EXHIBIT 10.3
INDEMNITY AGREEMENT
This Indemnity Agreement (the "Agreement" or the "Indemnity Agreement") is
dated the ___ day of April, 1999 among the entities listed on the signature
pages hereof as Holders (each individually a "Holder" and collectively, the
"Holders"), and the parties listed on the signature pages hereof as Indemnitors
(each individually an "Indemnitor" and collectively, the "Indemnitors").
RECITALS
A. PRIMESTAR, Inc. ("Primestar") is the obligor with respect to (i) notes
("Bridge Loans") issued by Primestar pursuant to the Senior Subordinated Credit
Agreement dated as of April 1, 1998, (ii) Primestar's 12-1/4% Senior
Subordinated Discount Notes due 2007, Series A and B (the "Discount Notes") and
(iii) Primestar's 10-7/8% Senior Subordinated Notes due 2007, Series A and B
(the "Current Pay Notes" and, together with the Bridge Loans and the Discount
Notes, the "Notes").
B. The Holders have entered into a lock-up agreement (the "Lock-up
Agreement") with Primestar under the terms of which the Holders will agree to
exchange with Primestar each one thousand ($1,000) dollars principal amount of
Notes (pursuant to the terms of the Lock-up Agreement) for the consideration set
forth in Section 2 of the Lock-up Agreement (the "Exchange Consideration").
Capitalized terms used herein but not defined shall have the meanings ascribed
to such terms in the Lock-up Agreement.
C. Affiliates of the Indemnitors are stockholders of Primestar and/or the
account parties under certain outstanding standby letters of credit that secure
certain other obligations of Primestar or its subsidiaries and will derive
substantial benefits as a result of Primestar consummating the transactions
contemplated by the Lock-up Agreement.
D. Indemnitors' delivery to the Holders of this Indemnity Agreement is a
condition to the Holders' consummation of the transactions contemplated by the
Lock-up Agreement.
E. The Indemnitors are the Funding Parties (as defined in the Funding
Agreement).
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements contained herein and in the Lock-up Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby covenant and agree as follows:
AGREEMENTS
1. Indemnification.
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Subject to the condition precedent set forth in Section 2 of this
Agreement, each of the Indemnitors agrees to indemnify and hold harmless each
Holder, each beneficial owner of, or party with an interest in, Notes held by
such Holder and their officers, directors, agents and advisers (collectively,
the "Indemnitees") from and against such Indemnitor's Pro Rata Share (as defined
in the Funding Agreement) of any and all losses, claims, damages, liabilities
and expenses (including, without limitation, all reasonable legal fees and other
costs of defense) ("Loss") which the Indemnitees, or any of them, may become
subject by reason of any action to avoid the transfer of, or otherwise recover,
the Exchange Consideration, (which shall include any transfer or payment made in
respect of or as security for any Exchange Consideration) any portion thereof or
the value thereof, brought by or on behalf of any bankruptcy estate of Primestar
or any affiliate of Primestar, or any assignee of such bankruptcy estate, or any
present or future creditor of Primestar or any affiliate of Primestar, or any
assignee of such a creditor, under (S)(S)544, 547, 548 or 550 of the United
States Bankruptcy Code or under the Uniform Fraudulent Transfer Act, the Uniform
Fraudulent Conveyance Act or any similar preference or fraudulent conveyance
provision of statute or common law as in effect in any state or other
jurisdiction; provided, however, that no Indemnitor shall indemnify an
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Indemnitee if such Indemnitee files an involuntary bankruptcy against Primestar
or any of its affiliates at any time after the closing of the transactions
contemplated by the Lock-up Agreement; provided, further, that no Indemnitor
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shall have any liability for the payment duties or other obligations of any
other Indemnitor hereunder, as guarantor, co-obligor or otherwise.
2. Condition Precedent.
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Anything contained herein to the contrary notwithstanding, the obligations
of each Indemnitor under Section 1 of this Agreement shall not be applicable,
and shall have no force or effect, unless (i) such Indemnitor shall be in
default in any material respect of the obligations of such Indemnitor under the
Funding Agreement, or (ii) in respect of a Loss resulting from a bankruptcy case
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of Primestar, such Indemnitor or any affiliate of such Indemnitor shall have
received any recovery or distribution from the bankruptcy estate of Primestar in
such bankruptcy case (a "Recovery"), and then only to the extent of such
Recovery.
3. Assignment of Recovery.
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In the event that any Indemnitor or any affiliate of such Indemnitor shall
receive any Recovery, whether or not such Indemnitor or affiliate sought a
Recovery, such Recovery shall be held in trust for the benefit of the
Indemnitees and will be turned over to the Indemnitees within five business days
after such receipt for application to the obligations, if any, of such
Indemnitor under Section 1 above, until such obligations shall have been
satisfied in full.
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4. Binding Effect.
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This Agreement shall be binding on and inure to the benefit of the parties
hereto and their respective successors and assigns. No assignment by an
Indemnitor shall relieve an Indemnitor from its obligations hereunder.
5. Notices.
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All notices, requests, demands, claims, and other communications hereunder
will be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly given (i) upon telephonic confirmation of
facsimile, (ii) when sent by overnight delivery or (iii) when mailed by
registered or certified mail return receipt requested and postage prepaid, to
the addresses listed on the signature pages hereto. Any party may send any
notice, request, demand, claim, or other communication hereunder to the intended
recipient at the address, telephone number or telecopier number for such
recipient (i) if such recipient is an Indemnitor, as set forth on the signature
pages hereof, with a copy to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 705-5000
Telecopy: (212) 705-5125
Attention: Marc A. Leaf, Esq.
and (ii) if such recipient is a Holder, as set forth on the signature pages
hereto, with copies to:
Orrick, Herrington & Sutcliffe, LLP
666 Fifth Avenue
New York, New York 10022
Telephone: (212) 506-5000
Telecopy: (212) 506-5151
Attention: Duncan N. Darrow, Esq.
and
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Telephone: (617) 951-7000
Telecopy: (617) 951-7050
Attention: William F. McCarthy, Esq.
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is
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received by the intended recipient. Any party may change the address to which
notices, requests, demands, claims, and other communications hereunder are to be
delivered by giving the other party notice in the manner herein set forth.
6. General; Choice of Law; Consent to Jurisdiction.
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The invalidity or unenforceability of any provision hereof shall not affect
the validity or enforceability of any other provision hereof, and any invalid or
unenforceable provision shall be modified so as to be enforceable to the maximum
extent of its validity or enforceability. The headings in this Agreement are for
convenience of reference only and shall not limit, alter or otherwise affect the
meaning hereof. This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior and
current understandings and agreements, whether written or oral, with respect to
such subject matter. This Agreement may be executed in any number of
counterparts, which together shall constitute one instrument. No amendment of
any provision of this Indemnity Agreement shall be valid unless the same shall
be in writing and signed by the Holders and the Indemnitors. This Agreement
shall be construed in accordance with and governed by the internal laws of the
State of New York without giving effect to any conflicts of laws principles.
Each party hereto hereby irrevocably submits to the jurisdiction of any New York
State court sitting in the Borough of Manhattan or any federal court sitting in
the Borough of Manhattan in respect of any suit, action or proceeding arising
out of or relating to this Agreement and the transactions pursuant hereto and in
connection herewith, and irrevocably agrees that all claims in respect of any
such suit, action or proceeding shall be heard and determined in such court.
Each party irrevocably waives any objection which it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.
7. Agreement on Certain Trading Activities.
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Each Indemnitor agrees that during the 15 calendar day period from and
including April 21, 2000, through and including May 5, 2000, it shall refrain,
and shall cause Primestar to refrain, from any trading activity in shares of the
Class H Common Stock, par value $.10 per share, of General Motors Corporation
(the "GMH Stock"), or any security convertible into, or exercisable or
exchangeable for, shares of GMH Stock, with the purpose of reducing the market
price of the GMH Stock over such 15 calendar day period. Without limiting the
generality of the foregoing, nothing in this Section 7 shall be construed to
prohibit any trading, portfolio, treasury or pension management activity in the
ordinary course of business by or on behalf of an Indemnitor. Anything
contained herein to the contrary notwithstanding, in the event of any
"Reorganization Event," as such term is defined in the Share Appreciation
Rights, all references in this Section 7 to shares of GMH Stock shall thereafter
mean and refer to shares of "Covered Stock," as such term is defined in the
Share Appreciation Rights.
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnity
Agreement on the date first written above.
HOLDER:
____________________________________________
(Please type or print proper name of Holder)
By:________________________________________
Name:_____________________________________
Title:_____________________________________
Address: ___________________________________
___________________________________
___________________________________
Telecopy No.:_______________________________
Telephone No.:______________________________
INDEMNITORS:
____________________________________
(Please type or print proper name of Indemnitor)
By:______________________________________
Name:____________________________________
Title:___________________________________
Address:___________________________________
___________________________________
___________________________________
Telecopy No.:______________________________
Telephone No.:_____________________________