without the
Borrower's prior written consent. Upon execution and delivery by the assignee to
the Borrower of an instrument in writing pursuant to which such assignee agrees
to become a "Lender" hereunder and Borrower's consent, if applicable, the
assignee shall have the obligations, rights and benefits hereunder of the
assigning Lender in respect of the Commitment (or portion thereof) and Loan(s)
theretofore held by such Lender, and the assigning Lender shall be released from
the Commitment (or portion thereof) so assigned. For purposes of this Section
10.04(b), the term "ELIGIBLE ASSIGNEE" means (A) a Lender or any Affiliate
thereof, (B) any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company, any insurance
company or similar financial institution or entity organized under the laws of
(x) the United States, or any state thereof, or (y) any other country which is a
member of the OECD, or a political subdivision of any such country, provided
that such bank is acting through a branch or agency located either in the
country in which it is organized, another country which is also an OECD member
or the Cayman Islands and (C) any Person (other than a natural person) that is
or will be engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit and has assets under
management of at least $500,000,000. "ELIGIBLE ASSIGNEE" shall not include a
competitor of the Borrower.
(c) The Borrower hereby acknowledges and agrees that in connection
with any assignment by any Lender of less than all of the Loans and the
Commitment, the Lenders may employ at the expense of the Lenders an
administrative agent to act on behalf of the Lenders under this Agreement and
the other Loan Documents, and the Borrower agrees to customary and reasonable
modifications to this Agreement and the other Loan Documents to reflect the
duties and responsibilities of such agent, acting on behalf of the Lenders, and
multiple Lenders. For the avoidance of doubt, it is understood and agreed that
in no event shall the amount of the Commitment, the rate of interest on the
Loans, the Maturity Date, the definition of Required Lenders, the
representations or warranties of the Borrower, the negative covenants or the
prepayment provisions of the Agreement be modified in connection with the
employment of such administrative agent.
(d) In connection with any assignment by any Lender (other than
assignments requiring the Borrower's approval), the assigning Lender shall
provide notice of such assignment to the Borrower, and the Borrower hereby
acknowledges and agrees to maintain a register of all assignments by the
Lenders.
(e) PARTICIPATIONS. Any Lender may, without the consent of the
Borrower, sell participations to one or more banks or other entities (a
"PARTICIPANT") in all or a portion of such Lender's rights and obligations under
this Agreement and the other Loan Documents (including all or a portion of the
Loans and the Commitment); provided that (i) such Lender's obligations under
this Agreement and the other Loan Documents shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. Any agreement or
instrument pursuant to which any Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and the
other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document. In no event shall the
selling Lender agree with the Participant to take or refrain from taking any
action under this Agreement 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 (1) increase or extend the term, or extend the time or
waive any requirement for the reduction, termination or prepayment, of the
Loans, (2) extend the date fixed for the payment of principal of or interest on
the Loans, (3) reduce the amount of any such payment of principal or any premium
payable hereunder, (4) reduce the rate at which interest is payable on any
amount under this Agreement, or reduce any fee or other amount payable to the
Participant to a level below the rate at which the Participant is entitled to
receive such interest or fee, (5) alter the rights or obligations of the
Borrower to prepay the Loans, or (6) release any portion of the Collateral or
terminate any Lien under the Security Documents prior to the payment in full of
the Loan and all amounts required to be paid by the Borrower to Collateral Agent
or any Lender under the Loan Documents except as contemplated in the Security
Documents.
(f) LIMITATIONS ON RIGHTS OF PARTICIPANTS. A Participant shall not be
entitled to receive any greater payment under Section 2.08 than the selling
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent.
SECTION 10.05. THE BUY OUT.
(a) One or more Lenders may (but shall not be obligated to) cause the
assignment to such Lender(s) or their designee (each, a "BUYING LENDER"), by any
other Lender (each, a "SELLING LENDER"), of all right, title and interest in,
to, arising under, or in respect of all Obligations of the Borrower and the
Guarantors hereunder and under the other Loan Documents owed to the Selling
Lenders under the Loan Documents upon written notice from the Buying Lenders to
the Selling Lenders given at any time after the date on which the Selling
Lenders (i) reject any waiver, amendment or modification of, or deny any
departure by the Borrower from, any provision of this Agreement or any Loan
Document or (ii) accelerate pursuant to Section 7.02(b) or any automatic
acceleration pursuant to Section 7.02(a).
(b) Such assignment shall be effected not later than ten (10) Business
Days following the giving of such notice upon the execution by the Buying
Lenders and the Selling Lenders of an instrument in writing pursuant to which
the Buying Lenders agree to assume all Obligations owed to the Selling Lenders
under the Loan Documents in exchange for the payment at par, in immediately
available funds, of the amount of the Obligations owed to each such Selling
Lenders as of the date on which such assignment is made, at which time the
Selling Lenders shall be released from all obligations and duties under the Loan
Documents. The assignments by the Selling Lenders pursuant to this Section 10.05
shall be without recourse or warranty of any kind.
SECTION 10.06. SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of each
Loan, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Lenders may have had notice or knowledge of
any Default or Event of Default or incorrect representation or warranty at the
time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
and so long as the Commitment has not expired or terminated. The provisions of
Sections 2.08, 2.09 and 10.03 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitment or the
termination of this Agreement or any provision hereof.
SECTION 10.07. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract between the parties relating to
the subject matter hereof and thereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof and thereof. Except as provided in Article IV, this Agreement shall
become effective when it shall have been executed by Collateral Agent and the
Lenders and when Collateral Agent and the Lenders shall have received a
counterpart hereof bearing the signature of the Borrower, and thereafter shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SECTION 10.08. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.09. GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
(b) SUBMISSION TO JURISDICTION. The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the non-exclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that
Collateral Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrower or its properties in
the courts of any jurisdiction.
(c) WAIVER OF VENUE. The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) SERVICE OF PROCESS. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
10.01. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. CONFIDENTIALITY. Each of the Borrower and the Lenders agree
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to the Borrower's and any Lender's
Affiliates and to such Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors who need to know (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and will agree to keep
such Information confidential), (b) to the extent requested by any regulatory
authority or to the extent required by applicable laws or regulations or by any
subpoena or similar legal process (provided, that prompt notice of such
requested or required disclosure shall be provided to any other party to this
Agreement so as to enable such party to obtain a protective order, confidential
treatment or other appropriate remedy), (c) to any other party to this
Agreement, (d) in connection with the exercise of any remedies hereunder or
under any other Loan Document or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (e) subject to an agreement containing provisions substantially the
same as those of this Section 10.12, to any assignee of or Participant in, or
any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (f) with the consent of the Borrower or the Lenders, as
the case may be, or (g) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this paragraph or (ii) becomes
available to the Borrower or to the Lenders on a non-confidential basis from a
source other than the Borrower or the Lenders as the case may be, provided, that
such source is not known to be bound by a confidentiality arrangement or
otherwise prohibited from transmitting the Information by a contractual, legal
or fiduciary obligation. For the purposes of this Agreement, "INFORMATION" means
all information (1) received by a Lender from the Borrower relating to the
Borrower or its business, other than any such information that is available to
such Lender on a non-confidential basis prior to disclosure by the Borrower; and
(2) received by the Borrower from a Lender relating to such Lender or its
business, other than such information that is available to the Borrower on a
non-confidential basis prior to disclosure by such Lender, provided that, in the
case of information received from either party after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 10.13. USA PATRIOT ACT. Each Lender hereby notifies the Borrower
and each Subsidiary Guarantor that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the "PATRIOT ACT"), it is required to obtain, verify and record information
that identifies the Borrower and each Subsidiary Guarantor, which information
includes the name and address of such Person and other information that will
allow such Lender to identify such Person in accordance with the Patriot Act.
The Borrower and each Subsidiary Guarantor agrees to provide all such
information to the Lenders upon request at any time, whether with respect to the
Borrower, any Person who is a Subsidiary Guarantor on the Effective Date or who
becomes a Subsidiary Guarantor thereafter.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
U.S. BANK NATIONAL ASSOCIATION, as
Collateral Agent
By: ____________________________
Name:
Title:
HARBINGER CAPITAL PARTNERS MASTER
FUND I, LTD., as a Lender
By: Harbinger Capital Partners Offshore
Manager, L.L.C., as investment manager
By: ____________________________
Name:
Title:
HARBINGER CAPITAL PARTNERS SPECIAL
SITUATIONS FUND, L.P., as a Lender
By: Harbinger Capital Partners Special
Situations GP, LLC, as general partner
By: ____________________________
Name:
Title:
ECHOSTAR CORPORATION, as a Lender
By: ____________________________
Name:
Title:
TERRESTAR NETWORKS INC., as Borrower
By: ____________________________
Name:
Title:
APPENDIX A-1
COMMITMENTS
======================================================================================
Pro
Lender Commitment Rata Share
Harbinger Capital Partners Master Fund I, LTD. $33,333,333.33 33 1/3%
--------------------------------------------------------------------------------------
Harbinger Capital Partners Special Situations Fund, L.P. $16,666,666.67 16 2/3%
--------------------------------------------------------------------------------------
EchoStar Corporation $50,000,000 50%
--------------------------------------------------------------------------------------
Total $100,000,000 100%
======================================================================================
SCHEDULE I
MATERIAL CONTRACTS
1. TerreStar Networks Inc. Amended and Restated Stockholders' Agreement, dated
May 6, 2006, by and among TerreStar Networks Inc. and the stockholders
listed therein
2. Second Amended and Restated Intellectual Property Assignment and License
Agreement, dated November 21, 2006, by and between TerreStar Networks Inc.
and ATC Technologies, LLC
3. Launch Services Agreement dated November 8, 2006 by and between TerreStar
Networks Inc. and Arianespace
4. Indenture, dated as of February 14, 2007, among TerreStar Networks Inc., as
issuer, the guarantors party thereto and U.S. Bank National Association, as
trustee
5. U.S. Security Agreement, dated as of February 14, 2007, among TerreStar
Networks Inc. and the future guarantors party thereto in favor of U.S. Bank
National Association, as collateral agent.
6. Funding Agreement, dated February 14, 2007, among TerreStar Corporation
(f/k/a Motient Corporation), Motient Ventures Holding Inc. and TerreStar
Networks Inc.
7. Master Development & Licensing Agreement, dated August 10, 2007, between
TerreStar Networks Inc. and Elektrobit, Inc.
8. Master Services Agreement, dated October 22, 2007, between TerreStar
Networks Inc. and ▇▇▇▇▇▇▇ Communications, Inc.
9. Network Equipment and Services Agreement, dated August 28, 2007, between
Nokia Siemens Networks US LLC and TerreStar Networks Inc.
10. TerreStar Canada Shareholders' Agreement, dated April 5, 2007, between
TerreStar Networks Inc., TMI Communications and Company, LP, TerreStar
Networks (Canada) Inc., TerreStar Networks Holdings (Canada) Inc. and BCE
Inc.
11. Rights and Services Agreement, dated April 5, 2007, between TerreStar
Networks Inc. and TerreStar Canada
12. TMI Guarantee and Share Pledge Agreement, dated April 5, 2007, between
TerreStar Networks Inc. and TMI Communications
13. TerreStar Canada Guarantee, dated April 5,2007, between TerreStar Canada
and TerreStar Networks Inc.
14. Contract for the Design, Development and Supply of Satellite Base Station
Subsystem, dated March 30, 2007, between TerreStar Networks Inc. and ▇▇▇▇▇▇
Network Systems, LLC
15. Amended and Restated Contract for TerreStar-2, dated December 12, 2007,
between TerreStar Networks Inc. and Space Systems/Loral, Inc.
16. Amended and Restated Contract for TerreStar-1, dated December 12, 2007,
between TerreStar Networks Inc. and Space Systems/Loral, Inc.
17. Contract for the TerreStar Space Based Network dated January 19, 2007,
between TerreStar Networks Inc. and Space Systems/Loral, Inc.
SCHEDULE II
MILESTONE PAYMENTS AND PAYMENT DATES
PART A
[See Attached]
SCHEDULE II
MILESTONE PAYMENTS AND PAYMENT DATES
PART B
[See Attached]
SCHEDULE 2.09(a)
LENDER PAYMENT ACCOUNTS
--------------------------------------------------------------------------------
Lender: Harbinger Capital Partners Master Fund I, Ltd.
Wire Info:
Bank: Citibank, N.A. New York
ABA No: ▇▇▇▇▇▇▇▇▇
F/A/O: Bear ▇▇▇▇▇▇▇ Securities Corporation
Account No.: ▇▇▇▇▇▇▇▇
F/F/C: Harbinger Capital Partners Master Fund I, Ltd.
Account No: ▇▇▇-▇▇▇▇▇-▇▇
--------------------------------------------------------------------------------
Lender: Harbinger Capital Partners Special Situations Fund, LP
Wire Info:
Bank: Chase Manhattan Bank, NY
ABA: ▇▇▇-▇▇▇-▇▇▇
F/A/O: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., NY
Account: ▇▇▇-▇-▇▇▇▇▇▇
F/F/C: Harbinger Capital Partners Special Situations Fund, L.P.
Account: ▇▇▇▇▇▇▇▇-1
--------------------------------------------------------------------------------
Lender: EchoStar Corporation
Wire Info:
Bank: Bank of America
ABA: ▇▇▇▇▇▇▇▇▇
Beneficiary: EchoStar Holding ACH/Wires
Account: 12330-65595
--------------------------------------------------------------------------------
SCHEDULE 3.05(c)
MATERIAL ADVERSE EFFECT EXCEPTIONS
Space Systems/Loral, Inc. has informed TerreStar of a delay in construction of
TerreStar-1 and given Terrestar a new expected delivery date for the end of
November, 2008. There can be no assurance that Space Systems/Loral, Inc. will
meet this date or not have additional delays. The Lenders have been given the
opportunity to speak with Space Systems/Loral, Inc. about this delay.
Allegations of a "Change in Control" or "Change of Control" under the Series A
or Series B preferred or the 15% Notes Indenture.
Litigation regarding shareholder approval of the transactions contemplated by
the Investment Agreement.
EXHIBIT A
FORM OF NOTICE OF BORROWING
[INSERT DATE]
Harbinger Capital Partners Master Fund I, Ltd.
Harbinger Capital Partners Special Situations Fund, LP
c/o Harbinger Capital Partners Funds
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: __________
EchoStar Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: __________
This Notice of Borrowing is delivered pursuant to Section 4.02(e) of the
Purchase Money Credit Agreement dated as of February 5, 2008 (as amended,
modified or supplemented and in effect from time to time, the "CREDIT
AGREEMENT") among TERRESTAR NETWORKS INC. (the "BORROWER"), U.S. BANK NATIONAL
ASSOCIATION, as collateral agent for the lenders referred to below, HARBINGER
CAPITAL PARTNERS MASTER FUND I, LTD., HARBINGER CAPITAL PARTNERS SPECIAL
SITUATIONS FUND, L.P., ECHOSTAR CORPORATION and the other lenders party thereto
from time to time. Unless otherwise defined herein, capitalized terms used in
this Notice of Borrowing have the meanings given to them (whether by reference
to another document or otherwise) in the Credit Agreement.
This Notice of Borrowing is irrevocable and constitutes a request for a
Loan as follows:
1. Purpose of Loan is to make a Milestone Payment.
2. Aggregate amount of the Loan: $____________
- Amount being paid to Satellite Manufacturer: $____________
3. Date of Loan: ___________.
4. Deposit Account: The account of the [Borrower / Satellite Manufacturer]
at Bank: [________], Routing Number: [________], Account Number: [________].
As contemplated by the Credit Agreement, the Borrower certifies that all
applicable conditions of Sections 4.01 and 4.02 of the Credit Agreement have
been met and that, as at the date of this Notice of Borrowing and the date of
the Loan (including after giving effect to the making of the Loan and the
intended use thereof):
(a) the representations and warranties of the Borrower set out in
Article III of the Credit Agreement shall be true and correct on and as of the
date of the making of the Loan;
(b) no Default or Event of Default shall have occurred and be
continuing. The Borrower further confirms and certifies to the Lender that the
proceeds of the requested Loan will be used solely for the purposes specified
and permitted by the Credit Agreement; and
(c) when the amount of the requested Loan is added to the aggregate
principal amount of all Loans theretofore made to the Borrower, the aggregate
principal amount of the Loans shall not exceed the Commitment then in effect.
Very truly yours,
TERRESTAR NETWORKS INC.
By: ____________________________________
Name:
Title:
EXHIBIT B
OPINIONS OF NEW YORK AND DELAWARE COUNSEL TO THE BORROWER AND THE GUARANTORS
EXHIBIT C
FORM OF SECURITY AGREEMENT
EXHIBIT D
FORM OF NOTE
EXHIBIT E
FORM OF JOINDER TO ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ 0003 853053