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SECURITY AGREEMENT and COLLATERAL ASSIGNMENT
Among
FIRST TRUST NATIONAL ASSOCIATION
("Trustee"),
ECHOSTAR SPACE CORPORATION
("Grantor")
and
ECHOSTAR DBS CORPORATION
("Grantor")
June 25, 1997
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This SECURITY AGREEMENT and COLLATERAL ASSIGNMENT ("AGREEMENT"), dated
as of June 25, 1997 between and among FIRST TRUST NATIONAL ASSOCIATION, as
secured party and as trustee for the benefit of the holders of the Notes (as
defined below) under the Indenture (as defined below) (the "TRUSTEE"), EchoStar
Space Corporation, a Colorado corporation ("ECHOSTAR SPACE"), and EchoStar DBS
Corporation, a Colorado corporation (the "ISSUER," and together with EchoStar
Space, the "GRANTORS").
RECITALS
A. Pursuant to that certain Indenture dated as of June 25, 1997 by
and between the Issuer and the Trustee, as trustee (the "INDENTURE"), the Issuer
has issued its Senior Secured Notes due 2002 ("NOTES").
B. Pursuant to a Satellite Escrow Agreement, the Issuer will be
entitled, subject to certain conditions, to draw certain proceeds from the sale
of the Notes for construction, launch or insurance of EchoStar IV (as defined
below).
C. The Grantors are each wholly-owned subsidiaries of EchoStar
Communications Corporation ("ECHOSTAR").
D. The Indenture requires that Grantor execute and deliver this
Agreement.
AGREEMENT
In consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantor hereby agrees with the Trustee as follows:
1. DEFINITIONS. Unless otherwise defined, all terms used herein
which are defined in the Indenture shall have their respective meanings therein.
The following terms shall have the respective meanings given:
"COLLATERAL DOCUMENTS" has the meaning given in the Indenture.
"ECHOSTAR IV" means the communications satellite of the Issuer
described in the Offering Memorandum dated June 20, 1997 relating to the sale of
the Notes, as EchoStar IV.
"FCC" means the United States Federal Communications Commission.
"GOVERNMENTAL AUTHORITIES" means any national, state or local
government (whether domestic or foreign), any political subdivision thereof or
any other governmental or quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity, or any arbitrator
with authority to bind a party at law.
"LAUNCH CONTRACT" means the launch services contract for the launch of
EchoStar IV.
"PERSON" means any natural person, corporation, partnership, firm,
association, Governmental Authority, or any other entity whether acting in an
individual, fiduciary or other capacity.
"SATELLITE CONTRACT" means the satellite construction contract for the
construction of EchoStar IV.
"SATELLITE ESCROW AGREEMENT" means the Satellite Escrow Agreement
dated as of June 25, 1997 among First Trust National Association, as Escrow
Agent and Trustee, and the Issuer.
"TT&C AGREEMENT" means the tracking, telemetry and control services
agreement to be entered into between the Issuer and AT&T Corp. or another
recognized provider of tracking, telemetry and control services and any other
tracking, telemetry and control agreement entered into by one or more Grantors
at any time in connection with EchoStar IV.
2. ASSIGNMENT, PLEDGE AND GRANT OF SECURITY INTEREST.
(a) To secure the timely payment and performance of the Obligations
(as defined below), each Grantor does hereby assign as collateral, grant a
security interest in, and pledge, to the Trustee, on behalf of the holders of
the Notes, all the estate, right, title and interest of such Grantor, whether
now owned or hereafter acquired, in, to and under:
(i) the following agreements and documents, as amended from time
to time (individually, an "ASSIGNED AGREEMENT," collectively, the "ASSIGNED
AGREEMENTS") and all of Grantor's rights thereunder:
(A) the Satellite Contract;
(B) the Launch Contract;
(C) the TT&C Agreement;
(D) all casualty insurance policies maintained or required
to be maintained under the Indenture with respect to EchoStar IV or other
tangible property included in the Collateral, including the Launch Insurance and
all in-orbit insurance and all loss proceeds and other amounts payable to
Grantor thereunder, and all eminent domain proceeds;
(E) any lease or sublease agreements or easement agreements
relating to ground stations, or any part thereof, or any ancillary facilities,
to which Grantor may be or become a party, and in each case which are used in
the telemetry, tracking and control of EchoStar IV; and
(F) all amendments, supplements, substitutions and renewals
to any of the aforesaid agreements.
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(ii) the proceeds of all of the foregoing (all of the collateral
described in clause (i) being herein collectively referred to as the
"COLLATERAL"), including (A) all rights of Grantor to receive moneys due and to
become due under or pursuant to the Collateral, (B) all rights of Grantor to
receive return of any premiums for or proceeds of any insurance, indemnity,
warranty or guaranty with respect to the Collateral or to receive condemnation
proceeds, (C) all claims of Grantor for damages arising out of or for breach of
or default under the Assigned Agreements or any other Collateral, (D) all rights
of Grantor under the Assigned Agreements, including rights to perform thereunder
and to compel performance and otherwise exercise all remedies thereunder and (E)
to the extent not included in the foregoing, all proceeds receivable or received
when any and all of the foregoing Collateral is sold, collected, exchanged or
otherwise disposed, whether voluntarily or involuntarily.
(b) Notwithstanding the foregoing grant, (i) the Trustee shall be
deemed to have released, without further action whatsoever, its security
interest in any asset the sale of which is not prohibited by the Indenture, upon
the sale of such asset, and (ii) the Trustee shall execute such documents and
instruments as shall be reasonably requested by any of the Grantors to
effectuate the foregoing clause (i).
(c) In order to effectuate the foregoing, each of the Grantors have
heretofore represented and warranted or concurrently herewith represent and
warrant that they have delivered true and correct copies of each of the Launch
Contract, Satellite Contract and the contract for Launch Insurance and there
have been no amendments, alterations, modifications or waivers thereto or in the
exhibits or schedules thereto that have not been delivered therewith.
(d) Anything herein contained to the contrary notwithstanding, each
of the Grantors shall remain liable under each of the Assigned Agreements, to
perform all of the obligations undertaken by it thereunder, all in accordance
with and pursuant to the terms and provisions thereof, and the Trustee shall
have no obligation or liability under any of such Assigned Agreements by reason
of or arising out of this Agreement, nor shall the Trustee be required or
obligated in any manner to perform or fulfill any obligations of any Grantor
thereunder or to make any payment, or to make any inquiry as to the nature or
sufficiency of any payment received by it, or present or file any claim, or take
any action to collect or enforce the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
(e) Subject to the terms of the Indenture, upon the occurrence and
during the continuance of an Event of Default, each of the Grantors does hereby
constitute the Trustee, acting for and on behalf of the Noteholders, the true
and lawful attorney of such Grantor, irrevocably, with full power (in the name
of such Grantor or otherwise) to ask, require, demand, receive, compound and
give acquittance for any and all moneys and claims for moneys due and to become
due under or arising out of the Assigned Agreements or any of the other
Collateral, including any insurance policies, to elect remedies thereunder, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings in connection
therewith which the Trustee may deem to be necessary or advisable; provided,
however, that the Trustee shall give any Grantor notice of any action taken by
it as such Grantor's attorney-in-fact promptly after taking any such action.
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(f) If any default by any Grantor under any of the Assigned
Agreements shall occur, the Trustee shall, at its option, be permitted (but
shall not be obligated) to remedy any such default by giving written notice of
such intent to the applicable Grantor and to the parties to each Assigned
Agreement in default. Any curing by the Trustee of any Grantor's default under
any of the Assigned Agreements shall not be construed as an assumption by the
Trustee of any obligations, covenants or agreements of such Grantor under such
Assigned Agreements, and the Trustee shall not incur any liability to such
Grantor or any other Person as a result of any actions undertaken by the Trustee
in curing or attempting to cure any such default. This Agreement shall not be
deemed to release or to affect in any way the obligations of any Grantor under
the Assigned Agreements assigned by such Grantor.
3. OBLIGATIONS SECURED. This Agreement secures (i) the payment and
performance of all obligations of the Issuer, now existing or hereafter arising,
under the Indenture and (ii) the payment and performance of any Supplemental
Indenture (such obligations being herein called the "OBLIGATIONS").
4. EVENTS OF DEFAULT. The occurrence of an Event of Default under
and as defined in the Indenture, whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be 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, shall constitute an
Event of Default hereunder.
5. REMEDIES.
(a) If any Event of Default has occurred and is continuing, the
Trustee may, subject to any applicable requirement of obtaining prior approval
from the FCC, and any applicable restrictions of the Communications Act and the
FCC Rules (i) declare the Notes to be due and payable immediately in accordance
with the provisions of the Indenture; (ii) proceed to protect and enforce the
rights vested in it by this Agreement, including the right to cause all revenues
hereby pledged as security and all other moneys pledged hereunder to be paid
directly to it, and to enforce its rights hereunder to such payments and all
other rights hereunder by such appropriate judicial proceedings as it shall deem
most effective to protect and enforce any of such rights, either at law or in
equity or otherwise, whether for specific enforcement of any covenant or
agreement contained in any of the Assigned Agreements, or in aid of the exercise
of any power therein or herein granted, or for any foreclosure hereunder and
sale under a judgment or decree in any judicial proceeding, or to enforce any
other legal or equitable right vested in it by this Agreement or by law; (iii)
cause any action at law or suit in equity or other proceeding to be instituted
and prosecuted to collect or enforce any Obligations or rights included in the
Collateral, or to foreclose or enforce any other agreement or other instrument
by or under or pursuant to which such Obligations are issued or secured, subject
in each case to the provisions and requirements thereof; (iv) sell or otherwise
dispose of any or all of the Collateral or cause the Collateral to be sold or
otherwise disposed of in one or more sales or transactions, at such prices as
the Trustee may deem best, and for cash or on credit or for future delivery,
without assumption of any credit risk, at any broker's board or at public or
private sale, without demand of performance or notice of intention to sell or of
time or place of sale (except such notice as is required by applicable statute,
rule or regulation, ncluding any applicable FCC regulation and cannot be
waived), it being agreed
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that the Trustee may be a purchaser on behalf of the holders of Notes at any
such sale and that the Trustee or anyone else who may be the purchaser of any
or all of the Collateral so sold shall thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity of
redemption, of any Grantor, any such demand, notice or right and equity being
hereby expressly waived and released to the extent permitted by law; (v) incur
expenses, including attorneys' fees, consultants' fees, and other costs
appropriate to the exercise of any right or power under this Agreement; (vi)
perform any obligation of any Grantor hereunder or under any other agreement
of such Grantor, and make payments, purchase, contest or compromise any Lien,
and pay taxes and expenses, without, however, any obligation so to do; (viii)
take possession of the Collateral and render it usable, and repair and
renovate the same, without, however, any obligation so to do, and enter upon
any location where the same may be located for that purpose, control, manage,
operate, rent and lease the Collateral, collect all rents and income from the
Collateral and apply the same to reimburse the Trustee and the holders of
Notes for any cost or expenses incurred hereunder or under the Indenture and
to the payment or performance of any of any Grantor's obligations hereunder or
under the Indenture, and apply the balance to the Notes as provided in the
Indenture and any remaining excess balance to whomsoever is legally entitled
thereto; (viii) secure the appointment of a receiver of the assets of any
Grantor or any part thereof and/or the Collateral or any part thereof; or (ix)
exercise any other or additional rights or remedies granted to a secured party
under the Uniform Commercial Code. If, pursuant to applicable law, rule or
regulation prior notice of any such action is required to be given to any
Grantor, such Grantor hereby acknowledges that the minimum tme required by
such applicable law, rule or regulation or if no minimum is specified, fifteen
(15) business days, shall be deemed a reasonable notice period.
(b) All costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Trustee in connection with any such suit or
proceeding, or in connection with the performance by the Trustee of any of any
Grantor's agreements contained in any exercise of its rights or remedies
hereunder, including any of the Assigned Agreements pursuant to the terms of
this Agreement, together with interest thereon (to the extent permitted by law)
computed at a rate per annum equal to the interest rate on the Notes from the
date on which such costs or expenses are incurred to the date of payment
thereof, shall constitute additional indebtedness secured by this Agreement and
shall be paid by such Grantor to the Trustee on behalf of the Noteholders on
demand.
6. REMEDIES CUMULATIVE; DELAY NOT WAIVER.
(a) No right, power or remedy herein conferred upon or reserved to
the Trustee is intended to be exclusive of any other right, power or remedy, and
every such right, power and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right, power and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy. Resort to any or all security now or hereafter held by the
Trustee, may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both.
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(b) No delay or omission of the Trustee to exercise any right or
power accruing upon the occurrence and during the continuance of any Event of
Default as aforesaid shall impair any such right or power or shall be construed
to be a waiver of any such Event of Default or an acquiescence therein; and
every power and remedy given by this Agreement may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee.
7. COVENANTS. Each Grantor covenants as follows:
(a) Grantor will not directly or indirectly create, incur, assume or
suffer to exist any Liens (except for Permitted Liens) on or with respect to any
property or assets constituting a part of the Collateral and Grantor will at its
own cost and expense promptly take such action as may be necessary to discharge
any such Liens (other than Permitted Liens) on or with respect to any properties
or assets constituting a part of the Collateral assigned by such Grantor.
(b) Any action or proceeding to enforce this Agreement or any
Assigned Agreement may be taken by the Trustee either in Grantor's name or in
the Trustee's name, as the Trustee may deem necessary.
(c) Grantor shall not modify, amend, terminate, waiver or supplement
any provision of any Assigned Agreement, if any such modification, amendment,
termination, waiver or supplement would adversely affect the interest of the
Trustee on behalf of the holders of the Notes in a degree greater than the
manner in which it adversely affects Grantor.
(d) Grantor shall pay, before the imposition of any fine, penalty,
interest or cost attached thereto, all taxes, assessments and other governmental
or non-governmental charges or levies now or hereafter assessed or levied
against the Collateral or upon the security interest provided for herein (except
for Liens for taxes and assessments not then delinquent or which Grantor may,
pursuant to the definition of "Permitted Liens" in the Indenture, permit to
remain unpaid or any charge being contested in good faith for which an adequate
reserve has been established), as well as pay, or cause to be paid, all claims
for labor, materials or supplies which, if unpaid, might become a prior Lien
(other than a Permitted Lien) thereon.
(e) Grantor shall keep the Collateral, or cause the same to be kept,
in good operating condition consistent with reasonable and prudent business
practices.
8. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and
warrants as follows:
(a) Each Assigned Agreement in which Grantor has rights in effect on
the date hereof has been duly authorized, executed and delivered by all parties
thereto and is in full force and effect and is binding upon and enforceable
against all parties thereto in accordance with its terms, subject to applicable
communications bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally, and to the exercise of judicial
discretion in accordance with general principles of equity. There
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exists no default under any such Assigned Agreement by Grantor, or to the best
of Grantor's knowledge, by the other parties thereto.
(b) No effective financing statement or other instrument similar in
effect covering all or any part of Grantor's interest in the Collateral is on
file in any recording office, except such as may have been filed pursuant to
this Agreement or pursuant to the documents evidencing Permitted Liens. The
provisions of this Agreement are effective to create in favor of the Trustee a
valid security interest in the Collateral (to the extent that the Grantor has
rights therein) and, upon the filing of UCC-1 Financing Statements in the filing
offices identified on SCHEDULE I in respect of such portions of the Collateral
in which a security interest may be perfected as a result of such filing, the
Trustee will have a valid and perfected security interest in the Collateral, to
the extent that the Grantor has rights therein (other than proceeds, to the
extent Section 9-306 of the Uniform Commercial Code as in effect in the relevant
jurisdiction(s) is not complied with in respect to such proceeds), subject to no
other Liens except Permitted Liens (as defined in the Indenture), and first
priority except to the extent of Permitted Liens described in the Indenture.
(c) Grantor is lawfully possessed of ownership of the Collateral
(provided that Grantor's rights in certain permits and licenses may, under
applicable law, not be characterized as ownership interests) and has full right,
title and interest in all rights purported to be granted to it under the
Assigned Agreements. Grantor has full power and lawful authority to grant and
assign the Collateral (as collateral) hereunder. Grantor will, so long as any
Obligations shall be outstanding, warrant and defend its title to the Collateral
against the claims and demands of all Persons whomsoever.
(d) Grantor has not assigned any of its rights under the Assigned
Agreements except as provided in this Agreement. Grantor will not make any other
assignment of its rights under the Assigned Agreements.
(e) Grantor shall use its best efforts to obtain any required
consents necessary to effect the collateral assignment of the Satellite
Contract, the Launch Contract and the contract for Launch Insurance, in each
case within 60 days after the date hereof and substantially in the form of
EXHIBIT A hereto.
(f) All subsidiaries of Grantor are listed in Paragraph 1 of SCHEDULE
II; all names of Grantor's predecessors-in-interest are listed in Paragraph 2 of
SCHEDULE II; and all names under which Grantor does business are listed in
Paragraph 3 of SCHEDULE II.
(g) Grantor's place of business, or if Grantor has more than one
place of business, Grantor's chief executive office, is set forth in Paragraph 4
of SCHEDULE II.
(h) Except for the filing or recording of the UCC Financing
Statements described in Section 8(b) and the notice requirements contained in
any applicable FCC regulation and except as otherwise described in Section 11,
no authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required either (i) for the
grant by Grantor of the security interest in the Collateral pursuant to this
Agreement or for the execution, delivery or performance of this
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Agreement by Grantor, or (ii) for the perfection of such security interest or
the exercise by the Trustee of the rights and remedies provided for in this
Agreement.
(i) The execution, delivery and performance by Grantor of this
Agreement and the consummation of the transactions contemplated hereby
(including the creation of the Liens granted hereunder) will not (i) violate
Grantor's constituent organizational documents, (ii) violate any order, judgment
or decree of any Governmental Authorities binding on Grantor or any property or
assets of Grantor, (iii) violate or conflict with any law, rule, regulation, or
Permit applicable to Grantor or any of its properties, (iv) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any agreement, indenture, mortgage, deed of trust, equipment
lease, instrument or other document to which Grantor is a party or pursuant to
which any of its properties or assets are bound, (v) result in or require the
creation or imposition of any Lien upon any material properties or assets of
Grantor (other than the creation of the Liens granted hereunder), or (vi)
require any approval or consent of Grantor's owners; PROVIDED, HOWEVER, that the
exercise of security interests and/or of powers granted the Trustee upon the
Event of Default is subject to the requirements and limitations of the
Communications Act and the FCC Rules including, without limitation, the
requirement of obtaining prior FCC approval to any transfer of control, as the
term "control" is used in the Communications Act and construed by the FCC, and
the restrictions on alien ownership and control established by the
Communications Act and the FCC Rules.
9. FURTHER ASSURANCES.
(a) Each Grantor agrees that from time to time, at its expense, it
will promptly (i) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments, endorsements or notices, and
take such other actions, as may be reasonably necessary or as the Trustee may
reasonably request, in order to perfect and preserve the assignments and
security interests granted or purported to be granted by such Grantor hereby;
and (ii) if any Collateral shall be located outside the United States, but on
the Earth, while title therein is vested in it, ensure that prior to such time
as such Collateral leaves the United States, all necessary steps are taken to
perfect the Trustee's security interest therein pursuant to local law.
Notwithstanding any other provision of this Agreement, neither Grantor shall be
required to perfect the Trustee's security interest in jurisdictions located
outside the United States, but on the Earth, except that each Grantor shall
exercise reasonable efforts to perfect the Trustee's security interest in
jurisdictions where such Grantor has major warehouses.
(b) Each Grantor hereby authorizes the Trustee to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without its signature where permitted by law. Copies
of any such statement or amendment thereto shall promptly be delivered to the
applicable Grantor.
(c) Each Grantor shall pay all filing, registration and recording
fees or refiling, re-registration and re-recording fees, and all expenses
incident to the execution and acknowledgment of this Agreement, any assurance,
and all federal, state, county and municipal stamp taxes and other taxes,
duties, imports, assessments and charges arising
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out of or in connection with the execution and delivery of this Agreement, any
agreement supplemental hereto and any instruments of further assurance.
10. PLACE OF PERFECTION. Each Grantor shall give the Trustee at
least thirty (30) business days' notice before it changes the location of its
chief executive office, or its name, identity or structure, and shall, at its
expense, execute and deliver such instruments and documents as are required to
maintain the priority and perfection of the security interest granted hereby.
Neither Grantor shall change the location of its principal place of business or
chief executive office to any location outside of the United States unless the
Trustee is reasonably satisfied (based upon advice of legal counsel) that the
security interest created under this Agreement will not be adversely affected or
impaired.
11. FCC MATTERS.
(a) If an Event of Default shall have occurred and be continuing,
Grantor shall take any action which the Trustee may request in the exercise of
the Trustee's rights and remedies under this Agreement to transfer and assign to
the Trustee, or to such one or more third parties as the Trustee may designate,
or to a combination of the foregoing, the Collateral; PROVIDED, HOWEVER, that
the Trustee shall provide at least ten days' prior written notice to the FCC and
to the Pledgor before taking any action which may result in repossession of any
Pledged Collateral where required by FCC rules and regulations and not waivable
by Pledgor. To enforce the provisions of this Section 11, the Trustee is hereby
empowered to seek from the FCC any approvals required by the Communications Act
or the FCC rules and regulations including, but not limited to, approval of an
involuntary transfer of control of any FCC license for the purpose of seeking a
BONA FIDE purchaser to whom control of such license will ultimately be
transferred. Each Grantor hereby agrees to authorize such an involuntary
transfer of control of such FCC license upon the request of the Trustee. Upon
the occurrence and continuation of an Event of Default, each Grantor shall use
its best efforts to assist in obtaining approval of the FCC, if required, for
any action or transactions contemplated by this Agreement, including the
preparation, execution and filing with the FCC of such Grantor's portion of any
application or applications for consent to transfer of control necessary or
appropriate under the FCC's rules and regulations for approval of the transfer
or assignment of any portion of the Collateral.
(b) Each Grantor acknowledges that any necessary FCC approvals and
FCC authorization for the transfer of control of the licenses of such Grantor
are integral to the Trustee's realization of the value of the Collateral for the
benefit of the holders of the Notes, that there is no remedy at law for failure
by such Grantor to comply with the provisions of this Section 11 and that such
failure would not be adequately compensable in damages, and therefore each
Grantor agrees that its agreements contained in this Section 11 may be
specifically enforced.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Trustee shall not, without first obtaining approval of the FCC,
take any action pursuant to this Agreement, including, but not limited to, any
action which would constitute or result in any assignment of an FCC license or
transfer of control of any Grantor if such action would require, under then
existing law (including the written rules and regulations of the FCC), the prior
approval of the FCC; nor shall any rights hereunder
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be deemed vested in the Trustee if such vesting would require prior FCC
approval or would be deemed to result in an assignment of an FCC license or
transfer of control of any Grantor, if such assignment or transfer would
require the prior approval of the FCC, unless and until such approval is
obtained.
(d) Each Grantor consents to the transfer of control or assignment of
the Collateral to a receiver, trustee, transferee, or similar official or to any
purchaser of the Collateral pursuant to any public or private sale, judicial
sale, foreclosure or exercise of other remedies available to the Trustee as
permitted by applicable law; PROVIDED, HOWEVER, that the Trustee shall provide
at least ten days' prior written notice to the FCC and to the Pledgor before
taking any action which may result in repossession of any Pledged Collateral
where required by FCC rules and regulations and not waivable by Pledgor.
(e) Notwithstanding anything to the contrary contained in this
Agreement, prior to the occurrence of an Event of Default and compliance with
all applicable laws by the Trustee, this Agreement and the transactions
contemplated hereby do not, will not, and are not intended to, constitute,
create or have the effect of constituting or creating, directly or indirectly,
actual or practical ownership of any Grantor by the Trustee or control,
affirmative or negative, direct or indirect, of any Grantor, over the management
or any other aspect of the operation of such Grantor, which ownership and
control remain exclusively and at all times in such Grantor. Notwithstanding any
other provision of this Agreement, any foreclosure on, sale, transfer or other
disposition of, or the exercise of any right to vote or consent with respect to,
any of the Collateral as provided herein or any other action taken or proposed
to be taken by the Trustee hereunder which would affect the operational, voting,
or other control of any Grantor or any of the Subsidiaries, shall be effected
pursuant to Section 310(d) of the Communications Act of 1934, as amended, and to
the applicable rules and regulations thereunder.
(f) There shall be no communications between the Pledgor and the
Trustee whereby the Trustee shall influence the management and/or operation of
any and all facilities subject to Title III of the Communications Act.
12. MISCELLANEOUS.
(a) NOTICES. All notices and other communications required or
permitted to be given or made under this Agreement shall be in writing and shall
be deemed to have been duly given and received, regardless of when and whether
received, either: (a) on the day of hand delivery; or (b) on the third business
day after the day sent, when sent by United States certified mail, postage and
certification fee prepaid, return receipt requested, addressed as follows:
To the Trustee:
First Trust National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Administration
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To Grantors:
EchoStar DBS Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
and
EchoStar Space Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
or at such other address as the specified entity most recently may have
designated in writing in accordance with this section to the others.
(b) HEADINGS. The headings in this Agreement are for purposes of
reference only and shall not affect the meaning or construction of any provision
of this Agreement.
(c) SEVERABILITY. The provisions of this Agreement are severable,
and if any clause or provision shall be held invalid, illegal or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
(d) AMENDMENTS, WAIVERS AND CONSENTS. Any amendment or waiver of any
provision of this Agreement and any consent to any departure by any Grantor from
any provision of this Agreement shall be effective only if made or given in
compliance with all of the terms and provisions of the Indenture.
(e) INTERPRETATION OF AGREEMENT. Time is of the essence in each
provision of this Agreement of which time is an element.
(f) CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing security interest in the Collateral and shall (i) remain in full
force and effect until payment and performance in full of the Obligations, (ii)
be binding upon each Grantor, its successors and assigns, and (iii) inure,
together with the rights and remedies of the Trustee hereunder, to the benefit
of the Trustee and its successors, transferees and assigns.
(g) REINSTATEMENT. To the extent permitted by law, this Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any amount received by the Trustee in respect of the Obligations is
rescinded or must otherwise be restored or returned by the Trustee, upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Grantor or upon the appointment of any
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receiver, intervenor, conservator, trustee or similar official for any Grantor
or any substantial part of its assets, or otherwise, all as though such
payments had not been made.
(h) SURVIVAL OF PROVISIONS. All representations, warranties and
covenants of any Grantor contained herein shall survive the execution and
delivery of this Agreement, and shall terminate only upon the full and final
payment and performance by such Grantor of the Obligations secured hereby.
(i) AUTHORITY OF THE TRUSTEE. Subject to any applicable requirement
of prior FCC approval and any applicable restrictions established by the
Communications Act and the FCC Rules, the Trustee shall have and be entitled to
exercise all powers hereunder which are specifically granted to the Trustee by
the terms hereof, together with such powers as are reasonably incident thereto.
The Trustee may perform any of its duties hereunder or in connection with the
Collateral by or through agents or employees and shall be entitled to retain
counsel and to act in reliance upon the advice of counsel concerning all such
matters. Neither the Trustee nor any director, officer, employee, attorney or
agent of the Trustee shall be liable to any Grantor for any action taken or
omitted to be taken by it or them hereunder, except for its or their own gross
negligence or willful misconduct, not shall the Trustee be responsible for the
validity, effectiveness or sufficiency of this Agreement or of any document or
security furnished pursuant hereto. The Trustee and its directors, officers,
employees, attorneys and agents shall be entitled to rely on any communication,
instrument or document reasonably believed by it or them to be genuine and
correct and to have been signed or sent by the proper person or persons. Each
Grantor agrees to indemnify and hold harmless the Trustee and any other Person
from and against any and all costs, expenses (including reasonable fees,
expenses and disbursements of attorneys and paralegals (including, without
duplication, reasonable charges of inside counsel)), claims and liabilities
incurred by the Trustee or such Person hereunder, unless such claim or liability
shall be due to willful misconduct or gross negligence on the part of the
Trustee or such Person.
(j) RELEASE; TERMINATION OF AGREEMENT. Subject to the provisions of
Section 12(g), this Agreement shall terminate upon full and final payment and
performance of all the Obligations. At such time, the Trustee shall, at the
request and expense of any Grantor, promptly reassign and redeliver to such
Grantor all of the Collateral hereunder which has not been sold, disposed of,
retained or applied by the Trustee in accordance with the terms hereof. Such
reassignment and redelivery shall be without warranty by or recourse to the
Trustee, except as to the absence of any prior assignments by the Trustee of its
interest in the Collateral, and shall be at the expense of Grantor.
(k) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which, when so executed and delivered, shall be deemed an original but all of
which shall together constitute one and the same agreement.
(l) WAIVERS. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 5(a) AND 11(a),
WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY
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KIND PRIOR TO THE EXERCISE BY THE TRUSTEE OF ITS RIGHTS FROM AND AFTER AN
EVENT OF DEFAULT TO REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR TO
REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL. GRANTOR WAIVES THE POSTING OF ANY
BOND OTHERWISE REQUIRED OF THE TRUSTEE IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON
COLLATERAL, TO ENFORCE ANY JUDGMENT OR OTHER SECURITY FOR THE OBLIGATIONS, TO
ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER, PRELIMINARY OR
PERMANENT INJUNCTION, THIS AGREEMENT;
(ii) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR
CROSS-CLAIM IN RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT
TO, SUCH ACTION OR PROCEEDING;
(iii) WAIVES DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND
ANY NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT EXCEPT FOR NOTICES REQUIRED
UNDER THE COMMUNICATIONS ACT AND/OR THE FCC RULES WHICH ARE NOT WAIVABLE BY
PLEDGOR; AND
(iv) WAIVES PRESENTMENT AND DEMAND FOR PAYMENT OF ANY OF THE
OBLIGATIONS, PROTEST AND NOTICE OF DISHONOR OR DEFAULT WITH RESPECT TO ANY OF
THE OBLIGATIONS.
(m) GOVERNING LAW. The validity, interpretation and enforcement of
this Agreement shall be governed by the laws of the State of New York without
giving effect to the conflict of law principles thereof.
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IN WITNESS WHEREOF, Grantors and the Trustee have caused this Security
Agreement and Collateral Assignment to be duly executed as of the day and year
first above written.
ECHOSTAR SPACE CORPORATION,
a Colorado corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President, General
Counsel and Secretary
ECHOSTAR DBS CORPORATION,
a Colorado corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President, General
Counsel and Secretary
FIRST TRUST NATIONAL
ASSOCIATION, as Trustee
------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President, General
Counsel and Secretary
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SCHEDULE I
UCC-1 FILING LOCATIONS
1. Secretary of State of the State of Colorado
2. Secretary of State of the State of Maryland
3. Secretary of State of the State of Delaware
4 Secretary of State of the State of New York
5. ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇. Secretary of State of the State of California
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SCHEDULE II
MISCELLANEOUS DISCLOSURES
(1) SUBSIDIARIES (Section 8(f)):
DirectSat Corporation
Dish, Ltd.
E-Sat, Inc. (80% owned by Dish, Ltd.)
Echo Acceptance Corporation
Echonet Business Network, Inc.
Echosphere Corporation
Echosphere de Mexico, S. de ▇.▇. de C.V.
EchoStar Capacity Corporation
EchoStar Indonesia, Inc.
EchoStar International Corporation
EchoStar International (Mauritius) Limited
EchoStar Manufacturing and Distribution Private Limited (India)
EchoStar North America Corporation
EchoStar Real Estate Corporation
EchoStar Satellite Broadcasting Corporation
EchoStar Satellite Corporation
FlexTracker Sdn. Bhd.
Houston Tracker Systems, Inc.
HT Ventures, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇ USA, Ltd. (a partnership)
Satellite Source, Inc.
Satrec Mauritius Limited (40% owned by EchoStar International Corporation)
(2) PREDECESSORS-IN-INTEREST (Section 8(f)):
None
(3) DBA'S (Section 8(f)):
None
(4) PLACE OF BUSINESS OR CHIEF EXECUTIVE OFFICE (Section 8(g)):
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "CONSENT AND AGREEMENT") is executed
by the Undersigned (as defined below) for the benefit of FIRST TRUST NATIONAL
ASSOCIATION (the "TRUSTEE"), as Trustee under a certain Indenture ("INDENTURE")
between the Trustee and EchoStar DBS Corporation, a Colorado corporation (the
"ISSUER") and secured party under a Security Agreement of even date therewith
("SECURITY AGREEMENT") and is acknowledged and agreed to by the Company (as
defined below).
The "UNDERSIGNED" is ____________________________________________________,
a _____________________________________________________________________.
RECITALS
A. The Undersigned and the Company have entered into the following
agreement (including the amendments, if any, listed as items (2) and beyond, and
as such agreement may have been amended from time to time, the "CONTRACT"):
(1) _____________________ between the Undersigned and
__________________ (the "COMPANY") dated as of _______________.
B. Pursuant to the Security Agreement, the Company has assigned its
interest under the Contract to the Trustee as collateral for the Company's
obligations with respect to the Senior Secured Notes of the Issuer ("NOTES") and
certain other obligations, all as set forth in the Indenture.
NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy is hereby acknowledged, the
Undersigned agrees as follows:
1. The Undersigned acknowledges and consents to the collateral
assignment referred to in Recital B, constituting any consent required under the
Contract.
2. The Undersigned acknowledges and, upon an Event of Default under
the Indenture, consents to the foreclosure upon the Contract by the Trustee or
its designee, successor or assignee, and subject to the Undersigned's consent,
which consent shall not be unreasonably withheld, the consequent replacement of
the Company under the Contract by the Trustee, its designee, successor or
assignee, or another purchaser or assignee. For purposes of this Paragraph 2,
the failure to provide such consent shall presumptively be deemed to be
unreasonable where (a) all reasonable requirements imposed by the Undersigned as
a result of any rule, regulation or law to which it is bound have been satisfied
and (b) any successor to the Company under the Contract (i) expressly
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assumes the Company's obligations thereunder for the benefit of the
Undersigned, (ii) succeeds to substantially all of the right, title, and
interest in and to all assets of the Company reasonably necessary for such
successor to perform its obligations under the Contract and (iii) is at least
as creditworthy as the Company at the time it originally executed the
Contract; provided, however, that any replacement of the Company under the
contract as permitted hereunder shall be effective only following written
notice to the Undersigned of such foreclosure (the "FORECLOSURE NOTICE").
Upon such succession and assumption by a party other than the Trustee, the
Trustee shall be released from any further liability under the Contract.
3. Following the delivery to the Underwriter of the Foreclosure
Notice, the Trustee shall be entitled to exercise all rights and to cure any
defaults of the Company under the Contract pursuant to the terms thereof. Upon
receipt of notice from the Trustee, the Undersigned agrees to accept such
exercise and cure by the Trustee and to render all or any part of the
performance due by the Undersigned under the Contract to the Trustee. The
Undersigned agrees to make all payments to be made by it under the Contract
directly to the Trustee upon receipt of the Trustee's written instructions.
4. The Undersigned shall not terminate the Contract by reason of any
default by the Company without first giving the Trustee at least 30 days prior
written notice of its intention to terminate the Contract and permitting the
Trustee to cure such default during such 30-day period or, in the event that the
Trustee is prohibited by applicable law from curing such default during such
30-day period, such longer period as shall be reasonably necessary. During any
such period for cure, the Undersigned shall be entitled to suspend its
activities or reschedule any launch as provided in Paragraph __ of the Contract.
5. In the event that the Contract is rejected by a trustee or
debtor-in-possession in any bankruptcy or insolvency proceeding and if, within
forty-five (45) days after such rejection, the Trustee or its successors or
assigns shall so request, the Undersigned will execute and deliver to the
Trustee a new Contract, which Contract shall be on the terms and conditions as
the original Contract for the remaining term of the Contract before giving
effect to such termination, subject to the proviso contained in paragraph 4
above.
6. In any event that the Contract is rejected by a trustee or
debtor-in-possession in any bankruptcy or insolvency proceeding and if, within
forty-five (45) days after such rejection, the Trustee or its successors or
assigns so request, the Undersigned shall after all final obligation of the
Company and the Trustee have been cured, executed and deliver to the Trustee
Undersigned will cooperate with the Trustee or its successor or assign in
preparing and executing a new contract with terms substantially identical to the
Contract, except relating solely to EchoStar IV, and for purposes of this
Consent and Agreement, the term "Contract" shall refer to such new contract.
The parties acknowledge and agree that, upon a foreclosure upon the Contract by
the Trustee, the Company will retain, and this Consent and Agreement shall not
affect, the Company's rights and obligations under the original Contract with
respect to launches other than EchoStar IV.
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7. The Undersigned agrees to provide the Trustee with all written
notices relating to any material breach by the Company under the Contract,
provided that the Undersigned has been provided with an address to which such
notices shall be sent.
8. The Undersigned represents and warrants that:
i. As of the date hereof, the Contract is in full force and effect
and has not been amended, supplemented or modified except pursuant to the
amendments listed in Paragraph A; and
ii. This Consent and Agreement shall be binding upon and benefit
the successors and assigns of the Undersigned, the Company, the Trustee and
their respective successors, transferees and assigns. No termination, amendment,
variation or waiver of any provisions of this Consent and Agreement shall be
effective unless in writing and signed by the party to be bound thereby. This
Consent and Agreement shall be governed by the laws of the State of New York.
iii. This Consent and Agreement may be executed in one or more
duplicate counterparts, and when executed and delivered by all the parties
listed below, shall constitute a single binding agreement.
IN WITNESS WHEREOF, the Undersigned by its officer thereunto duly
authorized, has duly executed this Consent and Agreement on the date set forth
below.
Dated: , 1997 ------------------------------
-----------
By: --------------------------
Name:
Title:
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Accepted and agreed to:
[INSERT NAME OF COMPANY]
By:
-------------------------------
Name:
Title:
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