EXHIBIT 4.10
EXECUTION COPY
RESTRUCTURING AGREEMENT
BY AND AMONG
SATELITES MEXICANOS, S.A. DE C.V.,
SERVICIOS CORPORATIVOS SATELITALES, S.A. DE C.V.,
SUPPORTING EQUITY HOLDERS,
SUPPORTING FRN HOLDERS
- AND -
SUPPORTING NOTEHOLDERS
AS OF MARCH 31, 2006
RESTRUCTURING AGREEMENT
PREFACE
This RESTRUCTURING AGREEMENT (this "Agreement"), dated as of March 31,
2006, is entered into by and among:
(a) Satelites Mexicanos, S.A. de C.V. (the "Company");
(b) Servicios Corporativos Satelitales, S.A. de C.V. ("Servicios");
(c) Loral Skynet Corporation and Loral SatMex Ltd. (collectively,
"Loral");
(d) Principia, S.A. de C.V. ("Principia" and, together with Loral, the
"Supporting Equity Holders");
(e) the undersigned beneficial owners (or investment managers or advisors
with power to vote or dispose of all or substantially all of the
relevant securities on behalf of the beneficial owners) of the Senior
Secured Floating Rate Notes due June 30, 2004, identified on Exhibit B
hereto (the "Supporting FRN Holders"); and
(f) the undersigned beneficial owners (or investment managers or advisors
with power to vote or dispose of all or substantially all of the
relevant securities on behalf of the beneficial owners) of the 10-1/8%
Senior Notes due November 1, 2004, identified on Exhibit B hereto (the
"Supporting Noteholders" and, together with the Supporting Equity
Holders, the Supporting FRN Holders and each other beneficial owner
(or investment managers or advisors with power to vote or dispose of
all or substantially all of the relevant securities on behalf of the
beneficial owners) of the FRNs, Senior Notes and the Existing Equity
(each as defined below) that executes, after the date hereof, a
counterpart signature page to this Agreement as provided in section 25
below or an Accession Agreement in accordance with the terms hereof,
the "Supporting Holders," and each, individually, a "Supporting
Holder").
For purposes hereof, all references in this Agreement to Supporting Holders
shall mean, as of any date of determination, those Supporting Holders who have
executed and delivered this Agreement as an original signatory on or before the
date of this Agreement, together with those additional Supporting Holders who
after the date of this Agreement, but on or before any such date of
determination, have become party to this Agreement by executing and delivering
counterpart signature pages as provided in section 25 below or an Accession
Agreement in accordance with the terms hereof, other than those Supporting
Holders, if any, who after the date of this Agreement cease to be a party hereto
in accordance with the terms of this Agreement. After the date of this
Agreement, as other Supporting Holders become signatories to this Agreement or
Supporting Holders cease to be parties hereto in accordance with the terms of
this Agreement, Exhibits B and/or C, as applicable, to this Agreement shall be
deemed to be updated to include such Supporting Holder and the Securities (as
defined below) held by such Supporting Holder, and to exclude any such
Supporting Holder that ceases to be a party hereto.
Capitalized terms used in this Agreement shall have the meaning ascribed to
them in section 1 hereof, unless otherwise defined in the Term Sheet (as defined
below), in which case any such term shall have the meaning ascribed to it in the
Term Sheet.
RECITALS
Whereas, (i) on June 29, 2005, the Company initiated the Concurso
Proceeding by filing a concurso mercantil petition; (ii) on September 7, 2005,
the Mexican Bankruptcy Court declared the Company in concurso mercantil under
the MBRA; (iii) on October 11, 2005, the Mexican Bankruptcy Court appointed
Thomas Stanley Heather Rodriguez as conciliador in the Concurso Proceeding (the
"Conciliador"); (iv) on December 30, 2005, the Mexican Bankruptcy Court issued a
judgment acknowledging claims (sentencia de reconocimiento, graduacion y
prelacion de creditos) (the "Recognition Judgment"); and (v) under the MBRA, the
Conciliador is required to attempt to facilitate a plan of reorganization
(Convenio Concursal) that he believes is supported by the Company and holders of
a majority of Recognized Claims, to submit such plan (Convenio Concursal) to
such holders for their assent and, if applicable, execution, and to subsequently
file such plan (Convenio Concursal) with the Mexican Bankruptcy Court for its
approval, as executed by the Company and by the requisite number and amount of
holders of Recognized Claims as provided by the MBRA.
Whereas, the Company, the Ad Hoc FRN Committee, the Ad Hoc Senior Note
Committee and the Supporting Equity Holders, with the support of the
Conciliador, have engaged in good faith negotiations with the objective of
consummating the Restructuring.
Whereas, to expedite and ensure the implementation of the Restructuring,
the Company is prepared to commit, on the terms and subject to the conditions of
this Agreement and Applicable Law, to execute the Concurso Plan, subject to the
terms hereof, and take the steps described herein and in the Term Sheet to
effect the Restructuring.
Whereas, to expedite and ensure the implementation of the Restructuring,
Servicios and each of the Supporting Equity Holders is prepared to commit, on
the terms and subject to the conditions of this Agreement and Applicable Law, to
support the approval, execution and consummation of the Concurso Plan, take the
steps described herein and in the Term Sheet to effect the Restructuring, and to
perform its other obligations hereunder, if any.
Whereas, to expedite and ensure the implementation of the Restructuring,
each Supporting Holder (other than the Supporting Equity Holders) is prepared to
commit, on the terms and subject to the conditions of this Agreement, to, if and
when solicited to do so, execute (or, in the case of Supporting Noteholders,
subject to the terms hereof, instruct the indenture trustee of the Senior Notes
to execute, and, if allowed under the MBRA, to allow such Supporting Noteholders
to execute) the Concurso Plan as part of the Restructuring and to support its
approval, and to perform its other obligations hereunder, if any.
Whereas, as specified further herein, to consummate the implementation of
the Restructuring, each Supporting Holder is prepared to commit, on the terms
and subject to the conditions of this Agreement and applicable bankruptcy law,
to, if and when solicited to do so, vote (or, in the case of managed accounts,
instruct its custodial agents to vote) to accept the Chapter 11 Plan in a case
as part of the Restructuring in the Bankruptcy Court under chapter 11
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of the Bankruptcy Code with respect to the Company (the "Chapter 11 Case"), to
support confirmation of the Chapter 11 Plan, and to perform its other
obligations hereunder, if any.
Whereas, to expedite and ensure the implementation of the Restructuring,
Servicios and each of the Supporting Holders acknowledge the necessity of the
Servicios Restructuring and are prepared to commit (as may be applicable), on
the terms and subject to the conditions of this Agreement and Applicable Law, to
support the approval and consummation of the Servicios Restructuring.
Now, therefore, in consideration of the promises and the mutual covenants
and agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the parties signatory to this Agreement, intending to be bound hereby,
agrees as follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"304 Proceeding" means that proceeding commenced ancillary to the Concurso
Proceeding pursuant to section 304 of the Bankruptcy Code in the Bankruptcy
Court by the Company on August 4, 2005 and styled as In re Satelites Mexicanos,
S.A. de C.V., Case No. 05-16103 (RDD).
"304 Stipulation" means the Stipulation, Agreement and Order, a copy of
which is annexed as Annex G hereto, executed on behalf of the Company, the
Supporting FRN Holders, the Supporting Noteholders and Loral (together with its
affiliated entities) on or about the date hereof, in connection with the 304
Proceeding.
"Accession Agreement" means the instrument of accession attached hereto as
Annex B.
"Ad Hoc Senior Note Committee" means the informal committee of holders of
the Senior Notes, the members of which are set forth in Annex D hereto, that,
directly and through its legal and financial advisors, has negotiated the terms
of the Restructuring with the Company.
"Ad Hoc FRN Committee" means the informal committee of holders of the FRNs,
the members of which are set forth in Annex D hereto, that, directly and through
its legal and financial advisors, has negotiated the terms of the Restructuring
with the Company.
"Agreement" shall have the meaning ascribed to that term in the Preface and
shall include all annexes and exhibits hereto, all of which are incorporated by
reference herein, and all amendments and modifications made pursuant hereto.
"Akin" shall have the meaning ascribed to that term in section 8(a) of this
Agreement.
"Applicable Law" means, with respect to any Person, any Law applicable to
such Person or its business, properties or assets.
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"Article 980" shall have the meaning ascribed to that term in section
5A(a)(iv) of this Agreement.
"Bankruptcy Code" means title 11 of the United States Code, 11 U.S.C.
Sections. 101-1532 (as may be amended).
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York.
"Bondholder Equity" shall have meaning ascribed to that term in the Term
Sheet.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in either New York City or Mexico City are authorized or
required by Applicable Law to close. Any event scheduled to occur on a day that
is not a Business Day shall be deferred until the next succeeding Business Day.
"CAAYS" shall have the meaning ascribed to that term in section 8(a) of
this Agreement.
"CAN" shall have the meaning ascribed to that term in section 8(a) of this
Agreement.
"Chanin" shall have the meaning ascribed to that term in section 8(a) of
this Agreement.
"Chapter 11 Case" shall have the meaning ascribed to that term in the
Recitals.
"Chapter 11 Filing Deadline" shall mean July 14, 2006.
"Chapter 11 Filing Trigger" shall have the meaning ascribed to that term in
section 3(b) of this Agreement.
"Chapter 11 Order Date" shall mean the date that the Chapter 11 Plan Order
is entered on the Bankruptcy Court's docket.
"Chapter 11 Plan" means a plan of reorganization of the Company filed in
the Chapter 11 Case, which plan shall be substantially on the terms and
conditions set forth in the Term Sheet, restructuring the debt and equity of the
Company.
"Chapter 11 Plan Order" means an order by the Bankruptcy Court in the
Chapter 11 Case confirming the Chapter 11 Plan.
"CNIE" means the Foreign Investments National Commission (Comision Nacional
de Inversiones Extranjeras) of Mexico.
"COFECO" means the Federal Antitrust Commission (Comision Federal de
Competencia) of Mexico.
"Committees" means the Ad Hoc FRN Committee and the Ad Hoc Senior Note
Committee, collectively.
"Company" shall have the meaning ascribed to that term in the Preface.
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"Conciliador" shall have the meaning ascribed to that term in the Recitals.
"Conciliador Termination Notice" shall have the meaning ascribed to that
term in section 2(b) of this Agreement.
"Conciliador's Submission" means the submission by the Conciliador of the
Concurso Plan to the holders of Recognized Claims in accordance with the first
and second paragraphs of article 161 of the MBRA.
"Concurso Filing Deadline" means the tenth (10th) Business Day following
the effective date of the Conciliador's Submission.
"Concurso Filing Trigger" means the receipt by the Conciliador of executed
counterpart signature pages of the Concurso Plan from the Required Noteholders.
"Concurso Plan" means a plan of reorganization (Convenio Concursal) of the
Company filed in the Concurso Proceeding, which plan shall (a) be substantially
on the terms and conditions set forth in the Term Sheet and (b) set forth the
manner for implementing the restructuring of the debt and equity of the Company
through consummation of the Chapter 11 Plan.
"Concurso Plan Order" means a final and non-appealable order entered by the
Mexican Bankruptcy Court approving the Concurso Plan.
"Concurso Proceeding" means the proceeding for the Company under the MBRA
currently pending before the Mexican Bankruptcy Court under file number
129/2005.
"Confidential Information" shall have the meaning ascribed to that term in
section 5(b) of this Agreement.
"Confirmation of Termination" shall have the meaning ascribed to that term
in section 2(b) of this Agreement.
"Debt" means the term debt as defined in section 101(12) of the Bankruptcy
Code.
"Designee" shall have the meaning ascribed to that term in section
5A(a)(iv) of this Agreement.
"Disclosure Statement" means a disclosure statement for the Chapter 11 Plan
prepared in accordance with the requirements of section 1125 of the Bankruptcy
Code.
"Effective Date" means the first Business Day on which (a) all conditions
precedent to the effectiveness of the Chapter 11 Plan have been satisfied or
waived pursuant to the terms of the Chapter 11 Plan and (b) the Chapter 11 Plan
Order has become a final non-appealable order.
"Enlaces" shall have the meaning ascribed to that term in the Term Sheet.
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"Equity Documents" shall have the meaning ascribed to that term in section
11(b) of this Agreement.
"Equity Holder Documents" shall have the meaning ascribed to that term in
section 11(f) of this Agreement.
"Equity Trust" shall have meaning ascribed to that term in the Term Sheet.
"Evercore" shall have the meaning ascribed to that term in section 8(h) of
this Agreement.
"Existing Equity" means the issued and outstanding common stock (Series "A"
or "B"), the convertible preferred stock (Series "C") and the neutral investment
stock (Series "N"), which represent all of the Company's issued and outstanding
capital stock, identified on Exhibit C hereto.
"Firmamento" means Firmamento Mexicano, S. de R.L. de C.V.
"First Priority Senior Secured Notes" shall have the meaning ascribed to
that term in the Term Sheet.
"First Priority Senior Secured Notes Documents" shall have the meaning
ascribed to that term in section 11(c) of this Agreement.
"FRN Advisors" shall have the meaning ascribed to that term in section 8(a)
of this Agreement.
"FRNs" means the Senior Secured Floating Rate Notes due June 30, 2004,
issued by the Company, in the aggregate outstanding principal amount of U.S.
$203,400,000 as of the date hereof.
"FRN Collateral Trustee" shall have the meaning ascribed to such term in
section 4(a) of this Agreement.
"Governmental Authority" means any entity exercising executive,
legislative, judicial, regulatory or administrative functions (or other similar
functions) of or pertaining to any national, federal, state, municipal, regional
or local government (whether foreign or domestic), including any governmental
authority, agency, department, board, commission or instrumentality or any
political subdivision thereof, and any tribunal, court or arbitrator(s) of
competent jurisdiction.
"Grant Holders" shall have the meaning ascribed to that term in section
5A(a)(iv) of this Agreement.
"Initial Draft" shall have the meaning ascribed to that term in section
5A(a)(iii) of this Agreement.
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"Intercreditor Agreement" shall have the meaning ascribed to that term in
section 11(e) of this Agreement.
"Law" means any law (including common law), statute, code, ordinance, rule,
regulation or other requirement enacted, promulgated, issued or entered by any
Governmental Authority.
"Lease Agreements" means collectively (i) that certain Agreement Concerning
the Lease of Transponders dated June 14, 2005, between the Company and Loral
Skynet, a division of Loral SpaceCom Corporation, as amended and (ii) that
certain Agreement Concerning the Lease of Transponders dated June 14, 2005,
between the Company and SS/L (as assignee of Loral Space & Communications
Corporation), as amended.
"Local Rules" means the Local Bankruptcy Rules for the Bankruptcy Court.
"Loral" shall have the meaning ascribed to that term in the Preface.
"Loral Documents" means the documents set forth on Exhibit F hereto.
"Loral Entities" shall have the meaning ascribed to that term in section
5A(a)(iv) of this Agreement.
"Loral Grant" shall have the meaning ascribed to that term in section
5A(a)(iv) of this Agreement.
"Loral Pledge" shall mean that certain pledge of 473,449 Series C,
Sub-Series C-1, shares of the Company pursuant to the Security Agreement, dated
November 21, 2005, by and among the Bank of New York, Loral Skynet Corporation
and certain subsidiaries of Loral Skynet Corporation signatories thereto to
secure Loral Skynet Corporation's 14% Senior Secured Notes due 2015.
"Loral Settlement Agreements" means collectively (i) that certain
Settlement Agreement (the "Settlement Agreement") dated June 14, 2005, by and
among the Company, Loral Space & Communications Corporation, Loral SpaceCom
Corporation, Loral Skynet, a division of Loral SpaceCom Corporation, Loral
Skynet Network Services, Inc. and SS/L, (ii) the New Agreements (as defined in
the Settlement Agreement) and (iii) the Active Capacity Agreements (as defined
in the Settlement Agreement).
"Loral Termination Notice" shall have the meaning ascribed to that term in
section 5A(a) of this Agreement.
"Loral Transponders" means those transponders that are the subject of the
Lease Agreements.
"Loral Usufructo" shall have the meaning ascribed to that term in section
5A of this Agreement.
"MAH" shall have the meaning ascribed to that term in section 8(a) of this
Agreement.
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"Majority FRN Holders" means, as of any applicable date of determination,
holders of FRNs who are signatories to this Agreement that hold at least
fifty-one percent (51%) of the principal amount of all outstanding FRNs.
"Majority Noteholders" means, as of any applicable date of determination,
holders of Senior Notes who are signatories to this Agreement that hold at least
fifty-one percent (51%) of the principal amount of all outstanding Senior Notes.
"MBRA" means the Ley de Concursos Mercantiles, published in the Official
Gazette of the Federation (Diario Oficial de la Federacion) on May 12, 2000, as
amended from time to time.
"Mexican Bankruptcy Court" means the Second Federal District Court for
Civil Matters in Mexico City, Mexico.
"MXP" means pesos, the legal currency of Mexico.
"Outside Date" means, with respect to the Concurso Plan Order, July 29,
2006; with respect to the Chapter 11 Plan Order, the date that is one hundred
and twenty (120) days from the date on which the Petition is filed with the
Bankruptcy Court by the Company; and, with respect to the Effective Date, the
date that is sixty (60) days from the Chapter 11 Order Date.
"Person" means any individual, partnership, corporation, limited liability
company, association, trust, joint venture, unincorporated organization or other
entity.
"Petition" means a voluntary petition for bankruptcy under chapter 11 of
the Bankruptcy Code to be filed by the Company to effectuate and implement the
Restructuring through the Chapter 11 Plan in accordance with section 3 of this
Agreement.
"Plan and Approval Documents" shall have the meaning ascribed to that term
in section 11(a) herein.
"Principia" shall have the meaning ascribed to that term in the Preface.
"Recognition Judgment" shall have the meaning ascribed to that term in the
Recitals.
"Recognized Claims" means those claims against the Company specified in the
Recognition Judgment and identified on Exhibit D hereto.
"Required FRN Holders" means, as of any applicable date of determination,
holders of FRNs that hold at least sixty-seven percent (67%), in the aggregate,
of the principal amount of all outstanding FRNs.
"Required Noteholders" means, as of any applicable date of determination,
holders of Senior Notes that hold at least sixty-seven percent (67%), in the
aggregate, of the principal amount of all outstanding Senior Notes.
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"Restructuring" means the restructuring of the debt and equity of the
Company substantially on the terms and conditions set forth in the Term Sheet
and as otherwise provided in this Agreement through the (i) Concurso Plan and
(ii) Chapter 11 Plan.
"Restructuring Documents" shall have the meaning ascribed to that term in
section 11(g) of this Agreement.
"Satmex 5 Satellite" means Satmex's satellite referred to as "Satmex 5."
"Satmex 6 Satellite" means the Satmex 6 satellite provided to the Company
pursuant to the contract dated June 14, 2005 (as amended), between SS/L and the
Company.
"SCT" means the Ministry of Communication and Transportation (Secretaria de
Comunicaciones y Transportes) of Mexico.
"Second Priority Senior Secured Notes" shall have the meaning ascribed to
that term in the Term Sheet.
"Second Priority Senior Secured Notes Documents" shall have the meaning
ascribed to that term in section 11(d) of this Agreement.
"Securities" means the FRNs, the Senior Notes and the Existing Equity.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Note Advisors" shall have the meaning ascribed to that term in
section 8(a) of this Agreement.
"Senior Notes" means the 10-1/8% Unsecured Senior Notes due November 1,
2004, issued by the Company, in the aggregate outstanding principal amount of
U.S. $320,000,000 as of the date hereof.
"Servicios" shall have the meaning ascribed to that term in the Preface.
"Servicios Proceeding" means the proceeding for Servicios under the MBRA
currently pending before the Mexican Bankruptcy Court, which proceeding shall
reflect the terms and conditions set forth in the Term Sheet, and which
proceeding shall be converted from the conciliation phase to the quiebra phase
in accordance with this Agreement.
"Servicios Restructuring" means the liquidation of the assets of Servicios
in the Servicios Proceeding through the transfer by the liquidator (sindico) to
the Mexican Government of the rights of Servicios under the Equity Trust to
receive payment of any amounts resulting from the future sale or disposition of
the shares to be contributed and the shares underlying the interests to be
contributed by Servicios to such Equity Trust in full satisfaction of the
obligation of Servicios to the Mexican Government arising from that certain
agreement dated December 29, 1997 (the "Menoscabo").
"Sitrick" shall have the meaning ascribed to that term in section 8(a) of
this Agreement.
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"Solicitation Materials" means the Disclosure Statement, ballots to vote
for or against the Chapter 11 Plan and other related materials that are
distributed by the Company in accordance with an order of the Bankruptcy Court
authorizing, among other things, procedures for the solicitation of votes on the
Chapter 11 Plan.
"SS/L" means Space Systems/Loral Inc., a corporation organized under the
laws of the State of Delaware.
"Subsequent Concurso Proceeding" shall have the meaning ascribed to that
term in section 3(f) of this Agreement.
"Successive Draft" shall have the meaning ascribed to that term in section
5A(a)(iii) of this Agreement.
"Supporting Equity Holders" shall have the meaning ascribed to that term in
the Preface.
"Supporting FRN Holders" shall have the meaning ascribed to that term in
the Preface.
"Supporting Holder" and "Supporting Holders" shall each have the meaning
ascribed to such term in the Preface.
"Supporting Noteholders" shall have the meaning ascribed to that term in
the Preface.
"Target" means each item under the column "Target" in the attached Annex C,
hereto.
"Target Date" means with respect to each Target that certain date under the
column "Target Date" associated with such Target as further described in Annex
C, hereto.
"Term Sheet" means that certain term sheet, including any exhibits or
schedules thereto, attached hereto as Annex A, that sets forth the material
terms and conditions of the Restructuring.
"Termination Date" shall have the meaning ascribed to that term in section
33 of this Agreement.
"Transfer" means to, directly or indirectly (whether by one or more
transactions), (i) lend, offer, sell, pledge, assign, encumber, grant any option
or any right with respect to, transfer or otherwise dispose of any participation
or interest (whether a voting interest, an economic interest or otherwise) in or
(ii) enter into an agreement, commitment or other arrangement to lend, offer,
sell, pledge, assign, encumber, grant any option or any right with respect to,
transfer or otherwise dispose of any participation or interest (whether a voting
interest, an economic interest or otherwise) in, or the act thereof; provided,
however, that the grant of any option or any right with respect to, or any
participation or interest in, any of the Senior Notes or FRNs shall not be
deemed a "Transfer" hereunder so long as the transferor Supporting Noteholder or
Supporting FRN Holder, as applicable, retains the absolute right to vote such
Senior Notes or FRNs, including the absolute right to vote such Senior Notes or
FRNs in support of the Restructuring as contemplated herein (including the
actions set forth in section 5(a) of this Agreement) until the end of the
Transfer Restriction Period.
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"Transferor Obligation" shall have the meaning ascribed to that term in
section 5(c) of this Agreement.
"Transfer Restriction Period" shall have the meaning ascribed to that term
in section 5(c) of this Agreement.
"WilmerHale" shall have the meaning ascribed to that term in section 8(a)
of this Agreement.
Section 2. Agreement to Complete Restructuring and Consummate Concurso Plan
and Chapter 11 Plan.
(a) Subject to the terms and conditions of this Agreement, the parties
to this Agreement agree to use their commercially reasonable efforts to
effectuate the Restructuring, as expeditiously as practicable, under the MBRA,
the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the Local Rules
and other Applicable Law, through the execution and approval of the Concurso
Plan and the consummation of the Chapter 11 Plan. With respect to the Concurso
Plan, the requisite acceptances and executions will be solicited pursuant to the
requirements of the MBRA. The parties to this Agreement acknowledge that the
Concurso Plan will set forth the final framework for the Restructuring but not
implement the restructuring of the debt or equity of the Company, which will be
restructured on the Effective Date.
(b) The Concurso Plan shall not be binding upon any Supporting FRN
Holder or Supporting Noteholder that is a party to both this Agreement and the
Concurso Plan if, prior to the Effective Date, the Conciliador delivers a notice
(pursuant to the procedures immediately below) to the Mexican Bankruptcy Court
stating that this Agreement has terminated pursuant to its terms as to such
Supporting FRN Holder or Supporting Noteholder (the "Conciliador Termination
Notice"). Upon the good faith termination of this Agreement pursuant to its
terms by any Supporting FRN Holder or Supporting Noteholder, such Supporting FRN
Holder or Supporting Noteholder may deliver a certificate to the Company, its
U.S. counsel and the Conciliador stating that this Agreement has terminated
pursuant to its terms with respect to such Supporting FRN Holder or Supporting
Noteholder. Upon receipt of such certificate, the Company shall have, for
purposes of preventing delivery of the Conciliador Termination Notice, three (3)
Business Days to challenge the validity of such termination. If the Company
challenges the validity of such termination, the Conciliador shall not be
obligated to deliver the Conciliador Termination Notice unless the Supporting
FRN Holder or Supporting Noteholder has obtained an order of a court of
competent jurisdiction confirming the termination, as duly evidenced to the
Conciliador by written notice delivered pursuant to section 16 hereof, which
notice shall be accompanied by a copy of such order and all appropriate legal
documentation, if any, required by such court order (such notice, the
"Confirmation of Termination"). The Conciliador shall deliver a Conciliador
Termination Notice as to the applicable Supporting FRN Holder or Supporting
Noteholder to the Mexican Bankruptcy Court promptly upon (a) expiration of the
three (3) Business Day objection period so long as the Conciliador did not
receive within such period written notice delivered pursuant to section 16
hereof evidencing that the Company objected within the objection period or (b)
receiving a Confirmation of Termination if the Company did object within the
objection period. The delivery of the Conciliador Termination Notice
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following the commencement of the Chapter 11 Case shall not affect the Chapter
11 Case in any manner.
(c) With respect to the Chapter 11 Plan, the requisite acceptances
will be solicited after the Company commences the Chapter 11 Case and in
accordance with the Bankruptcy Code and other Applicable Law. The parties to
this Agreement acknowledge that this Agreement is not a "convenio particular"
under Article 154 of the MBRA and that this Agreement shall be void ab initio in
the event that a court of competent jurisdiction enters a final order holding
otherwise.
Section 3. Company's Obligations to Support Restructuring.
The Company agrees that:
(a) It shall use commercially reasonable efforts to propose, execute,
and seek creditor, Mexican Bankruptcy Court, and all other necessary approvals
(including all necessary government approvals) of the Concurso Plan and shall
seek entry of the Concurso Plan Order as promptly as practicable and in no event
later than the Outside Date; provided, however, that the Company shall not be
required to execute the Concurso Plan until the Conciliador has received
counterpart signature pages of the Concurso Plan executed by the Required FRN
Holders and the Required Noteholders.
(b) It shall move to dismiss the 304 Proceeding and commence the
Chapter 11 Case to effectuate and implement the Restructuring through the
Chapter 11 Plan within five (5) Business Days following the entry of the
Concurso Plan Order (the "Chapter 11 Filing Trigger").
(c) It shall use commercially reasonable efforts to (i) obtain the
approval by the Bankruptcy Court of the Disclosure Statement with respect to the
Chapter 11 Plan within forty-five (45) days of filing of the Petition and (ii)
cause the Chapter 11 Plan Order to be entered within one hundred and twenty
(120) days of filing of the Petition.
(d) Subject to the terms and conditions set forth in this Agreement,
it shall perform its obligations hereunder and under the Term Sheet.
(e) Except as required by Applicable Law, it will not take any action
(including, without limitation, any filing, pleading or other action in
connection with the Concurso Proceeding or Servicios Proceeding) that is
inconsistent with the implementation and effectuation of the Restructuring, the
Servicios Restructuring, the Concurso Plan or the Chapter 11 Plan in accordance
with this Agreement, nor take any action that would unreasonably delay the
consummation of the Restructuring, the Servicios Restructuring, the Concurso
Plan or the Chapter 11 Plan.
(f) In the event that (i) the Effective Date has not occurred, (ii)
the Concurso Proceeding remains open or is continued, reactivated, or reopened,
or otherwise is or becomes pending, or any other or new proceeding under the
MBRA or successor statute in which the Company is the debtor is or becomes open,
pending, or active (such continued, reactivated, reopened, open, pending, or
active Concurso Proceeding or proceeding being a "Subsequent Concurso
Proceeding"), and (iii) this Agreement has been terminated as to all parties
hereto
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(other than a termination of this Agreement pursuant to section 33 hereof), the
parties to this Agreement hereby, subject to Applicable Law, waive and agree to
terminate (and to take all necessary actions to terminate) the conciliation
phase (as defined in Title V of the MBRA) of the Subsequent Concurso Proceeding;
provided, however, that such waiver and termination shall not take effect, and
the conciliation phase of the Subsequent Concurso Proceeding shall not be waived
or terminated, until the later of (x) the date that this Agreement is terminated
as to all parties hereto in accordance with the terms hereof, and (y) July 27,
2006. Notwithstanding anything to the contrary in this Agreement, this paragraph
shall survive the termination of this Agreement.
(g) It shall use its reasonable best efforts to cause the Conciliador
to file the Concurso Plan with the Mexican Bankruptcy Court as soon as both the
Required FRN Holders and the Required Noteholders accept and execute the
Concurso Plan.
Section 4. Conduct of Business Pending Consummation of Chapter 11 Plan.
From and after the date hereof until the earlier of the (i) termination of
this Agreement in accordance with the terms specified herein and (ii) Effective
Date, the Company agrees to comply with the following covenants, unless
compliance is waived by a majority of the Supporting FRN Holders and a majority
of the Supporting Noteholders; provided, however, that only a majority of the
Supporting FRN Holders is necessary to waive the requirements of section 4(d)
below:
(a) The Company shall not directly or indirectly take any action to or
suffer or permit any Person to do any of the following: (i) except that the
Company may, solely to the extent required to effect the Restructuring,
including any transactions set forth in the Term Sheet, (A) issue, sell, pledge,
dispose of or encumber any additional shares of, or any options, warrants,
conversion privileges or rights of any kind to acquire any shares of, its
capital stock, (B) materially amend its by-laws (estatutos sociales), (C) split,
combine or reclassify any outstanding shares of its capital stock, or declare,
set aside or pay any dividend or other distribution payable in cash, stock,
property or otherwise with respect to any of its shares of capital stock, (D)
redeem, purchase or acquire or offer to acquire any of its shares of capital
stock, (E) acquire, transfer, or sell (by merger, exchange, consolidation,
acquisition of stock or assets or otherwise) any corporation, partnership, joint
venture or other business organization or division, material asset thereof or
interest therein, (F) incur any indebtedness for borrowed money outside the
ordinary course of business consistent with prior business practices or issue
any debt securities outside the ordinary course of business consistent with
prior business practices and consistent with the allowance originally provided
for in the indentures pursuant to which the FRNs and Senior Notes were issued,
(G) enter into any transaction with any affiliate of the Company or its
shareholders (including Loral, Principia and their respective affiliates) other
than pursuant to existing agreements, (H) redeem, purchase or acquire or offer
to acquire any of the FRNs or Senior Notes; provided, however, that,
notwithstanding the foregoing and subject to the approval of the Majority
Noteholders, the Company may at any time redeem the FRNs, (I) increase the
compensation payable or to become payable to, or grant any severance or
termination pay or stay bonus to, any executive officer or director of the
Company except as agreed in connection with the Restructuring, (J) cancel or
terminate any applicable material insurance policy naming the Company as a
beneficiary or the Company or the collateral trustee
- 13 -
for the FRNs (the "FRN Collateral Trustee") as a loss payee, (K) take any action
to modify, amend or cancel, any concession or other license from the Mexican
Government or any landing right agreements or concessions with any other country
necessary for the continued operation of the Company's satellite communications
network in the same manner as the Company operates such network on the date
hereof, or (L) transfer, sell, or otherwise dispose of any assets outside the
ordinary course of business consistent with prior practices; (ii) enter into any
material agreement or material arrangement, or materially modify any agreement
or arrangement, with any banker, advisors, consultants or attorney of the
Company in connection with any matter relating to the Restructuring or any
merger or acquisition of the Company or its assets; (iii) enter into any
agreement, arrangement or understanding to pay or provide to the holder of any
of the Company's Securities or any affiliate thereof, directly or indirectly,
any fee, expense or other payment or compensation, in connection with the
Restructuring or any part thereof; provided, however, that, upon notice to
counsel to the respective Committees, the Company shall be permitted to enter
into any such agreement, arrangement or understanding if such agreement,
arrangement or understanding is on equally or more favorable terms to the
Company than any agreement, arrangement or understanding to which the Company is
a party as of the date hereof; or (iv) enter into or propose to enter into, or
modify or propose to modify, any agreement, arrangement or understanding
inconsistent with the matters set forth in this section 4(a).
(b) The Company shall not directly or indirectly engage in, agree to
or consummate any transaction outside the ordinary course of its business;
provided, however, that nothing herein shall limit the Company's ability to (i)
pay or otherwise satisfy all of the Recognized Claims (other than those related
to or connected with the FRNs and Senior Notes) immediately prior to the filing
of the Petition with the Bankruptcy Court or (ii) take such action as is
reasonably required to effect the Restructuring, including any transactions set
forth in this Agreement or the Term Sheet. For the avoidance of doubt, any
action taken by the Company consistent with industry practices to protect the
Satmex 6 Satellite during launch shall constitute activities conducted in the
ordinary course of business.
(c) The Company shall (i) maintain its legal existence under the Laws
of Mexico and (ii) notify the Committees' respective counsel of any governmental
or third party complaints, investigations or hearings (or communications
indicating that the same may be contemplated or threatened) regarding the
Company, which could reasonably be anticipated to materially adversely affect
the business, property, or financial condition of the Company and its
subsidiaries considered as one enterprise.
(d) The Company shall not launch the Satmex 6 Satellite until the
Concurso Filing Trigger has occurred; provided, however, that the restriction
provided for in this section 4(d) shall not apply if the Concurso Filing Trigger
does not occur due to (x) a breach by any Supporting FRN Holder or Supporting
Noteholder, or (y) the failure of the Required FRN Holders to (A) sign this
Agreement or (B) otherwise become irrevocably bound to support the Restructuring
(including to vote to accept the Chapter 11 Plan).
(e) The Company shall use commercially reasonable efforts to keep the
FRN Advisors and Senior Note Advisors informed of any material development
concerning its negotiations with the Mexican Government on the Restructuring or
any of the concessions granted to the Company by the Mexican Government or
landing rights with other countries
- 14 -
reasonably necessary for the continued operation of the Company's satellite
communications network as operated on the date hereof.
(f) The Company shall insure the Satmex 6 Satellite in accordance with
Annex E, which insurance shall name the FRN Collateral Trustee as loss payee
and, to the extent the insurers will permit, as an additional insured. The
Company shall use its reasonable best efforts to cause the insurers to name the
FRN Collateral Trustee as additional insured. Prior to the launch of the Satmex
6 Satellite, the Company shall provide counsel to the Ad Hoc FRN Committee and
counsel to the Ad Hoc Senior Note Committee with an insurance certificate
demonstrating the Company's compliance with the first sentence of this
paragraph.
Section 5. Supporting Holders' Obligations to Support Restructuring,
Concurso Plan and Chapter 11 Plan.
From and after the date hereof and until the earlier of the (i) termination
of this Agreement in accordance with the terms specified herein and (ii)
Effective Date:
(a) Each Supporting FRN Holder and Supporting Noteholder agrees to (i)
execute or cause to be executed the Concurso Plan and deliver to the Concilador
counterpart signature pages of the Concurso Plan promptly, but (A) with respect
to the Supporting FRN Holders, no later than eight (8) Business Days after the
effective date of the Conciliador's Submission and (B) with respect to the
Supporting Noteholders, no later than ten (10) Business Days after the effective
date of the Conciliador's Submission (provided, however, that no Supporting
Noteholder shall be required to execute the Concurso Plan unless Required FRN
Holders (1) sign this Agreement or (2) otherwise become irrevocably bound to
support the Restructuring (including to vote to accept the Chapter 11 Plan)) and
(ii) vote (or, in the case of managed accounts, instruct the custodial agent to
vote) to accept the Chapter 11 Plan promptly upon receipt of the Solicitation
Materials (but in all events before any deadlines for submitting such votes),
and to vote or take any other action (or, in the case of managed accounts,
instruct the custodial agent to vote) to reject any other bankruptcy plan,
convenio concursal, restructuring, reorganization, liquidation or similar
arrangement (in whatever jurisdiction proposed) that does not contain the terms
of the Restructuring substantially as set forth in the Term Sheet.
(b) Each Supporting FRN Holder and Supporting Noteholder agrees,
subject to the provisions of this section 5(b) and Annex F hereto, that it shall
not, directly or indirectly, use (other than solely in connection with the
evaluation of, negotiation of or voting with respect to the Restructuring) or
disclose to any Person any information relating to the transactions contemplated
hereby or any information included herein including, without limitation, the
existence of this Agreement or the Term Sheet or any of the transactions
contemplated therein (such information being referred to herein as "Confidential
Information"). Each Supporting FRN Holder that is a party to that certain
confidentiality agreement with the Company, dated January 30, 2006, and
Supporting Noteholder that is a party to that certain confidentiality agreement
with the Company, dated November 30, 2005 (whether expired pursuant to its terms
or not), agrees, pending termination of this Agreement (either in its entirety
or with respect to such individual holder), to keep in strict confidence all
information previously provided to it regarding the Company pursuant to the
terms of such confidentiality agreement, and agrees that
- 15 -
the "Disclosure Date" under any such agreement shall be the date of termination
of this Agreement.
(c) Each Supporting Holder (except in the case of the Loral Pledge or
any exercise of rights by the secured party or collateral trustee in connection
therewith) hereby agrees that it shall not Transfer any Securities.
Notwithstanding the foregoing, except for the period beginning five (5) days
prior to the Conciliador's Submission (such date to be set forth in a notice
from the Company to counsel for the Committees) and ending upon the expiration
of the five (5) Business Day period referred to under article 162 of the MBRA
(or, if such five (5) Business Day period does not commence within twenty (20)
Business Days following the Conciliador's Submission, then the end of such
twenty (20) Business Day period) (the "Transfer Restriction Period"), any
Supporting FRN Holder or Supporting Noteholder may Transfer any Securities so
long as (i) the transferee agrees in writing to be bound by all of the terms and
conditions of this Agreement by executing the Accession Agreement attached
hereto as Annex B and/or a counterpart signature page to this Agreement in
accordance with section 25 below and (ii) to the extent such transfer is made
prior to the commencement of the Transfer Restriction Period, the transferee
provides the Company with certifications of the record holders (e.g., DTC or
Euroclear) and, if applicable, the custodian and the transferee evidencing the
beneficial ownership of the FRNs or Senior Notes (as applicable) transferred
thereby as soon as practicable following the effectiveness of the Transfer, but
in no circumstances later than two (2) Business Days after the effectiveness of
such Transfer. The transferee Supporting FRN Holder or Supporting Noteholder
must provide a copy of such executed Accession Agreement and/or signature page
to this Agreement within three (3) Business Days after the effectiveness of any
Transfer to any transferee; provided, however, that, from the date of such
Transfer to the date such transferee executes and delivers the Accession
Agreement and/or signature page to this Agreement to the Company, the transferor
Supporting FRN Holder or Supporting Noteholder shall remain fully liable for any
and all obligations of such transferee under this Agreement (including without
limitation any failure to act or breach hereunder) (the "Transferor
Obligation"). Subject to compliance with this section 5(c), (i) nothing
contained in this Agreement shall affect or restrict the right of a Supporting
FRN Holder or Supporting Noteholder to Transfer its Securities and (ii) upon the
transfer by a Supporting FRN Holder or Supporting Noteholder of all of its
Securities in compliance with the terms of this Agreement, such Supporting FRN
Holder or Supporting Noteholder shall have no further obligation or liability
hereunder other than for any default by such Supporting FRN Holder or Supporting
Noteholder that occurred prior to the effectiveness of the Transfer or the
Transferor Obligation. Additionally, except for Supporting FRN Holders that are
not domiciled in the United States of America, each Supporting FRN Holder hereby
agrees that prior to delivery of its vote to accept the Chapter 11 Plan, it
shall not, without the prior written consent of the Company (not to be
unreasonably withheld), Transfer any Securities to a transferee unless the
transferee is (x) a Person domiciled in the United States of America or with a
place of business in the United States of America, (y) is a fund managed by a
person domiciled in the United States of America or with a place of business in
the United States of America or (z) a Supporting FRN Holder or another holder
that has become party to this Agreement by executing the Accession Agreement
attached hereto as Annex B and/or a counterpart signature page to this Agreement
in accordance with section 25 below. Notwithstanding the foregoing, following
the performance by the Supporting Equity Holders of all obligations to be
performed hereunder, the Supporting Equity Holders may seek to cause the
transfer of the shares of Firmamento and Servicios directly or indirectly held
by
- 16 -
them as necessary for tax purposes, as provided under the Term Sheet. For the
avoidance of doubt, any Transfer of the Senior Notes or FRNs that does not
comply with this section 5(c) shall be deemed ineffective to transfer any right
to accept or reject the Concurso Plan and Chapter 11 Plan, which right shall
remain with and be exercised only by the purported transferor.
(d) No Supporting Holder may revoke, withdraw or modify the execution
of the Concurso Plan or any ballot tendered in connection with a vote to accept
the Chapter 11 Plan; provided, however, that prior to the Effective Date, if any
term or condition of the Chapter 11 Plan or Concurso Plan is modified, amended,
or waived in any material respect, a Supporting Holder shall have the right to
revoke, withdraw, or modify its vote to the extent that such vote may be
revoked, withdrawn or modified under Applicable Law unless such modification,
amendment, or waiver has been approved pursuant to section 13 hereof.
(e) Each Supporting Holder agrees that (i) it will not, directly or
indirectly, execute, vote (or, in the case of managed accounts, instruct the
custodial agent to vote) for, consent to, provide any support for, participate
in the formulation of, or solicit or encourage others to formulate any
bankruptcy plan, convenio concursal, restructuring, reorganization, liquidation
or similar arrangement (in whatever jurisdiction proposed) for the Company or of
any of its affiliates other than the Restructuring, the Concurso Plan, the
Chapter 11 Plan and the Servicios Restructuring, (ii) in the case of the
Supporting FRN Holders and the Supporting Noteholders, it will use its
commercially reasonable efforts to cause all of the members of the Ad Hoc FRN
Committee and/or the Ad Hoc Senior Note Committee (as applicable) to take all
actions necessary to effectuate the Restructuring and consummate the Concurso
Plan and the Chapter 11 Plan; provided, however, that nothing herein shall
require the Supporting FRN Holders or Supporting Noteholders to indemnify the
indenture trustee for the FRNs or Senior Notes or the FRN Collateral Trustee, as
applicable, (iii) in the case of the Supporting FRN Holders, it will use its
commercially reasonable efforts to cause all of the members of the Ad Hoc FRN
Committee to take all actions necessary to effectuate the Servicios
Restructuring and, except as otherwise required to effect the Servicios
Restructuring, each Supporting FRN Holder shall not, directly or indirectly
through the FRN Collateral Trustee, take or cause to be taken, by exercise of
rights under the stock trusts securing the guarantees of the FRNs, any
shareholder action of Servicios; provided, however, that nothing herein shall
require the Supporting FRN Holders to indemnify the FRN Collateral Trustee, (iv)
it will support the Restructuring and approval of the Concurso Plan and the
Chapter 11 Plan including without limitation, in the case of the Supporting
Equity Holders, to vote (or cause to be voted) their direct and indirect shares
of Existing Equity in support of the Restructuring and to approve the Concurso
Plan; provided, however, that the Supporting Equity Holders shall vote (or cause
to be voted by the exercise of rights under the stock trusts securing the
guarantees of the FRNs or the Menoscabo or otherwise) their indirect shares of
Existing Equity only if they have the right to vote such shares and only if the
voting of such shares is not reasonably likely to lead based on the advise of
counsel to the incurrence of any liability of the Supporting Equity Holders as a
result thereof and (v) subject to section 30 hereof, it will permit public
disclosure, in a mutually agreed upon press release of the contents of this
Agreement (including, but not limited to, the commitments given in this section
5 and the Term Sheet).
(f) Each Supporting Holder further agrees that it will not object to,
or otherwise commence any proceeding to oppose, the Restructuring or the
Concurso Plan or
- 17 -
Chapter 11 Plan or the Servicios Restructuring and shall not
take any action in opposition to, or that would unreasonably delay the
consummation of, the Restructuring or the Concurso Plan or Chapter 11 Plan or
the Servicios Restructuring.
(g) Each Supporting Holder further agrees that any and all Securities
acquired by such Supporting Holder following the date of this Agreement shall be
subject to the terms and conditions of this Agreement and shall be subject to
the same treatment as the Securities held by such Supporting Holder as of the
date hereof. Notwithstanding anything contrary to the foregoing, each Supporting
Holder that acquires or disposes of any Securities after the date hereof shall
promptly send a written notice to the other parties hereto specifying the type,
amount and/or number (as applicable) of Securities acquired or disposed.
(h) Each Supporting Holder further agrees that it will not request (or
support any other Supporting Holder or other party requesting) or otherwise file
any motion or commence any action or proceeding, seeking adequate protection.
(i) Each Supporting Noteholder agrees that it will cause its appeal of
the Recognition Judgment to be withdrawn on or before the submission of the
Concurso Plan to the Mexican Bankruptcy Court by the Conciliador.
(j) Except as otherwise required to effect the Restructuring, each
Supporting FRN Holder shall not, directly or indirectly through the FRN
Collateral Trustee, take or cause to be taken, by exercise of rights under the
stock trusts securing the guarantees of the FRNs, any shareholder action of the
Company including, among others, any of the actions mentioned in section 4.
(k) For the avoidance of doubt, nothing in this Agreement shall, or
shall be construed to, impose any restriction or limitation on the ability of
any party to the Loral Settlement Agreements to enforce its rights or to
exercise its remedies in respect of the Loral Settlement Agreements and such
party shall incur no liability under this Agreement for the enforcement of its
rights or exercise of its remedies in respect of the Loral Settlement
Agreements.
(l) The Supporting Holders hereby consent (to the extent such consent
is required) to (i) the representation of Servicios by Javier Quijano Baz and/or
Alfonso Martin Lopez Melih in the Servicios Proceeding and (ii) the appointment
of Thomas Stanley Heather Rodriguez as conciliador and/or sindico in the
Servicios Proceeding; provided, however, that such persons will not be
compensated for such services other than for all reasonable out-of-pocket
expenses incurred in connection with the Servicios Proceeding, which shall be
borne by the Company in accordance with section 8(k) hereof. Nothing in this
paragraph will affect payment of the Conciliador's fees, as provided under
section 8(o) hereof.
(m) The Supporting Holders hereby consent to the payment by the
Company of success fees to the Company's advisors in accordance with the
retention agreements of such advisors as amended as of the date hereof, in each
case that have been provided to the FRN Advisors and Senior Note Advisors by the
Company.
- 18 -
(n) The Supporting FRN Holders and the Supporting Noteholders hereby
consent to the execution of the 304 Stipulation by the Company.
Section 5A. Loral's Obligation to Support Restructuring, Concurso Plan and
Chapter 11 Plan.
(a) Notwithstanding anything to the contrary set forth herein, this
Agreement may be terminated by Loral as to itself only, if any of the following
shall not have occurred or not have been complied with in all respects:
(i) The 304 Stipulation shall become a final and non-appealable order
by May 9, 2006 and time is of the essence with respect thereto.
(ii) The provisions of the 304 Stipulation shall have been fully
complied with.
(iii) The Loral Documents and the Equity Documents shall be in form
and substance reasonably satisfactory to counsel to Loral on or before the
respective effective dates of such documents. Loral shall be provided with
an initial draft of each of the Loral Documents and the Equity Documents
(each, an "Initial Draft") at the same time such Initial Draft is provided
to counsel for any of the Supporting Holders but in no event later than
forty-five (45) days prior to the earlier of (I) the respective effective
date of each Loral Document or Equity Document and (II) the Effective Date.
Loral shall only be permitted to terminate this Agreement pursuant to this
section 5A(a)(iii) if (x) Loral is not provided with an Initial Draft as
specified in the immediately preceding sentence, (y) after provision of
notice to the Company that an Initial Draft is not in form and/or substance
reasonably satisfactory to Loral, Loral does not receive a successive draft
(a "Successive Draft") of such Initial Draft within five (5) Business Days,
or (z) if such Successive Draft is not in form and/or substance reasonably
satisfactory to Loral, and Loral notifies the Company of such termination
within ten (10) Business Days of receipt of such Successive Draft.
(iv) On the Effective Date, the Company shall grant to certain
affiliates of Loral as designated by Loral (the "Loral Entities") a
usufructo under Articles 980 et seq. of Mexico's Federal Civil Code
("Article 980") (the "Loral Usufructo") with respect to the Loral
Transponders (the "Loral Grant"), which Loral Grant shall conform to the
requirements set forth herein and in the Term Sheet. Each of the parties to
this Agreement agrees that (a) consistent with Mexican law, the Loral
Usufructo shall constitute an in rem property right whereby the Loral
Entities and their assignees (collectively, the "Grant Holders") are
entitled to the quiet use and enjoyment of the Loral Transponders for (x)
the life of the Satmex 6 Satellite as to the Loral Transponders on the
Satmex 6 Satellite and (y) the life of the Satmex 5 Satellite as to the
Loral Transponders on the Satmex 5 Satellite; (b) as a consequence of the
Loral Usufructo and consistent with Mexican law, the Loral Transponders
cannot, under any circumstances, including, without limitation, in an
insolvency, bankruptcy or similar proceeding under Mexican or U.S. law, be
sold, transferred, pledged or otherwise disposed of free and clear of the
usufructo embodied in the Loral Grant and any purchaser or transferee
thereof takes subject to the Loral Usufructo; provided, however, that
solely in the event the Grant Holders determine to accept the Sale Proceeds
(as defined in the Term Sheet) in exchange for the termination and
extinguishment
- 19 -
of the Loral Usufructo as provided herein and in the Term Sheet, the
collateral trust agreements shall provide and the collateral trustee under
the First Priority Senior Secured Notes and/or Second Priority Senior
Secured Notes, as applicable, shall be irrevocably directed to pay the Sale
Proceeds to the applicable Grant Holders; (c) the Grant Holders may take
any action necessary to enforce their rights under the Loral Usufructo
against the Company, its successors and assigns, or any other party in any
context; (d) each party to this Agreement and any party with an interest in
or claim to the Satmex 5 Satellite or the Satmex 6 Satellite shall be
subject to and shall not foreclose and shall waive any right to foreclose
the Loral Usufructo in the Loral Transponders; (e) in any proceeding
outside Mexico with respect to (x) the subject matter of this section
5A(a)(iv), (y) the Loral Usufructo or the Loral Grant or (z) the Satmex 5
Satellite or the Satmex 6 Satellite as it relates to the rights of the
Grant Holders in the Loral Transponders, the parties to this Agreement
hereby irrevocably agree that Luis A. Nicolau or such other designee
selected by the Grant Holders (the "Designee"), which Designee shall be
reasonably acceptable to Satmex and the collateral trustees for the First
Priority Senior Secured Notes and Second Priority Senior Secured Notes,
shall be the sole expert on Mexican law (specifically including Article
980) and agree that Mr. Nicolau or such Designee will be the only witness
(expert or otherwise) that may submit evidence including, without
limitation, any expert report, testimony or opinion, for all purposes in
interpreting, enforcing or otherwise explaining the Mexican Federal Civil
Code, including Article 980 thereof, with respect to the Loral Usufructo
and the Loral Grant or the parties' rights in respect thereof (and each
party shall waive any right to call any other witness in respect of these
matters); (f) each of the parties to this Agreement is and shall be
estopped from arguing or taking any position that the Loral Usufructo
embodied in the Loral Grant is other than as expressly described herein;
and (g) in any dispute (in any court or other proceeding whether in Mexico,
the United States or otherwise) with respect to the Loral Usufructo
embodied in the Loral Grant, the laws of Mexico shall apply in connection
with the interpretation, enforceability and application of the Loral
Usufructo, and such application of Mexican law is to be considered to the
fullest extent under Rule 44.1 of the Federal Rules of Civil Procedure and
Rule 9017 of the Federal Rules of Bankruptcy Procedure, as may be
applicable.
(v) A provision identical in substance to that set forth above in
section 5A(a)(iv) shall be contained in each of (a) the collateral trust
agreement relating to the First Priority Senior Secured Notes, (b) the
collateral trust agreement relating to the Second Priority Senior Secured
Notes, (c) the security agreement entered between the Company and the
collateral trustee in favor of the First Priority Senior Secured Notes and
(d) the security agreement entered by the Company and the collateral
trustee in favor of the Second Priority Senior Secured Notes.
(vi) The parties to the Loral Settlement Agreements shall timely
perform their material obligations under the Loral Settlement Agreements,
including without limitation making payments when due, and with respect to
the Company, complying with section 1C of the Lease Agreement regarding the
Satmex 5 Satellite and section 1D of the Lease Agreement regarding the
Satmex 6 Satellite; provided, however, that Loral shall not be entitled to
terminate this Agreement pursuant to this section 5A(a)(vi) unless the
failure to timely perform material obligations under the Loral Settlement
Agreements extends beyond
- 20 -
the expiration of any applicable notice and cure periods under the Loral
Settlement Agreements but; provided, however, that Loral shall be entitled
to suspend performance under this Agreement until such default has been
cured.
Notwithstanding the foregoing, Loral shall not be entitled to
terminate this Agreement pursuant to section 5A(a)(v) unless, within twenty
(20) days following the occurrence of any ground for such termination,
Loral provides the Company and counsel to the Committees with five (5)
Business Days' notice of termination (the "Loral Termination Notice")
specifying the grounds for termination and unless such grounds shall not be
remedied, removed or cured to the reasonable satisfaction of Loral within
such five (5) Business Day period; provided that (x) Loral shall be
permitted to suspend its performance under this Agreement from the date of
such Loral Termination Notice until such grounds have been remedied,
removed or cured as provided for above and (y) the Loral Termination Notice
shall be immediately effective, with no opportunity for remedy, removal or
cure, if the termination grounds stated by Loral cannot be (I) remedied,
removed or cured or (II) remedied, removed or cured prior to the Effective
Date. Nothing herein shall affect, limit or modify the ability of Loral and
its affiliates to exercise any and all rights and remedies under the Loral
Settlement Agreements.
(b) Notwithstanding anything to the contrary contained herein or in
the Term Sheet, including section 13 of this Agreement, the following shall not
be amended, modified, supplemented or waived, nor any term or condition thereof
amended, modified, supplemented or waived, except in a writing signed by Loral:
section 5A of this Agreement and Section I of the Term Sheet under the captions
"Treatment of Enlaces," "Loral Transponders" and "SS/L Right of First Offer."
For the avoidance of doubt, no party, including the Company, the Supporting
Noteholders, the Supporting FRN Holders or the Equity Holders, shall have the
right to amend, modify or supplement this section 5A, nor the provisions of the
Term Sheet under the captions "Treatment of Enlaces," "Loral Transponders" and
"SS/L Right of First Offer," nor waive any term or condition thereof, without
the express written approval of Loral.
Section 6. Obligations of Servicios to Support Restructuring, Concurso
Plan, Chapter 11 Plan and Servicios Restructuring.
To the extent of its legal capacity, from and after the date hereof and
until the earlier of the (i) termination of this Agreement in accordance with
the terms specified herein and (ii) Effective Date:
(a) Servicios agrees that (i) it will not, directly or indirectly,
execute, vote for, consent to, provide any support for, participate in the
formulation of, or solicit or encourage others to formulate any bankruptcy plan,
convenio concursal, restructuring, reorganization, liquidation or similar
arrangement (in whatever jurisdiction proposed) for itself, for the Company or
of any of its affiliates other than the Restructuring, the Concurso Plan, the
Chapter 11 Plan and the Servicios Restructuring, (ii) it will support the
Restructuring and the Servicios Restructuring and approval of the Concurso Plan
and the Chapter 11 Plan, and (iii) it will permit public disclosure, in a
mutually agreed upon press release of the contents of this Agreement (including,
but not limited to, the commitments given in this section 6 and the Term Sheet);
- 21 -
(b) Servicios agrees that it will not object to or otherwise commence
any proceeding to oppose the Restructuring, the Concurso Plan, the Chapter 11
Plan or the Servicios Restructuring and shall not take any action in opposition
to or that would unreasonably delay the consummation of the Restructuring, the
Concurso Plan, the Chapter 11 Plan or the Servicios Restructuring; and
(c) Except as otherwise required to effect the Restructuring,
Servicios shall not, directly or indirectly, take or cause to be taken any
shareholder action of the Company including, among others, any of the actions
mentioned in section 4.
(d) In order to effect the Restructuring and the Servicios
Restructuring and to approve the Concurso Plan and the Chapter 11 Plan,
Servicios shall vote (or cause to be voted, by the exercise of rights under the
stock trust securing the guarantees of the FRNs or otherwise) the shares of
Existing Equity originally held by Servicios in the Company.
Section 7. Forbearance.
From and after the date hereof and until the earlier of the (i) termination
of this Agreement in accordance with the terms specified herein and (ii)
Effective Date, each Supporting Holder shall (x) forbear (and agrees not to give
instructions to any applicable indenture trustee or agent or other Person that
are inconsistent with the terms and conditions of this Agreement) from the
exercise of any rights, powers or remedies against the Company or any affiliate
it may have (including the right to call a default or seek payment or any other
relief in connection with any of the Securities) under (a) the Securities, (b)
any applicable documents governing the FRNs and Senior Notes, (c) any Applicable
Law in connection with the Securities and/or such documents or (d) the Concurso
Proceeding and (y) not challenge or cause to be challenged the Concurso Plan
Order; provided, however, that this section 7 shall not apply to actions in
furtherance of the Restructuring that are consistent with this Agreement and the
Term Sheet. Additionally, each of the Supporting Holders will direct its
indenture trustee(s) and in the case of the Supporting FRN Holders, the FRN
Collateral Trustee, each as reasonably necessary, to take actions in furtherance
of the Restructuring, the Concurso Plan, the Chapter 11 Plan and the Servicios
Restructuring; provided, further, that no direction shall be required if it
involves indemnification by the Supporting Holder of any party.
Section 8. Payment of Advisors and Conciliador Fees.
(a) In connection with the Restructuring, (i) the members of the Ad
Hoc FRN Committee have retained Wilmer Cutler Pickering Hale and Dorr LLP
("WilmerHale") as U.S. legal counsel; Cervantes, Aguilar-Alvarez, y Sainz, S.C.
("CAAYS") as Mexican counsel; and Mitchell A. Harwood Partners, LLC ("MAH") as
financial advisor (collectively, WilmerHale, CAAYS, and MAH are referred to
herein as the "FRN Advisors"), and (ii) the Ad Hoc Senior Note Committee has
retained Akin Gump Strauss Hauer & Feld LLP ("Akin") as U.S. legal counsel;
Asesoria Juridica-Canales y Socios ("CAN") as Mexican counsel; and Chanin
Capital Partners ("Chanin") as financial advisor (collectively, Akin, CAN, and
Chanin are referred to herein as the "Senior Note Advisors").
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(b) Advisor Fees from March 23, 2006 to the Petition Date. In order to
enable the Supporting FRN Holders and the Supporting Noteholders to effectuate
the Restructuring, the Company shall pay for all of the reasonable fees (based
on existing engagements as of the date of this Agreement and upon the
representation from the Committees that all such engagements have been provided
to the Company), actual and documented out-of-pocket costs, and actual and
documented out-of-pocket expenses of the FRN Advisors and Senior Note Advisors
related to the Restructuring incurred from March 23, 2006 until the earlier of
(a) filing of the Petition and (b) termination of this Agreement pursuant to the
terms hereof.
(i) To obtain payment for the fees and expenses set forth in this
section 8(b), each of the FRN Advisors and Senior Note Advisors shall
render bills to the Company on a bi-weekly basis for the reasonable fees
and actual, documented out-of-pocket expenses incurred in the prior two
weeks. The first such bills will cover the period from March 23, 2006
through and including April 2, 2006. Until filing of the Petition, the
Company shall pay all such bills, to the extent the fees and expenses
therein qualify for payment under this section 8(b), within five (5)
Business Days of delivery. In addition to the foregoing, the Company shall,
upon execution of this Agreement, pay to Akin U.S. $280,660.85, which
amount shall be on account of Akin's and CAN's unpaid bills for January 1,
2006 through March 22, 2006.
(ii) Upon the first to occur of (A) termination of an FRN
Advisor's or Senior Note Advisor's engagement by the members of the Ad Hoc
FRN Committee (or by members holding more than a majority of the FRNs held
by the members of the Ad Hoc FRN Committee as of the date hereof) or the Ad
Hoc Senior Note Committee (as the case may be), (B) completion of the
Restructuring, (C) the day that is two (2) Business Days prior to the date
the Petition is to be filed, (D) termination of this Agreement pursuant to
section 9 hereof, or (E) finalization of an FRN Advisor's or Senior Note
Advisor's representation of the Supporting FRN Holders or the Supporting
Noteholders (as the case may be), the applicable FRN Advisor or Senior Note
Advisor shall render a final bill (or final pre-petition bill, as
applicable) in accordance with this section 8(b) and such bills shall be
promptly paid; provided, however, that, in the case of the filing of the
Petition in clause (C), such bill shall be paid on or before the Business
Day that immediately precedes the date the Petition is filed.
(c) Retainers. On or before the Business Day that immediately precedes
the date the Petition is filed, the Company shall pay U.S. $150,000 to the group
of the legal counsel to members of the Ad Hoc Commitees and U.S. $150,000 to the
group of the Senior Notes Advisors as a retainer for services to be rendered
related to the Restructuring in accordance with the FRN Advisors' and Senior
Notes Advisors' respective engagements as of the date of this Agreement.
(d) Pre-Petition Payment of Fees for the period 9/8/05 - 3/22/06. On
or before the Business Day that immediately precedes the date the Petition is
filed, the Company shall pay the reasonable fees and actual documented
out-of-pocket expenses incurred by the FRN Advisors and Senior Note Advisors
from the period of September 8, 2005, through and including March 22, 2006, to
the extent not previously paid by the Company. The bills for such fees and
expenses shall be submitted to the Company by May 6, 2006.
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(e) Effective Date Payments. All fees and expenses of the FRN Advisors
and Senior Note Advisors not paid by the Company prior to the Effective Date
shall be paid by the Company on the Effective Date or as soon as practicable
thereafter in accordance with the Term sheet.
(f) Payment of MAH Fees. From the date hereof through the Effective
Date, the Company shall pay to MAH a monthly advisory fee for services to be
rendered related to the Restructuring of U.S. $50,000 and expenses; provided,
however, that from the date of the filing of the Petition through the Effective
Date, all such advisory fees and expenses shall accrue and be paid on or as soon
as practicable after the Effective Date. In addition to the foregoing monthly
fees, the Company shall be obligated to pay MAH an additional fee in the amount
of one million two hundred fifty thousand dollars (U.S. $1,250,000) upon the
Effective Date or as soon as practicable thereafter.
(g) Payment of Sitrick Fees. Prior to the filing of the Petition, the
Company shall make a one-time payment of U.S. $258,215.09 to reimburse the
members of the Ad Hoc FRN Committee for fees and expenses actually paid to
Sitrick and Company ("Sitrick") for public relations services rendered to the Ad
Hoc FRN Committee prior to the date hereof. Except for such one-time payment,
the Company will not pay or be obligated to pay any other fees or expenses of
Sitrick, directly or indirectly by reimbursement of any other Person that paid
or pays any other fees or expenses to Sitrick.
(h) Payment of Evercore Fees. Prior to the filing of the Petition, the
Company shall make a one-time payment to WilmerHale of U.S. $515,687.00 on
account of the fees and expenses of Evercore Restructuring L.P. ("Evercore") in
final satisfaction of all bills for services rendered by Evercore to the Ad Hoc
Committee.
(i) Payment of Chanin Fees. Upon the Effective Date or as soon as
practicable thereafter, the Company shall pay to Chanin its fees and expenses in
accordance with Chanin's engagement agreement as amended as of the date hereof.
(j) Payment of Loral and Principia Fees in Connection with Servicios
Proceeding. Upon the Effective Date or as soon as practicable thereafter, the
Company shall pay the amounts incurred by Loral and/or Principia for the
reasonable fees, costs and expenses of Principia and/or Loral's legal advisors
solely in connection with the Servicios Proceeding, if any; provided, however,
that the Company's payments of such fees and expenses shall not exceed U.S.
$50,000.00 in the aggregate.
(k) Payment of Servicios Expenses in Connection with Servicios
Proceeding. The Company shall pay the reasonable out-of-pocket expenses incurred
by Servicios in connection with the Servicios Proceeding, if any, upon the
Effective Date or as soon as practicable thereafter.
(l) Payment of Loral Fees. The Company shall pay (i) all fees, costs
and expenses of Loral's legal advisors incurred to date by the Loral Entities in
connection with the Loral Usufructo and (ii) from the date this Agreement is
executed, any and all amounts incurred by Loral and its affiliates for the fees,
costs and expenses of its legal advisors incurred in
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connection with the protection of Loral's rights and obligations under the
Restructuring Agreement, the Term Sheet (other than section IV thereof),
including without limitation with respect to the Loral Usufructo and the Loral
Grant, and the 304 Stipulation; provided, however, that from the date of the
filing of the Petition through the Effective Date, all such fees and expenses
shall accrue and be paid on or as soon as practicable after the Effective Date.
Notwithstanding the foregoing, the Company's payments of all fees and expenses
pursuant to this section 8(l) shall not exceed two hundred fifty thousand
dollars (U.S. $250,000) in the aggregate.
(m) The Company shall make all payments hereunder on account of fees
and expenses of WilmerHale, MAH, Evercore, Sitrick, Akin, Chanin and Loral's
legal advisors (other than any Mexican legal advisor) in U.S. currency without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, charges, or withholdings imposed by Mexico or any political
subdivision thereof. Payments hereunder to CAAYS, CAN, Principia, its legal
advisors and any Mexican legal advisor of Loral shall be billed and made in
Mexican currency.
(n) The Company acknowledges and agrees that each FRN Advisor and
Senior Note Advisor has been retained to act solely as counsel to the members of
the Ad Hoc FRN Committee and the Ad Hoc Senior Note Committee, respectively, and
that, notwithstanding the Company's agreement to pay the reasonable fees and
actual, documented out-of-pocket expenses of the FRN Advisors and Senior Note
Advisors, no FRN Advisor or Senior Note Advisor shall owe any duty or obligation
whatsoever to the Company, and that each FRN Advisor's and Senior Note Advisor's
sole responsibility with respect to the Restructuring is to the members of the
Ad Hoc FRN Committee and the Ad Hoc Senior Note Committee, respectively.
(o) Payment of Fees to the Conciliador. From the date hereof through
the Effective Date, the Company shall pay to the Conciliador, fees, costs and
expenses of the Conciliador, and of litigation counsel (Santamarina y Steta,
S.C.) and accounting advisors (Ernst & Young Mancera) to the Conciliador, for
services rendered relating to the Restructuring in the amount of MXP $2,000,000
per month; provided, however, that from the date of the filing of the Petition
through the Effective Date, all such advisory fees and expenses shall accrue and
be paid on or as soon as practicable after the Effective Date. The Conciliador
will not be entitled to any other success or other fee in connection with the
Concurso Proceeding or the Restructuring.
Section 9. Termination of Agreement.
This Agreement may be terminated, unless the Restructuring has been
consummated, as follows:
(a) By the Majority FRN Holders and the Majority Noteholders, acting
jointly, upon a breach of any covenant or agreement of the Company, Servicios or
any Supporting Equity Holder set forth in this Agreement, or if any
representation or warranty of the Company, Servicios, or any Supporting Equity
Holder set forth in this Agreement shall have been or becomes untrue, in each
case such that the ability of the Company or Servicios to perform its
obligations hereunder or otherwise to consummate the Restructuring or the
Servicios
- 25 -
Restructuring has been materially adversely affected; provided, however, that,
except in the case of an intentional or willful breach, the Majority FRN Holders
and the Majority Noteholders shall not be entitled to terminate this Agreement
pursuant to this section 9(a), (i) so long as the Company, Servicios or such
Supporting Equity Holder, as applicable, is using commercially reasonable
efforts to cure such breach or untruth and such breach or untruth is capable of
cure and is cured on or before the 30th calendar day after receiving notice
thereof or (ii) if such breach or untruth is proximately caused by a breach of
any obligation of any Supporting FRN Holder or Supporting Noteholder hereunder
and; provided, further, that the right to terminate this Agreement under this
section 9(a) shall not be available to any (x) Majority FRN Holders if such
majority includes and is dependent upon a Supporting FRN Holder in breach of its
obligations hereunder where such breach has caused the failure of the Concurso
Plan Order to be entered, the Chapter 11 Plan Order to be entered or has caused
the failure of the Effective Date to occur, in each case by the applicable
Outside Date and (y) Majority Noteholders if such majority includes and is
dependent upon a Supporting Noteholder in breach of its obligations hereunder
where such breach has caused the failure of the Concurso Plan Order to be
entered, the Chapter 11 Plan Order to be entered or has caused the failure of
the Effective Date to occur, in each case by the applicable Outside Date;
(b) By either the Company, the Majority FRN Holders, or the Majority
Noteholders, if the Concurso Plan Order or Chapter 11 Plan Order has not been
entered or the Effective Date has not occurred on or before the applicable
Outside Date; provided, however, that the right to terminate this Agreement
under this section 9(b) shall not be available to (1) the Company, if the
Company's default of its obligations under this Agreement has resulted in the
failure of the Concurso Plan Order or the Chapter 11 Plan Order to be entered,
or the Effective Date to occur on or before the applicable Outside Date and (2)
any (x) Majority FRN Holders if such majority includes and is dependent upon a
Supporting FRN Holder in breach of its obligations hereunder where such breach
has caused the failure of the Concurso Plan Order or the Chapter 11 Plan Order
to be entered, or has caused the failure of the Effective Date to occur, in each
case by the applicable Outside Date or (y) Majority Noteholders if such majority
includes and is dependent upon a Supporting Noteholder in breach of its
obligations hereunder where such breach has caused the failure of the Concurso
Plan Order or the Chapter 11 Plan Order to be entered, or has caused the failure
of the Effective Date to occur, in each case by the applicable Outside Date;
(c) By any Supporting Noteholder or Supporting FRN Holder, as to
itself only, if the Concurso Plan Order has not been entered or the Chapter 11
Plan Order has not been entered or the Effective Date has not occurred on or
before the applicable Outside Date;
(d) By the Company, so long as the Company is not then in breach of
its obligations under this Agreement in any material respect, upon a breach of
any covenant or agreement by any Supporting FRN Holder or Supporting Noteholder
set forth in this Agreement, or if any representation or warranty set forth in
this Agreement by any Supporting FRN Holder or Supporting Noteholder shall have
been or becomes untrue, in each case such that the ability of the Company to
consummate the Restructuring has been materially adversely affected; provided,
however, that, except in the case of an intentional or willful breach, the
Company shall not be entitled to terminate this Agreement pursuant to this
section 9(d) so long as the Supporting FRN Holder or Supporting Noteholder, as
applicable, is using commercially reasonable efforts to cure
- 26 -
such breach or untruth and such breach or untruth is capable of cure and is
cured on or before the 30th calendar day after receiving notice thereof;
(e) (i) By the Company or the Majority FRN Holders, if the Concurso
Filing Trigger has not occurred by the earlier of (A) the Concurso Filing
Deadline and (B) May 22, 2006, and (ii) by the Company, the Majority FRN
Holders, or the Majority Noteholders, if the Chapter 11 Filing Trigger has not
occurred within ten (10) days following the Chapter 11 Filing Deadline;
provided, however, that the right to terminate this Agreement under this section
9(e) shall not be available to (x) the Majority FRN Holders if such majority
includes and is dependent upon a Supporting FRN Holder in breach of its
obligations hereunder where such breach has caused the failure of the Concurso
Filing Trigger or Chapter 11 Filing Trigger to occur, or (y) the Majority
Noteholders if such majority includes and is dependent upon a Supporting
Noteholder in breach of its obligations hereunder where such breach has caused
the failure of the Chapter 11 Filing Trigger to occur, or (z) the Company if the
Company is in breach of its obligations hereunder where such breach has caused
the failure of the Concurso Filing Trigger or Chapter 11 Filing Trigger to
occur;
(f) By the Majority FRN Holders and the Majority Noteholders, acting
jointly, if a Target has not occurred within ten (10) Business Days of the
applicable Target Date; provided, however, that the right to terminate this
Agreement under this section 9(f) shall not be available to the (x) Majority FRN
Holders, if such majority includes and is dependent upon a Supporting FRN Holder
in breach of its obligations hereunder where such breach has caused a Target not
to occur within ten (10) Business Days of the applicable Target Date and (y)
Majority Noteholders, if such majority includes and is dependent upon a
Supporting Noteholder in breach of its obligations hereunder where such breach
has caused a Target not to occur within ten (10) Business Days of the applicable
Target Date;
(g) By any party to this Agreement if (i) the Concurso Proceeding
shall be converted to a quiebra under article 167 of the MBRA or (ii) if the
Chapter 11 Case shall be converted to a case under Chapter 7 of the Bankruptcy
Code or a liquidating chapter 11 case or (iii) if there is a total loss of the
Satmex 6 Satellite prior to the Effective Date;
(h) By the Required FRN Holders and the Required Noteholders, acting
jointly, if there shall be issued any medida cautelar, suspension order or
similar order by a court or other governmental body of competent jurisdiction
that materially and adversely affects the Company's obligations with respect to
this Agreement; provided, (i) such proceeding or order was issued at the request
or with the acquiescence of the Company or its affiliates or (ii) in all other
circumstances, if such order is not stayed, reversed or vacated before the
earlier of 30 days thereafter and the Outside Date; provided, further, that the
right to terminate this Agreement under this section 9(h) shall not be available
to the Required Noteholders or Required FRN Holders, as the case may be, if such
medida cautelar, suspension order or similar order is issued as a result of
actions taken by a Supporting Noteholder or Supporting FRN Holder or is
otherwise supported by a Supporting Noteholder or Supporting FRN Holder;
(i) By the Company, if there shall be issued any medida cautelar,
suspension order or similar order by a court or other governmental body of
competent jurisdiction that materially and adversely affects the Restructuring
and if such order is not stayed, reversed or
- 27 -
vacated before the earlier of 30 days thereafter and the Outside Date; provided,
however, that the Company shall not be entitled to terminate this Agreement
pursuant to this section 9(i) if such medida cautelar, suspension order or
similar order was issued at the request of, or acquiescence of, the Company or
its affiliates or is otherwise supported by the Company or its affiliates.
(j) By the Majority FRN Holders, upon a breach of any obligation of
any Supporting Noteholder set forth in section 5 of this Agreement, or if any
representation provided pursuant to section 10(b)(i) shall have been or becomes
untrue, such that the ability to consummate the Restructuring has been
materially adversely affected; provided, however, that the Majority FRN Holders
shall not be entitled to terminate this Agreement pursuant to this section 9(j)
so long as the Supporting Noteholder is using commercially reasonable efforts to
cure such breach or untruth and such breach or untruth is capable of cure on or
before the 30th calendar day after receiving notice thereof; provided, further,
that the right to terminate this Agreement under this section 9(j) shall not be
available to the Majority FRN Holders if such majority includes and is dependent
upon a Supporting FRN Holder in breach of its obligations set forth in section 5
of this Agreement, or if any representation provided by any such Supporting FRN
Holder pursuant to section 10(b)(i) shall have been or becomes untrue, such that
the breach or untruth has caused the failure of the Concurso Plan Order to be
entered, the Chapter 11 Plan Order to be entered or has caused the failure of
the Effective Date to occur, in each case by the applicable Outside Date;
(k) By the Majority Noteholders, upon a breach of any obligation of
any Supporting FRN Holder set forth in section 5 of this Agreement, or if any
representation provided pursuant to section 10(b)(i) shall have been or becomes
untrue, such that the ability to consummate the Restructuring has been
materially adversely affected; provided, however, that the Majority Noteholders
shall not be entitled to terminate this Agreement pursuant to this section 9(k)
so long as the Supporting FRN Holder is using commercially reasonable efforts to
cure such breach or untruth and such breach or untruth is capable of cure on or
before the 30th calendar day after receiving notice thereof; provided, further,
that the right to terminate this Agreement under this section 9(k) shall not be
available to the Majority Noteholders, if such majority includes and is
dependent upon a Supporting Noteholder in breach of its obligations set forth in
section 5 of this Agreement, or if any representation provided by any such
Supporting Noteholder pursuant to section 10(b)(i) shall have been or becomes
untrue, such that the breach or untruth has caused the failure of the Concurso
Plan Order to be entered, the Chapter 11 Plan Order to be entered or has caused
the failure of the Effective Date to occur, in each case by the applicable
Outside Date;
(l) By the Majority FRN Holders, if the Company fails (a) to insure
the Satmex 6 Satellite in accordance with section 4(f), and naming the FRN
Collateral Trustee as loss payee and additional insured, or (b) to provide
counsel to the Ad Hoc FRN Committee with the certificate of insurance referenced
in section 4(f) prior to the launch of the Satmex 6 Satellite;
(m) By Loral, as to itself only, pursuant to section 5A of this
Agreement; or
(n) By the Majority FRN Holders and the Majority Noteholders, acting
jointly, if SS/L fails to perform its obligations in accordance with the terms
of the Loral
- 28 -
Settlement Agreements but only to the extent such failure has a material impact
on the Restructuring or the business operation of the Company.
Upon any termination of this Agreement, no party shall have any further
right obligation or liability under this Agreement or the Term Sheet except that
such party shall not be relieved of any liability for damages resulting from its
breach of any representation, warranty, covenant or obligation that occurs prior
to the termination of this Agreement; provided, however, that (i) the Company
shall be liable for any reasonable fees and actual, documented out-of-pocket
expenses incurred pursuant to section 8 from the date hereof to the termination
of this Agreement and (ii) the Company shall provide the Loral Usufructo and
Loral Grant to the Loral Entities on the terms described in section I of the
Term Sheet under the caption "Loral Transponders"; provided, further, that as to
a termination of this Agreement solely with respect to a party, such party shall
have no further right, obligation or liability under this Agreement or the Term
Sheet except that such party shall not be relieved of any liability for damages
resulting from its breach of any representation, warranty, covenant or
obligation that occurs prior to the termination of this Agreement; provided,
further, that solely with respect to a termination by Loral as to itself only,
and in connection with the Restructuring, upon the Effective Date, the parties
to this Agreement shall provide the Loral Usufructo and Loral Grant to the Loral
Entities on the terms described in section I of the Term Sheet under the caption
"Loral Transponders". For the avoidance of doubt, Loral shall have no liability
under this Agreement for exercising any of its rights under the 304 Stipulation.
Upon the consummation of the Restructuring, neither the Company nor any
Supporting Holder shall have any further obligation or liability hereunder,
except for the Company's obligations under section 8. In the event of any
termination with respect to a party, the Company shall (i) promptly notify the
respective counsel to the Committees and Loral of such termination, and (ii)
advise the respective counsel to the Committees and Loral whether, following
such termination, (A) the aggregate principal amount of FRNs held by all
remaining Supporting FRN Holders has decreased below either a majority or
66-2/3% of the total outstanding FRNs, as applicable, and (B) the aggregate
principal amount of Senior Notes held by all remaining Supporting Noteholders
has decreased below a majority or 66-2/3% of the outstanding Senior Notes, as
applicable. The parties acknowledge that the Company will be relying upon
information provided to it from the security holders.
Section 10. Representations and Warranties.
(a) Each of the signatories to this Agreement represents and warrants
to the other signatories to this Agreement that, as of the date hereof:
(i) if an entity, it is duly organized, validly existing and in good
standing (to the extent applicable) under the Laws of the jurisdiction of
its organization and has all requisite corporate, partnership or other
power and authority to enter into this Agreement and, subject to the
provisions of section 10(d) below with respect to the Company, to carry out
the transactions contemplated by, and perform its respective obligations
under, this Agreement;
- 29 -
(ii) except with respect to the Company, the execution and delivery of
this Agreement and the performance of its obligations hereunder have been
duly authorized by all necessary corporate, partnership or other action on
its part (as it relates to the Company, all necessary corporate or other
action required for the execution and delivery of this Agreement and the
performance of its obligations hereunder will be obtained upon approval by
Firmamento);
(iii) the execution, delivery and performance by it of this Agreement
does not (A) violate any provision of Applicable Law applicable to it or
its certificate of incorporation or bylaws, estatutos sociales or other
organizational documents (subject to the provisions of section 10(d) below
with respect to the Company), or (B) conflict with, result in the breach of
or constitute (with due notice or lapse of time or both) a default under
any contractual obligations to which it is a party or under its certificate
of incorporation, bylaws, estatutos sociales or other governing instruments
(subject to the provisions of section 10(d) below with respect to the
Company), in each case so that such violation, breach or conflict would
materially adversely affect the ability of the Company to consummate the
Chapter 11 Plan;
(iv) this Agreement is a legally valid and binding obligation of it,
enforceable against it in accordance with the terms hereof (subject to the
provisions of section 10(d) below with respect to the Company), except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws, including the provisions of the
MBRA affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings
in equity or at law); and
(v) it has been represented by counsel in connection with this
Agreement and the transactions contemplated by this Agreement.
(b) Each of the Supporting Holders further represents and warrants to
the other signatories to this Agreement that:
(i) as of the date of this Agreement, such Supporting Holder is the
beneficial owner of, or the investment adviser or manager for the
beneficial owners of, or the indirect parent of the entity that holds, the
Securities, as specified with respect to it on Exhibits B and C hereto,
with full power and authority to vote and dispose of such Securities;
(ii) such Supporting Holder has reviewed, with the assistance of
professional and legal advisors of its choosing, all information necessary
for such Supporting Holder to decide to support the Restructuring through
the Concurso Plan and Chapter 11 Plan and as described herein and in the
Term Sheet on an informed basis;
(iii) such Supporting Holder is an "Accredited Investor" as defined in
Rule 501 of Regulation D under the Securities Act; and
- 30 -
(iv) such Supporting Holder does not owe any fiduciary or similar duty
to any other Person that would prevent it from taking any action required
of it under this Agreement.
(c) The Company further represents and warrants to the other
signatories to this Agreement that, as of the date hereof:
(i) the execution, delivery and performance by it of this Agreement
does not require any registration or filing with, the consent or approval
of, notice to, or any other action with respect to, any Governmental
Authority, except such filings and approvals as may be required for
disclosure, the U.S. Bankruptcy Court and the Securities and Exchange
Commission and, except further, that the performance by the Company
hereunder and the consummation of the Restructuring is subject to (a) the
prior approval by SCT to the amendment of the Company's bylaws (estatutos
sociales) as provided in the Term Sheet and to modify the existing equity
structure of the Company as provided in the Term Sheet, (b) the prior
approval by CNIE to issue Bondholder Equity in the form of "neutral
investment" Series N shares, (c) the prior approval by the Federal
Communications Commission, (d) the prior authorization of the Restructuring
by COFECO and (e) the registration of the First Priority Senior Secured
Notes and the Second Priority Senior Secured Notes in the Special Section
of the National Securities Registry of Mexico; provided, however, that it
is anticipated that in accordance with section 1145 of the Bankruptcy Code,
the issuance by the Company of the First Priority Senior Secured Notes to
holders of the FRNs and the Second Priority Senior Secured Notes and
Bondholder Equity to holders of the Senior Notes in the Restructuring shall
be exempt from registration under the Securities Act;
(ii) except for the FRN Advisors and the Senior Note Advisors, and
except for Milbank, Tweed, Hadley & McCloy LLP; Galicia y Robles, S.C.;
Javier Quijano Baz and/or Alfonso Martin Lopez Melih; UBS Warburg LLC;
Valor Consultores, S.A. de C.V.; Martinez, Algaba, Estrella, De Haro y
Galvan Duque, S.C., as counsel to Citibank, N.A.; Citibank, N.A., as
indenture trustee for the FRNs; Nixon Peabody, as counsel to Citibank,
N.A.; The Bank of New York, as indenture trustee for the Senior Notes;
Baker & McKenzie, LLP and Baker & McKenzie, S.C., as counsel to The Bank of
New York; Weil, Gotshal & Manges LLP, as counsel to Loral; Ritch Mueller,
S.C., as counsel to Loral; Chevez, Ruiz, Zamarripa y Compania, S.C., as
counsel to Principia; Villegas, Cassis y Asociados, S.C., as counsel to
Principia; Mansur y Ruiz Ortega, S.C., as counsel to Principia; and the
Conciliador, in each case pursuant to written agreements or arrangements
that have been provided or disclosed in full to the FRN Advisors and the
Senior Note Advisors or as set forth herein, the Company is not subject to
or bound by any other material agreement, arrangement or understanding to
pay or provide any Person, directly or indirectly, any fee, expense or
other payment or compensation, on account of advisory, banking, consulting,
legal, accounting or similar services in connection with the Restructuring
or any part thereof, or in connection with any other transaction now or
hereafter involving the Company, other than fees, expenses or other
payments or compensation that may relate to the Restructuring by ordinary
course professionals of the Company;
- 31 -
(iii) except as expressly provided in the Term Sheet or this
Agreement, the Company is not subject to or bound by any agreement,
arrangement or understanding to pay or provide directly or indirectly to
the holder of any of the Company's Securities or any affiliate thereof in
their capacity as such, directly or indirectly, any fee, expense or other
payment or compensation, in connection with the Restructuring or any part
thereof, or in connection with any other transaction now or hereafter
involving the Company;
(iv) neither the Company nor any of the service companies is a party
to or bound by any material employment, severance or retention agreements
or arrangements except for those as have been previously disclosed to the
FRN Advisors and the Senior Notes Advisors.
(d) As it relates to the Company, the other parties to this Agreement
acknowledge and agree that, until such time as the Company delivers to the
Supporting Holders item number "3" on Annex C, performance of this Agreement by
the Company and the consummation of the transactions herein contemplated
requires shareholder and, in some cases, board action which, pursuant to its
by-laws, requires further approval of Firmamento.
(e) Loral represents and warrants that, notwithstanding the Loral
Pledge, Loral has the right as of the date hereof to (i) vote the shares pledged
thereunder to support the Restructuring, (ii) exchange such shares for new
Series B Shares of the Company, and (iii) transfer such new Series B Shares to
the Equity Trust and sell such new Series B Shares, all as provided herein and
in the Term Sheet.
Section 11. Preparation of Restructuring Documents.
Promptly upon the effectiveness of this Agreement,
(a) the Company shall instruct its counsel to prepare (i) the
Petition, (ii) the Disclosure Statement, (iii) the Chapter 11 Plan, (iv) all
schedules, motions, pleadings, and other papers it deems necessary in connection
with the filing of the Petition, the presentation of the Concurso Plan to
holders of Recognized Claims and subsequent filing of the Concurso Plan with the
Mexican Bankruptcy Court and (v) all other motions, pleadings, papers,
agreements, documents (including without limitation the notices and writs to
obtain approvals by CNIE, COFECO, and SCT) and other materials necessary or
useful in implementing the Restructuring and consummating the Chapter 11 Plan
(collectively, with the Concurso Plan, the "Plan and Approval Documents"). The
Company shall provide all Plan and Approval Documents to the Supporting Holders'
respective counsel prior to their filing and/or execution (as the case may be)
and shall consult with such counsel with respect to the form and substance of
such Plan and Approval Documents.
(b) the Company shall instruct its counsel to prepare the documents
identified in Exhibit E hereto (collectively, the "Equity Documents"). The
Company shall provide all Equity Documents to the Supporting Holders' respective
counsel prior to their filing and/or execution (as the case may be) and shall
consult with such counsel with respect to the form and substance of such Equity
Documents.
- 32 -
(c) the holders on the Ad Hoc FRN Committee shall instruct their
counsel to prepare (i) the indenture for the First Priority Senior Secured Notes
to be issued by the Company, (ii) the new note for the First Priority Senior
Secured Notes, (iii) the new Collateral Trust Agreement for the First Priority
Senior Secured Notes, (iv) the mortgage instrument securing the First Priority
Senior Secured Notes, and (v) all other motions, pleadings, papers, agreements,
documents and other materials they and the Company deem necessary or useful in
issuing the First Priority Senior Secured Notes (collectively, the "First
Priority Senior Secured Notes Documents"). The Supporting FRN Holders shall
provide all First Priority Senior Secured Notes Documents to the Company's and
other Supporting Holders' counsel prior to their filing and/or execution (as the
case may be) and shall consult with such counsel with respect to the form and
substance of such First Priority Senior Secured Notes Documents.
(d) the Supporting Noteholders shall instruct their counsel to prepare
(i) the indenture for the Second Priority Senior Secured Notes to be issued by
the Company, (ii) the new note for the Second Priority Senior Secured Notes,
(iii) the mortgage instrument securing the Second Priority Senior Secured Notes,
(iv) the Collateral Trust Agreement for the Second Priority Senior Secured
Notes, (v) the registration rights agreement, (vi) the articles of incorporation
and by-laws of the SPE, and (vii) all other motions, pleadings, papers,
agreements, documents and other materials they and the Company deem necessary or
useful in issuing the Second Priority Senior Secured Notes (collectively, the
"Second Priority Senior Secured Notes Documents"). The Supporting Noteholders
shall provide all Second Priority Senior Secured Notes Documents to the
Company's and other Supporting Holders' counsel prior to their filing and/or
execution (as the case may be) and shall consult with such counsel with respect
to the form and substance of such Second Priority Senior Secured Notes
Documents.
(e) the members of the Ad Hoc FRN Committee and the Supporting
Noteholders shall instruct their respective counsel to prepare an intercreditor
agreement (the "Intercreditor Agreement") in connection with the issuance of the
First Priority Senior Secured Notes and the Second Priority Senior Secured
Notes. The Supporting FRN Holders and the Supporting Noteholders shall provide
the Intercreditor Agreement to the Company's and other Supporting Holders'
counsel prior to its execution and shall consult with such counsel.
(f) the Supporting Equity Holders shall take such resolutions and
shall instruct their counsel to prepare all motions, pleadings, papers,
agreements, documents and other materials as the Supporting Equity Holders
determine are reasonably necessary or useful in implementing the Restructuring
and consummating the Concurso Plan and the Chapter 11 Plan except as otherwise
provided in this Section 11 (collectively, the "Equity Holders Documents"). The
Supporting Equity Holders shall provide all Equity Holders Documents to the
Company's and other Supporting Holders' counsel prior to their filing and/or
execution (as the case may be) and shall consult with such counsel with respect
to the form and substance of such Equity Holders Documents.
(g) the (i) Plan and Approval Documents, (ii) Equity Documents, (iii)
First Priority Senior Secured Note Documents, (iv) Second Priority Senior
Secured Notes Documents, (v) Intercreditor Agreement, (vi) Equity Holder
Documents, and (vii) Loral Documents (collectively, the "Restructuring
Documents") shall be in form and substance reasonably satisfactory to the
respective counsel to the Committees and to the Company.
- 33 -
(h) the Company shall instruct its counsel to prepare the Loral
Documents. The Loral Documents and the Equity Documents shall be in form and
substance reasonably satisfactory to counsel to Loral.
Section 12. Good Faith.
Each of the signatories to this Agreement agrees to cooperate in good faith
with each other to facilitate the performance by the parties of their respective
obligations hereunder and the purposes of this Agreement. Each of the
signatories to this Agreement further agrees to negotiate the Restructuring
Documents in good faith and, in any event, in all respects consistent with the
Term Sheet.
Section 13. Amendments and Modifications.
This Agreement and the Term Sheet may be amended, modified, or
supplemented, and any term or condition of this Agreement or the Term Sheet may
be waived, only in writing signed by the Company and the Majority FRN Holders
and Majority Noteholders, provided, however, that:
(a) the written consent of a Supporting Equity Holder shall be
required with respect to any amendment, modification, supplement, or waiver that
(i) imposes any new or additional material obligation on that Supporting Equity
Holder, (ii) materially reduces the value of the rights of that Supporting
Equity Holder as set forth in the Term Sheet in a manner that is
disproportionate to reductions in value of similar rights of the other
Supporting Equity Holder and/or the Supporting Noteholders under section IV of
the Term Sheet, or (iii) has a material adverse effect on that Supporting Equity
Holder's ability to perform its obligations under this Agreement;
(b) the written consent of Loral shall be required as set forth in
section 5A(b) hereof; and
(c) the written consent of a Supporting FRN Holder or a Supporting
Noteholder shall be required with respect to any amendment, modification,
supplement, or waiver that (i) has a material effect on that Supporting FRN
Holder or Supporting Noteholder that is disproportionately adverse to that
Supporting FRN Holder as compared to other Supporting FRN Holders or to that
Supporting Noteholder as compared to other Supporting Noteholders, or (ii)
alters the rights of that Supporting FRN Holder or Supporting Noteholder to
terminate this Agreement as to itself pursuant to section 9(c) or 9(g);
provided, however, that any Outside Date may be extended for a period of up to
thirty (30) days with the consent of the Majority FRN Holders and Majority
Noteholders.
Notwithstanding the foregoing provisions of this section 13, the Majority FRN
Holders and the Majority Noteholders, acting jointly, without the consent of any
other party hereto, may change any Target Date to a later date by written notice
to the other parties hereto.
- 34 -
Section 14. Further Assurances.
Each of the signatories to this Agreement hereby further covenants and
agrees to execute and deliver all further documents, agreements and take all
further action that in good faith may be reasonably necessary or desirable, or
that the Company, the Conciliador, FRN Advisors, or Senior Note Advisors may
reasonably request, in order to enforce and effectively implement the terms and
conditions of this Agreement.
Section 15. Complete Agreement.
This Agreement, including the annexes and exhibits hereto, constitutes the
complete agreement between the parties to this Agreement with respect to the
subject matter hereof and supersedes all prior and contemporaneous negotiations,
agreements and understandings with respect to the subject matter hereof. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intent of the parties to this Agreement. In the event that any
provision of this Agreement conflicts with any annexes or exhibits hereto, the
provisions of this Agreement shall be controlling.
Section 16. Notices.
All notices, requests, demands, claims and other communications hereunder
shall be in writing and shall be (a) transmitted by hand delivery, (b) mailed by
first class, registered or certified mail, postage prepaid, (c) transmitted by
overnight courier or (d) transmitted by telecopy, and in each case, if to the
Company, at the address set forth below:
Rodolfo Gaona #86
Col. Lomas de Sotelo
Mexico D.F. 11200 Mexico
Telephone: (52) (55) 2629-5808
Facsimile: (52) (55) 2629-5895
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, NY 10005
Telephone: (212) 530-5000
Fax: (212) 530-5219
Attention: Luc A. Despins, Esq.
Matthew S. Barr, Esq.
- 35 -
if to Principia, at the address set forth below:
Rodolfo Gaona 86-F
Col. Lomas de Sotelo
Mexico D.F. 11200 Mexico
Telephone: (52) (55) 2629-5889
Facsimile: (52) (55) 2629-5848
Attention: Sergio Miguel Angel Autrey Maza
if to Loral, at the address set forth below:
600 Third Avenue
New York, NY 10016
Telephone: (212) 697-1105
Facsimile: (212) 338-5320
Attention: General Counsel
if to the Conciliador, at the address set forth below:
Thomas S. Heather
c/o White & Case, S.C.
Torre del Bosque - PH
Blvd. Manuel Avila Camacho #24
Col. Lomas de Chapultepec
11000 Mexico, D.F., Mexico
Telephone: (52) (55) 5540-9600
Fax: (52) (55) 5540-9699
if to a Supporting FRN Holder, to the address set forth on the signature pages
to this Agreement, with a copy (which shall not constitute notice) to:
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, MA 02109
Telephone: (617) 526-6000
Facsimile: (617) 526-5000
Attention: Dennis Jenkins, Esq.
George Shuster, Esq.
if to a Supporting Noteholder, to the address set forth on the signature pages
to this Agreement, with a copy (which shall not constitute notice) to:
Akin, Gump, Strauss, Hauer & Feld LLP
590 Madison Avenue
New York, NY 10022
- 36 -
Telephone: (212) 872-1000
Facsimile: (212) 872-1002
Attention: Michael S. Stamer, Esq.
Steven Scheinman, Esq.
if to a Supporting Equity Holder, to the address set forth on the signature
pages to this Agreement, with a copy (which shall not constitute notice) to:
Loral Space & Communications Inc.
600 Third Avenue
New York, NY 10016
Telephone: (212) 697-1105
Facsimile: (212) 338-5320
Attention: General Counsel
Principia, S.A. de C.V.
Rodolfo Gaona 86-F
Col. Lomas de Sotelo
Mexico D.F. 11200 Mexico
Telephone: (52) (55) 2629-5889
Facsimile: (52) (55) 2629-5848
Attention: Sergio Miguel Angel Autrey Maza
Notices mailed or transmitted in accordance with the foregoing shall be deemed
to have been given upon receipt. Notices may be given by United States of
America counsel to the party hereto.
Section 17. Several Liability. The obligations of the parties to this
Agreement hereunder are ratable and several and not joint nor joint and several,
and no party to this Agreement shall be liable for any breach or nonperformance
by any other party to this Agreement.
Section 18. No Waiver. Each of the signatories to this Agreement expressly
acknowledges and agrees that, except as expressly provided in this Agreement,
nothing in this Agreement is intended to, or does, in any manner waive, limit,
impair or restrict the ability of any party to this Agreement to protect and
preserve all of its rights, remedies and interests, including, without
limitation, with respect to its claims against and interests in the Company.
Section 19. Governing Law.
THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
(WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL RESPECTS BE
- 37 -
GOVERNED BY AND INTERPRETED, CONSTRUED, AND DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS OF LAW
PROVISION THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION).
NOTWITHSTANDING THE FOREGOING, THE CONCURSO PLAN CONTEMPLATED BY THIS
AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES THEREUNDER, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE THEREUNDER, SHALL IN ALL
RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED, AND DETERMINED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE UNITED MEXICAN STATES (WITHOUT REGARD TO ANY
CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY
OTHER JURISDICTION).
Section 20. Jurisdiction.
By its execution and delivery of this Agreement, each of the signatories to
this Agreement (i) irrevocably and unconditionally agrees that so long as the
Company has commenced a Chapter 11 Case, any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, shall be brought exclusively in the
Bankruptcy Court and (ii) so long as the Company has commenced a Chapter 11
Case, expressly waives any other forum that may correspond by virtue of
domicile, whether present or future, or otherwise.
The foregoing shall not preclude the jurisdiction of the Mexican Bankruptcy
Court with respect to any legal action, suit or proceeding against it with
respect to any matter under or arising out of or in connection with the Concurso
Plan contemplated by this Agreement, and the rights and obligations of the
parties thereunder, including all matters of construction, validity and
performance thereunder.
Section 21. 304 Injunction.
The Company shall, by April 20, 2006, file a motion seeking the
modification of the injunction pending in its 304 Proceeding solely in order to
permit the parties hereto only to terminate this Agreement in accordance with
the terms hereof, and this Agreement shall automatically terminate if the
Company does not file such motion within such period, and if the Bankruptcy
Court does not grant such modification by May 11, 2006, unless such deadline is
waived or extended by the majority of the Supporting FRN Holders hereto and the
majority of the Supporting Noteholders hereto, acting jointly; provided,
however, that the foregoing waiver shall not apply and shall have no effect as
to Loral and this Agreement shall automatically terminate as to Loral only if
the Company does not file such motion by April 20, 2006, and if the Bankruptcy
Court does not grant such modification by May 11, 2006, unless such deadline is
waived or extended by Loral in writing. Notwithstanding anything to the contrary
contained in this section 21, the parties agree that the Company may seek such
modification of the injunction in the 304 Proceeding by notice of presentment
attaching a form of order.
- 38 -
Section 22. Specific Performance.
It is understood and agreed by each of the signatories to this Agreement
that money damages may not be a sufficient remedy for any breach of this
Agreement by any party and each non-breaching party shall be entitled to seek
specific performance, injunctive, rescissionary or other equitable relief as a
remedy for any such breach.
Section 23. Headings.
The headings of the sections, paragraphs and subsections of this Agreement
are inserted for convenience only and shall not affect the interpretation
hereof.
Section 24. Successors and Assigns.
This Agreement is intended to bind and inure to the benefit of the parties
to this Agreement and their respective successors, permitted assigns, heirs,
executors, administrators and representatives.
Section 25. Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page by telecopier
shall be effective as delivery of a manually executed counterpart. Any Person
may become party to this Agreement on or after the date of this Agreement by
executing a signature page to this Agreement and/or, if applicable, in
accordance with section 5(c), executing an Accession Agreement. Upon the
delivery of such executed signature pages and/or Accession Agreement to the
Company, such Person shall be deemed to be a Supporting Holder as if it had been
an initial signatory hereto.
Section 26. No Third-Party Beneficiaries.
This Agreement shall be solely for the benefit of the parties to this
Agreement, and no other Person or entity shall be a third-party beneficiary
hereof.
Section 27. No Solicitations.
This Agreement is not intended to be, and each party to this Agreement
acknowledges that it is not, a solicitation of the acceptance or rejection of
any plan of reorganization for the Company pursuant to section 1125 of the
Bankruptcy Code. This Agreement is not a solicitation for acceptances or
rejections of a plan (Convenio Concursal) under the Concurso Proceeding of the
Company.
Section 28. Consideration.
It is hereby acknowledged by each of the parties that no consideration
(other than the obligations of the other parties under this Agreement) shall be
due or paid to the parties for their agreement to support the transactions
contemplated herein.
- 39 -
Section 29. Independent Due Diligence and Decision-Making.
(a) Each of the parties hereby confirms that its decision to execute
this Agreement has been based upon its independent investigation of the
operations, business, financial and other conditions and prospects of the
Company.
(b) Each of the Supporting Holders acknowledges that all documents,
records and books pertaining to the Company requested by such Supporting Holders
have been made available for inspection by it, its attorneys, financial advisors
and accountants, and that it understands that all such documents, books and
records will continue to be made available to it, its attorneys, financial
advisors and accountants for inspection upon reasonable notice, during
reasonable business hours. Each of the Supporting Holders and their respective
advisors has had a reasonable opportunity to ask questions of and receive
answers from the officers of the Company, or a Person or Persons acting on their
behalf, concerning the Company and the terms and conditions of the
Restructuring, the Concurso Plan and the Chapter 11 Plan, and to obtain
additional information, to the extent possessed or obtainable without
unreasonable effort or expense by the officers of the Company, necessary to
confirm the accuracy of the information provided by, or on behalf of, the
Company.
(c) Each of the Supporting Holders has such knowledge and experience
in financial and business matters as to enable it (i) to utilize the information
made available to it in connection with the Restructuring (including the Term
Sheet), (ii) to evaluate the merits and risks associated with the Restructuring
(including the Term Sheet) and (iii) to make an informed decision with respect
thereto.
(d) Each of the Supporting Holders has the capacity to protect its own
interests in connection with the Restructuring (including the Term Sheet) and
has obtained, in such Supporting Holder's judgment, sufficient information
relating to the Company and its business to evaluate the merits and risks of the
transactions contemplated herein.
(e) Each of the Supporting Holders understands that any and all
financial forecasts provided by, or on behalf of, the Company are based on
various estimates and assumptions of the officers of the Company and their
respective advisors and are subject to the caveats set forth in such materials.
(f) Between the date hereof and the Effective Date, the Company shall
afford or use its reasonable best efforts to cause to afford, in the case of
Enlaces, to the FRN Advisors and the Senior Note Advisors reasonable access to
the Company's and Enlaces' business, operations, properties, books, files and
records, and shall cooperate in the examination thereof and furnish such
advisors with all reasonable information with respect to the business and
affairs of the Company and Enlaces as such advisors may reasonably request
during normal business hours, subject to existing confidentiality obligations
and to any applicable privileges. Nothing in this section 29(f) shall obligate
the Company to prepare any information not prepared in the ordinary course of
business. All information furnished to the FRN Advisors and the Senior Note
Advisors pursuant to this section 29(f) shall be subject to the provisions of
their respective confidentiality agreements between the Company and the FRN
Advisors and the Senior Note Advisors.
- 40 -
Section 30. Public Disclosures.
Prior to the issuance of any public disclosures regarding the
Restructuring, the Company shall consult with the Committees' and Supporting
Equity Holders' respective counsel as to the form and substance of such public
disclosures materially related to this Agreement or any other transaction
contemplated hereby; provided, however, that nothing in this section 30 shall be
deemed to prohibit the Company from making any disclosure it deems necessary or
advisable in order to satisfy its respective disclosure obligations imposed by
Applicable Law or the rules of any stock exchange on which securities of the
Company are listed or quoted or to obtain any governmental approvals or filings
necessary to implement the Restructuring and consummate the Concurso Plan and
the Chapter 11 Plan. Notwithstanding the foregoing, the amount of Securities
held by a specific Supporting FRN Holder or Supporting Noteholder shall not be
publicly disclosed by the Company or any party hereto without the prior written
consent of such Supporting FRN Holder or Supporting Noteholder other than in
connection with the Chapter 11 Case and then only the identity of such
Supporting FRN Holder or Supporting Noteholder and the amount of Securities held
on an aggregate basis with all members of the applicable Committee; provided,
however, that, to the extent requested, the Company may disclose individual
Supporting FRN Holder and Supporting Noteholder information to a Governmental
Authority in order to obtain any governmental approvals or filings necessary to
implement the Restructuring and consummate the Concurso Plan and the Chapter 11
Plan.
Section 31. Impact of Appointment to Creditors' Committee.
Notwithstanding anything herein to the contrary, if any Supporting Holder
is appointed to and serves on any official committee of creditors or equity
holders in the Company's Chapter 11 Case, the terms of this Agreement shall not
be construed so as to limit such Supporting Holders' exercise (in its reasonable
judgment and discretion) of its fiduciary duties to any Person arising from its
service on such official committee, and any such exercise (in the reasonable
judgment and discretion of such Supporting Holder) of such fiduciary duties
shall not be deemed to constitute a breach of the terms of this Agreement.
Notwithstanding anything to the contrary herein, no Supporting Holder shall
request the appointment and/or creation of any trustee, examiner or committee
pursuant to the Bankruptcy Code or otherwise until such time as this Agreement
has been terminated pursuant to the terms specified herein.
Section 32. Survival.
The representations, warranties, covenants, obligations, rights and
remedies of the parties hereto under this Agreement shall be of no further force
and effect upon the termination of this Agreement pursuant to the terms
specified herein; provided, however, that the Company shall be liable pursuant
to section 8 of this Agreement for any reasonable fees and actual, documented
out-of-pocket expenses incurred from the date hereof until termination of this
Agreement.
Section 33. Automatic Termination.
This Agreement shall automatically terminate if on or before the earlier
of (i) the Concurso Filing Deadline and (ii) May 22, 2006 (the "Termination
Date"), Required FRN Holders have not (A) signed this Agreement or (B) otherwise
become irrevocably bound to
- 41 -
support the Restructuring (including to vote to accept the Chapter 11 Plan);
provided, however, that the Termination Date may be extended, or this section 33
may be waived, by (x) the majority of the Supporting Noteholders and (y) the
Company, acting jointly. The Company shall promptly notify the respective
counsel to the Committees in the event the Required FRN Holders have (A) signed
this Agreement or (B) otherwise become irrevocably bound to support the
Restructuring (including to vote to accept the Chapter 11 Plan) and, in the case
of (B), shall provide such counsel with the relevant documentation thereof or
other evidence reasonably acceptable to counsel to the Committees. The parties
acknowledge that the Company will be relying upon information provided to it
from the security holders.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
- 42 -
IN WITNESS WHEREOF, each of the parties to this Agreement has caused this
Agreement to be executed and delivered by its duly authorized officers as of the
date first written above.
Satelites Mexicanos, S.A. de C.V.
By: /s/ Cynthia Pelini Addario
-----------------------------------------
Name: Cynthia Pelini Addario
Title: EVP Finance & Administration
Rodolfo Gaona #86
Col. Lomas de Sotelo
Mexico D.F. 11200 Mexico
Telephone: (52) (55) 2629-5808
Fax: (52) (55) 2629-5895
By: /s/ Carmen Ochoa
-----------------------------------------
Name: Carmen Ochoa
Title: General Counsel
Rodolfo Gaona #86
Col. Lomas de Sotelo
Mexico D.F. 11200 Mexico
Telephone: (52) (55) 5201-0858
Fax: (52) (55) 2629-0895
Servicios Corporativos Satelitales, S.A. de
C.V.
By: /s/ Sergio Miguel Angel Autrey Maza
-----------------------------------------
Name: Sergio Miguel Angel Autrey Maza
Title: Attorney-in-fact
Rodolfo Gaona 86-F
Col. Lomas de Sotelo
Mexico D.F. 11200 Mexico
Telephone: (52) (55) 1250-6300
Fax: (52) (55) 1250-6329
Principia, S.A. de C.V.
By: /s/ Sergio Miguel Angel Autrey Maza
-----------------------------------------
Name: Sergio Miguel Angel Autrey Maza
Title: Attorney-in-fact
Rodolfo Gaona 86-F
Col. Lomas de Sotelo
Mexico D.F. 11200 Mexico
Telephone: (52) (55) 1250-6300
Fax: (52) (55) 1250-6329
Loral Skynet Corporation and Loral SatMex
Ltd., (collectively, "Loral")
By: /s/ Richard P. Mastoloni
-----------------------------------------
Name: Richard P. Mastoloni
Title: Vice President and Treasurer
SUPPORTING FRN HOLDERS:
CANYON VALUE REALIZATION FUND, L.P.
CANYON VALUE REALIZATION MAC 18 LTD.
INSTITUTIONAL BENCHMARKS SERIES
(MASTER FEEDER) LIMITED IN RESPECT OF
CENTAUR SERIES
THE CANYON VALUE REALIZATION FUND(CAYMAN)LTD.
By: CANYON CAPITAL ADVISORS LLC
Their Investment Advisor
By: /s/ Mitch Julis
-----------------------------------------
Name: Mitch Julis
Title: Managing Partner
CANYON CAPITAL ADVISORS LLC hereby represents
that it is the investment advisor with the
power to vote and dispose of all or
substantially all of the FRNs held on behalf
of the above-named beneficial owners of the
respective principal amounts of FRNs listed
next to the names of such beneficial owners
on Exhibit B to this Agreement.
Contact Person: Jack Hersch
Address: c/o Canyon Capital Advisors LLC
9665 Wilshire Boulevard
Beverly Hills, CA 90212
Telephone: 310.858.4249
Facsimile: 310.247.2701
E-mail: jhersch@canyonpartners.com
ALPHA U.S. SUBFUND II, LLC
CITI GOLDENTREE LTD.
REYNOLDS AMERICAN DEFINED BENEFIT MASTER
TRUST
GOLDENTREE CREDIT OPPORTUNITIES FINANCING I,
LTD.
GOLDENTREE CREDIT OPPORTUNITIES FINANCING II,
LTD.
GOLDENTREE HIGH YIELD MASTER FUND, LTD.
GOLDENTREE HIGH YIELD MASTER FUND II, LTD.
GOLDENTREE HIGH YIELD OPPORTUNITIES II, L.P.
GOLDENTREE HIGH YIELD VALUE MASTER, L.P.
GOLDENTREE MULTISTRATEGY FINANCING, LTD.
GPC LVIII, LLC
By: GOLDENTREE ASSET MANAGEMENT, LP
Their Investment Advisor
By: /s/ Adam Tuckman
-----------------------------------------
Name: Adam Tuckman
Title: Portfolio Manager
GOLDENTREE ASSET MANAGEMENT, LP hereby
represents that it is the investment advisor
with the power to vote and dispose of all or
substantially all of the FRNs held on behalf
of the above-named beneficial owners of the
respective principal amounts of FRNs listed
next to the names of such beneficial owners
on Exhibit B to this Agreement.
Contact Person: Adam Tuckman
Address: c/o GoldenTree Asset Management, LP
300 Park Avenue
New York, NY 10022
Telephone: 212.847.3542
Facsimile: 212.847.3535
E-mail: atuckman@goldentree.com
HIGHLAND CRUSADER OFFSHORE PARTNERS, L.P.
PAM CAPITAL FUNDING, L.P.
PAMCO CAYMAN, LTD.
By: HIGHLAND CAPITAL MANAGEMENT,L.P.
Their Collateral Manager
By: /s/ Mark Okada
-----------------------------------------
Name: Mark Okada
Title: Executive Vice President
Strand Advisors, Inc., General
Partner of Highland Capital
Management, L.P.
HIGHLAND CAPITAL MANAGEMENT, L.P. hereby
represents that it is the collateral manager
with the power to vote and dispose of all or
substantially all of the FRNs held on behalf
of the above-named beneficial owners of the
respective principal amounts of FRNs listed
next to the names of such beneficial owners
on Exhibit B to this Agreement.
Contact Person: Kenneth Toudouze
Address: c/o Highland Capital Management, LP
13455 Noel Road, Suite 800
Dallas, TX 75240
Telephone: 972.628.4100
Facsimile: 972.628.4147
E-mail: ktoudouze@hcmlp.com
MURRAY CAPITAL MANAGEMENT,INC., as agent on
behalf of certain discretionary accounts
By: /s/ Scott V. Beechert
-----------------------------------------
Name: Scott V. Beechert
Title: General Counsel &
Chief Compliance Officer
MURRAY CAPITAL MANAGEMENT,INC. hereby
represents that it is the investment advisor
with the power to vote and dispose of all or
substantially all of the FRNs held on behalf
of certain beneficial owners of the principal
amount of FRNs listed on Exhibit B to this
Agreement.
Contact Person: Scott V. Beechert
Address: Murray Capital Management, Inc.
680 Fifth Avenue, 26th Floor
New York, NY 10019
Telephone: 212.582.5505
Facsimile: 212.582.5525
E-mail: sbeechert@murraycapital.com
FEDERATED INTERNATIONAL HIGH INCOME FUND
By: /s/Roberto Sanchez-Dahl
-----------------------------------------
Name: Roberto Sanchez-Dahl
Title: Vice President/Portfolio Manager
Federated Investment Mangement
Co. as Attorney-in-Fact
Federated International High Income Fund
hereby represents that it is the beneficially
owner and/or investment advisor or manager
(with the power to vote and dispose of all or
substantially all of the Senior Notes held on
behalf of their beneficial owner) of
discretionary accounts for holders of
beneficial owners of the aggregate principal
amount of the Senior Notes listed next to its
name on Exhibit B to this Agreement.
Contact Person: Roberto Sanchez-Dahl
Address: Federated Investment Management Co.
1001 Liberty Avenue
Pittsburgh, PA 15222
Telephone: (412) 288-2287
Facsimile: (412) 288-6737
E-mail: rsanchez-dahl@federatedinv.com
FEDERATED STRATEGIC INCOME FUND
By: /s/ Roberto Sanchez-Dahl
-----------------------------------------
Name: Roberto Sanchez-Dahl
Title: Vice President/Portfolio Manager
Federated Investment Mangement
Co. as Attorney-in-Fact
Federated Strategic Income Fund hereby
represents that it is the beneficially owner
and/or investment advisor or manager (with
the power to vote and dispose of all or
substantially all of the Senior Notes held on
behalf of their beneficial owner) of
discretionary accounts for holders of
beneficial owners of the aggregate principal
amount of the Senior Notes listed next to its
name on Exhibit B to this Agreement.
Contact Person: Roberto Sanchez-Dahl
Address: Federated Investment Management Co.
1001 Liberty Avenue
Pittsburgh, PA 15222
Telephone: (412) 288-2287
Facsimile: (412) 288-6737
E-mail: rsanchez-dahl@federatedinv.com
ATLANTIC PACIFIC MANAGEMENT GROUP LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: Managing Director
Indian Harbor Capital Management
Advisor of Account
Atlantic Pacific Management Group LLC hereby
represents that it is the beneficially owner
and/or investment advisor or manager (with
the power to vote and dispose of all or
substantially all of the Senior Notes held on
behalf of their beneficial owner) of
discretionary accounts for holders of
beneficial owners of the aggregate principal
amount of the Senior Notes listed next to its
name on Exhibit B to this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
LPETE LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: President
LPETE LLC
LPETE LLC hereby represents that it is the
beneficially owner and/or investment advisor
or manager (with the power to vote and
dispose of all or substantially all of the
Senior Notes held on behalf of their
beneficial owner) of discretionary accounts
for holders of beneficial owners of the
aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
SSGDP LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: President
SSGDP LLC
SSGDP LLC hereby represents that it is the
beneficially owner and/or investment advisor
or manager (with the power to vote and
dispose of all or substantially all of the
Senior Notes held on behalf of their
beneficial owner) of discretionary accounts
for holders of beneficial owners of the
aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
DRALLI LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: Managing Director
Gramercy Investment Management
LLC, Sole Manager of the Company
DRALLI LLC hereby represents that it is the
beneficially owner and/or investment advisor
or manager (with the power to vote and
dispose of all or substantially all of the
Senior Notes held on behalf of their
beneficial owner) of discretionary accounts
for holders of beneficial owners of the
aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
GRAMERCY EMERGING MARKETS FUND
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: Director
Gramercy Emerging Markets Fund
Gramercy Emerging Markets Fund hereby
represents that it is the beneficially owner
and/or investment advisor or manager (with
the power to vote and dispose of all or
substantially all of the Senior Notes held on
behalf of their beneficial owner) of
discretionary accounts for holders of
beneficial owners of the aggregate principal
amount of the Senior Notes listed next to its
name on Exhibit B to this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
HFR EM SELECT MASTER TRUST
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: Co-Managing Partner, Gramercy
Advisors by Power of Attorney
HFR EM Select Master Trust hereby represents
that it is the beneficially owner and/or
investment advisor or manager (with the power
to vote and dispose of all or substantially
all of the Senior Notes held on behalf of
their beneficial owner) of discretionary
accounts for holders of beneficial owners of
the aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
KAPALI LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johntson
Title: President
KAPALI LLC
KAPALI LLC hereby represents that it is the
beneficially owner and/or investment advisor
or manager (with the power to vote and
dispose of all or substantially all of the
Senior Notes held on behalf of their
beneficial owner) of discretionary accounts
for holders of beneficial owners of the
aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
LMC RECOVERY FUND LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: Co-Managing Partner
Gramercy Advisors LLC
Investment Manager of Account
LMC Recovery Fund LLC hereby represents that
it is the beneficially owner and/or
investment advisor or manager (with the power
to vote and dispose of all or substantially
all of the Senior Notes held on behalf of
their beneficial owner) of discretionary
accounts for holders of beneficial owners of
the aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
PALLMALL LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: President
PALLMALL LLC
PALLMALL LLC hereby represents that it is the
beneficially owner and/or investment advisor
or manager (with the power to vote and
dispose of all or substantially all of the
Senior Notes held on behalf of their
beneficial owner) of discretionary accounts
for holders of beneficial owners of the
aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203)552-1920
Facsimile: (203)552-1906
E-mail: jcook@gramercy.com
UVIADO LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: President
UVIADO LLC
UVIADO LLC hereby represents that it is the
beneficially owner and/or investment advisor
or manager (with the power to vote and
dispose of all or substantially all of the
Senior Notes held on behalf of their
beneficial owner) of discretionary accounts
for holders of beneficial owners of the
aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203)552-1920
Facsimile: (203)552-1906
E-mail: jcook@gramercy.com
GRNPARK LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: President
GRNPARK LLC
GRNPARK LLC hereby represents that it is the
beneficially owner and/or investment advisor
or manager (with the power to vote and
dispose of all or substantially all of the
Senior Notes held on behalf of their
beneficial owner) of discretionary accounts
for holders of beneficial owners of the
aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
KADESI LLC
By: /s/ Jay A. Johnston
-----------------------------------------
Name: Jay A. Johnston
Title: President
KADESI LLC
KADESI LLC LLC hereby represents that it is
the beneficially owner and/or investment
advisor or manager (with the power to vote
and dispose of all or substantially all of
the Senior Notes held on behalf of their
beneficial owner) of discretionary accounts
for holders of beneficial owners of the
aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Jason Cook
Address: c/o Gramercy Advisors LLC
20 Dayton Avenue
Greenwich, CT 06830
Telephone: (203) 552-1920
Facsimile: (203) 552-1906
E-mail: jcook@gramercy.com
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD
(F/K/A HARBERT DISTRESSED INVESTMENT MASTER
FIND, LTD.)
By: Harbinger Capital Partners Offshore
Manager, LLC, as investment manager
By: /s/ Philip Falcone
-----------------------------------------
Name: Philip Falcone
Title: Vice President
Harbinger Capital Partners Master Fund I,
Ltd. (f/k/a Harbert Distressed Investment
Master Fund, Ltd.) hereby represents that it
is the beneficially owner and/or investment
advisor or manager (with the power to vote
and dispose of all or substantially all of
the Senior Notes held on behalf of their
beneficial owner) of discretionary accounts
for holders of beneficial owners of the
aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Philip Falcone
Address: Harbinger Capital Partners
555 Madison Avenue, 16th Floor
New York, NY 10022
Telephone: (212) 521-6988
Facsimile: (212) 508-3721
E-mail: pfalcone@harbingercap.net
ALPHA US SUB FUND VI, LLC
By: Harbert Fund Advisors, Inc.,*
as investment manager
By: /s/ Philip Falcone
-----------------------------------------
Name: Philip Falcone
Title: Vice President
*Pursuant to an Investment Advisory
Agreement, dated as of April 29, 2003 as
amended.
Alpha US Sub Fund VI, LLC hereby represents
that it is the beneficially owner and/or
investment advisor or manager (with the power
to vote and dispose of all or substantially
all of the Senior Notes held on behalf of
their beneficial owner) of discretionary
accounts for holders of beneficial owners of
the aggregate principal amount of the Senior
Notes listed next to its name on Exhibit B to
this Agreement.
Contact Person: Philip Falcone
Address: Harbinger Capital Partners
555 Madison Avenue, 16th Floor
New York, NY 10022
Telephone: (212) 521-6988
Facsimile: (212) 508-3721
E-mail: pfalcone@harbingercap.net
FOR ACKNOWLEDGEMENT PURPOSES ONLY:
Thomas Stanley Heather Rodriguez, solely in
his capacity as Conciliador appointed in the
Company's Concurso Proceeding and not as a
party hereto.
By: /s/ Thomas S. Heather
-----------------------------------------
Name: Thomas S. Heather
Title: Conciliador
c/o White & Case, S.C.
Torre del Bosque - PH
Blvd. Manuel Avila Camacho #24
Col. Lomas de Chapultepec
11000 Mexico, D.F., Mexico
Telephone: (52) (55) 5540-9600
Fax: (52) (55) 5540-9699
EXHIBIT A
[INTENTIONALLY OMITTED]
EXHIBIT B
SUPPORTING FRN HOLDERS
NAME PRINCIPAL AMOUNT OF FRNS HELD*
- ---- -----------------------------
*** ***
---------------------
TOTAL: $107,304,280 (52.76%)
=====================
- -------------
* Confidential - individual (not aggregate) holdings to be held by Company
counsel and counsel to FRNs only.
*** Confidential Treatment Requested by Satmex
EXHIBIT B
SUPPORTING NOTEHOLDERS
NAME PRINCIPAL AMOUNT OF SENIOR NOTES HELD*
- ---- -------------------------------------
*** ***
TOTAL: $229,356,000
- --------------
* Confidential - individual (not aggregate) holdings to be held by Company
counsel and counsel to Senior Notes only
*** Confidential Treatment Requested by Satmex
EXHIBIT C
EXISTING EQUITY
Series "A"
NAME NUMBER OF SHARES HELD
- ------------------------------------------------------------------ ---------------------
BBVA Bancomer, S.A., Institucion de Banca Multiple, Grupo 2,550 - Class I
Financiero BBVA Bancomer, Direccion Fiduciaria, as trustee for 2,598,450 - Class II
the shares of Servicios Corporativos Satelitales, S.A. de C.V.
---------------------
2,601,000
=====================
Series "B"
NAME NUMBER OF SHARES HELD
- ----------------------------------------------------------------- ---------------------
BBVA Bancomer, S.A., Institucion de Banca Multiple, Grupo 2,450 - Class I
Financiero BBVA Bancomer, Direccion Fiduciaria, as trustee for 2,496,550 - Class II
the shares of Servicios Corporativos Satelitales, S.A. de C.V.
---------------------
2,499,000
=====================
Series "C"
NAME NUMBER OF SHARES HELD
- ----------------------------------------------------------------- ---------------------
Loral Skynet Corporation, which shares have been pledged to the 473,449 - Class I, Sub-series "C-1"
Bank of New York pursuant to the Loral Pledge
-----------------------------------
Principia, S.A. de C.V. 133,281 - Class I, Sub-series "C-1"
-----------------------------------
TOTALS: 606,730
===================================
Series "N"
NAME NUMBER OF SHARES HELD
- ----------------------------------------------------------------- ---------------------
BBVA Bancomer, S.A., Institucion de Banca Multiple, Grupo 1,650,000 - Class II
Financiero BBVA Bancomer, Direccion Fiduciaria, as trustee for
the shares of Servicios Corporativos Satelitales, S.A. de C.V.
---------------------
Servicios Corporativos Satelitales, S.A. de C.V. 750,000 - Class II
---------------------
2,400,000
=====================
EXHIBIT D
RECOGNIZED CLAIMS IN CONCURSO PROCEEDING
AS OF DECEMBER 30, 2005
IFECOM APPOINTEE CREDITOR AMOUNT
SERGIO FRANCISCO HERMIDA GUERRERO (VISITOR'S FEES) 36,587.50 UDI'S
SECURED CREDITOR AMOUNT
CITIBANK, N.A. (FRN TRUSTEE FEES) U.S. $467,698.21
CITIBANK, N.A. (AS TRUSTEE FOR FRNS) U.S. $219,446,948.04
UNSECURED CREDITOR AMOUNT
HUGHES NETWORK SYSTEMS, INC. U.S. $12,377.00
AKIN (SENIOR NOTE ADVISOR) U.S. $675,765.19
CAAYS (FRN ADVISOR) U.S. $205,649.81
WILMERHALE (FRN ADVISOR) U.S. $434,618.18
THE BANK OF NEW YORK (AS TRUSTEE FOR SENIOR NOTES) U.S. $413,774,527.00
LORAL SKYNET U.S. $126,000.00
ANTENNA TECHNOLOGY COMMUNICATIONS, INC. U.S. $59.00
AGENTE ADUANAL ELIZONDO MXP $9,715
EXHIBIT E
EQUITY DOCUMENTS
Shareholder Resolutions of Satmex authorizing (i) the issuance of Bondholder
Equity, (ii) restructuring of existing equity, (iii) amendment of By-laws, (iv)
election of board members, and (v) related resolutions
By-laws of Satmex
New stock certificates
Notice of concentration to the Antitrust Commission
Release to Bancomer (as trustee) regarding the Servicios shares in Satmex
Release to Bancomer (as trustee) regarding the Firmamento shares in Servicios
Release or reinstatement of existing FRN mortgage on Satmex's assets
Transfer documents of service companies
Notice to SCT relating to the execution by Satmex of a mortgage instrument
pursuant to article 96 of the Ley de Vias Generales de Comunicacion
Equity Trust Documents
EXHIBIT F
LORAL DOCUMENTS
Documents implementing and relating to the Loral Usufructo arrangement and the
Loral Grant
Form of order to be submitted to the Bankruptcy Court in respect of the Loral
Grant
Letter agreement from the Company granting SS/L a right of first offer with
regard to its next satellite procurement, as further described in the Term Sheet
(the "ROFO")
Documents implementing the provisions of section I of the Term Sheet under the
caption "Treatment of Enlaces"
Any portion of any Restructuring Document referencing or directly impacting the
Loral Grant, the Loral Transponders, the Loral Settlement Agreements, the ROFO,
the Equity Documents or any of the foregoing documents in this Exhibit F
EXHIBIT G
ELIGIBLE EMPLOYEE BONUS PROGRAM
Payment 1**
(to be released
when the Payment 2**
Conciliador (to be released Final Payment
Submission one day prior (to be released 90
Period to the Petition days following
Employee Bonus Amount expires) Date) Effective Date)
- ------------------------------- ----------------------------------- --------------- --------------- ------------------
Tier 1
CFO 65% of base annual salary plus 2005 25% 25% 50%
Christmas bonus*
CSO 65% of base annual salary plus 2005 25% 25% 50%
Christmas bonus*
CLO 65% of base annual salary plus 2005 25% 25% 50%
Christmas bonus*
Tier 2
CEO of Enlaces 35% of base annual salary plus 2005 25% 25% 50%
Christmas bonus*
Executive Director of Satellite 35% of base annual salary plus 2005 25% 25% 50%
Engineering and Operations Christmas bonus*
Director Program Satellite TI 35% of base annual salary plus 2005 25% 25% 50%
Christmas bonus*
Director of Regulatory Branch 35% of base annual salary plus 2005 25% 25% 50%
Christmas bonus*
Access Management Director 35% of base annual salary plus 2005 25% 25% 50%
Christmas bonus*
Director of Engineering 35% of base annual salary plus 2005 25% 25% 50%
Christmas bonus*
- ---------------
* Counsel to the Committees shall receive dollar amounts separately.
** Only payable to the extent this Agreement is not terminated in accordance
with its terms.
ANNEX A
THIS DOCUMENT IS NOT A SOLICITATION FOR
ACCEPTANCES OR REJECTIONS OF THE PLAN (CONVENIO CONCURSAL)
UNDER THE CONCURSO MERCANTIL OF
SATELITES MEXICANOS, S.A. DE C.V. ("SATMEX")
OR ANY PLAN OF REORGANIZATION OF SATMEX
PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE
TERM SHEET FOR RESTRUCTURING OF SATMEX
Capitalized terms not otherwise defined in this Annex shall have the meaning
ascribed to such term in the body of the Restructuring Agreement (the
"AGREEMENT").
INTRODUCTION
This Term Sheet is to be maintained in strict confidence in accordance
with the Agreement and sets forth the principal terms of a proposal for the
Restructuring. As indicated in the Agreement, the framework for the
Restructuring of SATMEX will be established through a Concurso Plan of SATMEX in
its Concurso Proceeding, and will be implemented through the Chapter 11 Plan in
the Chapter 11 Case.
The consummation of the transactions described herein are subject to the
provisions of the MBRA and the Bankruptcy Code including, among others, approval
by the Mexican Bankruptcy Court and the Bankruptcy Court. The transactions
described herein are further subject to the execution of all necessary documents
and agreements. Any offer of securities in connection with the transactions
described below will be made only in compliance with all applicable securities
laws and other laws, including the MBRA and the Bankruptcy Code.
This Term Sheet is not a solicitation for approval of (i) a Plan under
Article 161 of the MBRA or (ii) a plan of reorganization under sections 1125 and
1126 of the Bankruptcy Code.
I. TREATMENT OF LABOR COSTS, TAXES, SUPPLIERS AND OTHER INDEBTEDNESS
General Operating Expenses: Except as otherwise provided herein or in the
Agreement, SATMEX will continue to make payment
of all direct and indirect labor and tax
obligations (including, but not limited to,
withholding taxes to the extent required by
applicable law, payroll taxes, and Social
Security contributions) as they become due, on a
timely basis; and suppliers and other
indebtedness, including but not limited to, the
costs associated with the Concurso Proceeding,
as approved by the Mexican Bankruptcy Court upon
the recommendation of the Conciliador, will be
paid in full on the terms provided for under
applicable contracts and/or purchase orders,
executory contracts and unexpired leases. Except
as provided for herein
A-1
or in the Agreement, other unsecured
indebtedness not paid prior to the commencement
of the Chapter 11 Case will be paid in full on
or before the later of (i) the Effective Date or
as soon as practicable thereafter without any
interest and (ii) the date such claim becomes
due and payable in the ordinary course of
business.
Treatment of Enlaces: As of December 31, 2005, Loral and Principia
contributed U.S. $2.3 million in equity to and
there were loans totaling U.S. $7.6 million from
SATMEX on the books of Enlaces Integra, S.A. de
C.V. ("ENLACES"). On or before the Effective
Date, or as soon thereafter as all required
regulatory approvals are obtained, SATMEX will
capitalize the entire U.S. $7.6 million of such
loans in return for seventy-five percent (75%)
of the fully diluted equity of Enlaces.
Any new equity infusions with respect to Enlaces
will be subject to a rights offering. The
Enlaces board of directors will be comprised of
three members, two of which will be designated
by SATMEX and one of which will be designated
jointly by Loral and Principia. SATMEX, Loral
and Principia will agree on a list of Enlaces
extraordinary actions that will be subject to
the prior approval of the Loral/Principia
director.
On or before the Effective Date, Enlaces will
enter into a contract with Globalstar de Mexico
S. de R.L. de C.V. ("GLOBALSTAR DE MEXICO"), a
company owned jointly by an affiliate of Loral
and Principia, or its designee, to provide
services at Enlaces' current market rates to
support Globalstar de Mexico's Enciclomedia
business. Satmex will continue to support
Enlaces with the transponder capacity necessary
to meet its obligations under the
above-referenced contract, on commercially
reasonable terms negotiated on an arms-length
basis. For the avoidance of doubt, all contracts
between Enlaces and Globalstar de Mexico or
between SATMEX and Globalstar de Mexico shall be
on an arms-length basis and subject to approval
by the Bondholders.
SATMEX will endeavor to obtain all required
regulatory approvals prior to the Effective
Date, or as soon thereafter as is practicable.
Except for the capitalization of the U.S. $7.6
million in loans described above, nothing herein
shall affect any right or remedy of Satmex or
Enlaces under any existing agreement, contract,
Applicable Law or other course of business
between Satmex and Enlaces.
Loral Transponders: On the Effective Date, SATMEX shall grant to
certain affiliates of Loral as designated by
Loral (the "LORAL ENTITIES") a usufructo under
Articles 980 et seq. of Mexico's Federal Civil
Code ("ARTICLE 980") (the "LORAL USUFRUCTO")
with respect to the Loral Transponders (the
"LORAL GRANT"), before a Mexican notary public,
and which Loral Grant will be registered at
SATMEX's commercial file with the relevant
Public Registry of Commerce. Each of the parties
to the Agreement agrees that (a)
A-2
consistent with Mexican law, the Loral Usufructo
shall constitute an in rem property right
whereby the Loral Entities and their assignees
(collectively, the "GRANT HOLDERS") are entitled
to the quiet use and enjoyment of the Loral
Transponders for (x) the life of the SATMEX 6
satellite ("SATMEX 6") as to the Loral
Transponders on SATMEX 6 and (y) the life of the
SATMEX 5 satellite ("SATMEX 5") as to the Loral
Transponders on SATMEX 5; (b) as a consequence
of the Loral Usufructo and consistent with
Mexican law, the Loral Transponders cannot,
under any circumstances, including, without
limitation, in an insolvency, bankruptcy or
similar proceeding under Mexican or U.S. law, be
sold, transferred, pledged or otherwise disposed
of free and clear of the usufructo embodied in
the Loral Grant and any purchaser or transferee
thereof takes subject to the Loral Usufructo;
provided, however, that solely in the event the
Grant Holders determine to accept the Sale
Proceeds (as defined below) in exchange for the
termination and extinguishment of the Loral
Usufructo as provided herein, the collateral
trust agreements shall provide and the
collateral trustee under the First Priority
Senior Secured Notes and/or Second Priority
Senior Secured Notes, as applicable, shall be
irrevocably directed to pay the Sale Proceeds to
the applicable Grant Holders; (c) the Grant
Holders may take any action necessary to enforce
their rights under the Loral Usufructo against
SATMEX, its successors and assigns, or any other
party in any context; (d) each party to the
Agreement and any party with an interest in or
claim to SATMEX 5 or SATMEX 6 shall be subject
to and shall not foreclose and shall waive any
right to foreclose the Loral Usufructo in the
Loral Transponders; (e) in any proceeding
outside Mexico with respect to (x) the subject
matter of this Section, (y) the Loral Usufructo
or the Loral Grant or (z) SATMEX 5 or SATMEX 6
as it relates to the rights of the Grant Holders
in the Loral Transponders, the parties to the
Agreement hereby irrevocably agree that Luis A.
Nicolau or such other designee selected by the
Grant Holders (the "DESIGNEE"), which Designee
shall be reasonably acceptable to Satmex and the
collateral trustees for the First Priority
Senior Secured Notes and Second Priority Senior
Secured Notes, shall be the sole expert on
Mexican law (specifically including Article 980)
and agree that Mr. Nicolau or such other
Designee will be the only witness (expert or
otherwise) that may submit evidence including,
without limitation, any expert report, testimony
or opinion, for all purposes in interpreting,
enforcing or otherwise explaining the Mexican
Federal Civil Code, including Article 980
thereof, with respect to the
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Loral Usufructo and the Loral Grant or the
parties' rights in respect thereof (and each
party shall waive any right to call any other
witness in respect of these matters); (f) each
of the parties to the Agreement is and shall be
estopped from arguing or taking any position
that the Loral Usufructo embodied in the Loral
Grant is other than as expressly described
herein; and (g) in any dispute (in any court or
other proceeding whether in Mexico, the United
States or otherwise) with respect to the Loral
Usufructo embodied in the Loral Grant, the laws
of Mexico shall apply in connection with the
interpretation, enforceability and application
of the Loral Usufructo, and such application of
Mexican law is to be considered to the fullest
extent under Rule 44.1 of the Federal Rules of
Civil Procedure and Rule 9017 of the Federal
Rules of Bankruptcy Procedure, as may be
applicable. Further, the Loral Grant shall (a)
be subject to the provisions of this Section,
(b) be on the same business terms as the Lease
Agreements, subject to certain modifications,
solely to the extent necessary, to reflect the
change from a lease to a usufructo structure, it
being expressly understood that the parties
hereto are agreeing to a usufructo and not a
lease in respect of the Loral Transponders and
(c) expressly set forth that (i) SATMEX shall,
to the extent reasonably necessary, assist the
Grant Holders in describing to their customers
the extent of the Grant Holders' rights, (ii)
the Grant Holders shall not be obligated to
maintain the Loral Transponders, except to the
extent, if any, expressly provided in the Lease
Agreements, (iii) the Loral Grant shall
terminate only in the circumstance described in
the following paragraph, (iv) except as provided
in the following paragraph, the Loral Grant
shall survive any sale or foreclosure of the
record title of the Loral Transponders or the
satellite in which the Loral Transponders are
located (v) the Grant Holders shall not be
obligated to provide any guarantee (fianza) in
respect of the Loral Grant and (vi) the Grant
Holders shall be entitled to indemnification
from SATMEX as provided in the Lease Agreements.
The liens on substantially all of SATMEX's
assets securing the First Priority Senior
Secured Notes and the Second Priority Senior
Secured Notes shall, with respect to the Loral
Transponders, be subject to, and acknowledge the
existence of, the Loral Grant as described
herein. The Loral Grant shall provide the Grant
Holders with the right to make one or more
protective UCC filings with regard to the Loral
Grant. SATMEX shall cooperate with the Grant
Holders and execute such documents as may be
necessary or appropriate to effect such filings.
The Loral Grant will not affect the exercise of
rights and remedies of the First Priority Senior
Secured Notes and the Second Priority Senior
Secured Notes. The Loral Grant shall survive any
exercise of such rights and remedies; provided,
however, that, if as a result of any such
exercise, SATMEX 5 or 6 is sold and moved from
the orbital slot for which it was designed, the
applicable Grant Holder shall be entitled to
receive, but only if the applicable Grant Holder
shall, in its sole discretion, elect not to
continue the Loral Grant at the new orbital
location from the net proceeds from the sale of
the respective satellite, the following (the
"SALE PROCEEDS"): the greater of (A) (i) in the
case of SATMEX 5, an amount equal to 6.25% of
such net sale proceeds and (ii) in the case of
SATMEX 6, an amount equal to 6.7% of such net
sale proceeds and (B) an amount equal to the
fair market value of the Loral Transponders as
determined by a panel of three satellite
industry experts on satellite valuation, with
such
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experts to be selected in the following manner:
each of (x) the Grant Holders and (y) the
applicable collateral trustee shall appoint one
of the experts and the experts so appointed by
the Grant Holders and the applicable collateral
trustee shall mutually agree on the third
expert. It is agreed that for the purposes of
such valuation, the experts shall assume that
the satellite has not been and will not be moved
from the orbital location for which it was
designed and, further, that the experts shall
take into account, among other things, the
customer base on the Loral Transponders existing
at the time of the valuation. The applicable
collateral trustee shall afford the Grant
Holders the same opportunity as any other
third-party bidder to bid on and purchase the
applicable satellite in any foreclosure, but
nothing in this sentence shall give the Grant
Holders any rights greater than any other
third-party bidder. The applicable Grant Holder
shall release the Loral Grant with respect to
the satellite in question (and shall be
obligated only to return the Loral Transponders
in their "as is" condition) upon receipt of the
Sale Proceeds. In addition, whether or not the
applicable Grant Holder elects to continue the
Loral Grant at the new orbital location pursuant
to any such exercise of rights and remedies that
result in the move of the satellite from its
orbital slot, the applicable Grant Holder shall
be entitled to an unsecured claim against SATMEX
in an amount equal to the direct damages that
will be incurred by the applicable Grant Holder
under customer contracts utilizing capacity on
the Loral Transponders that arise from or relate
to the move of the satellite from its orbital
slot. Receipt of the Sale Proceeds shall be in
full satisfaction of any and all claims that the
applicable Grant Holder may have against the
applicable satellite or any subsequent owner
thereof.
The Loral Grant shall become effective upon
filing for registration in the Public Registry
of Commerce, at which time the Lease Agreements
shall be terminated and the Grant Holders shall
have no further right to a lien on, or title to,
the Loral Transponders, except as provided in
the Loral Grant.
For purposes hereof, "LEASE AGREEMENTS" means,
collectively, (i) that certain Agreement
Concerning the Lease of Transponders dated June
14, 2005 between SATMEX and Loral Skynet, a
division of Loral SpaceCom Corporation, as
amended and (ii) that certain Agreement
Concerning the Lease of Transponders dated June
14, 2005 between SATMEX and SS/L (as assignee of
Loral Space & Communications Corporation), as
amended; and "LORAL TRANSPONDERS" means those
transponders that are the subject of the Lease
Agreements.
Upon the Effective Date, irrespective of whether
Loral has breached or terminated the Agreement
(as may be amended in accordance therewith), the
Loral Entities shall receive the Loral
Usufructo. With respect to SATMEX, the
obligation to provide the Loral Usufructo to the
Loral
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Entities shall survive termination of the
Agreement.
SS/L Right of First Offer: Space Systems/Loral, Inc. ("SS/L") shall have a
right of first offer ("ROFO") from SATMEX with
respect to the construction of SATMEX's next
satellite to be placed into one of SATMEX's
existing orbital locations or any orbital
location obtained in exchange for any of
SATMEX's existing orbital locations (the "NEXT
SATELLITE"). Pursuant to this ROFO, SATMEX
shall, in the event it determines to procure the
Next Satellite, provide to SS/L a request for
proposal (an "RFP") outlining the specifications
for the Next Satellite.
SS/L shall have a period of forty-five (45) days
from receipt of the RFP to respond with a
written proposal. After receipt of SS/L's
proposal, SATMEX shall for a period not to
exceed forty-five (45) days thereafter negotiate
in good faith with SS/L regarding the proposal
and shall elect (the "ELECTION") either to enter
into a contract with SS/L based on the terms
proposed and negotiated or to reject SS/L's
proposal. If SATMEX elects to reject SS/L's
proposal, SATMEX may then solicit proposals
(based on the same RFP submitted to SS/L) from
other satellite manufacturers that could lead to
a Superior Proposal, and during the one hundred
twenty (120) day period after the Election,
enter into a contract for the construction of
the Next Satellite with a party other than SS/L
if SATMEX receives a Superior Proposal from such
party. A "SUPERIOR PROPOSAL" shall mean a
proposal that provides superior value to SATMEX,
as reasonably determined by SATMEX, taking into
account technical capabilities, schedule,
reliability, price and terms and conditions. If
(i) after the expiration of such 120-day period,
SATMEX has not entered into a satellite contract
with another manufacturer for the Next
Satellite, or (ii) at any time, SATMEX makes any
material changes or modifications to the
original or any subsequently modified RFP
submitted to SS/L, then SATMEX shall again
extend the ROFO to SS/L (a "SUBSEQUENT ROFO") in
accordance with the above terms; provided,
however, that in the event of a Subsequent ROFO
pursuant to clause (i), each 45-day period and
the 120-day period set forth above shall be
reduced to thirty (30) and sixty (60) days,
respectively. Notwithstanding the foregoing,
SATMEX may elect to accept a proposal from
another manufacturer that is not fully compliant
with the RFP, and such acceptance shall not be
construed as a material change or modification
to the original or any subsequently modified RFP
requiring the Subsequent ROFO, so long as such
variance from the RFP was not made at SATMEX's
request or with SATMEX's prior consent and such
proposal, after taking into account this
variance, nevertheless constitutes a Superior
Proposal. For the avoidance of doubt, the
acceptance by SATMEX of a non-compliant bid from
another manufacturer shall not constitute
consent for the purpose of the preceding
sentence.
Provided SATMEX shall comply with this ROFO,
SATMEX shall have
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no other or further obligation to SS/L with
respect to SATMEX's Next Satellite. Any dispute
between the parties concerning this ROFO shall
be governed by New York law, and the courts of
New York shall have exclusive jurisdiction to
determine such dispute.
If SATMEX purchases an existing satellite to be
located in one of SATMEX's orbital slots, then
the Next Satellite shall be the next satellite
to be constructed and placed in a SATMEX orbital
slot. The ROFO described in this section shall
apply to any successor-in-interest to or buyer
of SATMEX, but only with respect to the Next
Satellite.
The ROFO provided for herein shall expire ten
(10) years from the Effective Date.
Releases: On the Effective Date, appropriate discharges
and releases reasonably acceptable to the
Conciliador shall be provided by SATMEX to its
current officers and directors, to the extent
permitted by law. The Conciliador shall use
reasonable efforts to obtain similar discharges
and releases of SATMEX's current officers and
directors from the Mexican Government.
II. TREATMENT OF EXISTING SENIOR SECURED FLOATING RATE NOTES DUE 2004: FIRST
PRIORITY SENIOR SECURED NOTES
Issuer: SATMEX.
Targeted Securities: For all outstanding principal amount of the FRNs
and all past due and unpaid interest on the
FRNs, the holders thereof will receive First
Priority Senior Secured Notes due 2011 (the
"FIRST PRIORITY SENIOR SECURED NOTES").
Principal Amount: Approximately U.S. $203,400,000 plus unpaid
accrued interest through the Effective Date with
such interest calculated such that, assuming an
Effective Date of September 30, 2006, the
principal amount of the First Priority Senior
Secured Notes will be U.S. $234,400,000. In the
event the Effective Date is other than September
30, 2006, the principal amount shall be adjusted
upward for each day after September 30, 2006, or
downward for each day before September 30, 2006,
as applicable, that the Effective Date occurs,
by the following amount: U.S. $234,400,000
multiplied by the per Diem Rate multiplied by
the number of days before or after September 30,
2006, that the Effective Date occurs. The "PER
DIEM RATE" shall mean a percentage equal to the
one-month LIBOR rate as of the date that is
three (3) business days prior to the Effective
Date
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plus four hundred and fifty basis points
(LIBOR+4.5%) divided by three hundred sixty
(360). For the avoidance of doubt, nothing
herein shall create an obligation by SATMEX for
its internal accounting purposes to treat
amounts paid above the principal amount of the
FRNs in a manner inconsistent with its current
tax and accounting practices.
Ranking and Security: The First Priority Senior Secured Notes will
continue to be secured by a first priority lien
on all present and after acquired assets of
SATMEX on substantially the same terms provided
for under the existing security documents for
the holders of the FRNs (junior only to
priorities recognized by statute in Mexico)
except (i) as provided for in Section I above
under the caption "LORAL TRANSPONDERS", and (ii)
as provided for immediately below under the
caption "GUARANTEES".
Guarantees: The First Priority Senior Secured Notes will not
be guaranteed in any manner by Servicios or by
Firmamento; consequently, liens on the shares of
SATMEX owned by Servicios and those of Servicios
owned by Firmamento will be discontinued as of
the Effective Date. The First Priority Senior
Secured Notes will be guaranteed by Restricted
Subsidiaries, following the concept in the
existing Senior Notes indenture. Restricted
Subsidiary guarantors will grant a lien on all
of their respective assets to secure the
guarantees, which liens will be senior in
priority, operation, and effect to the security
interests of the Second Priority Senior Secured
Notes in accordance with Exhibit A.
Interest Payments: 1 (one) or 3 (three) month LIBOR plus eight
hundred seventy five basis points per annum
(LIBOR+8.75%), payable in arrears in cash on the
last day of the applicable one or three month
period.
Final Maturity: Five years from the Effective Date.
Optional Prepayment: At any time in cash at 103%, 102% and 101% of
par in years one, two and three respectively,
thereafter at par; plus accrued and unpaid
interest.
Mandatory Prepayments: In the event of qualifying asset sales, future
new debt security issuances not contemplated
herein, and certain insured losses and subject
to prepayment at the terms described under the
immediately preceding "OPTIONAL PREPAYMENT"
caption. In addition, SATMEX shall be required
to repay all outstanding unpaid principal of the
First Priority Senior Secured Notes with 100% of
cash balances in excess of five million dollars
(U.S. $5,000,000) on a quarterly basis,
commencing on the last day of the first complete
calendar quarter following the launch of SATMEX
6, based on cash balances as estimated five (5)
business days before such quarterly payment
date, taking into account amounts expected to be
payable (including scheduled cash interest
payments
A-8
under the First Priority Senior Secured Notes
and the Second Priority Senior Secured Notes)
and cash expected to be received up to and
including such quarterly payment date (the
"AVAILABLE CASH FLOW REPAYMENT FORMULA");
provided, however, that if the launch of SATMEX
6 occurs after October 31, 2006, Satmex shall be
required to begin repaying the First Priority
Senior Secured Notes on March 31, 2007, based on
the Available Cash Flow Repayment Formula
modified to include an additional reserve of
135% of the estimated unpaid costs necessary to
launch SATMEX 6 including any satellite, launch
and insurance costs; provided, further, that
such additional reserve is held
by the collateral trustee for the First Priority
Senior Secured Notes in a collateral account;
and; provided, further, that if the launch of
SATMEX 6 does not occur within
30 months from the Effective Date, the funds in
the additional reserve shall be released as a
mandatory prepayment on the First Priority
Senior Secured Notes.
Covenants: To be based upon those provided for in the
existing FRN indenture, with financial covenants
revised to reflect the financial condition of
SATMEX, plus a covenant against the incurrence
of any additional indebtedness (other than
unsecured and subordinated indebtedness for
replacement satellites and other agreed upon
exceptions) and a covenant against capital
expenditures (with details and permitted
exceptions to be determined). Mandatory periodic
reporting requirements in compliance with U.S.
GAAP; SATMEX will be subject to periodic
reporting requirements applicable to non-U.S.
reporting companies under the U.S. Securities
Exchange Act of 1934, as amended (the
"SECURITIES EXCHANGE ACT"). Covenants to include
restrictions on (i) optional redemption of
Second Priority Senior Secured Notes so long as
First Priority Senior Secured Notes are
outstanding; (ii) offer of asset sale proceeds
or any other proceeds of collateral to Second
Priority Senior Secured Notes prior to offering
the First Priority Senior Secured Notes the
first right to such proceeds; and (iii) in the
event of a Change of Control (as defined below)
where both the First Priority Senior Secured
Notes and the Second Priority Senior Secured
Notes have put rights, the redemption of the
Second Priority Senior Secured Notes other than
on a pari passu basis with the First
Priority Senior Secured Notes.
Events of Default: Substantially the same as provided in the
existing FRN indenture and otherwise typical for
similar restructuring transactions.
Change of Control: In the event of a change of control of SATMEX
("CHANGE OF CONTROL")*, holders of the First
Priority Senior Secured Notes shall have a put
option
- --------------------
* "Change of Control" shall include the acquisition directly or indirectly by
any other person or group of a majority of the equity voting rights and/or
equity financial rights of SATMEX.
A-9
whereby such holders shall be entitled to redeem
all or any portion of their First Priority
Senior Secured Notes in exchange for payment in
cash from SATMEX of one hundred one percent
(101%) of the sum of the then-outstanding
principal amount plus accrued and unpaid
interest, which redemption shall be consummated
simultaneously with such Change of Control.
Default Rate of Interest: Upon the occurrence and during the continuance
of an Event of Default, the interest rate on the
unpaid principal balance shall be two hundred
(200) basis points above the then-applicable
non-default rate.
Advisory Fees: SATMEX will pay all fees and out-of-pocket
expenses (not previously paid by SATMEX) of one
financial advisor, one Mexican legal counsel and
one U.S. legal counsel to the members of the FRN
Ad Hoc Committee, and the fees and out-of-pocket
expenses of Evercore Partners and Sitrick and
Company (as specified in the Agreement), on or
as soon as practicable after the Effective Date
in accordance with the terms of the Agreement.
Trustee Fees: SATMEX will pay the reasonable fees and
out-of-pocket expenses directly related to the
Concurso Proceeding, the Chapter 11 Case and the
implementation of the respective "Plans" under
those proceedings, of one Mexican legal counsel
and one U.S. legal counsel to Citibank, N.A., as
Indenture Trustee to the FRNs promptly upon
receipt of reasonable documentation as soon as
practicable after the Effective Date.
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DTC and Transferability: The First Priority Senior Secured Notes shall be
eligible securities for clearance through The
Depository Trust Company ("DTC") and, at the
option of the holders thereof, be issued in
whole or in part in global form to DTC or a
nominee of DTC. The issuance of the First
Priority Senior Secured Notes will be exempt
from registration under the U.S. Securities Act
of 1933, as amended (the "SECURITIES ACT")
pursuant to Section 1145 of the Bankruptcy Code.
So long as a registration demand has been
granted to an Affiliated Bondholder (as defined
below), any holder of First Priority Senior
Secured Notes that believes that it cannot
transfer its First Priority Senior Secured Notes
without registration under the Securities Act
(without regard to whether an exemption from
registration is available, other than pursuant
to an exemption under Section 1145 of the
Bankruptcy Code) shall have the right to
register such First Priority Senior Secured
Notes as part of any registration conducted
pursuant to the registration demand of an
Affiliated Bondholder.
III. RESTRUCTURING OF 10.125% SENIOR NOTES DUE 2004 ("SENIOR NOTES"):
NEW SECOND PRIORITY SENIOR SECURED NOTES DUE 2013
Issuer: SATMEX.
Targeted Securities: For all outstanding principal amount of the
Senior Notes and all past due and unpaid
interest on the Senior Notes, holders thereof
(the "BONDHOLDERS") will be given a combination
of (a) Second Priority Senior Secured Notes due
2013 (the "SECOND PRIORITY SENIOR SECURED
NOTES") and (b) equity (shares) of reorganized
SATMEX as described below in Section IV.
Principal Amount: U.S. $140,000,000 Second Priority Senior Secured
Notes.
Issue Date: Effective Date.
Mandatory Prepayments: In the event of qualifying asset sales, future
new debt security issuances not contemplated
hereunder, and certain insured losses and
subject to prepayment at the terms described
below under "Call Rights". In addition, after
the payment in full of the First Priority Senior
Secured Notes, SATMEX shall be required to make
prepayments as per the Available Cash Flow
Prepayment Formula.
Interest: Interest will be payable quarterly in arrears at
the rate of 10.125% per annum. Interest will be
paid in kind and in cash as set forth below:
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Year PIK Cash
1 10.125% 0%
2 8.125% 2%
3 8.125% 2%
4 8.125% 2%
5 8.125% 2%
6 0% 10.125%
7 0% 10.125%
All interest paid in kind will be capitalized
quarterly. Notwithstanding the foregoing, upon
repayment in full of the First Priority Senior
Secured Notes, all interest shall be payable in
cash.
Final Maturity: Seven (7) years from the Effective Date.
Ranking and Security: The Second Priority Senior Secured Notes will
rank pari passu in right of payment to all
existing and future senior indebtedness
(including the First Priority Senior Secured
Notes) and will rank senior to all existing and
future subordinated indebtedness, subject to any
priorities recognized by statute, such as tax
and labor obligations. The security interests of
the Second Priority Senior Secured Notes on all
present and future assets of SATMEX will be
junior in priority, operation and effect to the
security interests created by the First Priority
Senior Secured Notes, all in accordance with the
terms set forth in Exhibit A hereto except (i)
as provided for in Section I above
under the caption "LORAL TRANSPONDERS", and (ii)
as provided for in Section II above under the
caption "GUARANTEES".
Call Rights: Callable, in whole or in part, at any time by
SATMEX at a price equal to the principal amount
of such Second Priority Senior Secured Notes
then outstanding plus accrued and unpaid
interest thereon.
Guarantors: Restricted Subsidiaries, as defined in and
required by the existing Senior Notes indenture,
which guarantees will rank pari passu in right
of payment to all existing and future senior
indebtedness of such Guarantors and will rank
senior to all existing and future subordinated
indebtedness of such Guarantors, subject to any
priorities recognized by statute, such as tax
and labor obligations. Restricted Subsidiary
guarantors will grant a lien on all of their
respective assets to secure the guarantees,
which liens will be junior in priority,
operation, and effect to the security interests
of the First Priority Senior Secured Notes in
accordance with Exhibit A.
Covenants: Substantially the same as those provided for in
the existing Senior Notes indenture and
otherwise as is typical for similar
restructuring transactions, plus covenants
against (a) the incurrence of any new
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indebtedness (other than unsecured and
subordinated indebtedness for replacement
satellites and other agreed upon exceptions) and
(b) the making of any capital expenditures (with
details and permitted exceptions to be
determined). Mandatory periodic reporting
requirements in compliance with U.S. GAAP;
SATMEX will be subject to periodic reporting
requirements applicable to non-U.S. reporting
companies under the Securities Exchange Act. In
any event, covenants shall not be more
restrictive than those agreed upon in the First
Priority Senior Secured Notes Indenture.
Events of Default: Substantially the same as provided in the
existing Senior Notes indenture and otherwise as
is typical for similar restructuring
transactions, plus cross acceleration to the
First Priority Senior Secured Notes.
Change of Control: In the event of a Change of Control to other
than an Approved Buyer (as defined below)
(unless waived by the vote of holders of 66-2/3%
of the aggregate principal amount of the Second
Priority Senior Secured Notes), holders of the
Second Priority Senior Secured Notes shall have
a put option whereby such holders shall be
entitled to redeem all or any portion of their
Second Priority Senior Secured Notes in exchange
for payment in cash from SATMEX of one hundred
percent (100%) of the sum of the
then-outstanding principal amount plus accrued
and unpaid interest, which redemption shall be
consummated simultaneously with such Change of
Control.
For purposes hereof, an "APPROVED BUYER" shall
mean a Buyer (as defined below) that is, or is
controlled by (A) a leading international
satellite or telecommunications company having a
minimum net worth of one billion dollars (U.S.
$1,000,000,000), and/or (B) a person or company
listed on Schedule D hereto; provided, however,
that (whether or not otherwise qualifying as an
Approved Buyer) no person or group may be an
Approved Buyer if such person or group, or
affiliate thereof, has been indicted for a
felony or charged (civilly or criminally) with a
violation of securities laws or regulations of
the U.S. or Mexico during the preceding five (5)
years; and a "BUYER" shall mean a person or
group (within the meaning of Section 13(d)(3) of
the Securities Exchange Act) that following a
Change of Control is the beneficial owner of,
and solely controls, shares of SATMEX
representing not less than a majority of the
equity financial rights of SATMEX and not less
than a majority of the equity voting rights of
SATMEX (including the right to appoint or elect
a majority of the Board of Directors of SATMEX).
If the Approved Buyer is a "foreign investor" or
its investment in SATMEX would be deemed a
"foreign investment" within the meaning provided
under the Foreign Investment Law, then the
Approved Buyer must be part of a group
(constituting a "Buyer" as defined above) with
another Approved Buyer
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that is not a "foreign investor", nor whose
investment in SATMEX would be deemed a "foreign
investment" within such meanings.
For purposes of the foregoing definitions, (x)
the term "CONTROL", when used with respect to
any specified person, means the power to direct
the management and policies of such person,
directly or indirectly, whether through the
ownership of voting securities, by contract or
otherwise, and the terms "CONTROLLING" and
"CONTROLLED" have meanings correlative to the
foregoing; (y) the term "PERSON" means any
individual, corporation, partnership, joint
venture, trust, unincorporated organization or
other entity; and (z) a person shall have
"BENEFICIAL OWNERSHIP" of any securities as to
which such person may be deemed the beneficial
owner pursuant to Rule 13d-3 under the
Securities Exchange Act and shall include,
without limitation, any securities such person
has the right to become the beneficial owner of
(whether or not such right is immediately
exercisable) pursuant to any agreement,
arrangement or understanding or upon the
exercise of any exchange right, conversion
right, option, warrant or other right.
Default Rate of Interest: Upon the occurrence and during the continuance
of an Event of Default, the interest rate on the
unpaid principal balance shall be two hundred
(200) basis points above the then applicable
non-default rate.
Acceleration: The Second Priority Senior Secured Notes may be
accelerated upon the occurrence of an Event of
Default and the affirmative vote of the majority
of the holders of the aggregate principal amount
of the Second Priority Senior Secured Notes.
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Advisory Fees: SATMEX will pay all fees and out-of-pocket
expenses (not previously paid by SATMEX) of one
financial advisor, one Mexican legal counsel and
one U.S. legal counsel to the Senior Notes Ad
Hoc Committee on or as soon as practicable after
the Effective Date in accordance with the terms
of the Agreement.
Trustee Fees: SATMEX will pay the reasonable fees and
out-of-pocket expenses directly related to the
Concurso Proceeding, the Chapter 11 Case and the
implementation of the respective "Plans" under
those proceedings, of one Mexican legal counsel
and one U.S. legal counsel to the Indenture
Trustee to the Senior Notes promptly upon
receipt of reasonable documentation as soon as
practicable after the Effective Date.
DTC and Transferability: The Second Priority Senior Secured Notes shall
be eligible securities for clearance through DTC
and, at the option of the holders thereof, be
issued in whole or in part in global form to DTC
or a nominee of DTC. The issuance of the Second
Priority Senior Secured Notes by SATMEX shall be
exempt from registration under the Securities
Act, pursuant to Section 1145 of the Bankruptcy
Code.
Bondholders that cannot transfer the Second
Priority Senior Secured Notes without
registration under the Securities Act (without
regard to whether an exemption from registration
is available, other than pursuant to an
exemption under Section 1145 of the Bankruptcy
Code) ("AFFILIATED BONDHOLDERS") shall be
granted demand registration rights to require
SATMEX to file a registration statement on Form
F-1 (or Form F-3, if such form may then be
utilized by SATMEX) with the U.S. Securities and
Exchange Commission to register for resale the
Second Priority Senior Secured Notes held by the
Affiliated Bondholders (or their successors or
assigns); such rights shall be set forth in a
registration rights agreement to be entered into
on the Effective Date (the "REGISTRATION RIGHTS
AGREEMENT") that will contain customary terms
and conditions, including, without limitation,
with respect to (i) the number of demand
registrations (not to exceed three) and the time
periods in which such registration statements
shall be filed (upon 60 days notice in the first
instance, and upon 30 days notice thereafter),
including customary delay fees, provided that
the first such demand may not be made until six
months after the Effective Date (ii) the
duration of the demand registration rights (so
long as any Affiliated Bondholder shall remain
an affiliate or until all securities of SATMEX
held by any Affiliated Bondholder can be sold
within a 3-month period pursuant to Rule 144
under the Securities Act), (iii) suspension
periods (up to 75 days in the aggregate per
year) to comply with U.S. securities laws and to
prevent the premature disclosure of material
confidential information, (iv) the obligation of
the Affiliated Bondholder to provide information
A-15
for the registration statement concerning such
Affiliated Bondholder and the plan of
distribution, (v) the right of the Affiliated
Bondholders and their counsel to review and
comment on any information contained in any
registration statement, prospectus and any
amendments and supplements thereto, (vi) the
payment by SATMEX of the registration expenses
and all expenses (including fees of counsel and
advisors) of SATMEX and the fees of one U.S. and
one Mexican counsel of such Affiliated
Bondholders in connection therewith and (vii)
indemnification and contribution by the
Affiliated Bondholder of and to SATMEX for all
information concerning such Affiliated
Bondholder and the plan of distribution provided
by such Affiliated Bondholder contained in such
registration statement, prospectus and any
amendments or supplements thereto, and
indemnification and contribution by SATMEX of
and to the Affiliated Bondholder for all other
information contained in such registration
statement, prospectus and any amendments or
supplements thereto. Mandatory periodic
reporting requirements in compliance with U.S.
GAAP; SATMEX will be subject to periodic
reporting requirements applicable to non-U.S.
reporting companies under the Securities
Exchange Act.
IV. EQUITY ISSUED TO BONDHOLDERS AND DILUTION OF EXISTING SHAREHOLDERS
New Bondholder Equity: On the Effective Date, the holders of the Senior
Notes ("BONDHOLDERS") will receive a portion of
newly-issued Series B Shares and Series N Shares
(neutral nonvoting shares) of SATMEX, which
portion of the Series B Shares and Series N
Shares will jointly represent 78% of the total
equity financial rights, and which portion of
the Series B Shares will represent 43% of the
total equity voting rights, of reorganized
SATMEX on a fully diluted basis (the "BONDHOLDER
EQUITY"). Bondholder Equity will be issued in
exchange for U.S. $180,000,000 in face amount of
existing Senior Notes, plus 100% of all other
amounts due in respect of the Senior Notes up to
the Effective Date, for an aggregate amount of
approximately U.S. $274,000,000 (the "EXCHANGED
DEBT"). The Exchanged Debt will be capitalized
upon the issuance of the Bondholder Equity.
On the Effective Date, stock certificates
representing the Bondholder Equity will be
issued and delivered to Nacional Financiera,
S.N.C. or another Mexican bank approved by the
Bondholders, as trustee (the "TRUSTEE"), which
shall hold the Bondholder Equity for the benefit
of a special purpose entity incorporated in a
jurisdiction other than Mexico ("SPE")
acceptable to the Bondholders. The SPE will
issue depository receipts against the assets of
the SPE, consisting of the beneficial ownership
of the Bondholder Equity, which depository
receipts initially will be issued to the
Bondholders.
A-16
Existing Equity: Immediately prior to the Effective Date, the
shares of SATMEX owned by Servicios Corporativos
Satelitales, S.A. de C.V. ("SERVICIOS") that are
held in trust by BBVA Bancomer (the "BANCOMER
TRUST") to secure payment of the existing FRNs
will be released as security for the FRNs.
On or prior to the Effective Date, (a) the
shares of SATMEX owned by the Mexican Government
and the shares of SATMEX owned by Servicios
(both those held directly and those held in the
Bancomer Trust), will be exchanged for Series A
Shares of common stock of SATMEX, and (b) the
606,730 shares of preferred stock of SATMEX held
by Loral Skynet Corporation ("LORAL SKYNET") and
Principia, S.A. de C.V. ("PRINCIPIA"), with face
amount of U.S. $31,900,000 and convertible into
4.0016 shares of common stock for each one share
of preferred stock, will not be converted and,
instead, will be exchanged for Series B Shares
of common stock of SATMEX.
The shares to be held by or for the benefit of
Servicios, the Mexican Government, Loral Skynet
and Principia will be referred to in this Term
Sheet as the "SERVICIOS SHARES", the "GOVERNMENT
SHARES", the "LORAL SHARES" and the "PRINCIPIA
SHARES", respectively.
Upon the issuance of Bondholder Equity, (1) the
Servicios Shares and the Government Shares will
be diluted and will jointly represent 20% of the
total equity financial rights and 55% of the
total equity voting rights of reorganized SATMEX
on a fully-diluted basis, and (2) the Loral
Shares and the Principia Shares will be diluted
and will jointly represent an aggregate of 2% of
the total equity financial rights and 2% of the
total equity voting rights of reorganized SATMEX
on a fully-diluted basis.
A capitalization table of the reorganized
SATMEX, indicating the ownership of its equity
financial rights and equity voting rights,
respectively, upon the Effective Date, shown in
final percentages, is set forth in Schedule A.
The Loral Shares and the Principia Shares may be
transferred on or before the Effective Date to a
special purpose entity or company which is
wholly owned by Loral and Principia,
respectively. On and after the Effective Date,
there shall be no restrictions (other than
restrictions required by U.S. securities laws)
on the sale or transfer of the equity interests
of any such special purpose entity or company.
On or after the Effective Date, after release of
the shares of Servicios held by Firmamento from
the security of the FRNs and release of the
equity interests of Firmamento held by Principia
and Loral SatMex Ltd. ("LORAL SATMEX") from the
security of the Mexican Government, Firmamento,
Principia and/or Loral Satmex shall have the
right to transfer such shares or equity
interests as they deem necessary or advisable.
A-17
Equity Trust: On the Effective Date, the Servicios Shares, the
Government Shares, the Loral Shares and the
Principia Shares, together with the Bondholder
Equity (collectively, the "TRUST SHARES"), will
be transferred (or issued) to the Trustee to be
held pursuant to an equity trust (the "EQUITY
TRUST"). If requested by a beneficial owner of
the Trust Shares, the Trustee will issue
certificates evidencing beneficial interests in
the Equity Trust to such beneficial owner
corresponding to such owner's beneficial
interest therein; provided such interests shall
not be negotiable instruments under Mexican law
(Article 228-D, Third Paragraph, General Law of
Negotiable Instruments and Credit Transactions).
The economic interest derived from the future
sale or disposition of the Servicios Shares held
by the Trustee will be transferred to the
Mexican Government to be applied in full
satisfaction of the menoscabo obligation
pursuant to the quiebra of Servicios.
A technical committee of three (3) persons (the
"TECHNICAL COMMITTEE") will be established
pursuant to the Equity Trust. The initial
members of the Technical Committee, and
alternates for such members, if any, will be
appointed from among the persons listed on
Schedule B-1. The initial term of such
appointment shall be 2 years, and to the extent
necessary, shall renew automatically for an
additional term of 2 years. Any subsequent
appointment to the Technical Committee shall be
approved by (i) the Voting Committee (as defined
below) and (ii) the SPE which, in turn, will
require the affirmative vote of the holders of
depository receipts representing not less than
66-2/3% of the Bondholder Equity. The majority
of the members of the Technical Committee shall
qualify as independent directors (in accordance
with Schedule B-2) and members of the Technical
Committee may also be directors of SATMEX.
The Technical Committee will be charged with
effecting the sale of the Trust Shares in a
manner to maximize the value thereof for the
holders of all of the beneficial interests in
the Trust Shares. The Technical Committee will
determine when the Trust Shares shall be offered
for sale, the method of sale, and whether to
recommend any proposed sale and, if applicable,
submit any proposed sale for approval by the
beneficial owners of the Trust Shares. The
Technical Committee may engage professional
advisors (consisting of legal counsel,
accountants and internationally recognized
investment bankers and financial advisors, the
latter of which shall be an Approved Bank, as
defined below) as it deems appropriate in
connection with any sale or proposed sale of the
Trust Shares, the fees and expenses of which
shall be paid by SATMEX. The Trust Shares shall
be offered pursuant to a competitive auction
process under which potential bidders shall be
afforded access to all material information
concerning SATMEX.
If the Trust Shares have not sooner been sold,
during the 180 day period
A-18
following each of (i) the successful launch and
operational certification of the SATMEX 6
satellite and (ii) the leasing of 80% of the
capacity available for permanent service
(excluding the Loral Transponders and capacity
reserved for the Mexican Government or SATMEX's
own use) of the SATMEX 6 satellite, the
Technical Committee shall retain one of Credit
Suisse, Morgan Stanley, Goldman Sachs, JPMorgan
Chase, Citigroup and Merrill Lynch (each, an
"APPROVED BANK") as investment banker or
financial advisor to market the Trust Shares for
sale as provided above.
Any recommendation for the sale of the Trust
Shares by the Technical Committee shall be
accompanied by a fairness opinion of an Approved
Bank that is independent of SATMEX. None of the
Trust Shares (or any beneficial ownership in any
Series A Shares or the right to vote any Series
A Shares), may be sold or otherwise transferred
except in a sale of all of the Trust Shares
pursuant to the foregoing procedure.
Provided (i) the proposed sale is for 100% of
the Trust Shares and the price per share
(whether Series A, Series B or Series N) shall
be the same, and (ii) the price for the Trust
Shares is payable 100% in cash (U.S. dollars),
no approval of the beneficial owners of the
Trust Shares shall be required for the sale of
the Trust Shares; provided, however, that if
such sale is consummated, or a binding agreement
with respect to such sale is entered into, on or
before the second (2nd) anniversary of the
Effective Date, the price for 100% of the Trust
Shares shall be not less than the amount
resulting from a total enterprise value (i.e.,
outstanding debt under First Priority Senior
Secured Notes and Second Priority Senior Secured
Notes, plus equity) of five hundred million
dollars (U.S. $500,000,000). If the proposed
sale of the Trust Shares does not meet the
foregoing conditions, such sale shall be subject
to the approval of (i) the Voting Committee and
(ii) the SPE which, in turn, will require the
affirmative vote of the holders of depository
receipts representing not less than 66-2/3% of
the Bondholder Equity.
Notwithstanding anything to the contrary herein,
unless the Buyer is an Approved Buyer (as such
terms are defined in Section III), a Change of
Control purchase offer for the Second Priority
Senior Secured Notes shall be consummated
simultaneously with the sale of the Trust Shares
as provided above or upon any subsequent Change
of Control (provided that such purchase offer
requirement may be waived by the vote of holders
of 66-2/3% of the aggregate principal amount of
the Second Priority Senior Secured Notes).
Pending the sale of the Trust Shares, in any
matter submitted to the vote of the shareholders
of SATMEX, the Trustee shall vote the voting
Trust Shares in accordance with the instructions
of the respective beneficial
A-19
owners of the Trust Shares; provided that with
respect to the Servicios Shares such
instructions shall be given by the Voting
Committee. A committee of three (3) persons (the
"VOTING COMMITTEE") will be established under
the Equity Trust and pursuant to the quiebra of
Servicios for purposes of providing instructions
to the Trustee with respect to the voting of the
Servicios Shares. The members of the Voting
Committee may be the same as the members of the
Technical Committee or of the Board of
Directors, provided that the initial members of
the Voting Committee, and alternates for such
members, if any, will be appointed from among
the persons listed on Schedule B-1. The initial
term of such appointment shall be 2 years, and
to the extent necessary, shall renew
automatically for an additional term of 2 years.
Any subsequent appointment to the Voting
Committee shall be approved by the members of
the Technical Committee appointed from the list
of candidates for Series A Directors. The
members of the Voting Committee shall qualify as
independent directors (in accordance with
Schedule B-2). Notwithstanding the foregoing,
the Trust Shares may not be voted in any manner
that conflicts with or is inconsistent with the
sale or corporate governance provisions
described in this Term Sheet.
Decisions with respect to the Bondholder Equity
(including the voting and disposition of 100% of
the Bondholder Equity) will be made by the
Trustee upon the affirmative vote of the SPE
which, in turn, will require the affirmative
vote of the holders of depository receipts
representing not less than 66-2/3% of the
Bondholder Equity.
The Equity Trust may be amended or terminated
only with the approval of (i) the Voting
Committee and (ii) the SPE which, in turn, will
require the affirmative vote of the holders of
depository receipts representing not less than
66-2/3% of the Bondholder Equity. All beneficial
owners of shares in the Equity Trust shall be
bound by any such amendment or termination;
provided that any amendment having a
disproportionate and material adverse impact on
the Loral Shares or Principia Shares shall
require the approval of the respective
beneficial holder of such shares.
Governance of SATMEX: The by-laws of SATMEX will be revised and
simplified, including eliminating existing veto
rights afforded to Firmamento, and will also be
revised in a manner acceptable to the
Bondholders consistent with the voting and
governance matters set forth in this Term Sheet,
subject to applicable regulatory approvals that
do not have a material impact on the provisions
herein.
To the extent not inconsistent with the terms of
this Term Sheet, SATMEX will adopt the
principles contained in the Code of Best
Corporate Practices (the "PRINCIPLES"), upon the
Effective Date.
A-20
Board of Directors: The Board of Directors of SATMEX will consist of seven
(7) members, appointed as follows:
(a) the holders of the Series A Shares will appoint
four (4) directors, as follows: (i) the Mexican
Government will appoint one (1) director, who will be
independent and a Mexican national; and (ii) the Voting
Committee with respect to the Servicios Shares will
appoint three (3) directors, who will be independent
and will be Mexican nationals (the "SERIES A
DIRECTORS");
(b) Principia and Loral Skynet, for so long as they
(individually or collectively) collectively
beneficially own 100% of the shares of SATMEX held by
them as of the Effective Date, will jointly appoint one
(1) Series B Director. The Series B Director appointed
by Principia and Loral Skynet shall not (i) participate
in, or have any access to the minutes of, any
discussion or action concerning the sale of SATMEX or
the Trust Shares as contemplated herein or (ii) be a
member of the Technical Committee or Voting Committee.
Notwithstanding the foregoing, such Series B Director
shall have such right to participate and to have access
(subject to customary standards of recusal in the event
of conflict of interest) if Principia and Loral Skynet
shall notify the Technical Committee in writing that
neither Principia nor Loral Skynet intends to offer or
otherwise seek, directly or indirectly, to purchase
SATMEX or its assets or the Trust Shares for a period
of twelve (12) months thereafter. The Series B Director
appointed by Loral Skynet and Principia may participate
in, and have access to the minutes of, any discussion
or action concerning the Next Satellite procurement by
SATMEX (subject to the recusal of the Series B Director
from (1) those Board discussions or any vote involving
an evaluation of proposals submitted in response to
Satmex's RFP for the Next Satellite and (2) the
decision as to which manufacturer will be awarded the
contract for the Next Satellite).
(c) the Bondholder Equity will appoint two (2)
directors (together with the director appointed
pursuant to clause (b) above, the "SERIES B
DIRECTORS"). In the event Principia and Loral Skynet
shall no longer (individually or collectively)
beneficially own 100% of the shares of SATMEX held by
them as of the Effective Date, the Bondholder Equity
may remove the Series B Director appointed by Principia
and Loral Skynet pursuant to clause (b) above, and
thereafter the Bondholder Equity will appoint such
third Series B Director.
The Series B Shares will be entitled to appoint the
Secretary of the Board of Directors, and will also have
the right to appoint a Statutory Auditor (Comisario).
Unless otherwise specified by the Bondholder Equity,
the Secretary and the Statutory Auditor shall be the
persons specified on Schedule B-1.
A-21
Director independence will be determined in accordance
with the principles set forth on Schedule B-2.
The Audit Committee and the Compensation Committee (or
a single committee, if permitted by applicable law)
each will be comprised of three persons, consisting
initially of two Series A independent directors and one
Series B Director designated by the Bondholder Equity
(which may be the Series B Director appointed by
Principia and Loral Skynet if so designated by the
Bondholder Equity and such designation is accepted by
such Director). Each of such committee member shall be
independent within the meaning of Section 10A(m)(3) of
the Securities Exchange Act. If the Board of Directors
determines to increase the size of such committee(s),
the Series B Director appointed by Principia and Loral
Skynet shall not be precluded from serving on such
committee(s). In any event, all committees of the Board
will include at least one Series B Director appointed
by the Bondholder Equity. The initial members of the
Board of Directors shall be appointed from among the
persons listed on Schedule B-1. The term of each
director shall be renewed automatically from year to
year, unless replaced by the holders of the shares that
appointed them, except that, in the case of directors
appointed by the Voting Committee, such replacement
shall be made by the Voting Committee. Directors may be
removed and replaced by the holders of the shares that
appointed them, and any successors to such directors
shall be appointed by the holders of the shares that
first appointed such directors, except that, in the
case of directors appointed by the Voting Committee,
such removal, replacement or appointment shall be made
by the Voting Committee.
Directors, as well as members of the Technical
Committee and Voting Committee, shall be entitled to
full indemnification and exculpation to the extent
permitted by law.
The indenture trustee for the First Priority Senior
Secured Notes shall have the right upon an event of
default (as defined in the First Priority Senior
Secured Notes indenture) to appoint an observer to the
Board of Directors.
A-22
Quorum and Voting;
Extraordinary Matters: Other than for Extraordinary Matters (as defined
below), a quorum of the Board shall be a majority of
the Board including a minimum of two Series B
Directors, unless such Series B Directors fail to be
present after a first call, in which case a quorum
shall be a majority of the Board with or without such
Series B Directors. For Extraordinary Matters, a quorum
requires a majority of the Board, including a majority
of the Series B Directors.
Actions of the Board shall require a majority vote,
provided that the approval of two Series A Directors
and two Series B Directors shall be required for
Extraordinary Matters. If an Extraordinary Matter is
submitted to the Board for consideration, but such
matter fails to obtain the required approval as
described above, the Extraordinary Matter can
nevertheless be approved by the shareholders of SATMEX
but only through an Extraordinary Shareholders Meeting
and only if such matter has been approved by the
affirmative vote of at least 75% of all of the voting
stock of SATMEX.
If an Extraordinary Matter is required by law or the
by-laws of SATMEX to be submitted to the shareholders
for consideration, such Extraordinary Matter shall be
submitted to an Extraordinary Shareholders Meeting and
will require approval by the affirmative vote of at
least 75% of all of the voting stock of SATMEX.
Resolutions taken by an Extraordinary Shareholders
Meeting on first or subsequent call shall be valid if
approved by the affirmative vote of at least 75% of all
of the voting stock of SATMEX.
"EXTRAORDINARY MATTERS" shall be the matters set forth
on Schedule C. The sale of the Trust Shares in
accordance with the provisions set forth above shall
not be an Extraordinary Matter.
Management; Appointment
of Officers: The CEO of SATMEX shall be appointed by the holders of
the Series A Shares (or the Series A Directors), and,
to the extent required by law, must be a Mexican
national. The CFO of SATMEX shall be appointed from a
list of nominees submitted by a majority of the holders
of the Series B Shares (or by a majority of the Series
B Directors). All other officers to be mutually agreed
upon by the Series A Directors and Series B Directors,
except that the COO of SATMEX (to the extent such
officer is deemed by the Board of Directors to be
necessary) will be appointed from a list of nominees
submitted by a majority of the holders of the Series B
Shares (or by a majority of the Series B Directors).
Foreign Investment Law: Series A Shares shall constitute at all times at least
51% of the voting stock of SATMEX and shall be held
exclusively by Mexican nationals in accordance with the
Foreign Investment Law. Series B Shares and Series
A-23
N Shares may be held by non-Mexicans. The Series B
Shares will be full voting shares and the Series N
Shares will be neutral nonvoting shares.
In the event Mexican law changes to permit voting
majority ownership of SATMEX by non-Mexicans, then,
within one (1) year after the enactment of such change,
the Series N Shares issued as part of the Bondholder
Equity will be converted into full voting Series B
Shares, such that the equity voting rights in SATMEX
will be in the same percentages as the equity financial
rights in SATMEX. In such event, the majority of the
Board of Directors will be appointed by a majority of
the Series B Shares.
Approvals: SATMEX and its shareholders, together with the
Conciliador, shall use commercially reasonable efforts
to obtain all governmental approvals required in
connection with the transactions contemplated in this
Term Sheet, including approvals of the Ministry of
Communications and Transportation, Foreign Investment
Commission, Federal Competition Commission, CNBV and
the U.S. Federal Communications Commission.
Service Companies: The shares of the three services companies
where all SATMEX personnel are currently lodged will be
transferred for nominal consideration and will become
subsidiaries of SATMEX on the Effective Date;
alternatively, all such personnel will be transferred
to SATMEX or to one or more wholly-owned subsidiaries
thereof on or before the Effective Date (then current
compensation to be continued, as required by Mexican
labor law).
Transferability: The issuance of the depository receipts representing
the beneficial ownership of the Trust Shares that
constitute the Bondholder Equity shall be exempt from
registration under the Securities Act pursuant to
Section 1145 of the Bankruptcy Code. Bondholders that
are identified on or before the Effective Date as
Affiliated Bondholders (as defined above) shall be
granted demand registration rights to require SATMEX to
file a registration statement on Form F-1 (or Form F-3,
if such form may then be utilized by SATMEX) with the
U.S. Securities and Exchange Commission to register for
resale any equity securities (e.g., depository
receipts) held by the Affiliated Bondholders (or their
successors or assigns); such rights shall be set forth
in the Registration Rights Agreement (as defined
above). Mandatory periodic reporting requirements in
compliance with U.S. GAAP; SATMEX will be subject to
periodic reporting requirements applicable to non-U.S.
reporting companies under the Securities Exchange Act.
A-24
V. SEVERANCE AND PERFORMANCE AND SUCCESS BONUS PROGRAMS
Compensation: The Board of Directors of reorganized SATMEX will
promptly establish a compensation, bonus and recruiting
program for certain key executives of SATMEX, including
the new CEO and the CFO and COO (if applicable) and key
sales and marketing executives, upon the recommendation
of the Compensation Committee.
Severance and Prior to the Effective Date, SATMEX, with the
Performance and Success concurrence of the Conciliador, shall enter into
Bonus Programs: certain severance arrangements with up to five (5)
technical engineers; such severance compensation, which
is to be paid in the event of severance following a
Change of Control within two years of the Effective
Date, shall not exceed six (6) months salary and
medical coverage benefits for such 6-month period, in
addition to the statutory requirement under Mexican
law. The contract entered into on November 1, 2003 by
SATMEX shall be honored with respect to the existing
CFO, CLO and Chief Sales Officer of SATMEX and the CEO
of Enlaces; provided, however, that with respect to the
CEO of Enlaces, any payment due under such contract
will be paid by Enlaces and guaranteed by SATMEX.
In addition, SATMEX, with the concurrence of the
Conciliador and approval of the Committees, Principia
and Loral, will establish the two-tiered performance
and success bonus program for certain employees set
forth on Schedule G to the Agreement (the "Eligible
Employees") that have and will continue to contribute
to the success of the Restructuring of SATMEX, which
program will be approved in connection with the
Concurso Proceeding. SATMEX will immediately deposit
funds in an escrow account in an
internationally-recognized Mexican bank for payment of
bonuses equal to the total of all amounts listed on
Schedule G to the Agreement. Eligible Employees will
receive payments in the amounts and manner described in
Schedule G to the Agreement. The existing CEO shall not
be a beneficiary of any of the foregoing arrangements.
A-25
SCHEDULE A
SATMEX EQUITY
SERIES VOTING RIGHTS FINANCIAL RIGHTS
------ ------------- ----------------
MEXICAN GOV'T A 10.0% 4.0%
SERVICIOS A 45.0% 16.0%
PRINCIPIA B 0.67% 0.67%
LORAL B 1.33% 1.33%
BONDHOLDERS B 43.0% 43.0%
BONDHOLDERS N 0% 35.0%
100.0% 100.0%
A-26
SCHEDULE B-1
CANDIDATES FOR BOARD OF DIRECTORS (7):
Series A
Voting Committee designees (4):
Luis Rebollar
Vicente Aristegui
Alberto Mulas
Erwin Starke
Ruben Goldberg
Eugenio Gamboa Hirales
Arturo D'Acosta
Edgardo Mendoza
Juan Carlos Braniff
Series B
Loral/Principia designee (1):
Sergio Autrey
Eric Zahler
Michael Targoff
Richard Mastoloni
Bondholder Equity designees (2):
Robert Rauch
Roberto Colliard
John Stevens
Arturo D'Acosta
Roberto Maza
TECHNICAL COMMITTEE (3):
Two persons from the list of candidates for Series A Directors, as appointed by
the Voting Committee
One person from the list of candidates for Series B Directors, as appointed by
the Bondholder Equity
A-27
VOTING COMMITTEE (3):
Three persons from the list of candidates for Series A Directors, as appointed
pursuant to the Servicios quiebra.
Secretary of the Board: Michel Nader S.
Statutory Auditor: Manuel Canal
A-28
SCHEDULE B-2
DIRECTOR INDEPENDENCE
"Independent Director" shall mean a director whose appointment is based
upon his/her experience, expertise and professional prestige. An Independent
Director cannot, however, be any of the following:
1. A person that is, or was at any time during the prior 3 years, an employee
or officer of SATMEX or any parent or subsidiary of SATMEX;
2. A person that is, or that is a partner, shareholder, director or officer
of an organization that is, or was at any time during the prior 3 years, a
direct or indirect shareholder of Satmex,
3. A person that has, or is a partner, shareholder, director or officer of an
organization that has, the direct or indirect power to elect or direct a
majority of the members of the Board of Directors of SATMEX;
4. A person that is an advisor or consultant of SATMEX or its affiliates or a
partner, shareholder, director or officer of an organization that acts as
an advisor or consultant of SATMEX or its affiliates and such person's or
organization's income significantly depends on such relationship with
SATMEX;
5. A person that is, or is a partner, shareholder, officer or employee of,
the outside auditor of SATMEX;
6. A person that is a client, customer, supplier, borrower or lender of
SATMEX, or a partner, advisor, employee, director or officer of any such
client, customer, supplier, borrower or lender;
7. A person that is an official or employee of any governmental agency or,
unless specified as a candidate for Series A Director on Schedule B-1, a
person that was at any time during the prior 3 years an official or
employee of any governmental agency,;
8. A person that is an officer, director, trustee or employee of a
foundation, university, association or non-profit association that
receives donations from SATMEX; or
9. A person that is a family member, up to the third degree, of any of the
persons mentioned in paragraphs 1 to 5 above, or up to the first degree of
any of the persons mentioned in paragraphs 6 and 8 above.
A-29
SCHEDULE C
EXTRAORDINARY MATTERS
1. New Line of Business
2. Transfer of Material Assets (all or any significant portion)
3. Merger, Liquidation, Voluntary Bankruptcy or Concurso
4. Change in Organizational Documents (estatutos sociales)
5. Adopt or Amend Strategic Business Plan and Annual Budget
6. Dividends or Distributions
7. Transactions with Affiliated Parties (including modification of any
existing agreements with Loral and any new agreements with Loral)
8. Deviations from the Business Plan that would impact Operating Cash Flow by
US$10 mm or 10%
9. Incurrence or Prepayment of Indebtedness
10. Issuance or Redemption of Equity
11. Engage Accountants other than a "Big-4" Firm, or change Accounting or Tax
Methods
12. Settlement of Litigation and Arbitration over U.S. $1,000,000
13. Compensation of Executive Management and Employee Benefit Plans
14. Request or Filing for, or Consent to, Modification or Transfer of
Telecommunications Concessions/Licenses
A-30
SCHEDULE D
CERTAIN APPROVED BUYERS
Provided any of the following persons (individually or as a group) shall
constitute the "Buyer" as defined in Section III, any of the following persons
(individually or as a group) shall be deemed to be "Approved Buyers":
- - Alejandro Burillo Azcarraga and/or Pegaso Comunicaciones
- - Clemente Serna and/or Grupo Medcom
- - Telefonos de Mexico, S.A. de C.V. and/or Grupo Carso
- - Grupo Televisa, S.A. de C.V.
- - Loral Space & Communications Inc. or any controlled affiliate thereof
- - Principia or any controlled affiliate thereof (provided Principia or any
such controlled affiliate is wholly-owned (directly or indirectly) by
Sergio Autrey or his family)
A-31
EXHIBIT A TO ANNEX A
DESCRIPTION OF SILENT SECOND LIEN
OF SECOND PRIORITY SENIOR SECURED NOTES
Collateral: SATMEX's obligations to pay interest and principal when
due on the First Priority Senior Secured Notes and
Second Priority Senior Secured Notes will be secured by
separate liens on all present and after acquired assets
of SATMEX and any Restricted Subsidiaries except as
provided for in Section I of this Term Sheet under the
caption "Loral Transponders" (the "SHARED COLLATERAL").
Ranking: Without giving effect to the liens on the Shared
Collateral, the First Priority Senior Secured Notes and
the Second Priority Senior Secured Notes will rank pari
passu in right of payment to all existing and future
senior indebtedness of SATMEX and any Restricted
Subsidiaries, and will rank senior to all existing and
future subordinated indebtedness of SATMEX, subject to
any priorities recognized by statute, such as tax and
labor obligations.
Lien Subordination: The Second Priority Senior Secured Notes will be junior
in priority, operation and effect at all times and
under all circumstances to the security interests of
the First Priority Senior Secured Notes and any
enforcement of the second priority lien and any payment
of the Second Priority Senior Secured Notes from the
collateral securing the Second Priority Senior Secured
Notes shall be subject to the prior payment in full of
the First Priority Senior Secured Notes. Subject to
Section I of this Term Sheet under the caption "Loral
Transponders", the proceeds of the Shared Collateral
will be applied to satisfy all outstanding obligations
under the First Priority Senior Secured Notes prior to
any proceeds being applied to any obligations under the
Second Priority Senior Secured Notes. The First
Priority Senior Secured Notes and the Second Priority
Senior Secured Notes will be structurally senior to all
unsecured indebtedness of SATMEX by virtue of their
lien rights.
Collateral Trustee: The respective trustees under the indentures
governing the First Priority Senior Secured Notes and
the Second Priority Senior Secured Notes will each be
granted a security interest in the Shared Collateral
and the indenture trustees shall enter into an
intercreditor agreement containing the terms set forth
herein (the "INTERCREDITOR AGREEMENT").
Prohibition on Liens: The indenture governing the Second Priority
Senior Secured Notes will prohibit SATMEX or any
guarantor from granting or suffering to exist any lien
on the Shared Collateral other than liens securing:
- the First Priority Senior Secured Notes and any
refinancing thereof;
- the Second Priority Senior Secured Notes and any
refinancing thereof;
- taxes, assessments or other governmental charges or
levies not yet delinquent or which are being validly
contested in good faith;
- carriers', warehousemen's, mechanics', laborers' or
similar liens arising in the ordinary course of
business and securing obligations that are not yet
due and payable or that are being contested in good
faith and in respect of which SATMEX will have set
aside on its books reserves;
- purchase money liens to finance the acquisition of
assets in the ordinary course of business so long as
such lien is limited to the assets so acquired, the
indebtedness does not exceed the purchase price and
such lien exists at the time of the acquisition or
will be created within 180 days of such acquisition;
and
- other customary permitted liens.
Refinancing: Notwithstanding anything to the contrary herein, SATMEX
will be permitted to refinance each of the First
Priority Senior Secured Notes and the Second Priority
Senior Secured Notes, provided that (i) the aggregate
principal amount outstanding after such refinancing is
not greater than the aggregate amount of all
obligations outstanding immediately prior to such
refinancing with respect to the obligations being
replaced, (ii) such refinancing shall not have a
shorter Average Life (as defined below) as compared
with the indebtedness being replaced, and (iii) the
interest rate and the cash interest payment terms on
such refinancing shall not be greater or more favorable
to the holders of such refinancing debt than the
interest rate and the cash interest payment terms on
the respective debt being refinanced unless such
greater or more favorable terms are commercially
reasonable at the time of such refinancing. "Average
Life" shall have the meaning set forth in the current
Senior Notes indenture without regard to any mandatory
prepayments. Any such refinancing debt will be entitled
to the same benefits, waivers and priority provided
under this Term Sheet to the debt being refinanced and
subject to the same burdens provided under this Term
Sheet, as applicable. The Available Cash Flow Repayment
Formula shall apply to any refinancing debt in
accordance with the terms of the debt being refinanced.
2
Release of Collateral: The lien of the Second Priority Senior Secured Notes
will be automatically released upon the foreclosure or
sale of any Shared Collateral by the holders of the
First Priority Senior Secured Notes in accordance with
the First Priority Senior Secured Notes Indenture,
provided that proceeds from such sale shall be applied
in accordance with the Intercreditor Agreement and the
respective Indentures. Notwithstanding the foregoing,
the holders of the Second Priority Senior Secured Notes
will not be permitted to object to any bankruptcy court
or concurso mercantil ordered sale of the Shared
Collateral that has been approved by the holders of the
First Priority Senior Secured Notes provided that the
lien of the Second Priority Senior Secured Notes
attaches to the proceeds of any such sale in accordance
with the priorities set forth in the Intercreditor
Agreement. In the event that any concurso mercantil
proceeding is filed in Mexico, the liens in favor of
the Second Priority Senior Secured Notes may be
released by the Common Representative (as defined
below) with the approval of the holders of more than
50% in principal amount of the outstanding Second
Priority Senior Secured Notes, with such release to be
effective as of immediately prior to the commencement
of the concurso mercantil.
Common Representative: A common representative shall be irrevocably appointed
under Mexican law to act for the benefit of 100% of the
holders of the Second Priority Senior Secured Notes
(the "COMMON REPRESENTATIVE") solely for the purposes
of (i) voting in favor of or accepting a plan of
reorganization in any future concurso mercantil
proceeding, (ii) exercising all veto rights in
connection with the approval of such concurso plan in
Mexico, but only in the event that such plan is
accepted by holders of a majority of the aggregate
outstanding principal amount of the Second Priority
Senior Secured Notes, and (iii) releasing liens as
described in the immediately preceding section.
Waivers: The Intercreditor Agreement will provide that until the
First Priority Senior Secured Notes have been paid in
full, the Second Priority Senior Secured Notes will be
deemed to have waived the following:
- right to exercise remedies against the Shared
Collateral,
- right to challenge the validity, enforceability or
priority of the first priority lien of the holders
of the First Priority Senior Secured Notes,
- all claims against the holders of the First Priority
Senior Secured Notes or their representatives based
on actions or inactions taken with respect to the
Shared Collateral, and the Second Priority Senior
Secured Notes will not contest any actions taken by
the holders of the First Priority Senior Secured
Notes with respect to Shared Collateral,
3
- right to seek adequate protection pursuant to
Section 361 of the Bankruptcy Code or its Mexican
equivalent in the event of any bankruptcy or
concurso mercantil proceeding, as applicable;
provided, however, that the holders of the Second
Priority Senior Secured Notes will be permitted to
cause the indenture trustee for the Second Priority
Senior Secured Notes to seek a junior lien on any
assets on which the United States bankruptcy court
grants a lien as adequate protection to secure the
First Priority Senior Secured Notes, so long as (i)
the junior lien is subject to the same lien
subordination arrangements as set forth in the
Intercreditor Agreement and (ii) the holders of the
Second Priority Senior Secured Notes waive all
rights, if any, to seek payment in cash of any
claims arising by virtue of such liens unless the
First Priority Senior Secured Notes have been paid
in full in cash,
- right to oppose adequate protection pursuant to
Section 361 of the Bankruptcy Code or its Mexican
equivalent in the event of a bankruptcy or concurso
mercantil proceeding, as applicable,
- right to oppose any debtor in possession financing
or concurso financing, including any right to oppose
debtor in possession financing that grants liens
senior to the liens securing the Second Priority
Senior Secured Notes or otherwise entitles the
debtor in possession financing or concurso financing
to payment prior to any payment to the holders of
Second Priority Senior Secured Notes; provided,
however, the holders of the Second Priority Senior
Secured Notes will retain the right to object to
such financing solely on the basis that more
favorable financing terms are available to SATMEX,
- right to seek payment in cash of any post-petition
interest that might otherwise accrue following
commencement of any insolvency proceedings unless
the First Priority Senior Secured Notes have been
paid in full in cash, and
- right to seek relief from the automatic stay or any
similar stay under Mexican law.
Governing Law: The Indentures and the Intercreditor Agreement will be
governed by the laws of the State of New York.
4
ANNEX B
INSTRUMENT OF ACCESSION
The undersigned __________________ (the "Transferee"), as a condition
precedent to becoming the beneficial holder and/or owner of [INSERT NAME AND
FACE AMOUNT OF DEBT SECURITY BEING ACQUIRED] of SATELITES MEXICANOS, S.A. DE
C.V. (the "Company"), (a) hereby agrees to become a party to and bound by the
terms and conditions of that certain Restructuring Agreement by and between the
Company and Supporting Holder, dated as of March 31, 2006 (as amended or
modified, the "Restructuring Agreement") and assume all of the Supporting
Holder's1 obligations thereunder and (b) such Transferee represents and warrants
that it has reviewed, with the assistance of professional and legal advisors of
its choosing, all information necessary for such Transferee to decide to support
the Restructuring through the Concurso Plan and Chapter 11 Plan as described in
the Restructuring Agreement and in the Term Sheet. This Instrument of Accession
shall take effect and shall become an integral part of the Restructuring
Agreement immediately upon execution and delivery to the Company of this
Instrument and the Transferee shall be deemed to be a party to the Restructuring
Agreement (and bound by all of its rights and obligations) as if it had been an
initial signatory thereto.
IN WITNESS WHEREOF, this INSTRUMENT OF ACCESSION has been duly executed by
or on behalf of the undersigned as of the date below written.
[For Entities]
____________________________________
By: ________________________________
Name:
Title:
[For Individuals]
____________________________________
Name:
Address: ___________________________
___________________________
- -----------
(1) Capitalized terms not defined herein shall have the meaning ascribed to
such term in the Restructuring Agreement.
Date: _____________________________
Acknowledged:
SATELITES MEXICANOS, S.A. DE C.V.
By: ___________________________
Date: _________________________
ANNEX C
TARGET DATE
-----------
I. COMPANY'S CONCURSO PROCEEDING
1. Delivery to Supporting Holders of form of Equity Trust Ninety (90) days after filing of the Petition
but in no event later than thirty (30) days
before the Confirmation Hearing
2. Delivery to Supporting Holders of executed Partner Within five (5) Business Days of entry of the
resolutions of Firmamento authorizing commencement of the Concurso Plan Order
Chapter 11 Case
3. Delivery to Supporting Holders of executed Partner Effective Date
resolutions of Firmamento authorizing the Restructuring
4. Delivery to Supporting Holders of form of Shareholder Ninety (90) days after filing of the Petition
resolutions of the Company but in no event later than thirty (30) days
before the Confirmation Hearing
5. Approval from CNIE June 6, 2006
6. Request approval from SCT (i.e., By-laws) April 24, 2006
7. Approval from SCT (i.e., By-laws) June 6, 2006
8. Approval from SCT (i.e., subscription of shares) June 6, 2006
9. Request authorization from COFECO May 26, 2006
10. Authorization from the COFECO July 24, 2006
II. U.S. CHAPTER 11
11. Delivery of draft U.S. Chapter 11 Plan and Disclosure June 2, 2006 but in no event later than
Statement thirty (30) days prior to the filing of the
Petition
12. Filing of U.S. Chapter 11 Plan and Disclosure Statement and Within two (2) Business Days of the filing of
motion to approve same the Petition
13. Approval of Disclosure Statement by Bankruptcy Court Within sixty (60) days of the filing of the
Petition
14. Confirmation of U.S. Chapter 11 Plan Within one hundred and twenty (120) of the
filing of the Petition
III. SERVICIOS PROCEEDING
15. Request of Servicios' "quiebra" to the Mexican Bankruptcy May 9, 2006
Court
16. Entering of a "quiebra" order of Servicios May 17, 2006
ANNEX D
MEMBERS OF THE FLOATING RATE NOTES AD HOC NOTEHOLDERS' COMMITTEE:
Canyon Value Realization Fund, L.P.
Canyon Value Realization MAC 18 Ltd.
Institutional Benchmarks Series (Master Feeder) Limited in Respect of Centaur
Series
The Canyon Value Realization Fund (Cayman), Ltd.
Alpha US Sub Fund II, LLC
Citi GoldenTree Ltd
GoldenTree Credit Opportunities II, Ltd.
GoldenTree Credit Opportunities Financing I, Ltd.
GoldenTree High Yield Master Fund, Ltd.
GoldenTree High Yield Master Fund II, Ltd.
GoldenTree High Yield Opportunities I, L.P.
GoldenTree High Yield Opportunities II, L.P.
GoldenTree High Yield Value Master Fund, L.P.
Reynolds American Defined Benefit Master Trust
GoldenTree MultiStrategy Financing, Ltd.
Highland Crusader Offshore Partners, L.P.
Pam Capital Funding, L.P.
Pamco Cayman, Ltd.
Murray Capital Management, Inc.
MEMBERS OF THE SENIOR NOTES AD HOC NOTEHOLDERS' COMMITTEE:
Federated International High Income Fund
Federated Strategic Income Fund
Atlantic Pacific Management Group LLC
LPETE LLC
SSGDP LLC
DRALLI LLC
Gramercy Emerging Markets Fund
HFR EM Select Master Trust
KAPALI LLC
LMC Recovery Fund LLC
PALLMALL LLC
UVIADO LLC
GRNPARK LLC
KADESI LLC
Harbinger Capital Partners Master Fund I, LTD (f/k/a Harbert Distressed
Investment Master Fund, LTD)
Alpha US Sub Fund VI, LLC
ANNEX E
SATMEX 6 SATELLITE INSURANCE PROTOCOL
Standard satellite insurance market terms and conditions based on the following:
Amount of Insurance: U.S. $230,000,000 (less LRG Credit, if applicable)
Coverage Period: Launch plus One Year
Named Insured: Satmex
Loss Payee: FRN Indenture Trustee
Coverage: Total, constructive total and partial loss
Exclusions: Standard for launch insurance
Deposit/Payment Terms: 10% of premium upon the binding of coverage,
remainder payable 4 weeks before launch
LRG Credit: U.S. $68,850,000 payable by Arianespace, applied as a
reduction to the Amount of Insurance, in the event of
Launch Failure under Launch Services Agreement
ANNEX F
CONFIDENTIALITY PROVISIONS
The provisions hereof (this "Annex") shall govern with respect to the
Confidential Information as described in section 5(b) of the Agreement.
Capitalized terms not defined herein shall have the meanings given to them in
the Agreement.
1. (a) The term "Confidential Information" has the meaning set forth in
section 5(b) of the Agreement. The term "Confidential Information" shall
not include information: (i) that is or becomes generally available to the
public (including any information contained in a press release issued
pursuant to section 30 of the Agreement) or to a recognized creditor in
connection with the Concurso Proceeding other than as a result of a breach
of section 5(b) of the Agreement and this Annex; (ii) that is already in
the possession of a Recipient without, to the knowledge of such Recipient,
restriction or (iii) that is or has been disclosed to a Recipient by a
third party, not employed by or otherwise affiliated with such Recipient,
who is, to the knowledge of such Recipient, after reasonable inquiry, not
prohibited from disclosing such information to such Recipient.
(b) The term "Recipient" means any Supporting FRN Holder or any Supporting
Noteholder.
(c) The term "Representatives" means, with respect to any Recipient, its
affiliates, its subsidiaries, its related or associated entities, or its
or their directors, members, officers, affiliates, partners, employees,
agents, advisers or representatives, including, without limitation,
attorneys, accountants, consultants, bankers, financial advisers and any
representatives of such advisers.
2. Confidential Information may be disclosed:
(a) as permitted by Paragraph 4 below;
(b) if approved by the Company in writing prior to its disclosure or
use; and
(c) if required by law, regulation, regulatory authority or other
applicable judicial or governmental order or process (including any
discovery request) or any governmental authority, or any "self regulatory
organization" as defined in section 3(a)(26) of the Securities Exchange
Act of 1934, as amended, or any successor act; provided, however, each
Recipient that is so required, will use its commercially reasonable
efforts to provide the Company with prompt notice of such request or
requirement so that the Company may at its election and sole expense seek
a protective order or other appropriate remedy and such Recipient and its
Representatives will, at the Company's sole expense, reasonably cooperate
with the Company's efforts to obtain the same. If, absent the entry of
such a protective order or other remedy, such Recipient or its
Representative is,
upon the advice of its counsel, compelled to disclose Confidential
Information, such Recipient or its Representative may disclose that
portion of the Confidential Information that such Recipient or its
Representative believes on the advice of counsel that it is compelled to
disclose.
3. Confidential Information may be used by any Recipient and its Representatives
in any discussions or negotiations with any other Recipient (and their
Representatives) or any holder of the Company's Securities (and its
Representatives) that is a party to the Agreement, the Conciliador, or the
government of Mexico, provided that the Recipient's discussion or negotiation
which may include Confidential Information does not render such Confidential
Information public and such discussion or negotiation of Confidential
Information shall be treated as Confidential Information pursuant hereto.
4. Each Recipient may disclose Confidential Information only to (i) its
Representatives on a need to know basis and in connection with the Restructuring
(and the Recipient agrees to be liable for any breaches of this Agreement by its
Representatives) and (ii) any Recipient or any other holder of the Debt that has
signed a confidentiality agreement acceptable to the Company. Notwithstanding
anything contained herein to the contrary, a Recipient may disclose to (i) any
third party that the Recipient has signed the Agreement and may be in possession
of material nonpublic information, (ii) to any member of any of the Committees
that the Recipient has signed this Agreement and that the Recipient may be in
possession of material nonpublic information, in each case without revealing any
Confidential Information and (iii) to any transferee of Securities in accordance
with section 5(c) of the Agreement. In any event, each Recipient shall maintain
a list of those of its Representatives or other persons to whom Confidential
Information has been disclosed (which list shall be presented to the Company on
request).
5. Each Recipient acknowledges that it has been advised by the Company and/or
its Representatives that the Confidential Information includes information that
may be material, nonpublic and highly confidential. The Company has been advised
that any Recipient may establish an information blocking device or "Ethical
Wall" between such Recipient's employees who receive the Confidential
Information and its other employees. The Company expressly takes no position on
the propriety of any such arrangement under applicable securities laws and
regulations and each Recipient agrees that it shall at all times comply with all
state and federal securities laws and regulations. Each Recipient agrees that,
in the event it establishes such an information blocking device or Ethical Wall,
that it will designate to the Company in writing the employees who, pursuant to
the Ethical Wall, are permitted to receive information or otherwise participate
in discussions concerning the Restructuring (the "Designated Representatives").
In order to preserve such Ethical Wall, if established (and without limiting the
generality of other provisions of this Agreement), each Recipient agrees that
the Designated Representatives shall not disclose Confidential Information to,
or otherwise discuss any matter concerning or relating to the Restructuring
with, any employee or director of the Recipient or the Recipient's affiliates
who is not a Designated Representative. The Company acknowledges that the
Recipients have disclosed that, in the event an Ethical Wall is established,
funds and accounts managed by a Recipient and its affiliates that are not
advised, directly or indirectly, by any Designated Representative may from time
to time purchase, hold or dispose of securities issued by the Company or its
affiliates during or after the term hereof. Each Recipient acknowledges that the
Company has not taken a position regarding the propriety of any such purchase,
retention or disposition of such securities under applicable securities laws and
regulations. Nothing contained in this Annex shall be deemed to restrict or
impair a Recipient's ability to purchase, hold or dispose of securities issued
by the Company or its affiliates in accordance with applicable securities laws
during or after the term hereof.
6. The obligations of each Recipient under section 5(b) of the Agreement and
this Annex shall terminate on the earliest of (a) the termination of the
Agreement as to such Recipient or (b) the date that the Disclosure Statement is
filed by the Company with the Bankruptcy Court (the "Disclosure Date"). Upon the
Disclosure Date (unless the Disclosure Date is pursuant to (b) above), the
Company shall promptly file an appropriate summary of the Confidential
Information, on Form 6-K or other periodic report required or permitted to be
filed under the Securities Exchange Act of 1934, as amended, with the Securities
and Exchange Commission. In the event the Company fails to make a filing of the
type prescribed in the foregoing sentence within five business days of the
Disclosure Date, any Recipient, any Recipient's Representatives or the
Recipients as a group, are hereby authorized to disclose publicly the
Confidential Information. If, upon the advice of counsel, any filing by the
Company made within such five business day period is insufficient to unrestrict
the Recipients, the Recipients or their Representatives shall so notify the
Company in writing, which notice shall set forth why the Recipient considers the
Company's public disclosure insufficient and what disclosure it feels is
required. If, within three business days of its receipt of such notice, the
Company and the Recipients do not agree on the nature or extent of the
disclosure required pursuant hereto, the Recipients are hereby authorized to
disclose publicly the Confidential Information, to the extent the Recipient on
the advice of counsel believes it is necessary to remedy the alleged
insufficiency of the Company's prior public disclosure. Each Recipient
acknowledges and agrees that its sole remedy for the Company's failure to make a
public filing as required pursuant to this Paragraph 6 is the remedy of public
disclosure by the Recipient as is expressly provided for in this Paragraph 6.
ANNEX G
304 STIPULATION
PRESENTMENT DATE: APRIL 27, 2006 AT 10:00 A.M. (NEW YORK TIME)
OBJECTION DEADLINE: APRIL 24, 2006 AT 4:00 P.M. (NEW YORK TIME)
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- -------------------------------------x
:
In re : In Proceeding Under
: Section 304 of
SATELITES MEXICANOS, S.A. DE C.V., : Bankruptcy Code
:
: Case No. 05-16103 (RDD)
Debtor in Foreign Proceeding. :
:
- -------------------------------------x
STIPULATION, AGREEMENT AND ORDER BETWEEN
SATELITES MEXICANOS, S.A. DE C.V. AND CERTAIN CREDITORS,
ON THE ONE HAND, AND THE LORAL ENTITIES, ON THE OTHER
WHEREAS on August 4, 2005 (the "Commencement Date"), Sergio Autrey, the
foreign representative of Satelites Mexicanos, S.A. de C.V. ("Satmex"), a debtor
in a proceeding under the MBRA(1) currently pending before the Second Federal
District Court for Civil Matters in Mexico City, Mexico under file number
129/2005 (the "Concurso Proceeding"), commenced the above-captioned proceeding
(the "304 Proceeding") under section 304 of title 11 of the United States Code
(the "Bankruptcy Code");
WHEREAS prior to the Commencement Date, on May 20, 2005, after more than a
year of intense negotiations, certain affiliates of Loral Space & Communications
Ltd.(2) and Satmex reached agreement on the terms of a global settlement
resolving all outstanding issues under various of the parties' then-existing
agreements, which settlement agreement and related
- ----------
(1) The "MBRA" means the Ley de Concursos Mercantiles, published in the
Official Gazette of the Federation (Diario Oficial de la Federacion) on May
12, 2000.
(2) Loral Space & Communications Ltd. and its affiliated debtors were debtors
and debtors in possession (as reorganized, the "Loral Reorganized Debtors")
in cases under chapter 11 of title 11 of the United States Code, which
cases are being jointly administered under the caption In re Loral Space &
Communications Ltd., et al., Lead Case No. 03-41710 (RDD) (collectively,
the "Loral Cases"). On November 21, 2005, the effective date of the Loral
Reorganized Debtors' plan of reorganization occurred.
documents (collectively, the "Loral Settlement Agreements") were approved by
this Court in the Loral Cases and Satmex's Board of Directors;
WHEREAS the Loral Settlement Agreements consist of (a) that certain
Settlement Agreement, dated as of June 14, 2005 (the "Settlement Agreement"), by
and among Satmex and Loral Space & Communications Corporation ("LSCC"), Loral
SpaceCom Corporation ("SpaceCom"), Loral Skynet, a division of SpaceCom ("Loral
Skynet"), Loral Skynet Network Services, Inc. ("LSNS") and Space Systems/Loral,
Inc. ("SS/L" and, together with LSCC, SpaceCom, Loral Skynet and LSNS, the
"Loral Entities"), (b) that certain Contract between Satmex and SS/L for the
SATMEX 6 Satellite Program dated June 14, 2005, as amended, (c) that certain
Agreement Between Loral Skynet and Satmex Concerning the Lease of Transponders
for the SATMEX 5 Satellite dated June 14, 2005, (d) that certain Agreement
Between SS/L (as assignee of LSCC) and Satmex Concerning the Lease of
Transponders for the SATMEX 6 Satellite dated June 14, 2005 and (e) the Active
Capacity Agreements;(3)
WHEREAS on May 25, 2005, certain holders of Satmex's debt securities filed
an involuntary petition under chapter 11 of the Bankruptcy Code against Satmex
in the United States Bankruptcy Court for the Southern District of New York (the
"Satmex Involuntary Case"), which case was entitled In re Satelites Mexicanos,
S.A. de C.V., Case No. 05-13862 (RDD);(4)
- ----------
(3) The "Active Capacity Agreements" consist of (i) that certain Satmex
Contract Number 673-1 between Loral Skynet and Satmex for the lease of
satellite capacity dated October 1, 2003, as amended, (ii) that certain
Satmex Contract Number 383-1 between Loral Skynet and Satmex for the lease
of satellite capacity dated March 1, 2000, as amended, and (iii) that
certain Satmex Contract Number 257-1 between Loral Skynet Network Services,
Inc. and Satmex for the lease of satellite capacity dated September 1,
1999, as amended.
(4) The Satmex Involuntary Case was dismissed upon commencement of the 304
Proceeding.
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WHEREAS on June 28, 2005, the Loral Entities filed in the Loral Cases and
the Satmex Involuntary Case a motion pursuant to sections 362 and 365 of the
Bankruptcy Code for, among other things, approval of the Loral Settlement
Agreements;
WHEREAS after a hearing held in the Loral Cases and the Satmex Involuntary
Case on July 19, 2005, the Court, on or about July 26, 2005, entered an order in
the Loral Cases [Docket No. 2247] and an order in the Satmex Involuntary Case
[Docket No. 73] as further described below (collectively, the "Settlement
Orders");
WHEREAS the Settlement Orders entered in the Satmex Involuntary Case
provided for the modification and waiver of the "automatic stay" extant in the
Satmex Involuntary Case pursuant to section 362(a) of the Bankruptcy Code (the
"Automatic Stay") to the extent necessary to (i) effect the offsets and
accommodations set forth in the Loral Settlement Agreements and (ii) permit the
Loral Entities to exercise upon the occurrence of an event of default or right
of termination under any of the Loral Settlement Agreements, after notice to
Satmex, counsel to certain ad hoc committees of Satmex's debt securities and
counsel to Citibank, N.A., as indenture trustee, all rights and remedies under
the Loral Settlement Agreements, without further application to the Court (the
"Loral Carve-Out");
WHEREAS the Settlement Order entered in the Loral Cases provided for, among
other things, (i) authority for the Loral Entities to execute, deliver,
implement and fully perform all obligations and to take any and all actions
reasonably necessary or appropriate to consummate the transactions contemplated
by the Loral Settlement Agreements, (ii) modification and waiver of the
Automatic Stay to the extent necessary to permit the Loral Entities to
effectuate the offsets and accommodations set forth in the Loral Settlement
Agreements and (iii) the Loral Carve-Out;
3
WHEREAS the launch of the SATMEX 6 satellite ("SATMEX 6") currently is
scheduled to occur the week of May 22, 2006;
WHEREAS Satmex cannot launch SATMEX 6 without the assistance of SS/L;
WHEREAS the launch of SATMEX 6 is integral to the restructuring of Satmex's
businesses and affairs and in the best interests of Satmex;
WHEREAS Satmex, the Loral Entities, certain holders of the Senior Secured
Floating Rate Notes due June 30, 2004 issued by Satmex (the "FRNs") and certain
holders of the 10-1/8% Unsecured Senior Notes due November 1, 2004 issued by
Satmex (the "Senior Noteholders" and, together with the FRNs, the "Noteholders"
and those Noteholders executing the Restructuring Agreement (as defined below)
hereinafter the "Supporting Debtholders" and, together with Satmex and the Loral
Entities, the "Parties") have been engaged in active negotiations and recently
have reached a general accord on the principal terms of an agreement which is
being executed contemporaneously herewith (the "Restructuring Agreement") to
effectuate a Restructuring (as defined in the Restructuring Agreement);
WHEREAS Satmex will pursue the Restructuring through approval of a plan of
reorganization in the Concurso Proceeding (the "Concurso Plan"), which will set
forth the framework for the Restructuring and will provide for implementation of
the Restructuring through a case under chapter 11 of the Bankruptcy Code, to be
commenced by Satmex in this Court after approval of the Concurso Plan in the
Concurso Proceeding;
WHEREAS in contemplation and reliance on the dismissal of the 304
Proceeding and the commencement of a chapter 11 case, Satmex, the Supporting
Debtholders and the Loral Entities specifically, knowingly and intelligently
bargained for and agreed to each of the provisions herein;
4
WHEREAS SS/L is providing launch support and related services to Satmex in
respect of SATMEX 6 in express reliance on Satmex (i) waiving any right to
reject the Loral Settlement Agreements in any chapter 11 case, (ii) assuming the
Loral Settlement Agreements in any chapter 11 case, if filed, and (iii)
modifying the Automatic Stay extant in any chapter 11 case, if filed; and
WHEREAS Satmex is executing this Stipulation, Agreement and Order in
express reliance on SS/L continuing to provide launch support and related
services to Satmex in respect of SATMEX 6 so long as Satmex continues to comply
with its obligations under the Loral Settlement Agreements.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and between Satmex,
the Supporting Debtholders and the Loral Entities, through their undersigned
counsel, that:
1. Consistent with this Court's Settlement Orders, the Loral Settlement
Agreements are approved. For the avoidance of doubt, nothing in this
Stipulation, Agreement and Order shall be deemed an assumption of the Loral
Settlement Agreements pursuant to section 365 of the Bankruptcy Code, which will
occur in accordance with paragraph 4 hereof.
2. Satmex may not, and waives any right to, reject the Loral Settlement
Agreements, whether in the 304 Proceeding or any case under chapter 11 of the
Bankruptcy Code (the "Chapter 11 Case"), in connection with the Restructuring or
otherwise.
3. No injunction entered in this 304 Proceeding shall be more restrictive
as against the Loral Entities than those injunctions issued pursuant to Orders
entered in the Satmex Involuntary Case dated August 8, 2005 [Docket No. 11],
October 19, 2005 [Docket No. 17] and January 11, 2006 [Docket No. 19].
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4. Satmex shall file a motion in the Chapter 11 Case seeking assumption of
the Loral Settlement Agreements within five (5) days after the commencement of
the Chapter 11 Case and there shall be a final and non-appealable order (the
"Assumption Order") assuming such Loral Settlement Agreements in the Chapter 11
Case by no later than July 24, 2006 (time being of the essence).
5. The Automatic Stay in the Chapter 11 Case automatically and without any
further action or filing is and shall be waived, modified and lifted immediately
upon commencement of the Chapter 11 Case to permit the Loral Entities to
exercise all of their rights and remedies under the Loral Settlement Agreements.
The Parties to this Stipulation, Agreement and Order enter into this waiver
knowingly and intelligently and are estopped from contesting its validity. From
the date hereof and terminating upon entry of the Assumption Order, the Loral
Entities shall provide five (5) business days' advance notice of an exercise of
any of their termination rights under the Loral Settlement Agreements to (a)
Satmex and its undersigned counsel, (b) Wilmer Cutler Pickering Hale and Dorr
LLP (Attn: George W. Shuster, Jr.) as counsel to FRNs, (c) Akin Gump Strauss
Hauer & Feld LLP (Attn: Steven H. Scheinman) as counsel to the Ad Hoc Committee
of Senior Noteholders, and (d) Nixon Peabody, LLP (Attn: Frank S. Hamblett), as
counsel to Citibank, N.A. as Indenture Trustee for the FRNs. To the extent the
Automatic Stay is implicated other than as provided in this paragraph, the
provisions of the Automatic Stay, including, without limitation, those
provisions prohibiting any act to collect, assess or recover a claim that arose
before the commencement of a Chapter 11 Case and/or assets or property of
Satmex's estate (as defined in section 541 of the Bankruptcy Code) shall remain
in full force and effect.
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6. Upon execution by Satmex, the Supporting Debtholders and the Loral
Entities, the terms and provisions of this Stipulation, Agreement and Order are
fully binding, effective and enforceable against the Parties hereto and
effectiveness hereof is not subject to the approval of the Court.
7. For the avoidance of doubt, nothing herein shall obligate Satmex to
commence a case under chapter 11 of the Bankruptcy Code.
8. This Stipulation, Agreement and Order shall be binding on all successors
and assigns of the Parties hereto.
9. This Stipulation, Agreement and Order shall be governed by the laws of
the State of New York.
10. Each person who executes this Stipulation, Agreement and Order
represents that he or she is duly authorized to execute this Stipulation,
Agreement and Order on behalf of the respective Parties hereto and that each
such party has full knowledge of and has consented to the terms and provisions
hereof.
11. This Stipulation, Agreement and Order may be executed in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument and it shall constitute sufficient proof
of this Stipulation, Agreement and Order to present any copy, copies or
facsimiles signed by the Parties hereto to be charged.
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12. This Stipulation, Agreement and Order can only be amended or otherwise
modified by a writing executed by the Parties hereto.
Dated: April 7, 2006
New York, New York /s/ Matthew S. Barr
-----------------------------------------------
Matthew Barr (MB 9170)
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, New York 10005
Telephone: (212) 530-5000
Facsimile: (212) 530-5219
Attorneys for Satelites Mexicanos, S.A. de C.V.
Dated: April 7, 2006
New York, New York /s/ Shai Y. Waisman
-----------------------------------------------
Stephen Karotkin (SK 7357)
Lori R. Fife (LF 2839)
Shai Y. Waisman (SW 6854)
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Attorneys for the Loral Entities
Dated: April 7, 2006
New York, New York /s/ Steven H. Scheinman
------------------------------------
Steven H. Scheinman (SS 2606)
Michael S. Stamer (MS 4900)
Akin Gump Strauss Hauer & Feld LLP
590 Madison Avenue
New York, NY 10022-2524
Telephone: (212) 872-1000
Facsimile: (212) 872-1002
Attorneys for the Supporting Noteholders (as
defined in the Restructuring Agreement)
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Dated: April 7, 2006
Boston, Massachusetts /s/ Dennis L. Jenkins
--------------------------------------------
Dennis L. Jenkins (DJ 4698)
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Telephone: (617) 526-6491
Facsimile: (617) 526-5000
Attorneys for the Supporting FRN Holders (as
defined in the Restructuring Agreement)
SO ORDERED, this ___ day of ______, 2006
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UNITED STATES BANKRUPTCY JUDGE
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