1
Exhibit 10.2
The Company has omitted from this Exhibit 10.2 a portion of the Schedules
hereto for which the Company has requested confidential treatment under Rule
406 under the Securities Act of 1933, as amended. The portion of this Agreement
for which confidential treatment has been requested is marked "[CONFIDENTIAL
TREATMENT REQUESTED]," and such confidential portion has been filed separately
with the Securities and Exchange Commission.
$150,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
among
GOLDEN SKY HOLDINGS, INC.,
GOLDEN SKY SYSTEMS, INC.,
VARIOUS BANKS,
BANQUE PARIBAS,
as Syndication Agent,
FLEET NATIONAL BANK,
as Administrative Agent,
and
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Documentation Agent
----------------------------------------
Dated as of July 7, 1997
Amended and Restated as of May 8, 1998
----------------------------------------
2
[CAPTION]
TABLE OF CONTENTS
Page
Section 1. Amount and Terms of Credit........................................
1.01 The Commitments................................................
1.02 Minimum Amount of Each Borrowing...............................
1.03 Notice of Borrowing............................................
1.04 Disbursement of Funds..........................................
1.05 Notes..........................................................
1.06 Conversions....................................................
1.07 Pro Rata Borrowings............................................
1.08 Interest.......................................................
1.09 Interest Periods...............................................
1.10 Increased Costs, Illegality, etc...............................
1.11 Compensation...................................................
1.12 Replacement of Banks...........................................
Section 1A. Letters of Credit................................................
1A.01 Letters of Credit.............................................
1A.02 Minimum Stated Amount.........................................
1A.03 Letter of Credit Requests.....................................
1A.04 Letter of Credit Participations...............................
1A.05 Agreement to Repay Letter of Credit Drawings..................
1A.06 Increased Costs...............................................
Section 2. Commitment Commission; Fees; Reductions of Commitment.............
2.01 Fees...........................................................
2.02 Voluntary Termination of Unutilized Commitments................
2.03 Mandatory Reduction of Commitments.............................
Section 3. Prepayments; Payments; Taxes......................................
3.01 Voluntary Prepayments..........................................
3.02 Mandatory Repayments and Commitment Reductions.................
3.03 Method and Place of Payment....................................
3.04 Net Payments...................................................
Section 4. Conditions Precedent to the Restatement Effective Date
and Loans on the Restatement Effective Date..........................
4.01 Execution of Agreement; Notes..................................
4.02 Officer's Certificate..........................................
4.03 Opinions of Counsel............................................
3
Page
4.04 Corporate Documents; Proceedings...............................
4.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Collective Bargaining
Agreements; Debt Agreements; Tax Sharing Agreements;
Affiliate Contracts and Material Contracts..................
4.06 Consummation of the Reorganization Transaction.................
4.07 Existing Credit Agreement......................................
4.08 Subsidiaries Guaranty..........................................
4.09 Holdings Pledge Agreement......................................
4.10 Security Document Acknowledgment; Pledge Agreements; Security
Agreement...................................................
4.11 Minimum Subscribers and Households.............................
4.12 Material Adverse Change, etc...................................
4.13 Litigation.....................................................
4.14 Fees, etc......................................................
4.15 Solvency Certificate; Insurance Analyses.......................
4.16 Approvals......................................................
4.17 Financial Statements; Projections; Management Letter Reports...
4.18 Consent Letter.................................................
4.19 Acquisitions...................................................
Section 5. Conditions Precedent to All Credit Events.........................
5.01 No Default; Representations and Warranties.....................
5.02 Notice of Borrowing; Letter of Credit Request..................
5.03 Permitted Acquisitions.........................................
5.04 Material Adverse Change, etc...................................
5.05 Litigation.....................................................
5.06 Borrowing Base Certificate.....................................
Section 6. Representations, Warranties and Agreements........................
6.01 Corporate Status...............................................
6.02 Corporate Power and Authority..................................
6.03 No Violation...................................................
6.04 Governmental Approvals.........................................
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc...............................
6.06 Litigation.....................................................
6.07 True and Complete Disclosure...................................
6.08 Use of Proceeds; Margin Regulations............................
6.09 Tax Returns and Payments.......................................
6.10 Compliance with ERISA..........................................
6.11 The Security Documents.........................................
6.12 Material Contracts.............................................
6.13 Properties.....................................................
6.14 Capitalization.................................................
6.15 Subsidiaries...................................................
6.16 Compliance with Statutes, etc..................................
6.17 Investment Company Act.........................................
6.18 Public Utility Holding Company Act.............................
6.19 Environmental Matters..........................................
6.20 Labor Relations................................................
6.21 Patents, Licenses, Franchises and Formulas.....................
6.22 Indebtedness...................................................
6.23 Restrictions on or Relating to Subsidiaries....................
6.24 The Transaction and Permitted Acquisitions.....................
6.25 Year 2000 Reprogramming........................................
Section 7. Affirmative Covenants.............................................
7.01 Information Covenants..........................................
7.02 Books, Records and Inspections.................................
7.03 Maintenance of Property, Insurance.............................
7.04 Corporate Franchises...........................................
7.05 Compliance with Statutes, etc..................................
7.06 Compliance with Environmental Laws.............................
7.07 ERISA..........................................................
7.08 End of Fiscal Years; Fiscal Quarters...........................
7.09 Performance of Obligations.....................................
7.10 Payment of Taxes...............................................
7.11 Interest Rate Protection.......................................
7.12 Use of Proceeds................................................
7.13 Acceptable Subordinated Debt...................................
7.14 Intellectual Property Rights...................................
7.15 Permitted Acquisitions.........................................
7.16 Registry.......................................................
7.17 Additional Security; Further Assurances........................
7.18 Senior Seller Notes............................................
Section 8. Negative Covenants................................................
8.01 Liens..........................................................
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc.........
8.03 Dividends......................................................
8.04 Indebtedness...................................................
8.05 Advances, Investments and Loans................................
8.06 Transactions with Affiliates...................................
8.07 Capital Expenditures...........................................
8.08 Net Adjusted Consolidated Indebtedness to Qualified Paying
Subscriber Ratio............................................
8.09 Adjusted Consolidated Senior Indebtedness to Qualified Paying
Subscriber Ratio............................................
8.10 Net Subscriber Acquisition Cost................................
8.11 Fixed Charge Coverage Ratio....................................
4
Page
8.12 Annualized Adjusted Consolidated Interest Coverage Ratio.......
8.13 Consolidated Interest Coverage Ratio...........................
8.14 Net Adjusted Consolidated Indebtedness to Pro Forma Annualized
Adjusted Consolidated EBITDA................................
8.15 Adjusted Consolidated Senior Indebtedness to Pro Forma
Annualized Adjusted Consolidated EBITDA.....................
8.16 Net Adjusted Consolidated Indebtedness to Pro Forma Annualized
Consolidated EBITDA.........................................
8.17 Adjusted Consolidated Senior Indebtedness to Pro Forma
Annualized Consolidated EBITDA..............................
8.18 Limitation on Voluntary Payments and Modification of Existing
Indebtedness; Limitation on Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements; etc....
8.19 Limitation on Certain Restrictions on Subsidiaries.............
8.20 Limitation on Issuance of Capital Stock........................
8.21 Business.......................................................
8.22 Limitation on Creation of Subsidiaries.........................
Section 9. Events of Default.................................................
9.01 Payments.......................................................
9.02 Representations, etc...........................................
9.03 Covenants......................................................
9.04 Default Under Other Agreements.................................
9.05 Bankruptcy, etc................................................
9.06 ERISA..........................................................
9.07 Security Documents.............................................
9.08 Guaranties.....................................................
9.09 Judgments......................................................
9.10 Change in Control..............................................
9.11 DBS Agreement; NRTC Agreements; FCC Licenses...................
Section 10. Definitions and Accounting Terms.................................
10.01 Defined Terms.................................................
Section 11. The Agents.......................................................
11.01 Appointment...................................................
11.02 Nature of Duties..............................................
11.03 Lack of Reliance on the Administrative Agent, the
Syndication Agent and the Documentation Agent..............
11.04 Certain Rights of the Administrative Agent and the
Syndication Agent..........................................
11.05 Reliance......................................................
11.06 Indemnification...............................................
11.07 The Administrative Agent and the Syndication Agent in Their
Individual Capacities.......................................
5
Page
11.08 Holders.......................................................
11.09 Resignation by the Agents.....................................
Section 12. Miscellaneous....................................................
12.01 Payment of Expenses, Indemnities, etc.........................
12.02 Right of Setoff...............................................
12.03 Notices.......................................................
12.04 Benefit of Agreement..........................................
12.05 No Waiver; Remedies Cumulative................................
12.06 Payments Pro Rata.............................................
12.07 Calculations; Computations....................................
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL........................................
12.09 Counterparts..................................................
12.10 Effectiveness.................................................
12.11 Headings Descriptive..........................................
12.12 Amendment or Waiver...........................................
12.13 Survival......................................................
12.14 Domicile of Loans.............................................
12.15 Post-Closing Obligations......................................
12.16 Amendment and Restatement; Termination of Existing Credit
Agreement...................................................
12.17 Additions of New Banks; Conversion of Existing Loans of
Continuing Banks; Termination of Commitments of
Non-Continuing Banks........................................
12.18 Entire Agreement; Successors and Assigns......................
Section 13. Holdings Guaranty................................................
13.01 The Guaranty..................................................
13.02 Bankruptcy....................................................
13.03 Nature of Liability...........................................
13.04 Guaranty Absolute.............................................
13.05 Independent Obligation........................................
13.06 Authorization.................................................
13.07 Reliance......................................................
13.08 Subordination.................................................
13.09 Waiver........................................................
13.10 Binding Nature of Guaranty....................................
13.11 Judgments Binding.............................................
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SCHEDULE I Commitments
SCHEDULE II Existing Letters of Credit
SCHEDULE III Projections
SCHEDULE IV Tax Matters
SCHEDULE V ERISA
SCHEDULE VI Material Contracts
SCHEDULE VII Real Property
SCHEDULE VIII Capitalization
SCHEDULE IX Subsidiaries
SCHEDULE X Patents and Licenses
SCHEDULE XI Existing Indebtedness
SCHEDULE XII Insurance
SCHEDULE XIII Existing Liens
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Term Note
EXHIBIT B-2 Revolving Note
EXHIBIT C Notice of Conversion
EXHIBIT D Letter of Credit Request
EXHIBIT E Section 3.04(b)(ii) Certificate
EXHIBIT F Form of Opinion of Reboul, MacMurray, Hewitt, Maynard & Kristol
EXHIBIT G Officers' Certificate of Credit Parties
EXHIBIT H Subsidiaries Guaranty
EXHIBIT I-1 Holdings Pledge Agreement
EXHIBIT I-2 Partnership Pledge Agreement
EXHIBIT J Security Documents Acknowledgment
EXHIBIT K Solvency Certificate
EXHIBIT L Consent Letter
EXHIBIT M Borrowing Base Certificate
EXHIBIT N Bank Assignment and Assumption Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 7, 1997,
amended and restated as of May 8, 1998, among GOLDEN SKY HOLDINGS, INC., a
corporation organized and existing under the laws of the State of Delaware
("Holdings"), GOLDEN SKY SYSTEMS, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Borrower"), the Banks party hereto
from time to time, BANQUE PARIBAS, as Syndication Agent, FLEET NATIONAL BANK, as
Administrative Agent, and GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation
Agent. Unless otherwise defined herein, all capitalized terms used herein and
defined in Section 10 are used herein as therein defined.
W I T N E S S E T H:
WHEREAS, the Borrower, each of the Banks (excluding the New Banks),
the Syndication Agent and the Administrative Agent are party to a Credit
Agreement, dated as of July 7, 1997 (as the same has been amended, modified or
supplemented prior to, but not including, the Restatement Effective Date, the
"Existing Credit Agreement");
WHEREAS, the parties hereto wish to amend and restate the Existing
Credit Agreement as herein provided;
WHEREAS, the Borrower wishes to obtain a credit facility to (i)
refinance Existing Loans, (ii) repay the Rocky Mountain Note, (iii) effect
Permitted Acquisitions, (iv) pay Transaction Fees and Expenses, (v) provide for
general corporate, capital expenditure and working capital purposes and (vi)
issue Letters of Credit in an amount not to exceed the limits in Section
1A.01(c);
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
Section 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and conditions
set forth herein, each Bank with a Term Loan Commitment severally agrees (A) in
the case of each Continuing Bank with a Term Loan Commitment, to convert into
Term Loans (each a "Term Loan Conversion," and together, the "Term Loan
Conversions"), on the Restatement Effective Date, Existing Term Loans made by
such Continuing Bank to the Borrower pursuant to the Existing Credit Agreement
and outstanding on the Restatement Effective Date and (B) in the case of New
Banks with a Term Loan Commitment and in the case of any Continuing Bank whose
Term Loan Commitment is greater than the aggregate outstanding principal amount
of Existing Term Loans made by such Continuing Bank to the Borrower pursuant to
the Existing Credit Agreement and outstanding on the Restatement Effective Date,
prior to the Restatement Effective Date, on the Restatement Effective Date, to
make a term loan (together with each Term Loan Conversion, each, a "Term Loan"
and, collectively, the "Term Loans") to the Borrower, which Term Loans (i)
shall, at the option of the Borrower, be Base Rate Loans or Eurodollar Loans;
8
provided that (x) except as otherwise specifically provided in Section 1.10(b),
all Term Loans comprising the same Borrowing shall at all times be of the same
Type and (y) no Eurodollar Loans may be incurred prior to the Syndication
Termination Date, (ii) shall not exceed for any Bank, in initial aggregate
principal amount, that amount which equals the Term Loan Commitment of such Bank
on such date (before giving effect to any reductions thereto on such date
pursuant to Section 2.03(b)) and (iii) shall not exceed for all Banks at any
time an aggregate principal amount which, when added to the aggregate amount of
all outstanding Revolving Loans at such time, and all Letter of Credit
Outstandings at such time and the aggregate outstanding amount of all other Net
Adjusted Consolidated Indebtedness at such time, equals the Borrowing Base at
such time. Once repaid, Term Loans incurred hereunder may not be reborrowed. To
the extent that any Continuing Bank's Term Loan Commitment is less than the
amount of Existing Term Loans made by such Continuing Bank to the Borrower
pursuant to the Existing Credit Agreement and outstanding on the Restatement
Effective Date immediately prior to the Restatement Effective Date, the proceeds
of other Term Loans shall be used to repay such Continuing Bank the amount of
such Continuing Bank's Existing Term Loans which exceeds such Term Loan
Commitment.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment severally agrees (A) in the case of
each Continuing Bank with a Revolving Loan Commitment, to convert into Revolving
Loans (each a "Revolving Loan Conversion," and together, the "Revolving Loan
Conversions"), on the Restatement Effective Date, Existing Revolving Loans made
by such Continuing Bank to the Borrower pursuant to the Existing Credit
Agreement and outstanding on the Restatement Effective Date and (B) in the case
of New Banks with a Revolving Loan Commitment and in the case of any Continuing
Bank whose Revolving Loan Commitment is greater than the aggregate outstanding
principal amount of Revolving Loans made by such Continuing Bank to the Borrower
pursuant to the Existing Credit Agreement and outstanding on the Restatement
Effective Date, prior to the Restatement Effective Date, at any time and from
time to time on or after the Restatement Effective Date and prior to the
Revolving Loan Maturity Date, to make a loan or loans (together with each
Revolving Loan Conversion, each a "Revolving Loan" and, collectively, the
"Revolving Loans") to the Borrower, which Revolving Loans (i) shall, at the
option of the Borrower, be Base Rate Loans or Eurodollar Loans, provided that
(x) except as otherwise specifically provided in Section 1.10(b), all Revolving
Loans comprising the same Borrowing shall at all times be of the same Type and
(y) prior to the Syndication Termination Date, only Borrowings of Eurodollar
Loans with an Interest Period of one week may be incurred, (ii) may be repaid
and reborrowed in accordance with the provisions hereof, (iii) shall not exceed
9
for any Bank at any time outstanding that aggregate principal amount which, when
added to the product of (x) such Bank's Percentage and (y) the aggregate amount
of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans), equals the Revolving Loan Commitment
of such Bank at such time and (iv) shall not exceed for all Banks at any time
that aggregate principal amount which, when added to the aggregate amount of all
Letter of Credit Outstandings at such time and all outstanding Term Loans at
such time and the aggregate outstanding amount of all other Net Adjusted
Consolidated Indebtedness at such time, equals the Borrowing Base at such time.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing hereunder shall not be less than the Minimum Borrowing Amount
and, if greater, shall be in integral multiples of $250,000 in the case of Base
Rate Loans and $500,000 in the case of Eurodollar Loans. More than one Borrowing
may occur on the same date, but at no time shall there be outstanding more than
eight (8) Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make a
Borrowing hereunder, it shall give the Administrative Agent at its Notice
Office, prior to 10:00 A.M. (New York time) at least one (1) Business Day's
prior written notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Base Rate Loans and at least three (3) Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans. Each such notice (each a "Notice of Borrowing"),
except as otherwise expressly provided in Section 1.10, shall be irrevocable and
shall be given by the Borrower in the form of Exhibit A, appropriately completed
to specify (i) the aggregate principal amount of the Loans to be made pursuant
to such Borrowing, (ii) the date of such Borrowing (which shall be a Business
Day), (iii) whether the Loans being made pursuant to such Borrowing shall
constitute Term Loans or Revolving Loans, (iv) whether the Loans being made
pursuant to such Borrowing are to be initially maintained as Base Rate Loans or
Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be
applicable thereto, and (v) the purposes for which the Loans being made pursuant
to such Borrowing are to be used (i.e., either Permitted Acquisitions, repayment
of Existing Indebtedness or working capital, capital expenditures or general
corporate purposes). Any notice received after 10:00 A.M. (New York time) shall
be deemed to be received on the next succeeding Business Day. The Administrative
Agent shall promptly give each Bank which is required to make Loans of the
Tranche specified in the respective Notice of Borrowing notice of such proposed
Borrowing, of such Bank's proportionate share thereof and of the other matters
specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or the respective Issuing Bank (in the case of Letters of
Credit) may, prior to receipt of written confirmation, act without liability
upon the basis of telephonic notice believed by the Administrative Agent or the
respective Issuing Bank (in the case of Letters of Credit) in good faith to be
from the President, the Chief Executive Officer, Chief Financial Officer,
General Counsel or Controller of the Borrower. In each such case, the
Administrative Agent's or such Issuing Bank's record of the terms of such
telephonic notice shall be conclusive absent manifest error.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York time)
on the date specified in each Notice of Borrowing, each Bank with a Commitment
of the respective Tranche will make available its pro rata portion (determined
in accordance with Section 1.07) of each such Borrowing requested to be made on
such date. All such amounts shall be made available in Dollars and in
immediately available funds at the Payment Office of the Administrative Agent,
and the Administrative Agent will make available to the Borrower at the Payment
Office the aggregate of the amounts so made available by the Banks. Unless the
Administrative Agent shall have been notified in writing by any Bank prior to
the date of Borrowing that such Bank does not intend to make available to the
Administrative Agent such Bank's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
10
made available to the Administrative Agent by such Bank, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall promptly
notify the Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Bank or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower, until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, the cost to the Administrative Agent of acquiring overnight federal funds
and (ii) if recovered from the Borrower, the rate of interest applicable to the
respective Borrowing, as determined pursuant to Section 1.08. Nothing in this
Section 1.04 shall be deemed to relieve any Bank from its obligation to make
Loans hereunder or to prejudice any rights which the Borrower may have against
any Bank as a result of any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if Term Loans,
by a promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-1 with blanks appropriately completed in conformity
herewith (each, a "Term Note" and, collectively, the "Term Notes") and (ii) if
Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each a "Revolving Note" and, collectively, the
"Revolving Notes").
(b) The Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Restatement
Effective Date, (iii) be in a stated principal amount equal to the Term Loan
Commitment of such Bank and be payable in the principal amount of the Term Loans
evidenced thereby, (iv) mature on the Term Loan Maturity Date, (v) bear interest
as provided in the appropriate clause of Section 1.08 in respect of the Base
Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to voluntary prepayment as provided in Section 3.01, and mandatory
repayment as provided in Section 3.02 and (vii) be entitled to the benefits of
this Agreement and the Guaranties and be secured by the Security Documents.
(c) The Revolving Note issued to each Bank with a Revolving Loan
Commitment shall (i) be executed by the Borrower, (ii) be payable to the order
of such Bank and be dated the Restatement Effective Date, (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Bank and be
payable in the principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the
11
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 3.01, and mandatory repayment as
provided in Section 3.02 and (vii) be entitled to the benefits of this Agreement
and the Guaranties and be secured by the Security Documents.
(d) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or the making of an incorrect notation shall not affect the Borrower's
obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on
any Business Day, all or a portion at least equal to the Minimum Borrowing
Amount of the outstanding principal amount of the Loans made pursuant to one or
more Borrowings (so long as of the same Tranche) of one Type of Loan into a
Borrowing or Borrowings (of the same Tranche) of the other Type of Loan;
provided that:
(i) except as otherwise provided in Section 1.10(b), Eurodollar
Loans may be converted into Base Rate Loans only on the last day of an
Interest Period applicable to the Loans being converted and no such
partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount applicable
thereto;
(ii) Base Rate Loans may only be converted into Eurodollar Loans
if no Default or Event of Default is in existence on the date of the
conversion;
(iii) no conversion pursuant to this Section 1.06 shall result in
a greater number of Borrowings than is permitted under Section 1.02;
and
(iv) prior to the Syndication Termination Date, Loans may be
converted into Eurodollar Loans that have a one-week Interest Period.
Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at its Notice Office prior to 12:00 Noon (New York time) at
least three (3) Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) (each a "Notice of Conversion") which notice
shall be in the form of Exhibit C, appropriately completed to specify the Loans
to be so converted, the Borrowing(s) pursuant to which such Loans were made and,
if to be converted into Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Bank prompt notice
of any such proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Loans under this Agreement
shall be incurred from the Banks pro rata on the basis of their respective Term
Loan Commitments or Revolving Loan Commitments, as the case may be. It is
understood that no Bank shall be responsible for any default by any other Bank
of its obligation to make Loans hereunder and that each Bank shall be obligated
to make the Loans provided to be made by it hereunder regardless of the failure
of any other Bank to make its Loans hereunder.
12
1.08 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan made to it from the date of
the Borrowing thereof until the earlier of (i) the maturity thereof (whether by
acceleration or otherwise) of such Base Rate Loan and (ii) the conversion of
such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per
annum which shall at all times be equal to the sum of the Applicable Margin plus
the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it from the date of the
Borrowing thereof until the earlier of (i) the maturity (whether by acceleration
or otherwise) of such Eurodollar Loan and (ii) the conversion of such Eurodollar
Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as
applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the Quoted
Rate for such Interest Period.
(c) Following an Event of Default under Section 9.03 with respect to
Sections 8.08 through 8.14, inclusive, or Section 8.20, or a Default under
Section 9.01 or Section 9.05, the unpaid principal amount of each Loan shall
bear interest at a rate per annum equal to the greater of (x) 2% per annum in
excess of the rate otherwise applicable to the Base Rate Loans of the respective
Tranche of Loans from time to time and (y) the rate which is 2% in excess of the
rate borne by such Loans. In addition, overdue principal and, to the extent
permitted by law, overdue interest in respect of each Loan and any other overdue
amount payable hereunder shall, in each case, bear interest at a rate per annum
equal to the greater of (x) 2% per annum in excess of the rate otherwise
applicable to the Base Rate Loans of the respective Tranche of Loans from time
to time and (y) the rate which is 2% in excess of the rate borne by such Loans.
Interest which accrues under this Section 1.08(c) shall be payable on demand;
provided, however, in no event shall the increased interest rate specified in
the two preceding sentences be cumulative.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Day, (ii) in respect of each Eurodollar Loan on (x) the date of any prepayment
or repayment thereof (on the amount prepaid or repaid), (y) the date of any
conversion into a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as
applicable (on the amount converted) and (z) on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period, (iii) in respect of each Loan, at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand and (iv) in
respect of each Existing Loan, on the Restatement Effective Date.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Quoted Rate for the Interest Period applicable to Eurodollar
Loans and shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
(f) All computations of interest hereunder shall be made in accordance
with Section 12.07(b).
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1.09 Interest Periods. At the time it gives any Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, a
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or prior to 10:00 A.M. (New York time) on the third Business Day prior to the
expiration of an Interest Period applicable to such Eurodollar Loan (in the case
of any subsequent Interest Period), the Borrower shall have the right to elect,
by giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable to such Eurodollar Loan, which Interest Period
shall, at the option of the Borrower, be a one, two, three, six or, if available
to each of the Banks (as determined by each such Bank in its sole discretion
based on prevailing conditions in the interbank Eurodollar market on any date of
determination thereof), nine or twelve month period provided that prior to the
Syndication Termination Date, one week Interest Periods may be selected so long
as all Interest Periods end on the same date, such date to occur prior to the
Syndication Termination Date; provided that:
(i) all Eurodollar Loans comprising a single Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Loan (including the date of
any conversion thereto from a Borrowing of Base Rate Loans) and each
Interest Period occurring thereafter in respect of such Loan shall
commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(v) no Interest Period for a Borrowing under a Tranche shall be
selected which extends beyond the respective Maturity Date of such
Tranche;
(vi) no Interest Period may be selected at any time when any
Default or Event of Default is then in existence;
(vii) no Interest Period in respect of any Borrowing of Term
Loans shall be selected which extends beyond any date upon which a
mandatory repayment of such Term Loans will be required to be made
under Section 3.02(A)(c) if, after giving effect to the selection of
such Interest Period, the aggregate principal amount of such Term
Loans maintained as Eurodollar Loans which have Interest Periods
expiring after such date will be in excess of the aggregate principal
amount of such Term Loans then outstanding less the aggregate amount
of such required prepayment;
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(viii) no Interest Period in respect of any Borrowing of
Revolving Loans shall be selected which extends beyond any Scheduled
Revolving Loan Commitment Reduction Date if, after giving effect to
the selection of such Interest Period, the aggregate principal amount
of Revolving Loans maintained as Eurodollar Loans which have Interest
Periods expiring after such date will be in excess of the aggregate
principal amount of Revolving Loans then outstanding less the excess,
if any, of the amount of the Scheduled Revolving Loan Commitment
Reduction on such date over the Total Unutilized Revolving Loan
Commitment; and
(ix) no Interest Period (other than an Interest Period which is a
one (1) week period) may be selected prior to the Syndication
Termination Date.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans the Borrower has failed to elect a new Interest Period to be
applicable to such Eurodollar Loans as provided above or a Default or Event of
Default then exists, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Quoted Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loan because of (x) any change since the
Original Effective Date in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payments to any
Bank of the principal of or interest on the Notes or any other amounts
payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Bank
imposed by the jurisdiction in which its principal office or
applicable lending office is located) or (B) a change in official
reserve requirements (but, in all events, excluding reserves required
under Regulation D to the extent included in the computation of the
Quoted Rate) and/or (y) other circumstances since the Original
Effective Date affecting such Bank or the interbank Eurodollar market
or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
15
good faith with any governmental request (whether or not having the
force of law) or (z) impracticable as a result of a contingency
occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (if by telephone, promptly
confirmed in writing) to the Borrower, and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, upon written demand therefor, such additional amounts (in the form of
an increased rate of, or a different method of calculating, interest
or otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding on all the parties hereto)
and (z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (i) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Administrative
Agent telephonic notice (confirmed in writing) on the same date that the
Borrower was notified by the affected Bank or the Administrative Agent pursuant
to Section 1.10(a)(ii) or (iii), cancel the respective Borrowing or conversion,
or (ii) if the affected Eurodollar Loan is then outstanding, upon at least three
(3) Business Days' written notice to the Administrative Agent, require the
affected Bank to convert such Eurodollar Loan into a Base Rate Loan; provided
that if more than one Bank is affected at any time, then all affected Banks must
be treated the same pursuant to this Section 1.10(b).
(c) If at any time after the Original Effective Date hereof, any Bank
determines that the introduction of or any change in applicable law or
governmental rule, regulation, order, guideline or request (whether or not
having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitments
hereunder or its obligations hereunder, then the Borrower shall pay to such
Bank, upon its written demand therefor, such additional amounts as shall be
required to compensate such Bank for the increased cost to such Bank or such
other corporation or the reduction in the rate of return to such Bank or such
16
other corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable; provided that such
Bank's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for calculation
of such additional amounts, although the failure to give any such notice shall
not release or diminish any of the Borrower's obligations to pay additional
amounts pursuant to this Section 1.10(c).
1.11 Compensation. Holdings and the Borrower jointly and severally
agree to compensate each Bank, upon its written request (which request shall set
forth in reasonable detail the basis for requesting such compensation), for all
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Bank to fund its Eurodollar Loans)
which such Bank may sustain: (i) if for any reason (other than a default by such
Bank or the Administrative Agent) a Borrowing of, or conversion from or into,
Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including
any repayment made on the Restatement Effective Date or made pursuant to Section
3.02 or as a result of an acceleration of the Loans pursuant to Section 9) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the terms
of this Agreement or any Note held by such Bank or (y) any election made
pursuant to Section 1.10(b). A Bank's basis for requesting compensation pursuant
to this Section, and a Bank's calculations of the amount thereof, shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
1.12 Replacement of Banks. If any Bank becomes a Defaulting Bank then
the Borrower shall have the right, if no Default or Event of Default then
exists, to replace such Bank (the "Replaced Bank") with any other Bank or with
one or more Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Bank at the time of such replacement (collectively, the "Replacement
Bank") reasonably acceptable to the Agents and the Issuing Bank or, at the
option of the Borrower, to replace the Commitments (and Loans outstanding
pursuant thereto) of the Replaced Bank with identical Commitments (and Loans
outstanding pursuant thereto) provided by the Replacement Bank; provided that:
(i) at the time of any replacement pursuant to this Section 1.12,
the Replacement Bank shall enter into one or more assignment
agreements pursuant to Section 12.04(b) (and with all fees payable
pursuant to said Section 12.04(b) to be paid by the Replacement Bank)
pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of the Replaced Bank and, in the
case of replacement of the Revolving Loan Commitment of the respective
Bank, participations in Letters of Credit by, the Replaced Bank and in
connection therewith, shall pay to (x) the Replaced Bank in respect
thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans and
(B) an amount equal to such Replaced Bank's Percentage of all Unpaid
Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect
thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 2.01 hereof, and (y) the Issuing Bank or Banks, an amount
equal to such Replaced Bank's Percentage of any Unpaid Drawing (which
at such time remains an Unpaid Drawing) with respect to a Letter of
Credit issued by such Issuing Bank to the extent such amount was not
theretofore funded by such Replaced Bank; and
17
(ii) all obligations of the Borrower owing to the Replaced Bank
(other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full by the Borrower to
such Replaced Bank concurrently with such replacement.
Upon the execution of the respective assignment documentation, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Administrative Agent pursuant to Section 7.16 and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes, executed by the Borrower, (x) the Replacement Bank
shall become a Bank hereunder and (y) the Replaced Bank shall cease to
constitute a Bank hereunder with respect to the Loans and Commitments so
transferred, except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Bank, and the Percentages of
the Banks shall be automatically adjusted at such time to give effect to such
replacement.
Section 1A. Letters of Credit.
1A.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request any Issuing Bank at any
time and from time to time on and after the Restatement Effective Date and prior
to the third Business Day immediately preceding the Revolving Loan Maturity Date
to issue, for the account of the Borrower and for the benefit of any holder (or
any trustee, agent or other similar representative for any such holders) of L/C
Supportable Indebtedness, an irrevocable standby letter of credit in a form
customarily used by such Issuing Bank or in such other form as has been approved
by such Issuing Bank in support of said L/C Supportable Indebtedness (each such
letter of credit, a "Letter of Credit" and, collectively, the "Letters of
Credit"); provided that the Borrower may request any Issuing Bank after the
Restatement Effective Date to issue one or more Letters of Credit in support of
the NRTC L/C Obligation (collectively, the "NRTC Letter of Credit"). All Letters
of Credit shall be denominated in Dollars.
(b) Each Issuing Bank (other than Fleet) may agree in its sole
discretion and Fleet hereby agrees that it will (subject to the terms and
conditions contained herein), at any time and from time to time after the
Restatement Effective Date and prior to the Revolving Loan Maturity Date,
following its receipt of the respective Letter of Credit Request, issue for the
account of the Borrower one or more Letters of Credit in support of such L/C
Supportable Indebtedness as is permitted to remain outstanding without giving
rise to a Default or Event of Default hereunder; provided that the respective
Issuing Bank shall be under no obligation to issue any Letter of Credit if at
the time of such issuance:
18
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain such
Issuing Bank from issuing such Letter of Credit or any requirement of
law applicable to such Issuing Bank or any request or directive
(whether or not having the force of law) from any governmental
authority with jurisdiction over such Issuing Bank shall prohibit, or
request that such Issuing Bank refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Bank with respect to such Letter of Credit
any restriction or reserve or capital requirement (for which such
Issuing Bank is not otherwise compensated) not in effect on the date
hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Issuing Bank as of the date
hereof and which such Issuing Bank in good faith deems material to it;
(ii) such Issuing Bank shall have received a notice of the type
described in the second sentence of Section 1A.03(b) from any Bank
prior to the issuance of such Letter of Credit; or
(iii) a Bank Default exists, unless such Issuing Bank has entered
into arrangements satisfactory to it and the Borrower to eliminate
such Issuing Bank's risk with respect to the Bank which is the subject
of the Bank Default, including by cash collateralizing such Bank's
Percentage of the Letter of Credit Outstandings.
Schedule II attached hereto contains a description of all letters of credit
issued by an Issuing Bank pursuant to the Existing Credit Agreement and which
are to remain outstanding on the Restatement Effective Date. Each such letter of
credit, including any extension thereof (each an "Existing Letter of Credit")
shall constitute a "Letter of Credit" for all purposes of this Agreement. Each
Existing Letter of Credit shall be deemed issued for purposes of Sections 1A.04
and 2.01(b) through (d), inclusive, on the Restatement Effective Date.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of,
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed (x) $20,000,000 (or $40,000,000 at any time after the Borrower shall have
issued Acceptable Subordinated Debt), (y) when added to the aggregate principal
amount of all Revolving Loans then outstanding, the Total Revolving Loan
Commitment then in effect (after giving effect to any reductions to the Total
Revolving Loan Commitment on such date) or (z) when added to the aggregate
principal amount of all Revolving Loans then outstanding and the aggregate
principal amount of all Term Loans then outstanding and the aggregate
outstanding amount of all other Net Adjusted Consolidated Indebtedness at such
time, the Borrowing Base at such time and (ii) each Letter of Credit shall by
its terms terminate on or before the earlier of (x) the date which occurs twelve
(12) months after the date of the issuance thereof (although any such Letter of
Credit may be renewable for successive periods of up to twelve (12) months, but
not beyond the Revolving Loan Maturity Date, on terms acceptable to the Issuing
Bank) and (y) the third Business Day immediately preceding the Revolving Loan
Maturity Date.
19
1A.02 Minimum Stated Amount. The Stated Amount of each Letter of
Credit shall be not less than $1,000,000 or such lesser amount as is acceptable
to the Issuing Bank.
1A.03 Letter of Credit Requests. (a) Whenever the Borrower desires
that a Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and the respective Issuing Bank at least ten (10) Business
Days' (or such shorter period as is acceptable to the respective Issuing Bank in
any given case) written notice prior to the proposed date of issuance (which
shall be a Business Day). Each notice shall be in the form of Exhibit D (each a
"Letter of Credit Request"). The Issuing Bank shall promptly transmit copies of
each Letter of Credit Request to each Bank.
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
1A.01(c). Unless the Issuing Bank has received notice from any Bank before it
issues a Letter of Credit that one or more of the conditions specified in
Section 5 are not then satisfied, or that the issuance of such Letter of Credit
would violate Section 1A.01(c), then such Issuing Bank may issue the requested
Letter of Credit for the account of the Borrower in accordance with the Issuing
Bank's usual and customary practices.
1A.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the respective Issuing Bank of any Letter of Credit or on the
Restatement Effective Date with respect to Existing Letters of Credit, such
Issuing Bank shall be deemed to have sold and transferred to each Bank with a
Revolving Loan Commitment, other than such Issuing Bank (each such Bank, in its
capacity under this Section 1A.04, a "Participant"), and each such Participant
shall be deemed irrevocably and unconditionally to have purchased and received
from such Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Percentage in such Letter of
Credit, each substitute letter of credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments of the Banks pursuant to Section 12.04, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 1A.04 to reflect the new Percentages of the assignor and
assignee Bank or of all Banks with Revolving Loan Commitments, as the case may
be.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall not have any obligation relative to the other Banks other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any Issuing Bank under or in connection with any Letter of Credit
if taken or omitted in the absence of gross negligence or willful misconduct,
shall not create for such Issuing Bank any resulting liability to the Borrower
or any Bank.
20
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Bank pursuant to Section 1A.05(a), such Issuing Bank shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such Issuing
Bank the amount of such Participant's Percentage of such unreimbursed payment in
Dollars and in same day funds. If the Administrative Agent so notifies, prior to
11:00 A.M. (New York time) on any Business Day, any Participant required to fund
a payment under a Letter of Credit, such Participant shall make available to the
Administrative Agent at the Payment Office of the Administrative Agent for the
account of such Issuing Bank in Dollars such Participant's Percentage of the
amount of such payment on such Business Day in same day funds. If and to the
extent such Participant shall not have so made its Percentage of the amount of
such payment available to the Administrative Agent for the account of such
Issuing Bank, such Participant agrees to pay to the Administrative Agent for the
account of such Issuing Bank, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent for the account of such Issuing Bank at the
overnight Federal Funds Rate. The failure of any Participant to make available
to the Administrative Agent for the account of such Issuing Bank its Percentage
of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Administrative
Agent for the account of such Issuing Bank its Percentage of any Letter of
Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Administrative Agent for the account of such Issuing Bank such other
Participant's Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
such Issuing Bank any payments from the Participants pursuant to clause (c)
above, such Issuing Bank shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay each Participant which has paid its
Percentage thereof, in Dollars and in same day funds, an amount equal to such
Participant's share (based on the proportionate aggregate amount funded by such
Participant to the aggregate amount funded by all Participants) of the principal
amount of such reimbursement obligation and interest thereon accruing after the
purchase of the respective participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Issuing Bank with respect to
Letters of Credit issued shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary named in
a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), the Agents, any
Participant, or any other Person, whether in connection with this
21
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction
between the Borrower and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
1A.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the respective Issuing Bank, by making payment to the
Administrative Agent in immediately available funds at the Payment Office (or by
making the payment directly to such Issuing Bank at such location as may
otherwise have been agreed upon by the Borrower and such Issuing Bank), for any
payment or disbursement made by such Issuing Bank under any Letter of Credit
(each such amount so paid until reimbursed, an "Unpaid Drawing"), immediately
after, and in any event on the date of, such payment or disbursement, with
interest on the amount so paid or disbursed by such Issuing Bank, to the extent
not reimbursed prior to 12:00 Noon (New York time) on the date of such payment
or disbursement, from and including the date paid or disbursed to but excluding
the date such Issuing Bank is reimbursed by the Borrower therefor at a rate per
annum which shall be the Base Rate in effect from time to time plus 4 1/4%, in
each case with such interest to be payable on demand.
(b) The obligations of the Borrower under this Section 1A.05 to
reimburse the respective Issuing Bank with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against any Bank
(including in its capacity as Issuing Bank or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse any Issuing Bank for any wrongful payment made by such
Issuing Bank under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Issuing
Bank.
1A.06 Increased Costs. If at any time after the Original Effective
Date hereof any Issuing Bank or any Participant determines that the introduction
of or any change in any applicable law, rule, regulation, order, guideline or
request or in the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by such Issuing Bank or any Participant, or any corporation
22
controlling such Person, with any request or directive by any such authority
(whether or not having the force of law), shall either (i) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by such Issuing Bank or participated in by any
Participant, or (ii) impose on such Issuing Bank or any Participant, or any
corporation controlling such Person, any other conditions relating, directly or
indirectly, to this Agreement or any Letter of Credit; and the result of any of
the foregoing is to increase the cost to such Issuing Bank or any Participant of
issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by such Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit, then, upon demand to the Borrower by such Issuing Bank or any
Participant (a copy of which demand shall be sent by such Issuing Bank or such
Participant to the Administrative Agent), the Borrower shall pay to such Issuing
Bank or such Participant such additional amount or amounts as will compensate
such Bank for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital. Such Issuing Bank or any
Participant, upon determining that any additional amounts will be payable
pursuant to this Section 1A.06, will give prompt written notice thereof to the
Borrower, which notice shall include a certificate submitted to the Borrower by
such Issuing Bank or such Participant (a copy of which certificate shall be sent
by such Issuing Bank or such Participant to the Administrative Agent), setting
forth in reasonable detail the basis for the calculation of such additional
amount or amounts necessary to compensate such Issuing Bank or such Participant,
although failure to give any such notice shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this Section 1A.06.
The certificate required to be delivered pursuant to this Section 1A.06 shall,
absent manifest error, be final, conclusive and binding on the Borrower.
Section 2. Commitment Commission; Fees; Reductions of Commitment.
2.01 Fees. (a) The Borrower agrees to pay to the Administrative Agent
for distribution to each Bank with a Revolving Loan Commitment a commitment
commission (the "Commitment Commission") for the period from and including the
Restatement Effective Date to and excluding the Revolving Loan Maturity Date (or
such earlier date as the Total Commitment shall have been terminated) computed
at a rate for each day equal to 1/2 of 1% per annum on the daily Unutilized
Revolving Loan Commitment of such Bank. Accrued Commitment Commission shall be
due and payable quarterly in arrears on each Quarterly Payment Date and on the
Revolving Loan Maturity Date or such earlier date upon which the Total
Commitment is terminated.
(b) The Borrower agrees to pay to each Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued by such Issuing
Bank hereunder (the "Facing Fee"), for the period from and including the date of
issuance of such Letter of Credit (which in the case of the Existing Letters of
Credit shall be the Restatement Effective Date) to and including the date of
termination of such Letter of Credit, equal to 1/4 of 1% per annum of the daily
Stated Amount of such Letter of Credit; provided that in no event shall the
annual Facing Fee with respect to each Letter of Credit be less than $500.
23
Accrued Facing Fees shall be due and payable in arrears to the Issuing Bank in
respect of each Letter of Credit issued by it on each Quarterly Payment Date and
the date of the termination of the Total Revolving Loan Commitment on which no
Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the Administrative Agent for
distribution to each Bank with a Revolving Loan Commitment a fee in respect of
each Letter of Credit issued hereunder (the "Letter of Credit Fee"), for the
period from and including the date of issuance of such Letter of Credit (which
in the case of the Existing Letters of Credit shall be the Restatement Effective
Date) to and including the date of termination of such Letter of Credit,
computed at a rate per annum equal to the product of (x) the Applicable
Eurodollar Rate Margin for Revolving Loans and (y) the daily Stated Amount of
such Letter of Credit. Letter of Credit Fees shall be distributed by the
Administrative Agent to the Banks on the basis of the respective Percentages as
in effect from time to time. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the date of
the termination of the Total Revolving Loan Commitment on which no Letters of
Credit remain outstanding.
(d) The Borrower hereby agrees to pay in immediately available funds
directly to the Issuing Bank upon each issuance of, drawing under, and/or
amendment of, a Letter of Credit issued by the Issuing Bank such amount as shall
at the time of such issuance, drawing or amendment be the administrative charge
which the Issuing Bank is customarily charging for issuances of, drawings under
(including wire charges) or amendments of, letters of credit issued by it or
such alternative amounts as may have been agreed upon in writing by the Borrower
and the Issuing Bank.
(e) Notwithstanding anything to the contrary contained in this
Agreement or in the Existing Credit Agreement, all unpaid Fees under, and as
defined in, the Existing Credit Agreement (including, without limitation, all
Commitment Commission as defined in the Existing Credit Agreement) accrued to
the Restatement Effective Date (immediately prior to giving effect thereto)
shall be payable on the Restatement Effective Date.
(f) The Borrower shall pay to the Agents, for their accounts, such
other fees and other consideration as have been agreed to in writing by the
Borrower or any of its Subsidiaries and one or both of the Agents.
2.02 Voluntary Termination of Unutilized Commitments. Upon at least
three (3) Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Banks),
the Borrower shall have the right, without premium or penalty, to terminate the
Total Unutilized Revolving Loan Commitment in whole or in part; provided that
(i) each such reduction shall apply proportionately to reduce the Revolving Loan
Commitment of each Bank with such a Commitment, (ii) any partial reduction
pursuant to this Section 2.02 shall be in integral multiples of at least
$1,000,000 in the case of reductions to the Total Unutilized Revolving Loan
Commitment, and (iii) any partial reduction of the Total Unutilized Revolving
Loan Commitment pursuant to this Section 2.02 shall apply to reduce the amount
of the then-remaining Scheduled Revolving Loan Commitment Reductions in inverse
order of maturity.
2.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and
the Term Loan Commitment and the Revolving Loan Commitment of each Bank with
such a Commitment) shall terminate on May 15, 1998 unless the Restatement
Effective Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 2.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Bank with such a Commitment) shall terminate in its entirety
on the Restatement Effective Date (after giving effect to the incurrence of Term
Loans on such date).
24
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 2.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank with such a Commitment) shall terminate in its
entirety on the Revolving Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 2.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank with such a Commitment) shall be reduced at the
time any payment is required to be made on the principal amount of Revolving
Loans (or would be required to be made if Revolving Loans were then outstanding)
pursuant to Section 3.02(B)(a), by an amount equal to the maximum amount of
Revolving Loans that would be required to be repaid pursuant to Section
3.02(B)(a) assuming that Revolving Loans were outstanding in an aggregate
principal amount equal to the Total Revolving Loan Commitment. All reductions to
the Total Revolving Loan Commitment pursuant to this Section 2.03(d) shall be
applied to reduce the amount of then-remaining Scheduled Revolving Loan
Commitment Reductions in inverse order of maturity.
(e) In addition to any other mandatory commitment reductions pursuant
to this Section 2.03, on each date set forth below (each, a "Scheduled Revolving
Loan Commitment Reduction Date"), the Revolving Loan Commitment shall be
permanently reduced by the amount set forth opposite such date (each such
reduction, as such reduction may have been reduced pursuant to Section 2.02
and/or 2.03(d), a "Scheduled Revolving Loan Commitment Reduction"):
Scheduled Revolving Loan Commitment Reduction Amount Date
June 30, 2000 $4,312,500
September 30, 2000 $4,312,500
December 31, 2000 $4,312,500
March 31, 2001 $4,312,500
June 30, 2001 $5,750,000
September 30, 2001 $5,750,000
December 31, 2001 $5,750,000
March 31, 2002 $5,750,000
June 30, 2002 $7,187,500
September 30, 2002 $7,187,500
December 31, 2002 $7,187,500
March 31, 2003 $7,187,500
June 30, 2003 $8,625,000
September 30, 2003 $8,625,000
December 31, 2003 $8,625,000
March 31, 2004 $8,625,000
June 30, 2004 $11,500,000
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(f) Each reduction to the Total Revolving Loan Commitment pursuant to
this Section 2.03 shall be applied proportionately to reduce the Revolving Loan
Commitment of each Bank with such a Commitment.
Section 3. Prepayments; Payments; Taxes.
3.01 Voluntary Prepayments. The Borrower shall have the right to
prepay Loans, without premium or penalty, in whole or in part from time to time
on the following terms and conditions:
(i) the Borrower shall give the Administrative Agent prior to
10:00 A.M. (New York time) at its Notice Office at least three (3)
Business Days' prior written notice in the case of Eurodollar Loans
and one (1) Business Day's prior written notice in the case of Base
Rate Loans of its intent to prepay the Loans, whether Term Loans or
Revolving Loans shall be prepaid, the amount of such prepayment and
the Types of Loans to be prepaid and, in the case of Eurodollar Loans,
the specific Borrowing or Borrowings pursuant to which made, which
notice the Administrative Agent shall promptly transmit to each of the
Banks;
(ii) each prepayment shall be in an aggregate principal amount of
at least the applicable Minimum Borrowing Amount and, if greater, in
integral multiples of $500,000; provided that no partial prepayment of
Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount;
(iii) no prepayments of Eurodollar Loans made pursuant to this
Section 3.01 may be made on a day other than the last day of an
Interest Period applicable thereto;
(iv) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; and
(v) each prepayment of Term Loans pursuant to this Section 3.01
shall be applied to reduce the then remaining Scheduled Repayments in
inverse order of maturity.
3.02 Mandatory Repayments and Commitment Reductions.
(A) Requirements:
(a) If any Borrowing Base Certificate shall disclose the existence of
a Borrowing Base Deficiency, the Borrower shall on the date of delivery of the
Borrowing Base Certificate in accordance with Section 5.06, repay the principal
of the Revolving Loans outstanding in an aggregate amount equal to the Borrowing
Base Deficiency and, to the extent such Revolving Loans have been repaid in
full, and, to the extent such Borrowing Base Deficiency continues to exist after
such repayment, the Borrower shall pay to the Administrative Agent at its
Payment Office an amount of cash or Cash Equivalents equal to such excess, such
cash or Cash Equivalents to be held as security for all Obligations of the
26
Borrower hereunder with respect to the Letter of Credit Outstandings in a cash
collateral account established and maintained (including the investments made
pursuant thereto) by the Administrative Agent pursuant to a cash collateral
agreement in form and substance satisfactory to the Administrative Agent (the
"Letter of Credit Cash Collateral Account"). In the event that a Borrowing Base
Deficiency continues to exist after such repayment and cash collateralization,
the Borrower shall not be required to make any further repayments in connection
with such Borrowing Base Deficiency. In the event that cash and Cash Equivalents
held in the Letter of Credit Cash Collateral Account exceed the amount of the
Borrowing Base Deficiency, then, so long as there shall exist no Default or
Event of Default, such excess amount shall be returned to the Borrower.
(b) On any day on which the sum of the aggregate outstanding principal
amount of the Revolving Loans and Letter of Credit Outstandings at such time
exceeds the Total Revolving Loan Commitment as then in effect, the Borrower
shall prepay the principal of Revolving Loans in an amount equal to such excess.
If, after giving effect to the prepayment of all outstanding Revolving Loans,
the aggregate amount of the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall pay to the
Administrative Agent at its Payment Office on such date an amount of cash or
Cash Equivalents equal to the amount of such excess, such cash or Cash
Equivalents to be held as security for all Obligations of the Borrower hereunder
in the Letter of Credit Cash Collateral Account.
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02(A), the Borrower shall repay on each
date set forth below (provided that if any date set forth below is not a
Business Day then the repayment shall occur on the first Business Day
immediately succeeding such date set forth below) the principal amount of Term
Loans, to the extent then outstanding, set forth below opposite such date (each
such repayment as the same may be reduced as provided in Sections 3.01 and
3.02(B), a "Scheduled Repayment"):
Scheduled Term Loan Repayment Date Amount
June 30, 2001 $87,500
September 30, 2001 $87,500
December 31, 2001 $87,500
March 31, 2002 $87,500
June 30, 2002 $87,500
September 30, 2002 $87,500
December 31, 2002 $87,500
March 31, 2003 $87,500
June 30, 2003 $175,000
September 30, 2003 $175,000
December 31, 2003 $175,000
March 31, 2004 $175,000
June 30, 2004 $2,100,000
September 30, 2004 $10,500,000
December 31, 2004 $10,500,000
March 31, 2005 $10,500,000
27
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02, on the date of the receipt thereof by
Holdings or any of its Subsidiaries, an amount equal to:
(i) 100% of the cash proceeds (net of underwriting discounts and
commissions and all other reasonable costs associated with such
transaction) from any sale or issuance after the Restatement Effective
Date of equity of Holdings or any Subsidiary of Holdings (other than
proceeds from issuances of Holdings Common Stock to shareholders,
directors and employees of Holdings and its Subsidiaries and other
individuals as a result, in each case, of the exercise of any options
or warrants of up to $500,000 in the aggregate in any fiscal year);
and
(ii) 100% of the cash proceeds (net of underwriting discounts and
commissions, loan fees and all other reasonable costs associated with
such transaction) from any incurrence of any Indebtedness by Holdings
or any Subsidiary of Holdings (other than Indebtedness permitted by
Sections 8.04(i) through (vi), inclusive, it being understood that
Indebtedness permitted pursuant to Section 8.04(vii) shall be required
to be applied as provided in Section 3.02(B) as said Sections are in
effect on the Restatement Effective Date), shall be applied as
provided in Section 3.02(B).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02, on or prior to each Excess Cash Flow
Payment Date, an amount equal to the Excess Cash Flow Recapture Percentage of
Excess Cash Flow of Holdings and its Subsidiaries for the relevant Excess Cash
Flow Payment Period shall be applied as provided in Section 3.02(B).
(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02, (A) on each date after the Restatement
Effective Date on which Holdings or any Subsidiary of Holdings receives cash
proceeds from any sale of assets (including capital stock and securities other
than capital stock) the proceeds from the sale of which is recaptured (or would
be recaptured except for the parenthetical continued therein) under Section
3.02(A)(d) but excluding (i) sales of inventory in the ordinary course of
business, (ii) sales of assets so long as the aggregate amount of Net Sale
Proceeds excluded pursuant to this clause (ii) does not exceed $100,000 in the
aggregate for all such asset sales in any fiscal year of Holdings and (iii)
Permitted Acquisition Cash Collateralized Amounts (so long as the aggregate
deposits in the Permitted Acquisition Cash Collateral Account from proceeds of
sales of assets shall not exceed an amount equal to $10,000,000 per year and
shall not exceed a maximum aggregate amount equal to $30,000,000 during any
rolling five-year period), an amount equal to 100% of the Net Sale Proceeds
thereof shall be applied as provided in Section 3.02(B); (B) on any date on
which there shall exist an Event of Default, all Permitted Acquisition Cash
Collateralized Amounts shall be applied as provided in Section 3.02(B) and (C)
on the 180th day after which amounts were deposited into the Permitted
Acquisition Cash Collateral Account, to the extent any such amounts have not
been utilized to effect a Permitted Acquisition in accordance with Section 7.15,
all such amounts held in such account shall be applied as provided in Section
3.02(B).
28
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02, on each date after the Restatement
Effective Date of the receipt thereof by Holdings or any Subsidiary of Holdings,
an amount equal to 100% of the cash proceeds of any Recovery Event (net of
reasonable costs incurred in connection with such Recovery Event (including the
estimated marginal increase in income taxes which will be payable as a result of
such Recovery Event by Holdings or any Subsidiary of Holdings)) shall be applied
as provided in Section 3.02(B); provided that proceeds from Recovery Events not
in excess of $250,000 in the aggregate for all Recovery Events occurring on and
after the Restatement Effective Date, and prior to the date on which there are
no outstanding Obligations, shall not be required to be so applied on such date;
provided further, that proceeds from Recovery Events in excess of $250,000 in
the aggregate for all Recovery Events occurring on or after the Restatement
Effective Date and prior to the day on which there are no outstanding
Obligations, shall not be required to be so applied on such date to the extent
that the Borrower delivers a certificate to the Administrative Agent on or prior
to such date stating that such proceeds shall be used to replace or restore any
properties or assets in respect of which such proceeds were paid within a period
specified in such certificate not to exceed 180 days after the date of receipt
of such proceeds (which certificate shall set forth estimates of the proceeds to
be so expended); and provided further, that if all or any portion of such
proceeds not so applied pursuant to Section 3.02(B) are not so used within the
period specified in the proviso, such remaining portion shall be applied on the
last day of such specified period as provided in Section 3.02(B).
Notwithstanding the forgoing, so long as on the date of such Recovery Event and
during the period commencing on such date and ending on the date on which the
repurchase of Holdings Capital Stock referred to below is effected there shall
exist no Default or Event of Default, proceeds from a Recovery Event relating to
the Weary Key-Man Life Insurance, occurring on or after the Restatement
Effective Date and prior to the date on which there are no outstanding
Obligations shall not be required to be applied as provided in Section 3.02(B)
on such date to the extent that the Borrower delivers a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used to (i) purchase all the Holdings Capital Stock previously owned by the
person in respect of whose life such insurance proceeds were paid and (ii)
appoint a replacement Chief Executive Officer of the Borrower, both within a
period not to exceed 180 days after the date of receipt of such proceeds (which
certificate shall set forth estimates of the proceeds to be so expended);
provided that if all or any portion of such proceeds not so applied pursuant to
Section 3.02(B) are not so used within such 180 day period, such remaining
portion shall be applied on the last day of such specified period as provided in
Section 3.02(B).
(h) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02(A), on each date upon which Holdings or
any of its Subsidiaries receives cash proceeds pursuant to any agreement or
understanding relating to any Permitted Acquisition, including, without
limitation, indemnification or similar payments and post-closing adjustments,
but excluding in each case post-closing working capital adjustments and
reimbursement of out-of-pocket costs and expenses, an amount equal to 100% of
such proceeds (net of reasonable expenses incurred in connection with obtaining
such proceeds and the estimated marginal increase in income taxes payable in
respect thereof) shall be applied as provided in Section 3.02(B).
29
(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02(A), on the date of the receipt thereof
by Holdings or any of its Subsidiaries, an amount equal to 100% of the proceeds
of any Tax Refund (net of reasonable expenses incurred in connection with
obtaining same and the estimated marginal increase in income taxes payable as a
result thereof) shall be applied as provided in Section 3.02(B); provided that
any refunds of estimated taxes paid in the ordinary course of business in excess
of the actual amount of taxes owing shall not be required to be so applied.
(j) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 3.02(A), on the date of the receipt thereof
by Holdings or any of its Subsidiaries of a Pension Plan Refund, an amount equal
to 100% of such Pension Plan Refund (net of reasonable expenses incurred in
connection with obtaining same and the estimated marginal increase in income
taxes payable in respect thereof) shall be applied as provided in Section
3.02(B).
(k) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all then outstanding Loans of each respective Tranche shall be
repaid in full on the Maturity Date for such Tranche.
(B) Application:
(a) Each mandatory repayment of Loans pursuant to Sections
3.02(A)(d)(ii), (e) through (g), inclusive (other than in the case of proceeds
of a Recovery Event relating to the Weary Key-Man Life Insurance), and (i)
through (j), inclusive, shall be applied:
(i) first, to prepay the principal of outstanding Revolving Loans
(with a corresponding reduction to the Total Revolving Loan
Commitment) and Term Loans on a pro rata basis based on the aggregate
principal amount of all Term Loans outstanding at such time and the
then Total Revolving Loan Commitment;
(ii) second, to cash collateralize Letter of Credit Outstandings
by depositing cash into the Letter of Credit Cash Collateral Account
in an amount equal to such Letter of Credit Outstandings (with a
corresponding reduction to the Total Revolving Loan Commitment); and
(iii) third, to reduce the remaining (i.e., after giving effect
to all prior reductions thereto, including, without limitation, the
reductions theretofore effected pursuant to the preceding clauses (i)
and (ii)) Total Revolving Loan Commitment (it being understood and
agreed that the amount of such reductions shall be deemed to be an
application of proceeds for purposes of this Section 3.02(B)(a)(iii)
even though cash is not actually applied).
(b)(I) Each mandatory repayment of Loans pursuant to Section
3.02(A)(d)(i) shall be applied:
(i) until the first anniversary of the Restatement Effective Date
(and so long as there shall exist no Default or Event of Default, in
which case all such mandatory repayments shall be applied in
accordance with Section 3.02(B)(a)), to prepay the principal of
outstanding Revolving Loans (without a corresponding reduction to the
Total Revolving Loan Commitment), and second, to cash collateralize
Letter of Credit Outstandings by depositing cash into the Letter of
Credit Cash Collateral Account in an amount equal to such Letter of
Credit Outstandings (without a reduction to the Total Revolving Loan
Commitment) and to the extent no Revolving Loans are then outstanding
and there are no Letter of Credit Outstandings, the Borrower may
retain the proceeds which otherwise would have applied to such
Revolving Loans or Letter of Credit Outstandings; and
30
(ii) after the first anniversary of the Restatement Effective
Date (and so long as there shall exist no Default or Event of Default,
in which case all such mandatory repayments shall be applied in
accordance with Section 3.02(B)(a)), 50% of the amount to be applied
shall be applied in the same manner as if such proceeds were to be
applied in accordance with Section 3.02(B)(a) and the remaining 50%
shall be applied in the same manner as it would be applied in
accordance with Section 3.02(B)(b)(i), except that to the extent
Revolving Loans in such amount are not outstanding and there are no
Letter of Credit Outstandings, such excess amounts shall be deposited
in the Permitted Acquisition Cash Collateral Account.
(II) Each mandatory repayment of Loans pursuant to Section
3.02(A)(d)(ii) arising from the receipt of proceeds of Indebtedness permitted by
Section 8.04(vii) shall be applied to prepay the principal of outstanding
Revolving Loans (without a corresponding reduction to the Total Revolving Loan
Commitment) and to the extent no Revolving Loans are then outstanding, the
Borrower may retain the proceeds which otherwise would have been applied to such
Revolving Loans; provided, however, to the extent that the aggregate principal
amount of Acceptable Subordinated Debt issued by the Borrower exceeds
$150,000,000, then 50% of such excess amount shall be applied in accordance with
Section 3.02(B)(a) with the remaining amount of such proceeds being applied in
accordance with this Section 3.02(B)(b)(II) (without giving effect to this
proviso).
(c) Each mandatory repayment of Loans pursuant to Section 3.02(A)(g)
arising from the receipt of proceeds of a Recovery Event relating to the Weary
Key-Man Life Insurance shall be applied: (i) the first $3,000,000 shall be
applied in the same manner as if such proceeds were to be applied in accordance
with Section 3.02(B)(a) and (ii) 50% of the remaining amount shall be applied in
the same manner as it would be applied in accordance with Section 3.02(B)(a) and
(so long as there shall exist no Default or Event of Default, in which case all
such mandatory repayments shall be applied in accordance with Section
3.02(B)(a)) the remaining 50% may be retained by the Borrower.
(d) Each mandatory repayment of Loans pursuant to Section 3.02(A)(h)
shall, so long as there shall exist no Default or Event of Default, in which
case all such mandatory repayments shall be applied in accordance with Section
3.02(B)(a), be applied to prepay the principal of outstanding Revolving Loans
(without a corresponding reduction to the Total Revolving Loan Commitment), and
second, to cash collateralize Letter of Credit Outstandings by depositing cash
into the Letter of Credit Cash Collateral Account in an amount equal to such
Letter of Credit Outstandings (without a reduction to the Total Revolving Loan
Commitment) and to the extent no Revolving Loans are then outstanding and there
are no Letter of Credit Outstandings, the Borrower may retain the proceeds which
otherwise would have applied to such Revolving Loans or Letter of Credit
Outstandings.
(e) All mandatory repayments of Revolving Loans pursuant to this
Section 3.02(B) (and mandatory reductions to the Total Revolving Loan
Commitment) shall be applied to reduce the then-remaining Scheduled Revolving
Loan Commitment Reductions in inverse order of maturity and all mandatory
repayments of Term Loans pursuant to this Section 3.02(B) shall be applied to
31
reduce the then-remaining Scheduled Repayments in inverse order of maturity.
(f) Notwithstanding anything to the contrary contained in this Section
3.02 or elsewhere in this Agreement (including, without limitation, in Section
12.12), the Borrower shall have the option, in its sole discretion, to give the
Banks with outstanding Terms Loans the option to waive a mandatory repayment of
such Loans pursuant to Section 3.02, in each case, upon the terms and provisions
set forth in this Section 3.02. If the Borrower elects to exercise the option
referred to in the preceding sentence, the Borrower shall give to the
Administrative Agent written notice of its intention to give the Banks the right
to waive a mandatory repayment at least five (5) Business Days prior to such
repayment, which notice the Administrative Agent shall promptly forward to all
Banks with outstanding Term Loans (indicating in such notice the amount of such
repayment to be applied to each such Bank's outstanding Term Loans). The
Borrower's offer to permit such Banks to waive any such mandatory repayment may
apply to all or part of such repayment, provided that any offer to waive part of
such repayment must be made ratably to such Banks on the basis of their
outstanding Term Loans. In the event any such Bank desires to waive such Bank's
right to receive any such mandatory repayment, in whole or in part, such Bank
shall so advise the Administrative Agent no later than the close of business two
(2) Business Days after the date of such notice from the Administrative Agent,
which notice shall also include the amount such Bank desires to receive in
respect of such repayment. If any Bank does not reply to the Administrative
Agent within the two (2) Business Days, it will be deemed not to have waived any
part of such repayment. If any Bank does not specify an amount it wishes to
receive, it will be deemed to have accepted 100% of the total payment. In the
event that any such Bank waives all or part of such right to receive any such
mandatory repayment, the Administrative Agent shall apply 100% of the amount so
waived by such Bank to the Revolving Loans in accordance with Section 3.02(B).
(g) With respect to each repayment of Loans required by this Section
3.02, the Borrower may designate the Types of Loans which are to be repaid and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings of the
respective Tranche pursuant to which made; provided that: (i) repayments of
Eurodollar Loans pursuant to this Section 3.02 may only be made on the last day
of an Interest Period applicable thereto unless all Eurodollar Loans of the
respective Tranche with Interest Periods ending on such date of required
repayment and all Base Rate Loans of the respective Tranche have been paid in
full; (ii) if any repayment of Eurodollar Loans made pursuant to a single
Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to such
Borrowing to an amount less than the applicable Minimum Borrowing Amount, such
Borrowing shall immediately be converted into Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a single Borrowing shall be applied pro
rata among such Loans. In the absence of a designation by such Borrower as
described in the preceding sentence, the Administrative Agent shall, subject to
the above, make such designation in its sole discretion.
32
3.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
not later than 12:00 Noon (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
3.04 Net Payments. (a) All payments made by Holdings or the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 3.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Bank pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Bank is located
or any political subdivision or taxing authority thereof or therein) and all
interest, penalties or similar liabilities with respect to such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, Holdings and the Borrower jointly and severally agree to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due hereunder or under any Note, after withholding
or deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, Holdings and the Borrower jointly and
severally agree to reimburse each Bank, upon the written request of such Bank,
for taxes imposed on or measured by the net income or net profits of such Bank
pursuant to the laws of the jurisdiction or any political subdivision or taxing
authority thereof or therein in which such Bank is organized or in which the
principal office or applicable lending office of such Bank is located and for
any withholding of taxes as such Bank shall determine are payable by, or
withheld from, such Bank in respect of such amounts so paid to or on behalf of
such Bank pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Bank pursuant to this sentence. Holdings and the
Borrower jointly and severally will furnish to the Administrative Agent within
forty-five (45) days after the date of the payment of any Taxes due pursuant to
applicable law certified copies of tax receipts evidencing such payment by
Holdings and the Borrower jointly and severally. Holdings and the Borrower
jointly and severally agree to indemnify and hold harmless each Bank, and
reimburse such Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent on or prior to the Restatement Effective Date, or
in the case of a Bank that is an assignee or transferee of an interest under
33
this Agreement pursuant to Section 12.04 (unless the respective Bank was already
a Bank hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Bank, (i) two accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor forms) certifying to such Bank's entitlement to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Bank is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit E (any such certificate, a
"Section 3.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time to
time after the Restatement Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Borrower and the Administrative Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001, or Form W-8 and a Section 3.04(b)(ii) Certificate, as the
case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such form or certificate,
in which case such Bank shall not be required to deliver any such form or
certificate pursuant to this Section 3.04(b). Notwithstanding anything to the
contrary contained in Section 3.04(a), but subject to the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Bank which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Bank has not provided to the Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the Borrower shall not be obligated pursuant to Section 3.04(a) hereof to
gross-up payments to be made to a Bank in respect of income or similar taxes
imposed by the United States if (I) such Bank has not provided the Borrower the
Internal Revenue Service Forms required to be provided the Borrower pursuant to
this Section 3.04(b) or (II) in the case of a payment, other than interest, to a
Bank described in clause (ii) above, to the extent that such forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 3.04, the Borrower agrees to pay additional amounts and to
indemnify each Bank in the manner set forth in Section 3.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any Taxes deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Restatement Effective
Date in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of such Taxes.
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Section 4. Conditions Precedent to the Restatement Effective Date and
Loans on the Restatement Effective Date. The obligation of each Bank to make
Loans on the Restatement Effective Date is subject at the time of such Loan to
the satisfaction of the following conditions unless any of such conditions are
waived by the Agents:
4.01 Execution of Agreement; Notes. On or prior to the Restatement
Effective Date (i) this Agreement shall have become effective as provided in
Section 12.10 and (ii) there shall have been delivered to the Administrative
Agent for the account of each of the Banks the appropriate Term Note or
Revolving Note executed by the Borrower, in each case in the amount, maturity
and as otherwise provided herein.
4.02 Officer's Certificate. On the Restatement Effective Date,
the Agents shall have received a certificate dated the Restatement Effective
Date signed on behalf of each Credit Party by the President, the Chief Financial
Officer, the General Counsel or any Vice President of such Credit Party and
which certificate, in the case of the Borrower, shall state that all of the
conditions in Sections 4.06, 4.07(iii) and (iv) (with respect to 4.07(iii)),
4.11, 4.12, 4.13, 4.14, 4.16, 4.19, 5.01, 5.03 (if a Permitted Acquisition will
be consummated on the Restatement Effective Date) and 5.04 have been satisfied
on such date; provided that the certificate shall not be required to certify as
to the acceptability of any items to the Agents and/or the Banks or as to
whether the Agents and/or the Banks are satisfied with any of the matters
described in said Sections.
4.03 Opinions of Counsel. On the Restatement Effective Date, the
Agents shall have received from Reboul, MacMurray, Hewitt, Maynard & Kristol,
counsel to the Borrower and its Subsidiaries, an opinion addressed to the
Agents, the Collateral Agent and each of the Banks and dated the Restatement
Effective Date covering the matters set forth in Exhibit F and such other
matters incident to the transactions contemplated herein as the Agents may
reasonably request.
4.04 Corporate Documents; Proceedings. (a) On the Restatement
Effective Date, the Agents shall have received a certificate, dated the
Restatement Effective Date, signed by the President or any Vice President of
each Credit Party, and attested to by the Secretary or any Assistant Secretary
of such Credit Party, in the form of Exhibit G with appropriate insertions,
together with copies of the Certificate of Incorporation, By-Laws or other
organizational documents of such Credit Party and the resolutions of such Credit
Party referred to in such certificate, and the foregoing shall be acceptable to
the Agents and the Required Banks in their sole discretion.
(b) On the Restatement Effective Date, all corporate and legal
proceedings and all instruments and agreements relating to the transactions
contemplated by this Agreement and the other Credit Documents shall be
satisfactory in form and substance to the Agents and the Required Banks, and the
Agents shall have received all information and copies of all documents and
papers, including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams, if any, which the Agents or the
Required Banks may have requested in connection therewith, such documents and
35
papers where appropriate to be certified by proper corporate or governmental
authorities.
4.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Collective Bargaining Agreements; Debt
Agreements; Tax Sharing Agreements; Affiliate Contracts and Material Contracts.
To the extent that documents previously delivered to the Banks in connection
with Section 4.05 of the Existing Credit Agreement have undergone material
changes or that such documents have not been so delivered, on or prior to the
Restatement Effective Date, there shall have been delivered to the Banks true
and correct copies, certified as true and complete by an appropriate officer of
the Borrower of the following documents:
(i) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans," as defined in
Section 3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees
of the Borrower or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any
multiemployer plan, as defined in 4001(a)(3) of ERISA, only to the
extent that any document described therein is in the possession of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any such
plan); and all other employee benefit plans, or any other similar
plans or arrangements for the benefit of employees of the Borrower or
any Subsidiary of the Borrower and any profit sharing plans and
deferred compensation plans of the Borrower or any Subsidiary of the
Borrower (collectively, the "Employee Benefit Plans");
(ii) all agreements entered into by the Borrower or any
Subsidiary of the Borrower governing the terms and relative rights of
its capital stock and any agreements entered into by shareholders
relating to any such entity with respect to their capital stock
(collectively, the "Shareholders' Agreements");
(iii) all agreements with members of, or with respect to the,
management of the Borrower or any Subsidiary of the Borrower other
than Employment Agreements (collectively, the "Management
Agreements");
(iv) any employment agreements entered into by the Borrower or
any Subsidiary of the Borrower (collectively, the "Employment
Agreements");
(v) all collective bargaining agreements applying or relating to
any employee of the Borrower or any Subsidiary of the Borrower
(collectively, the "Collective Bargaining Agreements");
(vi) all agreements evidencing or relating to Indebtedness of the
Borrower or any Subsidiary of the Borrower whether or not such
agreement is to remain outstanding after giving effect to the
incurrence of Loans on the Restatement Effective Date (collectively,
the "Debt Agreements");
36
(vii) all tax sharing, tax allocation and other similar
agreements entered into by the Borrower or any Subsidiary of the
Borrower (collectively, the "Tax Sharing Agreements");
(viii) all contracts, agreements or understandings entered into
between the Borrower or any of its Subsidiaries on the one hand, and
any of its Affiliates, on the other hand (collectively, the "Affiliate
Contracts"); and
(ix) all material contracts and licenses of the Borrower or any
of its Subsidiaries that are to remain in effect after giving effect
to the consummation of the Transaction, including, without limitation,
all NRTC Agreements, all leases pursuant to which the Borrower or any
of its Subsidiaries are lessees and all agreements, letters of intent
and memoranda of understanding with respect to the acquisition or sale
by the Borrower of any assets which are unconsummated and in effect
(collectively, the "Material Contracts");
all of which Plans, Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Debt
Agreements, Tax Sharing Agreements, Affiliate Contracts and Material Contracts
shall be in form and substance satisfactory to the Agents and the Required Banks
and shall be in full force and effect on the Restatement Effective Date.
4.06 Consummation of the Reorganization Transaction. On or prior to
the Restatement Effective Date, there shall have been delivered to the Agents
true and correct copies of all Reorganization Transaction Documents, and all
terms and provisions of such Reorganization Transaction Documents shall be in
form and substance satisfactory to the Agents. The Reorganization Transaction
shall have been consummated in accordance with all applicable law and the
Reorganization Transaction Documents.
4.07 Existing Credit Agreement. On the Restatement Effective Date, (i)
each Continuing Bank shall have converted its Existing Loans as contemplated by
Section 1.01, (ii) the Borrower shall have paid all interest and fees (including
commitment fees) owing under the Existing Credit Agreement through the
Restatement Effective Date, (iii) the Borrower shall have repaid to any
Continuing Bank and any Non-Continuing Bank all amounts owing to it, including
without limitation, all Existing Loans (not being converted in the case of
Continuing Banks), interest thereon, fees and expenses, if any, set forth in
Section 1.11 and (iv) the Agents shall have received evidence in form, scope and
substance satisfactory to them that the matters set forth in this Section 4.07
have been satisfied on the Restatement Effective Date.
4.08 Subsidiaries Guaranty. On the Restatement Effective Date, each
Subsidiary of the Borrower (excluding the South Plains DBS Limited Partnership
and DCE Satellite Entertainment, LLC, in each case so long as (i) neither such
partnership nor such limited liability company is a Wholly-Owned Subsidiary of
the Borrower and (ii) the Borrower does not own a sufficient equity interest in
such partnership or sufficient membership interests in such limited liability
company to require such partnership or limited liability company, as the case
may be, to act otherwise) shall have executed and delivered a guaranty
agreement, substantially in the form of Exhibit H (the "Subsidiaries Guaranty").
37
4.09 Holdings Pledge Agreement. On the Restatement Effective Date,
Holdings (i) shall have executed and delivered a pledge agreement substantially
in the form of Exhibit I-1 (the "Holdings Pledge Agreement") and (ii) shall have
delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledged
Securities referred to in the Holdings Pledge Agreement, then owned by Holdings,
together with executed and undated irrevocable stock powers with respect to the
Pledged Securities.
4.10 Security Document Acknowledgment; Pledge Agreements; Security
Agreement. (a) On the Restatement Effective Date, the Borrower and each
Subsidiary Guarantor shall have duly authorized, executed and delivered either
original Security Documents, if not previously executed by such party, or, if
such has been previously executed by such party, an assumption and
acknowledgment in the form of Exhibit J (the "Security Documents
Acknowledgment") with respect to the Borrower/Subsidiary Pledge Agreement, the
Security Agreement and the Collateral Assignment of Marketing and Distribution
Agreements, which assumption and acknowledgment, among other things, (i)
acknowledges and agrees that the "Obligations" (as defined in each of such
documents) include all of the Obligations under this Agreement after giving
effect to the Restatement Effective Date, (ii) acknowledges and agrees that,
after giving effect to the Restatement Effective Date, each of the Security
Documents shall remain in full force and effect in accordance with the
respective terms thereof and (iii) has confirmatory schedules attached thereto
with respect to all of the information required to be provided on the schedules
to the Security Documents, and each of the Borrower and each Subsidiary
Guarantor shall have taken all actions reasonably requested by the Collateral
Agent (including, without limitation, the obtaining of UCC-11's or equivalent
reports and the preparation, execution and delivery of UCC-1's, UCC-2's or
UCC-3's to be filed) in connection with the granting of liens pursuant to the
Security Documents.
(b) On the Restatement Effective Date, the Collateral Agent, as
pledgee shall have in its possession all of the Pledged Securities referred to
in the Holdings Pledge Agreement, endorsed in blank in the case of promissory
notes or accompanied by executed and undated stock powers in the case of capital
stock, and each Pledge Agreement shall be in full force and effect.
(c) On the Restatement Effective Date, (i) no filings, recordings,
registrations or other actions (other than as set forth in Section 4.10(a)(ii))
shall be necessary to maintain the perfection and priority of the security
interests granted pursuant to the Security Documents in the Collateral covered
thereby, and (ii) the Banks shall have received evidence that all other actions
necessary or, in the opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Security Documents
have been taken.
4.11 Minimum Subscribers and Households. The Agents shall have
received evidence satisfactory to them that, on and as of the Restatement
Effective Date, the Borrower's franchise service area includes no less than (a)
117,000 subscribers and (b) 1,220,000 households.
4.12 Material Adverse Change, etc. Since December 31, 1997, nothing
shall have occurred (and the Banks shall have become aware of no facts or
conditions not previously known) which the Agents or the Required Banks shall
determine (a) could reasonably be expected to have a material adverse effect on
the rights or remedies of the Banks or the Agents, or on the ability of the
Borrower or any of its Subsidiaries to perform their obligations to the Agents
and the Banks under this Agreement or any other Credit Document, (b) could
38
reasonably be expected to have a materially adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole or (c) indicates the inaccuracy in any material respect of the
information previously provided to the Agents or the Banks (taken as a whole) in
connection with their analysis of the transactions contemplated hereby or
indicates that the information previously provided omitted to disclose any
material information.
4.13 Litigation. On the Restatement Effective Date, no litigation by
any entity (private or governmental) shall be pending or threatened with respect
to this Agreement, any other Document or any documentation executed in
connection herewith or with respect to the transactions contemplated hereby, or
which the Agents or Required Banks shall determine could reasonably be expected
to have a materially adverse effect on the Transaction or on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
4.14 Fees, etc. On the Restatement Effective Date, the Borrower shall
have paid in full to the Agents and the Banks all costs, fees and expenses
(including, without limitation, all legal fees and expenses) payable to the
Agents and the Banks to the extent then due pursuant hereto or as otherwise
agreed between the Borrower and the Agents.
4.15 Solvency Certificate; Insurance Analyses. On the Restatement
Effective Date, the Borrower shall cause to be delivered to the Agents and the
Banks:
(i) a certificate from the Chief Financial Officer of the
Borrower, in the form of Exhibit K hereto, supporting the conclusions
that, after giving effect to the Transaction and the incurrence of all
financings contemplated herein, that each Credit Party, and all Credit
Parties taken as a whole, as the case may be, are not insolvent and
will not be rendered insolvent by the Indebtedness incurred in
connection therewith, will not be left with unreasonably small capital
with which to engage in Credit Party businesses and will not have
incurred debts beyond their ability to pay such debts as they mature;
and
(ii) evidence (including, without limitation, certificates with
respect to each insurance policy listed on Schedule XII) of insurance,
complying with the requirements of Section 7.03, with respect to the
executives, business and properties of the Borrower and its
Subsidiaries, in scope, form and substance satisfactory to the Agents
and the Required Banks and naming each of the Collateral Agent, the
Agents and the Banks as an additional insured and the Collateral Agent
as loss payee and stating that such insurance shall not be canceled or
revised without thirty (30) days' prior written notice by the insurer
to the Collateral Agent.
4.16 Approvals. All necessary governmental and third party approvals
in connection with the transactions contemplated by the Credit Documents and
otherwise referred to herein or therein (including, but not limited to, those
approvals required in respect of existing permits, landlord consents and
transfers of contract rights) shall have been obtained and remain in effect, and
all applicable waiting periods shall have expired without any action being taken
39
by any competent authority which restrains, prevents or imposes, in the sole
judgment of the Agents or the Required Banks, adverse conditions upon the
consummation of the Transaction or the other transactions contemplated by the
Documents and otherwise referred to herein or therein. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunction relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the consummation of
the Transaction, the transactions contemplated by the Documents, the making of
the Loans or the issuance of Letters of Credit.
4.17 Financial Statements; Projections; Management Letter Reports. (a)
On or prior to the Restatement Effective Date, the Banks shall have received:
(i) the consolidated balance sheet of the Borrower or Holdings,
as the case may be, as at December 31, 1996 and December 31, 1997 and
the related consolidated statements of earnings and stockholders'
equity and cash flows of such Person, as applicable for the fiscal
periods ended as of said dates, which statements have been examined by
KPMG Peat Marwick LLP, which is an independent certified public
accountant, which delivered unqualified opinions in respect thereto;
and
(ii) the pro forma (after giving effect to the Transaction)
consolidated balance sheet of Holdings as at February 28, 1998, all of
which financial statements referred to in clause (i) and (ii) shall be
prepared in accordance with generally accepted accounting principles
consistent with past practices and shall be in form and substance
satisfactory to the Agents and the Required Banks, and shall not
disclose any material adverse differences in the business, properties,
assets, liabilities, results of operations, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a
whole from that previously disclosed to the Agents and the Required
Banks.
(b) On the Restatement Effective Date, the Banks shall have received
detailed consolidated financial projections, certified by the Chief Financial
Officer of the Borrower, for Holdings and its Subsidiaries, which include the
projected consolidated results of Holdings, after giving effect to the
Transaction and the other transactions contemplated herein, for the period
commencing on the Restatement Effective Date and ending after the Term Loan
Maturity Date (the "Projections"), which Projections, and the supporting
assumptions and explanations thereto, and the accounting practices and
procedures to be utilized by Holdings following the Restatement Effective Date,
shall be satisfactory in form and substance to the Agents and the Required Banks
and shall be as set forth on Schedule III hereto.
(c) On or prior to the Restatement Effective Date, the Agents shall
have received a copy of any "management letter" received by Holdings or any of
its Subsidiaries from its certified public accountants since the Original
Effective Date.
4.18 Consent Letter. The Agents shall have received a letter from
Corporation Service Company, with offices on the date hereof at 80 State Street,
Albany, New York 12207, substantially in the form of Exhibit L hereto,
indicating its consent to its appointment by Holdings and its Subsidiaries as
their agent to receive service of process as specified in Section 12.08 of this
Agreement.
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4.19 Acquisitions. The Agents shall have received a schedule of all
acquisitions of DirecTV franchises since the Original Effective Date and shall
be satisfied that all such acquired entities (excluding the South Plains DBS
Limited Partnership and DCE Satellite Entertainment, LLC, in each case so long
as (i) neither such partnership nor such limited liability company is a
Wholly-Owned Subsidiary and (ii) the Borrower does not own a sufficient equity
interest in such partnership or sufficient membership interests in such limited
liability company to require such partnership or limited liability company, as
the case may be, to act otherwise) shall have executed and delivered the
appropriate Subsidiaries Guaranty and Security Documents and that the Collateral
Agent for the benefit of the Secured Creditors has a valid and perfected first
priority security interest in all assets and capital stock of such entities.
Section 5. Conditions Precedent to All Credit Events. The obligation
of each Bank to make Loans (including Loans made on the Restatement Effective
Date) and the obligation of an Issuing Bank to issue any Letter of Credit is
subject, at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:
5.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (except
to the extent such representations specifically relate to earlier dates in which
case such representations shall be correct in all material respects on and as of
such dates).
5.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan, the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03.
(b) Prior to the issuance of each Letter of Credit, the Issuing Bank
shall have received a Letter of Credit Request meeting the requirements of
Section 1A.03.
5.03 Permitted Acquisitions. Prior to the making of each Revolving
Loan, the proceeds of which are to be utilized to effect, in whole or in part, a
Permitted Acquisition, (i) all conditions to such Permitted Acquisition set
forth in Section 7.15 and in the definition thereof shall have been satisfied
and the President or any other senior executive officer of the Borrower shall
have delivered an officer's certificate certifying that such conditions have
been met and (ii) the Total Unutilized Revolving Loan Commitment shall be at
least $15,000,000.
5.04 Material Adverse Change, etc. Nothing shall have occurred since
December 31, 1997 (and the Banks shall have become aware of no facts or
conditions not previously known) which the Agents or the Required Banks shall
determine (i) could reasonably be expected to have a material adverse effect on
the rights or remedies of the Banks or the Agents, or on the ability of the
41
Borrower or any Subsidiary of the Borrower to perform its obligations to the
Banks under this Agreement or any other Credit Document or (ii) which could
reasonably be expected to have a materially adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole.
5.05 Litigation. At the time of each such Credit Event and also after
giving effect thereto, no litigation by any entity (private or governmental)
shall be pending or threatened with respect to this Agreement or any other
Credit Document executed in connection herewith or the transactions contemplated
hereby or which the Required Banks shall determine could reasonably be expected
to have a materially adverse effect on the performance, business, assets, nature
of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
5.06 Borrowing Base Certificate. On the date of each Credit Event, the
Agents shall have received a borrowing base certificate of the Borrower in the
form of Exhibit M (each a "Borrowing Base Certificate"), with respect to the
Qualified Paying Subscribers and the Subscribers to be Acquired of the Borrower
and its Subsidiaries as of the last day of the immediately preceding month
(after giving effect to the Credit Events being contemplated and the
transactions contemplated hereby and by the other Credit Documents) certified by
the Chief Financial Officer of the Borrower.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Banks that all the
conditions specified in Section 4 and in this Section 5 and applicable to such
Credit Event exist as of that time; provided that such acceptance of benefits of
each Credit Event shall not constitute a representation and warranty by the
Borrower as to the acceptability of any items to the Agents and/or the Banks or
as to whether the Agents and/or the Banks are satisfied with any of the matters
described in such sections. All of the Notes, certificates, legal opinions and
other documents and papers referred to in Section 4 and in this Section 5,
unless otherwise specified, shall be delivered to the Administrative Agent at
the Notice Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks and, unless otherwise
specified, shall be in form and substance satisfactory to the Banks.
Section 6. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement on the Restatement Effective Date
and to make the Loans, and issue (or participate in) the Letters of Credit as
provided herein, each of Holdings and the Borrower makes the following
representations, warranties and agreements as to itself and as to each of its
Subsidiaries (to the extent applicable), as of the Restatement Effective Date
(both before and after giving effect to the Credit Events occurring on such
date, the Transaction and the other transactions contemplated by the Documents,
and all references to the Borrower herein and elsewhere in this Agreement,
shall, unless otherwise specifically indicated, be references to the Borrower
after giving effect to the Transaction) and as of the date of each subsequent
Credit Event which representations, warranties and agreements shall survive the
execution and delivery of this Agreement and the Notes and any subsequent Credit
Event, with the occurrence of each Credit Event on or after the Restatement
Effective Date being deemed to constitute a representation and warranty that the
42
matters specified in this Section 6 are true and correct on and as of the
Restatement Effective Date and on the date of each such Credit Event (except to
the extent such representations specifically relate to earlier dates in which
case such representations shall be correct in all material respects on and as of
such dates):
6.01 Corporate Status. Each of Holdings and its Subsidiaries (i) is a
duly organized and validly existing corporation in good standing under the laws
of the jurisdiction of its organization, (ii) has the power and authority to own
its property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the ownership,
leasing or operation of property or the conduct of its business requires such
qualifications except for failures to be so qualified which, in the aggregate,
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
6.02 Corporate Power and Authority. Each of Holdings and its
Subsidiaries has the corporate power to execute, deliver and perform the terms
and provisions of each of the Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of each of such Documents. Each of Holdings and its Subsidiaries has duly
executed and delivered each of the Documents to which it is party, and each of
such Documents constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by general equitable principles
(regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law).
6.03 No Violation. Neither the execution, delivery or performance by
Holdings or any of its Subsidiaries of the Credit Documents to which it is a
party, nor compliance by it with the terms and provisions thereof, (i) will
contravene any provision of any applicable law, statute, rule or regulation or
any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except pursuant to the Security Documents) upon any of the property or
assets of Holdings or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other agreement, contract or instrument to which Holdings or its Subsidiaries is
a party or by which it or any of its property or assets is bound or to which it
may be subject or (iii) will violate any provision of the Certificate of
Incorporation or By-Laws (or similar organizational documents) of Holdings or
any of its Subsidiaries. Neither the execution, delivery or performance by
Holdings or any of its Subsidiaries of the Documents (other than the Credit
Documents) to which it is a party, nor compliance by it with the terms and
provisions thereof, (i) will contravene any provision of any applicable material
law, statute, rule or regulation or any material order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the property or assets of Holdings or any of its
43
Subsidiaries pursuant to the terms of any material indenture, mortgage, deed of
trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument to which Holdings or its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the Certificate of Incorporation or
By-Laws (or similar organizational documents) of Holdings or any of its
Subsidiaries.
6.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made on or prior to the Restatement Effective
Date and are in full force and effect), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of any Credit Document or (ii) the legality, validity, binding effect or
enforceability of any such Credit Document. No material order, consent,
approval, license, authorization or validation of, or material filing, recording
or registration with (except as have been obtained or made on or prior to the
Restatement Effective Date and are in full force and effect), or exemption by,
any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of any Document (other than the Credit Documents) or
(ii) the legality, validity, binding effect or enforceability of any such
Document (other than the Credit Documents).
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheet of the
Borrower as at December 31, 1996 and Holdings as at December 31, 1997, and the
related statements of earnings and stockholders' equity and cash flows for the
fiscal period ended as of such date, in the case of the annual statements, have
been examined by KMPG Peat Marwick LLP, which is an independent certified public
accountant, which delivered unqualified opinions in respect thereto, copies of
all of which financial statements referred to in the preceding clause have
heretofore been furnished to each Bank, present fairly in all material respects
the financial position of the Borrower or Holdings, as the case may be, and
their respective Subsidiaries at the dates of said statements and the results of
operations for the period covered thereby. All such financial statements have
been prepared in accordance with generally accepted accounting principles and
practices consistently applied except to the extent provided in the notes to
said financial statements and with respect to interim financial statements,
subject to normal year end adjustments. Since December 31, 1997, there has been
no material adverse change in the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries as a whole.
(b) On and as of the Restatement Effective Date, on a pro forma basis
after giving effect to the Transaction and all other transactions contemplated
to take place on or prior to the Restatement Effective Date and to all
Indebtedness (including the Loans) being incurred in connection with the
Transaction, and Liens created, and to be created, by each Credit Party in
connection therewith: (a) the sum of the assets (including all intangible
assets), at a fair market valuation, of each Credit Party will exceed its debts;
(b) no Credit Party has incurred or intends to, or believes that it will, incur
debts beyond its ability to pay such debts as such debts mature; and (c) each
Credit Party will have sufficient capital with which to conduct its business.
For purposes of this Section 6.05(b) "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
44
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(c) Except as fully reflected in the financial statements and the
notes related thereto described in Section 6.05(a) there were as of the
Restatement Effective Date (and after giving effect to the Transaction and the
other transactions contemplated hereby and by the Documents) no liabilities or
obligations with respect to Holdings or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, could reasonably be
expected to have a materially adverse effect on the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole. As of the Restatement Effective Date, neither Holdings nor any of its
Subsidiaries knows of any basis for the assertion against Holdings or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully reflected in the financial statements and the notes related thereto
described in Section 6.05(a) which, either individually or in the aggregate,
could reasonably be expected to be material to the Borrower and its Subsidiaries
taken as a whole. As of the Restatement Effective Date (and after giving effect
to the Transaction) none of Holdings or any of its Subsidiaries will have any
outstanding Indebtedness or preferred stock other than (i) the Loans, (ii) the
Existing Indebtedness and (iii) 418,000 shares of Series A Convertible
Participating Preferred Stock of Holdings and 228,500 shares of Series B
Convertible Participating Preferred Stock of Holdings.
(d) On and as of the Restatement Effective Date, the Projections have
been prepared in good faith by the Borrower and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to the Borrower to be misleading or which fail to take into
account material information regarding the matters reported therein. On the
Restatement Effective Date, the Borrower believes that the Projections were
reasonable and attainable (although actual results may differ from the
Projections and no representation is made that the Projections will in fact be
attained).
6.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Holdings and its Subsidiaries, threatened (i) with
respect to any Document, or (ii) that are reasonably likely to materially and
adversely affect the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
6.07 True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of Holdings or
any of its Subsidiaries in writing to any Bank (including, without limitation,
all information contained in the Documents) for purposes of or in connection
with this Agreement or any transaction contemplated herein (including, without
limitation, in connection with the issuance of Acceptable Subordinated Debt) is,
and all other such factual information (taken as a whole with all information
previously furnished) hereafter furnished by or on behalf of Holdings or any of
its Subsidiaries in writing to any Bank will be, true and accurate in all
45
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact.
6.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Term
Loans and up to $100,000,000 of the proceeds of Revolving Loans incurred by the
Borrower on the Restatement Effective Date shall be used by the Borrower to (i)
repay Existing Loans, accrued interest thereon, breakage costs and fees relating
thereto and relating to the Existing Letters of Credit, (ii) repay the Rocky
Mountain Note, (iii) pay Transaction Fees and Expenses and (iv) provide for
working capital purposes. Proceeds of Revolving Loans incurred after the
Restatement Effective Date shall be used by the Borrower only to effect
Permitted Acquisitions and for general corporate, capital expenditure and
working capital purposes.
(b) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
6.09 Tax Returns and Payments. Each of Holdings and each of its
Subsidiaries has timely filed or caused to be timely filed (including pursuant
to any valid extensions of time for filing) with the appropriate taxing
authority, all material returns, statements, forms and reports for taxes (the
"Returns") required to be filed by or with respect to the income, properties or
operations of Holdings and/or any of its Subsidiaries. The Returns accurately
reflect in all material respects all liability for taxes of Holdings and its
Subsidiaries for the periods covered thereby. Each of Holdings and each of its
Subsidiaries has paid, or have provided adequate reserves in accordance with
generally accepted accounting principles for all material taxes (including,
without limitation, all withholding taxes) payable by them which have become due
or will become due for the current fiscal year through the date hereof. There is
no material action, suit, proceeding, investigation, audit, or claim now pending
or, to the best knowledge of Holdings or any of its Subsidiaries, threatened by
any authority regarding any taxes relating to Holdings or any of its
Subsidiaries. Except as set forth on Schedule IV, as of the Restatement
Effective Date, neither Holdings nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of a
material amount of taxes of Holdings or any of its Subsidiaries, or is aware of
any circumstances that would cause the taxable years or other taxable periods of
the Borrower or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. Neither Holdings nor any of its Subsidiaries
has incurred, or will incur, any material tax liability in connection with the
Transaction or any other transactions contemplated hereby.
6.10 Compliance with ERISA. Schedule V sets forth each Plan;
each Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including, without
46
limitation, ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA;
all contributions required to be made with respect to a Plan have been timely
made; neither Holdings nor any of its Subsidiaries Holdings nor any ERISA
Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to Holdings, any of its
Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of
a Plan pursuant to the foregoing provisions of ERISA and the Code; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Plan which is subject to Title IV of ERISA; no action, suit, proceeding,
hearing, audit or investigation with respect to the administration, operation or
the investment of assets of any Plan (other than routine claims for benefits) is
pending, expected or threatened; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, there exist
no liabilities of Holdings, its Subsidiaries and/or its ERISA Affiliates to all
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Plan ended prior to the date of the most recent
Credit Event; each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of Holdings, its Subsidiaries, or any ERISA Affiliate has at all times
been operated in compliance with the provisions of Part 6 of subtitle B of Title
I of ERISA and Section 4980B of the Code; no lien imposed under the Code or
ERISA on the assets of Holdings, any of its Subsidiaries or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and Holdings and its
Subsidiaries may cease contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.
6.11 The Security Documents. (a) The provisions of the Security
Documents (other than the Pledge Agreements) are effective to create in favor of
the Collateral Agent for the benefit of the Secured Creditors a legal, valid and
enforceable security interest in all right, title and interest of the respective
Credit Parties in the Collateral described therein and the Collateral Agent, for
the benefit of the Secured Creditors, has a fully perfected Lien on, and
security interest in, all right, title and interest of the respective Credit
Parties, in all of the Collateral described therein, subject to no other Liens
other than Permitted Liens. The recordation of the Security Agreement in the
United States Patent and Trademark Office together with filings on Form UCC-1
made pursuant to the Security Agreement will be effective, under federal and
state law, to perfect the security interest granted to the Collateral Agent in
the trademarks and patents covered by the Security Agreement and the filing of
the Security Agreement with the United States Copyright Office together with
filings on Form UCC-1 made pursuant to the Security Agreement will be effective
under federal and state law to perfect the security interest granted to the
Collateral Agent in the copyrights covered by the Security Agreement. Each of
the Credit Parties party to the Security Agreement has good and merchantable
title to all Collateral described therein, free and clear of all Liens except
those described above in this clause (a).
47
(b) The security interests created in favor of the Collateral Agent,
as Pledgee for the benefit of the Secured Creditors, under the Pledge Agreements
constitute first perfected security interests in the Pledged Securities
described in the Pledge Agreements, subject to no security interests of any
other Person. No filings or recordings are required in order to perfect (or
maintain the perfection or priority of) the security interests created in the
Pledged Securities and the proceeds thereof under the Pledge Agreements.
6.12 Material Contracts. All Material Contracts of Holdings and each
of its Subsidiaries as of the Restatement Effective Date are listed on Schedule
VI.
6.13 Properties. Each of Holdings and each of its Subsidiaries has
good and merchantable title to all properties owned by them, including all
property reflected in the consolidated pro forma balance sheet (after giving
effect to the Transaction) referred to in Section 6.05(a) (except as sold or
otherwise disposed of since the date of such balance sheet in the ordinary
course of business or as permitted by Section 8.02), free and clear of all
Liens, other than (i) as referred to in the consolidated balance sheet or in the
notes thereto or in the pro forma balance sheet or (ii) otherwise permitted by
Section 8.01. Schedule VII contains a true and complete list of each parcel of
Real Property owned or leased by Holdings and each of its Subsidiaries on the
Restatement Effective Date, and the type of interest therein held by Holdings
and/or its Subsidiaries.
6.14 Capitalization. On the Restatement Effective Date, after giving
effect to the Transaction, the authorized capital stock of (a) Holdings consists
of (i) 1,000,000 shares of common stock, $.01 par value per share ("Holdings
Common Stock"), 100 of which shares are issued and outstanding, (ii) 1,293,800
shares of designated preferred stock, $.01 par value per share, of which (a)
418,000 shares have been designated as Series A Convertible Participating
Preferred stock ("Holdings Series A Convertible Preferred Stock"), all of which
are issued and outstanding, (b) 418,000 shares have been designated as Series A
Redeemable Preferred Stock ("Holdings Series A Redeemable Preferred Stock"),
none of which are issued, (c) 228,500 shares have been designated as Series B
Convertible Participating Preferred Stock ("Holdings Series B Convertible
Preferred Stock"), of which 228,442 shares are issued and outstanding, (d)
228,500 shares have been designated as Series B Redeemable Preferred Stock
("Holdings Series B Redeemable Preferred Stock"), none of which are issued, and
(iii) 300,000 shares of undesignated preferred stock, $.01 par value per share
("Holdings Undesignated Preferred Stock") and (b) the Borrower consists of 1,000
shares of common stock, $.01 par value per share ("Borrower Common Stock"), all
of which shares are issued and outstanding. Such Holdings Common Stock, Borrower
Common Stock, Holdings Series A Convertible Preferred Stock and Holdings Series
B Convertible Preferred Stock is owned in the amounts, and by the Persons, set
forth on Schedule VIII. Except as set forth in Schedule VIII, all of such
outstanding shares have been duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights. Except as set forth in this
Section and on Part A of Schedule VIII, on the Restatement Effective Date,
neither Holdings, the Borrower nor any Subsidiary of the Borrower has
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
48
6.15 Subsidiaries. Schedule IX hereto lists each Subsidiary of
Holdings, and the direct and indirect ownership interest of Holdings therein, in
each case existing on the Restatement Effective Date.
6.16 Compliance with Statutes, etc. Each of Holdings and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except with
respect to each of the foregoing such noncompliance as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
6.17 Investment Company Act. None of Holdings and any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.18 Public Utility Holding Company Act. None of Holdings and any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
6.19 Environmental Matters. (a) Holdings and each of its Subsidiaries
have complied with, and on the date of such Credit Event are in compliance with,
in all respects, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws except such noncompliances which,
in the aggregate, could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole. There are no past, pending or,
to the best knowledge of Holdings or any of its Subsidiaries, threatened
material Environmental Claims against Holdings or any of its Subsidiaries or any
Real Property currently owned or operated by Holdings or any of its
Subsidiaries. There are no facts, circumstances, conditions or occurrences
concerning the business or operations of Holdings or any of its Subsidiaries or
any Real Property owned or operated at any time by Holdings or any of its
Subsidiaries or, to the knowledge of Holdings or any of its Subsidiaries, any
property adjoining any such Real Property that could reasonably be expected (i)
to form the basis of an Environmental Claim against Holdings or any of its
Subsidiaries or any Real Property owned or operated by Holdings or any of its
Subsidiaries or (ii) to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property under any Environmental Law except such Environmental Claims and
restrictions which individually or in the aggregate could not reasonably be
expected to have a material adverse effect on the performance, business, assets,
nature of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
49
(b) Neither Holdings nor any of its Subsidiaries has, at any time,
generated, used, treated, stored, transported or released Hazardous Materials
on, to or from any Real Property at any time owned, leased or at any time
operated by Holdings or any of its Subsidiaries.
(c) There are no underground storage tanks located on any Real
Property owned or operated by Holdings or any of its Subsidiaries the existence
of which could reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
6.20 Labor Relations. None of Holdings and any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
material adverse effect on Holdings and its Subsidiaries taken as a whole. There
is (i) no significant unfair labor practice complaint pending against Holdings
or any of its Subsidiaries or, to the best knowledge of Holdings, threatened
against any of them, before the National Labor Relations Board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against Holdings or any
of its Subsidiaries or, to the best knowledge of Holdings, threatened against
any of them and (ii) no significant strike, labor dispute, slowdown or stoppage
pending against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings, threatened against Holdings or any of its Subsidiaries.
6.21 Patents, Licenses, Franchises and Formulas. (a) Except as set
forth in Schedule X, Holdings, together with its Subsidiaries, has a license to
use or otherwise has the right to use, free and clear of pending or threatened
Liens, all the material patents, patent applications, trademarks, service marks,
trade names, trade secrets, copyrights, proprietary information, computer
programs, data bases, licenses, franchises and formulas, or rights with respect
to the foregoing (collectively, "Intellectual Property"), and has obtained all
licenses and other rights of whatever nature, necessary for the present conduct
of its business, without any known conflict with the rights of others which, or
the failure to obtain which, as the case may be, could reasonably be expected to
have a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole.
(b) Neither Holdings nor any of its Subsidiaries has knowledge of any
claim by any third party contesting the validity, enforceability, use or
ownership of the Intellectual Property, or of any existing state of facts that
would support a claim that use by Holdings or any of its Subsidiaries of any
such Intellectual Property has infringed or otherwise violated any Intellectual
Property right of any other Person and, that to the best knowledge of Holdings
and its Subsidiaries, no claim is threatened except, in each case, for such
claims that could not individually or in the aggregate reasonably be expected to
have a material adverse affect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole.
6.22 Indebtedness. Schedule XI sets forth a true and complete list of
all Indebtedness and preferred stock (other than the Loans and Convertible
Preferred Stock) of Holdings and each of its Subsidiaries as of the Restatement
Effective Date after giving effect to the Transaction and the other transactions
50
contemplated hereby (the "Existing Indebtedness"), in each case showing the
aggregate amount thereof and the name of the respective obligor and any other
entity which directly or indirectly guaranteed such debt. None of the Existing
Indebtedness was incurred in connection with, or in contemplation of, the
Transaction or the other transactions contemplated hereby.
6.23 Restrictions on or Relating to Subsidiaries. There does not exist
any encumbrance or restriction on the ability of (i) any Subsidiary of Holdings
to pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by Holdings or any
Subsidiary of Holdings, or to pay any Indebtedness owed to Holdings or a
Subsidiary of Holdings, (ii) any Subsidiary of Holdings to make loans or
advances to Holdings or any of its Subsidiaries or (iii) any Subsidiary of
Holdings to transfer any of its properties or assets to Holdings or any
Subsidiary of Holdings, except for such encumbrances or restrictions existing
under or by reason of (x) applicable law, (y) this Agreement and the other
Credit Documents or (z) provisions restricting assignment of any contract by
which Holdings or a Subsidiary of Holdings is bound.
6.24 The Transaction and Permitted Acquisitions. All aspects of the
Transaction have been effected in accordance with the Documents and applicable
law except for such non-compliances as could not reasonably be expected to have
a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole. At the time of
the consummation thereof, each Permitted Acquisition and the issuance of the
Acceptable Subordinated Debt shall have been effected in accordance with the
documents relating to such Permitted Acquisition or issuance of Acceptable
Subordinated Debt, as the case may be, and all applicable law except for such
non-compliances as could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole. At the time of consummation
thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to consummate the Transaction and any
Permitted Acquisition and the issuance of the Acceptable Subordinated Debt shall
have been obtained, given, filed or taken and are in full force and effect (or
effective judicial relief with respect thereto has been obtained) except for
such consents, approvals, filings, and registrations, or other actions the
failure to obtain, give, file or take as could not reasonably be expected to
have a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole. All applicable
waiting periods with respect thereto have or, prior to the time when required,
will have, expired without, in all such cases, any action being taken by any
competent authority which restrains, prevents or imposes material adverse
conditions upon the consummation of the Transaction or any Permitted Acquisition
or the issuance of the Acceptable Subordinated Debt. Additionally, at the time
of consummation thereof, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the consummation of the
Transaction or any Permitted Acquisition.
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6.25 Year 2000 Reprogramming. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of the Borrower's or any of
its Subsidiaries', or, to the knowledge of the Borrower, NRTC's or DirecTV's (i)
computer systems and (ii) equipment containing embedded microchips (including
systems and equipment supplied by others or with which the Borrower's, NRTC's or
DirecTV's systems interface) and the testing of all such systems and equipment,
as so reprogrammed, shall be completed by April 1, 1999. The costs to the
Borrower of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 (including, without limitation, reprogramming errors
and the failure of others' systems or equipment) could not reasonably be
expected to have a material adverse effect on the performance, business, assets,
nature of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
Except for such of the reprogramming referred to in the preceding sentence as
may be necessary, the computer and management information systems of the
Borrower and its Subsidiaries are, and to the knowledge of the Borrower, the
computer and management information systems of NRTC and DirecTV are, and with
ordinary course upgrading and maintenance will continue to be for the term of
this Agreement, sufficient to permit the Borrower and its Subsidiaries to
conduct its business without such conduct resulting in a material adverse effect
on the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
Section 7. Affirmative Covenants. Each of Holdings and the Borrower
covenants and agrees that on and after the Restatement Effective Date and until
the Total Commitment and all Letters of Credit have terminated and the Loans and
Notes and Unpaid Drawings, together with interest, Fees and all other
obligations incurred hereunder and thereunder, are paid in full:
7.01 Information Covenants. Holdings will furnish to each Bank:
(a) Monthly Reports. Within fortyfive (45) days after the end of
each fiscal month other than the last such month of any fiscal quarter
of Holdings, the consolidated and consolidating balance sheets of
Holdings and its Subsidiaries as at the end of such month and for the
elapsed portion of the fiscal year ended with the last day of such
month and the related consolidated and consolidating statements of
income for such month and for the elapsed portion of the fiscal year
ended with the last day of such month and a statement of cash flows
for the elapsed portion of the fiscal year ended with the last day of
such month, in each case setting forth comparative figures for the
corresponding month and elapsed portion of such fiscal year for the
prior fiscal year and comparable budgeted figures for such period as
well as subscriber information (including, without limitation, with
respect to new subscribers and disconnected subscribers) and the
amount of MDU Investments (and a break-down thereof) for such period
and, upon request of either Agent, a management discussion and
analysis of such results, all of which shall be certified by the Chief
Financial Officer or Controller of Holdings, subject to normal
year-end audit adjustments.
(b) Quarterly Financial Statements. Within forty-five (45) days
after the close of each quarterly accounting period in each fiscal
year of Holdings, the consolidated and consolidating balance sheets of
Holdings and its Subsidiaries as at the end of such quarterly period
and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows, in each case for such quarterly
period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, in each case setting forth
52
comparative figures for the related periods in the prior fiscal year
and comparable budgeted figures for such period as well as subscriber
information (including, without limitation, with respect to new
subscribers and disconnected subscribers) and the amount of MDU
Investments (and a break-down thereof) for such period and the period
commencing on the Restatement Effective Date and a management
discussion and analysis of such results, all of which shall be
certified by the Chief Financial Officer or Controller of Holdings,
subject to normal year-end audit adjustments.
(c) Annual Financial Statements. Within 120 days after the close
of each fiscal year of Holdings, the consolidated and consolidating
balance sheets of Holdings and its Subsidiaries as at the end of such
fiscal year and the related consolidated and consolidating statements
of income, stockholders' equity and cash flows for such fiscal year
and setting forth comparative figures for the preceding fiscal year
and comparable budgeted figures for such period as well as subscriber
information (including, without limitation, with respect to new
subscribers and disconnected subscribers) and the amount of MDU
Investments (and a break-down thereof) for such period and the period
commencing on the Restatement Effective Date and a management
discussion and analysis of such results, certified, (x) in the case of
the consolidating statements, by the chief financial officer or
controller of Holdings and (y) in the case of the consolidated
financial statements of Holdings and its Subsidiaries, by KMPG Peat
Marwick, LLP or any of the "big six" or other independent certified
public accountants of recognized national standing reasonably
acceptable to the Agents, together with a signed opinion of such
accounting firm (which opinion shall not be qualified as to the scope
of the audit or the status of Holdings or any Subsidiary of Holdings
as a going concern in any respect) stating that in the course of its
regular audit of the financial statements of Holdings which audit was
conducted in accordance with generally accepted auditing standards,
such accounting firm obtained no knowledge of any Default or Event of
Default which has occurred and is continuing or, if in the opinion of
such accounting firm such a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof.
(d) Management Letters. Promptly after the receipt thereof by
Holdings or any Subsidiary of Holdings, a copy of any "management
letter" received by Holdings or any Subsidiary of Holdings from its
certified public accountants.
(e) Budgets. As soon as available but in no event later than
thirty (30) days after the first day of each fiscal year of Holdings,
a budget for Holdings and its Subsidiaries in form customarily
prepared by Holdings (including budgeted statements of earnings and
sources and uses of cash and balance sheets and budgeted acquisitions
of franchises) prepared by Holdings for each calendar month of such
53
fiscal year in reasonable detail with appropriate presentation and
discussion of the principal assumptions upon which such budgets are
based, accompanied by the statement of the Chief Financial Officer or
Controller of Holdings to the effect that, to the best of his
knowledge, the budget is a reasonable estimate for the period covered
thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 7.01(a), (b) and (c), a
certificate of the Chief Financial Officer or Controller of Holdings
and the Borrower to the effect that no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has
occurred and is continuing, specifying the nature and extent thereof,
which certificate, (x) in the case of certificates delivered pursuant
to Section 7.01(b) or (c), shall set forth the calculations required
to establish whether Holdings and the Borrower were in compliance with
the provisions of Sections 2.03, 3.02, 7.15, 8.02, 8.04, 8.05, 8.07,
8.08 through 8.17, inclusive, at the end of such fiscal quarter or
year, as the case may be, and (y) in the case of certificates
delivered pursuant to Section 7.01(c), the amount of Excess Cash Flow
for the relevant Excess Cash Flow Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event
within three (3) Business Days after an officer of Holdings or any of
its Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or Event of
Default, (ii) any litigation or governmental investigation or
proceeding pending (x) against any of Holdings or its Subsidiaries
which could reasonably be expected to materially and adversely affect
the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole or (y)
with respect to any Document and (iii) any other event which could
reasonably be expected to materially and adversely affect the
performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
(h) Other Reports and Filings. Promptly upon transmission
thereof, copies of any financial information, proxy materials and
other information and reports, if any, which Holdings or any of its
Subsidiaries (x) has filed with the Securities and Exchange Commission
or any successor thereto (the "SEC") or (y) has delivered to holders
of, or any agent or trustee with respect to, Indebtedness of Holdings
or any of its Subsidiaries in its capacity as such a holder, agent, or
trustee or (z) has delivered to any shareholder in its capacity as a
shareholder.
(i) Environmental Matters. Promptly upon, and in any event within
three (3) Business Days after an officer of Holdings or of any of its
Subsidiaries obtains knowledge thereof, notice of any of the following
environmental matters (i) any pending or threatened material
Environmental Claim against Holdings or any of its Subsidiaries or any
Real Property owned or operated at any time by Holdings or any of its
Subsidiaries; (ii) any condition or occurrence on or arising from any
Real Property owned or operated at any time by Holdings or any of its
Subsidiaries that (a) could reasonably be anticipated to result in a
material noncompliance by Holdings or any of its Subsidiaries with any
material applicable Environmental Law, or (b) could reasonably be
anticipated to form the basis of a material Environmental Claim
against Holdings or any of its Subsidiaries or any Real Property owned
or operated by Holdings or any of its Subsidiaries; (iii) any
condition or occurrence on any material Real Property owned or
operated by Holdings or any of its Subsidiaries that could reasonably
be anticipated to cause such Real Property to be subject to any
material restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to a
material Release or material threatened Release or the actual or
alleged presence of any Hazardous Material on or from any Real
54
Property owned or operated at any time by Holdings or any of its
Subsidiaries in each case as required by any Environmental Law or any
governmental or other administrative agency. All such notices shall
describe in reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or remedial action and Holdings' or
such Subsidiary's response thereto. In addition, Holdings will provide
the Banks with copies of all material communications with any
government or governmental agency relating to material Environmental
Claims, all material communications with any person relating to
material Environmental Claims, and such detailed reports of any
Environmental Claim as may reasonably be requested by the Required
Banks.
(j) Annual Meetings with Banks. Within 150 days after the close
of each fiscal year of the Borrower, the Borrower shall, at the
request of either Agent or Required Banks, hold a meeting (at a
mutually agreeable location and time) with all Banks who choose to
attend such meeting at which meeting shall be reviewed the financial
results of the previous fiscal year and the financial condition of
Holdings and its Subsidiaries and the budgets presented for the
current fiscal year of Holdings and its Subsidiaries.
(k) Other Information. From time to time, such other information
or documents (financial or otherwise) with respect to Holdings or any
of its Subsidiaries, as the Agents, or the Required Banks may
reasonably request.
7.02 Books, Records and Inspections. Holdings will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries, in conformity with United States generally
accepted accounting principles and all requirements of law, shall be made of all
dealings and transactions in relation to its business and activities. Holdings
will, and will cause each of its Subsidiaries to, permit officers and designated
representatives of the Agents or any Bank to visit and inspect, under guidance
of officers of Holdings or of such Subsidiary, any of the properties of the
Borrower or such Subsidiary, and to examine the books of account of Holdings or
such Subsidiary and discuss the affairs, finances and accounts of Holdings or of
such Subsidiary with, and be advised as to the same by, its and their officers,
all at such reasonable times and intervals and to such reasonable extent as the
Agents or such Bank may request.
7.03 Maintenance of Property, Insurance. (a) Schedule XII sets forth a
true and complete listing of all insurance maintained by Holdings and each of
its Subsidiaries as of the Restatement Effective Date. Holdings will, and will
cause each of its Subsidiaries to, (i) keep all material property useful and
necessary in its business in good working order and condition (ordinary wear and
tear excepted), (ii) maintain with financially sound and reputable insurance
companies key-man life insurance, liability insurance and insurance on all its
property in at least such amounts and against at least such risks as are
described on Schedule XII and (iii) furnish to the Administrative Agent, upon
written request, full information as to the insurance carried. The provisions of
this Section 7.03 shall be deemed to be supplemental to, but not duplicative of,
the provisions of any of the Security Documents that require the maintenance of
insurance.
55
(b) Holdings will at all times keep, and will cause each of its
Subsidiaries to keep, its property insured in favor of the Collateral Agent, and
all policies (including mortgage policies) or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance maintained by
Holdings or its Subsidiaries (other than employee benefit insurance)) (i) shall
be endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee and naming the Collateral Agent, the Agents and each Bank as an
additional insured) with respect to Collateral, (ii) shall state that such
insurance policies shall not be canceled or revised in a manner adverse to the
Banks without thirty (30) days' prior written notice thereof by the respective
insurer to the Collateral Agent, (iii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to the
Collateral Agent, (iv) shall contain the standard noncontributory mortgagee
clause endorsement in favor of the Collateral Agent with respect to hazard
insurance coverage, (v) shall provide that any losses shall be payable
notwithstanding (A) any act or neglect of Holdings or any of its Subsidiaries,
(B) the occupation or use of the properties for purposes more hazardous than
those permitted by the terms of the respective policy if such coverage is
obtainable at commercially reasonable rates and is of the kind from time to time
customarily insured against by Persons owning or using similar property and in
such amounts as are customary, (C) any foreclosure or other proceeding relating
to the insured properties or (D) any change in the title to or ownership or
possession of the insured properties and (vi) shall be deposited with the
Collateral Agent. If Holdings or any of its Subsidiaries shall fail to insure
its property in accordance with this Section 7.03, or if Holdings or any of its
Subsidiaries shall fail to endorse and deposit all policies or certificates with
respect thereto, the Collateral Agent shall have the right (but shall be under
no obligation) to procure such insurance and the Borrower jointly and severally
agrees, to reimburse the Collateral Agent for all costs and expenses of
procuring such insurance.
7.04 Corporate Franchises. Holdings will do, and will cause each of
its Subsidiaries to do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises
and authority to do business; provided, however, that nothing in this Section
7.04 shall prevent the withdrawal by Holdings or any Subsidiary of Holdings of
its qualification as a foreign corporation in any jurisdiction where such
withdrawal could not reasonably be expected to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities, properties,
operations, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.05 Compliance with Statutes, etc. Holdings will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.06 Compliance with Environmental Laws. (a) Holdings will comply, and
will cause each of its Subsidiaries to comply, in all material respects with all
material Environmental Laws applicable to ownership or use of the Real Property,
will promptly pay or cause the Borrower to pay all costs and expenses incurred
in such compliance, and will keep or cause to be kept all such Real Properties
56
free and clear of any Liens imposed pursuant to such Environmental Laws. None of
Holdings and any Subsidiary of Holdings will generate, use, treat, store,
release or dispose of, or permit the generation, use, treatment, storage,
Release or disposal of Hazardous Materials on any Real Property, or transport or
permit the transportation of Hazardous Materials to or from any Real Property,
other than in compliance in all material respects with applicable law.
(b) At the request of the Agents or the Required Banks at any time and
from time to time during the existence of this Agreement: (i) if an Event of
Default exists under this Agreement, (ii) upon the reasonable belief by the
Agents that Holdings or any of its Subsidiaries has breached any representation
or covenant herein with respect to any environmental matters and such breach is
continuing, or (iii) in the event notice is provided under Section 7.01(i)
herein, Holdings will cause the Borrower to, and the Borrower will, provide, at
its sole cost and expense (or will cause the relevant Subsidiary to provide at
its sole cost and expense), an environmental site assessment report reasonable
in scope concerning any Real Property of Holdings or its Subsidiaries, prepared
by an environmental consulting firm approved by the Agents and the Required
Banks, indicating the presence or Release of Hazardous Materials on or from any
of the Real Property and the potential cost of any removal or remedial action in
connection with any Hazardous Materials on such Real Property. If the Borrower
fails to provide the same after thirty (30) days' notice, the Agents may order
the same, and the Borrower shall grant and hereby grants to the Agents and the
Banks and their agents access to such Real Property and specifically grants the
Agents and the Banks an irrevocable non-exclusive license, subject to the rights
of tenants, to undertake such an assessment all at the Borrower' expense, which
assessments, if obtained, will be provided to the Borrower.
7.07 ERISA. As soon as possible and, in any event, within ten (10)
days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, Holdings will
cause the Borrower to, and the Borrower will, deliver to each of the Banks a
certificate of the chief financial officer of the Borrower setting forth the
full details as to such occurrence and the action, if any, that Holdings, such
Subsidiary of Holdings or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by Holdings, such Subsidiary of Holdings, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred (except to the extent that Holdings, any Subsidiary of
Holdings or any ERISA Affiliate has previously delivered to the Banks a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof) and an event described in subsection .62, .63, .64,
.65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to
occur with respect to such Plan within the following thirty (30) days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
57
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that any contribution required to be made with respect to a Plan has not been
timely made; that a Plan has been or may be terminated, reorganized, partitioned
or declared insolvent under Title IV of ERISA; that a Plan has an Unfunded
Current Liability; that proceedings may be or have been instituted to terminate
or appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that Holdings, any Subsidiary of
Holdings or any ERISA Affiliate will or may incur any liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),
4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or
with respect to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that
Holdings or any Subsidiary of Holdings may incur any material liability pursuant
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan. Holdings will cause the Borrower
to, and the Borrower will, deliver to each of the Banks (i) a complete copy of
the annual report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service and (ii) copies of any records, documents or other information that must
be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof, copies of annual reports and any records,
documents or other information required to be furnished to the PBGC, and any
material notices received by Holdings, any Subsidiary of Holdings or any ERISA
Affiliate with respect to any Plan shall be delivered to the Banks no later than
ten (10) days after the date such report has been filed with the Internal
Revenue Service or such records, documents and/or information has been furnished
to the PBGC or such notice has been received by Holdings, the Subsidiary or the
ERISA Affiliate, as applicable.
7.08 End of Fiscal Years; Fiscal Quarters. Holdings will cause its,
and each of its Subsidiaries', fiscal years to end on December 31 and each of
its, and each of its Subsidiaries', first three fiscal quarters to end on March
30, June 30 and September 30.
7.09 Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non- performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.10 Payment of Taxes. Holdings will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties would
otherwise attach
58
thereto, and all lawful claims which, if unpaid, might become a lien or charge
upon any properties of Holdings or any of its Subsidiaries not otherwise
permitted under Section 8.01; provided that neither Holdings nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with generally
accepted accounting principles.
7.11 Interest Rate Protection. Holdings will cause the Borrower to,
and the Borrower will, no later than 120 days following the Restatement
Effective Date, enter into arrangements acceptable to the Agents establishing a
fixed or maximum interest rate acceptable to the Agents for an aggregate
notional amount of at least an amount equal to 50% of Net Adjusted Consolidated
Indebtedness at any time, and from time to time, for a period of at least three
(3) years after the Restatement Effective Date; provided, however, that the
outstanding principal amount of Acceptable Subordinated Debt less the amount of
Cash Interest Reserves shall be counted as acceptable arrangements for
establishing a fixed interest rate acceptable to the Agents.
7.12 Use of Proceeds. All proceeds of the Loans shall be used as
provided in Section 6.08.
7.13 Acceptable Subordinated Debt. In connection with the issuance of
Acceptable Subordinated Debt, the Agents shall receive, as early as practicable
(but in any event not later than thirty (30) days prior to the printing of the
preliminary offering circular for such Acceptable Subordinated Debt), the
initial terms and conditions of such Acceptable Subordinated Debt and shall
receive on a regular basis after receipt of such initial terms and conditions,
all revisions thereto. The Agents and their counsel shall receive, prior to the
issuance of Acceptable Subordinated Debt, all drafts of the Acceptable
Subordinated Debt Documents which shall be in form and substance satisfactory to
the Agents. The Agents and Banks shall receive (i) certified final copies of all
of the Acceptable Subordinated Debt Documents, (ii) reliance letters with
respect to all legal opinions delivered by counsel to the Borrower in connection
with the issuance of the Acceptable Subordinated Debt and (iii) such other
opinions from counsel to the Borrower as shall be reasonably requested in
connection with such issuance. The Borrower shall cause the offering materials
for the Acceptable Subordinated Debt not to contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading.
7.14 Intellectual Property Rights. The Borrower will, and Holdings
will cause each of its other Subsidiaries to, maintain in full force and effect
all Intellectual Property rights necessary or appropriate to the business of
Holdings or any Subsidiary of Holdings and take no action (including, without
limitation, the licensing of Intellectual Property), or fail to take an action,
as the case may be, in connection with such Intellectual Property rights which
could reasonably be expected to result in a material adverse effect on the
performance, business, assets, nature of assets, liabilities, properties,
59
operations, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole. The Borrower will, and Holdings will cause each
of its other Subsidiaries to, diligently prosecute all pending applications
filed in connection with seeking or seeking to perfect the Intellectual Property
rights and take all other reasonable actions necessary for the protection and
maintenance of the Intellectual Property rights necessary or appropriate to the
business of Holdings or any Subsidiary of Holdings at all times from and after
the Restatement Effective Date other than any such actions the failure of which,
in the aggregate, could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole.
7.15 Permitted Acquisitions. (a) Subject to the remaining provisions
of this Section 7.15 applicable thereto and the requirements contained in the
definition of Permitted Acquisition, the Borrower and its Subsidiaries may from
time to time on or after the Restatement Effective Date effect Permitted
Acquisitions, so long as with respect to each Permitted Acquisition:
(i) the Borrower demonstrates that no Default or Event of Default
is in existence at the time of the consummation of such Permitted
Acquisition or would exist after giving effect thereto and all
representations and warranties contained herein and in the other
Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties
were made on and as of the date of such Permitted Acquisition (both
before and after giving effect thereto);
(ii) the Borrower shall have given the Agents and the Banks at
least fifteen (15) days prior written notice of any such Permitted
Acquisition (each such notice, a "Permitted Acquisition Notice"),
which notice shall (s) contain the estimated date such Permitted
Acquisition is scheduled to be consummated, (t) attach a true and
correct copy of the draft purchase agreement, letter of intent,
description of material terms or similar agreement executed by the
Borrower and the seller in connection with such Permitted Acquisition,
(u) contain the estimated aggregate purchase price of such Permitted
Acquisition and the amount of related costs and expenses and the
intended method of financing thereof, (v) contain the estimated amount
of Loans required to effect such Permitted Acquisition and any amounts
to be withdrawn from the Permitted Acquisition Cash Collateral
Account, with respect thereto, (w) contain a description of the
Permitted Seller Notes, Holdings Common Stock or Seller Preferred
Stock to be issued by Holdings in connection with such Permitted
Acquisition, and (x) disclose the number of Subscribers to be Acquired
and the number of households in the acquired franchise area and the
purchase price per Subscriber to be Acquired and per household in the
acquired franchise area; provided, however, that if the estimated
aggregate purchase price of such Permitted Acquisition is less than
$3,000,000, such notice need not contain the documents described in
clause (t) above unless the Agents request such information; provided
further, however, in the event that after delivery of the
documentation described in clause (t) above any material economic
terms of the Permitted Acquisition shall be amended in any material
way, then promptly after such amendment the Borrower shall provide the
Agents and the Banks written notice of such changes;
(iii) the Borrower shall have given the Banks such other
information related to the Person or business, division or product
line being acquired and the Permitted Acquisition as the Agents shall
reasonably request;
(iv) (I) as soon as available but not later than the date of the
consummation of such Permitted Acquisition, a copy of the executed
purchase agreement and all related agreements, schedules and exhibits
with respect to such Permitted Acquisition and (II) at the time of
60
delivery of the purchase agreement, a certification from the Borrower
as to the purchase price for the acquisition and the estimated amount
of all related costs, fees and expenses and that, except as described,
there are no other amounts which will be payable in connection with
the respective Permitted Acquisition;
(v) the Agents shall be satisfied in their reasonable discretion
that the proposed Permitted Acquisition will not reasonably likely
result in materially increased liabilities (contingent or otherwise)
of Holdings or any of its Subsidiaries other than Permitted Seller
Notes (including, without limitation, tax, ERISA or environmental
liabilities); provided that, so long as the Permitted Acquisition
Notice has been given as required above and so long as the Borrower
has furnished each Agent with all information with respect to
liabilities of the type described in this clause, if any Agent has not
notified the Borrower on or prior to the tenth day prior to the
consummation of the Permitted Acquisition that such Agent has not yet
been satisfied that the proposed Permitted Acquisition would not be
reasonably likely to result in materially increased liabilities of the
Borrower or any of its Subsidiaries, such Agent shall be deemed for
purposes of this clause (v) to be so satisfied;
(vi) recalculations are made by the Borrower of compliance with
the covenants contained in Sections 8.08 through 8.17, inclusive, for
the fiscal quarter most recently ended prior to the date of the
Permitted Acquisition (the "Calculation Period") annualized and on a
Pro Forma Basis, and such recalculations shall show that all such
covenants would have been complied with throughout the Calculation
Period on a Pro Forma Basis;
(vii) the Borrower in good faith believes that on a Pro Forma
Basis, the financial covenants contained in Sections 8.08 through
8.17, inclusive, will continue to be met following the date of the
consummation of the respective Permitted Acquisition and for the
remaining term of the Loans; provided, however, the Agents may, in
their reasonable discretion, request the Borrower to provide
calculations made by the Borrower with respect to compliance with such
covenants;
(viii) the consent of Hughes and the NRTC to such Permitted
Acquisition shall have been obtained; and
(ix) prior to the consummation of the respective Permitted
Acquisition, the Borrower shall furnish the Agents and the Banks an
officer's certificate executed by the Chief Financial Officer of the
Borrower, certifying as to compliance with the requirements of
preceding clauses (i) through (viii), inclusive, and containing the
calculations, if any, required by preceding clauses (v) through (vii),
inclusive. The consummation of each Permitted Acquisition shall be
deemed to be a representation and warranty by the Borrower that all
conditions thereto have been satisfied and that same is permitted in
accordance with the terms of this Agreement, which representation and
warranty shall be deemed to be a representation and warranty for all
purposes hereunder, including, without limitation, Sections 5 and 9;
provided that the consummation of each Permitted Acquisition shall not
be deemed to be a representation and warranty by the Borrower as to
the acceptability of any items to the Agents and/or the Banks or as to
whether the Agents and/or the Banks are satisfied with any of the
matters described in such sections.
61
(b) At the time of each Permitted Acquisition involving the creation
or acquisition of a Subsidiary, not less than 100% of the capital stock of such
Subsidiary shall be directly owned by the Borrower or a Subsidiary Guarantor and
such 100% owned by the Borrower or such Subsidiary Guarantor shall be pledged
for the benefit of the Secured Creditors pursuant to the applicable Pledge
Agreement or pursuant to a similar agreement satisfactory to the Agents.
(c) The Borrower shall cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Acquisition to execute and
deliver, prior to or on the date of the respective Permitted Acquisition, the
Subsidiaries Guaranty (or by an amendment thereto pursuant to which it shall be
a party thereto) or a substantially similar guaranty, in either case with the
documentation to be in form and substance satisfactory to the Agents.
(d) The Borrower shall on the date of a Permitted Acquisition, in the
case of Permitted Acquisitions involving the acquisition of assets by the
Borrower, or, in the case of an acquisition by the respective Subsidiary, shall
cause the respective Subsidiary to, grant to the Collateral Agent, for the
benefit of the Secured Creditors, first priority perfected security interests in
all property of the Borrower or such Subsidiaries acquired in connection with
the Permitted Acquisition and to take, or cause such Subsidiary to take, all
actions requested by the Agents or the Required Banks (including, without
limitation, the obtaining of UCC-11's and the filing of UCC-1's) in connection
with the granting of such security interests. All security interests required to
be granted pursuant to this Section 7.15(d) shall be granted pursuant to such
security documentation (which shall be substantially similar to the analogous
Security Documents already executed and satisfactory in form and substance to
the Agents) and shall (except as otherwise consented to by the Agents and the
Required Banks) constitute valid and enforceable perfected security interests
prior to the rights of all third Persons and subject to no other Liens except
such Liens as are permitted by Section 8.01. The security documents and other
instruments related thereto shall be duly recorded or filed in such manner and
in such places as are required by law to establish, perfect, preserve and
protect the Liens, in favor of the Collateral Agent for the benefit of the
Secured Creditors, required to be granted pursuant to the respective Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall be paid in full by the Borrower. At the time of the execution
and delivery of Additional Security Documents, the Borrower shall cause to be
delivered to the Collateral Agent such opinions of counsel, environmental
appraisals and other related documents as may be reasonably requested by the
Collateral Agent or the Required Banks to assure themselves that this Section
has been complied with. All actions required to be taken by this Section 7.15(d)
with respect to the Additional Collateral shall be completed no later than the
date on which the Permitted Acquisition is effected unless otherwise consented
to by the Agents.
7.16 Registry. The Borrower hereby designates the Administrative Agent
to serve as its agent, solely for purposes of this Section 7.16, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitments of such Bank and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Administrative Agent with respect to ownership of such Commitments and Loans and
62
prior to such recordation all amounts owing to the transferor with respect to
such Commitments and Loans shall remain owing to the transferor. The
registration of an assignment or transfer of all or part of any Commitments and
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
assignment and assumption agreement pursuant to Section 12.04(b). Coincident
with the delivery of such an assignment and assumption agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 7.16.
7.17 Additional Security; Further Assurances. (a) Each Credit Party
shall grant to the Collateral Agent, for the benefit of the Secured Creditors,
at the request of the Agents or the Required Banks, at any time, a security
interest in any Real Property or vehicles owned by any such Credit Party and any
other assets of such Credit Party and not already subject to a Security Document
and shall take all actions requested by the Agents or the Required Banks
(including, without limitation, the obtaining of mortgage policies, title
surveys and real estate appraisals satisfying the requirements of all applicable
laws) in connection with the granting of such security interest.
(b) The security interests required to be granted pursuant to clause
(a) above shall be granted pursuant to mortgages, deeds of trust and security
agreements, in each case satisfactory in form and substance to the Agents and
the Required Banks, which mortgages and security agreements shall create valid
and enforceable perfected security interests prior to the rights of all third
Persons and subject to no other Liens except such Liens as are permitted by
Section 8.01. The mortgages and other instruments related thereto and security
agreements shall be duly recorded or filed in such manner and in such places and
at such times as are required by law to establish, perfect, preserve and protect
the Liens, in favor of the Collateral Agent for the benefit of the Secured
Creditors, required to be granted pursuant to such documents and all taxes, fees
and other charges payable in connection therewith shall be paid in full by the
Borrower. At the time of the execution and delivery of the additional documents,
the Borrower shall cause to be delivered to the Collateral Agent such opinions
of counsel, mortgage policies, title surveys, real estate appraisals,
certificates of title and other related documents as may be reasonably requested
by the Agents or the Required Banks to assure themselves that this Section 7.17
has been complied with.
(c) Each Credit Party agrees that each action required by Section
7.17(a), or (b) shall be completed within sixty (60) days of the date such
action is requested to be taken.
7.18 Senior Seller Notes. The Borrower hereby covenants that, upon
maturity of the Senior Seller Notes described in the definition thereof, the
Collateral Agent shall automatically be granted, for the benefit of the Secured
Creditors, and without the requirement of any action on its part, (i) a first
63
priority perfected security interest in all of the collateral securing such
Senior Secured Notes and (ii) a pledge of the Borrower's capital stock, if any,
in the franchises securing such Senior Seller Notes.
Section 8. Negative Covenants. Each of Holdings and the Borrower
hereby covenants that on and after the Restatement Effective Date and until the
Total Commitment and all Letters of Credit have terminated and the Loans and
Notes and all Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
8.01 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to Holdings or any of its Subsidiaries), or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 8.01
shall not prevent Holdings or any of its Subsidiaries from creating, incurring,
assuming or permitting the existence of the following (liens described below are
herein referred to as "Permitted Liens"):
(i) inchoate Liens with respect to Holdings or any of its
Subsidiaries for taxes not yet due or Liens for taxes being contested
in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with generally accepted
accounting principles;
(ii) unperfected Liens in respect of property or assets of the
Borrower or any of its Subsidiaries imposed by law, which were
incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as carriers', warehousemen's,
materialmen's, mechanics' and landlords' liens and other similar Liens
arising in the ordinary course of business, and (x) which do not in
the aggregate materially detract from the value of the Borrower's or
any of its Subsidiaries' property or assets or materially impair the
use thereof in the operation of the business of the Borrower or its
Subsidiaries or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens of the Borrower or its Subsidiaries in existence on
the Restatement Effective Date which are listed, and the property
subject thereto described, on Schedule XIII, but only to the
respective date, if any, set forth in such Schedule XIII for the
removal and termination of any such Liens;
(iv) Liens created pursuant to the Security Documents;
(v) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances on the property of the Borrower
64
or any of its Subsidiaries arising in the ordinary course of business
and not materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries;
(vi) Liens on property of the Borrower and its Subsidiaries
subject to, and securing only, Capitalized Lease Obligations to the
extent such Capitalized Lease Obligations are permitted by Section
8.04(iii); provided that such Liens only serve to secure the payment
of Indebtedness arising under such Capitalized Lease Obligation and
the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of the Borrower or any of
its Subsidiaries;
(vii) Liens (other than any Lien imposed by ERISA) on property of
the Borrower or any of its Subsidiaries incurred or deposits made in
the ordinary course of business in connection with (x) workers'
compensation, unemployment insurance and other types of social
security or (y) to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of
borrowed money); provided that the aggregate amount of cash and the
fair market value of the property encumbered by Liens described in
this clause (vii)(y) shall not exceed $500,000;
(viii) Liens placed upon equipment or machinery used in the
ordinary course of the business of the Borrower or any of its
Subsidiaries within sixty (60) days following the time of purchase
thereof by the Borrower or any of its Subsidiaries and improvements
and accretions thereto to secure Indebtedness incurred to pay all or a
portion of the purchase price thereof or any Indebtedness incurred to
refinance such Indebtedness, provided that (x) the aggregate principal
amount of all Indebtedness secured by Liens permitted by this clause
(viii) does not exceed at any one time outstanding, when aggregated
with the amount of Indebtedness permitted pursuant to Section
8.04(iii), $2,000,000 and (y) in all events, the Lien encumbering the
equipment or machinery so acquired and improvements and accretions
thereto does not encumber any other asset of the Borrower or any of
its Subsidiaries;
(ix) Liens arising from precautionary UCC-1 financing statement
filings regarding operating leases entered into by the Borrower or any
of its Subsidiaries in the ordinary course of business;
(x) inchoate Liens (where there has been no execution or levy and
no pledge or delivery of collateral) arising from and out of judgments
or decrees in existence at such time not constituting an Event of
Default; and
(xi) Liens for the benefit of the holders of the Acceptable
Subordinated Debt on the Cash Interest Reserves so long as the amount
of such Cash Interest Reserves and the terms and conditions of the
escrow arrangements and security interests with respect thereto are
satisfactory to the Agents.
65
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
enter into any partnerships, joint ventures or sale-leaseback transactions, or
purchase or otherwise acquire in one or a series of related transactions (or
agree to do any of the foregoing at any future time) any part of the property or
assets (other than purchases or other acquisitions by Holdings or any of its
Subsidiaries of inventory, materials and equipment in the ordinary course of
business) of any Person, except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries
shall be permitted to the extent not in violation of Section 8.07;
(ii) each of the Borrower and its Subsidiaries may lease (as
lessee) real or personal property in the ordinary course of business
(so long as such lease does not create Capitalized Lease Obligations);
(iii) investments may be made to the extent permitted by Section
8.05;
(iv) the Transaction shall be permitted as contemplated by the
Documents;
(v) the Borrower may effect Permitted Acquisitions in accordance
with the requirements of Section 7.15 and may enter into agreements to
effect Permitted Acquisitions so long as at no time shall the Borrower
have outstanding an aggregate amount of nonrefundable deposits with
respect thereto in excess of the remainder of $2,000,000 over the
aggregate amount of nonrefundable deposits previously forfeited;
(vi) the Borrower may sell assets so long as the aggregate amount
of Net Sales Proceeds received from such sales does not exceed
$500,000 in the aggregate for all such asset sales in any fiscal year;
and
(vii) the Borrower and its Subsidiaries may sell, lease or rent
subscriber broadcast equipment to subscribers in the ordinary course
of business and consistent with past practice.
To the extent the Required Banks waive the provisions of this Section 8.02 with
respect to the sale of any Collateral (to the extent the Required Banks are
permitted to waive such provisions in accordance with Section 12.12), or any
Collateral is sold as permitted by this Section 8.02, such Collateral shall be
sold free and clear of the Liens created by the Security Documents, and the
Administrative Agent and Collateral Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
8.03 Dividends. Holdings will not, nor will Holdings permit any of its
Subsidiaries to, declare or pay any Dividends with respect to Holdings or any of
its Subsidiaries except that (i) any Subsidiary of Holdings may pay Dividends to
Holdings or any Wholly-Owned Subsidiary of Holdings, (ii) Holdings may pay
Dividends to its stockholders in an aggregate amount not to exceed $500,000 for
the purpose of repurchasing stock held by such stockholders, (iii) proceeds from
the Weary Key-Man Insurance may be applied to purchase all of Holdings Capital
Stock owned by Mr. Weary at the time of his death so long as such proceeds are
66
permitted to be used for such repurchase in accordance with Section 3.02(A)(g)
and are not required to be applied in accordance with Section 3.02(B), (iv)
Holdings may pay Dividends (x) to its employees in the form of options
convertible into Holdings Common Stock, (y) in the form of Seller Preferred
Stock payable in connection with a Permitted Acquisition and (z) so long as
there exists no Default or Event of Default, in the form of cash payable to any
Person holding a minority interest (in the form of stock, partnership interest,
membership interest or otherwise) in any Subsidiary of Holdings on or prior to
the Restatement Effective Date for the purpose of purchasing such minority
interest, and (v) holders of warrants shall be permitted to effect the cashless
exercise thereof.
8.04 Indebtedness. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Indebtedness of the Borrower under any Interest Rate
Protection or Other Hedging Agreement or under any similar type of
agreement to the extent such is entered into to satisfy the
requirements of Section 7.11;
(iii) Indebtedness evidenced by Capitalized Lease Obligations to
the extent permitted pursuant to Section 8.07; provided that the
aggregate amount of Indebtedness evidenced by Capitalized Lease
Obligations under all Capital Leases outstanding under this clause
(iii) at any one time, when aggregated with the amount of Indebtedness
permitted pursuant to Section 8.04(v), shall not exceed $2,000,000;
(iv) Existing Indebtedness of the Borrower listed on Schedule XI
but without giving effect to any refinancings, renewals or increases
in the principal amount thereof;
(v) Indebtedness in amounts, and subject to Liens, permitted
under Section 8.01(viii);
(vi) Indebtedness of the Borrower evidenced by Permitted Seller
Notes;
(vii) Acceptable Subordinated Debt, provided that both before and
immediately after giving effect to the issuance thereof (with all
covenants being tested at the time of the issuance but using EBITDA
financial information relating to the fiscal quarter or four fiscal
quarters most recently ended prior to the date of issuance), there
shall exist no Default or Event of Default; and
(viii) Guarantees of the Acceptable Subordinated Debt by Holdings
and the Subsidiary Guarantors on a subordinated basis, provided that
the terms of such subordination and all other terms and conditions of
such guaranty shall be in form and substance satisfactory to the
Agents, including, without limitation, that such guaranty with respect
to Holdings or a particular Subsidiary of the Borrower shall be
released at any time that Holdings' guaranty under this Agreement or
the Subsidiaries Guaranty is released with respect to any such
Subsidiary, as the case may be.
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8.05 Advances, Investments and Loans. Holdings will not, and will not
permit any of its Subsidiaries to, directly or indirectly lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents,
except that the following shall be permitted:
(i) Cash Interest Reserves;
(ii) the Borrower and its Subsidiaries may acquire and hold
receivables owing to any of them, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance
with customary terms;
(iii) the Borrower and its Subsidiaries may acquire and hold cash
and Cash Equivalents, provided that during any time that Revolving
Loans are outstanding, the aggregate amount of cash and Cash
Equivalents permitted to be held by the Borrower and its Subsidiaries
shall not exceed $5,000,000 for any period of five (5) consecutive
Business Days, provided further, that amounts on deposit in the Letter
of Credit Cash Collateral Account and the Permitted Acquisitions Cash
Collateral Account shall not be included in calculating such limit;
(iv) the Borrower may enter into interest rate protection
agreements to the extent such is entered into to satisfy the
requirements of Section 7.11;
(v) the Borrower and its Subsidiaries may make Capital
Expenditures to the extent permitted by Section 8.07;
(vi) the Borrower may effect Permitted Acquisitions to the extent
permitted by Section 7.15 and may enter into agreements to effect
Permitted Acquisitions so long as at no time shall the Borrower have
outstanding an aggregate amount of non-refundable deposits in excess
of the remainder of $2,000,000 over the aggregate amount of
non-refundable deposits previously forfeited;
(vii) the Borrower and its Subsidiaries may endorse negotiable
instruments for collection in the ordinary course of business;
(viii) other than Permitted Acquisitions, the Borrower may enter
into joint venture transactions relating directly to the DirecTV
business; provided that the total value of all capital or asset
contributions made by the Borrower in connection therewith shall not
exceed an aggregate amount equal to $1,000,000; and
(ix) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business consistent with past
practices to their respective employees for moving, travel and
emergency expenses and other similar expenses, so long as the
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aggregate principal amount thereof at any one time outstanding
(determined without regard to any write-downs or write-offs of such
loans and advances) shall not exceed $500,000.
8.06 Transactions with Affiliates. Holdings will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any Affiliate of any Subsidiary of Holdings, other
than transactions by the Borrower or any of its Subsidiaries with any such
Affiliates in the ordinary course of business unless such transaction or series
of related transactions is in writing and on terms that are no less favorable to
the Borrower or such Subsidiary, as the case may be, than those that would be
available in a comparable transaction in arm's-length dealings with an unrelated
third party; except that (i) the Borrower and its Subsidiaries may effect the
Transaction, (ii) loans and advances made in accordance with Section 8.05(ix)
shall be permitted and (iii) the Borrower and Holdings may pay customary fees to
non-officer directors of the Borrower. In no event may any management or similar
fees be paid or payable by Holdings or any of its Subsidiaries to any Person.
8.07 Capital Expenditures. (a) Holdings will not, and will not permit
any of its Subsidiaries to, make any expenditure for fixed or capital assets
(including, without limitation, expenditures for maintenance and repairs which
should be capitalized in accordance with generally accepted accounting
principles and including Capitalized Lease Obligations but excluding capitalized
Subscriber Acquisition Costs (collectively, "Capital Expenditures"), except that
the Borrower and its Subsidiaries may make Capital Expenditures (other than in
connection with Permitted Acquisitions) so long as the aggregate amount thereof
does not exceed during any fiscal year of the Borrower (i) $2,000,000 or (ii)
$3,000,000 in the event that the Borrower has issued Acceptable Subordinated
Debt.
(b) In addition to the Capital Expenditures permitted above, the
Borrower and its Subsidiaries may make Permitted Acquisitions in accordance with
Section 7.15 in an amount not to exceed the amounts permitted thereby.
(c) In addition to the Capital Expenditures permitted above, the
Borrower and its Subsidiaries may make Capital Expenditures in connection with
the MDU Business so long as the expenditures therefor do not exceed the amounts
permitted pursuant to Section 8.21.
8.08 Net Adjusted Consolidated Indebtedness to Qualified Paying
Subscriber Ratio. Holdings will cause the Borrower not to permit, and the
Borrower will not permit, the ratio of (x) Net Adjusted Consolidated
Indebtedness at the end of any fiscal quarter to (y) the number of Qualified
Paying Subscribers on the last day of such fiscal quarter to exceed the amount
set forth opposite such date set forth below:
69
Fiscal Quarter
Ended Amount
-------------- ------
June 30, 1998 $1,200
September 30, 1998 $1,200
December 31, 1998 $1,200
March 31, 1999 $1,100
June 30, 1999 $1,000
September 30, 1999 $1,000
December 31, 1999 $1,000
March 31, 2000 $900
June 30, 2000 $900
September 30, 2000 $900
December 31, 2000 $900
March 31, 2001 $800
June 30, 2001 $800
September 30, 2001 $800
December 31, 2001 $800
March 31, 2002 and $700
thereafter
8.09 Adjusted Consolidated Senior Indebtedness to Qualified Paying
Subscriber Ratio. Holdings will cause the Borrower not to permit, and the
Borrower will not permit, the ratio of (x) Adjusted Consolidated Senior
Indebtedness at the end of any fiscal quarter to (y) the number of Qualified
Paying Subscribers on the last day of such fiscal quarter to exceed the amount
set forth opposite such date set forth below:
Fiscal Quarter
Ended Amount
-------------- ------
June 30, 1998 $1,000
September 30, 1998 $1,000
December 31, 1998 $1,000
March 31, 1999 $900
June 30, 1999 $800
September 30, 1999 $800
December 31, 1999 $800
March 31, 2000 $700
June 30, 2000 $700
September 30, 2000 $700
December 31, 2000 $700
March 31, 2001 $600
June 30, 2001 $600
September 30, 2001 $600
December 31, 2001 $600
March 31, 2002 and $500
thereafter
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8.10 Net Subscriber Acquisition Cost. Holdings will cause the Borrower
not to permit, and the Borrower will not permit, the Net Subscriber Acquisition
Cost for any fiscal quarter ending after March 31, 1998 to exceed an amount
equal to (a) $300 or (b) $400 in the event that the Borrower has issued
Acceptable Subordinated Debt. Notwithstanding the foregoing, the Borrower shall
not be required to comply with this Section 8.10 for any fiscal quarter ended on
and after June 30, 2000 so long as the ratio of (i) Net Adjusted Consolidated
Indebtedness as at the end of such fiscal quarter to (ii) Annualized
Consolidated EBITDA for such quarter and for the immediately preceding quarter
is less than 7.0:1.0.
8.11 Fixed Charge Coverage Ratio. Holdings will cause the Borrower not
to permit, and the Borrower will not permit, the Fixed Charge Coverage Ratio for
any period of four consecutive fiscal quarters ending on or after June 30, 2000,
in each case, taken as one accounting period, to be equal to or less than 1.05
to 1.0.
8.12 Annualized Adjusted Consolidated Interest Coverage Ratio.
Holdings will cause the Borrower not to permit, and the Borrower will not
permit, the ratio of Annualized Adjusted Consolidated EBITDA to Annualized
Adjusted Consolidated Interest Expense for any fiscal quarter ending on a date
set forth below to be less than the ratio set forth opposite such date:
Fiscal Quarter
Ended Ratio
September 30, 1998 1.00x
December 31, 1998 1.25x
March 31, 1999 1.50x
June 30, 1999 1.50x
September 30, 1999 1.50x
December 31, 1999 1.75x
March 31, 2000 2.00x
8.13 Consolidated Interest Coverage Ratio. Holdings will cause the
Borrower not to permit, and the Borrower will not permit, the ratio of
Consolidated EBITDA to Consolidated Interest Expense for any period of four
consecutive fiscal quarters, in each case taken as one accounting period, ending
on a date set forth below to be less than the ratio set forth opposite such
date:
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Fiscal Quarter
Ended Ratio
June 30, 2000 1.50x
September 30, 2000 1.50x
December 31, 2000 1.50x
March 31, 2001 1.50x
June 30, 2001 1.50x
September 30, 2001 1.50x
December 31, 2001 1.50x
March 31, 2002 1.75x
June 30, 2002 1.75x
September 30, 2002 2.00x
December 31, 2002 2.00x
March 31, 2003 2.25x
June 30, 2003 2.25x
September 30, 2003 2.50x
December 31, 2003 2.50x
March 31, 2004 and thereafter 3.00x
8.14 Net Adjusted Consolidated Indebtedness to Pro Forma Annualized
Adjusted Consolidated EBITDA. Holdings will cause the Borrower not to permit,
and the Borrower will not permit, the ratio of Net Adjusted Consolidated
Indebtedness as at the end of any fiscal quarter ended on a date set forth below
to Pro Forma Annualized Adjusted Consolidated EBITDA for such fiscal quarter to
be greater than (i) in the event that the Borrower has not issued Acceptable
Subordinated Debt, the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
September 30, 1998 10.00x
December 31, 1998 8.50x
March 31, 1999 7.50x
June 30, 1999 7.00x
September 30, 1999 6.50x
December 31, 1999 6.00x
March 31, 2000 5.50x
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or (ii) in the event that the Borrower has issued Acceptable Subordinated Debt,
the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
September 30, 1998 12.00x
December 31, 1998 11.00x
March 31, 1999 10.00x
June 30, 1999 9.00x
September 30, 1999 8.00x
December 31, 1999 8.00x
March 31, 2000 7.00x
8.15 Adjusted Consolidated Senior Indebtedness to Pro Forma
Annualized Adjusted Consolidated EBITDA. Holdings will cause the Borrower not to
permit, and the Borrower will not permit, the ratio of Adjusted Consolidated
Senior Indebtedness as at the end of any fiscal quarter ended on a date set
forth below to Pro Forma Annualized Adjusted Consolidated EBITDA for such fiscal
quarter to be greater than (i) in the event that the Borrower has not issued
Acceptable Subordinated Debt, the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
September 30, 1998 10.00x
December 31, 1998 8.50x
March 31, 1999 7.50x
June 30, 1999 7.00x
September 30, 1999 6.50x
December 31, 1999 6.00x
March 31, 2000 5.50x
or (ii) in the event that the Borrower has issued Acceptable Subordinated Debt,
the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
September 30, 1998 6.50x
December 31, 1998 6.50x
March 31, 1999 5.50x
June 30, 1999 5.25x
September 30, 1999 4.75x
December 31, 1999 4.75x
March 31, 2000 4.75x
8.16 Net Adjusted Consolidated Indebtedness to Pro Forma Annualized
Consolidated EBITDA. Holdings will cause the Borrower not to permit, and the
Borrower will not permit, the ratio of Net Adjusted Consolidated Indebtedness as
at the end of any fiscal quarter ended on a date set forth below to Pro Forma
Annualized Consolidated EBITDA for such fiscal quarter to be greater than (i) in
the event that the Borrower has not issued Acceptable Subordinated Debt, the
ratio set forth opposite such date below:
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Fiscal Quarter
Ended Ratio
June 30, 2000 6.50x
September 30, 2000 6.50x
December 31, 2000 6.50x
March 31, 2001 5.00x
June 30, 2001 5.00x
September 30, 2001 5.00x
December 31, 2001 5.00x
March 31, 2002 3.00x
June 30, 2002 3.00x
September 30, 2002 3.00x
December 31, 2002 3.00x
March 31, 2003 and thereafter 2.00x
or (ii) in the event that the Borrower has issued Acceptable Subordinated Debt,
the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
June 30, 2000 8.00x
September 30, 2000 8.00x
December 31, 2000 8.00x
March 31, 2001 7.00x
June 30, 2001 7.00x
September 30, 2001 7.00x
December 31, 2001 7.00x
March 31, 2002 5.50x
June 30, 2002 5.50x
September 30, 2002 5.50x
December 31, 2002 5.50x
March 31, 2003 4.50x
June 30, 2003 4.50x
September 30, 2003 4.50x
December 31, 2003 4.50x
March 31, 2004 and thereafter 4.00x
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8.17 Adjusted Consolidated Senior Indebtedness to Pro Forma
Annualized Consolidated EBITDA. Holdings will cause the Borrower not to permit,
and the Borrower will not permit, the ratio of Adjusted Consolidated Senior
Indebtedness as at the end of any fiscal quarter ended on a date set forth below
to Pro Forma Annualized Consolidated EBITDA for such fiscal quarter to be
greater than (i) in the event that the Borrower has not issued Acceptable
Subordinated Debt, the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
June 30, 2000 6.50x
September 30, 2000 6.50x
December 31, 2000 6.50x
March 31, 2001 5.00x
June 30, 2001 5.00x
September 30, 2001 5.00x
December 31, 2001 5.00x
March 31, 2002 3.00x
June 30, 2002 3.00x
September 30, 2002 3.00x
December 31, 2002 3.00x
March 31, 2003 and thereafter 2.00x
or (ii) in the event that the Borrower has issued Acceptable Subordinated Debt,
the ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
June 30, 2000 5.00x
September 30, 2000 5.00x
December 31, 2000 5.00x
March 31, 2001 4.00x
June 30, 2001 4.00x
September 30, 2001 4.00x
December 31, 2001 4.00x
March 31, 2002 3.00x
June 30, 2002 3.00x
September 30, 2002 3.00x
December 31, 2002 3.00x
March 31, 2003 and thereafter 2.00x
8.18 Limitation on Voluntary Payments and Modification of Existing
Indebtedness; Limitation on Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc. Holdings will not, and will not
permit any of its Subsidiaries to:
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(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption (including pursuant to any change of
control provision) or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due), any
Existing Indebtedness, any Indebtedness incurred pursuant to Section
8.04(vii) or Permitted Seller Notes (other than the Rocky Mountain Note);
(ii) amend or modify, or permit the amendment or modification of, any
provision of the Existing Indebtedness, the Permitted Seller Notes,
Indebtedness incurred pursuant to Section 8.04(vii) or the Documents or of
any agreement relating to any of the foregoing except for such amendments
or modifications of the Existing Indebtedness or of the Documents entered
into in connection with Permitted Acquisitions which, in the aggregate or
individually, could not reasonably be likely to be adverse to any Bank in
its capacity as such;
(iii) materially amend, modify or change its Certificate of
Incorporation (including, without limitation, by the filing or modification
of any certificate of designation) or By-Laws, in a manner adverse to the
Banks;
(iv) amend, modify or change, terminate, or enter into any new
Shareholders' Agreement or any other agreement with respect to its equity
interests, except for such amendments, modifications or changes which, in
the aggregate or individually could not reasonably be likely to be adverse
to any Bank in its capacity as such;
(v) amend, modify or change, terminate or enter into any new Tax
Sharing Agreement;
(vi) amend, modify or change the NRTC Agreements in any manner that is
deemed to be material by the Agents in their sole discretion; or
(vii) amend, modify or change, or enter into any new Management
Agreement, Employee Benefit Plan, Employment Agreement or Material Contract
(other than the NRTC Agreements and other than Material Contracts which
constitute one of the agreements or documents referred to in preceding
clauses (i) through (vi) of this Section 8.18) except if the aggregate cost
to Holdings and its Subsidiaries as a result of such amendments,
modifications, changes to such plans, agreements and contracts and new
plans, agreements and contracts are not reasonably likely to have a
material adverse effect on the performance, business, property, assets,
nature of assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
8.19 Limitation on Certain Restrictions on Subsidiaries. Holdings will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any Subsidiary of Holdings to (i) pay dividends
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or make any other distributions on its capital stock or any other interest or
participation in its profits owned by Holdings or any Subsidiary of Holdings, or
pay any Indebtedness owed to Holdings or a Subsidiary of Holdings, (ii) make
loans or advances to Holdings or any Subsidiaries of Holdings or (iii) transfer
any of its properties or assets to Holdings or the Borrower, except for such
encumbrances or restrictions existing under or by reason of (x) applicable law,
(y) this Agreement and the other Credit Documents and (z) customary provisions
restricting subletting or assignments of any lease governing a leasehold
interest of the Borrower or a Subsidiary of the Borrower.
8.20 Limitation on Issuance of Capital Stock. (a) Holdings will not
permit any of its Subsidiaries to issue any capital stock or other equity
interests (including, without limitation, partnership interests) (including by
way of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into, capital stock, except (i) for transfers and
replacements of then outstanding shares, (ii) for stock splits, stock dividends
and similar issuances which do not decrease the percentage ownership of any
person in any class of the capital stock of the Borrower or such Subsidiary, and
(iii) upon the formation of any new Subsidiaries as permitted by Section 8.22.
Any stock issued as permitted by this Section 8.20, if owned by Holdings or any
of its Subsidiaries, shall be immediately pledged as Collateral and delivered
pursuant to the applicable Pledge Agreement.
(b) Holdings will not issue any capital stock or any options or
warrants to purchase, or securities convertible into, capital stock, except for
issuances of Holdings Capital Stock, options or warrants exercisable into
Holdings Common Stock where, after giving effect to such issuance, the proceeds
therefrom, if any, are applied in accordance with Section 3.02(A)(d) (or, in the
case of Seller Preferred Stock, issued as consideration to the sellers in a
Permitted Acquisition) and no Default or Event of Default will exist under
Section 9.10 (or, in the case of issuance of options, warrants, or convertible
securities, no Default or Event of Default would exist under Section 9.10 if
such options, warrants or convertible securities were to be exercised or
converted), provided that the terms and conditions of any preferred stock issued
in accordance with the foregoing shall be satisfactory to the Agents.
8.21 Business. Holdings, will not engage in any business and will hold
no assets other than common stock of the Borrower and Holdings, will not permit
any of its Subsidiaries, to engage (directly or indirectly) in any business
other than a Permitted Business and the MDU Business so long as, with respect to
engaging in the MDU Business, (i) the aggregate amount spent by the Borrower and
its Subsidiaries in connection with the MDU Business (whether capital
expenditures, operating expenses, Subscriber Acquisition Costs, call center
costs or any other amounts of any type and collectively referred to as "MDU
Investments") shall not exceed during the period commencing on the Restatement
Effective Date and ending on the date on which there shall be no remaining
Obligations or Commitments under this Agreement, (x) $5,000,000 or (y) if the
Acceptable Subordinated Debt has been issued, $10,000,000, without, in either
case, giving effect to any write-offs or write-downs with respect thereto and
(ii) at the time thereof and after giving effect thereto, there is no Default or
Event of Default.
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8.22 Limitation on Creation of Subsidiaries. Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire any new
Subsidiary, except that the Borrower may acquire or form a Subsidiary in
connection with Permitted Acquisitions to the extent otherwise permitted by this
Agreement, so long as (w) such new Subsidiary is a Wholly-Owned Subsidiary, (x)
such new Subsidiary executes and delivers a Subsidiaries Guaranty, (y) such new
Subsidiary executes and delivers counterparts to the applicable Pledge Agreement
and (z) such new Subsidiary executes and is made party to the applicable
Security Documents.
Section 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. Holdings or the Borrower shall (i) default in the
payment when due of any principal of any Loan or any Note or Unpaid Drawing or
(ii) default, and such default shall continue unremedied for five (5) or more
days, in the payment when due of any interest on any Loan or Note or Unpaid
Drawing, or any Fees or any other amounts owing by it hereunder, thereunder or
under any interest rate protection agreements entered into by Holdings or the
Borrower pursuant to Section 7.11 hereof; or
9.02 Representations, etc. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
9.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(g)(i), 7.08, 7.11, 7.13, 7.15, 7.17, 7.18 or 8 or (ii) default in
the due performance or observance by it of any other term, covenant or agreement
contained in any Credit Document and such default shall continue unremedied for
a period of fifteen (15) days after written notice to the Borrower by the
Administrative Agent or any Bank; or
9.04 Default Under Other Agreements. Holdings or any of its
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Indebtedness referred to in Section 9.01) beyond the period of grace (not to
exceed ten (10) days), if any, provided in the instrument or agreement under
which such Indebtedness was created, (ii) default in the observance or
performance of any agreement or condition relating to any Indebtedness (other
than the Indebtedness referred to in Section 9.01) or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), such
Indebtedness to become due prior to its stated maturity and such default shall
not have been cured or waived, or (iii) any Indebtedness (other than the
Indebtedness referred to in Section 9.01) of Holdings or any of its Subsidiaries
shall be declared to be due and payable, or required to be prepaid other than by
78
a regularly scheduled required prepayment, prior to the stated maturity thereof;
provided that it shall not constitute an Event of Default pursuant to this
Section 9.04 unless the aggregate amount of all Indebtedness referred to in the
preceding clauses (i) through (iii), inclusive, above exceeds $1,000,000 at any
one time; or
9.05 Bankruptcy, etc. Holdings or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
Holdings or any of its Subsidiaries and the petition is not controverted within
ten (10) days, or is not dismissed or discharged, within sixty (60) days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Holdings or any of its Subsidiaries, or Holdings or any of its Subsidiaries
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to Holdings
or any of its Subsidiaries, or there is commenced against Holdings or any of its
Subsidiaries any such proceeding which remains undismissed or undischarged for a
period of sixty (60) days, or Holdings or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or Holdings or any of its Subsidiaries suffers
any appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of sixty (60)
days; or Holdings or any of its Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation 4043 shall be reasonably expected to occur with
respect to such Plan within the following thirty (30) days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan has not
been timely made, Holdings or any Subsidiary of Holdings or any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a Plan
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account of a
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) under Section 4980B of the Code, or Holdings or any Subsidiary of
79
Holdings has incurred or is likely to incur liabilities pursuant to one or more
employee welfare benefit plans (as defined in Section 3(1) of ERISA) that
provide benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or Plans; (b) there shall result from any such
event or events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, has had, or could reasonably be expected to have,
a material adverse effect upon the business, operations, condition (financial or
otherwise) or prospects of Holdings or any Subsidiary of Holdings; or
9.07 Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 6.11), and subject to no other Liens (except as permitted by Section
6.11), or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security Documents and such default shall continue beyond any
grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
9.08 Guaranties. At any time after the execution and delivery thereof,
any Guaranty or any provision thereof shall cease to be in full force or effect
as to any Guarantor, or any Guarantor or any Person acting by or on behalf of
any Guarantor shall deny or disaffirm such Guarantor's obligations under the
respective Guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to the respective Guaranty and such default shall continue
beyond any grace period specifically applicable thereto; or
9.09 Judgments. One or more judgments or decrees shall be entered
against Holdings or any of its Subsidiaries involving in the aggregate for
Holdings and its Subsidiaries a liability (not paid or fully covered by a
reputable insurance company) of $1,000,000 or more and all such judgments or
decrees shall not be satisfied, vacated, discharged or stayed or bonded pending
appeal for any period of thirty (30) consecutive days; or
9.10 Change in Control. There shall be a Change in Control; or
9.11 DBS Agreement; NRTC Agreements; FCC Licenses. The DBS Agreement
or one or more of the NRTC Agreements shall have been terminated, expired or be
the subject of any dispute that, in each case, could reasonably be expected to
have a material adverse effect on Holdings or any of its Subsidiaries' right or
ability to engage in the Permitted Business or could otherwise be reasonably
expected to have a material adverse effect on the performance, business, assets,
80
nature of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole or any
FCC Licenses (whether issued to Hughes, DirecTV, the NRTC or the Borrower or any
of its Subsidiaries) shall have terminated or expired or shall have been revoked
or canceled, which termination, expiry, revocation or cancellation could
reasonably be expected to have a material adverse effect on Holdings' or any of
its Subsidiaries' right or ability to engage in the Permitted Business or could
otherwise be reasonably expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole; then, and in any such event, and at any time
thereafter, if any Event of Default shall then be continuing, the Administrative
Agent, upon the written request of the Required Banks, shall by written notice
to the Borrower, take any or all of the following actions, without prejudice to
the rights of the Agents, any Bank or the holder of any Note to enforce its
claims against any Credit Party (provided that, if an Event of Default specified
in Section 9.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent to the
Borrower as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment
terminated, whereupon all Commitments of each Bank shall forthwith terminate
immediately and any Fees shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) exercise any rights or remedies
under any of the Guaranties; (iv) terminate any Letter of Credit which may be
terminated in accordance with its terms; (v) direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the occurrence of an
Event of Default specified in Section 9.05, it will pay) to the Collateral Agent
at the Payment Office such additional amount of cash, to be held as security by
the Collateral Agent for the benefit of the Banks in a cash collateral account
established and maintained by the Collateral Agent pursuant to a cash collateral
agreement in form and substance satisfactory to the Collateral Agent, as is
equal to the aggregate Stated Amount of all Letters of Credit then outstanding;
and (vi) enforce, as Collateral Agent, all of the Liens and security interests
created pursuant to the Security Documents.
Section 10. Definitions and Accounting Terms.
10.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acceptable Subordinated Debt" shall mean subordinated debt issued by
the Borrower on one date with respect to which the Borrower has received gross
proceeds in an amount not less than $125,000,000 and net proceeds (after
deduction for transaction costs and an interest reserve satisfactory to the
Agents and the Required Banks to cover at least two (2) years' interest on such
81
Acceptable Subordinated Debt) of at least $100,000,000 on or prior to December
31, 1998, on terms and conditions (including, without limitation, interest
rates, redemption provisions, maturity date, subordination provisions, covenants
and events of default) acceptable to, and in form and substance satisfactory to,
the Agents.
"Acceptable Subordinated Debt Documents" shall mean the indenture or
similar document pursuant to which the Acceptable Subordinated Debt is issued
and all related documents, including, without limitation, the preliminary
offering memorandum, the final offering memorandum, the purchase agreement or
underwriting agreement with respect thereto, the registration rights agreement,
the escrow agreement for the Cash Interest Reserve and all related documents,
all of which shall be in form and substance satisfactory to the Agents.
"Additional Collateral" shall mean all property (whether real or
personal) in which security interests are granted (or purported to be granted)
(and continue to be in effect at the time of determination) pursuant to Section
7.15 or 7.17.
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 7.15 or 7.17 with respect to Additional Collateral.
"Adjusted Consolidated EBITDA" shall mean for any period the amount of
Consolidated EBITDA for such period plus Subscriber Acquisition Costs during
such period.
"Adjusted Consolidated Indebtedness" shall mean, as of any date, the
remainder of Consolidated Indebtedness minus the sum of (i) the amount, if any,
by which (x) the aggregate amount of NRTC Letter of Credit Outstandings related
to NRTC Letters of Credit exceeds (y) the aggregate amount owed as at such date
by the Borrower and its Subsidiaries to the NRTC under the NRTC Agreements and
(ii) the aggregate amount of Indebtedness of Holdings or any of its Subsidiaries
supported by any Letter of Credit.
"Adjusted Consolidated Interest Expense" for any period shall mean the
remainder of Consolidated Interest Expense for such period minus the amount of
interest paid on the Acceptable Subordinated Debt from Cash Interest Reserves
during such period.
"Adjusted Consolidated Senior Indebtedness" shall mean, as of any
date, the remainder of (i) Adjusted Consolidated Indebtedness minus (ii) the
remainder of (x) the aggregate outstanding principal amount of the Acceptable
Subordinated Debt over (y) the amount of Cash Interest Reserves.
"Administrative Agent" shall mean Fleet in its capacity as
Administrative Agent for the Banks hereunder, and shall include any successor to
the Administrative Agent appointed pursuant to Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited, to all directors
82
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person; provided, however, that for purposes of Section 8.06,
an Affiliate of Holdings shall include any Person that directly or indirectly
(including through limited partner or general partner interests) owns more than
5% of any class of the capital stock of Holdings and for all purposes of this
Agreement, neither the Agents, the Collateral Agent, any Bank or any of their
respective Affiliates, shall be considered an Affiliate of Holdings or any of
its Subsidiaries. A Person shall be deemed to control another Person if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Affiliate Contracts" shall have the meaning provided in Section
4.05(viii).
"Agents" shall mean each of the Administrative Agent and the
Syndication Agent.
"Agreement" shall mean this Amended and Restated Credit Agreement, as
modified, supplemented, amended, amended and restated, extended or renewed from
time to time.
"Annualized Adjusted Consolidated EBITDA" for any fiscal quarter shall
mean (i) Consolidated EBITDA for such fiscal quarter plus Non-Capitalized
Subscriber Acquisition Costs for such fiscal quarter times four; less (ii)
Consolidated EBITDA for such fiscal quarter plus the Non-Capitalized Subscriber
Acquisition Costs for such fiscal quarter, in each case, related to the MDU
Business times four.
"Annualized Adjusted Consolidated Interest Expense" shall mean for any
fiscal quarter the product of (i) Adjusted Consolidated Interest Expense for
such fiscal quarter and (ii) four.
"Annualized Consolidated EBITDA" shall mean for any fiscal quarter the
product of (i) Consolidated EBITDA for such fiscal quarter and (ii) four.
"Applicable Base Rate Margin" shall mean a percentage per annum equal
to (i) in the case of Revolving Loans, 2.25% and (ii) in the case of Term Loans,
2.50%, in each case less the then applicable Leverage Reduction Discount, if
any.
"Applicable Eurodollar Rate Margin" shall mean a percentage per annum
equal to (i) in the case of Revolving Loans, 3.50% and (ii) in the case of Term
Loans, 3.75%, in each case less the then applicable Leverage Reduction Discount,
if any.
"Applicable Margin" shall mean the Applicable Base Rate Margin or the
Applicable Eurodollar Rate Margin, as the case may be.
"BancBoston" shall mean BancBoston Capital, acting through BancBoston
Ventures, Inc.
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"Bank" shall mean each financial institution listed on Schedule I, as
well as any institution which becomes a "Bank" hereunder pursuant to Section
12.04.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 1A.04(c) or (ii) a Bank
having notified in writing to the Borrower and/or the Administrative Agent that
it does not intend to comply with its obligations under Section 1.01, including
in either case as a result of any takeover of such Bank by any regulatory
authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Banque Paribas" shall mean Banque Paribas, a French banking
organization acting through its New York branch.
"Base Rate" shall mean the higher of (i) 1/2 of 1% in excess of the
Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean any Loan designated or deemed designated
as such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower Common Stock" shall have the meaning provided in Section
6.14.
"Borrower/Subsidiary Pledge Agreement" shall mean the
Borrower/Subsidiary Pledge Agreement, dated as of July 7, 1997, between the
Borrower and the Collateral Agent, as amended, modified or supplemented from
time to time, including, without limitation, as supplemented by the Security
Documents Acknowledgment.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments with respect to such Tranche on a
pro rata basis on a given date (or resulting from a conversion or conversions on
such date) having in the case of Eurodollar Loans the same Interest Period;
provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of the related Borrowing of Eurodollar Loans.
"Borrowing Base" shall mean, as at any date on which the amount
thereof is being determined, an amount equal to the remainder of (I) the product
of (x) the sum of (i) Qualified Paying Subscribers and (ii) to the extent the
Borrowing Base is being determined in connection with a Loan being made to
finance a Permitted Acquisition, Subscribers to be Acquired in connection with
such acquisition and (y) $1,200 until and including December 31, 1998, and
$1,100 thereafter minus (II) $15,000,000 in the case of Borrowings of Loans
incurred to finance Permitted Acquisitions, each as determined from the
Borrowing Base Certificate most recently delivered pursuant to Section 5.06.
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"Borrowing Base Certificate" shall have the meaning provided in
Section 5.06.
"Borrowing Base Deficiency" shall mean, at any time, the amount, if
any, by which (A) the sum of (x) the aggregate principal amount of outstanding
Revolving Loans and Term Loans at such time, (y) the aggregate amount of Letter
of Credit Outstandings at such time, and (z) the aggregate outstanding amount of
all other Net Adjusted Consolidated Indebtedness at such time exceeds (B) the
Borrowing Base at such time.
"Burr Egan" shall mean Burr, Egan, Deleage & Co., acting through Alta
Subordinated Debt Partners III, L.P., Alta Communications VI, L.P. and Alta Comm
S By S, LLC.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City or the State of Massachusetts a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) above and which is also
a day for trading by and between banks in the New York interbank Eurodollar
market.
"Calculation Period" shall have the meaning provided in Section
7.15(a)(vi).
"Capital Expenditures" shall have the meaning provided in Section
8.07.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with generally accepted accounting principles, is accounted for as a
capital lease on the balance sheet of that Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations under Capital Leases, in each case taken at the amount thereof
accounted for as Indebtedness in accordance with generally accepted accounting
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank organized under the laws of the United States,
any State thereof or the District of Columbia having, or which is the principal
banking subsidiary of a bank holding company organized under the laws of the
United States, any State thereof, or the District of Columbia having, capital,
surplus and undivided profits aggregating in excess of $200,000,000 and having a
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long-term unsecured debt rating of at least "A-" or the equivalent thereof from
Standard & Poor's Ratings Services ("S&P") or "A3" or the equivalent thereof
from Moody's Investors Service, Inc. ("Moody's"), with maturities of not more
than six months from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) commercial paper issued by
any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's
and in each case maturing not more than six months after the date of acquisition
by such Person, and (v) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses (i)
through (iv), inclusive, above.
"Cash Interest Reserve" shall mean cash proceeds from Acceptable
Subordinated Debt deposited by the Borrower into an escrow account with an
escrow agent, and pursuant to terms and conditions, acceptable to the Agents, to
be used solely to make interest payments on the Acceptable Subordinated Debt for
the number of interest payments required by the Acceptable Subordinated Debt
Documents.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
"Change in Control" means the occurrence of one or more of the
following: (i) the Investor Group and their Affiliates shall cease to have the
power to elect a majority of the Board of Directors of Holdings, (ii) the
Investor Group and their Affiliates shall cease to have record and beneficial
ownership of at least 66 2/3% of (a) the voting stock of Holdings and (b) 66
2/3% of all capital stock of Holdings (in each case assuming conversion and
exercise of all options, warrants and similar securities held by Persons other
than the Investor Group and their Affiliates) or (iii) Holdings ceases to own
100% of the Borrower Common Stock.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purport to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Additional
Collateral and all cash and Cash Equivalents delivered as collateral pursuant to
this Agreement or any other Credit Document.
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"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Collateral Assignment of Marketing and Distribution Agreements" shall
mean the Collateral Assignment of Marketing and Distribution Agreements, dated
as of July 7, 1997, between the Borrower and the Collateral Agent as
acknowledged and agreed to by the NRTC and Hughes as amended, modified or
supplemented from time to time, including, without limitation, as supplemented
by the Security Documents Acknowledgment.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 4.05(v).
"Commitment" shall mean, with respect to each Bank, such Bank's Term
Loan Commitment and Revolving Loan Commitment, if any.
"Commitment Commission" shall have the meaning provided in Section
2.01(a).
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income before interest income, Consolidated Interest Expense and provision for
taxes and without giving effect to any extraordinary gains or gains or losses
from sales of assets.
"Consolidated EBITDA" for any period shall mean Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation that were deducted in arriving at Consolidated Net Income for such
period.
"Consolidated Indebtedness" shall mean, at any time, all Indebtedness
of Holdings and its Subsidiaries determined on a consolidated basis excluding
all Indebtedness of the type described in clause (vii) of the definition
thereof, except to the extent amounts are owing with respect thereto upon the
termination of the respective agreement constituting such Indebtedness, plus any
original issue discount attributable to such Indebtedness that would be payable
at such time if such Indebtedness were to be or become due and payable.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of Holdings and its Subsidiaries for such period
(calculated without regard to any limitations on the payment thereof) payable
during such period in respect of all Indebtedness of Holdings and its
Subsidiaries, on a consolidated basis, for such period (including, without
duplication, that portion of Capitalized Lease Obligations of Holdings and its
Subsidiaries representing the interest factor for such period).
"Consolidated Net Income" shall mean, for any period, the net income
of Holdings and its Subsidiaries for such period determined on a consolidated
basis (after provision for taxes); provided, however, the net income of any
Person, which is not a Subsidiary of Holdings but whose income is included in
the consolidated financial results of Holdings in accordance with GAAP, shall
have its net income included in the consolidated Net Income of Holdings and its
Subsidiaries only to the extent of the net income which Holdings would report in
accordance with GAAP.
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"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation should not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Bank" shall mean each Existing Bank with a Commitment
under this Agreement (immediately upon giving effect to this Agreement on the
Restatement Effective Date).
"Contributed Equity" shall mean, at any time, the aggregate amount of
capital contributions to, and purchases of Holdings Capital Stock from, Holdings
which as of the date hereof is an amount equal to $87,488,000.
"Convertible Preferred Stock" shall mean Holdings Series A Convertible
Preferred Stock and Holdings Series B Convertible Preferred Stock.
"Credit Documents" shall mean, collectively, this Agreement and, once
executed and delivered pursuant to the terms of this Agreement (or previously
executed in connection with the Existing Credit Agreement), each Note, each
Notice of Borrowing, each Notice of Conversion, each Letter of Credit, each
Letter of Credit Request, the Subsidiaries Guaranty, each Security Document and
any letter agreements or other documents executed or delivered in connection
with any of the above, as the same may be modified, amended, extended, restated
or supplemented from time to time, except as released prior to or in accordance
with the execution of this Agreement.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
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"Credit Party" shall mean Holdings, the Borrower and each of its
Subsidiaries party to a Subsidiaries Guaranty.
"DBS Agreement" shall mean the DBS Agreement between NRTC and Hughes.
"Debt Agreements" shall have the meaning provided in Section 4.05(vi).
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is then in effect.
"DirecTV" shall mean the direct broadcast satellite and programming
service available from DirecTV, a California corporation.
"DirecTV Market" shall mean any exclusive marketing rights from the
NRTC to the Borrower or any of its Subsidiaries to distribute satellite
television services provided by DirecTV.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
(including, without limitation, its preferred stockholders) or authorized or
made any other distribution, payment or delivery of property (other than common
stock of such Person) or cash to its stockholders in their capacity as
stockholders, or redeemed, retired, purchased or otherwise acquired, directly or
indirectly, for a consideration any shares of any class of its capital stock
outstanding on or after the Restatement Effective Date (or any options or
warrants issued by such Person with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such Person outstanding on or after the
Restatement Effective Date (or any options or warrants issued by such Person
with respect to its capital stock). Without limiting the foregoing, "Dividends"
with respect to any Person shall also include all cash payments made or required
to be made by such Person with respect to any stock appreciation rights, equity
incentive plans or any similar plans or setting aside of any funds for the
foregoing purposes.
"Documentation Agent" shall mean GECC in its capacity as Documentation
Agent for the Banks hereunder.
"Documents" shall mean the Credit Documents, the Acceptable
Subordinated Debt Documents, if any, and the material documents entered into in
connection with any Permitted Acquisition.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
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"Drawing" shall have the meaning provided in Section 1A.05(b).
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, other "accredited investor" (as defined in Regulation D
of the Securities Act) other than individuals, or a "qualified institutional
buyer" as defined in Rule 144A of the Securities Act.
"Employee Benefit Plans" shall have the meaning provided in Section
4.05(i).
"Employment Agreements" shall have the meaning provided in Section
4.05)(iv).
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any violation of, or liability under, any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, policy and rule of common law
now or hereafter in effect (including, without limitation, the EPA guidance on
asbestos abatement and removal) and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. ss. 7401 et seq.; the Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss. 3803 et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the Occupational Safety
and Health Act, 29 U.S.C. ss. 651 et seq.; and any applicable state and local or
foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement, and to any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
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be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary
of the Borrower being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by a
Borrower at the time of the incurrence thereof or conversion thereto.
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any period, the remainder of (i)
the sum of (a) Consolidated EBITDA for such period, (b) the amount of all
extraordinary cash gains realized by Holdings and its Subsidiaries during such
period, and (c) the amount of all interest income realized by Holdings and its
Subsidiaries during such period, minus (ii) the sum of (a) the amount of all
cash payments for any taxes made by Holdings and its Subsidiaries during such
period, (b) the amount of cash Capital Expenditures (to the extent not financed
by Indebtedness but not in excess of the amounts permitted pursuant to Section
8.07) made by Holdings and its Subsidiaries on a consolidated basis during such
period, (c) the amount of all extraordinary cash losses realized by Holdings and
its Subsidiaries during such period, (d) the amount of all interest and fee
payments (including any letter of credit fees and facing fees) relating to the
Indebtedness of Holdings and its Subsidiaries paid during such period, (e) the
amount of permanent principal payments of Indebtedness for borrowed money of
Holdings and its Subsidiaries (other than repayments of Loans); provided that
repayments of Loans shall be deducted in determining Excess Cash Flow if such
repayments were applied to Scheduled Repayments or repayments of Revolving Loans
arising as a result of prepayment with internally generated funds (but in the
case of a voluntary prepayment of Revolving Loans, only to the extent
accompanied by a voluntary reduction to the Total Revolving Loan Commitment)
during such period, and (f) the amount of cash expended in respect of Permitted
Acquisitions and the MDU Business during such period (to the extent not financed
with Indebtedness).
"Excess Cash Flow Payment Date" shall mean the date occurring 120 days
after the last day of each fiscal year of Holdings (beginning with its fiscal
year ended in 2000).
"Excess Cash Flow Payment Period" shall mean with respect to the
repayment required on each Excess Cash Flow Payment Date, the immediately
preceding fiscal year of Holdings.
"Excess Cash Flow Recapture Percentage" shall mean a percentage equal
to 75% or 50% in the event that at the time of a mandatory repayment in
accordance with Section 3.02(A)(e) there exists no Default or Event of Default
and the ratio of Consolidated Indebtedness as of the last day of the applicable
Excess Cash Flow Payment Period to Consolidated EBITDA for the four fiscal
quarters ending on the last day of the applicable Excess Cash Flow Payment
Period is equal to or less than 4.0x.
"Existing Bank" shall mean a Bank with a Commitment pursuant to the
Existing Credit Agreement.
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"Existing Credit Agreement" shall have the meaning provided in the
first WHEREAS clause hereof.
"Existing Indebtedness" shall have the meaning provided in Section
6.22.
"Existing Letter of Credit" shall have the meaning provided in Section
1A.01(b).
"Existing Loans" shall mean the Existing Term Loans and Existing
Revolving Loans.
"Existing Revolving Loans" shall mean the Revolving Loans incurred by
the Borrower pursuant to the Existing Credit Agreement.
"Existing Term Loans" shall mean the Term Loans incurred by the
Borrower pursuant to the Existing Credit Agreement.
"Facing Fee" shall have the meaning provided in Section 2.01(b).
"FCC Licenses" shall mean licenses necessary for DirecTV transmission
and distribution, if any.
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 2.01.
"Fixed Charge Coverage Ratio" for any period shall mean the ratio of
(x) Consolidated EBITDA less the amount of all cash Capital Expenditures of the
Borrower or any of its Subsidiaries for such period (exclusive of Permitted
Acquisitions and MDU Investments) to (y) Fixed Charges for such period.
"Fixed Charges" for any period shall mean the sum of (i) Consolidated
Interest Expense for such period, plus (ii) the aggregate principal amount of
all scheduled repayments of Indebtedness (including the principal portion of
rentals under Capitalized Lease Obligations and including principal payments
92
with respect to the Senior Seller Notes), plus (iii) taxes paid by Holdings and
its Subsidiaries for such period (including taxes paid during such period by the
Person or business, division or product line acquired by the Borrower or any of
its Subsidiaries pursuant to a Permitted Acquisition during such period but
excluding any taxes paid by such acquired Person or business, division or
product line prior to the date of its acquisition by the Borrower or any of its
Subsidiaries), and minus (iv) interest paid on Acceptable Subordinated Debt with
the Cash Interest Reserves.
"Fleet" shall mean Fleet National Bank, a national banking
association.
"GECC" shall mean General Electric Capital Corporation, a company
organized under the laws of the State of New York.
"Guaranties" shall mean and include the guaranty issued by Holdings
pursuant to Section 13 and each of the Subsidiary Guaranties executed by the
Subsidiaries of the Borrower.
"Guarantor" shall mean Holdings and each Subsidiary of the Borrower.
"HarbourVest" shall mean Hancock Venture Partners V-Direct Fund L.P.
"Hazardous Materials" means (a) petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain,
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "toxic substances,"
"toxic pollutants," "contaminants," or "pollutants," or words of similar meaning
and regulatory effect, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated under applicable Environmental Laws.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Capital Stock" shall mean Holdings Common Stock, Convertible
Preferred Stock, Redeemable Preferred Stock and Holdings Undesignated Preferred
Stock.
"Holdings Common Stock" shall have the meaning provided in Section
6.14.
"Holdings Pledge Agreement" shall have the meaning provided in Section
4.09.
"Holdings Series A Convertible Preferred Stock" shall have the meaning
provided in Section 6.14.
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"Holdings Series A Redeemable Preferred Stock" shall have the meaning
provided in Section 6.14.
"Holdings Series B Convertible Preferred Stock" shall have the meaning
provided in Section 6.14.
"Holdings Series B Redeemable Preferred Stock" shall have the meaning
provided in Section 6.14.
"Holdings Undesignated Preferred Stock" shall have the meaning
provided in Section 6.14.
"Hughes" shall mean Hughes Communications Galaxy, Inc.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services other than trade payables and accrued expenses arising in the ordinary
course of business, (ii) the maximum amount available to be drawn under all
letters of credit issued for the account of such Person and all unpaid drawings
in respect of such letters of credit, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person, (iv) all Capitalized Lease
Obligations of such Person, (v) all obligations of such Person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person, and (vii) all obligations under any Interest Rate
Protection or Other Hedging Agreement or under any similar type of agreement
entered into with a Person not a Bank.
"Indemnified Matters" shall have the meaning provided in Section
12.01.
"Indemnitees" shall have the meaning provided in Section 12.01.
"Intellectual Property" shall have the meaning provided in Section
6.21.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection or Other Hedging Agreements" shall have the
meaning provided in the Security Documents.
"Investor Group" shall mean Burr Egan, Spectrum, BancBoston, Norwest
and HarbourVest.
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"Issuing Bank" shall mean Fleet and any Bank which at the request of
the Borrower agrees, in such Bank's sole discretion, to become an Issuing Bank
for the purpose of issuing Letters of Credit pursuant to Section 1A.
"L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrower or any of its Subsidiaries incurred in the ordinary course of business
with respect to workers compensation, surety bonds and other similar statutory
obligations, (ii) the NRTC L/C Obligation, (iii) Permitted Seller Notes and (iv)
such other obligations of the Borrower or any of its Subsidiaries as are
reasonably acceptable to the Issuing Bank and otherwise permitted to exist
pursuant to the terms of this Agreement.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
1A.01(a).
"Letter of Credit Cash Collateral Account" shall have the meaning
provided in Section 3.02(A)(a).
"Letter of Credit Fee" shall have the meaning provided in Section
2.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
1A.03(a).
"Leverage Reduction Discount" shall mean as follows:
(i) on the Restatement Effective Date and during any period in which
clause (ii) or (iii) below, as the case may be, does not apply, the
Leverage Reduction Discount shall be 0%;
(ii) in the case of Revolving Loans, from and after the Start Date to
and including the End Date and subject to (iv) below, the following
percentage, to the extent but only to the extent that as of the last day of
the most recent fiscal quarter ending immediately prior to such Start Date
for which a certificate has been delivered to the Banks pursuant to the
next succeeding sentence hereinafter the ratio of Net Adjusted Consolidated
Indebtedness as of the most recent fiscal quarter ending immediately prior
to such Start Date to Annualized Consolidated EBITDA for such fiscal
quarter shall be as set forth below:
Net Adjusted
Consolidated Indebtedness to
Percentage Annualized Consolidated EBITDA
.25% less than 7:1 but greater than or equal to
6:1
.75% less than 6:1 but greater than or equal to
5:1
1.00% less than 5:1 but greater than or equal to
4:1
1.50% less than 4:1;
(iii) in the case of Term Loans, from and after the Start Date to and
including the End Date and subject to (iv) below, .75%, to the extent but
only to the extent that as of the last day of each of the two most recent
fiscal quarters ending immediately prior to such Start Date for which a
certificate has been delivered to the Banks pursuant to the next succeeding
sentence hereinafter the ratio of Net Adjusted Consolidated Indebtedness at
the end of each of such fiscal quarters to Annualized Consolidated EBITDA
for each of such two fiscal quarters (including the quarter with respect to
which the certificate referred to below is being delivered) shall be less
than or equal to 6:1; and
(iv) notwithstanding (ii) and (iii) above, if at any time (a) a
Default or Event of Default shall exist, or (b) the Consolidated EBITDA for
the most recent fiscal quarter shall be less than or equal to zero, the
Leverage Reduction Discount shall be 0%.
The Leverage Reduction Discount shall be determined by the delivery of a
certificate of the Borrower, certified by the Chief Financial Officer of the
Borrower, together with the financial statements required to be delivered
pursuant to Section 7.01(b) or (c), as the case may be, which certificate shall
set forth the Leverage Reduction Discount arising from the calculation of the
ratio of Net Adjusted Consolidated Indebtedness to Annualized Consolidated
EBITDA of the Borrower for the fiscal quarter or quarters, as the case may be,
ending with the fiscal quarter or fiscal year with respect to which such
certificate is being delivered and the basis for such calculations. The Leverage
Reduction Discount so determined shall apply, except as set forth above, to the
period beginning on the date such financial statements are delivered and ending
on the earlier of (the "End Date") (i) the next date of actual delivery of the
financial statements required to be delivered pursuant to Section 7.01(b) or (c)
or (ii) the date on which such financial statements are required to be delivered
(the day of delivery of such financial statements on which such period commences
being herein referred to as the "Start Date").
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
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(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Term Loan and each Revolving Loan.
"Management Agreements" shall have the meaning provided in Section
4.05(iii).
"Managing Agent" shall mean each of Banque Paribas and Fleet in their
capacity as Managing Agents for the Banks hereunder.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Contracts" shall have the meaning provided in Section
4.05(ix).
"Maturity Date" with respect to a Tranche shall mean either the Term
Loan Maturity Date or the Revolving Loan Maturity Date, as the case may be.
"MDU Business" shall mean the business of the Borrower relating to the
installation of DirecTV services in multiple unit dwellings containing from four
(4) units to 200 units to the extent same is conducted outside of areas in which
the Borrower has exclusive NRTC franchises.
"MDU Investments" shall have the meaning provided in Section 8.21.
"Minimum Borrowing Amount" shall mean (i) for Term Loans, $5,000,000,
and (ii) for Revolving Loans, (a) $1,000,000 in the case of Eurodollar Loans and
(b) $500,000 in the case of Base Rate Loans.
"Moody's" shall have the meaning provided in the definition of "Cash
Equivalents."
"Net Adjusted Consolidated Indebtedness" shall mean the remainder of
Adjusted Consolidated Indebtedness minus Cash Interest Reserves.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale, net of reasonable transaction costs (including, without
limitation, attorneys' fees), the amount of such gross cash proceeds required to
be used to permanently repay any Indebtedness which is secured by the respective
assets which were sold, and the estimated marginal increase in income taxes
which will be payable by the Borrower's consolidated group as a result of such
sale.
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"Net Subscriber Acquisition Cost" shall mean for any period the
product of (x) Subscriber Acquisition Costs for such period divided by (y) Net
Subscribers for such period.
"Net Subscribers" shall mean for any period the number of new DirecTV
subscribers of the Borrower or any of its Subsidiaries added (excluding DirecTV
subscribers acquired through Permitted Acquisitions and excluding subscribers to
the MDU Business) during such period less DirecTV subscribers of the Borrower or
any of its Subsidiaries disconnected during such period.
"New Banks" shall mean each of the Persons listed on Schedule I hereto
that is not a Continuing Bank.
"Non-Capitalized Subscriber Acquisition Costs" shall mean for any
period (I) Subscriber Acquisition Costs minus (II) the remainder of (X) the
amount of the Borrower's and its Subsidiaries' cost of equipment and products,
over (Y) the Borrower's and its Subsidiaries' equipment revenue, in each case
for such period.
"Non-Continuing Bank" shall mean each Existing Bank that is not a
Continuing Bank.
"Norwest" shall mean Norwest Equity Partners V.
"Note" shall mean each Term Note and each Revolving Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at Mail Stop MA0FD03D, 1 Federal Street, Boston, MA 02110, Attention:
Christopher A. Swindell or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"NRTC" shall mean the National Rural Telecommunications Cooperative.
"NRTC Agreements" shall mean the agreements set forth on Schedule VI.
"NRTC L/C Obligation" shall mean the Borrower's obligation, from time
to time, to post one or more letters of credit for the benefit of the NRTC in an
amount equal to three times the Borrower's subscriber billings for the one month
during the six full months immediately preceding the date of the issuance of the
NRTC Letter of Credit in which such subscriber billings were greatest.
"NRTC Letter of Credit" shall have the meaning provided in Section
1A.01.
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"Obligations" shall mean all amounts owing to the Agents, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"Original Effective Date" shall mean the Effective Date under, and as
defined in, the Existing Credit Agreement.
"Participant" shall have the meaning provided in Section 1A.04(a).
"Partnership Pledge Agreement" shall have the meaning provided in
Section 4.09.
"Payment Office" shall mean the office of the Administrative Agent
located at Mail Stop MA0FD03D, 1 Federal Street, Boston, MA 02110, Attention:
Deborah Burke or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan Refund" shall mean any cash payments received by the
Borrower or any of its Subsidiaries upon the termination of any Plan as a rebate
or refunding relating to any such Plan unless such payments are used to fund a
replacement plan in accordance with Section 4980 of the Code.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Revolving Loan Commitment of such
Bank at such time and the denominator of which is the Total Revolving Loan
Commitment at such time; provided that if the Percentage of any Bank is to be
determined after the Total Revolving Loan Commitment has been terminated, then
the Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Acquisition" shall mean the acquisition by the Borrower or
any of its Subsidiaries of DirecTV Markets (excluding franchises relating to the
MDU Business), although any such acquisition shall only be a Permitted
Acquisition so long as (A) the consideration therefor consists solely of the
proceeds of the Loans, proceeds of Acceptable Subordinated Debt, issuances of
Holdings Common Stock, Seller Preferred Stock, Permitted Seller Notes or amounts
in the Permitted Acquisition Cash Collateral Account and (B) the Agents shall be
satisfied that the aggregate purchase price for any single acquisition does not
exceed the greater of (x) $2,000 per Subscriber to be Acquired or (y) $150 per
household in the acquired franchise area. Notwithstanding anything to the
contrary contained in the immediately preceding sentence, an acquisition shall
be a Permitted Acquisition only if all requirements of Section 7.15 with respect
to Permitted Acquisitions are met with respect thereto.
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"Permitted Acquisition Cash Collateral Account" shall mean a cash
collateral account to be maintained with the Collateral Agent pursuant to a cash
collateral agreement in form and substance satisfactory to the Collateral Agent
into which, so long as at the time of any sale of assets by the Borrower or any
of its Subsidiaries or sale of equity there shall not exist a Default or Event
of Default, shall be deposited (i) cash proceeds from any such sale of assets
which shall be earmarked by the Borrower for a Permitted Acquisition to be made
in accordance with Section 7.15 and (ii) proceeds of equity issuances permitted
to be deposited in accordance with Section 3.02(B)(b)(ii).
"Permitted Acquisition Cash Collateralized Amounts" shall mean all
amounts held by the Collateral Agent in the Permitted Acquisition Cash
Collateral Account.
"Permitted Acquisition Notice" shall have the meaning provided in
Section 7.15(a)(ii).
"Permitted Business" shall mean the business of operating DirecTV
Franchises excluding the MDU Business.
"Permitted Liens" shall have the meaning provided in Section 8.01.
"Permitted Seller Notes" shall mean (i) Seller Notes supported by a
Letter of Credit and (ii) all other Seller Notes so long as the outstanding
aggregate principal amount of all such other Seller Notes issued after the
Restatement Effective Date does not exceed $5,000,000 at any time.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any pension plan, as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower, a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, a Subsidiary of the Borrower or
an ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreements.
"Pledge Agreements" shall mean the Holdings Pledge Agreement, the
Partnership Pledge Agreement and the Borrower/Subsidiary Pledge Agreement.
"Pledged Securities" shall have the meaning assigned that term in the
applicable Pledge Agreement.
99
"Prime Lending Rate" shall mean the rate which Fleet announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer by Banque Paribas or Fleet, who may make commercial loans or
other loans at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Annualized Adjusted Consolidated EBITDA" for any fiscal
quarter shall mean (i) Consolidated EBITDA for such fiscal quarter calculated on
a Pro Forma Basis plus the non-capitalized Subscriber Acquisition Costs for such
fiscal quarter times four; less (ii) Consolidated EBITDA for such fiscal quarter
calculated on a Pro Forma Basis plus the non-capitalized Subscriber Acquisition
Costs for such fiscal quarter, in each case, related to the MDU Business times
four.
"Pro Forma Annualized Consolidated EBITDA" shall mean for any fiscal
quarter the product of (i) the Consolidated EBITDA for such fiscal quarter
calculated on a Pro Forma Basis and (ii) four.
"Pro Forma Basis" shall mean, (a) with respect to any Permitted
Acquisition, the calculation of the consolidated results of Holdings and its
Subsidiaries otherwise determined in accordance with this Agreement as if the
respective Permitted Acquisition (and all other Permitted Acquisitions
consummated during the respective Calculation Period or thereafter and prior to
the date of determination pursuant to Section 7.15 or other applicable provision
of this Agreement) had been effected on the first day of the respective
calculation period and (b) with respect to the determination of Consolidated
EBITDA calculated on a Pro Forma Basis, the calculation of the consolidated
results of Holdings and its Subsidiaries otherwise determined in accordance with
this Agreement as if all Permitted Acquisitions consummated during the period
for which Consolidated EBITDA calculated on a Pro Forma Basis is being
determined had been effected on the first day of the respective period; provided
that all calculations shall take into account the following assumptions:
(i) (x) with respect to the determinations made for Permitted
Acquisitions in accordance with clause (a) above, if any Indebtedness is
incurred pursuant to the respective Permitted Acquisition (or was incurred
in any other Permitted Acquisition which occurred during the relevant
Calculation Period or thereafter and prior to the date of determination)
then all such Indebtedness shall be deemed to have been outstanding from
the first day of the respective Calculation Period (and the interest
expense associated with such Indebtedness, shall be determined at the
actual rates applicable thereto or which would have been applicable had
such debt been outstanding for the whole such period and shall be included
in determining Consolidated Interest Expense on such Pro Forma Basis) and
all Indebtedness that was outstanding during the Calculation Period or
thereafter and prior to the date of the Permitted Acquisition but not
outstanding on the date of the Permitted Acquisition shall be deemed to
have been repaid in full on the first day of the Calculation Period and (y)
with respect to any determinations made of Consolidated EBITDA calculated
on a Pro Forma Basis in accordance with clause (b) above, the maximum
amount of Indebtedness outstanding during the two-week period
100
immediately preceding the date of determination shall be deemed to be
outstanding from the first day of the relevant period (and the Interest
Expense associated with such Indebtedness shall be determined at the actual
rates applicable thereto or which would have been applicable had such debt
been outstanding for the whole such period and shall be included in
determining Adjusted Consolidated Interest Expense for such period on such
Pro Forma Basis); and
(ii) all calculations of Consolidated EBITDA (and the other components
of the definition of Consolidated EBITDA included therein) shall include
only the Consolidated EBITDA of Holdings and its Subsidiaries (and the
other components of the definition of Consolidated EBITDA included therein)
during the relevant Calculation Period or period, as the case may be, and
shall not include any Consolidated EBITDA (or other components) of the
Person or business, division or product line being acquired pursuant to the
Permitted Acquisition or acquired during the period of determination
(except for the Consolidated EBITDA of such Person or business, division or
product line generated after the date of such acquisition) unless either
(x) such Consolidated EBITDA of the Person or business, division or product
line being acquired has been audited for the entire Calculation Period (or
the period prior to acquisition) by any of the "big six" or (y) in the case
of calculations based on unaudited financial statements, the Agents shall
be reasonably satisfied with the amounts of Consolidated EBITDA (and the
other components) of such Person or business, division or product line
being acquired pursuant to the respective Permitted Acquisition (or
acquired during the period of determination).
"Projections" shall have the meaning provided in Section 4.17(b).
"Qualified Paying Subscribers" shall mean all subscribers (other than
subscribers to the MDU Business) of the Borrower or any of its Subsidiaries to
DirecTV that are located in the Borrower's and its Subsidiaries' DirecTV Market
areas and who have paid all amounts due to the Borrower or any of its
Subsidiaries within sixty (60) days of the initial due date thereof.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December of each calendar year.
"Quoted Rate" shall mean (a) the quotation offered to the
Administrative Agent in the New York interbank Eurodollar market for U.S. dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of the Administrative Agent for which an
interest rate is then being determined with maturities comparable to the
Interest Period applicable to such Eurodollar Loan as determined by the
Administrative Agent's Treasury Funding Management on the date which is two (2)
Business Days prior to the commencement of such Interest Period, divided (and
rounded upward to the next whole multiple of 1/16 of 1%) by (b) a percentage
equal to the remainder of 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
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Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any Subsidiary
of Holdings of any cash insurance proceeds from key-man life insurance or
liability insurance or insurance payable by reason of theft, physical
destruction or damage or any other similar event with respect to any properties
or assets of Holdings or any Subsidiary of Holdings (including, without
limitation, business interruption insurance).
"Redeemable Preferred Stock" shall mean Holdings Series A Redeemable
Preferred Stock and Holdings Series B Redeemable Preferred Stock.
"Register" shall have its meaning provided in Section 7.16.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Related Fund" shall mean, with respect to any Bank that is a fund
that invests in Loans, any other fund that invests in Loans and is managed by
the same investment advisor as such Bank or by an Affiliate of such investment
advisor.
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"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Reorganization Transaction" shall mean the reorganization transaction
of the Borrower pursuant to which all of the holders of capital stock of the
Borrower exchanged (whether by exchange agreement, merger or otherwise) their
interests in the Borrower for equivalent interests in Holdings, all of whose
assets consist of 100% of the capital stock of the Borrower.
"Reorganization Transaction Documents" shall mean (i) the Agreement
and Plan of Merger, dated September 9, 1997, between the Borrower, Holdings and
GSS Mergersub Inc., (ii) various consents of the shareholders and directors of
the Borrower, (iii) the unanimous written consent of the directors of Holdings,
(iv) the written consent of the sole director of GSS Mergersub Inc. and (v) all
other documents entered into or delivered in connection with said agreements or
the Reorganization Transaction.
"Replaced Bank" shall have the meaning provided in Section 1.12.
"Replacement Bank" shall have the meaning provided in Section 1.12.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27, or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Banks the sum of whose outstanding Term
Loans and Revolving Loan Commitments (or after the termination thereof, the sum
of outstanding Revolving Loans and Letter of Credit Outstandings), represent an
amount equal to or greater than 66.6% of the sum of all outstanding Term Loans
and the Total Revolving Loan Commitment (or after the termination thereof, the
sum of the then total outstanding Revolving Loans and Letter of Credit
Outstandings).
"Required Revolving Banks" shall mean Banks, the sum of whose
outstanding Revolving Loan Commitments represent an amount greater than 66.6% of
the Total Revolving Loan Commitment or after termination of such Commitments,
Banks, the sum of whose outstanding Revolving Loans and Letter of Credit
Outstandings represent an amount greater than 66.6% of the total outstanding
Revolving Loans and Letter of Credit Outstandings.
"Required Term Banks" shall mean Banks the sum of whose outstanding
Term Loans represent an amount greater than 66.6% of all outstanding Term Loans
made by all Banks.
"Restatement Effective Date" shall have the meaning provided in
Section 12.10.
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"Returns" shall have the meaning provided in Section 6.09.
"Revolving Facility" shall mean the facility evidenced by the Total
Revolving Loan Commitment.
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name on Schedule I hereto directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced or terminated
from time to time pursuant to Sections 2.02, 2.03, 3.02 and/or 9 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant to
Section 1.12 or 12.04.
"Revolving Loan Conversion" shall have the meaning provided in Section
1.01(b).
"Revolving Loan Maturity Date" shall mean June 30, 2004
"Revolving Loans" shall have the meaning provided in Section 1.01(b).
"Revolving Note" shall have the meaning provided in Section
1.05(a)(ii).
"Rocky Mountain Note" shall mean the Promissory Note dated May 1,
1997, issued by the Borrower to Western Montana DBS, Inc. d/b/a Rocky Mountain
DBS in the amount of $2,350,000.
"S&P" shall have the meaning provided in the definition of "Cash
Equivalents."
"Scheduled Repayment" shall have the meaning provided in Section
3.02(A)(c).
"Scheduled Revolving Loan Commitment Reduction" shall have the meaning
provided in Section 2.03(e).
"Scheduled Revolving Loan Commitment Reduction Date" shall have the
meaning provided in Section 2.03(e).
"SEC" shall have the meaning provided in Section 7.01(h).
"Section 3.04(b)(ii) Certificate" shall have the meaning provided in
Section 3.04(b)(ii).
"Secured Creditors" shall mean (x) the Banks, the Agents, the
Collateral Agent and (y) any Bank which on the date hereof is, or subsequently
becomes, party to any Interest Rate Protection or Other Hedging Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
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"Security Agreement" shall mean the Security Agreement, dated as of
July 7, 1997, between the Borrower and the Collateral Agent, as amended,
modified or supplemented from time to time, including as supplemented by the
Security Documents Acknowledgment.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean the Pledge Agreements, the Security
Agreement, the Collateral Assignment of Marketing and Distribution Agreements,
each Additional Security Document, the Security Documents Acknowledgment and the
agreements relating to the Letter of Credit Cash Collateral Account and the
Permitted Acquisition Cash Collateral Account.
"Security Document Acknowledgment and Consent" shall have the meaning
provided in Section 4.10.
"Seller Notes" shall mean notes issued by Holdings to sellers of
DirecTV Markets in a Permitted Acquisition and issued in accordance with Section
7.15, which notes (other than those notes supported by a Letter of Credit) shall
be fully subordinated to the Obligations and obligations under Interest Rate
Protection or Other Hedging Agreements, and all such notes shall otherwise be in
form and substance satisfactory to the Agents.
"Seller Preferred Stock" shall mean preferred stock issued by Holdings
which preferred stock, so long as this Agreement (as the same may be amended,
modified, extended, renewed, replaced, restated, supplemented, restructured or
refinanced from time to time) remains outstanding, shall not permit mandatory
redemptions, shall not contain sinking fund or similar requirements, shall pay
no cash dividends and shall have no covenants that differ in any material
respect from the covenants contained in the Convertible Preferred Stock, and is
otherwise acceptable in all respects to the Agents.
"Senior Seller Notes" shall mean (i) the Rocky Mountain Note, (ii) the
TEG Note and (iii) the Western Montana Note.
"Shareholder" shall mean any holder of issued and outstanding Borrower
Capital Stock.
"Shareholders' Agreements" shall have the meaning provided in Section
4.05(ii).
"Spectrum" shall mean Spectrum Equity Investors, acting through
Spectrum Equity Investors L.P. and Spectrum Equity Investors II L.P.
"Start Date" shall have the meaning provided in the definition of
"Leverage Reduction Discount."
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"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder at such time (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Subscriber Acquisition Costs" shall mean for any period the remainder
of (I) the sum of (a) the amount of all payroll expenses of Holdings and its
Subsidiaries for such period in respect of employees or agents engaged primarily
in sales and marketing, (b) the amount of all sales commissions paid by the
Borrower and its Subsidiaries during such period to employees or agents for
services and/or equipment sold, (c) the amount of all expenses paid by the
Borrower and its Subsidiaries during such period for marketing and promotional
activities conducted by the Borrower and its Subsidiaries to promote services
and products, and (d) the excess, if any, of (i) the sum of (x) the amount equal
to the Borrower's and its Subsidiaries' cost of equipment and products and (y)
the amount equal to the Borrower's and its Subsidiaries' expenses incurred in
generating installation revenue, minus (ii) the Borrower's and its Subsidiaries'
equipment and installation revenue for such period minus (II) Subscriber
Acquisition Costs relating to the MDU Business.
"Subscribers to be Acquired" shall mean, in connection with any
Permitted Acquisition, the number of subscribers to DirecTV service to be
acquired as such number shall be certified to the Banks in the Permitted
Acquisition Notice.
"Subsidiaries Guaranty" shall have the meaning provided in Section
4.08.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person, (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time and (iii) any
partnership or limited liability company in which such Person is the general
partner or manager.
"Subsidiary Guarantor" shall mean each Subsidiary (other than South
Plains DBS Limited Partnership and DCE Satellite Entertainment, LLC, in each
case so long as (i) neither such partnership nor such limited liability company
is a Wholly-Owned Subsidiary of the Borrower and (ii) the Borrower or one of its
Subsidiaries does not own a sufficient equity interest in such partnership or
sufficient membership interests in such limited liability company to require
such partnership or limited liability company, as the case may be, to act
otherwise) of the Borrower.
"Syndication Agent" shall mean Banque Paribas in its capacity as
Syndication Agent for the Banks hereunder, and shall include any successor to
the Syndication Agent appointed pursuant to Section 11.09.
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"Syndication Termination Date" shall mean the earlier of (x) 120 days
after the Restatement Effective Date or (y) the date on which the Agents and the
Documentation Agent, in their sole discretion, determines (and notifies the
Borrower and the other Banks) that the primary syndication (and the resultant
addition of institutions as Banks pursuant to Section 12.04) has been completed.
"Tax Refund" shall mean any cash payment received by Holdings or any
of its Subsidiaries as a rebate or refund relating to any federal, state or
local income taxes paid by Holdings or any of its Subsidiaries or with respect
to the assets or properties of Holdings or any of its Subsidiaries.
"Tax Sharing Agreements" shall have the meaning provided in Section
4.05(vii).
"Taxes" shall have the meaning provided in Section 3.04(a).
"TEG Note" shall mean the Promissory Note dated June 12, 1997, issued
by the Borrower to 59 TEG DBS Services, Inc. in the amount of $2,500,000.
"Term Facility" shall mean the facility evidenced by Total Term Loan
Commitment.
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Term Loan Commitment," as the same may be terminated pursuant
to Section 2.03.
"Term Loan Conversion" shall have the meaning provided in Section
1.01(a).
"Term Loan Maturity Date" shall mean March 31, 2005.
"Term Note" shall have the meaning provided in Section 1.05(a)(i).
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment, less the sum of (y) the aggregate principal amount of Revolving
Loans then outstanding and (z) the then aggregate amount of Letter of Credit
Outstandings.
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"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being two separate Tranches, i.e., whether
Term Loans or Revolving Loans.
"Transaction" shall mean collectively, (i) the incurrence and
continuation of Loans hereunder on the Restatement Effective Date and (ii) the
payment of the Transaction Fees and Expenses in connection therewith.
"Transaction Fees and Expenses" shall mean all fees and expenses
incurred in connection with and arising out of the transactions contemplated by
the Credit Documents; provided, however, that the aggregate amount of such fees
and expenses shall not exceed $2,000,000 in the aggregate.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the fair market value of the assets
allocable thereto.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
1A.05(a).
"Unutilized Revolving Loan Commitment" for any Bank, at any time,
shall mean the Revolving Loan Commitment of such Bank at such time less the sum
of (i) the aggregate principal amount of Revolving Loans made by such Bank and
then outstanding and (ii) such Bank's Percentage of the Letter of Credit
Outstandings.
"Weary Key-Man Insurance" shall mean the key-man life insurance
maintained with respect to Mr. Rodney Weary.
"Western Montana Note" shall mean the Promissory Note dated December
22, 1997, issued by the Borrower to Western Montana Entertainment Television,
Inc. in the amount of $3,750,000.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock is at the time owned by such Person
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and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
Section 11. The Agents.
11.01 Appointment. The Banks hereby designate Fleet as Administrative
Agent (for purposes of this Section 11, the term "Administrative Agent" shall
include Fleet in its capacity as Collateral Agent pursuant to the Security
Documents), Banque Paribas as Syndication Agent, and GECC, as Documentation
Agent, in each case to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent and the Syndication Agent to take such action on its behalf
under the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent and the Syndication Agent
by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. Each of the Administrative Agent and the Syndication Agent
may perform any of its duties hereunder by or through its officers, directors,
agents or employees.
11.02 Nature of Duties. The Administrative Agent shall have no duties
or responsibilities except those expressly set forth in this Agreement and the
Security Documents. The Syndication Agent and the Documentation Agent shall not
have any duties or responsibilities under this Agreement or any Security
Document or any other document or matter related thereto. None of the
Administrative Agent, the Syndication Agent, the Documentation Agent and any of
their respective officers, directors, agents or employees shall be liable for
any action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Administrative Agent
and the Syndication Agent shall be mechanical and administrative in nature; the
Administrative Agent, the Syndication Agent and the Documentation Agent shall
not have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Bank or the holder of any Note; and nothing in
this Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon the Administrative Agent, the
Syndication Agent or the Documentation Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein.
11.03 Lack of Reliance on the Administrative Agent, the Syndication
Agent and the Documentation Agent. Independently and without reliance upon the
Administrative Agent, the Syndication Agent and the Documentation Agent, each
Bank and the holder of each Note, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation of the
financial condition and affairs of Holdings and its Subsidiaries in connection
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with the making and the continuance of the Loans and the participation in
Letters of Credit and the taking or not taking of any action in connection
herewith and (ii) its own appraisal of the creditworthiness of Holdings and its
Subsidiaries and, except as expressly provided in this Agreement, the
Administrative Agent, the Syndication Agent and the Documentation Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Bank or the holder of any Note with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Loans, the participation in the Letters of Credit or at any time or times
thereafter. Neither the Administrative Agent, the Syndication Agent nor the
Documentation Agent shall be responsible to any Bank or the holder of any Note
for any recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of Holdings or its Subsidiaries
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Credit Document, or the financial condition of Holdings or its
Subsidiaries or the existence or possible existence of any Default or Event of
Default.
11.04 Certain Rights of the Administrative Agent and the Syndication
Agent. If the Administrative Agent or the Syndication Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Administrative Agent or the Syndication Agent, as the case may be,
shall be entitled to refrain from such act or taking such action unless and
until the Administrative Agent shall have received instructions from the
Required Banks; and the Administrative Agent or the Syndication Agent, as the
case may be, shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Bank or the holder of any Note shall have any
right of action whatsoever against the Administrative Agent, the Syndication
Agent or the Documentation Agent as a result of the Administrative Agent acting
or refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
11.05 Reliance. The Administrative Agent and the Syndication Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, statement, certificate, telex, teletype or
facsimile message, cablegram, radiogram, order or other document or telephone
message signed, sent or made by any Person that the Administrative Agent or the
Syndication Agent believed to be the proper Person, and, with respect to all
legal matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by the
Administrative Agent and the Syndication Agent (which may be counsel for the
Credit Parties).
11.06 Indemnification. (a) To the extent the Administrative Agent, the
Syndication Agent or the Documentation Agent is not reimbursed and indemnified
by the Borrower, the Banks will reimburse and indemnify the Administrative
Agent, the Syndication Agent or the Documentation Agent, as the case may be, in
proportion to its respective "percentages" as used in determining the Required
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Banks, for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Administrative Agent, the Syndication Agent or the Documentation
Agent, as the case may be, in performing their respective duties hereunder or
under any other Credit Document, in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Bank shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's, the Syndication Agent's or the Documentation Agent's
gross negligence or willful misconduct.
(b) The Administrative Agent, the Syndication Agent and the
Documentation Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Credit Document (except actions expressly
required to be taken by it hereunder or under the Credit Documents) unless it
shall first be indemnified to its satisfaction by the Banks pro rata against any
and all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
11.07 The Administrative Agent and the Syndication Agent in Their
Individual Capacities. With respect to its obligation to make Loans under this
Agreement, each of the Administrative Agent, the Syndication Agent and the
Documentation Agent shall have the rights and powers specified herein for a
"Bank" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Banks," "Required Banks,"
"holders of Notes" or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent, the Syndication Agent and
the Documentation Agent in their individual capacities. Each of the
Administrative Agent, the Syndication Agent and the Documentation Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with any Credit Party or any Affiliate of any
Credit Party as if they were not performing the duties specified herein, and may
accept fees and other consideration from the Borrower or any other Credit Party
for services in connection with this Agreement and may purchase and hold equity
interests in the Borrower or any other Credit Party without having to account
for the same to the Banks and otherwise without having to account for the same
to the Banks.
11.08 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 Resignation by the Agents. (a) The Administrative Agent may
resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving fifteen (15) Business
Days' prior written notice to the Borrower and the Banks. Such resignation shall
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take effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower (it being
understood and agreed that any Bank is deemed to be acceptable to the Borrower).
(c) If a successor Administrative Agent shall not have been so
appointed within such fifteen (15) Business Day period, the Administrative
Agent, with the consent of the Borrower, shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 30th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Banks shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any other Credit
Document until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
(e) The Syndication Agent, as such, may resign at any time by giving
five (5) Business Days' prior written notice to the Banks. Such resignation
shall take effect at the end of such five (5) Business Day period.
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Section 12. Miscellaneous.
12.01 Payment of Expenses, Indemnities, etc. The Borrower, agrees to:
(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agents (including, without
limitation, the reasonable fees and disbursements of White & Case and local
counsel) in connection with the preparation, execution and delivery of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein and any amendment, waiver or consent relating
hereto or thereto, of the Agents in connection with its syndication efforts with
respect to this Agreement (including, without limitation, the reasonable fees
and disbursements of White & Case) and of the Agents and each of the Banks in
connection with the enforcement of this Agreement and the other Credit Documents
and the documents and instruments referred to herein and therein (including,
without limitation, the reasonable fees and disbursements of counsel for the
Agents and for each of the Banks); (ii) pay and hold each of the Banks harmless
from and against any and all present and future stamp, excise and other similar
taxes with respect to the foregoing matters and save each of the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes; and (iii) defend, protect, indemnify and hold harmless the Agents
and each Bank, and each of their respective officers, directors, employees,
representatives, attorneys and agents (collectively called the "Indemnitees")
from and against any and all liabilities, obligations (including removal or
remedial actions), losses, damages (including foreseeable and unforeseeable
consequential damages and punitive damages), penalties, claims, actions,
judgments, suits, costs, expenses and disbursements (including reasonable
attorneys' and consultants fees and disbursements) of any kind or nature
whatsoever that may at any time be incurred by, imposed on or assessed against
the Indemnitees directly or indirectly based on, or arising or resulting from,
or in any way related to, or by reason of (a) any investigation, litigation or
other proceeding (whether or not any Agent, the Collateral Agent or any Bank is
a party thereto and whether or not any such investigation, litigation or other
proceeding is between or among any Agent, the Collateral Agent, any Bank, the
Borrower or any third person or otherwise) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
any transactions contemplated herein (including, without limitation, the
Transaction) or in any other Credit Document or the exercise of any of their
rights or remedies provided herein or in the other Credit Documents; or, (b) the
actual or alleged generation, presence or Release of Hazardous Materials on or
from, or the transportation of Hazardous Materials to or from, any Real Property
owned or at any time operated by Holdings or any of its Subsidiaries or; (c) any
Environmental Claim relating to Holdings or any of its Subsidiaries or any Real
Property owned or at any time operated by Holdings or any of its Subsidiaries
or; (d) the exercise of the rights of any Agent and of any Bank under any of the
provisions of this Agreement or any other Credit Document or any Letter of
Credit or any Loans hereunder; or (e) the consummation of any transaction
contemplated herein (including, without limitation, the Transaction) or in any
other Credit Document (the "Indemnified Matters") regardless of when such
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Indemnified Matter arises, but excluding any such Indemnified Matter based the
gross negligence or willful misconduct of any Indemnitee.
12.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Credit
Party or to any other Person, any such notice being hereby expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of each Credit Party against and on account of
the Obligations and liabilities of such Credit Party to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Bank pursuant to
Section 12.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
12.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to Holdings or the
Borrower, at its address specified opposite its signature below; if to any Bank,
at its address specified opposite its name below; and if to the Administrative
Agent, at its Notice Office; or, as to any Credit Party or the Administrative
Agent, at such other address as shall be designated by such party in a written
notice to the other parties hereto and, as to each Bank, at such other address
as shall be designated by such Bank in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, facsimilied, or cabled or sent by overnight courier, be
effective three (3) Business Days after deposited in the mails, certified,
return receipt requested, when delivered to the telegraph company, cable company
or one day following delivery to an overnight courier, as the case may be, or
sent by telex or facsimile device, except that notices and communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
12.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, neither Holdings nor any of
its Subsidiaries may assign or transfer any of its rights, obligations or
interest hereunder or under any other Credit Document without the prior written
consent of the Banks; and provided further, that although any Bank may transfer,
assign or grant participations in its rights hereunder, such Bank shall remain a
"Bank" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitments or Loans hereunder except as provided in Section
12.04(b)) and the transferee, assignee or participant, as the case may be, shall
not constitute a "Bank" hereunder; and provided further, that no Bank shall
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transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the Commitments in which such participant
is participating over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment shall not constitute a change in the terms of any
Commitment, and that an increase in any Commitment shall be permitted without
the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
Holdings or any of its Subsidiaries of any of its rights and obligations under
this Agreement or (iii) release all or substantially all of the Collateral under
all of the Security Documents (except as expressly provided in the Credit
Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with
one or more other Banks) may (x) (A) pledge its Loans and/or Notes hereunder to
a Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank or (B) assign all or a portion of its Loans or Commitments
and related outstanding Obligations hereunder to its parent company, principal
office and/or any Affiliate or Related Fund of such Bank or one or more other
Banks or (y) assign all or a portion equal to at least $5,000,000, of such Loans
or Commitments and related outstanding Obligations hereunder to one or more
Eligible Transferees each of which assignees shall become a party to this
Agreement as a Bank by execution of an assignment and assumption agreement
substantially in the form of Exhibit N (appropriately completed); provided that:
(i) at such time Schedule I shall be deemed modified to reflect the Commitments
of such new Bank and of the existing Banks; (ii) new Notes will be issued to
such new Bank and to the assigning Bank upon the request of such new Bank or
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05 to the extent needed to reflect the revised Commitments; (iii) the
consent of the Agents shall be required in connection with any assignment; and
(iv) the Agents shall receive and share equally at the time of each such
assignment, from the assigning Bank, the payment of a non-refundable assignment
fee of $3,000. To the extent of any assignment pursuant to this Section
12.04(b), the assigning Bank shall be relieved of its obligations hereunder with
respect to its assigned Commitments. No transfer or assignment under this
Section 12.04(b) will be effective until recorded by the Administrative Agent on
the Register pursuant to Section 7.16. At the time of each assignment pursuant
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to this Section 12.04(b) to a Person which is not already a Bank hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall provide to the Borrower, and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a Section
3.04(b)(ii) Certificate) required by Section 3.04(b).
12.05 No Waiver; Remedies Cumulative. No failure or delay on the part
of either Agent or any Bank or any holder of any Note in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any other Credit Party and the Agents or any
Bank or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Agents or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Agents or any Bank or the holder of
any Note to any other or further action in any circumstances without notice or
demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of Holdings or the
Borrower in respect of any Obligations hereunder, it shall distribute such
payment to the Banks pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount; provided that if all
or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States consistently
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applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Borrower to the Banks);
provided that, except as otherwise specifically provided herein, all
computations of Excess Cash Flow and all computations determining compliance
with Sections 8.07 through 8.17, inclusive, including the definitions used
therein, shall utilize accounting principles and policies in conformity with
those used to prepare the historical financial statements for the fiscal year
ended December 31, 1997 delivered to the Banks pursuant to Section 6.05.
(b) All computations of interest and Fees hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or Fees are payable.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY
IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CORPORATION SERVICE COMPANY WITH
OFFICES ON THE DATE HEREOF AT 80 STATE STREET, ALBANY, NEW YORK 12207 AS ITS
DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS
BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS,
SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO
BE AVAILABLE TO ACT AS SUCH, EACH OF HOLDINGS AND THE BORROWER AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT ON THE TERMS AND FOR THE PURPOSES
OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT.
EACH OF HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO HOLDINGS OR THE BORROWER AT, AS THE CASE MAY BE, ITS ADDRESS SET
FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30)
DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO
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SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 Effectiveness. (a) This Agreement shall become effective on the
date (the "Restatement Effective Date") on which all of the parties hereto shall
have signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at its Notice Office or, in the
case of the Banks, shall have given to the Administrative Agent telephonic
notice (confirmed in writing), written or facsimile transmission notice
(actually received) in accordance with Section 12.03 at such office that the
same has been signed and mailed to it.
(b) On the Restatement Effective Date, each New Bank and each
Continuing Bank shall have delivered to the Administrative Agent for the account
of the Borrower an amount equal to (i) in the case of each New Bank, the Loans
to be made by such New Bank on the Restatement Effective Date and (ii) in the
case of each Continuing Bank, the amount by which the principal amount of Loans
to be made and/or converted by such Continuing Bank on the Restatement Effective
Date exceeds the amount of the Existing Loans of such Continuing Bank
outstanding on the Restatement Effective Date. Notwithstanding anything to the
contrary contained in this Section 12.10(b), in satisfying the foregoing
condition, unless the Administrative Agent shall have been notified by any Bank
prior to the occurrence of the Restatement Effective Date that such Bank does
not intend to make available to the Administrative Agent such Bank's Loans
118
required to be made by it on such date, then the Administrative Agent may, in
reliance on such assumption, make available to the Borrower the corresponding
amounts in accordance with the provisions of Section 1.04, and the making
available by the Administrative Agent of such amounts shall satisfy the
condition contained in this Section 12.10(b).
12.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks; provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (with Obligations of the respective
types being directly affected thereby): (i) extend the final scheduled maturity
of any Loan or Note beyond the applicable Maturity Date or extend the stated
maturity of any Letter of Credit beyond the Revolving Loan Maturity Date, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates), or reduce the principal amount thereof, or increase
the Commitments of any Bank over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment or a mandatory prepayment shall not constitute
an increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank); or (ii) release all or a substantial portion of the
Collateral (except for the release of Collateral (other than the release of all
or substantially all of the Collateral) in connection with asset dispositions
approved by the Required Banks); or (iii) amend, modify or waive any provision
of this Section 12.12; or (iv) reduce the percentage specified in, or otherwise
modify, the definition of Required Banks (it being understood that, with the
consent of the Required Banks, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Banks on
substantially the same basis as the extensions of Term Loans, Term Loan
Commitments and Revolving Loan Commitments are included on the Restatement
Effective Date); or (v) modify the date of any Scheduled Repayment or of any
Scheduled Revolving Loan Commitment Reduction Date or the amount of any
Scheduled Repayment or Scheduled Revolving Loan Commitment Reduction; or (vi)
consent to the assignment or transfer by Holdings or the Borrower of any of its
rights and obligations under this Agreement; provided further, that no such
change, waiver, discharge or termination shall: (u) increase the Commitments of
any Bank over the amount thereof then in effect (it being understood that a
waiver of any conditions precedent, covenants, Defaults or Events of Default or
of a mandatory reduction in the Total Commitment or of a mandatory prepayment
shall not constitute an increase of the Commitment of any Bank, and that an
increase in the available portion of any Commitment of any Bank shall not
constitute an increase in the Commitment of such Bank) without the consent of
such Bank; or (v) without the consent of any Issuing Bank effected thereby,
amend, modify or waive any provision of Section 1A or alter its rights or
119
obligations with respect to Letters of Credit; or (w) without the consent of
each Agent affected thereby, amend, modify or waive any provision of Section 11
as same applies to such Agent or any other provision relating to the rights or
obligations of such Agent; or (x) without the consent of the Collateral Agent,
amend, modify or waive any provision of Section 11 or any other provision
relating to the rights or obligations of the Collateral Agent; or (y) without
the consent of the Required Term Banks amend, modify or waive (A) Sections
3.01(v) or 3.02(B) to the extent that, in any such case, such amendment,
modification or waiver would alter the application of prepayments or repayments
as between the Term Facility and the Revolving Facility in a manner adverse to
the Term Loans or (B) Section 3.02(A)(c) or the definition of Required Term
Banks; or (z) without the consent of the Required Revolving Banks amend, modify
or waive (A) Section 3.02(B) to the extent that such amendment, modification or
waiver would alter the application of prepayments or repayments as between the
Term Facility and the Revolving Facility in a manner adverse to the Revolving
Loans or Revolving Loan Commitments or (B) Section 2.03(e) or the definition of
Required Revolving Banks.
(b) Notwithstanding anything to the contrary contained above in this
Section 12.12, the Collateral Agent may (i) enter into amendments to the
Subsidiaries Guaranty and the Security Documents for the purpose of adding
additional Subsidiaries of the Borrower (or other Credit Parties) as parties
thereto and (ii) enter into security documents to satisfy the requirements of
Sections 7.15 and 7.17, in each case without the consent of the Required Banks.
12.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 1A.06, 3.04, 11.06 and 12.01 shall survive
the execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
12.15 Post-Closing Obligations. (a) Notwithstanding anything to the
contrary contained in this Agreement or the other Credit Documents, the parties
hereto acknowledge and agree that (i) the UCC financing statements delivered by
the relevant Credit Party on the Restatement Effective Date shall be filed in
the appropriate governmental office and (ii) the UCC-11's or equivalent reports
required to be delivered to the Collateral Agent pursuant to Section 4.10 shall
be so delivered, in each case as early as practicable but in any event not later
than ten (10) Business Days after the Restatement Effective Date, and no
Borrowings (other than the Borrowings made on the Restatement Effective Date)
may be made under this Agreement until the conditions contained in this Section
12.15(a) have been determined by the Agents in their sole discretion to have
been satisfied. The representations and warranties made in each of the Credit
Documents with respect to the due filing or recording of such financing
statements and the perfection and priority of the security interests under the
Security Documents, and any defaults arising therefrom, shall be waived for such
ten (10) Business Day period.
120
(b) The Borrower hereby acknowledges that in connection with certain
assignments hereof, the Agents or any of the Banks may be required to obtain a
rating of the Obligations and Commitments hereunder of the Borrower hereby
consents to such Agents or Banks providing to the respective rating agency such
information regarding the Obligations and creditworthiness of the Borrower as is
customary practice of such rating agency.
(c) Notwithstanding anything herein to the contrary, the Borrower
shall have as ten (10) Business Days after the Restatement Effective Date within
which to (i) obtain and deliver to the Agents the NRTC's and DirecTV's
acknowledgment of and agreement to the Security Documents Acknowledgment with
respect to the Collateral Assignment of Marketing and Distribution Agreements,
(ii) deliver to the Agents a true and correct copy of resolutions which have
been duly adopted by the Board of Directors of each of Holdings and the Borrower
ratifying the execution and delivery of each of the Documents and (iii) to the
extent not delivered on or prior to the Restatement Effective Date, deliver, and
cause each of Holdings and Argos to deliver, to the Agents good standing
certificates, including a statement as to the payment of all fees and taxes by
such Person, from the Secretary of State for the State of such Person's
incorporation and listing all charter documents on file with the Secretary of
State, and from each of the jurisdictions in which such Person is qualified to
do business. No Borrowings (other than the Borrowings made on the Restatement
Effective Date) may be made under this Agreement until all the conditions
contained in this Section 12.15(c) have been determined by the Agents in their
sole discretion to have been satisfied.
12.16 Amendment and Restatement; Termination of Existing Credit
Agreement. On the Restatement Effective Date, without further action by any
party, the Existing Credit Agreement shall be amended and restated to read in
full as set forth herein. Holdings, the Borrower and each of the Banks agrees
that the "Commitments" as defined in the Existing Credit Agreement shall be
terminated in their entirety on and as of the Restatement Effective Date.
12.17 Additions of New Banks; Conversion of Existing Loans of
Continuing Banks; Termination of Commitments of Non-Continuing Banks. (a) On and
as of the occurrence of the Restatement Effective Date in accordance with
Section 12.10, each New Bank shall become a "Bank" under, and for all purposes
of, this Agreement and the other Credit Documents.
(b) The parties hereto acknowledge that each Existing Bank has been
offered the opportunity to participate in this Agreement, after the occurrence
of the Restatement Effective Date, as a Continuing Bank hereunder, but that no
Existing Bank is obligated to be a Continuing Bank.
(c) Notwithstanding anything to the contrary contained in the Existing
Credit Agreement, this Agreement or any other Credit Document, Holdings, the
Borrower and each of the Banks hereby agree that on the Restatement Effective
121
Date, (i) each Bank with a Commitment as set forth on Schedule I (after giving
effect to the Restatement Effective Date) shall make or maintain (including by
way of conversion) that principal amount of Term Loans and/or Revolving Loans to
the Borrower as is required by Section 1.01, provided that if the Existing Loans
of any Continuing Bank outstanding on the Restatement Effective Date
(immediately before giving effect thereto) exceed the aggregate principal amount
of Loans required to be made available by such Bank on such date (after giving
effect to the Restatement Effective Date), then Existing Loans of such
Continuing Bank in an amount equal to such excess shall be repaid on the
Restatement Effective Date to such Bank and (ii) in the case of each
Non-Continuing Bank, all of such Non-Continuing Bank's Existing Loans
outstanding on the Restatement Effective Date shall be repaid in full on such
date, together with interest thereon and all accrued Fees (and any other
amounts) owing to such Non-Continuing Bank, and the Commitment (under, and as
defined in, the Existing Credit Agreement) of such Non-Continuing Bank, if any,
shall be terminated, effective upon the occurrence of the Restatement Effective
Date. Notwithstanding anything to the contrary contained in the Existing Credit
Agreement, this Agreement or any other Credit Document, the parties hereto
hereby consent to the repayments and reductions required above, and agree that
in the event that any Existing Bank shall fail to execute a counterpart of this
Agreement prior to the occurrence of the Restatement Effective Date, such
Existing Bank shall be deemed to be a Non-Continuing Bank and, concurrently with
the occurrence of the Restatement Effective Date, the Commitment (under, and as
defined, in the Existing Credit Agreement) of such Existing Bank, if any, shall
be terminated, all Existing Loans of such Existing Bank outstanding on the
Restatement Effective Date shall be repaid in full, together with interest
thereon and all accrued Fees (and any other amounts) owing to such Existing
Bank, and concurrently with the occurrence of the Restatement Effective Date,
such Existing Bank shall no longer constitute a "Bank" under this Agreement and
the other Credit Documents, provided that all indemnities of the Credit Parties
under the Existing Credit Agreement and the other Credit Documents (as in effect
prior to the Restatement Effective Date) for the benefit of such Existing Bank
shall survive in accordance with the terms thereof.
12.18 Entire Agreement; Successors and Assigns. This Agreement and the
other Credit Documents constitute the entire agreement among Holdings, the
Borrower, the Agents and the Banks, supersedes any prior agreements among them
(other than the commitment letter, dated May 5, 1998, addressed to the Borrower
from Paribas, Fleet and GECC and the related fee letters), and shall bind and
benefit Holdings, the Borrower, the Agent and the Banks and their respective
successors and permitted assigns.
Section 13. Holdings Guaranty.
13.01 The Guaranty. In order to induce the Banks to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans, Holdings
hereby agrees with the Secured Creditors as follows: Holdings hereby
unconditionally and irrevocably guarantees as primary obligor and not merely as
surety the full and prompt payment when due, whether upon maturity, by
acceleration or otherwise, of any and all indebtedness of the Borrower to
122
the Banks under this Agreement and the other Credit Documents and under each
Interest Rate Protection or Other Hedging Agreement. If any or all of the
indebtedness of the Borrower to the Banks becomes due and payable hereunder or
under such other Credit Documents or Interest Rate Protection or Other Hedging
Agreements, Holdings unconditionally promises to pay such indebtedness to the
Secured Creditors, or order, on demand, together with any and all expenses which
may be incurred by the Agent or the Banks in collecting any of the indebtedness.
The word "indebtedness" is used in this Section 13 in its most comprehensive
sense and means any and all advances, debts, obligations and liabilities of the
Borrower arising in connection with this Agreement or any other Credit Documents
or under any Interest Rate Protection or Other Hedging Agreement, in each
case, heretofore, now, or hereafter made, incurred or created, whether
voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such indebtedness is
from time to time reduced, or extinguished and thereafter increased or incurred,
whether the Borrower may be liable individually or jointly with others, whether
or not recovery upon such indebtedness may be or hereafter become barred by any
statute of limitations, and whether or not such indebtedness may be or hereafter
become otherwise unenforceable.
13.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all indebtedness of the Borrower
to the Banks under this Agreement and the other Credit Documents and under each
Interest Rate Protection or Other Hedging Agreement, whether or not due or
payable by the Borrower upon the occurrence of any of the events specified in
Section 9.05, and unconditionally and irrevocably promises to pay such
indebtedness to the Banks, or order, on demand, in lawful money of the United
States.
13.03 Nature of Liability. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by Holdings, any other guarantor
or by any other party, and the liability of Holdings hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Agents or the Banks on the indebtedness which the Agents or such Banks repay the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and Holdings waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
13.04 Guaranty Absolute. No invalidity, irregularity or
unenforceability of all or any part of the indebtedness guaranteed hereby or of
any security therefor shall affect, impair or be a defense to this guaranty, and
this guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or guarantor except
payment in full of the indebtedness guaranteed herein.
123
13.05 Independent Obligation. The obligations of Holdings hereunder
are independent of the obligations of any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against Holdings
whether or not action is brought against any other guarantor or the Borrower and
whether or not any other guarantor or the Borrower be joined in any such action
or actions. Holdings waives, to the fullest extent permitted by law, the benefit
of any statue of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to Holdings.
13.06 Authorization. Holdings authorizes the Agents, the Collateral
Agent and the Banks without notice or demand, and without affecting or impairing
its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of the
indebtedness (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to the
indebtedness as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the indebtedness and
sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged
or mortgaged to secure, or howsoever securing, the indebtedness or any
liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate
the payment of all or any part thereof to the payment of any liability
(whether due or not) of the Borrower to its creditors other than the Banks;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Banks regardless of what
liability or liabilities of Holdings or the Borrower remain unpaid;
124
(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Section 13.
13.07 Reliance. It is not necessary for the Agent or the Banks to
inquire into the capacity or powers of the Borrower or the Subsidiaries of the
Borrower or the officers, directors, partners or agents acting or purporting to
act on its behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
13.08 Subordination. Any indebtedness of the Borrower now or hereafter
held by Holdings is hereby subordinated to the indebtedness of the Borrower to
the Agents and the Banks; and such indebtedness of the Borrower to Holdings, if
the Agents (at the direction of the Required Banks), after an Event of Default
has occurred, so request, shall be collected, enforced and received by Holdings
as trustee for the Banks and be paid over to the Banks on account of the
indebtedness of the Borrower to the Banks, but without affecting or impairing in
any manner the liability of Holdings under the other provisions of this
guaranty. Prior to the transfer by Holdings of any note or negotiable instrument
evidencing any indebtedness of the Borrower to Holdings, Holdings shall mark
such note or negotiable instrument with a legend that the same is subject to
this subordination. Without limiting the generality of the foregoing, Holdings
hereby agrees with the Agents and the Banks that it will not exercise any right
of subrogation which it may at any time otherwise have as a result of this
guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or
otherwise) until all guaranteed Obligations have been paid in full in cash.
13.09 Waiver. (a) Holdings waives any right to require the Agents or
the Banks to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in the
Agents' or the Banks' power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party other than payment in full of the indebtedness, including, without
limitation, any defense based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the indebtedness.
The Agents and the Banks may, in accordance with the Credit Documents, at their
election, foreclose on any security held by the Agents, the Collateral Agent or
the Banks by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the Agents
and the Banks may have against the Borrower or any other party, or any security,
125
without affecting or impairing in any way the liability of Holdings hereunder
except to the extent the indebtedness has been paid. Holdings waives any defense
arising out of any such election by the Agents and the Banks, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of Holdings against the Borrower or any
other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Holdings assumes all responsibility for being and keeping itself
informed of the Borrower's financial condition and assets, and of all other
circumstances bearing upon the risk of non-payment of the indebtedness and the
nature, scope and extent of the risks which Holdings assumes and incurs
hereunder, and agrees that the Agents and the Banks shall have no duty to advise
Holdings of information known to them regarding such circumstances or risks.
13.10 Binding Nature of Guaranty. This guaranty shall be binding upon
Holdings and its successors and assigns and shall inure to the benefit of the
Banks and their successors and assigns.
13.11 Judgments Binding. If claim is ever made upon any Bank or any
subsequent holder of a Note for repayment or recovery of any amount or amounts
received in payment or on account of any of the indebtedness and any of the
aforesaid payees repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property, or (b) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower) then and in such event Holdings agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation hereof or the cancellation of any Note,
or other instrument evidencing any liability of the Borrower, and Holdings shall
be and remain liable to the aforesaid payees hereunder for the amount so repaid
or recovered to the same extent as if such amount had never originally been
received by any such payee.
* * *
126
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
605 W. 47th Street GOLDEN SKY HOLDINGS, INC.
Suite 300
Kansas City, MO 64112
Attention: Robert B. Weaver By:/s/Robert B. Weaver
Telephone: (816) 753-5544 Name: Robert B. Weaver
Facsimile: (816) 753-5595 Title: Chief Financial Officer
127
605 W. 47th Street GOLDEN SKY SYSTEMS, INC.
Suite 300
Kansas City, MO 64112
Attention: Robert B. Weaver By:/s/Robert B. Weaver
Telephone: (816) 753-5544 Name: Robert B. Weaver
Facsimile: (816) 753-5595 Title: Chief Financial Officer
787 Seventh Avenue BANQUE PARIBAS,
New York, New York 10019 Individually and as Syndication
Attention: William B. Schink Agent and Managing Agent
Telephone: (212) 841-2389
Facsimile: (212) 841-2369
By:/s/William B. Schink
Name: William B. Schink
Title: Director
By:/s/Errol R. Antzis
Name: Errol R. Antzis
Title: Managing Director,
Group Head
128
Mail Stop MAOFDO3D FLEET NATIONAL BANK,
1 Federal Street Individually and as
Boston, MA 02110 Administrative Agent and
Attention: Christopher A. Swindell Managing Agent
Telephone: (617) 346-5579
Facsimile: (617) 346-4345 By:/s/Paula Lang
Name: Paula Lang
Title: Senior Vice President
Structured Finance Group GENERAL ELECTRIC CAPITAL
120 Long Ridge Road CORPORATION,
3rd Floor Individually and as
Stamford, CT 06927 Documentation Agent
Attention: Manager of
Portfolio Operations By:/s/Molly Fergusson
Telephone: (203) 357-4309 Name: Molly Fergusson
Facsimile: (203) 357-6868 Title: Manager, Operations
129
SCHEDULE I
COMMITMENTS
TERM LOAN REVOLVING LOAN
BANK COMMITMENT COMMITMENT
Banque Paribas $11,666,666.67 $38,333,333.33
Fleet National Bank $11,666,666.67 $38,333,333.33
General Electric Capital
Corporation $11,666,666,67 $38,333,333.33
-------------- --------------
$35,000,000.00 $115,000,000.00
130
SCHEDULE II
EXISTING LETTERS OF CREDIT
1. Western Montana Entertainment Television Inc.
#ms10890799
$3,750,000
Date 12/22/97
Exp. Date 12/17/98
2. The National Rural Telecommunications Cooperative
#ms1078657
$3,166,718
Date 10/16/97
Exp. Date 9/15/98
131
SCHEDULE III
PROJECTIONS
[CONFIDENTIAL TREATMENT REQUESTED]
132
SCHEDULE IV
TAX MATTERS
None
133
SCHEDULE V
ERISA
I. 401(k) Plan
On file with White & Case LLP
134
SCHEDULE VI
MATERIAL CONTRACTS
NRTC MEMBER AGREEMENTS:
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and TV Tennessee, Inc. (formerly Rural TV Tennessee, Inc.)
dated July 12, 1993, as amended, and assigned to the Borrower pursuant
to an Application for Assignment effective as of November 20, 1996.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and TV Tennessee, Inc. (formerly Rural TV Tennessee, Inc.)
dated July 12, 1993, as amended, assigned to Aurora Cable TV, Inc.,
pursuant to an Application for Assignment effective as of June 30,
1996, and assigned to the Borrower pursuant to an Application for
Assignment effective as of November 15, 1996.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Totah Telephone Company, Inc. dated October 16, 1992,
as amended, assigned to Images DBS Kansas, LLC pursuant to an
Application for Assignment dated as of May 23, 1994, and assigned to
the Borrower pursuant to an Application for Assignment effective as of
February 12, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Totah Telephone Company, Inc. dated October 16, 1992,
as amended, assigned to Images DBS Oklahoma, LLC pursuant to an
Application for Assignment dated as of May 23, 1994, and assigned to
the Borrower pursuant to an Application for Assignment effective as of
February 12, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Direct Satellite TV, Limited dated June 3, 1993, as
amended, and assigned to the Borrower pursuant to an Application for
Assignment effective as of February 19, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Thunderbolt Systems, Inc. dated August 10, 1992, as
amended, and assigned to the Borrower pursuant to an Application for
Partial Assignment effective as of March 11, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Deep East Texas Telecommunications, Inc. dated April
30, 1993, as amended and assigned to the Borrower pursuant to an
Application for Assignment effective as of April 11, 1997.
135
SCHEDULE VI
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PAGE 2
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Hickory Tech Corporation dated July 23, 1993, as
amended and assigned to the Borrower pursuant to an Application for
Assignment effective as of July 15, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Western Montana DBS, Inc., d/b/a Rocky Mountain DBS,
dated May 4, 1993, as amended, and assigned to the Borrower pursuant to
a Partial Application for Assignment effective as of May 1, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Coast Satellite TV dated December 16, 1992, as
amended, assigned to TEG-DBS Services, Inc. pursuant to an Application
for Assignment dated as of November 23, 1994 and assigned to the
Borrower pursuant to an Application for Assignment effective as of
June 12, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and GVEC Rural; TV, Inc. dated August 16, 1992 , as
amended and assigned to the Borrower pursuant to an Application for
Assignment effective as of July 8, 1997.
NRTC/Member Agreements for Marketing and Distribution of DBS Services
between NRTC and Argos Support Services Company, formerly Argos Direct
Broadcast Satellite Services dated July 16, 1994 and October 20, 1994,
as amended and assigned to the Borrower pursuant to an Application for
Assignment effective as of August 8, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Satellite Entertainment, Inc. dated January 29, 1993,
as amended and assigned to the Borrower pursuant to an Application for
Assignment effective as of July 14, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Jackson Electric Cooperation, Inc. dated August 19,
1992, as amended, assigned to the Borrower pursuant to an Application
for Assignment effective as of August 26, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Gardonville Systems, Inc. d/b/a Lakes Area TV dated
September 30, 1992, as amended, assigned to the Borrower pursuant to an
Application for Assignment effective as of September 2, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and DBS, LC dated July 13, 1993, as amended, assigned to
the Borrower pursuant to an Application for Assignment effective as of
November 17, 1997.
136
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PAGE 3
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Dunn County Electric Cooperative, Inc. dated September
30, 1992, as amended, assigned to the DCE Satellite Entertainment, LLC
pursuant to an Application for Assignment effective as of October 14,
1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and CTS Communications Corporation dated December 4, 1992,
as amended, assigned to the Borrower pursuant to an Application for
Assignment effective as of November 7, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Panora Telecommunications, Inc. dated September 24,
1992, as amended, assigned to the Borrower pursuant to an Application
for Assignment effective as of November 20, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Souris River Telecommunications Cooperative dated July
1, 1992, as amended, assigned to the Borrower pursuant to an
Application for Assignment effective as of November 21, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Cal-Ore Digital TV, Inc. dated July 29, 1993, as
amended, assigned to the Borrower pursuant to an Application for
Assignment effective as of December 9, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Cable & Communications Corporation and Mid-Rivers
Telephone Cooperative, Inc. dated June 3, 1992, as amended, assigned to
the Borrower pursuant to an Application for Assignment effective as of
December 24, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Missoula Electric Cooperative, Inc. dated November 17,
1992, as amended, assigned to the Borrower pursuant to an Application
for Assignment effective as of December 22, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Lakeland DBS, Inc. dated October 30, 1992, as amended,
assigned to the Borrower pursuant to an Application for Assignment
effective as of December 29, 1997.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Nemont Communications, Inc. dated July 6, 1992, as
amended, assigned to the Borrower pursuant to an Application for
Assignment effective as of January 14, 1998.
137
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PAGE 4
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Triangle Communication System, Inc. dated June 8,
1992, as amended, assigned to the Borrower pursuant to an Application
for Assignment effective as of January 20, 1998.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Wyoming Mutual Telephone Company dated December 2,
1992, as amended, assigned to the Borrower pursuant to an Application
for Assignment effective as of January 21, 1998.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Northwest Communications Cooperative dated June 29,
1992, as amended, assigned to the Borrower pursuant to an Application
for Assignment effective as of March 6, 1998.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and North Willamette Telecom, Inc. dated November 3, 1992,
as amended, assigned to the Borrower pursuant to an Application for
Assignment effective as of March 10, 1998.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Beulahland Communications, Inc. d/b/a Sangre De Cristo
DBS dated June 8, 1992, as amended, assigned to the Borrower pursuant
to an Application for Assignment effective as of March 19, 1998.
NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and SCS Communications & Security, Inc. dated January 1,
1993, as amended, assigned to the Borrower pursuant to an Application
for Assignment effective as of April 21, 1998.
ACQUISITION AGREEMENTS
Asset Purchase Agreement between the Borrower, and TV Tennessee, Inc.
dated as of August 20, 1996, as amended.
Asset Purchase Agreement between the Borrower and Aurora Cable TV, Inc.
dated as of August 20, 1996, as amended.
Asset Purchase Agreement between the Borrower and Images DBS Kansas,
LLC, Images DBS Oklahoma, LLC and Total Communications dated as of
December 3, 1996, as amended.
138
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 5
Asset Purchase Agreement between the Borrower and Direct Satellite TV,
Limited dated as of January 22, 1997, as amended.
Asset Purchase Agreement between the Borrower and Deep East Texas
Telecommunications, Inc. dated as of February 11, 1997, as amended.
Stock Purchase Agreement between the Borrower and Gary Stone,
individually, for purchase of 175 shares of stock in Argos Support
Services Company.
Asset Purchase Agreement between the Borrower and Thunderbolt Systems,
Inc. dated as of February 28, 1997.
Asset Purchase Agreement between the Borrower and Hickory Tech
Corporation dated as of April 29, 1997, as amended.
Asset Purchase Agreement between the Borrower and Western Montana DBS,
Inc. d/b/a Rocky Mountain DBS dated as of May 1, 1997.
Asset Purchase Agreement between the Borrower and TEG-DBS Services,
Inc. dated as of May 16, 1997.
Asset Purchase Agreement among the Borrower, Satellite Entertainment,
Inc. and Ace Telephone Association dated as of May 30, 1997.
Asset Purchase Agreement between the Borrower and GVEC Rural TV Inc.
dated as of June 3, 1997.
Stock Purchase Agreement among the Borrower, Argos Support Services
Company and the Several Shareholders listed on Schedule I thereto dated
as of July 11, 1997 [supercedes the Letter of Interest between the
Borrower and Argos Support Services Company dated April 3, 1997].
Asset Purchase Agreement between the Borrower and Jackson Electric
Cooperative, Inc. dated as of July 15, 1997 [supercedes Letter
Agreement between the Borrower and Jackson Electric Cooperative, Inc.
dated May 8, 1997].
Asset Purchase Agreement among the Borrower, Gardonville Cooperative
Telephone Association and Gardonville Systems, Inc. d/b/a Lakes Area TV
dated as of August 15, 1997.
139
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 6
Asset Purchase Agreement between the Borrower and DBS, LC dated as of
October 1, 1997.
Operating Agreement among the Borrower, DCE Satellite Entertainment,
LLC and Dunn County Electric dated as of October 14, 1997.
Asset Purchase Agreement between the Borrower and CTS Communications
Corporation dated as of October 31, 1997.
Asset Purchase Agreement between the Borrower and Panora
Telecommunications, Inc. dated as of October 31, 1997.
Asset Purchase Agreement between the Borrower and Souris River
Telecommunications Cooperative dated as of November 21, 1997.
Asset Purchase Agreement between the Borrower and Cal-Ore Digital TV,
Inc. dated as of December 9, 1997.
Agreement to Purchase General Partnership Interest between the Borrower
and South Plains Advanced Communications & Electronics, Inc. dated as
of December 11, 1997.
Asset Purchase Agreement among the Borrower, Cable & Communications
Corporation and Mid-Rivers Telephone Cooperative, Inc. dated as of
December 17, 1997.
Asset Purchase Agreement among the Borrower, Missoula Electric
Cooperative, Inc. and Western Montana Entertainment Television, Inc.
dated as of December 22, 1997.
Agreement to Purchase General Partnership Interest and Limited
Partnership Interest between the Borrower and Poka Lambro
Telecommunications, Inc. dated as of December 23, 1997.
Asset Purchase Agreement between the Borrower and Lakeland D.B.S., Inc
dated as of December 24, 1997.
Asset Purchase Agreement between the Borrower and Nemont
Communications, Inc. dated as of January 13, 1998.
Asset Purchase Agreement between the Borrower and Computel, Inc. d/b/a
Radio Shack dated as of January 13, 1998.
140
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 7
Asset Purchase Agreement between the Borrower and Triangle
Communications, Inc. dated as of January 19, 1998.
Asset Purchase Agreement between the Borrower and Wyoming Mutual
Telephone Company dated as of January 21, 1998.
Asset Purchase Agreement between the Borrower and Northwest
Communications Cooperative dated as of February 27, 1998.
Asset Purchase Agreement between the Borrower and North Willamette
Telecom, Inc. dated as of March 10, 1998.
Asset Purchase Agreement between the Borrower and Beulahland
Communications, Inc. d/b/a Sangra De Cristo DBS dated as of February
17, 1998.
Letter Agreement between the Borrower and Frontier Communications - St
Croix, Inc. dated March 16, 1998.
Letter of Interest between the Borrower and Splitrock Telecom
Cooperative, Inc. dated March 30, 1998 out for signature.
Letter of Interest between the Borrower and Union Telephone Company
dated March 30, 1998 out for signature.
Letter of Interest between the Borrower and Baltic Telecom Cooperative
dated March 30, 1998 out for signature.
Letter of Interest between the Borrower and Breda Telephone Corporation
dated May 1, 1998 out for signature.
Asset Purchase Agreement between the Borrower and SCS Communications &
Security, Inc. dated as of April 16, 1998.
Asset Purchase Agreement between the Borrower and MegaTV, Inc. dated as
of April 16, 1997, as amended.
Letter of Interest between the Borrower and Semo Communications
Corporation, d/b/a Semo Satellite Systems dated April 16, 1998 out for
signature.
Letter Agreement between the Borrower and North Texas Communications
Company dated April 27, 1998.
141
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 8
EARNEST MONEY ESCROW AGREEMENTS:
Earnest Money Escrow Agreement among the Borrower, Images DBS Kansas,
L.C., Images DBS Oklahoma, L.C. and Total Communications, Inc. dated
December 12, 1996.
Earnest Money Escrow Agreement among the Borrower, Direct Satellite TV,
Limited and Commerce Bank, N.A. dated December 20, 1996.
Earnest Money Escrow Agreement among the Borrower, Hickory Tech
Corporation, and Commerce Bank, N.A. dated as of April 29, 1997.
Earnest Money Escrow Agreement among the Borrower, TEG-DBS Services,
Inc. and Commerce Bank, N.A. dated as of May 16, 1997.
Earnest Money Escrow Agreement among the Borrower, GVEC Rural TV, Inc.
and Commerce Bank dated as of June 3, 1997.
Earnest Money Escrow Agreement among the Borrower, Satellite
Entertainment, Inc. and Commerce Bank, N.A. dated as of March 21, 1997.
Earnest Money Escrow Agreement among the Borrower, Jackson Electric
Cooperative, Inc. and Norwest Bank Texas, South Central dated as of
July 15 1997.
Earnest Money Escrow Agreement among the Borrower, Gardonville Systems,
Inc. d/b/a Lakes Area TV and Commerce Bank, N.A. dated as of August 20,
1997.
Earnest Money Escrow Agreement among the Borrower, DBS, LC and Commerce
Bank, N.A. dated as of October 1, 1997.
Earnest Money Escrow Agreement among the Borrower, Cable &
Communications Corporation, Mid-Rivers Telephone Cooperative, Inc. and
Commerce Bank dated as of December 17, 1997.
Earnest Money Escrow Agreement among the Borrower, Beulahland
Communications, Inc. d/b/a Sangre De Cristo DBS and Commerce Bank, N.A.
dated as of February 17, 1998.
Earnest Money Escrow Agreement among the Borrower, MegaTV, Inc. and
Commerce Bank dated as of April 21, 1998.
142
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 9
INDEMNITY ESCROW AGREEMENTS:
Indemnity Escrow Agreement among the Borrower, TV Tennessee, Inc., and
First State Bank, Union City, Tennessee dated January 15, 1997.
Indemnity Escrow Agreement among the Borrower, Aurora Cable TV Company
and Bank of Camden, Camden, TN dated January 15, 1997.
Indemnity Escrow Agreement among the Borrower, Images DBS Kansas, L.C.,
Images DBS Oklahoma, L.C., Total Communications, Inc. and Commerce
Bank, N.A. dated February 10, 1997.
Indemnity Escrow Agreement among the Borrower, Direct Satellite TV,
Limited and Commerce Bank, N.A. dated February 19, 1997.
Indemnity Escrow Agreement between the Company Western Montana DBS,
Inc. d/b/a Rocky Mountain DBS dated May 1, 1997.
Indemnity Escrow Agreement among the Borrower, Thunderbolt Systems,
Inc. d/b/a Direct Broadcast Satellite of Missouri and Commerce Bank,
N.A. dated March 11, 1997.
Indemnity Escrow Agreement among the Borrower, Deep East Texas
Telecommunications, Inc. and Commerce Bank, N.A. dated April 11, 1997.
Indemnity Escrow Agreement among the Borrower, Hickory Tech
Corporation, and Commerce Bank, N.A. dated as of April 29, 1997.
Indemnity Escrow Agreement among the Borrower, Western Montana DBS,
Inc., d/b/a Rocky Mountain DBS, and Commerce Bank, N.A. dated as of
May 1, 1997.
Indemnity Escrow Agreement among the Borrower, TEG DBS Services, Inc.
and Commerce Bank, N.A. dated as of June 12, 1997.
Indemnity Escrow Agreement among the Borrower, GVEC Rural TV, Inc. and
Commerce Bank dated as of July 8, 1997.
Indemnity Escrow Agreement among the Borrower, Satellite Entertainment,
Inc. and Commerce Bank, N.A. dated as of July 14, 1997.
Indemnity Escrow Agreement among the Borrower, Jackson Electric
Cooperative, Inc. and Norwest Bank Texas, South Central dated as of
August 26, 1997.
143
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 10
Indemnity Escrow Agreement among the Borrower, Gardonville Systems,
Inc. d/b/a Lakes Area TV and Commerce Bank, N.A. dated as of September
2, 1997.
Indemnity Escrow Agreement among the Borrower, DBS, LC and Commerce
Bank, N.A. dated as of November 17, 1997.
Indemnity Escrow Agreement among the Borrower, CTS Communications
Corporation and Commerce Bank, N.A. dated as of November 7, 1997.
Indemnity Escrow Agreement among the Borrower, Panora
Telecommunications, Inc. and Commerce Bank, N.A. dated as of November
20, 1997.
Indemnity Escrow Agreement among the Borrower, Souris River
Telecommunications Cooperative and Commerce Bank dated as of November
21, 1997.
Indemnity Escrow Agreement among the Borrower, Cal-Ore Digital TV, Inc.
and Commerce Bank, N.A. dated as of December 9, 1997.
Indemnity Escrow Agreement among the Borrower, Cable & Communications
Corporation, Mid-Rivers Telephone Cooperative, Inc. and Commerce Bank
dated as of December 24, 1997.
Indemnity Escrow Agreement among the Borrower, Western Montana
Entertainment Television, Inc. and Commerce Bank, N.A. dated as of
December 22, 1997.
Indemnity Escrow Agreement among the Borrower, Lakeland DBS, Inc. and
Commerce Bank, N.A. dated as of December 29, 1997.
Indemnity Escrow Agreement among the Borrower, Nemont Communications,
Inc. and Commerce Bank, N.A. dated as of January 14, 1998.
Indemnity Escrow Agreement among the Borrower, Triangle Communication
System, Inc. and Rural Utilities Cooperative Finance Corporation dated
as of January 20, 1998.
Indemnity Escrow Agreement among the Borrower, Wyoming Mutual Telephone
Company and Commerce Bank, N.A dated as of January 21, 1998.
Indemnity Escrow Agreement among the Borrower, Northwest Communications
Cooperative and Commerce Bank, N.A. dated as of March 6, 1998.
144
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 11
Indemnity Escrow Agreement among the Borrower, North Willamette
Telecom, Inc. and Commerce Bank, N.A. dated as of March 10, 1998.
Indemnity Escrow Agreement among the Borrower, Beulahland
Communications, Inc. d/b/a Sangre De Cristo DBS and Commerce Bank, N.A.
dated as of March 19, 1998.
Escrow Agreement among the Borrower, SCS Communications & Security,
Inc. and Commerce Bank dated as of April 21, 1998.
ESCROW AGREEMENT
Escrow Agreement among the Borrower, Gilbert A. Collver and Loomis,
Ewert, Parlsey, Davis & Gotting, P.C. dated as of November 7, 1997.
NON COMPETITION AGREEMENTS:
Non-Competition Agreement between the Borrower and Aurora Cable TV,
Inc, and individually, with Michael White and Donna White, each dated
November 15, 1996.
Non-Competition Agreement between the Borrower and TV Tennessee, Inc.,
and individually, with David Critchlow, each dated November 20, 1996.
Non-Competition Agreement between the Borrower and Images DBS Kansas,
L.C., Images DBS Oklahoma L.C., Total Communications, Inc., Totah
Telephone Company, Incorporated, and individually with Ray League each
dated February 10, 1997.
Non-Competition Agreement between the Borrower and Direct Satellite TV,
Limited and individually, with James T. Dickens, each dated February
19, 1997.
Non-Competition Agreement between the Borrower and Thunderbolt Systems,
Inc., d/b/a Direct Broadcast Satellite of Missouri, and individually,
with Garold Scobee and Billy L. Reeves, each dated March 11, 1997.
Non-Competition Agreement between the Company and Deep East Texas
Telecommunications, Inc., and individually with Paul Spurgeon and Eric
Magee, each dated April 11, 1997.
Non-Competition Agreement between the Borrower and Western Montana DBS,
Inc., d/b/a Rocky Mountain DBS, and individually with Marti Bowland,
each dated as of May 1, 1997.
145
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 12
Non-Competition Agreement between the Company and TEG-DBS Services,
Inc., and individually with Jadwinder Singh and Kulwinder Singh each
dated June 12, 1997.
Non-Competition Agreement between the Borrower and GVEC Rural TV, Inc.,
and individually with Marcus W. Pridgeon, each dated as of July 8,
1997.
Non-Competition Agreement between the Borrower and Andrew W. O'Pry
dated as of July , 1997 in connection with the Purchase of Argos
Support Services Company.
Non-Competition Agreement between the Company and Satellite
Entertainment, Inc. and between the Company and Ace Telephone
Association each dated July 14, 1997.
Non-Competition Agreement between the Borrower and Hickory Tech
Corporation dated July 15, 1997.
Non-Competition Agreement between the Borrower and Jackson Electric
Cooperative, Inc., and individually with Mary Williamson, David Brent
Nance, Mark Cayce, Cindy Bures, Roy Dale Griffin and Everett Williams
each dated as of August 26, 1997.
Non-Competition Agreement between the Borrower and Gardonville Systems,
Inc. d/b/a Lakes Area TV, between the Borrower and Gardonville
Cooperative Telephone Association, and individually with Harold
Brethorst each dated September 2, 1997.
Non-Competition Agreement between the Borrower and DBS, LC dated as of
November 17, 1997.
Non-Competition Agreement between DCE Satellite Entertainment, LLC and
Dunn County Electric Cooperative, Inc., and individually James R.
Hathaway each dated as of October 14, 1997 and with Mark Hayden dated
as of October 15, 1997.
Non-Competition Agreements between the Borrower and Laquita Allen,
William J. Gerski, Eric Tucker and Dennis O'Hara dated as of November
3, 1997.
Non-Competition Agreement between the Borrower and CTS Communications
Corporation, and individually with Gilbert A. Collver each dated as of
November 7, 1997.
Non-Competition Agreement between the Borrower and Panora
Telecommunications, Inc., and individually with Dale J. Grotjohn each
dated as of November 20, 1997.
Non-Competition Agreement between the Borrower and Souris River
Telecommunications Cooperative dated as of November 21, 1997.
146
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 13
Non-Competition Agreement between the Borrower and Cal-Ore Digital TV,
Inc., and individually with Robert H. Edgar, Edward B. Ormsbee, Marc J.
Estep, Marion A. Edgar, Susan M. Graham, Robert W. Edgar, Brian H.
Edgar, Brian H. Edgar and Scott N. Edgar each dated as of December 5,
1997.
Non-Competition Agreement between the Borrower and Cable &
Communications Corporation and Mid-Rivers Telephone Cooperative, Inc.
each dated as of December 24, 1997.
Non-Competition Agreement between the Borrower and Western Montana
Entertainment Television, Inc. and Missoula Electric Cooperative, and
individually with Cindy Conley, Robert P. Walker, Terry W. Hoke, Daniel
B. Bailey, Raymond Cebulski each dated as of December 22, 1997.
Non-Competition Agreement between the Borrower and Poka Lambro
Telecommunications Inc. dated December 23, 1997
Non-Competition Agreement between the Borrower and Lakeland DBS, Inc.,
and individually with Orlean Smith each dated December 29, 1997.
Non-Competition Agreement between the Borrower and Nemont
Communications, Inc. dated as of January 14, 1998.
Non-Competition Agreement between the Borrower and Triangle
Communication System, Inc. dated as of January 20, 1998.
Non-Competition Agreement between the Borrower and Wyoming Mutual
Telephone Company, and individually with Darwin E. Betzer each dated as
of January 21, 1998.
Non-Competition Agreement between the Borrower and Northwest
Communications Cooperative dated as of March 6, 1998.
Non-Competition Agreement between the Borrower and North Willamette
Telecom, Inc. dated as of March 10, 1998.
Non-Competition Agreement between the Borrower and Beulahland
Communications, Inc. d/b/a Sangre De Cristo DBS and J.E.D. Entreprises,
Inc. d/b/a Pine Drive Telephone Company, each dated as of March 19,
1998.
147
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 14
Non-Competition Agreement between the Borrower and SCS Communications &
Security, Inc., and individually with Don Lawrence and Curt Thornton
each dated as of April 21, 1998.
BROKER AGREEMENTS:
Agreement between the Company and Daniels and Associates dated March
14, 1997 for brokerage services on NRTC member affiliate territories.
Verbal agreement with Nations Media Partners for brokerage services for
various deals on a case-by-case basis.
EQUIPMENT LEASES:
Equipment Lease Agreement between Financial Associates, Inc. DBA
Alliance Financial Group dated December 30, 1996.
EMPLOYMENT AGREEMENTS:
Employment Agreements dated February 12, 1997, between the Borrower and
Rodney A. Weary, Robert B. Weaver, Ron D. Foster and Jo Ellen Linn.
The Borrower executed an Employment Agreement with Andrew W. O'Pry
dated as of July 11, 1997 in connection with the purchase of Argos
Support Services Company.
Employment Agreements dated November 3, 1997, between the Borrower and
Laquita Allen, Eric Tucker, William J. Gerski and Dennis O'Hara.
MANAGEMENT AGREEMENTS:
GSS has a verbal consulting agreement with Mr. Robert Liepold, a Vice
President and Director of the Company, to provide expertise at a flat
monthly rate
GSS has a verbal consulting agreement with Mr. Richard Muller, a former
DirecTV Vice President involved in DirecTV's national MDU/SMATV
marketing program, utilizing his services on a month-to-month basis for
a fee of $15,000 per month.
GSS has a verbal arrangement with Q Network to provide E-Mail and
Intemet connectivity database training for employees at an estimated
cost of $15,000.
148
SCHEDULE VI
MATERIAL CONTRACTS
PAGE 15
Consulting Agreement between the Borrower and Gilbert A. Collver dated
as of November 7, 1997.
Management Agreement between the Borrower and South Plains DBS Limited
Partnership dated as of December 24, 1997.
CONVERTIBLE STOCK PURCHASE DOCUMENTS:
All documents related to the consummation of the Transaction between
the Company and its Series A Convertible Participating Preferred Stock
investors on February 12, 1997.
MISCELLANEOUS CONTRACTS:
All documents related to the consummation of the Transaction between
the Borrower and its Series B Convertible Participating Preferred Stock
investors on November 24, 1997.
Collectively, all Equipment Rental Agreements and Equipment Financing
Agreements between Customers and the Company, both new and assumed in
connection with individual acquisitions.
Collectively, the Borrower has executed approximately 350 Dealer
Application and Agreements.
Distributorship Agreement between Borrower and Hughes Network Systems
for DIRECPC Equipment and Services dated April 30, 1998.
DIRECTV MOU System Operator Agreement between DIRECTV, Inc. and
Borrower dated July 28, 1997, as amended by the DIRECTV MOU Master
System Operator Agreement dated December 30, 1997.
DERECTV SMATV Affiliate Agreement between DIRECTV, Inc. and Borrower
dated July 29, 1997.
Agreement for Purchase of Direct Broadcast Satellite Services Area
between Argos Direct Broadcast Satellite Services and DBS TelaVenture,
Inc. dated as of July 16, 1994.
Agreement for Purchase of Direct Broadcast Satellite Services Area
between Argos Direct Broadcast Satellite Services and Meridian, Inc.
dated as of October 20, 1994.
SEE ALSO SCHEDULE XII (INSURANCE POLICIES); VII (REAL PROPERTY); VIII
(CAPITALIZATION) TO THE CREDIT AGREEMENT.
149
SCHEDULE VII
REAL PROPERTY (1)
PROPERTY LESSOR EXPIRES MONTHLY BASE
CORPORATE OFFICE 605 W. 47th St. Investment Co. 10/31/1999 $5,642.75
605 W. 47th Street c/o Block & Co., Inc.
Kansas City, MO
Dept. 0578, P.O. Box 419263
K.C. MO 64193-0578
(Sublease) Month-to-month $2,466.25
Ellerbe Becket
605 West 47th St.
COLORADO OFFICE
Avon, CO Southwestern Eagle, L.L.C. 5/30/2002 $3,145.00
Eagle/Vail Business 1675 Larimer Street, Ste. 720
(Center) Park Denver, CO 80202
40814 U.S Highway 6
Avon, CO 81620
KANSAS OFFICES
Chanute, KS Chanute Realty, LLC 5/30/2002 $1,261.00
Wal-Mart Plaza Sandoe Building
2506 S. Santa Fe 2220 N. Meridian St.
Chanute, KS 66720 Indianapolis, IN 46208-5728
Coffeyville, KS Dale Apartments 3/01/1997 $ 300.00
206 W. 8th Street Joyce Miller, Mgr. Month-to-month
Coffeyville, KS 67337 206 W. 8th Street, Str. 707
Coffeyville, KS 67337
Coffeyville, KS Byron Bales 4/30/1999 $1,666.66
903-907 W. 11th Street 901 West 11th Street
Coffeyville, KS 67337 Coffeyville, KS 67337
(1.) All real property is leased.
150
PROPERTY LESSOR EXPIRES MONTHLY BASE
Independence, KS United Cities Gas Company 5/31/1999 $ 650.00
112 W. Myrtle Street 122 W. Myrtle Street
Independence, KS 67301 P.O. Box 347
Independence, KS 67301
Pittsburgh, KS Donald W. Hight 5/31/1998 $ 480.00
522 N. Broadway 771 S. 180th St.
Pittsburgh, KS 66782 Pittsburgh, KS 66762
MISSOURI OFFICES
Moberly, MO Furnell 8/31/1998 $3,800.00
1011 C North Morley 201 West 3rd Street
Moberly, MO 65270 Sedalia, MO 65301
Hannibal, MO Steven E. Anderson 10/31/2000 $1,000.00
102 Steamboat Bend Glimcher Development Corp.
Shopping Ctr. 20 South Third Street
Hannibal, MO Columbus, OH 43215
Hannibal, MO Glimcher Development LP. 10/31/2000 $1,000.00
102 Steamboat Bend Steamboat Bend
Shopping Ctr. #12 Lock Box 1342
Hannibal, MO Columbus, OH 43215
Corporate Apartment Rent The Locarno Month-to-month $ 995.00
Apt. 702 235 Ward Parkway
Kansas City, MO 64112
Richmond, MO Swafford's Ford Sales, Inc. 3/31/1999 $ 800.00
105 East Main 223 S. Thorton St.
Suite 1 Richmond, MO 64085-1755
Richmond, MO 64085
NEVADA OFFICES
Las Vegas, NV Galit Rozen 6/31/2000 $2,574,00
Rancho Santa Fe Center 4417 Zev Court
5081 N. Rainbow, Ste. 106 Las Vegas, NV 89121
Las Vegas, NV 89103
OKLAHOMA OFFICES
151
PROPERTY LESSOR EXPIRES MONTHLY BASE
Bartlesville, OK Eastland, Inc. 9/31/2000 $1,835.00
554 S.E. Washington c/o Steve Wells
546 S.E. Washington 12346 East Skelly Drive
Bartlesville, OK Tulsa, OK 74128
McAlester, OK Carole Cramer & G. Murphy 12/31/2000 $2,142.00
142 E Carl Albert Parkway Alstate Properties
Tandy Town Shopping Ctr 18033 Burbank Blvd.
McAlester, OK Encino, CA 91316
Claremore, OK Jeannie Orender Month to Month $ 500.00
514 North Lynn Riggs 512 North Lynn Riggs
U.S. Hwy 66 Claremore, OK 74017
Claremore, OK 74017
TENNESSEE OFFICES
Camden, TN Mark and Lori Ward 12/31/1998 $1,400.00
148 Highway 641 N 125 Lockhart St.
Camden, TN 38320 Camden, TN 38320
Martin, TN Bobby Bequette Month-to-month $ 550.00
643 N. Lindell St. 643 N. Lindell Street
Ste. A Martin, TN 38237
Martin, TN 38237
Martin, TN-Warehouse Gene Gifford Month-to-month $ 150.00
Jackson St. 162 Brooks Drive
Martin, TN 38237 Martin, TN 38237
Paris, TN Jimmy Caldwell Month-to-month $ 550.00
110 Fentress 220 Westwood Street
Paris, TN 38242 Paris, TN 38242
TEXAS OFFICES
Center, TX Real Estate Services 4/30/1998 $ 600.00
202 Tenaha Street 2711 North Haskell Ave.
Center, TX Dallas, TX 75204
Dallas, TX Wetwood Management Ltd. 3/8/1998 $ 730.00
11453 Newkirt Street 11518 Reeder Rd. Suite 105
Dallas, TX 75229 Dallas, TX 75229
Sequin Sagebitel Family Partnership 6/30/2000 $1,750.00
256 West Court 217 S. River
Sequin, TX 78155 Sequin, TX 78155
152
PROPERTY LESSOR EXPIRES MONTHLY BASE
Victoria, TX James Wayne Properties 8/31/2000 $2,500.00
6703 N. Navarro 2608 N. Laurent
Victoria, TX 77904 Victoria, TX 77901
Flower Mound, TX Harmony/FM 24499 Partners 4/30/2002 $2,916.67
Towne View Plaza 1235 Douglas Avenue (subject to
1900 Long Prairie Road Suite 805, LB-69 change)
Suite 148 Dallas, TX 75225
Flower Mound, TX 75028
Lubbock, TX North Kingsgate 7/31/2002 $2,346.67
4210 82nd Street P.O. Box 65207
Lubbock, TX 79423 Lubbock, TX 79464
Livingstone, TX Jennings Cove Development Month-to-month $600.00
2114 Hwy 190 West P.O. Box 987
Livingstone, TX 77351 Livingstone, TX 77351
Office Warehouse Commerce Business Park 3/31/2003 $2,732.00
Commerce Business Park 585 Commerce Street
Southlake, TX 76092
MINNESOTA OFFICES
Mankato, MN Madison East Properties LLC 7/31/1998 $ 1,402.96
1400 Madison Ave. c/o Fisher & Lidstrom
Suite 624 Commercial
Mankato, MN 56001 209 E. Second, Suite 400
Mankato, MN 65001
New Ulm, MN Nierengarten & Hippert, Ltd 10/14/2000 $ 800.00
1 South Minnesota Street 11 North Minnesota St
New Ulm, MN 56073 P.O. Box 214
New Ulm, MN 56073
Winona, MN L&M Enterprises 9/30/1998 $ 500.00
1157 Gilmore Ave. P.O. Box 30055
Winona, MN 55987 Winona, MN 559897
Alexandria, MN Bob Ruhr 12/1/1998 $ 800.00
1224 N. Nokomis N.E. Vacation Properties Network
Suite 111 Costum One Real Estate
Alexandria, MN 56308 1224 N. Nokomis, N.E.
Alexandria, MN 56308
153
PROPERTY LESSOR EXPIRES MONTHLY BASE
Houston, MN Satellite Entertainment, Inc. 6/30/1998 $ 600.00
113 S. Grant Street P.O. Box 360
Houston, MN 55943 Houston, MN 55943
MICHIGAN OFFICES
Battle Creek, MI Hinco, LLC 11/30/2002 $2,437.50
Capital Centre 535 South Burdick Street
2545 Capital Ave. Suite 1
Suite 120 P.O. Box 50751
Battle Creek, MI 49015 Kalamazoo, MI 49005-0751
Cadillac, MI Lakeland Square Associates 8/31/2002 $1,375.00
2124 N. Mitchell Drive 6960 Orchard Lake Rd.
Cadillac, MI 49601 Suite 300
West Bloomfield, MI 48322
Traverse City, MI Heatherlee Yorty-Gosnick 8/31/2000 $3,500.00
3289 W. South Airport Rd. 3295 Lee Point Rd.
Traverse City, MI 49684 Suttons Bay, MI 49682
FLORIDA OFFICES
Port Charlotte, FL Donald Brandt 9/9/2000 $2,568.00
2486 A Tamiami Trail P.O. Box 14366
Port Charlotte, FL 33952 Bradenton, FL 34280
Cape Coral, FL Caper's Plasa, Inc. 2/28/2001 $3,200.00
2126 Del Prado Blvd. 1840 SE 40th Street
Units 1,2,3&4 Cape Coral, FL 33904
Cape Coral, FL 33904
IOWA OFFICE
Marshalltown, IA Ray Osthus - Trial RA Trust 11/30/2001 $1,687.50
Marshalltown Retail Mercantila Bank Bldg
Center 123 West Main Street
3109 Center Street Unit 2 Marshalltown, IA 50158
Marshalltown, IA 50158
UTAH OFFICE
Park City, UT Utah-Pacific Partners, L.P. 3/31/2001 $2,746.33
1612 W. Ute Blvd. c/o Bruce Leidenberger
Suite 106 5333 Mission Center Rd.
Park City, UT 84098 Suite 360
San Diego, CA 92108
154
PROPERTY LESSOR EXPIRES MONTHLY BASE
OREGON OFFICE
Klamath Falls, OR B. Skillington & M. Stewart 12/31/2000 $2,330.00
2650 Washburn Way Tower Enterprises
Suite 140 1763 Washburn Way
Klamath Falls, OR 97603 Klamath Falls, OR 97603
NORTH DAKOTA OFFICE
Fargo, ND Wagner & Ohe and 1/1/2001 $1,466.67
3033 13th Ave. S.W. Associates
Fargo, ND 58103 1001 Center Ave., Suite D
Moorehead, MN 56560
WISCONSIN OFFICE
Menomonie, WI Broadway Plaza, Inc. 9/31/2002 $1,200.00
1400 N. Broadway Street 1400 N. Broadway Street
Menomonie, WI 54751 Menomonie, WI 54751
MONTANA OFFICES
Billings, MT Earnest Bahm & Anita Bahm 1/31/2000 $1,900.00
2219 Grand Avenue 1400 Poly Drive
Billings, MT 59102 P.O. Box 23508
Billings, MT 59104-3508
Havre, MT Ruby M. Worstell 12/31/2000 $1,538.00
437 First Street P.O. Box 2002
Havre, MT 59501 Havre, MT 59501
Missoula, MT Gateway Limited Partnership 2/28/2001 $3,200.00
Northgate Plaza 101 International Way
1900 Sherwood St. P.O. Box 8182
Suite 115 Missoula, MT 59807
Missoula, MT 59802
155
SCHEDULE VIII
CAPITALIZATION
1. In connection with the Convertible Stock Purchase transaction
consummated on February 12, 1997, Alta Subordinated Debt
Partners III, L.P., or its assigns, has a Common Stock
Purchase Warrant to purchase 2,103 shares of Common Stock in
Company on or before February 12, 2007; Alta-Comm S By S, LLC,
or its assigns, has a Common Stock Purchase Warrant to
purchase 80 shares of Common Stock in Company on or before
February 12, 2007; and Alta Communications VI, L.P., or its
assigns, has a Common Stock Purchase Warrant to purchase 3,499
shares of Common Stock in Company on or before February 12,
2007.
2. On October 8, 1997, Holdings entered into Non-Qualified Stock
Option Agreements with certain employees of the Borrower
pursuant to the Golden Sky Systems, Inc. Stock Option and
Restricted Stock Purchase Plan, granting options to acquire an
aggregate 62,525 shares of Holdings Common Stock for $1 per
share.
156
SCHEDULE VIII
PAGE 2
Capitalization
Common Stock and Series A Preferred Stock
List of Investors
INITIAL CLOSING
-------------------------------------------------------------------------------------------
ADDITIONAL CLOSING
NUMBER OF NUMBER AGGREGATE NUMBER OF AGGREGATE
SERIES A OF PURCHASE SERIES A NUMBER OF PURCHASE
PREFERRED COMMON PRICE FOR PREFERRED COMMON PRICE FOR
SHARES SHARES SHARES SHARES SHARES SHARES
NAME (Column 1) (Column 2) (Column 3) (Column 4) (Column 5) (Column 6)
- ---- ---------- ---------- ---------- ---------- ---------- ----------
Alta Subordinated Debt Partners 31,246 13 $3,124,613 24,286 -- $2,248,600
III, L.P. 51,971 23 5,197,123 40,349 -- 4,039,400
Alta Communications VI, L.P. 1,183 1 118,301 920 -- 92,000
Alta-Comm S By S, LLC
c/o Alta Combinations, Inc.
One Embarcadero Center
Suite 4050
San Francisco CA 94111
Attn: Robert Benbow
Spectrum Equity Investors, L.P. 50,000 12 5,000,012 -- -- --
Spectrum Equity Investors II, -- -- 100,000 25 10,000,025
L.P.
125 High Street, Suite 2600
Boston, MA 02110
Attn: William Collatos
BancBoston Ventures Inc. 33,600 19 3,360,019 41,400 -- 4,140,000
175 Federal Street
Boston, MA 02110
Attn: William O. Charman
The Millenial Fund 500 -- 50,000 -- -- --
c/o G. Jackson Tankersley
The Centennial Funds
1428 15th Street
Denver, CO 80202
157
SCHEDULE VIII
PAGE 3
NUMBER OF NUMBER AGGREGATE NUMBER OF AGGREGATE
SERIES A OF PURCHASE SERIES A NUMBER OF PURCHASE
PREFERRED COMMON PRICE FOR PREFERRED COMMON PRICE FOR
SHARES SHARES SHARES SHARES SHARES SHARES
Builder Investment Partnership 500 -- 50,000 -- -- --
Five Piedmont Center, Suite 700
Atlanta, GA 30305
Attn: Allen A. Builder
Rodney A. Weary Revocable 16,030 1 250,001 -- -- --
Trust Dated 10/25/95
300 West 90th Street
Prairie Village, KS 66207
F.G. Weary III Revocable Trust 2,500 -- 250,001 -- -- --
1508 S. Golf Club Drive
Richmond, MO 64085
Sarah Weary Revocable Trust 2,500 -- 250,001 -- -- --
1508 S. Golf Club Drive
Richmond, MO 64085
Robert B. Liepold 1,000 -- 100,000 -- -- --
6140 Mission Drive
Shawnee Mission, KS 66208
Ron D. Foster 900 -- 90,000 -- -- --
4613 N.E. Whispering Winds Dr.
Lees Summit, MO 64064
Jo Ellen Linn 430 -- 43,000 -- -- --
4613 N.E. Whispering Winds Dr.
Lees Summit, MO 64064
Robert Weaver 1,000 -- 100,000 -- -- --
6221 Belle Rive Dr.
Brentwood, TN 37027
Donald and Barbara Tucker 150 -- 15,000 -- -- --
109 Lord Ashley Drive
Greenville, NC 27858
Robert H. Weaver 350 -- 35,000 -- -- --
1509 Douglas Drive
Jackson, MS 39211
158
SCHEDULE VIII
PAGE 4
NUMBER OF NUMBER AGGREGATE NUMBER OF AGGREGATE
SERIES A OF PURCHASE SERIES A NUMBER OF PURCHASE
PREFERRED COMMON PRICE FOR PREFERRED COMMON PRICE FOR
SHARES SHARES SHARES SHARES SHARES SHARES
Jeff K. or Rebecca D. Ramsey, 100 -- 10,000 -- -- --
Jt. Ten. w/ rights of Survivorship
P.O. Box 2293
Corrales, NM 87048
A Delaware Trust Arthur B. 20 -- 2,000 -- -- --
Ramsey, Trustee
1621 Sagebrush Trail S.E.
Albuquerque, NM 87123
Ramsey Trust Dated 12/14/95 20 -- 2,000 -- -- --
1621 Sagebrush Trail S.E.
Albuquerque, NM 87123
Paul Spurgeon 5,000 -- 5,001 -- -- --
3000 SW 19th Street
Topeka, KS 66604
TOTAL 199,000 75 $19,900,075 207,000 25 $20,700,025
======= == =========== ======= == ===========
159
SCHEDULE VIII
PAGE 5
Golden Sky Holdings, Inc.
NAMES SERIES A PREFERRED SHARES
Andy O'Pry 3,375
Jane O'Pry 250
Robert Wasert 500
Andy O'Pry, Jr. 250
Paul O'Pry 250
Timothy Dewhirst 200
Rick Nerby 200
Michael Buross 50
Cory Duffy 50
Ron Hageman 50
Eric Norgate 100
Shawn Richardson 50
Clinton L. Noren 75
Sandra D. Noren 75
Harold Poulsen 1,000
Carmen Poulsen 200
J. Mark Poulsen 200
Randy Robertson 100
Mark Robertson 100
Shirley Fjield 200
Jack S. Ramirez 200
David Garland O'Pry Irrevocable Trust 200
Andrew O'Pry, Sr. 300
J.W. Braman 1,000
D.H. Braman, Jr. 2,000
Kate S. O'Connor Trust for Thomas Edward Braham 1,000
Jacob Osborne 25
160
SCHEDULE VIII
PAGE 6
Series B
Preferred Stock
List of Investors
PRINCIPAL NUMBER OF
AMOUNT OF SERIES B NUMBER OF TOTAL NUMBER
SERIES B CONVERTIBLE SERIES B OF SERIES B
CONVERTIBLE PREFERRED CONVERTIBLE CONVERTIBLE
NOTE SHARES PREFERRED AGGREGATE PREFERRED
PLUS ACCRUED ISSUABLE UPON SHARES PURCHASE SHARES
INTEREST CONVERSION PURCHASED PRICE ISSUABLE
(COLUMN 1) (COLUMN 2) (COLUMN 3) (COLUMN 4) (COLUMN 5)
---------- ---------- ---------- ---------- ----------
NAME
SERIES B OUTSIDE INVESTORS:
Norwest Equity Partners V $ 3,473,276 17,367 57,758.62 $11,551,724 75,125.62
c/o Norwest Venture Capital
Management, Inc.
2800 Piper Jaffray Tower
222 South Ninth Street
Minneapolis, MN 55402
Attn: Erik Torgerson
Hancock Venture Partners $ 3,473,276 17,367 57,758.62 $11,551,724 75,125.62
V-Direct Fund L.P.
c/o HarbourVest Partners, LLC
One Financial Center
44th Floor
Boston, MA 02111
Attn: Bill Johnson
161
SCHEDULE VIII
PAGE 7
PRINCIPAL NUMBER OF
AMOUNT OF SERIES B NUMBER OF TOTAL NUMBER
SERIES B CONVERTIBLE SERIES B OF SERIES B
CONVERTIBLE PREFERRED CONVERTIBLE CONVERTIBLE
NOTE SHARES PREFERRED AGGREGATE PREFERRED
PLUS ACCRUED ISSUABLE UPON SHARES PURCHASE SHARES
INTEREST CONVERSION PURCHASED PRICE ISSUABLE
(COLUMN 1) (COLUMN 2) (COLUMN 3) (COLUMN 4) (COLUMN 5)
---------- ---------- ---------- ---------- ----------
Alta Subordinated Debt $ 514,343.15 2,572 8,553.24 $ 1,710,648 11,125.24
Partners III, L.P.
Alta Communications VI, L.P. $ 855,493.69 4,278 14,226,375 $ 2,845,275 18,504,375
Alta-Comm S By S, LLC $ 19,473.16 98 323,835 $ 64,767 421,835
c/o Alta Combinations, Inc.
One Embarcadero Center
Suite 4050
San Francisco CA 94111
Attn: Robert Benbow
Lion Investments Limited $ 289,330.55 1,447 3,563.76 $ 712,752 5,010.76
Westpool Investment Trust plc $ 867,993.66 4,340 10,691.27 $ 2,138,254 15,031.27
c/o London Merchant
Securities
Carlton House
33 Robert Adam Street
London WIM 5AH
England
Attn: Iain MacPhail
Weber Family Trust $ 434.12 3 72,845 $ 14,569 75,845
dated 1/6/89
c/o Eugene M. Weber
50 California Street
Suite 3200
San Francisco, CA 94111
Attn: Eugene M. Weber
162
SCHEDULE VIII
PAGE 8
PRINCIPAL NUMBER OF
AMOUNT OF SERIES B NUMBER OF TOTAL NUMBER
SERIES B CONVERTIBLE SERIES B OF SERIES B
CONVERTIBLE PREFERRED CONVERTIBLE CONVERTIBLE
NOTE SHARES PREFERRED AGGREGATE PREFERRED
PLUS ACCRUED ISSUABLE UPON SHARES PURCHASE SHARES
INTEREST CONVERSION PURCHASED PRICE ISSUABLE
(COLUMN 1) (COLUMN 2) (COLUMN 3) (COLUMN 4) (COLUMN 5)
---------- ---------- ---------- ---------- ----------
BancBoston Ventures Inc. $578,879.67 2,895 9,626,435 $1,925,287 12,521,435
175 Federal Street
10th Floor
Boston, MA 02110
Attn: William Charman
General Electric Capital Corporation -- -- 15,000 $3,000,000 15,000
120 Long Ridge Road
3rd Floor
Stamford, CT 06927
Attn: Peter Foley
The Millennial Fund -- -- 250 $50,000 250
c/o G. Jackson Tankersley, Jr.
The Centennial Funds
1428 15th Street
Denver, CO 80202
Builder Investment -- -- 250 $50,000 250
Partnership
Five Piedmont Center
Suite 700
Atlanta, GA 30305
Attn: Allen A. Builder
163
SCHEDULE IX
SUBSIDIARIES
Golden Sky Holdings, Inc. owns 100% of Golden Sky Systems, Inc. (Borrower)
Golden Sky Systems, Inc. (Borrower) owns 100% of Argos Support Services Company
Golden Sky Systems, Inc. (Borrower) owns 100% of DCE Satellite Entertainment,
LLC
Golden Sky Systems, Inc. (Borrower) owns 70.25% of South Plains DBS Limited
Partnership
164
SCHEDULE X
PATENTS AND LICENSES
None.
165
SCHEDULE XI
EXISTING INDEBTEDNESS
1. Promissory Note and Security Agreement issued May 1, 1997 to Western
Montana DBS, Inc., d/b/a Rocky Mountain DBS in the amount of $2,350,000 which
matures May 1, 1999, paid in full on the Restatement Effective Date.
2. Promissory Note and Security Agreement issued June 12, 1997 to TEG
DBS Services, Inc. in the amount of $2,500,000 which matures June 12, 1999 with
quarterly interest payments.
3. Promissory Note issued December 22, 1997 to Western Montana
Entertainment Television, Inc. in the amount of $3,750,000 which matures June 1,
2002.
4. Other Permitted Indebtedness
See attached chart.
166
Permitted Liens
Name of Debtor State Office Secured Party/ Type of Number File Date
Plaintiff Filing
- ---------------------------------------- --------- --------------------------------------------------------------------------
Golden Sky Systems, Inc. NV SOS TEG DBS Services Inc. UCC-1 9710408-U 16-Jun-97
Golden Sky Systems, Inc. MN SOS T&W Funding UCC-1 2017690 6-Mar-98
Company I, LLC
Golden Sky Systems, Inc. MO SOS Financial Associates UCC-1 2768049 17-Mar-97
Golden Sky Systems, Inc. MO SOS Commercial Capital UCC-1 2784168 28-Apr-97
Corporation
Golden Sky Systems, Inc. MO SOS Commercial Capital UCC-1 2797559 5-Jun-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W UCC-1 2810205 14-Jul-97
Financial Corporation
Golden Sky Systems, Inc. MO SOS T&W UCC-1 2812910 23-Jul-97
Financial Corporation
Golden Sky Systems, Inc. MO SOS T&W UCC-1 2825625 26-Aug-97
Financial Corporation
Golden Sky Systems, Inc. MO SOS T&W UCC-1 2832790 19-Sep-97
Financial Corporation
Golden Sky Systems, Inc. MO SOS T&W UCC-1 2844339 24-Oct-97
Financial Corporation
Golden Sky Systems, Inc. MO SOS T&W UCC-1 2852885 18-Nov-97
Financial Corporation
Golden Sky Systems, Inc. MO SOS T&W UCC-1 2852886 18-Nov-97
Financial Corporation
Golden Sky Systems, Inc. MO SOS T&W UCC-1 2852887 18-Nov-97
Financial Corporation
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2858638 5-Dec-97
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2878313 9-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2878314 9-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2878315 9-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2879720 13-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2882272 24-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2887887 9-Mar-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2887890 9-Mar-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2887899 9-Mar-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2887915 9-Mar-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2904521 17-Apr-98
Golden Sky Systems, Inc. MI SOS T&W Funding Company UCC-1 D363501 17-Apr-98
167
SCHEDULE XII
INSURANCE
I. Insurance Policy Numbers
1. 37UUNEX5439
2. 37WBBB1970
3. 37MSEX4740 (computer policy)
4. 37HUEX7760 (umbrella policy)
Insurance Policies are on file with White & Case
II. Directors and Officers Liability Coverage
See attached document.
III. Certificate of Insurance
See attached document.
168
WESTROPE & ASSOCIATES COVERNOTE OF INSURANCE
920 Baltimore Avenue
Kansas City, Mo 64105 No. NSP2421912
Telephone: (816) 842-8222
Fax: (816) 842-3081
Named Insured:
GOLDEN SKY HOLDINGS
605 W. 47TH STREET, STE 300
KANSAS CITY MO 64112
(913) 451-3900
MONTE GIDDINGS
CLINE-WOOD AGENCY, INC. Insurance described below has been effected
10901 LOWELL, #130 with the following company or companies:
OVERLAND PARK KS 66210 Name of insurer(s)
Great American Ins. Co. 100%
Effective: 04-20-98 to 04-20-99
Limits: $5,000,000 LIMIT OF LIABILITY Premium
$ 70,000.00
Coverage: DIRECTORS & OFFICERS LIABILITY
Deductible: $0 EA DIRECTOR/$0 ALL DIRECTORS/
$100,000 COMPANY REIMBURSEMENT TOTAL CHARGED $ 70,000.00
Endorsements and special conditions See attached Form DEF-0033
Minimum Earned Premium Regardless of Term: 25%
Premium is Minimum & Deposit.
30 Day Notice of Cancellation - 10 Day for Non-Payment.
CARRIER ADMITTED - NO TAX APPLIES
*SEE ATTACHED TERMS AND CONDITIONS*
If the Assured shall make any claim knowing the same
to be false or fraudulent, as regards amount or otherwise,
this certificate shall become void, and all claims thereunder
shall be forfeited.
COVER NOTE PROVISIONS
1. Cancellation of this Cover Notice shall be in accordance with
the provisions of the applicable policy.
2. This Cover Note shall be terminated by the issuance of the
policy by the Company and the premium shall be credited
thereon.
3. This insurance is further subject to the terms, conditions,
and limitations of the policy(ies) in current use by the above
mentioned Company(ies).
Signed at Kansas City, MO, on April 21, 1998
WESTROPE & ASSOCIATES
By___________________
SUPPLEMENTAL TERMS AND CONDITIONS
169
WESTROPE & ASSOCIATES COVERNOTE OF INSURANCE
920 Baltimore Avenue
Kansas City, Mo 64105 No. NSP2421912
Telephone: (816) 842-8222
Fax: (816) 842-3081
Reference Number: NSP2421912 Date; April 20, 1998
Name Insured: GOLDEN SKY HOLDINGS
GREAT AMERICAN INSURANCE COMPANY - POLICY FORM D100A
CONDITIONS/ENDORSEMENTS/EXCLUSIONS:
Non-Profit Outside Directorship Liability Coverage
Non-Cancelable Policy except for Non-Payment of Premium with
60 days Notice of Non-Renewal
Spousal Extension
Nuclear Energy Exclusion
Prior and Pending Litigation Exclusion at Inception
Subsidiary Wrongful Acts Exclusion
Advancement of Defense Costs - all sides
100% Entity Coverage for Securities Claims (waiver of SEC
retention provided in endorsement)
Notice of Offering
Worldwide Coverage Endorsement
Addition to Section VIII Endorsement
Provides Pay on Behalf wording (all insuring clauses)
Allows for Notice of Circumstances during the
Discovery Period
Provides for Director and Officer "status" liability
coverage
Deletes "solely" from the definition of Wrongful Act
Amend the definition of Claim to include "written
coverage
Presumptive Indemnification amendment
Allows for Notice of Circumstances for up to 90 days
after the expiration date
Bilateral Discovery - 12 months at 75% of annual premium
Subsidiary Coverage
Non-Entity Employment Practices Liability coverage
Modification to Section IV Endorsement
Deletes Hostile Takeover Exclusion
Amends BI/PD Exclusions to "for" wording
Amend "profit or advantage" and "dishonesty"
exclusions from "in fact" wording to "final
adjudication" wording
Amends Insured vs Insured to provide for cross
claims/third party claims with: "Affiliate" word
deleted
Amendment to definition of Loss - Punitive Damages
where insurable
Addition to Section VII General Conditions to add
term general Partnerships
Outside Directorship coverage for Golden Eagle Gale
and Unicom
170
WESTROPE & ASSOCIATES COVERNOTE OF INSURANCE
920 Baltimore Avenue
Kansas City, Mo 64105 No. NSP2421912
Telephone: (816) 842-8222
Fax: (816) 842-3081
***SUBJECT TO RECEIPT, REVIEW AND APPROVAL OF***
1. Original signed and dated Great American Insurance Companies
Proposal Form for Directors' and Officers' Liability
insurance.
2. Provide further details regarding the response(s) to
Question(s) No. 10 of the American International Companies
application.
3. The Outside Directorship coverage provided by Endorsement No.
D406 is subject to receipt, review and acceptance of the most
recent audited financial statements for Golden Eagle Gale.
4. Please provide details on partnerships in which the company
participates including disclosure of general and limited
partnerships as well as the latest audited financial
statements, if available.
NOTE:
This indication expires 30 days from the date referenced above. If between the
date of this indication and the effective Date of the policy there is a
significant adverse change in the condition of the Proposed Insured or an event
which could substantially change the underwriting evaluation of the Proposed
Insured, then at the company's option, this indication may be withdrawn.
In the event of any conflict or ambiguity between the proposed policy and any
statements made concerning this coverage, the proposed policy shall control.
171
CERTIFICATE OF INSURANCE Date (mm/dd/yy)
05/05/98
(301) 220-3200 THIS CERTIFICATE IS ISSUED AS A MATTER OF
Telcom Insurance Company INFORMATION ONLY AND CONFERS NO RIGHTS UPON
6301 Ivy Lane - Suite 506 THE CERTIFICATE HOLDER. THIS CERTIFICATE DOE
Greenbelt, MD 20770 NOT AMEND, EXTEND OR ALTER THIS COVERAGE
AFFORDED BY THE POLICIES BELOW.
COMPANIES AFFORDING COVERAGE
Company
A THE TRAVELERS INDEMNITY CO. OF IL
Company
B
South PlainsDBS L.P.
DBA Digital Satellite Television Company
C/O Poka-Lambro Telco, Inc. C
P.O. Box 1340, Hwy 87
Tahoka, TX 79373 Company
D
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LIMITED BELOW HAVE
BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY INDICATED.
NOTWITHSTANDING ANY REQUIREMENT, TERM OF CONDITION OF ANY CONTRACT OR
OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR
MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS
SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.
LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
CO POLICY POLICY
LTR TYPE OF INSURANCE POLICY NUMBER EFFECTIVE EXPIRATION
DATE DATE LIMITS
GENERAL LIABILITY UJ-660-190X6759-TIL-97 09/01/97 08/01/98 $ 2,000,000
$ 1,000,000
$ 1,000,000
$ 1,000,000
$ 50,000
$ 5,000
UJ-660-190X6759-TIL-97 08/01/97 08/01/98 $ 1,000,000
172
OTHER
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
CERTIFICATE HOLDERS CANCELLATION
Fleet National Bank SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED
Attn: Mark Bernier BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY
1 Federal Street WILL ENDEAVOR TO MAIL 60 DAYS WRITTEN NOTICE TO THE
Boston, MA 02110 CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL
SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY
KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
Authorized Representative
173
SCHEDULE XIII
EXISTING LIENS
1. Promissory Note and Security Agreement issued June 12, 1997 to
TEG DBS Services, Inc. in the amount of $2,500,000 which
matures June 12, 1999 with quaterly interest payments.
2. Promissory Note issued December 22, 1997 to Western Montana
Entertainment Television, Inc. in the amount of $3,750,000
which matures June 1, 2002.
3. Other Permitted Indebtedness
See attached chart.
174
Permitted Liens
NAME OF DEBTOR State Office Secured Party/ Type of Number File Date
Plaintiff Filing
Golden Sky Systems, Inc. NV SOS TEG DBS Services Inc. UCC-1 9710408-U 16-Jun-97
Golden Sky Systems, Inc. MN SOS T&W Funding UCC-1 2017690 6-Mar-98
Company I, LLC
Golden Sky Systems, Inc. MO SOS Financial Associates UCC-1 2768049 17-Mar-97
Golden Sky Systems, Inc. MO SOS Commercial Capital UCC-1 2784168 28-Apr-97
Corporation
Golden Sky Systems, Inc. MO SOS Commercial Capital UCC-1 2797559 5-Jun-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W Financial UCC-1 2810205 14-Jul-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W Financial UCC-1 2812910 23-Jul-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W Financial UCC-1 2825625 26-Aug-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W Financial UCC-1 2832790 19-Sep-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W Financial UCC-1 2844339 24-Oct-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W Financial UCC-1 2852885 18-Nov-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W Financial UCC-1 2852886 18-Nov-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W Financial UCC-1 2852887 18-Nov-97
Corporation
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2858638 5-Dec-97
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2878313 9-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2878314 9-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2878315 9-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2879720 13-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2882272 24-Feb-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2887887 9-Mar-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2887890 9-Mar-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2887899 9-Mar-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2887915 9-Mar-98
Golden Sky Systems, Inc. MO SOS T&W Funding Company UCC-1 2904521 17-Apr-98
Golden Sky Systems, Inc. MI SOS T&W Funding Company UCC-1 D363501 17-Apr-98
175
EXHIBIT A
NOTICE OF BORROWING
[Date]
Fleet National Bank, as Administrative
Agent for the Banks party to the
Credit Agreement referred to below
Mail Stop MA0FD03D
I Federal Street
Boston, MA 02110
Attention: Christopher A. Swindell
Ladies and Gentlemen:
The undersigned, Golden Sky Systems, Inc. (the "Borrower"), refers to
the Amended and Restated Credit Agreement, dated as of July 7, 1997, amended and
restated as of May __, 1998 (as amended from time to time, the "Credit
Agreement," the terms defined therein being used herein as therein defined),
among Golden Sky Holdings, Inc., the Borrower, certain financial institutions
from time to time party thereto (the "Banks"), Banque Paribas, as Syndication
Agent, you, as Administrative Agent for such Banks, and General Electric Capital
Corporation, as Documentation Agent, and hereby gives you notice, irrevocably,
pursuant to Section 1.03 of the Credit Agreement, that the undersigned hereby
requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 1.03 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ,
19__.(1)
(ii) The aggregate principal amount of the Proposed Borrowing
is $________ .
(iii) The Proposed Borrowing is to consist of [Term Loans]
[Revolving Loans].
- --------
(1) Shall be a Business Day at least one Business Day in the case
of Base Rate Loans and three Business Days in the case of
Eurodollar Loans, in each case, after the date hereof.
176
EXHIBIT A
PAGE 2
(iv) The Loans to be made pursuant to the Proposed Borrowing
shall be initially maintained as [Base Rate Loans] [Eurodollar
Loans].(2)
[(v) The initial Interest Period for the Proposed Borrowing
shall be month(s).](3)
The Undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and correct
in all material respects, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds thereof (except for any
representation and warranty that speaks only as of a specific date, which
shall be true and correct in all material respects as of such date), as
though made on such date; [and]
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof[.] [; and]
[(C), all of the conditions to the Proposed Borrowing contained in
Section 5.03 and 7.15 have been satisfied.(4)
Very truly yours,
GOLDEN SKY SYSTEMS, INC.
By________________________
Name:
Title:
- --------
(2) Eurodollar Loans may not be incurred prior to the Syndication
Termination Date.
(3) To be included for a Proposed Borrowing of Eurodollar Loans.
(4) To be included for a Proposed Borrowing of Loans, the proceeds
of which are to be utilized to effect, in whole or in part, a
Permitted Acquisition.
177
EXHIBIT B-1
TERM NOTE
$_____________
New York, New York
May 8,1998
FOR VALUE RECEIVED, Golden Sky Systems, Inc., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of ___________ (the
"Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Fleet National Bank (the "Administrative
Agent") located at Mail Stop MA0FD03D, 1 Federal Street, Boston, MA 02110 on the
Term Loan Maturity Date (as defined in the Agreement referred to below) the
principal sum of ($ ) or, if less, the then unpaid principal amount
of all Term Loans (as defined in the Agreement) made by the Bank pursuant to the
Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement
referred to below.
This Note is one of the Term Notes referred to in the Amended
and Restated Credit Agreement, dated as of July 7, 1997, amended and restated as
of May 8, 1998, among Golden Sky Holdings, Inc., the Borrower, the financial
institutions from time to time party thereto (including the Bank), Banque
Paribas, as Syndication Agent, Fleet National Bank, as Administrative Agent, and
General Electric Capital Corporation, as Documentation Agent (as from time to
time in effect, the "Agreement") and is entitled to the benefits thereof. This
Note is also entitled to the benefits of the Guaranties (as defined in the
Agreement) and is secured by and entitled to the benefits of the Security
Documents (as defined in the Agreement). As provided in the Agreement, this Note
is subject to voluntary prepayment and mandatory repayment prior to the Term
Loan Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
178
EXHIBIT B-1
PAGE 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
GOLDEN SKY SYSTEMS, INC.
By________________________
Name:
Title:
179
EXHIBIT B-2
REVOLVING NOTE
$__________________ New York, New York
May 8,1998
FOR VALUE RECEIVED, Golden Sky Systems, Inc., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of (the
"Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Fleet National Bank (the "Administrative
Agent") located at Mail Stop MA0FD03D, 1 Federal Street, Boston, MA 02110, the
Revolving Loan Maturity Date (as defined in the Agreement referred to below) the
principal sum of ($ ) or, if less, the then unpaid principal amount of
all Revolving Loans (as defined in the Agreement) made by the Bank pursuant to
the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement
referred to below.
This Note is one of the Revolving Notes referred to in the
Amended and Restated Credit Agreement, dated as of July 7, 1997, amended and
restated as of May 8, 1998, among Golden Sky Holdings, Inc., the Borrower, the
financial institutions from time to time party thereto (including the Bank),
Banque Paribas, as Syndication Agent, Fleet National Bank, as Administrative
Agent, and General Electric Capital Corporation, as Documentation Agent (as from
time to time in effect, the "Agreement") and is entitled to the benefits
thereof. This Note is also entitled to the benefits of the Guaranties (as
defined in the Agreement) and is secured by and entitled to the benefits of the
Security Documents (as defined in the Agreement). As provided in the Agreement,
this Note is subject to voluntary prepayment and mandatory repayment prior to
the Revolving Loan Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
180
EXHIBIT B-2
PAGE 2
THE NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
GOLDEN SKY SYSTEMS, INC.
By_________________________
Name:
Title:
181
EXHIBIT C
NOTICE OF CONVERSION
[Date]
Fleet National Bank, as Administrative
Agent for the Banks party to the
Credit Agreement referred
to below
Mail Stop MA0FD03D
1 Federal Street
Boston, MA 02110
Attention: Christopher A. Swindell
Ladies and Gentlemen:
The undersigned, Golden Sky Systems, Inc. (the "Borrower"), refers to
the Amended and Restated Credit Agreement, dated as of July 7, 1997, amended and
restated as of May , 1998 (as amended from time to time, the "Credit
Agreement," the terms defined therein being used herein as therein defined),
among Golden Sky Holdings, Inc., the Borrower, certain financial institutions
from time to time party thereto (the "Banks"), Banque Paribas, as Syndication
Agent, you, as Administrative Agent for such Banks, and General Electric Capital
Corporation, as Documentation Agent, and hereby gives you notice, irrevocably,
pursuant to Section 1.06 of the Credit Agreement, that the undersigned hereby
requests a conversion of a Loan or Loans under the Credit Agreement, and in that
connection sets forth below the information relating to such Conversion (the
"Proposed Conversion") as required by Section 1.06 of the Credit Agreement:
(i) The Business Day of the Proposed Conversion is 199_.(1)
(ii) The aggregate principal amount of the Proposed Conversion is
$ .
(iii) The Loan[s] to be converted [is/are] [Term Loan[s]] and
[Revolving Loan[s]].
- ------------
(1) Shall be a Business Day at least three Business Days after the earlier
of (i) the date hereof and (ii) the date on which telephonic notice was
given (which telephonic notice was promptly confirmed in writing).
182
EXHIBIT C
PAGE 2
(iv) The Borrowing[s] pursuant to which the Loan[s] in clause (iii)
were made [is/are] currently outstanding as [Base Rate/Eurodollar](2) Loans and
[is/are] hereby requested to be converted into [Eurodollar/Base Rate] Loans and
[was/were] made on , 19 .
[(v) The Loan[s] to be converted into Eurodollar Loans shall initially
have an Interest Period of .________________](3)
[The undersigned hereby certifies that on the date hereof, and on the
date of the Proposed Conversion, no Default or Event of Default has occurred and
is continuing, or would result from such Proposed Conversion or from the
application of the proceeds thereof.](2)
Very truly yours,
GOLDEN SKY SYSTEMS, INC.
By_____________________
Name:
Title:
- ------------
(2) Base Rate Loans may not be converted into Eurodollar Loans
prior to the Syndication Termination Date.
(3) To be included in the event the Loan is to be converted into a
Eurodollar Loan.
183
EXHIBIT D
LETTER OF CREDIT REQUEST
No. (1) Dated (2)
Fleet National Bank, is Administrative Agent and as Issuing
Bank, under the Amended and Restated Credit Agreement
(as amended, modified or supplemented frozen time to
time, the "Credit Agreement"), dated as of July 7, 1997,
amended and restated as of May ___, 1998, among Golden
Sky Holdings, Inc., Golden Sky Systems, Inc., the
financial institutions from time to time party thereto,
Banque Paribas, as Syndication Agent, Fleet National
Bank, as Administrative Agent, and General Electric
Capital Corporation, as Documentation Agent
Mail Stop MA0FD03D
1 Federal Street
Boston, MA 02110
Attention: Christopher A. Swindell
[Issuing Bank if different from Fleet]
Ladies and Gentlemen:
We hereby request that the Issuing Bank referred to above issue a
standby Letter of Credit for the account of the undersigned on (3) (the "Date of
Issuance") in the aggregate stated amount of (4) .
______________________
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
184
EXHIBIT D
PAGE 2
For purposes of this Letter of Credit Request, unless
otherwise defined herein, all capitalized terms used herein which are defined in
the Credit Agreement shall have the respective meanings provided therein.
The beneficiary of the requested Letter of Credit will be (5),
and such Letter of Credit will be in support of (6) and will have a stated
expiration date of (7) .
We hereby certify that:
(A) The representations and warranties contained in the Credit
Agreement and the other Credit Documents will be true and correct in all
material respects, before and after giving effect to the issuance of the Letter
of Credit requested hereby (except for any representation and warranty that
speaks only as of a specific date, which shall be true and correct in all
material respects as of such date), on the Date of Issuance.
(B) No Default or Event of Default has occurred and is
continuing nor, after giving effect to the issuance of the Letter of Credit
requested hereby, would such a Default or Event of Default occur.
Copies of all documentation with respect to the supported
transaction are attached hereto.
GOLDEN SKY SYSTEMS, INC.
By_______________________
Name:
Title:
________________________
(... continued)
(3) Date of Issuance at least ten Business Days from the date indicated in
(2) above (or such shorter period as is acceptable to the Issuing Bank
in any given case).
(4) Aggregate initial stated amount of Letter of Credit.
(5) Insert name and address of beneficiary.
(6) Insert description of L/C Supportable Indebtedness and describe
obligation to which it relates.
(7) Insert last date upon which drafts may be presented which may not be
later than the earlier of 12 months after the Date of Issuance and the
third Business Day preceding the Revolving Loan Maturity Date.
185
EXHIBIT E
Section 3.04(b)(ii) Certificate
Reference is hereby made to the Amended and Restated Credit
Agreement, dated as of July 7, 1997, amended and restated as of May ___, 1998
among Golden Sky Holdings, Inc., Golden Sky System, Inc., the financial
institutions from time to time party thereto, Banque Paribas, as Syndication
Agent, Fleet National Bank, as Administrative Agent, and General Electric
Capital Corporation, as Documentation Agent, as amended through the date hereof
(the "Credit Agreement"). Pursuant to the provisions of Section 3.04(b)(ii) of
the Credit Agreement, the undersigned hereby certifies that it is not a "bank"
as such term is used in Section 881(c)(3)(A)of the Internal Revenue Code of
1986, as amended.
[NAME OF BANK]
By____________________
Name:
Title:
Date:
186
EXHIBIT F
[Letterhead of Reboul, MacMurray, Hewitt, Maynard & Kristol]
May 8, 1998
To the Agents, the Collateral Agent,
GECC and each of the Banks party to
the Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as counsel to Golden Sky Holdings, Inc., a
Delaware corporation ("Holdings"), Golden Sky Systems, Inc., a Delaware
corporation (the "Borrower"), and Argos Support Services Company, a Texas
corporation ("Argos," and together with Holdings and the Borrower, the "Loan
Parties") in connection with the preparation, execution and delivery of the
Amended and Restated Credit Agreement, dated as of July 7, 1997 amended and
restated as of May 8, 1998 (the "Credit Agreement"), among Holdings, the
Borrower, the financial institutions party thereto from time to time (the
"Banks"), Banque Paribas, as Syndication Agent("Banque Paribas"), Fleet National
Bank, as Administrative Agent ("Fleet" and, together with Banque Paribas, the
"Agents"), and General Electric Capital Corporation, as Documentation Agent
("GECC"), and the transactions contemplated thereby. This opinion is delivered
to you pursuant to Section 4.03(i) of the Credit Agreement. Unless otherwise
defined herein, terms used herein shall have the respective meanings set forth
in the Credit Agreement.
For purposes of this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction of, the following
documents (the documents referred to in paragraphs (a) through (j) below being
hereinafter referred to as the "Credit Documents"):
(1) the Credit Agreement, including schedules and exhibits
thereto;
187
EXHIBIT F
Page 2
(2) the Notes;
(3) the Subsidiaries Guaranty;
(4) the Holdings Pledge Agreement, including annexes thereto;
(5) the Borrower/Subsidiary Pledge Agreement, including
annexes thereto;
(6) the Security Agreement, including annexes thereto;
(7) the Security Documents Acknowledgment, including schedules
thereto;
(8) the Collateral Assignment of Marketing and Distribution
Agreements;
(9) the Form UCC-1 financing statements in the form attached
hereto as Exhibit I (the "Financing Statements") to be
filed in respect of the Security Agreement in the Uniform
Commercial Code filing offices listed on Exhibit II hereto
(the "Filing Offices") located in the States (the "Foreign
Jurisdictions") set forth on said Exhibit, naming the
Borrower, as debtor, and the Collateral Agent, as secured
party;
(10) The Reorganization Transaction Documents.
We have also examined the originals, or copies certified or
otherwise identified to our satisfaction, of such other documents, corporate
records, certificates or comparable documents of public officials and of
officers and representatives of the Loan Parties and have made such inquiries of
such officers and representatives of the Loan Parties as we have deemed relevant
and necessary as a basis for the opinions expressed below.
In such examination, we have assumed the genuineness of all
signatures (other than those of the Loan Parties), the due authorization,
execution and delivery of each Credit Document by all parties to such document
other than the Loan Parties, the authenticity of all documents submitted to us
as original documents, the conformity to original documents of all documents
submitted to us as copies thereof and the legal capacity of individuals
executing documents in their individual capacity. As to all questions of fact
material to this opinion that have not been independently established, we have
relied upon certificates or comparable documents of officers and
representatives of the Loan Parties and upon the factual representations and
warranties of the Loan Parties contained in the Credit Documents.
References to:
188
EXHIBIT F
Page 3
(i) the term "Applicable Laws" means (A) those laws,
rules and regulations of the United States of America
and of the State of New York which are customarily
applicable to transactions of the type contemplated
by the Credit Documents and (B) the General
Corporation Law of the State of Delaware;
(ii) the term "Governmental Authority" means (A) any
executive, legislative, judicial, administrative or
regulatory body of the United States of America or
the State of New York and (B) the Secretary of State
of the State of Delaware and the Recorder of Deeds of
the county in which the registered office of the
Borrower is located in the State of Delaware; and
(iii) the term "Governmental Approval" means any consent,
approval, license, authorization or validation of, or
filing, recording or registration with, any
Governmental Authority pursuant to Applicable Laws.
Furthermore, whenever used herein and with respect to any
matter, the words "to our knowledge" or words of similar purport refer to the
actual knowledge of the lawyers of this firm who have responsibility for our
representation of the Loan Parties in connection with the Credit Documents.
Based on the foregoing examination, and subject to the
assumptions, exceptions, limitations and qualifications herein stated, we are of
the following opinion:
1. Each of Holdings and the Borrower is a duly organized and
validly existing corporation in good standing under the laws of the State of
Delaware. Based solely on our review of certificates from the Secretary of State
of the State of Texas, Argos is a validly existing corporation in good standing
under the laws of the state of Texas. Each of the Loan Parties has the corporate
power and authority to own its property and assets and to transact the business
in which it is engaged. Based solely on our review of certificates from the
Secretary of State or other comparable governmental authority of the States
listed on Exhibit III hereto, each of the Loan Parties is duly qualified and is
authorized to do business in the States set forth opposite the name of such Loan
Party on said Exhibit III.
2. Each of the Loan Parties has the corporate power and
authority to execute, deliver and perform the terms and provisions of each of
the Credit Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Credit Documents to which it is a party. Each of the Loan Parties has duly
executed and delivered each of the Credit Documents to which it is a party and
each of such Credit Documents constitutes the legal, valid and binding
obligation of such Loan Party enforceable against such Loan Party in accordance
with its terms.
189
EXHIBIT F
Page 4
3. Neither the execution and delivery of the Credit Documents
to which it is party by each of the Loan Parties, nor compliance with any of the
provisions thereof, will (i) violate any provision of Applicable Law (including,
without limitation, Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System), or any order or decree of any Governmental Authority to
which such Party is subject (and of which we have knowledge), (ii) conflict
with, or result in the breach of, or constitute a default under, any indenture,
mortgage, deed of trust, agreement or other instrument to which such Loan Party
is a signatory (and of which we have knowledge), (iii) to our knowledge, result
in the creation or imposition of any Lien upon any of the property of such Loan
Party (except in favor of the Collateral Agent) pursuant to agreements to which
such Loan Party is a signatory or (iv) violate any provision of the Certificate
(or Articles) of Incorporation or By-laws of such Loan Party.
4. Except as set forth in Exhibit IV hereto, to our knowledge
there is no pending or threatened action, suit or proceeding before any court,
governmental or regulatory authority, agency, commission or board of arbitration
against any of the Loan Parties which, if adversely determined, is reasonably
likely to result in a material adverse effect on the business, operations or
financial condition of such Loan Party or which purports to affect the legality,
validity or enforceability of any Credit Document or the performance thereof.
5. No action of, or filing with, any Governmental Authority is
required to authorize, or is otherwise required in connection with, the
execution, delivery and performance of the Credit Documents by any of the Loan
Parties (except that although not required to be made with a Governmental
Authority, we call your attention to the fact that financing statements and
other filings may be required under applicable provisions of the Uniform
Commercial Code as in effect in those jurisdictions whose laws govern perfection
of security interests in any of the Collateral).
6. None of the Loan Parties is an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
7. None of the Loan Parties is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
8. The authorized capital stock of Holdings consists of (i)
1,000,000 shares of common stock, $.01 par value per share, 100 of which shares
are issued and outstanding, (ii) 1,293,800 shares of designated preferred stock,
$.01 par value per share, of which (a) 418,000 shares have been designated as
Series A Convertible Participating Preferred Stock, all of which shares are
issued and outstanding and (b) 418,000 shares have been designated as Series A
Redeemable Preferred Stock, none of which is issued, (c) 228,500 shares of
Series B Convertible Participating Preferred Stock, 228,442 of which shares are
issued and outstanding, (d) 228,500 shares of Series
190
EXHIBIT F
Page 5
B Redeemable Preferred Stock, none of which are issued, and (iii) 300,000 shares
of undesignated preferred stock, $.01 par value per share. All such outstanding
shares are owned of record in the amounts, and by the Persons, set forth on
Schedule VIII to the Credit Agreement. All of such outstanding shares have been
duly and validly issued and are fully paid and nonassessable. Except as set
forth on Schedule VIII to the Credit Agreement, to our knowledge, on the
Restatement Effective Date, Holdings has no outstanding securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock, or
any stock appreciation or similar right with respect thereto.
9. The authorized capital stock of the Borrower consists of
(i) 1,000 shares of common stock, $.01 par value per share, all of which shares
are issued and outstanding and are owned of record and beneficially by Holdings.
All of such outstanding shares have been duly and validly issued and are fully
paid and nonassessable. To our knowledge, on the Restatement Effective Date, the
Borrower has no outstanding securities convertible into or exchangeable for its
capital stock or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock, or any stock appreciation or similar
right with respect thereto.
10. The authorized capital stock of Argos consists of 10,000
shares of common stock, $1.00 par value per share, 1,175 of which shares are
issued and outstanding. All such outstanding shares are owned of record and
beneficially by the Borrower. All of such outstanding shares have been duly and
validly issued and are fully paid and nonassessable. To our knowledge, on the
Restatement Effective Date, Argos has no outstanding securities convertible into
or exchangeable for its capital stock or outstanding any rights to subscribe for
or to purchase, or any options for the purchase of, or any agreements providing
for the issuance (contingent or otherwise) of, or any calls, commitments or
claims of any character relating to, its capital stock, or any stock
appreciation or similar right with respect thereto.
11. After giving effect to the making of the Loans on the
Restatement Effective Date under the Credit Agreement, the Holdings Pledge
Agreement will create in favor of the Collateral Agent for the benefit of the
Banks a valid security interest in the interests of Holdings in the shares of
capital stock of the Borrower listed on Annex A to the Holdings Pledge Agreement
(the "Holdings Pledged Shares") when the Collateral Agent acquires possession of
the stock certificate or certificates representing the Holdings Pledged Shares,
each accompanied by a stock power indorsed in blank. Further assuming delivery
in New York to, and continued possession in New York by, the Collateral Agent of
the stock certificates representing the Holdings Pledged Shares (accompanied by
such stock powers so indorsed), such security interest in the Holdings Pledged
Shares will constitute a perfected security interest in all right, title and
interest of Holdings in the
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EXHIBIT F
Page 6
Holdings Pledged Shares under the New York UCC, to the extent that the New York
UCC is applicable thereto.
12. After giving effect to the making of the Loans on the
Restatement Effective Date under the Credit Agreement, the security interest
granted by the Borrower pursuant to the Borrower/Subsidiary Pledge Agreement
remains, subject to such qualifications with respect thereto as are stated
herein and in our opinion (the "Original Opinion") delivered with respect to the
Existing Credit Agreement on July 7, 1997, in full force and effect on the date
hereof, assuming delivery in New York on the Effective Date, as such term is
defined in the Existing Credit Agreement to, and continuous possession in New
York by, the Collateral Agent of the stock certificates representing the
Borrower Pledged Shares, each accompanied by a stock power indorsed in blank,
such security interest in the Borrower Pledged Shares will constitute a
perfected security interest in all right, title and interest of the Borrower in
the Borrower Pledged Shares under the New York UCC, to the extent that the New
York UCC is applicable thereto.
13. After giving effect to the making of the Loans on the
Restatement Effective Date under the Credit Agreement, the security interest
granted by the Borrower pursuant to the Security Agreement remains, subject to
such qualifications with respect thereto as are stated herein and in our
Original Opinion, in full force and effect on the date hereof.
14. After giving effect to the making of the Loans on the
Restatement Effective Date under the Credit Agreement, the Security Agreement
creates in favor of the Collateral Agent, for the benefit of the Banks, a valid
security interest together with the Security Interest (as such term is defined
in the Original Opinion, the "Restatement Security Interest") in the interests
of Argos in the Collateral covered thereby to the extent that a security
interest can be created therein under Article 9 of the Uniform Commercial Code
as in effect in the State of New York (such Collateral being hereinafter called,
together with the Personal Property Collateral (as such term is defined in the
Original Opinion) the "Restatement Personal Property Collateral"), as security
for the payment of the obligations purported to be secured thereby.
15. Assuming that the Financing Statements were duly and
properly filed in the Filing Offices (as each such term is defined in the
Original Opinion) and assuming that the Financing Statements are duly and
properly filed in the Filing Offices (as such term is defined herein), and
further assuming, in connection therewith, that all required filing fees, taxes
and other fees, if any, were or have been tendered to all such filing offices)
the Restatement Security Interest in the interests of the Borrower and Argos in
the Restatement Personal Property Collateral covered by the Security Agreement
will be perfected to the extent that a security interest therein may be
perfected by the filing in the Foreign Jurisdictions of a Form UCC-1 financing
statement under Article 9 of the Uniform Commercial Code as in effect in the
Foreign Jurisdictions in which such filing offices are located (each, a "Foreign
Jurisdiction UCC"). Assuming that the representation made by each of the
Borrower and Argos in Section 2.4 of the Security Agreement with respect to the
location of its chief executive office is true and correct, the perfection of
the Restatement Security Interest in the
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EXHIBIT F
Page 7
Receivables, Contracts, Contract Rights and General Intangibles (as each such
term is defined in the Security Agreement) of the Borrower and Argos is, under
each Foreign Jurisdiction UCC, governed by the laws of the jurisdiction in which
the chief executive office of the Borrower or Argos, as the case may be, is
located to the extent that said Receivables, Contracts, Contract Rights and
General Intangibles consist of "accounts" and "general intangibles" as defined
in the Foreign Jurisdiction UCC of such Foreign Jurisdiction.
The foregoing opinions are subject to the following exceptions, qualifications
and limitations:
A. Our opinions set forth in paragraphs 2, 11, 12 and 14 above are
subject to (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally,
including fraudulent transfer or conveyance laws; (ii) the effect of public
policy considerations or court decisions which may limit rights to obtain
indemnification; and (iii) with regard to the enforceability of any of the
parties' obligations, general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and the
qualification that certain remedial provisions of the Credit Documents are or
may be unenforceable in whole or in part under Applicable Laws, but the
inclusion of such provisions does not make the remedies afforded by such Credit
Documents inadequate for the practical realization of the rights and benefits
purported to be provided thereby except for the economic consequences resulting
from any delay imposed by, or procedures required by, Applicable Laws.
B. Except as expressly provided in paragraphs 12 and 15 hereof, we
express no opinion herein as to the perfection of any security interest, or
validity of any lien, in any of the Personal Property Collateral and we express
no opinion herein as to priority of any of the Security Interests in any of the
Collateral.
C. We express no opinion as to the creation, validity or the
enforceability of the Restatement Security Interests (i) in any part of the
Restatement Personal Property Collateral in which a security interest would not
be covered by the New York UCC by virtue of Section 9-102 or 9-104 thereof and
(ii) except as provided in Sections 9-104(g) and 9-306 of the New York UCC with
respect to insurance proceeds payable by reason of loss or damage to Collateral,
in any interest in or claim in or under policies of insurance, or in Collateral
that consists or will consist of deposit accounts. We call to your attention
that under certain circumstances described in Section 9-306 of the New York UCC,
comparable provisions of each Foreign Jurisdiction UCC and applicable Federal
bankruptcy law, the rights of a secured party to enforce a perfected security
interest in proceeds of collateral may be limited.
D. We express no opinion with respect to (i) any Loan Party's
right, title or interest in or to any Collateral, (ii) the creation, validity,
perfection, priority or enforceability of any security interest sought to be
created in any Patents, Trademarks or Copyrights (as such terms are defined in
the Security Agreement) to the extent a security interest therein is excluded
from the coverage of Article 9 of the New York UCC or any Foreign Jurisdiction
UCC, (iii) the perfection of any security
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EXHIBIT F
Page 8
interest in any Collateral consisting of fixtures, (iv) the adequacy or accuracy
of the descriptions of the Restatement Personal Property Collateral contained in
the Security Agreement, the Pledge Agreements or the Financing Statements, or
(v) the perfection of any security interest in any Collateral located in
jurisdictions other than the Foreign Jurisdictions.
E. In the case of the issuance or other distribution in respect of the
Holdings Pledged Shares or Borrower Pledged Shares of "investment property" (as
such term is defined in Article 9 of the New York UCC), the security interest of
the Collateral Agent therein will be perfected only if possession thereof,
accompanied by stock powers indorsed in blank, is obtained and continued in
accordance with the provisions of the applicable Pledge Agreement or perfection
otherwise occurs in a manner provided for in Section 9-115(4) of the New York
UCC.
F. Perfection of the security interests generally will be terminated
under the circumstances described in Sections 9-103, 9-402 and 9-403 of the New
York UCC, and the corresponding provisions of each Foreign Jurisdiction UCC,
unless appropriate action is taken as provided therein. We call your attention
to the fact that, without limitation (i) all financing statements filed must be
continued at prescribed intervals by the timely filing of continuation
statements and (ii) a new or amended financing statement may be required to be
filed to retain any perfected security interest in the event any debtor changes
its name, identity, corporate structure or location of its chief executive
office or chief place of business.
G. We express no opinion with regard to any matter which may be
governed by the law of any jurisdiction other than (i) the laws of the State of
New York, (ii) the Federal law of the United States of America, (iii) the
General Corporation Law of the State of Delaware and (iv) subject to the
limitations stated herein, each Foreign Jurisdiction UCC. Although we are not
admitted to practice in any of the Foreign Jurisdictions and have not obtained
opinions of counsel admitted in such jurisdiction with respect to the perfection
or the continued perfection of the security interests created by the Security
Agreement in the Collateral covered thereby, we have examined the applicable
provisions of each Foreign Jurisdiction UCC which we understand to be in effect
in such Foreign Jurisdiction on May 6, 1998 (as those provisions are available
through WESTLAW), and our opinions in paragraph 15, to the extent such opinions
involve conclusions as to perfection of such security interests under the laws
of the Foreign Jurisdictions, are based solely on such review. We also note that
Argos is a Texas corporation and we have, in rendering this opinion, with your
consent, assumed for the purposes hereof that the laws of the State of Texas are
identical in all respects to the laws of the State of New York.
H. We express no opinion (i) to the extent that the security interests
of the Collateral Agent for the benefit of the Banks may be affected by Section
552 of the United States Bankruptcy Code (under which a bankruptcy court has
discretion as to the extent to which post-petition proceeds may be subject to a
lien arising from a security agreement entered into by the debtor before the
194
EXHIBIT F
Page 9
commencement of the case) and (ii) as to the applicability of Section 548 of the
United States Bankruptcy Code or of any provisions of any state fraudulent
conveyance or comparable foreign statute to the transactions contemplated by the
Credit Documents.
I. We express no opinion as to (i) the enforceability of any provisions
contained in the Credit Documents that purport to establish (or may be construed
to establish) evidentiary standards, (ii) the enforceability of any provisions
contained in the Credit Documents that constitute waivers which are prohibited
under the New York UCC or any Foreign Jurisdiction UCC prior to default or (iii)
the enforceability of forum selection clauses in the Federal courts.
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EXHIBIT F
Page 10
This opinion letter is solely for your benefit and for the
benefit of each Bank from time to time party to the Credit Agreement and for the
benefit of their participants and assigns. This opinion may not be relied upon
for any other purpose, or relied upon by any other person, firm or corporation
for any purpose, without our prior written consent.
Very truly yours,
/s/ Reboul, MacMurray, Hewitt, Maynard & Kristol
196
EXHIBIT F
PAGE 11
EXHIBIT I
FINANCING STATEMENTS
On file with White & Case LLP.
197
EXHIBIT F
PAGE 12
EXHIBIT II
FILING OFFICES
State County
- ----- ------
GOLDEN SKY SYSTEMS, INC.
- ------------------------
COLORADO Eagle
Secretary of State
IOWA Marshall
Secretary of State
KANSAS Montgomery
Secretary of State Neosho
Crawford
Cherokee
Labette
MICHIGAN Calhoun
Secretary of State Grand Traverse
Wexford
MINNESOTA Blue Earth
Secretary of State Brown
Douglas
Houston
Winona
MISSOURI Clay
Secretary of State Jackson
Ray
MONTANA Hill
Secretary of State Missoula
Valley
Yellowstone
NEVADA Clark
Secretary of State
198
EXHIBIT F
PAGE 13
NORTH DAKOTA Cass
Secretary of State
OKLAHOMA Pittsburg
Secretary of State Rogers
Washington
OREGON Klamath
Secretary of State Marion
TEXAS Collin
Secretary of State Dallas
Denton
Guadalupe
Lubbock
Polk
Tarrant
Shelby
Victoria
WISCONSIN Dunn
Secretary of State
ARGOS SUPPORT SERVICES COMPANY
- ------------------------------
FLORIDA Charlotte
Secretary of State Lee
TEXAS Collin
Secretary of State Denton
Tarrant
UTAH Summit
Secretary of State
199
EXHIBIT F
PAGE 14
EXHIBIT III
FOREIGN QUALIFICATIONS
Loan Parties States
- ------------ ------
Holdings Missouri
Borrower California
Colorado
Iowa
Kansas
Michigan
Minnesota
Missouri
Montana
Nevada
North Dakota
Oklahoma
Oregon
Texas
Utah
Wisconsin
Argos Florida
200
EXHIBIT G
[NAME OF CREDIT PARTY]
Officers' Certificate
I, the undersigned, [President/Chief Financial Officer/General
Counsel/Vice President] of [Name of Credit Party], a corporation organized and
existing under the laws of the State of (the "Company"), do hereby
certify on behalf of the Company that:
1. This Certificate is furnished pursuant to the Amended and
Restated Credit Agreement, dated as of July 7, 1997, amended and restated as of
May , 1998, among Golden Sky Holdings, Inc., a corporation organized and
existing under the laws of the State of Delaware, Golden Sky Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, the
financial institutions from time to time party thereto, Banque Paribas, as
Syndication Agent, Fleet National Bank, as Administrative Agent, and General
Electric Capital Corporation, as Documentation Agent (such Credit Agreement, as
in effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office as of the date of the signing of any Credit Document. The
signature written opposite the name and title of each such officer is his
correct signature.
Name(4) Office Signature
------- ------ ---------
----------------- ---------------- -------------------
----------------- ---------------- -------------------
----------------- ---------------- -------------------
----------------- ---------------- -------------------
a. Attached hereto as Exhibit A* is a certified copy of the
Certificate of Incorporation of the Company as filed in the Office of the
Secretary of State of the State of its incorporation, together with all
amendments thereto adopted through the date hereof.
3. Attached hereto as Exhibit B* is a true and correct copy of
the By-Laws of the Company, together with all amendments thereto, which were
duly adopted and are in full force and effect on the date hereof.
- ------------------------
(4) Include name, office and signature of each officer who will
sign any Credit Document, including the officer who will sign the
certification at the end of this Certificate.
* Referenced exhibit not included as part of Exhibit G.
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EXHIBIT G
PAGE 2
4. Attached hereto as Exhibit C* is a true and correct copy of
resolutions which were duly adopted on , 19 [by unanimous consent of
the Board of Directors of the Company] [by a meeting of the Board of Directors
of the Company at which a quorum was present and acting throughout], and said
resolutions have not been rescinded, amended or modified. Except as attached
hereto as Exhibit C, no resolutions have been adopted by the Board of Directors
of the Company which deal with the execution, delivery or performance of any of
the Documents to which the Company is party.
5. To the extent that such documents previously delivered to the
Banks in connection with Sect on 4.05 of the Existing Credit Agreement have
undergone material changes or that such documents have not been so delivered,
attached hereto as Exhibit D are true and correct copies of all Employee Benefit
Plans of the Company and its Subsidiaries.
6. To the extent that such documents previously delivered to the
Banks in connection with Section 4.05 of the Existing Credit Agreement have
undergone material changes or that such documents have not been so delivered,
attached hereto as Exhibit E are true and correct copies of all Shareholders'
Agreements of the Company and its Subsidiaries.
7. To the extent that such documents previously delivered to the
Banks in connection with Sect on 4.05 of the Existing Credit Agreement have
undergone Material changes or that such documents have not been so delivered,
attached hereto as Exhibit F are true and correct copies of all Management
Agreements of the Company and its Subsidiaries.
8. To the extent that such documents previously delivered to the
Banks in connection with Section 4.05 of the Existing Credit Agreement have
undergone material changes or that such documents have not been so delivered,
attached hereto as Exhibit G are true and correct copies of all Employment
Agreements of the Company and its Subsidiaries.
9. To the extent that such documents previously delivered to the
Banks in connection with Section 4.05 of the Existing Credit Agreement have
undergone material changes or that such documents have not been so delivered,
attached hereto as Exhibit H are true and correct copies of all Collective
Bargaining Agreements of the Company and its Subsidiaries.
10. To the extent that such documents previously delivered to the
Banks in connection with Section 4.05 of the Existing Credit Agreement have
undergone material changes or that such documents not been so delivered,
attached hereto as Exhibit I are true and correct copies of all Debt Agreements
of the Company and its Subsidiaries.
11. To the extent that such documents previously delivered to the
Banks in connection with Section 4.05 of the Existing Credit Agreement have
undergone material changes or that such documents have not been so delivered,
attached hereto as Exhibit J are true and correct copies of all Tax Sharing
Agreements entered into by the Company or any of its Subsidiaries.
* Referenced exhibit not included as part of Exhibit G.
202
EXHIBIT G
PAGE 3
12. To the extent that such documents previously delivered to the
Banks in connection with Section 4.05 of the Existing Credit Agreement have
undergone material changes or that such documents have not been so delivered,
attached hereto as Exhibit K are true and correct copies of all Material
Contracts of the Company or any of its Subsidiaries.
13. To the extent that such documents previously delivered to the
Banks in connection with Section 4.05 of the Existing Credit Agreement have
undergone material changes or that such documents have not been so delivered,
attached hereto as Exhibit L are true and correct copies of all Affiliate
Contracts of the Company or any of its Subsidiaries.
14. To the extent that such documents previously delivered to the
Banks in connection with Section 4.05 of the Existing Credit Agreement have
undergone material changes or that such document, have not been so delivered,
attached hereto as Exhibit M are true and correct copies of the Projections.
15. To the extent that such documents previously delivered to the
Banks in connection with Section 4.05 of the Existing Credit Agreement have
undergone material changes or that such documents have not been so delivered,
attached hereto as Exhibit N are true and correct copies of the Stock Purchase
Documents.
16. On the date hereof, all of the conditions in Sections 4.06,
4.07 (iii) and (iv) (with respect to Section 4.07 (iii)), 4.11, 4.12, 4.13,
4.14, 4.16, 4.19, 5.01, 5.03 (if a Permitted Acquisition will be Consummated on
the Restatement Effective Date) and 5.04 have been satisfied (except to the
extent as to the acceptability of any items to the Agents and/or the Required
Banks or as to whether the Agents and/or the Required Banks are satisfied with
any of the matters described in said Sections).](5)
6. [18.] On the date hereof, the representations and warranties
contained in the Credit Agreement and in the other Credit Documents [with
respect to the Company](6) are true and correct in all material respects with
the same effect as though such representations and warranties had been made on
the date hereof, both before and after giving effect to each Credit Event to
occur on the date hereof and the application of the proceeds thereof.
7. [19.] On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from any Credit Event as contemplated
in the Credit agreement on the date hereof or from the application of the
proceeds thereof.
- ------------------------
(5) Insert items 6-17 only in the certificate of the Borrower.
(6) To be inserted in the certificate of Credit Parties other than
Holdings and the Borrower.
203
EXHIBIT G
PAGE 4
8. [20.] There is no proceeding for the dissolution or liquidation
of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this day
of May, 1998.
[NAME OF CREDIT PARTY]
By:_____________________________________
Name:
Title:
204
EXHIBIT G
PAGE 5
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify that:
1. [Name of Person making above certifications] is the duly
elected and qualified [President/Chief Financial Officer/General Counsel/Vice
President] of the Company and the signature above is his genuine signature.
2. certifications made by [name of Person making above
certifications] in Items 2, 3, 4, 5, 6 [18], 7 [19] and 8 [20] above are true
and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this day
of May, 1998.
[NAME OF CREDIT PARTY]
By:_____________________________________
Name:
Title:
205
EXHIBIT H
[CONFORMED AS EXECUTED]
SUBSIDIARIES GUARANTY
SUBSIDIARIES GUARANTY, dated as of May 8, 1998, made by each of
the undersigned (each a "Guarantor" and collectively, the "Guarantors"). Except
as otherwise defined herein, terms used herein and defined in the Credit
Agreement (as hereinafter defined) shall be used herein as so defined.
WITNESSETH:
WHEREAS, Golden Sky Holdings, Inc., a Delaware corporation, Golden
Sky Systems, Inc., a Delaware corporation (the "Borrower"), various financial
institutions from time to time party thereto (the "Banks"), Banque Paribas, as
Syndication Agent ("Banque Paribas"), Fleet National Bank, as Administrative
Agent ("Fleet", and together with Banque Paribas, the "Agents"), and General
Electric Capital Corporation, as Documentation Agent, have entered into an
Amended and Restated Credit Agreement, dated as of July 7, 1997, amended and
restated as of May 8, 1998 (as modified, supplemented or amended from time to
time, the "Credit Agreement"), providing for the making of Loans to the Borrower
(the Banks and the Agents being herein called the "Bank Creditors");
WHEREAS, the Borrower may from time to time enter into, or
guaranty, one or more (i) interest rate protection agreements (including,
without limitation, interest rate swaps, caps, floors, collars and similar
agreements), (ii) foreign exchange contracts, currency swap agreements or other
similar agreements or arrangements designed to protect against the fluctuations
in currency values and/or (iii) other types of hedging agreements from time to
time (collectively, the "Interest Rate Protection or Other Hedging Agreements"),
with the Agents in their individual capacities, any Bank or a syndicate of
financial institutions organized by the Agents or any such Bank or an affiliate
of the Agents or such Bank (even if neither of the Agents or any such Bank
ceases to be a Bank under the Credit Agreement for any reason) and any such
institution that participates in such Interest Rate Protection or Other Hedging
Agreements and their subsequent assigns (collectively, the "Other Creditors"
and, together with the Bank Creditors, are herein called the "Creditors");
WHEREAS, each Guarantor is a direct or indirect Subsidiary of the
Borrower;
WHEREAS, it is a condition to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement and to
the Other Creditors entering into the Interest Rate Protection or Other Hedging
Agreements that each Guarantor shall have executed and delivered this Guaranty;
and
1
206
EXHIBIT H
PAGE 2
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Creditors and hereby covenants and agrees with each
Creditor as follows:
1. Each Guarantor irrevocably and unconditionally, and jointly and
severally, guarantees (i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of (x) the principal of and
interest on the Notes issued by, and Loans made to, the Borrower under the
Credit Agreement and all reimbursement obligations and Unpaid Drawings with
respect to Letters of Credit issued under the Credit Agreement, and (y) all
other obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due), indebtedness and
liabilities (including, without limitation, indemnities, Fees and interest
thereon) of the Borrower owing to the Bank Creditors now existing or hereafter
incurred under, arising out of or in connection with the Credit Agreement and
the other Credit Documents and the due performance and compliance by the
Borrower with the terms, conditions and agreements contained in the Credit
Documents (all such principal, interest, obligations and liabilities under this
clause (i), except to the extent consisting of obligations or liabilities with
respect to Interest Rate Protection or Other Hedging Agreements, being herein
collectively referred to as the "Credit Document Obligations") and (ii) the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations, which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due),
indebtedness and liabilities (including, without limitation, indemnities, fees
and interest thereon) owing by the Borrower to the Other Creditors under any
Interest Rate Protection or Other Hedging Agreement, whether such Interest Rate
Protection or Other Hedging Agreement is now in existence or hereafter arising,
and the due performance and compliance by the Borrower with the terms,
conditions and agreements contained therein (all such obligations and
indebtedness being herein collectively called the "Interest Rate Protection
Obligations"; and together with the Credit Document Obligations are herein
collectively called the "Guaranteed Obligations"). Subject to Section 21 of this
Agreement, each Guarantor understands, agrees and confirms that the Creditors
may enforce this Guaranty up to the full amount of the Guaranteed Obligations
against such Guarantor without proceeding against the Borrower, against any
security for the Guaranteed Obligations, against any other Guarantor, or against
any other guarantor under any other guaranty covering the Guaranteed
Obligations. This Guaranty shall constitute a guaranty of payment and not of
collection. All payments by each Guarantor under this Guaranty shall be made on
the same basis as payments by the Borrower under Sections 3.03 and 3.04 of the
Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any of
the events specified in Section 9.05 of the Credit Agreement, and
unconditionally
2
207
EXHIBIT H
PAGE 3
and irrevocably, jointly and severally, promises to pay such Guaranteed
Obligations to the Creditors, or order, on demand, in lawful money of the United
States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of such Guarantor hereunder
shall not be affected or impaired by: (i) any direction as to application of
payment by the Borrower; (ii) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower; (iii) any payment on or in reduction of any such
other guaranty or undertaking; (iv) any dissolution, termination or increase,
decrease or change in personnel by the Borrower; or (v) any payment made to any
Creditor on the indebtedness which any Creditor repays the Borrower pursuant to
court order in an bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Borrower, and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower, and whether or not any other Guarantor, any
other guarantor or the Borrower be joined in any such action or actions. Each
Guarantor waives, to the fullest extent permitted by law, the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
taken by the Agents or any other Creditors against, and any other notice to, any
party liable thereon (including such Guarantor or any other Guarantor or
guarantor).
6. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to any
"Guarantor, without impairing or releasing the obligations of any Guarantor
hereunder, upon or without any terms or conditions and in whole or in part (and
each Guarantor hereby irrevocably waives any defenses it may now or hereafter
have in any way relating to any and all of the following):
(i) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any
3
208
EXHIBIT H
PAGE 4
liability incurred directly or indirectly in respect thereof, and the guaranty
herein made shall apply to the Guaranteed Obligations as so changed, extended,
renewed or altered;
(ii) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing the Guaranteed Obligations
or any liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst;
(iii) exercise or refrain from exercising any rights against the
Borrower, any Guarantor or others or otherwise act or refrain from acting;
(iv) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of the Borrower to creditors of the Borrower;
(v) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of what
liabilities of the Borrower remain unpaid;
(vi) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection or Other Hedging Agreements
or any of the Credit Documents or any of the instruments or agreements referred
to therein, or otherwise amend, modify or supplement any of the Interest Rate
Protection or Other Hedging Agreements or any of the Credit Documents or any of
such other instruments or agreements; and/or
(viii) act or fail to act in any manner permitted under this
guaranty which may deprive any Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
8. This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder and no course of
dealing between any Guarantor and any Creditor shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other
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EXHIBIT H
PAGE 5
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly specified are cumulative and
not exclusive of any rights or remedies which any Creditor would otherwise have.
No notice to or demand on any Guarantor in any case shall entitle such Guarantor
to any other further notice (in demand in similar or other circumstances or
constitute a waiver of the rights of any Creditor to any other or further action
in any circumstances without notice or demand. It is not necessary for any
Creditor to inquire into the capacity or powers of the Borrower or any of its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on its behalf and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred, so requests, shall
be collected, enforced and received by, such Guarantor as trustee for the
Creditors and be paid over to the Creditors on account of the indebtedness of
the Borrower to the Creditors, but without affecting or impairing in any manner
the liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by such Guarantor of any note or negotiable instrument
evidencing any indebtedness of the Borrower to such Guarantor, such Guarantor
shall mark such note or negotiable instrument with a legend that the same is
subject to this subordination. Without limiting the generality of the foregoing,
each Guarantor hereby agrees with the Creditors that it will not exercise any
right of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
10. (a) Each Guarantor waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Creditors to
(i) proceed against the Borrower, any other Guarantor, any other guarantor or
any other party, (ii) proceed against or exhaust any security held from the
Borrower, any other Guarantor, any other guarantor or any other party or (iii)
pursue any other remedy in the Creditors' power whatsoever. Each Guarantor
waives any defense based on or arising out of any defense of the Borrower, any
other Guarantor, any other guarantor or any other party other than payment in
full of the Guaranteed Obligations, including, without limitation, any defense
based on or arising out of the disability of the Borrower, any other Guarantor,
any other guarantor or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full of the
Guaranteed Obligations. The Creditors may, at their election, foreclose on any
security held by the Agents, the Collateral Agent or the other Creditors by one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been paid in full. Each Guarantor waives
any defense arising out of any such election by the
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EXHIBIT H
PAGE 6
Creditors, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notice, including without limitation notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional indebtedness. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known them regarding such circumstances
or risks.
11. In order to induce the Banks to make Loans to the Borrower,
and to issue, and participate in, Letters of Credit for the account of the
Borrower pursuant to the Credit Agreement and to induce the Other Creditors to
execute, deliver and perform the Interest Rate Protection and Other Hedging
Agreements, each Guarantor hereby represents, warrants and covenants that:
(i) Such Guarantor and each of its Subsidiaries (x) is a duly
organized and validly existing corporation in good standing under the laws of
the jurisdiction of its incorporation, (y) has the corporate power and authority
to own its property and assets and to transact the business in which it is
engaged and presently proposes to engage and (z) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction where the
ownership, leasing or operation of property or the conduct of its business
requires such qualification except for failures to be so qualified which, in the
aggregate, would not have a material adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of such Guarantor or of such
Guarantor and its Subsidiaries taken as a whole.
(ii) Such Guarantor has the corporate power to execute, deliver
and perform the terms and provisions of this Guaranty and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of this Guaranty. Such Guarantor has duly executed and delivered this
Guaranty, and this Guaranty constitutes its legal valid and binding obligation
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by general equitable
principles (regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
(iii) Neither the execution, delivery or performance by such
Guarantor of this Guaranty, nor compliance by it with the terms and provisions
hereof, (x) will contravene any provision of any law, statute, rule or
regulation or any order, writ, injunction or decree of any court or governmental
instrumentality, (y) will conflict with or result in any breach of any of the
terms,
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EXHIBIT H
PAGE 7
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Security Documents) upon any of the property or
assets of such Guarantor pursuant to the terms of any indenture, mortgage, deed
of trust, credit agreement or loan agreement, or any other agreement, contract
or instrument to which such Guarantor is a party or by which it or any of its
property or assets is bound or to which it may be subject or (z) will violate
any provision of the Certificate of Incorporation or By-Laws (or similar
organizational documents) of such Guarantor or any of its Subsidiaries.
(iv) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as have been
obtained or made prior to the Initial Borrowing Date and are in full force and
effect), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (x) the execution, delivery and performance of this Guaranty or (y) the
legality, validity, binding effect or enforceability of this Guaranty.
(v) There are no actions, suits or proceedings pending or, to the
best knowledge of any Guarantor, threatened (x) with respect to this Guaranty,
(y) with respect to any Indebtedness of the Guarantor or any of its Subsidiaries
or (z) that are reasonably likely to materially and adversely affect the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of such Guarantor
and its Subsidiaries taken as a whole.
(vi) On the date hereof and after giving effect to the incurrence
by such Guarantor of the Contingent Obligations evidenced by this Guaranty, (x)
the assets of such Guarantor, at a fair valuation, will exceed its debts, (y)
the Guarantor will have sufficient capital to conduct its business and (z) such
Guarantor will not have incurred debts, and does not intend to incur debts,
beyond its ability to pay such debts as they mature. For purposes of this clause
(vi), "debt" means any liability on a claim, and "claim" means (x) right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured; or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, or unsecured.
12. Each Guarantor covenants and agrees that on and after the date
hereof and until the Total Commitment and all Letters of Credit have terminated
and all Guaranteed Obligations have been paid in full, such Guarantor shall
take, or will refrain from taking, as the case may be, all actions that are
necessary to be taken or not taken so that no violation of any provision,
covenant or agreement contained in Section 7 or 8 of the Credit Agreement, and
so that no Default or Event of Default, is caused by the actions of such
Guarantor or any of its Subsidiaries.
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EXHIBIT H
PAGE 8
13. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
14. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated in any manner whatsoever unless in writing duly
signed by the Administrative Agent (with, except as provided in Section 12.12 of
the Credit Agreement, the consent of the Required Banks) and each Guarantor
directly affected thereby it being understood that the release or addition of
any Guarantor hereunder shall not constitute a change or waiver affecting any
Guarantor other than the Guarantor so released or added); provided however, that
any change, waiver, modification or variance affecting the rights and benefits
of a single Class (as defined below) of Creditors (and not all Creditors in a
like or similar manner) shall require the written consent of the Requisite
Creditors (as defined below) of such Class of Creditors. For the purpose of this
Guaranty, the term "Class" shall mean each class of Creditors, i.e., whether (x)
the Bank Creditors as holders of the Credit Document Obligations or (y) the
Creditors as holders of the Interest Rate Protection Obligations. For the
purpose of this Guaranty, the term "Requisite Creditors" of any Class shall mean
each of (x) with respect to the Credit Document Obligations, the Required Banks
and (y) with respect to the Interest Rate Protection Obligations, the holders of
at least a majority of all obligations outstanding from time to time under the
Interest Rate Protection or Other Hedging Agreements.
15. Each Guarantor acknowledges that an executed (or conformed)
copy of the Credit Agreement has been made available to its principal executive
officers and such officers are familiar with its contents.
16. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" under, and as defined in, the Credit
Agreement or any payment default (after giving effect to any grace period
applicable thereto) under any Interest Rate Protection or Other Hedging
Agreement and shall in any event, include without limitation any payment default
on any of the Guaranteed Obligations after giving effect to any grace period
applicable thereto), each Creditor is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to any
Guarantor or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Creditor
(including, without limitation, by branches and agencies of such Creditor
wherever located) to or for the credit or the account of such Guarantor, against
and on account of the obligations and liabilities of such Guarantor to such
Creditor under this Guaranty, irrespective of whether or not such Creditor shall
have made any demand hereunder and although said obligations, liabilities,
deposits or claims, or any of them, shall be contingent or unmatured.
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EXHIBIT H
PAGE 9
17. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guarantor, addressed to
such party at (i) in the case of any Bank Creditor, as provided in the Credit
Agreement, (ii) in the case of any Guarantor, at its address set forth on its
signature page below, and (iii) in the case of any Other Creditor, as provided
in the Security Agreement; or in any case at such other address as any of the
Persons listed above may hereafter notify the others in writing.
18. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon it, notwithstanding any revocation hereof or the
cancellation of any Note or any Interest Rate Protection or Other Hedging
Agreement or other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
19. Any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by the Borrower or other Persons
liable, in respect of the Guaranteed Obligations (including any Guarantor), with
respect to any of the Guaranteed Obligations shall, if the statute of
limitations in favor of any Guarantor against any Creditor shall have commenced
to run, toll the running of such statute of limitations, and if' the period of
such statute of limitations shall have expired, prevent the operation of such
statute of limitations.
20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS GUARANTY, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO SUCH ACTIONS OR
PROCEEDINGS. EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS
CORPORATION SERVICE COMPANY WITH ITS OFFICES ON THE DATE HEREOF AT 80 STATE
STREET, ALBANY, NEW YORK, 12207, AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND
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EXHIBIT H
PAGE 10
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF IT'S PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND
AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH GUARANTOR AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT ON THE TERMS AND FOR THE PURPOSES
OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATION AGENT FOR THE BANKS UNDER
THIS GUARANTY. EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO EACH GUARANTOR AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE
BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY OF THE CREDITORS TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION.
(B) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY
OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
21. (a) Each Guarantor, in addition to the subrogation rights it
shall have against the Borrower under applicable law as a result of any payment
it makes hereunder, shall also have a right of Contribution against all other
Guarantors in respect of any such payment pro rata among same based on their
respective net fair value as enterprises, provided any such right of
contribution shall be subject and subordinate to the prior payment in full of
the Guaranteed Obligations (and such Guarantor's obligations in respect
thereof). It is the desire and intent of each Guarantor and the Creditors that
this Guaranty shall be enforced against each Guarantor to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought.
(b) If, however, and to the extent, that the obligations of any
Guarantor under this Guaranty would, in the absence of this sentence, be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers), then the amount of the Guaranteed
Obligations of such Guarantor (but not the Guaranteed Obligations of any other
Guarantor unless such other Guarantor or Guarantors are individually subject to
the circumstances covered by this Section 21) shall be
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EXHIBIT H
PAGE 11
deemed to be reduced ab initio to that maximum amount which would be permissible
under applicable law without causing such Guarantor's obligations hereunder to
be so invalidated.
22. The Creditors agree that this Guaranty may be enforced only by
the action of the Administrative Agent or the Collateral Agent, in each case
acting upon the instructions of the Required Banks land that no Creditor shall
have any right individually to seek to enforce or to enforce this Guaranty or to
realize upon the security to be granted by the Security Documents, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent for the benefit of the Creditors
upon the terms of this Guaranty and the Security Documents.
23. This Guaranty may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
24. In the event that all of the capital stock of one or more
Guarantors is sold in connection with a sale permitted by Section 8.02 of the
Credit Agreement and the proceeds of such sale or sales are applied in
accordance with the provisions of Section 3.02 of the Credit Agreement, to the
extent applicable, each Guarantor (x) all of the capital stock of which is so
sold or (y) which is a Subsidiary of a Guarantor all of the capital stock of
which is so sold, shall be released from this Guaranty and this Guaranty shall,
as to each Guaranty or Guarantors, terminate, and have no further force or
effect.
25. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
26. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
27. It is understood and agreed that any Subsidiary of the
Borrower that is required to execute, a counterpart of this Guaranty after the
date hereof pursuant to the Credit Agreement shall automatically become a
Guarantor hereunder by executing counterpart hereof and delivering the same to
the Administrative Agent.
* * *
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EXHIBIT H
PAGE 12
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
ARGOS SUPPORT SERVICES COMPANY
By: /s/ Rodney A. Weary
------------------------------
Name: Rodney A. Weary
Title: President
FLEET NATIONAL BANK,
as Administrative Agent
By: /s/ Christopher A. Swindell
---------------------------------------
Name: Christopher A. Swindell
Title: Vice President
By: /s/ Vincent J. Rivers
---------------------------------------
Name: Vincent J. Rivers
Title: Assistant Vice President
217
EXHIBIT I
[CONFORMED AS EXECUTED]
HOLDINGS PLEDGE AGREEMENT
HOLDINGS PLEDGE AGREEMENT, dated as of May 8, 1998 (as amended,
modified or supplemented from time to time, the "Agreement"), made by Golden Sky
Holdings, Inc. (the "Pledgor"), in favor of FLEET NATIONAL BANK, as
Administrative Agent (the "Pledgee"), for the benefit of (x) the Banks (as
defined below) and the Agents (as defined below) under, and any other lender
from time to time party to, the Credit Agreement hereinafter referred to (such
Banks, the Agents and the other lenders, if any, hereinafter being referred to
as the "Bank Creditors") and (y) if the Agents in their individual capacities,
any Bank or a syndicate of financial institutions organized by the Agents or any
such Bank or an affiliate of the Agents or such Bank enter into one or more (i)
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements), (ii) foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against the fluctuations in currency values and/or (iii)
other types of hedging agreements from time to time (collectively, the "Interest
Rate Protection or Other Hedging Agreements"), with, or guaranteed by, the
Borrower (as defined below) or any of its Subsidiaries, the Agents, any such
Bank or an affiliate of the Agents or such Bank (even if either of the Agents or
any such Bank ceases to be a Bank under the Credit Agreement for any reason) and
any such institution that participates in such Interest Rate Protection or Other
Hedging Agreements and their subsequent assigns (collectively, the "Other
Creditors" and, together with the Bank Creditors, are herein called the "Secure
Creditors"). Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement shall be used herein as therein defined.
WITNESSETH:
WHEREAS, the Pledgor, Golden Sky Systems, Inc. (the "Borrower"),
the financial institutions from time to time party thereto (the "Banks"), Banque
Paribas, as Syndication Agent ("Banque Paribas"), Fleet National Bank, as
Administrative Agent (Fleet National Bank, to ether with Banque Paribas, the
"Agents"), and General Electric Capital Corporation, as Documentation Agent,
have entered into an Amended and Restated Credit Agreement, dated as of July 7.
1997, amended and restated May 8, 1998, providing for the making of Loans and
the issuance of, and participation in, Letters of Credit as contemplated therein
(as used herein , the term "Credit Agreement" means the Amended and Restated
Credit Agreement described above in this paragraph, as the same may be amended,
modified, extended, renewed, replaced, restated, supplemented, restructured or
refinanced from time to time, and including any agreement extending the maturity
of, refinancing or restructuring (including, but not limited to, the inclusion
of additional borrowers thereunder that are Subsidiaries of the Borrower and
whose obligations are guaranteed by the Borrower thereunder or any increase in
the amount borrowed) all or any portion of, the Indebtedness under such
agreement or any
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EXHIBIT I-1
PAGE 2
successor agreements; provided, that with respect to any agreement providing for
the refinancing of Indebtedness under the Credit Agreement, such agreement shall
only be treated as, or as part of, the Credit Agreement hereunder if (i) either
(A) all obligations under the Credit Agreement being refinanced shall be paid in
full at the time of such refinancing, and all commitments and letters of credit
issued pursuant to the refinanced Credit Agreement shall have terminated in
accordance with their terms or (B) the Required Banks shall have consented in
writing to the refinancing Indebtedness being treated, along with their
Indebtedness, as Indebtedness pursuant to the Credit Agreement, (ii) the
refinancing Indebtedness shall be permitted to be incurred under the Credit
Agreement being refinanced (if such Credit Agreement is to remain outstanding,)
and (iii) a notice to the effect that the refinancing Indebtedness shall be
treated as issued under the Credit Agreement shall be delivered by the Borrower
to the Collateral Agent);
WHEREAS, the Borrower desires to incur Loans and to have Letters
of Credit issued for its account pursuant to the Credit Agreement;
WHEREAS, the Borrower may at any time and from time to time enter
into one or more Interest Rate Protection or Other Hedging Agreements with one
or more Other Creditors;
WHEREAS, Holdings has executed the Credit Agreement to perform
certain obligations in connection with the incurrence of Loans by the Borrower
thereunder and to guarantee all of the obligations of the Borrower thereunder;
WHEREAS, it is a condition to each of the above-described
extensions of credit to the Borrower that the Pledgor shall have executed and
delivered this Agreement to the Pledgee; and
WHEREAS, the Borrower and the Pledgor will obtain benefits from
the incurrence of the Term Loan and Revolving Loans by, and the issuance of
Letters of Credit to, the Borrower under the Credit Agreement and the entering
into of the Interest Rate Protection or Other Hedging Agreements and,
accordingly, desires to execute this Agreement in order to satisfy the
conditions described in the preceding paragraph and to secure its obligations
under the Credit Agreement;
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the Pledgee
for the benefit of the Secured Creditors and hereby covenants and agrees with
the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by the Pledgor
for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation,
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EXHIBIT I-1
PAGE 3
indemnitees, fees and interest thereon) of the Pledgor and the Borrower
owing to the Bank Creditors, now existing or hereafter incurred under,
arising out of or in connection with any Credit Document and the due
performance and compliance by the Pledgor an I the Borrower with the
terms of each such Credit Document (all such obligations and
liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate Protection or
Other Hedging Agreement, being herein collectively called the "Credit
Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, indemnitees, fees and
interest thereon) of the Pledgor and the Borrower owing to the Other
Creditors, now existing or hereafter incurred under, arising out of or
in connection with any Interest Rate Protection or Other Hedging
Agreement (all such obligations and indebtedness under this clause (ii)
being herein collectively called the "Interest Rate Protection
Obligations");
(iii) any and all sums advanced by the Pledgee in accordance with
the terms of this Agreement in order to preserve the Collateral (as
defined in Section 3.4 herein) or preserve its security interest in the
Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness obligations, or liabilities referred to
in clauses (i), (ii) and (iii) above, after an Event of Default (such
term, as used in this Agreement, shall mean any Event of Default under,
and as defined in, the Credit Agreement, or any payment default under
any Interest Rate Protection or Other Hedging Agreement after the
expiration of any applicable grace period and shall in any event
include, without limitation, any payment and default on any of the
Obligations (as hereinafter defined) after the expiration of any
applicable grace period) shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing or realizing on the Collateral, or of
any exercise by the Pledgee of its rights hereunder, together with
reasonable attorneys' fees and court costs; and
(v) all amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement under Section 11 of this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section I being herein collectively called the
"Obligations"; provided, that it is acknowledged and agreed that the
"Obligations" shall include extensions of credit of the types described above,
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.
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2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used herein,
the term "Stock" shall mean all of the issued and outstanding shares of capital
stock at any time owned by the Pledgor of any corporation and (ii) the term
"Notes" shall mean all promissory notes at any time issued to the Pledgor by any
of its Subsidiaries, Affiliates or any other Person. As used herein, the term
"Securities" shall mean all of the Stock and Notes. The Pledgor represents and
warrants, as to the Stock of corporations and promissory notes owned by the
Pledgor, that on the date hereof (a) the Stock consists of the number and type
of shares of the stock of the corp orations as described in Annex A hereto; (b)
such Stock constitutes that percentage of the issued and outstanding capital
stock of the issuing corporation as is set forth in Annex A hereto; (c) the
Notes consist of the promissory notes described in Annex B hereto; and (d) the
Pledgor is the holder of record and sole beneficial owner of the Stock and the
Notes and there exist no options or preemption rights in respect of any of the
Stock.
3. PLEDGE OF SECURITIES, ETC.
a. Pledge. To secure the Obligations and for the purposes set
forth in Section 1, the Pledgor hereby: (i) grants to the Pledgee a security
interest in all of the Collateral owned by the Pledgor; (ii) pledges and
deposits as security with the Pledgee the Securities owned by the Pledgor on the
date, hereof, and delivers to the Pledgee certificates or instruments therefor,
duly endorsed in blank in the case of Notes and accompanied by undated stock
powers duly executed in blank by the Pledgor in the case of Stock, or such other
instruments of transfer as are reasonably acceptable to the Pledgee; and (iii)
assigns, transfers, hypothecates, mortgages, charges and sets over to the
Pledgee all of the Pledgor's right, title and interest in and to such Securities
(and in and to all certificates or instruments evidencing such Securities), in
each case to be held by the Pledgee upon the terms and conditions set forth in
this Agreement.
b. Subsequently Acquired Securities. If the Pledgor shall acquire
(by purchase, stock dividend or Otherwise) any additional Securities at any time
or from time to time after the date hereof, the Pledgor will forthwith pledge
and deposit such Securities (or certificates or instruments representing such
Securities) as security with the Pledgee and deliver to the Pledgee certificates
therefor or instruments thereof, duly endorsed in blank in the case of Notes and
accompanied by updated stock powers duly executed in blank in the case of Stock,
or such other instruments of transfer as are reasonably acceptable to the
Pledgee, to secure the Obligations and for the purposes set forth in Section 1,
and will promptly thereafter deliver to the Pledgee a certificate executed by
any of the Chairman of the Board, the Chief Financial Officer, the President, a
Vice Chairman, any Vice President or the Treasurer of the Pledgor describing
such Securities and certifying that the same have been duly pledged with the
Pledgee hereunder.
c. Uncertificated Partnership Interests. Notwithstanding anything
to the contrary contained in Section 3.2, to the extent any of the Securities
(whether now owned or hereafter acquire) are uncertificated, the Pledgor shall
promptly notify the Pledgee thereof, and shall promptly
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take all actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under the provisions of Articles 8 and
9 of the New York UCC). The Pledgor further agrees to take such actions as the
Pledgee deems necessary or desirable, including, filing of appropriately
completed and executed Uniform Commercial Code financing statements with
appropriate governmental authorities, to effect the foregoing and to permit the
Pledgee to exercise any of its rights and remedies hereunder, and agrees to
provide an opinion of counsel reasonably satisfactory to the Pledgee with
respect to any such pledge of uncertificated Securities promptly upon request of
the Pledgee.
d. Definition of Pledged Stock; Pledged Notes, Pledged Securities
and Collateral . All Stock at any time pledged or required to be pledged
hereunder is hereinafter called the "Pledged Stock "' all Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes," all of the Pledged Stock and Pledged Notes together are hereinafter
called the "Pledged Securities," which together with all proceeds thereof,
including any securities and moneys received and at the time held by the Pledgee
hereunder, is hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Securities.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until (i)
an Event of Default shall have occurred and be continuing and (ii) written
notice thereof shall have been given by the Pledgee to the Pledgor (provided,
that if an Event of Default specified in Section 9.05 of the Credit Agreement
shall occur, no such notice shall be required), the Pledgor shall be entitled to
exercise any and all voting and other consensual right pertaining to the Pledged
Securities owned by it and to give consents, waivers or ratifications in respect
thereof, provided, that no note shall be cast or any consent, waivers or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Agreement, any other Credit Document or any
Interest Rate Protection or Other Hedging Agreement (collectively, the "Secured
Debt Agreements"), or which would have the effect of impairing the position or
interests of the Pledgee or any Secured Creditor. All such rights of the Pledgor
to vote and to give consents, waivers and ratifications shall cease in case an
Event of Default shall occur and be continuing, and Section 7 hereof shall
become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default
shall have occurred and be continuing (or would occur as a result thereof), all
cash dividends payable in respect of the Pledged Stock and all payments in
respect of the Pledged Notes shall be paid to the Pledgor free and clear of the
securities interests created under this Agreement or any other Credit Document;
provided, that all cash dividends payable in respect of the Pledged Stock which
are reasonably determined by the Pledgee, in its sole discretion, to represent
in whole or in part an extraordinary, liquidating or other distribution in
return of capital shall be paid, to the extent so
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determined to represent an extraordinary, liquidating or other distribution in
return of capital, to the Pledgee and retained by it as part of the Collateral.
The Pledgee shall also be entitled to receive directly, and to retain as part of
the Collateral:
(i) all other or additional stock or other securities or property
(other than cash) paid or distributed by way of dividend or otherwise
in respect of the Pledged Stock;
(ii) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Pledged Stock by
way of stock-split, spin-off, split-up, reclassification, combination
of shares or similar rearrangement; and,
(iii) all other or additional stock or other securities or
property (including cash) which may be paid in respect of the
Collateral by reason of any consolidation, merger, exchange or stock,
conveyance of assets, liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by the Pledgor contrary to the provisions of this Section 6
and Section 7 shall be received in trust for the benefit of the Pledgee, shall
be segregated from other property or funds of the Pledgor and shall be Forthwith
paid over to the Pledgee as Collateral in the same form as so received (with any
necessary endorsement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. (a) In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by any other Secured Debt Agreement or by law) for the protection
and enforcement of its rights in respect of the Collateral, and the Pledgee
shall be entitled, without limitation, to exercise the following rights, which
the Pledgor hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
payable to the Pledgor under Section 6;
(ii) to transfer all or any part of the Pledged Securities into
the Pledgee's name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment of amounts then due and payable thereon);
(iv) subject as set forth in section 5, to vote all or any part of
the Pledged Securities (whether or not transferred into the name of the
Pledgee) and give all consents,
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waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof
(the Pledgor hereby irrevocably constituting and appointing the Pledgee
the proxy and attorney-in-fact of the Pledgor, with full power of
substitution to do so); and
(v) at any time or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the
time or place of sale or adjournment thereof or to redeem or otherwise
(all of which are hereby waived by the Pledgor to the extent permitted
by applicable law), for cash or credit or for other property, for
immediate or future delivery without any assumption of credit risk, and
for such price or prices and on such terms as the Pledgee may, in
compliance with any mandatory requirements of applicable law, determine
to be commercially reasonable; provided, that at least 10 days' notice
of the time and place of any such sale shall be given to the Pledgor.
The Pledgor hereby waives and releases to the fullest extent permitted
by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if
any, of marshalling the Collateral and any other security for the
Obligations or otherwise. At any such sale, unless prohibited by
applicable law, the Pledgee on behalf of the Secured Creditors may bid
for and purchase all or any part of the Collateral so sold free from
any such right or equity of redemption. Neither the Pledgee nor any
Secured Creditor shall be liable for failure to collect or realize upon
any or all of the Collateral or for any delay in so doing nor shall any
of them be tender any obligation to take any action whatsoever with
regard thereto.
(b) In case the Pledgee shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement by foreclosure, sale,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Pledgee,
then and in such case the Pledgor, the Pledgee and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interests created under
this Agreement, and all rights, remedies and powers of the Pledgee shall
continue as if no such proceeding had been instituted.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement or any other Secured Debt Agreement or
now or hereafter existing al law or in equity or by statute shall be cumulative
and concurrent and shall be in addition to every other such right, power or
remedy. The exercise or beginning of the exercise by the Pledgee or any Secured
Creditor of any one or more of the rights, powers or remedies provided for in
this Agreement or any other Secured Debt Agreement or now or hereafter existing
at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Pledgee or any Secured Creditor of all
such other rights, powers or remedies, and no failure or delay on the part of
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the Pledgee or any Secured Creditor to exercise any such right, power or remedy
shall operate as a waiver thereof.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder shall be applied as follows:
(i) first, to the payment of all Obligations owing to the Pledgee
(or any Indemnitee, in the case of clause (v) of Section I of this
Agreement) of the type described in clauses (iii), (iv) and (v) of
Section I of this Agreement;
(ii) second, to the extent moneys remain after the application
pursuant to the preceding clause (i), an amount equal to the
outstanding Primary Obligations shall be paid to the Secured Creditors
as provided in Section 9(e), with each Secured Creditor receiving an
amount equal to its outstanding Primary Obligations or, if the proceeds
are insufficient to pay in full all such Primary Obligations, its Pro
Rata Share of the amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured
Creditors as provided in Section 9(e), with each Secured Creditor
receiving an amount equal to its outstanding Secondary Obligations or,
if the proceeds are insufficient to pay in full all such Secondary
Obligations, its Pro Rata Share of the amount remaining to be
distributed; and
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i), (ii) and (iii), to the Pledgor
or as required by applicable law.
(2) For purposes of this Agreement (x) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the
case of the Credit Document Obligations, all principal of, and interest on, all
Loans, all Unpaid Drawings theretofore made (together will all interest accrued
thereon), the aggregate Stated Amounts of all Letters of Credit issued under the
Credit Agreement, and all Fees and (ii) in the case of the Interest Rate
Protection Obligations, all amounts due under the Interest Rate Protection or
Other Hedging Agreements (other than indemnities, fees (including, without
limitation, Attorneys' fees) and similar obligations and liabilities) and (z)
"Secondary Obligations" shall mean all Obligations other than Primary
Obligations.
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(3) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (i) first, to their Primary Obligations and (ii)
second, to their Secondary Obligations. If any payment to any Secured Creditor
of its Pro Rata Share of any distribution would result in overpayment to such
Secured Creditor, such excess amount shall instead be distributed in respect of
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of
the other Secured Creditors, with each Secured Creditor whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid in
full to receive an amount equal to such excess amount multiplied by a fraction
the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the denominator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of all Secured Creditors entitled to such distribution.
(4) Each of the Secured Creditors agrees and acknowledges that if
the Bank Creditors are to receive a distribution on account of undrawn amounts
with respect to Letters of Credit issued under the Credit Agreement (which shall
only occur after all outstanding Loans and Unpaid Drawings with respect to such
Letters of Credit have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the Bank Creditors, as cash security for the repayment
Obligations owing to the Bank Creditors as such. If any amounts are held as cash
security pursuant to the immediately preceding sentence, then upon the
termination of all outstanding Letters of Credit, and after the application of
all such cash security to the repayment of all Obligations owing to the Bank
Creditors after giving effect to the termination of all such Letters of Credit,
if there remains any excess cash, such excess cash shall be returned by the
Administrative Agent to the Collateral Agent for distribution in accordance with
Section 9(a) hereof.
(5) Except as set forth in Section 9(d) hereof, all payments
required to be made hereunder shall be made (i) if to the Bank Creditors, to the
Administrative Agent under the Credit Agreement for the account of the Bank
Creditors, and (ii) if to the Other Creditors, to the trustee, paying agent or
other similar representative (each a "Representative") for the Other Creditors
or, in the absence of such a Representative, directly to the Other Creditors.
(6) For purposes of applying payments received in accordance with
this Section 9, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Representative for
the Other Creditors or, in the absence of such a Representative, upon the Other
Creditors for a determination (which the Administrative Agent, each
Representative for any Secured Creditors and the Secured Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Bank Creditors or the
Other Creditors, as the case may be. Unless it has actual knowledge (including
by way of written notice from a Bank Creditor or an Other Creditor to the
contrary, the Administrative Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume
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that no Secondary Obligations are outstanding. Unless it has actual knowledge
(including by way of written notice from an Other Creditor) to the contrary, the
Collateral Agent, in acting hereunder, shall be entitled to assume that no
Interest Rate Protection or Other Hedging Agreements are in existence.
(7) It is understood and agreed that the Pledgor shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder I and the aggregate amount of the
sums referred to in clauses (i), (ii) and (iii) of Section 9(a).
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by
the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise, the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledged or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY.
a. Indemnity. (a) The Pledgor jointly and severally agrees to
indemnify, reimburse and hold the Pledgee, each Secured Creditor and their
respective successors, permitted assigns, employees, agents and servants
(hereinafter in this Section 11.1 referred to individually as "Indemnitee," and
collectively as "Indemnitees") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs, expenses or disbursements (including attorneys'
fees and expenses) (for the purposes of this Section 11.1 the foregoing are
collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against -or incurred by any of the Indemnitees in any way relating to
or arising out of this Agreement, any other Secured Debt Agreement or any other
document executed in connection herewith and therewith or in any other way
connected with the administration of the transactions contemplated hereby and
thereby or the enforcement of any of the terms of, or the preservation of any
rights under any thereof, the violation of the laws of any country, state or
other governmental body or unit, any tort or contract claim; provided, that no
Indemnitee shall be indemnified pursuant to this Section 11.1 (a) for losses,
damages or liabilities to the extent caused by the gross negligence or willful
misconduct of such Indemnitee. In no event shall any Indemnitee be liable for
any matter or thing in connection with this Agreement other than to account
moneys actually received by it in connection with the terms hereof. The Pledgor
agrees that upon written notice by any Indemnitee of the assertion of such a
liability, obligation, damage injury, penalty, claims, demand, action, judgment
or suit, the Pledgor shall assume full responsibility for the defense thereof.
Each Indemnitee agrees to use its best efforts to promptly notify the Pledgor of
any such assertion of which such Indemnitee has knowledge.
(2) Without limiting the application of Section 11.1(a), the
Pledgor jointly and severally agrees to pay or reimburse the Pledgee for any and
all fees, costs and expenses of whatever
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kind or nature reasonably incurred in connection with the creation, preservation
or protection of the Pledgee's Liens on, and security interest in, the
Collateral, including, without limitation, all fees and taxes in connection with
the recording or filing of instruments and documents in public offices, payment
or discharge of any taxes or Liens upon or in respect of the Collateral (other
than Liens permitted under this Agreement or the Credit Agreement so long as no
Event of Default has occurred and is continuing) and all other reasonable fees,
costs and expenses in connection with protecting, maintaining or preserving the
Collateral and the Pledgee's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(3) If and to the extent that the obligations of the Pledgor under
this Section 11 are unenforceable for any reason, the Pledgor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
b. Indemnity Obligations Secured by Collateral, Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of the Pledgor contained in this Section 11 shall continue
in full force and effect notwithstanding the full payment of all the Notes
issued under the Credit Agreement, the termination of all Letters of Credit and
all Interest Rate Protection or Other Hedging Agreements and the payment of all
other Obligations and notwithstanding the discharge thereof.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) The Pledgor agrees
that it will join with the Pledgee in executing and, at the Pledgor's own
expense, file and refile under the UCC such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of the Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.
(2) The Pledgor hereby appoints the Pledgee as its
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's discretion
to take any action and to execute any instrument which the Pledgee may deem
necessary or advisable to accomplish the purposes of this Agreement.
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13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by the parties hereto and each
Secured Creditor, by accepting the benefits of this Agreement, acknowledges and
agrees that the obligation of the Pledgee as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise
under this Agreement, are only those expressly set forth in this Agreement. The
Pledgee shall act hereunder on the terms and conditions set forth herein and in
Section 11 of the Credit Agreement.
14. TRANSFER BY PLEDGOR. The Pledgor will not sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except as may be
permitted in accordance with the terms of the Credit Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. The
Pledgor represents, warrants and covenants that: (i) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by the Credit Agreement and this Agreement;
(ii) it has the requisite corporate power, authority and legal right to pledge
all the Securities pledged by it pursuant to this Agreement; (iii) this
Agreement has been duly authorized, executed and delivered by the Pledgor and
constitutes a legally valid and binding obligation of the Pledgor enforceable in
accordance with its terms, except to the extent that the enforceability hereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
(iv) no consent of any other party (including, without limitation, any
stockholder, limited or general partner or creditor of the Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required to be obtained by the Pledgor in
connection with the execution, delivery or performance of this Agreement, except
as obtained on or before the date hereof or as permitted to be obtained after
the date hereof by Section 3.1 of this Agreement; (v) the execution, delivery
and performance of this Agreement does not violate any provision of any
applicable law or regulation or of any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or foreign, applicable
to the Pledgor or of the certificate of incorporation or by-laws of the Pledgor
or of any securities issued by the Pledgor or any of its Subsidiaries, or of any
mortgage, indenture, lease, deed of trust, agreement, instrument or undertaking
to which the Pledgor or any of its Subsidiaries is a party or which purports to
be binding upon the Pledgor or any of its Subsidiaries or upon any of their
respective assets and will not result in the creation or imposition of any lien
or encumbrance on any of the assets of the Pledgor or any of its Subsidiaries
except as contemplated by this Agreement; (vi) all the shares of Stock have been
duly and validly issued, are fully paid and nonassessable; (vii) to the best
knowledge of Pledgor, each of its Pledged Notes, when executed by the obligor
thereof, will be the legal, valid and binding
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obligation of such obligor, enforceable in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by equitable principles (regardless of whether
enforcement is sought in equity or at law); and (viii) the pledge and assignment
of the Securities by it pursuant to this Agreement, together with the delivery
of the Securities by it pursuant to this Agreement, creates a valid and
perfected first priority security interest in such Securities and the proceeds
thereof (except to the extent further action may be required to maintain a
perfected security interest in proceeds after the actual receipt thereof by the
Pledgee), subject to no prior lien or encumbrance or to any agreement (other
than as may be created by any other Credit Document) purporting to grant to any
third party a lien or encumbrance on the property or assets of the Pledgor which
would include such Securities. The Pledgor covenants and agrees that it will
defend the Pledgee's right, title and security interest in and to the Securities
pledged by it pursuant to this Agreement and the proceeds thereof against the
claims and demands of all persons whomsoever, and the Pledgor covenants and
agrees that it will have like title to and right to pledge any other property at
any time hereafter pledged to the Pledgee as Collateral hereunder and will
likewise defend the right thereto and security interest therein of the Pledgee
and the Secured Creditors.
16. THE PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. (a) The obligations
of the Pledgor hereunder shall remain in full force and effect without regard
to, and shall not be impaired by:
(2) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of the Pledgor, except to the
extent that the enforceability thereof may be limited by such event; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under in respect of this Agreement, any other Credit Document or any
Interest Rate Protection or Other Hedging Agreement, except as specifically set
forth in a waiver granted pursuant to Section 20; or (c) any amendment to or
modification of any Credit Document, or any Interest Rate Protection or Other
Hedging Agreement or any security for any of the Obligations; whether or not the
Pledgor shall have notice or knowledge of any of the foregoing, except as
specifically set forth in an amendment or modification executed pursuant to
Section 20.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that the Pledgor cause any registration,
qualification or compliance under any federal or state securities law or laws to
be effected with respect to all or any part of it, Pledged Stock, the Pledgor as
soon as practicable and at its expense shall cause such registration to be
effected (and be kept effective), and shall cause such qualification and
compliance to be effected (and be kept effective) as may be so requested and
shall permit or facilitate the sale and distribution of such Pledged Stock,
including, without limitation, registration under the Securities Act of 1933 as
then in effect (or any similar statute then in effect), appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with any other government requirements; provided that the
Pledgee
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EXHIBIT I-1
PAGE 14
shall furnish to the Pledgor such information regarding the Pledgee as the
Pledgor may request in writing and as shall be required in connection with any
such registration, qualification or compliance. The Pledgor will cause the
Pledgee to be kept reasonably advised in writing as to the progress of each
such registration, qualification or compliance and as to the completion thereof,
will furnish to the Pledge - such number of prospectuses, offering circulars or
other documents incident thereto as the Pledgee from time to time may reasonably
request, and will indemnify the Pledgee and all others Participating in the
distribution of the Pledged Stock against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to the
Pledgor by the Pledgee expressly for use therein.
(2) If at any time when the Pledgee shall determine to exercise
its right to sell all or any part of the Pledged Securities pursuant to Section
7, such Pledged Securities or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Securities Act of 1933,
as then in effect, the Pledgee may, in its sole and absolute discretion, sell
such Pledged Securities or part thereof by private sale in such manner and under
such circumstances as the Pledgee may deem necessary or advisable in order that
such sale may legally be effected without such registration. Without limiting
the generality of the foregoing, in any such event the Pledgee, in its sole and
absolute discretion: (i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under such Securities Act; (ii)
may approach and negotiate with a single possible purchaser to effect such sale;
and (iii) may reflect such sale to a purchaser who will represent and agree that
such purchaser is purchasing for its own account, for investment, and not with a
view to the distribution or sale of such Pledged Securities or part thereof In
the event of any such sale, the Pledgee shall incur no responsibility or
liability for selling all or any I art of the Pledged Securities at a price
which the Pledgee, in its sole and absolute discretion, may in good faith deem
commercially reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might be realized if the sale were deferred
until after Registration of such Pledged Securities for public sale.
18. TERMINATION, RELEASE. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
Pledgor, will promptly execute and deliver to the Pledgor such statements,
documents or other instruments as may be reasonably requested by the Pledgor
acknowledging the satisfaction and termination of this Agreement and the
security interests created hereby, and will duly assign, transfer and deliver to
the Pledgor (without recourse and without any representation or warranty) such
of the Collateral of the Pledgor as may be in the possession of the Pledgee and
as has
14
231
EXHIBIT I-1
PAGE 15
not theretofore been sold or otherwise applied or released pursuant to this
Agreement. As used in this Agreement, "Termination Date" shall mean the date
upon which the Total Commitment and all Interest Rate Protection aid Other
Hedging Agreements have been terminated, no Note is outstanding (and all Loans
have been paid in full), all Letters of Credit have been terminated (or cash
collateralized to the Pledgee's satisfaction) and all other Obligations then
owing have been paid in full and there shall exist no unsatisfied claim for
reimbursement by any Indemnitee pursuant to Section 11.2.
(2) In the event that any part of the Collateral is sold in
connection with a sale permitted by the Credit Agreement or is otherwise
released at the direction of the Required Banks (or all the Banks if required by
Section 12.12 of the Credit Agreement), and the proceeds of such sale or sales
or from such release are applied in accordance with the terms of the Credit
Agreement, such Collateral will be sold free and clear of the Liens created by
this Agreement and the Pledgee, at the request and expense of the Pledgor, will
duly assign, transfer and deliver to the Pledgor (without recourse and without
any representation or warranty) such of the Collateral of the Pledgor as is then
being (or has been) so sold or released and as may be in possession of the
Pledgee and has not theretofore been released pursuant to this Agreement.
(3) At any time that the Pledgor desires that Collateral be
released as provided in the foregoing Section 18(a) or (b), it shall deliver to
the Pledgee a certificate signed by its chief financial officer or another
authorized senior officer stating that the release of the respective Collateral
is permitted pursuant to Section 18(a) or (b). If requested by the Pledgee
(although the Pledgee shall have no obligation to make any such request), the
Pledgor shall furnish appropriate legal opinions (from counsel, which may be in-
house counsel, reasonably acceptable to the Pledgee) to the effect set forth in
the immediately preceding sentence. The Pledgee shall have no liability
whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this Section 18.
19. NOTICES, ETC. All notices and other communications hereunder
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and shall be delivered, mailed telegraphed, telexed,
facsimile transmitted or cabled, addressed:
(1) if to the Pledgor, at its address set forth opposite its
signature below;
(2) if to the Pledgee, at:
Fleet National Bank
Mail Stop MA0FD03D
1 Federal Street
Boston, MA 02110
Attention: Christopher A. Swindell
15
232
EXHIBIT I-1
PAGE 16
Telephone No.: (617) 346-5579
Facsimile No.: (617) 346-4345
(3) if to any Bank Creditor (other than the Pledgee), either (x)
to the Administrative Agent, at the address of the Administrative Agent
specified in the Credit Agreement or (y) at such address as such Bank Creditor
shall have specified in the Credit Agreement;
(4) if to any Other Creditor or to the Representative for the
Other Creditors, at such address as such Representative may have provided to the
Borrower and the Pledgee from time to time, or, in the absence of a
Representative, directly to the Other Creditors at such address as the Other
Creditors shall have specified in writing to the Borrower and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. All such notices
and communications shall, when mailed, telegraphed, telexed , facsimile
transmitted or cabled or sent by overnight courier, be effective on the third
Business Day following deposit in the mails, certified, return receipt
requested, when delivered to the telegraph company, cable company or on the day
following delivery to an overnight courier, as the case may be, or sent by telex
or facsimile device, except that notices and communications to the Collateral
Agent shall not be effective until received by the Collateral Agent.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be amended, changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the Pledgor and the Pledgee (with
the written consent of the Required Banks (or all the Banks if required by
Section 12.12 of the ("Credit Agreement)); provided, that any amendment, change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Secured Creditors (and not all Secured Creditors in
a like or similar manner) shall require the written consent of the Requisite
Creditors (as defined below) of such Class. For the purpose of this Agreement,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (i)
the Bank Creditors as holders of the Credit Document Obligations or (ii) :he
Other Creditors as holders of the Interest Rate Protection Obligations. For the
purpose of this Agreement, the term "Requisite Creditors" of any Class shall
mean each of (i) with respect to the Credit Document Obligations, the Required
Banks and (ii) with respect to the Interest Rate Protection Obligations, the
holders of at least a majority of all obligations outstanding from time to time
under the Interest Rate Protection or Other Hedging Agreements.
21. MISCELLANEOUS. (a) This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of and by
enforceable by the Pledgee and each Secured Creditor and their respective
successors and assigns.
16
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EXHIBIT I-1
PAGE 17
(1) THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
(2) The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof.
(3) This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which shall constitute one
instrument.
22. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
* * *
17
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EXHIBIT I-1
PAGE 18
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
Address: GOLDEN SKY HOLDINGS, INC.
as Pledgor
605 West 47th Street
Suite 300 By: /s/ Robert B. Weaver
Kansas City, MO 64112 -------------------------------
Attention: Robert B, Weaver Name: Robert B. Weaver
Tel: (212) 593-7901 Title: Chief Financial Officer
Fax: (212) 754-6348
Mail Stop MA0FD03D FLEET NATIONAL BANK
1 Federal Street as Pledgee
Boston, MA 02110
Attention: Christopher A. Swindell By: /s/ Christopher A. Swindell
Telephone: (617) 346-5579 -------------------------------
Facsimile: (617) 346-4345 Name: Christopher A. Swindell
Title: Vice President
235
EXHIBIT I-1
PAGE 19
LIST OF STOCK
Pledgor Issuer Number/Type Percentage
- ------- ------ ----------- ----------
Golden Sky Holding Inc. Golden Sky Systems, Inc. 1000 Shares 100%
Common Stock
236
EXHIBIT I-1
PAGE 20
ANNEX B
to
Pledge Agreement
LIST OF NOTES
Maker Payee Amount
- ----- ----- ------
NONE
237
EXHIBIT I-2
PARTNERSHIP PLEDGE AGREEMENT
PARTNERSHIP PLEDGE AGREEMENT, dated as of May __, 1998 (as
amended, modified or supplemented from time to time, the "Agreement"), made by
the undersigned (the "Pledgor"), in favor of FLEET NATIONAL BANK, as
Administrative Agent (the "Pledgee"), for the benefit of (x) the Banks (as
defined below) and the Agents (as defined below) under, and any other lender
from time to time party to the Credit Agreement hereinafter referred to (such
Banks, the Agents and the other lenders, if any, are hereinafter called the
"Bank Creditors") and (y) if the Agents in their individual capacities, any Bank
or a syndicate of financial institutions organized by the Agents or any such
Bank or an affiliate of the Agents or such Bank enter into one or more (i)
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements), (ii) foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against the fluctuations in currency values and/or (iii)
other types of hedging agreements from time to time (collectively, the "Interest
Rate Protection or Other Hedging Agreements"), with, or guaranteed by, the
Borrower (as defined below), the Agents, any such Bank or an affiliate of the
Agents or such Bank (even if either of the Agents or any such Bank ceases to be
a Bank under the Credit Agreement for any reason) and any such institution that
participates in such Interest Rate Protection or Other Hedging Agreements and
their subsequent assigns (collectively, the "Other Creditors" and, together with
the Bank Creditors, are herein called the "Secured Creditors"). Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement
shall be used herein as therein defined.
WITNESSETH:
WHEREAS, Golden Sky Holdings, Inc., Golden Sky Systems, Inc. (the
"Borrower"), various financial institutions from time to time party thereto (the
"Banks"), Banque Paribas, as Syndication Agent, Fleet National Bank, as
Administrative Agent (Fleet National Bank together with Banque Paribas, the
"Agents"), and General Electric Capital Corporation, as Documentation Agent,
have entered into an Amended and Restated Credit Agreement, dated as of July 7,
1997, amended and restated as of May _, 1998, providing for the making of Loans
to the Borrower and the issuance of, and participation in, Letters of Credit for
the account of the Borrower, all as contemplated therein (as used herein, the
term "Credit Agreement" means the Amended and Restated Credit Agreement
described above in this paragraph, as the same may be amended, modified,
extended, renewed, replaced, restated, supplemented, restructured or refinanced
from time to time, and including any agreement extending the maturity of,
refinancing or restructuring (including, but not limited to, the inclusion of
additional borrowers thereunder that are Subsidiaries of the Borrower and whose
obligations are guaranteed by the Borrower thereunder or any increase in the
amount borrowed)) all or any portion of, the Indebtedness under such agreement
or any successor agreements; provided, that with respect to any agreement
providing for the refinancing of Indebtedness under the Credit Agreement, such
agreement shall only be treated as, or as part of, the Credit Agreement
hereunder if (i) either (A) all obligations under the Credit Agreement being
refinanced shall be paid in full at the time of such refinancing, and all
commitments and Letters of Credit issued pursuant to the refinanced
238
EXHIBIT I-2
PAGE 2
Credit Agreement shall have terminated in accordance with their terms or (B) the
Required Banks shall have consented in writing to the refinancing Indebtedness
being treated, along with their Indebtedness, as Indebtedness pursuant to the
Credit Agreement, (ii) the refinancing Indebtedness shall be permitted to be
incurred under the Credit Agreement being refinanced (if such Credit Agreement
is to remain outstanding) and (iii) a notice to the effect that the refinancing
Indebtedness shall be treated as issued under the Credit Agreement 'shall be
delivered by the Borrower to the Collateral Agent);
WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary of
the Borrower has jointly and severally guaranteed to the Secured Creditors the
payment when due of all obligations and liabilities of the Borrower under or
with respect to the Credit Documents and each Interest Rate Protection or Other
Hedging Agreement with one or more Other Creditors;
WHEREAS, the Pledgor is the owner of the partnership interests in
a certain limited partnership (the "Partnership") as set forth in Annex A
hereto, such Partnership being governed by an agreement of limited partnership
(the "Limited Partnership Agreement");
WHEREAS, the Pledgor desires to incur Loans and to have Letters of
Credit issued for its account pursuant to the Credit Agreement;
WHEREAS, the Pledgor may at any time and from time to time enter
into one or more Interest Rate Protection or Other Hedging Agreements with one
or more Other Creditors;
WHEREAS, it is a condition to each of the above-described
extensions of credit to the Pledgor that the Pledgor shall have executed and
delivered this Agreement o the Pledgee; and
WHEREAS, the Pledgor desires to execute this Agreement to satisfy
the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the Pledgee
for the benefit of the Secured Creditors and hereby covenants and agrees with
the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by the Pledgor
for the benefit of the Secured Creditors to secure:
i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, indebtedness and
liabilities including, without limitation, indemnities, fees and interest
thereon and including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) of the Pledgor owing to
the Bank Creditors, now existing or hereafter incurred under, arising out of or
in connection with any Credit
239
EXHIBIT I-2
PAGE 3
Document and the due performance and compliance by the Pledgor with the terms of
each such Credit Document (all such obligations and liabilities under this
clause (i), except to the extent consisting of obligations or indebtedness with
respect to Interest Rate Protection or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations");
ii) the full and prompt payment when due (whether at the stated
maturity, by ,acceleration or otherwise) of all obligations, indebtedness and
liabilities (including, without limitation, indemnities, fees and interest
thereon and including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) of the Pledgor owing to
the Other Creditors, now existing or hereafter incurred under, arising out of or
in connection with any Interest Rate Protection or Other Hedging Agreement
including, in the case of each Subsidiary Guarantor, all obligations under the
Subsidiaries Guaranty in respect of Interest Rate Protection or Other Hedging
Agreements (all such obligations and indebtedness under this clause (ii) being
herein collectively called the "Interest Rate Protection Obligations");
iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) or preserve its security interest in the
Collateral;
iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred to in
clauses (i), (ii) and (iii) above, after an Event of Default (such term, as used
in this Agreement, shall mean any Event of Default under, and as defined in, the
Credit Agreement, or any payment default under any Interest Rate Protection or
Other Hedging Agreement and shall in any event include, without limitation, any
payment default on any of the Obligations (as hereinafter defined)) shall have
occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing or realizing on the
Collateral, or of any exercise by the Pledgee of its rights hereunder, together
with reasonable attorneys' fees and court costs; and
v) all amounts paid by any Indemnities as to which such Indemnitee
has the right to reimbursement under Section 11 of this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section I being herein collectively called the
"Obligations"; provided, that it is acknowledged and agreed that the
"Obligations" shall include extensions of credit of the types described above,
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.
2. DEFINITION OF PARTNERSHIP INTERESTS, ETC. As used herein, (i)
the term "Partnership Interest' shall mean the entire partnership interest at
any time owned by the Pledgor in any Partnership and (ii) the term "Pledged
Partnership Interest" shall mean each Partnership Interest pledged or required
to be pledged hereunder. The Pledgor represents and warrants that the
Partnership Interests held by the Pledgor constitute that percentage of the
entire partnership interest of the Partnership as set forth on Annex A hereto.
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EXHIBIT I-2
PAGE 4
3. GRANT OF SECURITY INTEREST, ETC.
a. Pledge. (a) To secure the Obligations and for the purposes set
forth in Section 1, the Pledgor hereby pledges and grants to the Pledgee a first
priority continuing security interest in, and as part of such grant and pledge,
hereby transfers and assigns to the Pledgee all of the following whether now
existing or hereafter acquired (the "Collateral"): the Pledgor's Partnership
Interest and all of the Pledgor's right, title and interest in such Partnership
including, without limitation:
i) all the capital thereof and its interest in all profits,
losses, Partnership Assets (as defined below) and other distributions to which
the Pledgor shall at any time be entitled in respect of the Partnership
Interest;
ii) all other payments due or to become due to the Pledgor in
respect of the Partnership Interest whether under the Limited Partnership
Agreement or any elated contract or otherwise, whether as contractual
obligations, damages, insurance proceeds otherwise;
iii) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under the Limited
Partnership Agreement or any related contract or at law or otherwise in respect
of the Partnership Interest;
iv) all present and future claims, if any, of the Pledgor against
the Partnership for moneys loaned or advanced, for services rendered or
otherwise;
v) all of the Pledgor's rights under the Limited Partnership
Agreement relating to such partnership or at law to exercise and enforce every
right, power, remedy, authority, option and privilege of the Pledgor relating to
its Partnership Interest, including any power to terminate, cancel or modify the
Limited Partnership Agreement, to execute any instruments and to take any and
all other action on behalf of and in the name of the Pledgor in respect of the
Partnership Interest and the Partnership, to make determinations, to exercise
any election (including, but not limited to, election of remedies) or option or
to give or receive any notice, consent, amendment, waiver or approval, together
with full power and authority to demand, receive, enforce, collect or receipt
for any of the foregoing or for any Partnership Asset, to enforce or execute any
checks, or other instruments or orders, to file any claims and to take any
action in connection with any of the foregoing;
vi) all other property hereafter delivered in substitution for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other properly at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
vii) to the extent not otherwise included, all proceeds of any or
all of the foregoing.
241
EXHIBIT I-2
PAGE 5
(b) As used herein, the term "Partnership Assets" shall mean all
assets, whether tangible or intangible and whether real, personal or mixed
(including, without limitation, all partnership capital and interests in other
partnerships), at any time owned or represented by the Partnership Interest.
b. Subsequently Acquired Partnership Interests. If the Pledgor
shall acquire (by purchase, distribution or otherwise) any additional
Partnership Interest at any time or from time to time after the date hereof, the
Pledgor shall forthwith pledge such Partnership Interest as security with the
Pledgee hereunder and, to the extent such Partnership Interest is certificated,
deliver to the Pledgee certificates therefor, accompanied by such instruments of
transfer as are acceptable to the Pledgee, and shall promptly thereafter deliver
to the Pledgee a certificate executed by any of the Chairman of the Board, the
Chief Financial Officer, the President, any Vice President or the Treasurer of
the Pledgor describing such Partnership Interest and certifying that the same
has been duly pledged with the Pledgee hereunder.
c. Certificated Partnership Interests. Notwithstanding anything to
the contrary contained in Section 3.2, to the extent the Partnership Interest of
the Pledgor (whether now owned or hereafter acquired) is certificated, the
Pledgor shall also deposit as security with the Pledgee the Partnership Interest
owned by the Pledgor on the date hereof, and deliver to the Pledgee certificates
or instruments therefor with corresponding instruments of transfer, executed in
blank, as are reasonably acceptable to the Pledgee.
d. Uncertificated Partnership Interests. Notwithstanding anything
to the contrary contained in Section 3.2, to the extent the Partnership Interest
of the Pledgor (whether now owned or hereafter acquired) is uncertificated, the
Pledgor shall promptly notify the Pledgee thereof, and shall promptly take all
actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under the provisions of Articles 8 and
9 of the New York UCC). The Pledgor further agrees to take such actions as the
Pledgee deems necessary or desirable, including filing of appropriately
completed and executed Uniform commercial Code financing statements with
appropriate governmental authorities, to effect the foregoing and to permit the
Pledgee to exercise any of its rights and remedies hereunder, and agrees to
provide an opinion of counsel reasonably satisfactory to the Pledgee with
respect to any such pledge of uncertificated Partnership Interests promptly upon
request of the Pledgee.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Collateral, which may be held (in the discretion of
the Pledgee) in the name of the Pledgor, endorsed or assigned in blank or in
favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent
appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until an
Event of Default shall have occurred and be continuing, the Pledgor shall be
entitled to exercise any
242
EXHIBIT I-2
PAGE 6
and all voting, consent, administration, management and other rights and
remedies under the Limited Partnership Agreement or otherwise with respect to
the Pledged Partnership Interest of the Pledgor; provided, that no action shall
be taken or omitted to be taken which would violate or be inconsistent with any
of the terms of this Agreement, any other Credit Document or any Interest Rate
Protection Agreement or Other Hedging Agreement (collectively, the "Secured Debt
Agreements"), or which would have the effect of impairing the position or
interests of the Pledgee or any Secured Creditor. All such rights of the Pledgor
or to vote and to take other actions with respect to its Pledged Partnership
Interest shall cease in case an Event of Default shall occur and be continuing
and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default
shall have occurred and be continuing (or will occur as a result thereof)
distributions in respect of any Pledged Partnership Interest shall be paid to
the Pledgor. The Pledgee shall be entitled to receive directly, and to retain as
part of the Collateral to be held and applied in the manner set forth in this
Agreement:
i) all other property (other than cash) paid or distributed by way
of dividend or distribution, as the case may be, in respect of the Pledgor's
Pledged Partnership Interest; and
ii) all other property which may be paid in respect of the
Collateral by reason of any consolidation, merger, conveyance of assets,
liquidation or similar partnership reorganization.
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by any other Secured Debt Agreement or by law) for the protection
and enforcement of its rights in respect of the Collateral, and the Pledgee
shall be entitled, without limitation, to exercise the following rights:
i) to receive all amounts payable in respect of the Collateral
payable to the Pledgor under Section 6;
ii) to transfer all or any part of each Pledged Partnership
Interest into the Pledgee's name or the name of its nominee or nominees;
iii) to vote all or any part of each Pledged Partnership Interest
(whether or not transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were the outright owner thereof (the Pledgor hereby
irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of the Pledgor, with full power of substitution to do so); and
iv) at any time or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any interest
therein, at any public or private sale,
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without demand of performance, advertisement or notice of intention to sell
(except as set forth in the proviso below) or of the time or place of sale or
adjournment thereof or to redeem or otherwise (all of which are hereby waived by
the Pledgor), for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or prices and
on such terms as the Pledgee in its absolute discretion may determine; provided,
that at least 10 days' notice of the time and place of any such sale shall be
given to the Pledgor. The Pledgor hereby waives and releases to the fullest
extent permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshaling the Collateral and any other security for the Obligations or
otherwise. At any Such sale, unless prohibited by applicable law, the Pledgee on
behalf of the Secured Creditors may bid for and purchase all or any part of the
Collateral so sold free from any such right or equity of redemption. To the
extent permitted by applicable law, neither the Pledgee nor any Secured Creditor
shall be liable for failure to collect or realize upon any or all of the
Collateral or for any delay in so doing nor shall any of them be under any
obligation to take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement or any other Secured Debt Agreement or
now or hereafter existing at law or in equity or by statute shall be cumulative
and concurrent and shall be in addition to every other such right, power or
remedy. The exercise or beginning of the exercise by the Pledgee or any Secured
Creditor of any one or more of the rights, powers or remedies provided for in
this Agreement or any other Secured Debt Agreement or now or hereafter existing
at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Pledgee or any Secured Creditor of all
such other rights, powers or remedies, and no failure or delay on the part of
the Pledgee or any Secured Creditor to exercise any such right, power or remedy
shall operate as a waiver thereof. The Secured Creditors agree that this
Agreement may be enforced only by the action of the Agents or the Pledgee, in
each case acting upon the instructions of the Required Banks (or, after the date
on which all credit Document Obligations have been paid in full, the holders of
at least the majority of the Outstanding Other Obligations) and that no other
Secured Creditor shall have any right individually to seek to enforce or to
enforce this Agreement or to realize upon the security to be granted hereby, it
being understood and agreed that such rights and remedies may be exercised by
the Agent or the Pledgee or the holders of at least a majority of the
outstanding Other Obligations, as the case may be, for the benefit of the
Secured Creditors upon the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement
(with references to the Assignor and Assignee being deemed modified to read
Pledgor and Pledgee); and
(b) It is understood and agreed that the Pledgor shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
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10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by
the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof
11. INDEMNITY.
a. Indemnity. (a) The Pledgor jointly and severally agrees to
indemnify, reimburse and hold the Pledgee, each Secured Creditor and their
respective successors, permitted assigns, employees, agents and servants
(hereinafter in this Section 11.1 referred to individually as "Indemnitee," and
collectively as "Indemnities") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs, expenses or disbursements (including reasonable
attorneys' fees and expenses) (for the purposes of this Section 11.1 the
foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnities in any way
relating to or arising out of this Agreement, any other Secured Debt Agreement
or any other document executed in connection herewith and therewith or in any
other way connected with the administration of the transactions contemplated
hereby and thereby or the enforcement of any of the terms of, or the
preservation of any rights under any thereof, the violation of the laws of any
country, state or other governmental body or unit, any tort or contract claim;
provided, that no Indemnitee shall be indemnified pursuant to this Section
11.1(a) for expenses to the extent caused by the gross negligence or willful
misconduct of such Indemnitee. In no event shall any Indemnitee be liable for
any matter or thing in connection with this Agreement other than to account for
moneys actually received by it in accordance with the terms hereof. The Pledgor
agrees that upon written notice by any Indemnitee of the assertion of such a
liability, obligation, damage, injury, penalty, claims, demand, action, judgment
or suit, the Pledgor shall, upon the request of the Pledgee, assume full
responsibility for the defense thereof.
(b) Without limiting the application of Section 11.1(a), the
Pledgor jointly and severally agrees to pay or reimburse the Pledgee for any and
all fees, costs and expenses of whatever kind or nature incurred in connection
with the creation, preservation or protection of the Pledgee's Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral and all other fees, costs and expenses in
connection with protecting, maintaining or preserving the Collateral and the
Pledgee's interest therein, whether through judicial proceedings or otherwise,
or in defending or prosecuting any actions, suits or proceedings arising out of
or relating to the Collateral.
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EXHIBIT I-2
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(c) If and to the extent that the obligations of the Pledgor under
this Section 11 is unenforceable for any reason, the Pledgor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
b. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of the Pledgor contained in this Section 11 shall continue
in full force and effect notwithstanding the full payment of all the Notes
issued under the Credit Agreement, the termination of all Letters of Credit and
all Interest Rate Protection or Other Hedging Agreements and the payment of all
other Obligations and notwithstanding the discharge thereof.
12. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed to
make the Pledgee or any other Secured Creditor liable as a general partner or
limited partner of any Partnership and the Pledgee or any other Secured Creditor
by virtue of this Agreement or otherwise (except as referred to in the following
sentence) shall not have any of the duties, obligations or liabilities of a
general partner or limited partner of any Partnership. The parties hereto
expressly agree that, unless the Pledgee shall become the absolute owner of any
Pledged Partnership Interest pursuant hereto, this Agreement shall not be
construed as creating a partnership or joint venture among the Pledgee, any
other Secured Creditor and or the Pledgor.
(b) Except as provided in the last sentence of paragraph (a) of
this Section, the Pledgee, by accepting this Agreement, did not intend to become
a general partner or limited partner of any Partnership or otherwise be deemed
to be a co-venturer with respect to the Pledgor or any Partnership either before
or after an Event of Default shall have occurred. The Pledgee shall have only
those powers set forth herein and shall assume none of the duties, obligations
or liabilities of a general partner or limited partner of any Partnership or of
the Pledgor.
(c) The Pledgee shall not be obligated to perform or discharge any
obligation of the Pledgor as a result of the collateral assignment hereby
effected.
(d) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Pledgee to appear in or defend any action or proceeding
relating to the Collateral to which it is not a party, or to take any action
hereunder or thereunder, or to expend any money or incur any expenses or perform
or discharge any obligation, duty or liability under the Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) The Pledgor agrees
that it will join with the Pledgee in executing and, at the Pledgor's own
expense, file and refile under the UCC such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and whenever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
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EXHIBIT I-2
PAGE 10
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of the Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.
(b) The Pledgor hereby appoints the Pledgee as its
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's discretion
to take any action and to execute any instrument which the Pledgee may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement.
14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by the parties hereto and each
Secured Creditor, by accepting the benefits of this Agreement, acknowledges and
agrees that the obligations of the Pledgee as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise
under this Agreement, are only those expressly set forth in this Agreement. The
Pledgee shall act hereunder on the terms and conditions set forth herein and in
Section 11 of the Credit Agreement.
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. The
Pledgor represents, warrants and covenants that:
i) it will defend the Pledgee's right, title and interest in and
to its Pledged Partnership Interest and in and to the Collateral pledged by it
pursuant hereto or in which it has granted a security interest pursuant hereto
against the claims and demands of all other persons whomsoever, and the Pledgor
covenants and agrees that it will have like title to and right to pledge any
other property at any time hereafter pledged to the Pledgee as Collateral
hereunder and will likewise defend the right thereto and the security interest
therein of the Pledgee and the Secured Creditors.
ii) It is the legal and beneficial owner of and has good title to
its Pledged Partnership Interest and has good title to all of the other
Collateral pledged by it pursuant hereto or in which it has granted a security
interest pursuant hereto, free and clear of ill claims, pledges. liens,
encumbrances and security interests of every nature whatsoever, except such as
are created pursuant to this Agreement and Permitted Liens, and has the
unqualified right to pledge and grant a security interest in the same as herein
provided without the consent of any other Person, firm or entity which has not
been obtained.
iii) It has full power, authority and legal right to pledge the
Partnership Interest pledged by it pursuant to this Agreement. Such Pledged
Partnership Interest has been
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EXHIBIT I-2
PAGE 11
validly acquired and is fully paid for and is duly and validly pledged
hereunder.
iv) The Limited Partnership Agreement delivered to the Pledgee is
an original signed counterpart (or a copy thereof) of the complete and entire
such listed partnership agreement in effect on the date hereof.
v) The Limited Partnership Agreement constitutes a legal, valid
and binding obligation of the Pledgor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement or creditors' rights generally and
general equitable principles (whether enforcement is sought by proceedings in
equity or at law). The Pledgor is not in default in the payment of any portion
of any mandatory capital contribution, if any, required to be made under its
Limited Partnership Agreement, and the Pledgor is not in violation of any other
material provisions of its Limited Partnership Agreement, or otherwise in
default or violation thereunder. At no time in the past has the Pledgor been in
default for the payment of any portion of a mandatory capital contribution or in
violation of any other material provisions of its Limited Partnership Agreement
or otherwise in default or violation thereunder other than those which have been
cured or waived prior to the date of this Agreement. The Pledged Partnership
Interest is not subject to any defense, offset or counterclaim, nor have any of
the foregoing been asserted or alleged against the Pledgor by any Person with
respect thereto. As of the date hereof, there are no certificates, instruments,
documents or other writings (other than the Limited Partnership Agreement and
certificates delivered to the Collateral Agent) which evidence any Partnership
Interest of the Pledgor.
vi) It will not sell, assign, or otherwise dispose of, grant any
option with respect to, or mortgage, pledge, grant a security interest in or
otherwise encumber any of the Collateral or any interest therein, or suffer any
of the same to exist; and any sale, assignment, option, mortgage, pledge,
security interest or other encumbrance or disposition of any nature whatsoever
made in violation of this covenant shall be a nullity and of no force and
effect, and upon demand of the Pledgee, shall forthwith be canceled or satisfied
by an appropriate instrument in writing, except as permitted by the Credit
Agreement.
vii) The pledge and assignment of its Pledged Partnership Interest
pursuant to this Agreement, together with the relevant filings or recordings
(which filings and recordings have been made), create a valid, perfected and
continuing first priority security interest in such Partnership Interest and the
proceeds thereof, subject to no prior lien or encumbrance or to any agreement
purporting to grant to any third party a lien or encumbrance on the property or
assets of the Pledgor which would include the Collateral (other than Permitted
Liens).
viii) There are no currently effective financing statements under
the UCC covering any property which is now or hereafter may be included in the
Collateral and the Pledgor will not prior to the Termination Date, without the
prior written consent of the Pledgee, execute and, until the Termination Date,
there will not ever be on file in any public office, any enforceable financing
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EXHIBIT I-2
PAGE 12
statement or statements covering any or all of the Collateral, except financing
statements filed or to be filed in favor of the Pledgee as secured party.
ix) The Pledgor shall give the Pledgee prompt notice of any
written claim relating to the Collateral. The Pledgor shall deliver to the
Pledgee a copy of each other demand, notice or document received by it which may
adversely affect the Pledgee's interest in the Collateral promptly upon, but in
any event within 10 days after, the Pledgor's receipt thereof
x) The Pledgor shall not withdraw as a general partner of its
Partnership, or file or pursue or take any action which may, directly or
indirectly, cause a dissolution or liquidation of or with respect to its
Partnership or seek a partition of any property of its Partnership, except as
permitted by the Credit Agreement.
xi) A notice in the form set forth in Annex C attached hereto and
by this reference made a part hereof (such notice, the "Partnership Notice"),
appropriately completed, notifying its Partnership of the existence of this
Agreement and a certified copy of this Agreement have been delivered by the
Pledgor to its Partnership, and the Pledgor has received and delivered to the
Collateral Agent an acknowledgment in the form set forth in Annex 13 attached
hereto (such acknowledgement, the "Partnership Acknowledgement"), duly executed
by its Partnership.
xii) The chief executive office and principal place of business of
the Pledgor and the sole location where the records of the Pledgor with respect
to the Collateral are kept at the address set forth for the Pledgor on Annex B
hereto. The Pledgor shall not move its chief executive office, principal place
of business, or such location of records unless (x) it shall have given to the
Pledgee not less than 30 days' prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Pledgee may reasonably request and (y) with respect
to such new location, it shall have taken all action, reasonably satisfactory to
the Pledgee, to maintain the security interest of the Pledgee in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
xiii) As of the date hereof, it neither has or operates nor has
had or operated in any jurisdiction within the five year period preceding the
date of this Agreement under any name except its legal name as set forth on the
signature pages hereto. The Pledgor shall not change its legal name or assume or
operate in any jurisdiction under any trade, fictitious or other name unless (x)
it shall have given to the Pledgee not less than 30 days' prior written notice
of its intention so to do, clearly describing such new name and the
jurisdictions in which such new name shall be used and providing such other
information in connection therewith as the Pledgee may reasonably request and
(y) with respect to such new name, it shall have taken all action, reasonably
satisfactory to the Pledgee, to maintain the security interest of the Pledgee in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
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EXHIBIT I-2
PAGE 13
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of the
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof, (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument or this Agreement; (iii) any furnishing of any
additional security to the Pledgee or its assignee or any acceptance thereof or
any release of any security by the Pledgee or its assignee; (iv) any limitation
on any party's liability or obligations under any such instrument or agreement
or any invalidity or unenforceability, in whole or in part, of any such
instrument or agreement or any term thereof, or (v) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to the Pledgor or any Subsidiary of the Pledgor, or any
action taken with respect to this Agreement by any trustee or receiver, or by
any court, in any such proceeding, whether or not the Pledgor shall have notice
or knowledge of any of the foregoing.
17. TRANSFER BY PLEDGORS. The Pledgor will not sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except as may be
permitted in accordance with the terms of the Credit Agreement).
18. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that the Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of its Pledged Partnership Interest,
the Pledgor as soon as practicable and at its expense will use its best efforts
to cause such registration to be effected (and be kept effective) and will use
its best efforts to cause such qualification and compliance to be effected (and
be kept effective) as may be so requested and as would permit or facilitate the
sale and distribution of its Pledged Partnership Interest, including, without
limitation, registration under the Securities Act of 1933 as then in effect (or
any similar statute then in effect), appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with any
other government requirements; provided, that the Pledgee shall furnish to the
Pledgor such information regarding the Pledgee as the Pledgor may request in
writing and as shall be required in connection with any such registration,
qualification or compliance. The Pledgor will cause the Pledgee to be kept
reasonably advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, will furnish to
the Pledgee such number of prospectuses, offering circulars or other documents
incident thereto as the Pledgee from time to time may reasonably request, and
will indemnify the Pledgee and all others participating in the distribution of
its Pledged Partnership Interest against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission)
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EXHIBIT I-2
PAGE 14
to state therein (or in any related registration statement, notification or the
like) a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same may have been
caused by an untrue statement or omission based upon information furnished in
writing to the Pledgor by the Pledgee expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise
its right to sell all or any part of its Pledged Partnership Interest pursuant
to Section 7, such Pledged Partnership Interest or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the
Securities Act of 1933, as then in effect, the Pledgee may, in its sole and
absolute discretion, sell such Pledged Partnership Interest or part thereof by
private sale in such manner and under such circumstances as the Pledgee may deem
necessary or advisable in order that such sale may legally be effected without
such registration; provided, that at least 10 days' notice of the time and place
of any such sale shall be given to the Pledgor. Without limiting the generality
of the Foregoing, in any such event the Pledgee, in its sole and absolute
discretion: (i) may proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Pledged Partnership
Interest or part thereof shall have been filed under such Securities Act; (ii)
may approach and negotiate with a single possible purchaser to effect such sale;
and (iii) may restrict such sale to a purchaser who will represent and agree
that such purchaser is purchasing for its own account, for investment, and not
with a view to the distribution or sale of such Pledged Partnership Interest or
part thereof. In the event of any such sale, the Pledgee shall incur no
responsibility or liability for selling all or any part of such Pledged
Partnership Interest at a price which the Pledgee, in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until after registration as aforesaid.
19. TERMINATION, RELEASE. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive such termination) and the Pledgee, at the request and expense of the
Pledgor, will promptly execute and deliver to the Pledgor a proper instrument or
instruments (including UCC termination statements on form UCC-3 or analogous
form) acknowledging the satisfaction and termination of this Agreement, and will
duly assign, transfer and deliver to the Pledgor (without recourse and without
any representation or warranty) such of the Collateral of the Pledgor as may be
in the possession of the Pledgee and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Interest Rate Protection Agreements and Other Hedging
Agreements have been terminated, no Note is outstanding (and all Loans have been
paid in full), all Letters of Credit have been terminated (or cash
collateralized to the Pledgee's satisfaction) and all other Obligations have
been paid in full.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 8.02 of the Credit Agreement or is
otherwise released at tie direction of the Required Banks (or all the Banks if
required by Section 12.12 of the Credit Agreement), and the
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EXHIBIT I-2
PAGE 15
proceeds of such sale or sales or from such release are applied in accordance
with the terms of the Credit Agreement to the extent required to be so applied,
the Pledgee, at the request and expense of the Pledgor, will duly assign,
transfer and deliver to the Pledgor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold or released and as may be in the possession of the Pledgee and has
not theretofore been released pursuant to this Agreement.
(c) At any time that the Pledgor desires that Collateral be
released as provided in the foregoing Section 19(a) or (b), it shall deliver to
the Pledgee a certificate signed by its chief financial officer or another
authorized senior officer stating that the release of the respective Collateral
is permitted pursuant to Section 19(a) or (b). If requested by the Pledgee
(although the Pledgee shall have no obligation to make any such request), the
Pledgor shall furnish appropriate legal opinions (from counsel, which may be
in-house counsel, reasonably acceptable to the Pledgee) to the effect set forth
in the immediately preceding sentence. The Pledgee shall have no liability
whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this Section 19.
20. NOTICES, ETC. All notices and other communications hereunder
shall be in writing and shall be delivered or mailed by first class mail,
postage prepaid, addressed:
(a) if to the Pledgor, at its address set forth opposite its
signature below;
(b) if to the Pledgee, at:
Fleet National Bank
Mail Stop MA0FD03D
1 Federal Street
Boston, MA 02110
Attention: Christopher A. Swindell
Telephone No.: (617) 346-5579
Facsimile No.: (617) 346-4346
(c) if to any Bank (other than the Pledgee), at such address as
such Bank shall have specified in the Credit Agreement; and
(d) if to any Other Creditor directly to the Other Creditors al
such address as the Other Creditors shall have specified in writing to the
Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
21. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing
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PAGE 16
duly signed by the Pledgor and the Pledgee (with the written consent of the
Required Banks (or all the Banks if required by Section 12.12 of the Credit
Agreement)); provided, that any change, waiver, modification or variance
affecting the rights and benefits of a single Class (as defined below) of
Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors (as defined below)
of such Class. For the purpose of this Agreement, the term "Class" shall mean
each class of Secured Creditors, i.e., whether (i) the Bank Creditors as holders
of the Credit Document Obligations or (ii) the Other Creditors as holders of the
Interest Rate Protection Obligations. For the purpose of this Agreement, the
term "Requisite Creditors" of any Class shall mean each of (i) with respect to
the Credit Document Obligations, the Required Banks and (ii) with respect to the
Interest Rate Protection Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection or
Other Hedging Agreements.
22. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
The headings in this Agreement are for purposes of reference only and shall not
limit or define the meaning hereof. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
constitute one instrument.
23. LIMITED OBLIGATIONS. It is the desire and intent of the
Pledgor, the Pledgee and the Secured Creditors that this Agreement shall be
enforced against the Pledgor to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
If and to the extent that the obligations of the Pledgor under this Agreement
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers, which laws would determine the solvency of
the Pledgor by reference to the full amount of the Obligations at the time of
the execution and delivery of this Agreement), then the amount of the
Obligations of the Pledgor shall be deemed to be reduced and the Pledgor shall
pay the maximum amount of the Obligations which would be permissible under the
applicable law.
* * *
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PAGE 17
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
Address: GOLDEN SKY SYSTEMS, INC.,
605 W. 47th Street as Pledgor
Suite 300
Kansas City, MO 64112
Attention: Robert B. Weaver By: /s/ Rodney A. Weary
Tel: (816) 753-5544 -------------------------------
Fax: (816) 753-5044 Name:
Title:
Mail Stop MA0FD03D FLEET NATIONAL BANK,
1 Federal Street as Pledgee
Boston, MA 02110
Attention: Christopher A. Swindell
Tel: (617) 346-5579 By: /s/Christopher A. Swindell
Fax: (617) 346-4346 -------------------------------
Name:
Title:
254
EXHIBIT I-2
PAGE 18
ANNEX A
to
PARTNERSHIP PLEDGE AGREEMENT
PARTNERSHIP INTERESTS
A. Pledgor
Type of
Percentage Partnership
Partnership Owned Interest
----------- ---------- -----------
255
EXHIBIT I-2
PAGE 19
ANNEX B
to
PARTNERSHIP PLEDGE AGREEMENT
OFFICE LOCATIONS
A. Pledgor
Office Locations County
---------------- ------
256
EXHIBIT I-2
PAGE 20
ANNEX C
to
PARTNERSHIP
PLEDGE AGREEMENT
FORM OF PARTNERSHIP NOTICE
[Letterhead of Pledgor]
[Date]
TO: [Name of Pledged Entity]
Notice is hereby given that, pursuant to the Partnership Pledge
Agreement (a true and correct copy of which is attached hereto), dated as of
____________ ___, _____ (as amended, modified, restated or supplemented from
time to time in accordance with the terms thereof, the "Partnership Pledge
Agreement"), between [NAME OF PLEDGOR] (the "Pledgor") and Fleet National Bank
(the "Pledgee") on behalf of the Secured Creditors described therein, the
Pledgor has pledged and assigned to the Pledgee for the benefit of the Secured
Creditors, and granted to the Pledgee for the benefit of the Secured Creditors a
continuing security interest in, all right, title and interest of the Pledgor,
whether now existing or hereafter arising or acquired, as a general partner in
[NAME OF PARTNERSHIP] (the "Partnership"), and in, to and under the [TITLE OF
APPLICABLE PARTNERSHIP AGREEMENT] (the "Limited Partnership Agreement"),
including, without limitation:
i) all the capital of the Partnership and the Pledgor's interest in all
profits, losses, Partnership Assets (as defined in the Partnership Pledge
Agreement) and other distributions to which the Pledgor shall at any time be
entitled in respect of such partnership interest;
ii) all other payments due or to become due to the Pledgor in respect
of such partnership interest, whether under the Limited Partnership Agreement or
any related contract or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
iii) all of its claims, rights, powers, privileges, authority, options,
security interest, liens and remedies, if any, under the Limited Partnership
Agreement or any related contract or at law or otherwise in respect of such
partnership interest;
iv) all present and future claims, if any, of the Pledgor against the
Partnership for moneys loaned or advanced, for services rendered or otherwise;
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EXHIBIT I-2
PAGE 21
v) all of the Pledgor's rights under the Limited Partnership
Agreement relating to such partnership or at law to exercise and enforce every
right, power, remedy, authority, option and privilege of the Pledgor relating to
its Partnership Interest, including any power to terminate, cancel or modify the
Limited Partnership Agreement, to execute any instruments and to take any and
all other action on behalf of and in the name of the Pledgor in respect of the
Partnership Interest and the Partnership, to make determinations, to exercise
any election (including, but not limited to, election of remedies) or option or
to give or receive any notice, consent, amendment, waiver or approval, together
with full power and authority to demand, receive, enforce, collect or receipt
for any of the foregoing or for any Partnership Asset, to enforce or execute any
checks, or other instruments or orders, to file any claims and to take any
action in connection with any of the foregoing;
vi) all other property hereafter delivered in substitution for or in
addition to any of the foregoing, all certificates and instruments representing
or evidencing such other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all thereof;
and
vii) to the extent not otherwise included, all proceeds of any or all
of the foregoing.
Pursuant to the Partnership Pledge Agreement, the Partnership is
hereby authorized and directed to register the Pledgor's pledge to the Pledgee
on behalf of the Secured Creditors of the interest of the Pledgor on the
Partnership's books.
* * *
258
EXHIBIT I-2
PAGE 22
The Pledgor hereby requests the Partnership to indicate the
Partnership's acceptance of this Notice and consent to and confirmation of its
terms and provisions by signing a copy hereof where indicated on the attached
page and returning the same to the Pledgee on behalf of the Secured Creditors.
[NAME OF PLEDGOR]
By:_____________________
Name:
Title:
259
EXHIBIT I-2
PAGE 23
ANNEX D
to
PARTNERSHIP
PLEDGE AGREEMENT
FORM OF ACKNOWLEDGMENT
[NAME OF PLEDGED ENTITY] (the "Partnership") hereby acknowledges
receipt of a copy of the assignment by [NAME OF PLEDGOR] (the "Pledgor") of its
interest under the [TITLE OF APPLICABLE PARTNERSHIP AGREEMENT] pursuant to the
terms of the Partnership Pledge Agreement, dated as of ____________ __, _____,
between the Pledgor and Fleet National Bank (the "Pledgee") on behalf of the
Secured Creditors described therein. The undersigned hereby further confirms the
registration of the Pledgor's pledge of its interest to the Pledgee on behalf of
the Secured Creditors on the Partnership's books.
Dated: __________ __, _____
[NAME OF PARTNERSHIP]
By:_____________________
Name:
Title:
260
EXHIBIT J
Page 1
[CONFORMED AS EXECUTED]
SECURITY DOCUMENTS ACKNOWLEDGMENT
May 8, 1998
To the Agents and each of the Banks
party to the Credit Agreement
referred to below:
Ladies and Gentlemen:
Reference is made to (i) the Amended and Restated Credit Agreement, dated
as of July 7, 1997, amended and restated as of May 8, 1998, among Golden Sky
Holdings, Inc. ("Holdings"), Golden Sky Systems, Inc. (the "Borrower"), the
financial institutions party thereto, Banque Paribas, as Syndication Agent,
Fleet National Bank, as Administrative Agent, and General Electric Capital
Corporation, as Documentation Agent (as so amended and restated and as further
amended, modified or supplemented from time to time, the "Credit Agreement"),
pursuant to which, among other things, the Total Commitment was increased from
$100,000,000 to $150,000,000, (ii) the Borrower/Subsidiary Pledge Agreement,
dated as of July 7, 1997 (as amended, modified and supplemented from time to
time, including, without limitation, as modified hereby, the
"Borrower/Subsidiary Pledge Agreement"), made by the Pledgors under, and as
defined in, the Borrower/Subsidiary Pledge Agreement, in favor of Fleet National
Bank, as Collateral Agent and Pledgee for the benefit of the Secured Creditors
(as defined in the Borrower/Subsidiary Pledge Agreement), (iii) the Security
Agreement, dated as of July 7, 1997 (as amended, modified and supplemented from
time to time, including, without limitation, as modified hereby, the "Security
Agreement"), made by the Assignors under, and as defined in, the Security
Agreement, in favor of Fleet National Bank, as Collateral Agent and Assignee for
the benefit of the Secured Creditors (as defined in the Security Agreement) and
(iv) the Collateral Assignment of Marketing and Distribution Agreements, dated
as of July 7, 1997 (as amended, modified and supplemented from time to time,
including, without limitation, as modified hereby, the "Collateral Assignment of
Marketing and Distribution Agreements") made by the Borrower, as Assignor under,
and as defined in, the Collateral Assignment of Marketing and Distribution
Agreements, in favor of Fleet National Bank, as Collateral Agent and Assignee
for the benefit of the Secured Creditors (as defined in the Collateral
Assignment of Marketing and Distribution Agreements), as acknowledged and agreed
to by the NRTC and DirecTV, Inc. (DirecTV, Inc. together with the Borrower,
Fleet National Bank and the NRTC, the "Collateral Assignment Parties"). Unless
otherwise indicated herein, capitalized terms used but not defined herein shall
have the respective meanings set forth in the Credit Agreement.
I. BORROWER/SUBSIDIARY PLEDGE AGREEMENT ACKNOWLEDGMENT
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EXHIBIT J
Page 2
1. By executing this Security Documents Acknowledgment, Argos is
hereby made a party to the Borrower/Subsidiary Pledge Agreement (conformed as
executed and attached hereto as Exhibit A) and is a Pledgor (as defined in the
Borrower/Subsidiary Pledge Agreement) thereunder.
2. Each of the undersigned which is a party to the Borrower/Subsidiary
Pledge Agreement hereby acknowledges the Credit Agreement and the transactions
contemplated thereby.
3. Each such Pledgor hereby acknowledges and agrees, and represents
and warrants, that on and after the occurrence of, and after giving effect to,
the Restatement Effective Date, (i) it constitutes a "Pledgor" which is a party
to the Borrower/Subsidiary Pledge Agreement, (ii) the Borrower/Subsidiary Pledge
Agreement shall remain in full force and effect with respect to such Pledgor,
and (iii) the Credit Agreement and the Obligations under the Credit Agreement
shall constitute the "Credit Agreement" and the "Obligations," respectively, in
each case, under, and as defined in, the Borrower/Subsidiary Pledge Agreement
and shall continue to be entitled to the benefits of the Borrower/Subsidiary
Pledge Agreement. Each of the undersigned Pledgors which are party to the
Borrower/Subsidiary Pledge Agreement hereby makes in all material respects each
of the representations and warranties contained in the Borrower/Subsidiary
Pledge Agreement on the date hereof, both before and after giving effect to this
Acknowledgment, unless stated to relate to a specific earlier date in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
4. By executing and delivering this Acknowledgment, each of the
undersigned Pledgors party to the Borrower/Subsidiary Pledge Agreement hereby
further agrees to (a) update and attach Annexes A and B (replacing the existing
annexes if any of such annexes have been changed) to the Borrower/Subsidiary
Pledge Agreement (as described in Section 2 to the Borrower/Subsidiary Pledge
Agreement), (b) execute and deliver to the Pledgee such financing statements and
other documents, in the form acceptable to the Pledgee, and (c) take such other
actions, as the Pledgee may request or as are necessary or desirable in the
opinion of the Pledgee to establish and maintain a valid, enforceable, first
priority perfected security interest in the Collateral (as defined in the
Borrower/Subsidiary Pledge Agreement).
II. SECURITY AGREEMENT ACKNOWLEDGMENT
1. By executing this Security Documents Acknowledgment, Argos is
hereby made a party to the Security Agreement (conformed as executed and
attached hereto as Exhibit B) and is an Assignor (as defined in the Security
Agreement) thereunder.
2. Each of the undersigned which is a party to the Security Agreement
hereby acknowledges the Credit Agreement and the transactions contemplated
thereby.
3. Each Assignor hereby acknowledges and agrees, and represents and
warrants, that on and after the occurrence of, and after giving effect to, the
Restatement Effective Date, (i) it
262
EXHIBIT J
Page 3
constitutes an "Assignor" which is a party to the Security Agreement, (ii) the
Security Agreement shall remain in full force and effect with respect to such
Assignor, and (iii) the Credit Agreement and the obligations under the Credit
Agreement shall constitute the "Credit Agreement" and the "Obligations,"
respectively, in each case, under, and as defined in, the Security Agreement and
shall continue to be entitled to the benefits of the Security Agreement. Each of
the undersigned Assignors hereby makes in all material respects each of the
representations and warranties contained in the Security Agreement on the date
hereof, both before and after giving effect to this Acknowledgment, unless
stated to relate to a specific earlier date in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date.
4. By executing and delivering this Acknowledgment, each of the
undersigned Assignors hereby further agrees to (a) update and attach Annexes A,
B, C, D, E, F and G (as described in Sections 2.4, 2.5, 2.6, 4.1 and 5.1 of the
Security Agreement) (replacing the existing annexes if any of such annexes have
been changed) to the Security Agreement and (b) execute and deliver to the
Assignee such financing statements and other documents, in the form acceptable
to the Assignee, and take such other actions, as the Assignee may request or as
are necessary or desirable in the opinion of the Assignee to establish and
maintain a valid, enforceable, first priority perfected security interest in the
Collateral (as defined in the Security Agreement).
III. COLLATERAL ASSIGNMENT OF MARKETING AND DISTRIBUTION AGREEMENTS
1. By executing the Collateral Assignment Acknowledgment (attached
hereto as Annex I), each of the Collateral Assignment Parties hereby
acknowledges the Credit Agreement and the transactions contemplated thereby.
2. By executing the Collateral Assignment Acknowledgment (attached
hereto as Annex I), each of the Collateral Assignment Parties hereby
acknowledges and agrees, and represents and warrants, that on and after the
occurrence of, and after giving effect to, the Restatement Effective Date, (i)
it remains party to the Collateral Assignment of Marketing and Distribution
Agreements (as executed and attached hereto as Exhibit C) and (ii) the
Collateral Assignment of Marketing and Distribution Agreements shall remain in
full force and effect with respect to each of the Collateral Assignment Parties.
IV. MISCELLANEOUS PROVISIONS
1. This Acknowledgment may be signed in any number of counterparts and
by the different parties hereto in separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
2. This Acknowledgment is limited as specified and shall not
constitute an acceptance, consent or waiver of any other provision of the
Borrower/Subsidiary Pledge Agreement,
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EXHIBIT J
Page 4
the Security Agreement, the Collateral Assignment of Marketing and Distribution
Agreements or any other Credit Document.
3. THIS ACKNOWLEDGMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
* * *
264
EXHIBIT J
Page 5
IN WITNESS WHEREOF, each of the undersigned has caused this Collateral
Assignment Acknowledgment to be duly executed and delivered as of the date first
above written.
GOLDEN SKY SYSTEMS, INC.
By: /s/ Robert B. Weaver
-------------------------------
Name: Robert B. Weaver
Title: Chief Financial Officer
ARGOS SUPPORT SERVICES, INC.
By: /s/ Rodney A. Weary
------------------------------
Name: Rodney A. Weary
Title: President
ACKNOWLEDGED AND AGREED:
FLEET NATIONAL BANK,
as Collateral Agent
By: /s/ Christopher A. Swindell
------------------------------
Name: Christopher A. Swindell
Title: Vice President
265
EXHIBIT J
Page 6
EXHIBIT A to the
Security Documents Acknowledgment
[CONFORMED AS EXECUTED]
BORROWER/SUBSIDIARY PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of July 7, 1997 (as amended, modified or
supplemented from time to time, the "Agreement"), made by each of the
undersigned (each, a "Pledgor" and collectively the "Pledgors"), in favor of
FLEET NATIONAL BANK, as Collateral Agent (the "Pledgee"), for the benefit of (x)
the Banks (as defined below) and the Agents (as defined below) under, and any
other lender from time to time party to the Credit Agreement hereinafter
referred to (such Banks, the Agents and the other lenders, if any, are
hereinafter called the "Bank Creditors") and (y) if the Agents in their
individual capacity, any Bank or a syndicate of financial institutions organized
by the Agents or any such Bank or an affiliate of the Agents or such Bank enter
into one or more (i) interest rate protection agreements (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements),
(ii) foreign exchange contracts, currency swap agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values and/or (iii) other types of hedging agreements from time to time
(collectively, the "Interest Rate Protection or Other Hedging Agreements"),
with, or guaranteed by, the Borrower (as defined below) or any of its
Subsidiaries, the Agents, any such Bank or an affiliate of the Agents or such
Bank (even if either of the Agents or any such Bank ceases to be a Bank under
the Credit Agreement for any reason) and any such institution that participates
in such Interest Rate Protection or Other Hedging Agreements and their
subsequent assigns (collectively, the "Other Creditors" and, together with the
Bank Creditors, are herein called the "Secured Creditors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement shall be
used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Golden Sky Systems, Inc. (the "Borrower"), the financial
institutions from time to time party thereto (the "Banks") and Banque Paribas,
as Syndication Agent and as Managing Agent ("Banque Paribas"), and Fleet
National Bank, as Administrative Agent and as Managing Agent ("Fleet", and
together with Banque Paribas, the "Agents"), have entered into a Credit
Agreement, dated as of July 7, 1997, providing for the making of Loans and the
issuance of, and participation in, Letters of Credit as contemplated therein (as
used herein, the term "Credit Agreement" means the Credit Agreement described
above in this paragraph, as the same may be amended, modified, extended,
renewed, replaced, restated, supplemented, restructured or refinanced from time
to time, and including any agreement extending the maturity of, refinancing or
restructuring
266
EXHIBIT J
Page 7
(including, but not limited to, the inclusion of additional borrowers thereunder
that are Subsidiaries of the Borrower and whose obligations are guaranteed by
the Borrower thereunder or any increase in the amount borrowed) all or any
portion of, the Indebtedness under such agreement or any successor agreements;
provided, that with respect to any agreement providing for the refinancing of
Indebtedness under the Credit Agreement, such agreement shall only be treated
as, or as part of, the Credit Agreement hereunder if (i) either (A) all
obligations under the Credit Agreement being refinanced shall be paid in full at
the time of such refinancing, and all commitments and letters of credit issued
pursuant to the refinanced Credit Agreement shall have terminated in accordance
with their terms or (B) the Required Banks shall have consented in writing to
the refinancing Indebtedness being treated along with their Indebtedness, as
Indebtedness pursuant to the Credit Agreement, (ii) the refinancing Indebtedness
shall be permitted to be incurred under the Credit Agreement being refinanced
(if such Credit Agreement is to remain outstanding) and (iii) a notice to the
effect that the refinancing Indebtedness shall be treated as issued under the
Credit Agreement shall be delivered by the Borrower to the Collateral Agent);
WHEREAS, to the extent that the Borrower creates or acquires any
Subsidiary in accordance with the terms of the Credit Agreement, such Subsidiary
will enter into the Subsidiaries Guaranty pursuant to which such Subsidiary
shall from time to time jointly and severally guarantee to the Secured Creditors
the payment when due of all obligations and liabilities of the Borrower under or
with respect to the Credit Documents and each Interest Rate Protection Agreement
or Other Hedging Agreement with one or more Other Creditors;
WHEREAS, the Borrower desires to incur Loans and to have Letters of
Credit issued for its account pursuant to the Credit Agreement;
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection or Other Hedging Agreements with one or
more Other Creditors;
WHEREAS, it is a condition to each of the above-described extensions
of credit to the Borrower that each Pledgor shall have executed and delivered
this Agreement to the Pledgee; and
WHEREAS, each Pledgor desires to execute this Agreement to satisfy the
conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
for the benefit of the Secured Creditors and hereby covenants and agrees with
the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor
for the benefit of the Secured Creditors to secure:
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EXHIBIT J
PAGE 8
i) the full and prompt payment when due (whether at the stated
maturity by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, indemnitees, fees and
interest thereon) of such Pledgor owing to the Bank Creditors, now
existing or hereafter incurred under, arising out of or in connection
with any Credit Document and the due performance and compliance by
such Pledgor with the terms of each such Credit Document (all such
obligations and liabilities under this clause (i), except to the
extent consisting of obligations or indebtedness with respect to
Interest Rate Protection or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations").
ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, indemnitees, fees and
interest thereon) of such Pledgor owing to the Other Creditors, now
existing or hereafter incurred under, arising out of or in connection
with any Interest Rate Protection or Other Hedge Agreement (all such
obligations and indebtedness under this clause (ii) being herein
collectively called the "Interest Rate Protection Obligations");
iii) any and all sums advanced by the Pledgee in accordance with
the terms of this Agreement in order to preserve the Collateral (as
defined in Section 3.4 herein) or preserve its security interest in
the Collateral;
iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred
to in clauses (i), (ii) and (iii) above, after an Event of Default
(such term, as used in this Agreement, shall mean any Event of Default
under, and as defend in, the Credit Agreement, or any payment default
under any Interest Rate Protection or Other Hedging Agreement after
the expiration of any applicable grace period and shall in any event
include, without limitation, any payment default on any of the
Obligations (as hereinafter defined) after the expiration of any
applicable grace period) shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing or realizing on the Collateral, or of
any exercise by the Pledgee of its rights hereunder, together with
reasonable attorneys' fees and court costs; and
v) all amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement under Section 11 of this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations"; provided, that it is acknowledged and agreed that the
"Obligations" shall include extensions of credit of the types described above,
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used herein, (i)
the term "Stock" shall mean all of the issued and outstanding shares of capital
stock at any time owned by the Pledgor of any corporation and (ii) the term
"Notes" shall mean all promissory notes
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EXHIBIT J
PAGE 9
at any time issued to the Pledgor by any of its Subsidiaries, Affiliates or any
other Person. As used herein, the term "Securities" shall mean all of the Stock
and Notes. The Pledgor represents and warrants, as to the Stock of corporations
and promissory notes owned by the Pledgor, that on the date hereof (a) the Stock
consists of the number and type of shares of the stock of the corporations as
described in Annex A hereto; (b) such Stock constitutes that percentage of the
issued and outstanding capital stock of the issuing corporation as is set forth
in Annex A hereto; (c) the Note; consist of the promissory notes described in
Annex B hereto; and (d) the Pledgor is the holder of record and sole beneficial
owner of the Stock and the Notes and there exist no options or preemption rights
in respect of any of the Stock.
3. PLEDGE OF SECURITIES, ETC.
a. Pledge. To secure the Obligations and for the purposes set forth in
Section 1, each Pledgor hereby: (i) grants to the Pledgee a security interest in
all of the Collateral owned by the Pledgor; (ii) pledges and deposits as
security with the Pledgee the Securities owned by such Pledgor on the date
hereof, and delivers to the Pledgee certificates or instruments therefor, duly
endorsed in blank in the case of Notes and accompanied by undated stock powers
duly executed in blank by such Pledgor in the case of Stock, or such other
instruments of transfer as are reasonably acceptable to the Pledgee; and (iii)
assigns, transfers, hypothecates, mortgages, charges and sets over to the
Pledgee all of such Pledgor's right, title and interest in and to such
Securities (and in and to all certificates or instruments evidencing such
Securities), in each case to be held by the Pledgee, upon the terms and
conditions set forth in this Agreement.
b. Subsequently Acquired Securities. If any Pledgor shall acquire (by
purchase, stock dividend or otherwise) any additional Securities at any time or
from time to time after the date hereof, the Pledgor will forthwith pledge and
deposit such Securities (or certificates or instruments representing such
Securities) as security with the Pledgee and deliver to the Pledgee certificates
therefor or instruments thereof, duly endorsed in blank in the case of Notes and
accompanied by undated stock powers duly executed in blank in the case of Stock,
or such other instruments of transfer as are reasonably acceptable to the
Pledgee, to secure the Obligations and for the purposes set forth in Section 1,
and will promptly thereafter deliver to the Pledgee a certificate executed by
any of the Chairman of the Board, the Chief Financial Officer, the President, a
Vice Chairman, any Vice President or the Treasurer of such Pledgor describing
such Securities and certifying that the same have been duly pledged with the
Pledgee hereunder.
c. Uncertificated Securities. Notwithstanding anything to the contrary
contained in Sections 3.1 and 3.2 (other than the last sentence of Section 3.2),
if any Securities (whether now owned or hereafter acquired) are uncertificated
securities, the respective Pledgor shall promptly notify the Pledgee thereof,
and shall promptly take all actions required to perfect the security interest of
the Pledgee under applicable law (including, in any event, under Sections 8-313
and 8-321 of the New York UCC, if applicable). Each Pledgor further agrees to
take such actions as the Pledgee reasonably deems necessary or desirable to
effect the foregoing and to permit the Pledgee to exercise any of its rights and
remedies hereunder, and agrees to provide an opinion of counsel satisfactory to
the Pledgee
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EXHIBIT J
PAGE 10
with respect to any such pledge of uncertificated Securities promptly upon
request of the Pledgee.
d. Definition of Pledged Stock, Pledged Notes, Pledged Securities and
Collateral. All Stock at any time pledged or required to be pledged hereunder is
hereinafter called the "Pledged Stock," all Notes at any time pledged or
required to be pledged hereunder are hereinafter called the "Pledged Notes," all
of the Pledged Stock and Pledged Notes together are hereinafter called the
"Pledged Securities," which together with all proceeds thereof, including any
securities and moneys received and at the time held by the Pledgee hereunder, is
hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Securities.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until (i) an
Event of Default shall have occurred and be continuing and (ii) written notice
thereof shall have been given by the Pledgee to the relevant Pledgor (provided,
that if an Event of Default specified in Section 9.05 of the Credit Agreement
shall occur, no such notice shall be required), each Pledgor shall be entitled
to exercise any and all voting and other consensual rights pertaining to the
Pledged Securities owned by it and to give consents, waivers or ratifications in
respect thereof; provided, that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Agreement, any other Credit Document or any
Interest Rate Protection or Other Hedging Agreement (collectively, the "Secured
Debt Agreements"), or which would have the effect of impairing the position or
interests of the Pledgee or any Secured Creditor. All such rights of such
Pledgor to vote and to give consents, waivers and ratifications shall cease in
case an Event of Default shall occur and be continuing and Section 7 hereof
shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default shall
have occurred and be continuing (or would occur as a result thereof), all cash
dividends payable in respect of the Pledged Stock and all payments in respect of
the Pledged Notes shall be paid to the respective Pledgor free and clear of the
security interests created under this Agreement or any other Credit Document;
provided, that all cash dividends payable in respect of the Pledged Stock which
are reasonably determined by the Pledgee, in its sole discretion, to represent
in whole or in part an extraordinary, liquidating or other distribution in
return of capital shall be paid, to the extent so determined to represent an
extraordinary, liquidating or other distribution in return of capital, to the
Pledgee and retained by it as part of the Collateral. The Pledgee shall also be
entitled to receive directly, and to retain as part of the Collateral:
i) all other or additional stock or other securities or property
(other than cash) paid or distributed by way of dividend or otherwise
in respect of the Pledged Stock;
ii) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Pledged Stock
by way of stock-split, spinoff, split-
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up, reclassification, combination of shares or similar rearrangement;
and
iii) all other or additional stock or other securities or
property (including cash) which may be paid in respect of the
Collateral by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by any Pledgor contrary to the provisions of this Section 6
and Section 7 shall be received in trust for the benefit of the Pledgee, shall
be segregated from other property of funds of such Pledgor and shall be
forthwith paid over to the Pledgee as Collateral in the same form as so received
(with any necessary endorsement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. (a) In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by any other Secured Debt Agreement or by law) for the protection
and enforcement of its rights in respect of the Collateral, and the Pledgee
shall be entitled, without limitation, to exercise the following rights, which
each Pledgor hereby agrees to be commercially reasonable:
i) to receive all amounts payable in respect of the Collateral
payable to such Pledgor under Section 6;
ii) to transfer all or any part of the Pledged Securities into
the Pledgee's name or the name of its nominee or nominees;
iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other action to collect upon
any Pledged Note (including, without limitation, to make any demand
for payment of amounts then due and payable thereon);
iv) to vote all or any part of the Pledged Securities (whether or
not transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof
(each Pledgor hereby irrevocably constituting and appointing the
Pledgee the proxy and attorney-in-fact of such Pledgor, with full
power of substitution to do so); and
v) at any time or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or
any interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the
time or place of sale or adjournment thereof or to redeem or otherwise
(all of which are hereby waived by each Pledgor to the extent
permitted by applicable law), for cash, on credit or for other
property, for immediate or future delivery without any assumption of
credit risk, and for such price or prices and on such terms as the
Pledgee may, in compliance with any
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mandatory requirements of applicable law, determine to be commercially
reasonable; provided, that at least 10 days' notice of the time and
place of any such sale shall be given to such Pledgor. Each Pledgor
hereby waives and releases to the fullest extent permitted by law any
right or equity of redemption with respect to the Collateral, whether
before or after sale hereunder, and all rights, if any, of marshalling
the Collateral and any other security for the Obligations or
otherwise. At any such sale, unless prohibited by applicable law, the
Pledgee on behalf of the Secured Creditors may bid for and purchase
all or any part of the Collateral so sold free from any such right or
equity of redemption. Neither the Pledgee nor any Secured Creditor
shall be liable for failure to collect or realize upon any or all of
the Collateral or for any delay in so doing nor shall any of them be
under any obligation to take any action whatsoever with regard
thereto.
(b) In case the Pledgee shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement by foreclosure, sale,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Pledgee,
then and in such case the relevant Pledgor, the Pledgee and each holder of any
of the Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interests
created under this Agreement, and all rights, remedies and powers of the Pledgee
shall continue as if no such proceeding, had been instituted.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement or any other Secured Debt Agreement or
now or hereafter existing at law or in equity or by statute shall be cumulative
and concurrent and shall be in addition to every other such right, power or
remedy. The exercise or beginning of the exercise by the Pledgee or any Secured
Creditor of any one or more of the rights, powers or remedies provided for in
this Agreement or any other Secured Debt Agreement or now or hereafter existing
at law or in equity, or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Pledgee or any Secured Creditor of all
such other rights, powers or remedies, and no failure or delay on the part of
the Pledgee or any Secured Creditor to exercise any such right, power or remedy
shall operate as a waiver thereof.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee
upon any sale or other disposition of the Collateral pursuant to the terms of
this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied as follows:
i) first, to the payment of all Obligations owing to the Pledgee
(or any Indemnitee, in the case of clause (v) of Section 1 of this
Agreement) of the type described in clauses (iii), (iv) and (v) of
Section 1 of this Agreement;
ii) second, to the extent moneys remain after the application
pursuant to the preceding clause (i), an amount equal to the
outstanding Primary Obligations shall be paid to the Secured Creditors
as provided in Section 9(e), with each Secured Creditor receiving an
amount equal to its outstanding Primary Obligations or, if the
proceeds are insufficient to pay
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in full all such Primary Obligations, its Pro Rata Share of the amount
remaining to be distributed;
iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured
Creditors as provided in Section 9(e), with each Secured Creditor
receiving an amount equal to its outstanding Secondary Obligations or,
if the proceeds are insufficient to pay in full all such Secondary
Obligations, its Pro Rata Share of the amount remaining to be
distributed; and
iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i), (ii) and (iii), to the relevant
Pledgor or as required by applicable law.
(2) For purposes of this Agreement (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the
Credit Document Obligations, all principal of, and interest on, all Loans, all
Unpaid Drawings theretofore made (together with all interest accrued thereon),
the aggregate Stated Amounts of all Letters of Credit issued under the Credit
Agreement, and all Fees and (ii) in the case of the Interest Rate Protection
Obligations, all amounts due under the Interest Rate Protection or Other Hedging
Agreements (other than indemnities, fees (including, without limitation,
attorneys' fees) and similar obligations and liabilities) and (z) "Secondary
Obligations" shall mean all Obligations other than Primary Obligations.
(3) When payments to Secured Creditors are based upon their respective
Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall
be applied (i) first, to their Primary Obligations and (ii) second, to their
Secondary Obligations. If any payment to any Secured Creditor of its Pro Rata
Share of any distribution, would result in overpayment to such Secured Creditor,
such excess amount shall instead be distributed in respect of the unpaid Primary
Obligations or Secondary Obligations, as this case may be, of the other Secured
Creditors, with each Secured Creditor whose Primary Obligations or Secondary
Obligations, as the case may be, have not been paid in full to receive an amount
equal to such excess amount multiplied by a fraction the numerator of which is
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of
such Secured Creditor and the denominator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
(4) Each of the Secured Creditors agrees and acknowledges that if the
Bank Creditors are to receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued under the Credit Agreement (which shall only
occur after all outstanding Loans and Unpaid Drawings with respect to such
Letters of Credit have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and
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ratable benefit of the Bank Creditors, as cash security for the repayment of
Obligations owing to the Bank Creditors as such. If any amounts are held as cash
security pursuant to the immediately preceding sentence, then upon the
termination of all outstanding Letters of Credit, and after the application of
all such cash security to the repayment of all Obligations owing to the Bank
Creditors after giving effect to the termination of all such Letters of Credit,
if there remains any excess cash, such excess cash shall be returned by the
Administrative Agent to the Collateral Agent for distribution in accordance with
Section 9(a) hereof.
(5) Except as set forth in Section 9(d) hereof, all payments required
to be made hereunder shall be made (i) if to the Bank Creditors, to the
Administrative Agent under the Credit Agreement for the account of the Bank
Creditors, and (ii) if to the Other Creditors, to the trustee, paying agent or
other similar representative (each a "Representative") for the Other Creditors
or, in the absence of such a Representative, directly to the Other Creditors.
(6) For purposes of applying payments received in accordance with this
Section 9, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Representative for
the Other Creditors or, in the absence of such a Representative, upon the Other
Creditors for a determination (which the Administrative Agent, each
Representative for any Secured Creditors and the Secured Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Bank Creditors or the
Other Creditors, as the case may be. Unless it has actual knowledge (including
by way of written notice from a Bank Creditor or an Other Creditor) to the
contrary, the Administrative Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written notice
from an Other Creditor) to the contrary, the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Interest Rate Protection or Other
Hedging Agreements are in existence.
(7) It is understood and agreed that the Pledgors shall remain jointly
and severally liable to the extent of any deficiency between the amount of the
Proceeds of the Collateral hereunder and the aggregate amount of the sums
referred to in clauses (i), (ii) and (iii) of Section 9(a).
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY.
a. Indemnity. (a) Each Pledgor jointly and severally agrees to
indemnify, reimburse and hold the Pledgee, each Secured Creditor and their
respective successors, permitted assigns,
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employees, agents and servants (hereinafter in this Section 11.1 referred to
individually as "Indemnitee," and collectively as "Indemnities") harmless from
any and all liabilities, obligations, damages, injuries, penalties, claims,
demands, actions, suits, judgments and any and all costs, expenses or
disbursements (including attorneys' fees and expenses) (for the purposes of this
Section 11.1 the foregoing are collectively called "expenses") of whatsoever
kind and nature imposed on, asserted against or incurred by any of the
Indemnities in any way relating to or arising out of this Agreement, any other
Secured Debt Agreement or any other document executed in connection herewith and
therewith or in any other way connected with the administration of the
transactions contemplated hereby and thereby or the enforcement of any of the
terms of, or the preservation of any rights under any thereof, the violation of
the laws of any country, state or other governmental body or unit, any tort or
contract claim; provided, that no Indemnitee shall be indemnified pursuant to
this Section 11.1(a) for losses, damages or liabilities to the extent caused by
the gross negligence or willful misconduct of such Indemnitee. In no event shall
any Indemnitee be liable for any matter or thing, in connection with this
Agreement other than to account for moneys actually received by it in connection
with the terms hereof. Each Pledgor agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, damage, injury,
penalty, claims, demand, action, judgment or suit, such Pledgor shall assume
full responsibility for the defense thereof. Each Indemnitee agrees to use its
best efforts to promptly notify the relevant Pledgor of any such assertion of
which such Indemnitee has knowledge.
(2) Without limiting the application of Section ll.l(a), each Pledgor
jointly and severally agrees to pay or reimburse the Pledgee for any and all
fees, costs and expenses of whatever kind or nature reasonably incurred in
connection with the creation, preservation or protection of the Pledgee's Liens
on, and security interest in, the Collateral, including, without limitation, all
fees and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral (other than Liens permitted under this Agreement or
the Credit Agreement so long as no Event of Default has occurred and is
continuing) and all other reasonable fees, costs and expenses in connection with
protecting, maintaining or preserving the Collateral and the Pledgee's interest
therein, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral.
(3) If and to the extent that the obligations of any Pledgor under
this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
b. Indemnity Obligations Secured by Collateral; Survival. Any amounts
paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Pledgor contained in this Section 11 shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Letters of
Credit and all Interest Rate Protection or Other Hedging Agreements and the
payment of all other Obligations and notwithstanding the
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discharge thereof.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees
that it will join with the Pledgee in executing and, at such Pledgor's own
expense, file and refile under the UCC such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of such Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee as its attorney-in-fact,
with full authority in the place and stead of such Pledgor and in the name of
such Pledgor or otherwise, from time to time after the occurrence and during the
continuance of an Event of Default, in the Pledgee's discretion to take any
action and to execute any instrument which the Pledgee may deem necessary or
advisable to accomplish the purposes of this Agreement.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by the parties hereto and each
Secured Creditor, by accepting the benefits of this Agreement, acknowledges and
agrees that the obligations of the Pledgee as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise
under this Agreement, are only those expressly set forth in this Agreement. The
Pledgee shall act hereunder on the terms and conditions set forth herein and in
Section 11 of the Credit Agreement.
14. TRANSFER BY PLEDGORS. No Pledgor will sell or otherwise dispose
of, grant any option with respect to, or mortgage, pledge or otherwise encumber
any of the Collateral or any interest therein (except as may be permitted in
accordance with the terms of the Credit Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. Each Pledgor
represents, warrants and covenants that: (i) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by the Credit Agreement and this Agreement;
(ii) it has the requisite corporate power, authority and legal right to pledge
all the Securities pledged by it pursuant to this Agreement; (iii) this
Agreement has been duly authorized, executed and delivered by such Pledgor and
constitutes a legal, valid and binding obligation of such Pledgor enforceable in
accordance with its terms, except to the extent that the enforceability hereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws
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affecting creditors' rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law); (iv) no consent of any other
party (including, without limitation, any stockholder, limited or general
partner or creditor of such Pledgor or any of its Subsidiaries) and no consent,
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required to be obtained by such Pledgor in connection with the execution,
delivery or performance of this Agreement, except as obtained on or before the
date hereof or as permitted to be obtained after the date hereof by Section 3.1
of this Agreement; (v) the execution, delivery and performance of this Agreement
does not violate any provision of any applicable law or regulation or of any
order, judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, applicable to such Pledgor or of the certificate
of incorporation or by-laws of such Pledgor or of any securities issued by such
Pledgor or any of its Subsidiaries, or of any mortgage, indenture, lease, deed
of trust, agreement, instrument or undertaking to which such Pledgor or any of
its Subsidiaries is a party or which purports to be binding upon such Pledgor or
any of its Subsidiaries or upon any of their respective assets and will not
result in the creation or imposition of any lien or encumbrance on any of the
assets of such Pledgor or any of its Subsidiaries except as contemplated by this
Agreement; (vi) all the shares of Stock have been duly and validly issued, are
fully paid and nonassessable; (vii) to the best knowledge of Pledgor, each of
its Pledged Notes, when executed by the obligor thereof, will be the legal,
valid and binding obligation of such obligor, enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law); and (viii) the pledge and
assignment of the Securities by it pursuant to this Agreement, together with the
delivery of the Securities by it pursuant to this Agreement, creates a valid and
perfected first priority security interest in such Securities and the proceeds
thereof (except to the extent further action may be required to maintain a
perfected security interest in proceeds after the actual receipt thereof by the
Pledgee), subject to no prior lien or encumbrance or to any agreement (other
than as may be created by any other Credit Document) purporting to grant to any
third party a lien or encumbrance on the property or assets of such Pledgor
which would include such Securities. Each Pledgor covenants and agrees that it
will defend the Pledgee's right, title and security interest in and to the
Securities pledged by it pursuant to this Agreement and the proceeds thereof
against the claims and demands of all persons whomsoever, and such Pledgor
covenants and agrees that it will have like title to and right to pledge any
other property at any time hereafter pledged to the Pledgee as Collateral
hereunder and will likewise defend the right thereto and security interest
therein of the Pledgee and the Secured Creditors.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor hereunder shall remain in full force and effect without regard to, and
shall not be impaired by:
(a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Pledgor, except to
the extent that the enforceability thereof may be limited by such event: (b) any
exercise or non-exercise, or any waiver of, any right,
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remedy, power or privilege under in respect of this Agreement, any other Credit
Document or any Interest Rate Protection or Other Hedging Agreement, except as
specifically set forth in a waiver granted pursuant to Section 20; or (c) any
amendment to or modification of any Credit Document, or any Interest Rate
Protection or Other Hedging Agreement or any security for any of the
Obligations; whether or not any Pledgor shall have notice or knowledge of any of
the foregoing, except as specifically set forth in an amendment or modification
executed pursuant to Section 20.
17. REGISTRATION, ETC. (a) If an Event of Default shall have occurred
and be continuing and any Pledgor shall have received from the Pledgee a written
request or requests that such Pledgor cause any registration, qualification or
compliance under any federal or state securities law or laws to be effected with
respect to all or any part of its Pledged Stock, such Pledgor as soon as
practicable and at its expense shall cause such registration to be effected (and
be kept effective), and shall cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and shall permit or
facilitate the sale and distribution of such Pledged Stock, including, without
limitation, registration under the Securities Act of 1933 as then in effect or
any similar statute then in effect), appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with any
other government requirements; provided, that the Pledgee shall furnish to such
Pledgor such information regarding the Pledgee as such Pledgor may request in
writing and as shall be required in connection with any such registration,
qualification or compliance. Such Pledgor will cause the Pledgee to be kept
reasonably advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, will furnish to
the Pledgee such number of prospectuses, offering circulars or other documents
incident thereto as the Pledgee from time to time may reasonably request, and
will indemnify the Pledgee, and all others participating in the distribution of
the Pledged Stock against all claims, losses, damages and liabilities caused by
any untrue statement (or alleged untrue statement) of a material fact contained
therein (or in any related registration statement, notification or the like) or
by any omission (or alleged omission) to state therein (or in any related
registration statement, notification or the like) a material fact required to be
stated therein or necessary to make the statements therein not misleading,,
except insofar as the same may have been caused by an untrue statement or
omission based upon information furnished in writing to such Pledgor by the
Pledgee expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7,
such Pledged Securities or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act of 1933, as then
in effect, the Pledgee may, in its sole and absolute discretion, sell such
Pledged Securities or part thereof by private sale in such manner and under such
circumstances as the Pledgee may deem necessary or advisable in order that such
sale may legally be effected without such registration. Without limiting the
generality of the foregoing, in any such event the Pledgee, in its sole and
absolute discretion (i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under such Securities Act; (ii)
may approach and negotiate with a single possible purchaser to effect such sale;
and (iii) may restrict such sale to a purchaser who will represent and agree
that such purchaser is purchasing for its own account, for investment, and not
with a view to the
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distribution or sale of such Pledged Securities or part thereof. In the event of
any such sale, the Pledgee shall incur no responsibility or liability for
selling all or any part of the Pledged Securities at a price which the Pledgee,
in its sole and absolute discretion, may in good faith deem commercially
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after registration of such Pledged Securities for public sale.
18. TERMINATION, RELEASE. (a) After the Termination Date (as defined
below), this Agreement shall terminate (provided that all indemnities set forth
herein including, without limitation, in Section 11 hereof shall survive any
such termination) and the Pledgee, at the request and expense of the respective
Pledgor, will promptly execute and deliver to such Pledgor such statements,
documents or other instruments as may be reasonably requested by such Pledgor
acknowledging the satisfaction and termination of this Agreement and the
security interests created hereby, and will duly assign, transfer and deliver to
such Pledgor (without recourse and without any representation or warranty) such
of the Collateral of such Pledgor as may be in the possession of the Pledgee and
as has not theretofore been sold or otherwise applied or released pursuant to
this Agreement. As used in this Agreement, "Termination Date" shall mean the
date upon which the Total Commitment and all Interest Rate Protection and Other
Hedging Agreements have been terminated, no Note is outstanding (and all Loans
have been paid in full), all Letters of Credit have been terminated (or cash
collateralized to the Pledgee's satisfaction) and all other Obligations then
owing have been paid in full and there shall exist no unsatisfied claim for
reimbursement by any Indemnitee pursuant to Section 11.2.
(2) In the event that any part of the Collateral is sold in connection
with a sale permitted by the Credit Agreement or is otherwise released at the
direction of the Required Banks (or all the Banks if required by Section 12.12
of the Credit Agreement), and the proceeds of such sale or sales or from such
release are applied in accordance with the terms of the Credit Agreement, such
Collateral will be sold free and clear of the Liens created by this Agreement
and the Pledgee, at the request and expense of the respective Pledgor, will duly
assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral of such Pledgor as is then
being (or has been) so sold or released and as may be in possession of the
Pledgee and has not theretofore been released pursuant to this Agreement.
(3) At any time that a Pledgor desires that Collateral be released as
provided in the foregoing Section 18(a) or (b), it shall deliver to the Pledgee
a certificate signed by its chief financial officer or another authorized senior
officer stating that the release of the respective Collateral is permitted
pursuant to Section 18(a) or (b). If requested by the Pledgee (although the
Pledgee shall have no obligation to make any such request), the relevant Pledgor
shall furnish appropriate legal opinions (from counsel, which may be in-house
counsel, reasonably acceptable to the Pledgee) to the effect set forth in the
immediately preceding sentence. The Pledgee shall have no liability whatsoever
to any Secured Creditor as the result of any release of Collateral by it as
permitted by this Section 18.
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19. NOTICES, ETC. All notices and other communication hereunder shall
be in writing (including telegraphic, telex, facsimile transmission or cable
communication) and shall be delivered, mailed, telegraphed, telexed, facsimile
transmitted or cabled, addressed:
(a) if to any Pledgor, at its address set forth opposite its signature
below;
(b) if to the Pledgee, at:
Fleet National Bank
Mail Stop MA0FD03D
1 Federal Street
Boston, MA 02110
Attention: Mark Bernier
Telephone No.: (617) 346-4347
Facsimile No.: (617) 346-4345
(c) if to any Bank Creditor (other than the Pledgee), either (x) to
the Administrative Agent, at the address of the Administrative Agent
specified in the Credit Agreement or (y) at such address as such Bank
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor or to the Representative for the Other
Creditors, at such address as such Representative may have provided to the
Borrower and the Pledgee from time to time, or, in the absence of a
Representative, directly to the Other Creditors at such address as the
Other Creditors shall have specified in writing to the Borrower and the
Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. All such notices
and Communications shall, when mailed, telegraphed, telexed, facsimile
transmitted or cabled or sent by overnight courier, be effective on the third
Business Day following deposit in the mails, certified, return receipt
requested, when delivered to the telegraph company, cable company or on the day
following delivery to an overnight courier, as the case may be, or sent by telex
or facsimile device, except that notices and communications to the Collateral
Agent shall not be effective until received by the Collateral Agent.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be amended, changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Pledgor and the Pledgee with
the written consent of the Required Banks (or all the Banks if required by
Section 12.12 of the Credit Agreement)); provided, that any amendment, change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Secured Creditors (and not all Secured Creditors in
a like or similar manner) shall require the written consent of the Requisite
Creditors (as defined below) of such Class. For the purpose of this Agreement,
the term "Class" shall mean each class of Secured Creditors, i.e.,
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PAGE 21
whether (i) the Bank Creditors as holders of the Credit Document Obligations or
(ii) the Other Creditors as holders of the Interest Rate Protection Obligations.
For the purpose of this Agreement, the term "Requisite Creditors" of any Class
shall mean each of (i) with respect to the Credit Document Obligations, the
Required Banks and (ii) with respect to the Interest Rate Protection
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Protection or Other Hedging
Agreements.
21. MISCELLANEOUS. (a) This Agreement shall be binding upon the
successors and assigns of each Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and each Secured Creditor and their respective
successors and assigns.
(b) THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
(c) The headings in this Agreement are for purposes of reference only
and shall not limit or define the meaning hereof.
(d) This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which shall constitute one instrument.
22. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
* * *
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IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as if
the date first above written.
Address:
605 West 47th Street GOLDEN SKY SYSTEMS, INC.
Suite 300 as a Pledgor
Kansas City, MO 64112
Attention: Robert B. Weaver
Tel: (212) 593-7900 By /s/ Rodney A. Weary
Fax: (212) 754-6348 ---------------------------
Name: Robert B. Weaver
Title: President
Mail Stop MA0FD03D FLEET NATIONAL BANK
1 Federal Street as Pledgee
Boston, MA 02110
Attention: Mark Bernier
Telephone: (617) 346-4347 By /s/ Paula H. Lang
Facsimile: (617) 346-4345 ---------------------------
Name: Paula P. Lang,
Title: Senior Vice President
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PAGE 23
ANNEX A
to
Pledge Agreement
BORROWER PLEDGE AGREEMENT
PLEDGED STOCK
I. Issuer: Argos Support Services Company
Stock Certificate(s) representing 1,175 shares of Common Stock, $1 par
value, issued to Golden Sky Systems, Inc. - 100%
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PAGE 24
ANNEX B
to
Pledge Agreement
LIST OF NOTES
Maker Payee Amount
NONE.
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PAGE 25
EXHIBIT B to the
Security Documents Acknowledgment
[CONFORMED AS EXECUTED]
SECURITY AGREEMENT
among
GOLDEN SKY SYSTEMS, INC.
VARIOUS SUBSIDIARIES
and
FLEET NATIONAL BANK,
as Collateral Agent
Dated as of July 7, 1997
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TABLE OF CONTENTS
Page
Table of Contents will generate here
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SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of July 7, 1997 (as amended, modified or
supplemented from time to time, the "Agreement"), among each of the undersigned
(each an "Assignor" and collectively, the "Assignors") and FLEET NATIONAL BANK,
as Collateral Agent (the "Collateral Agent"), for the benefit of (x) the Banks
(as defined below) and the Agents (as defined below) under, and any other lender
from time to time party to the Credit Agreement hereinafter referred to (such
Banks, the Agents and the other lenders, if any, are hereinafter called the
"Bank Creditors") and (y) if the Agents in their individual capacities, any Bank
or a syndicate of financial institutions organized by the Agents or any such
Bank or an affiliate of the Agents or such Bank enter into one or more (i)
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements), (ii) foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against the fluctuations in currency values and/or (iii)
other types of hedging agreements from time to time (collectively, the "Interest
Rate Protection or Other Hedging Agreements"), with, or guaranteed by, the
Borrower, the Agents, any such Bank or an affiliate of the Agents or such Bank
(even if the Agents or any such Bank ceases to be a Bank under the Credit
Agreement for any reason) and any such institution that participates in such
Interest Rate Protection or Other Hedging Agreements and their subsequent
assigns (collectively, the "Other Creditors" and, together with the Bank
Creditors, are herein called the "Secured Creditors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement shall be
used herein as therein defined.
W I T N E S S E T H:
WHEREAS, GOLDEN SKY SYSTEMS, INC. (the "Borrower"), various financial
institutions from time to time party thereto (the "Banks"), Banque Paribas, as
Syndication Agent and as Managing Agent ("Banque Paribas"), and Fleet National
Bank, as Administrative Agent and as Managing Agent ("Fleet", and together with
Banque Paribas, the "Agents"), have entered into a Credit Agreement, dated as of
July 7, 1997, providing for the making of Loans and the issuance of, and
participation in, Letters of Credit as contemplated therein (as used herein, the
term "Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified, extended, renewed, replaced,
restated, supplemented, restructured or refinanced from time to time, and
including any agreement extending the maturity of, refinancing or restructuring
(including, but not limited to, the inclusion of additional borrowers thereunder
that are Subsidiaries of the Borrower and whose obligations are guaranteed by
the Borrower thereunder or any increase in the amount borrowed) all or any
portion of, the Indebtedness under such agreement or any successor agreements;
provided, that with respect to any agreement providing for the refinancing of
Indebtedness under the Credit Agreement, such agreement shall only be treated
as, or as part of, the Credit Agreement hereunder if (i) either (A) all
obligations under the Credit Agreement being refinanced shall be paid in full at
the time of such refinancing and all commitments and letters of credit
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issued pursuant to the refinanced Credit Agreement shall have terminated in
accordance with their terms or (B) the Required Banks shall have consented in
writing to the refinancing Indebtedness being treated, along with their
Indebtedness, as Indebtedness pursuant to the Credit Agreement, (ii) the
refinancing Indebtedness shall be permitted to be incurred under the Credit
Agreement being refinanced (if such Credit Agreement is to remain outstanding)
and (iii) a notice to the effect that the refinancing Indebtedness shall be
treated as issued under the Credit Agreement shall be delivered by the Borrower
to the Collateral Agent);
WHEREAS, the Borrower desires to incur Loans and to have Letters of Credit
issued account pursuant to the Credit Agreement;
WHEREAS, the Borrower may at any time and from time time enter into one or
more Interest Rate Protection or Other Hedging Agreements with one or more Other
Creditors;
WHEREAS, it is a condition precedent to the above-described extensions of
credit that each of the Assignors shall have executed and delivered to the
Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute this Agreement to satisfy the
condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each Assignor,
the receipt and sufficiency of which are hereby acknowledged, each Assignor
hereby makes the following representations and warranties to the Collateral
Agent and hereby covenants and agrees with the Collateral Agent as follows:
ARTICLE I.
SECURITY INTERESTS
A. Grant of Security Interests. (a) As security for the prompt and
complete payment and performance when due of all of the Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and does
hereby grant to the Collateral Agent for the benefit of the Secured Creditors, a
continuing security interest of first priority in, all of the right, title and
interest of such Assignor in, to and under all of the following, whether now
existing or hereafter from time to time acquired: (i) each and every Receivable,
(ii) all Contracts, together with all Contract Rights arising thereunder, (iii)
all Inventory, (iv) the Cash Collateral Account and any other cash collateral
account established for any Assignor and all moneys, securities and instruments
deposited or required to be deposited in such Cash Collateral Account and any
such other cash collateral account, (v) all Equipment, (vi) all Marks, together
with the registrations and right to all renewals thereof, and the goodwill of
the business of such Assignor symbolized by the Marks, (vii) all Patents and
Copyrights, (viii) all computer programs of such Assignor and all intellectual
property rights
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therein and all other proprietary information of such Assignor, including, but
not limited to, trade secrets, (ix) all other Goods, General Intangibles,
Chattel Paper, Documents and Instruments (other than the Pledged Securities) and
(x) all Proceeds and products of any and all of the foregoing (all of the above,
collectively, the "Collateral"), provided, however, that if any Contract
prohibits, or requires the consent for (in accordance with the terms thereof
after giving effect to any applicable laws), the granting of a security interest
therein, or in the event the granting of a security interest in any Contract
shall violate applicable law, then the security interest granted hereby shall be
limited to the extent (and only to the extent) necessary so that such Contract
may not be so violated or no such violation of law shall exist, as the case may
be.
(b) The security interest of the Collateral Agent under this Agreement
extends to all Collateral of the kind which is the subject of this Agreement
which any Assignor may acquire at any time during the continuation of this
Agreement.
B. Power of Attorney. Each Assignor hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all moneys and claims for moneys due
or to become due to such Assignor under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem to be necessary or advisable to protect the interests
of the Secured Creditors, which appointment as attorney is coupled with an
interest.
ARTICLE II.
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
A. Necessary Filings. All filings, registrations and recordings
necessary or appropriate to create, preserve, protect and perfect the security
interest granted by such Assignor to the Collateral Agent hereby in respect of
the Collateral have been accomplished and the security interest granted to the
Collateral Agent pursuant to this Agreement in and to the Collateral constitutes
a perfected security interest therein prior to the rights of all other Persons
therein and subject to no other Liens (other than Permitted Liens) and is
entitled to all the rights, priorities and benefits afforded by the Uniform
Commercial Code or other relevant law as enacted in any relevant jurisdiction to
perfected security interests.
B. No Liens. Such Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of all
Collateral free from any Lien, security
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interest, encumbrance or other right, title or interest of any Person (other
than Permitted Liens), and such Assignor shall defend the Collateral against all
claims and demands of all Persons (other than Persons claiming by, through, or
under the Collateral Agent) at any time claiming the same or any interest
therein adverse to the Collateral Agent.
C. Other Financing Statements. There is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover an interest of any kind in the
Collateral (other than Permitted Liens), and so long as the Total Commitment has
not been terminated or any Letter of Credit or Note remains outstanding or any
of the Obligations remain unpaid or any Interest Rate Protection or Other
Hedging Agreement remains in effect or any Obligations are owed with respect
thereto, such Assignor will not execute or authorize to be filed in any public
office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby by such Assignor or as permitted
by the Credit Agreement.
D. Chief Executive Office; Records. The chief executive office of such
Assignor is located at the address or addresses indicated on Annex A hereto.
Such Assignor will not move its chief executive office except to such new
location as such Assignor may establish in accordance with the last sentence of
this Section 2.4. The originals of all documents evidencing all Receivables and
Contract Rights of such Assignor and the only original books of account and
records of such Assignor relating thereto are, and will continue to be, kept at
such chief executive office or at such other locations as are set forth on Annex
B hereto or at such other locations as such Assignor may establish in accordance
with the last sentence of this Section 2.4. All Receivables and Contract Rights
of such Assignor are, and will continue to be, maintained at, and controlled and
directed (including, without limitation, for general accounting purposes) from,
the office locations described above or such new location established in
accordance with the last sentence of this Section 2.4. No Assignor shall
establish new locations for such offices until (i) it shall have given to the
Collateral Agent not less than 30 days' prior written notice of its intention to
do so, clearly describing such new location and providing such other information
in connection therewith as the Collateral Agent may request, (ii) with respect
to such new location, it shall have taken all action, satisfactory to the
Collateral Agent, to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect, (iii) at the request of the Collateral Agent, it shall
have furnished an opinion of counsel acceptable to the Collateral Agent to the
effect that all financing or continuation statements and amendments or
supplements thereto have been filed in the appropriate filing office or offices,
and (iv) the Collateral Agent shall have received evidence that all other
actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the first
priority security interest granted hereby.
E. Location of Inventory and Equipment. All Inventory and Equipment
held on the date hereof by each Assignor is located at one of the locations
shown on Annex C hereto. Each Assignor agrees that all Inventory and Equipment
now held or subsequently acquired by it shall be
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kept at (or shall be in transport to) any one of the locations shown on Annex C
hereto or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.5. Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent not less than 30 days prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Collateral Agent may request, (ii) with respect to
such new location, it shall have taken all action satisfactory to the Collateral
Agent to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect, (iii) at the request of the Collateral Agent, it shall
have furnished an opinion of counsel acceptable to the Collateral Agent to the
effect that all financing or continuation statements and amendments or
supplements thereto have been filed in the appropriate filing office or offices,
and (iv) the Collateral Agent shall have received evidence that all other
actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the first
priority security interest granted hereby.
F. Trade Names; Change of Name. No Assignor has or (operates in any
jurisdiction under, or previously has had or has operated in any jurisdiction
within the [five] year period preceding the date of this Agreement under, any
trade names, fictitious names or other names except its legal name and such
other trade or fictitious names as are listed on Annex D hereto. No Assignor
shall change its legal name or assume or operate in any jurisdiction under any
trade, fictitious or other name except those names listed on Annex D hereto and
new names established in accordance with the last sentence of this Section 2.6.
No Assignor shall assume or operate in any jurisdiction under any new trade,
fictitious or other name until (i) it shall have given to the Collateral Agent
not less than 30 days' prior written notice of its intention so to do, clearly
describing such new name and the jurisdictions in which such new name shall be
used and providing such other information in connection therewith as the
Collateral Agent may request, (ii) with respect to such new name, it shall have
taken all action requested by the Collateral Agent, to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted hereby
at all times fully perfected and in full force and effect, (iii) at the request
of the Collateral Agent, it shall have furnished an opinion of counsel
acceptable to the Collateral Agent to the effect that all financing or
continuation statements and amendments or supplements thereto have been filed in
the appropriate filing office or offices, and (iv) the Collateral Agent shall
have received evidence that all other actions (including, without limitation,
the payment of all filing fees and taxes, if any, payable in connection with
such filings) have been taken, in order to perfect (and maintain the perfection
and priority of) the first priority security interest granted hereby.
G. Recourse. This Agreement is made with full recourse to the Assignor
and pursuant to and upon all the warranties, representations, covenants and
agreements on the part of such Assignor contained herein, in the other Credit
Documents, in the Interest Rate Protection or Other Hedging Agreements and
otherwise in writing in connection herewith or therewith.
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ARTICLE III.
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
A. Additional Representations and Warranties. As of the time when each
of its Receivables arises, the relevant Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto are genuine and in all respects what they purport to
be, and that all papers and documents relating thereto (i) will represent the
genuine, legal, valid and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by the respective account debtor arising out of the
performance of labor or services or the sale or lease and delivery of the
inventory, materials, equipment or merchandise listed therein, or both, (ii)
will be the only original writings evidencing and embodying such obligation of
the account debtor named therein (other than copies created for general
accounting purposes), (iii) will evidence true and valid obligations,
enforceable in accordance with their respective terms, except to the extent that
the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
by equity principles (regardless of whether enforcement is sought in equity or
at law), and (iv) will be in compliance in all material respects and will
conform with all applicable federal, state and local laws and applicable laws of
any relevant foreign jurisdiction.
B. Maintenance of Records. Each Assignor will keep and maintain at its
own cost and expense satisfactory and complete records of its Receivables and
Contracts, including, but not limited to, originals or copies of all
documentation (including each Contract) with respect thereto, records of all
payments received, all credits granted thereon, all merchandise returned and all
other dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such Assignor's
own cost and expense, at any and all reasonable times during, so long as no
Event of Default has occurred and is continuing, normal business hours and so
long as no Event of Default has occurred or is continuing, upon prior notice to
the chief financial officer or other authorized officer of such Assignor. Upon
the occurrence and during the continuance of an Event of Default and at the
request of the Collateral Agent, such Assignor shall, at its own cost and
expense, deliver all tangible evidence of its Receivables and Contract Rights
(including, without limitation, all documents evidencing the Receivables and all
Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Assignor) and, if the Collateral Agent so directs, such Assignor shall
legend, in form and manner satisfactory to the Collateral Agent, the Receivables
and the Contracts, as well as books, records and documents of such Assignor
evidencing or pertaining to such Receivables and Contracts with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.
C. Direction to Account Debtors; Contracting Parties; etc. Upon the
occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor,
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to the extent permitted by applicable law, such Assignor agrees (x) to cause all
payments on account of the Receivables and Contracts to be made directly to the
Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in preceding clause
(x), and (z) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Assignor.
Without notice to or assent by any Assignor, the Collateral Agent may apply any
or all amounts then in, or thereafter deposited in, the Cash Collateral Account
which application shall be effected in the manner provided in Section 7.4 of
this Agreement. The costs and expenses (including attorneys' fees) of
collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the Assignors.
D. Modification of Terms; etc. Upon the occurrence and during the
continuance of an Event of Default, no Assignor shall rescind or cancel any
indebtedness evidenced by any Receivable or under any Contract, or modify any
term thereof or make any adjustment with respect thereto, or extend or renew the
same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable or Contract, or interest
therein, without the prior written consent of the Collateral Agent, except as
permitted by Section 3.5. Each Assignor will duly fulfill all obligations on its
part to be fulfilled under or in connection with the Receivables and Contracts
and will do nothing to impair the rights of the Collateral Agent in the
Receivables or Contracts, except as permitted by Section 3.5.
E. Collection. Each Assignor shall endeavor to cause to be collected
from the account debtor named in each of its Receivables or obligor under any of
its Contracts, as and when due (including, without limitation, amounts, services
or products which are delinquent, such amounts, services or products to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts, services or products owing under or on account of such
Receivable or Contract, and apply forthwith upon receipt thereof all such
amounts, services or products as are so collected to the outstanding balance of
such Receivable or under such Contract, except that, prior to the occurrence of
an Event of Default, any Assignor may allow in the ordinary course of business
as adjustments to amounts, services or products owing under its Receivables and
Contracts (i) an extension or renewal of the time or times of payment or
exchange, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services. The costs and expenses (including, without
limitation, attorneys' fees) of collection, whether incurred by an Assignor or
the Collateral Agent, shall be borne by the Assignors.
F. Instruments. If any Assignor owns or acquires any Instrument
constituting Collateral, such Assignor will within 10 Business Days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
G. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse,
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acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to its
Receivables, Contracts, Instruments and other property or rights covered by the
security interest hereby granted, as the Collateral Agent may reasonably
require.
ARTICLE IV.
SPECIAL PROVISIONS CONCERNING TRADEMARKS
A. Additional Representations and Warranties. Each Assignor represents
and warrants that it is the true and lawful owner of or otherwise has the right
to use the Marks listed in Annex E hereto and that said listed Marks constitute
all the Marks that such Assignor presently owns or uses in connection with its
business. Except as set forth on Annex E, each Assignor represents and warrants
that it owns, is licensed to use or otherwise has the right to use all Marks
that it uses. Other than as set forth on Annex E, each Assignor further warrants
that it has no knowledge as of the date hereof, of any third party claim that
any aspect of such Assignor's present or contemplated business operations
infringes or will infringe any rights in any trademark, service mark or
trademark. Each Assignor represents and warrants that it is the beneficial and
record owner of all U.S. and foreign trademark registrations and applications
listed in Annex E hereto and that said registrations are valid, subsisting, and
have not been canceled and that, such Assignor is not aware of any third-party
claim that any of said registration is invalid or unenforceable, or that there
is any reason that any of said applications will not pass to registration. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of an Event of Default, any
document which may be required by the U.S. Patent and Trademark Office or
secretary of state or equivalent governmental agency of any State of the United
States or in any foreign jurisdiction in order to effect an absolute assignment
of all right, title and interest in each Mark, and record the same.
B. Licenses and Assignments. Each Assignor hereby agrees not to divest
itself of any right under any Mark absent prior written approval of the
Collateral Agent.
C. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to
(i) any party who such Assignor believes is infringing or diluting or otherwise
violating in any material respect any of such Assignor's rights in and to any
Mark, or (ii) any party claiming that such Assignor's use of any Mark violates
in any material respect any property right of that party. Each Assignor further
agrees, unless otherwise agreed by the Collateral Agent, diligently to prosecute
any Person infringing any material Mark.
D. Preservation of Marks. Each Assignor agrees to use its Marks in
interstate commerce during the time in which this Agreement is in effect,
sufficiently to preserve such Marks as valid and subsisting trademarks or
service marks under the laws of the United States, except if the
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failure to preserve such Marks could not reasonably be expected to have a
material adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower or its Subsidiaries taken as a whole.
E. Maintenance of Registration. Except as otherwise provided in
Section 4.4, each Assignor shall, at its own expense, diligently process all
documents required by the Trademark Act of 1946, as amended, 15 U.S.C.
Sections 1051 et seq. to maintain trademark registrations, including but
not limited to affidavits of continued use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
registered Marks pursuant to 15 U.S.C. Sections 1058, 1059 and 1065 and
any foreign equivalent thereof, and shall pay all fees and disbursements in
connection therewith and shall not abandon any such filing of affidavit of use
or any such application of renewal prior to the exhaustion of all administrative
and judicial remedies without prior written consent of the Collateral Agent.
Each Assignor agrees to notify the Collateral Agent three (3) months prior to
the dates on which the affidavits of continued use or the applications for
renewal registration are due with respect to any Mark that the affidavits of
continued use or the application for renewal is being processed.
F. Future Registered Marks. If any registration for any Mark issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office or any equivalent
governmental agency in any foreign jurisdiction, within 30 days of receipt of
such certificate, such Assignor shall deliver to the Collateral Agent a copy of
such certificate, and an assignment for security in such Mark, to the Collateral
Acent and at the expense of such Assignor, confirming the assignment for
security in such Mark to the Collateral Agent hereunder, the form of such
security to be substantially the same as the form hereof or in such other form
as may be satisfactory to the Collateral Agent.
G. Remedies. If an Event of Default shall occur and be continuing, the
Collateral Agent may, by written notice, to the relevant Assignor, take any or
all of the following actions: (i) declare the entire right, title and interest
of such Assignor in and to each of the Marks, together with all trademark rights
and rights of protection to the same and the goodwill of such Assignor's
business symbolized by said Marks and the right to recover for past
infringements thereof, vested in the Collateral Agent for the benefit of the
Secured Creditors, in which event such rights, title and interest shall
immediately vest, in the Collateral Agent for the benefit of the Secured
Creditors, and the Collateral Agent shall be entitled to exercise the power of
attorney referred to in Section 4.1 to execute, cause to be acknowledged and
notarized and to record said absolute assignment with the applicable agency;
(ii) take and use or sell the Marks and the goodwill of such Assignor's business
symbolized by the Marks and the right to carry on the business and use the
assets of such Assignor in connection with which the Marks have been used; and
(iii) direct such Assignor to refrain, in which event such Assignor shall
refrain, from using the Marks in any manner whatsoever, directly or indirectly,
and, if requested by the Collateral Agent, change such Assignor's corporate name
to eliminate therefrom any use of any Mark and execute such other and further
documents that the Collateral Agent may request to further confirm this and to
transfer ownership of the Marks and registrations and any pending trademark
applications therefor in the United States Patent and
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Trademark Office or any equivalent governmental agency in any foreign
jurisdiction to the Collateral Agent.
ARTICLE V.
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
A. Additional Representations and Warranties. Each Assignor represents
and warrants that it is the true and lawful owner of all rights in (i) all trade
secrets and proprietary information necessary to operate the business of such
Assignor (the "Trade Secret Rights"), (ii) the Patents listed in Annex F hereto
and (iii) the Copyrights listed in Annex G hereto, that said Patents constitute
all the patents and applications for patents that such Assignor now owns and
that such Copyrights constitute all registrations of copyrights and applications
for copyright registrations that such Assignor now owns. Each Assignor further
represents and warrants that it has the exclusive right to use and practice
under all such Patents and Copyrights that it owns, uses or practices under.
Each Assignor further warrants that it is aware of no claim that any aspect of
such Assignor's present or contemplated business operations infringes or will
infringe any rights of any third party in any patent or copyright or such
Assignor has misappropriated any trade secret or proprietary information. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of any Event of Default,
any document which may be required by the U.S. Patent and Trademark Office or
equivalent governmental agency in any foreign jurisdiction or the U.S. Copyright
Office or equivalent governmental agency in any foreign jurisdiction in order to
effect an absolute assignment of all right, title and interest in each Patent
and Copyright, and to record the same.
B. Licenses and Assignments. Each Assignor hereby agrees not to divest
itself of any right under any Patent or Copyright absent prior written approval
of the Collateral Agent.
C. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to infringement,
contributing infringement or active inducement to infringe in any Patent or
Copyright or to any claim that the practice of any Patent or the use of any
Copyright violates any property right of a third party, or with respect to any
misappropriation of any Trade Secret Right or any claim that practice of any
Trade Secret Right violates any property right of a third party. Each Assignor
further agrees, absent direction of the Collateral Agent to the contrary,
diligently to prosecute any Person infringing any material Patent or material
Copyright or any Person misappropriating any material Trade Secret Right.
D. Maintenance of Patents and Copyrights. At its own expense, each
Assignor shall make timely payment of all post-issuance fees required pursuant
to 35 U.S.C. Section 41 and any foreign equivalent thereof to maintain in full
force rights under each Patent, and to apply as permitted
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pursuant to applicable law for any renewal of each Copyright absent prior
written consent of the Collateral Agent.
E. Prosecution of Patent Application. At its own expense, each
Assignor shall diligently prosecute all applications for Patents listed in Annex
F hereto and shall not abandon any such application prior to exhaustion of all
administrative and judicial remedies, absent written consent of the Collateral
Agent.
F. Other Patents and Copyrights. Within 30 days of the acquisition or
issuance of a Patent or of a Copyright registration, or of filing of an
application for a Patent or Copyright registration, the relevant Assignor shall
deliver to the Collateral Agent a copy of said Copyright registration or Patent
or certificate or registration of, or application therefor, as the case may be,
with an assignment for security as to such Patent or Copyright, as the case may
be, to the Collateral Agent and at the expense of such Assignor confirming the
assignment for security, the form of such assignment for security to be
substantially the same as the form hereof or in such other form as may be
satisfactory to the Collateral Agent.
G. Remedies. If an Event of Default shall occur and be continuing, the
Collateral Agent may by written notice to the relevant Assignor, take any or all
of the following actions: (i) declare the entire right, title, and interest of
such Assignor in each of the Patents and Copyrights vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such right,
title, and interest shall immediately vest in the Collateral Agent for the
benefit of the Secured Creditors, in which case the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 to
execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights and (iii) direct such Assignor to refrain, in which event
such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such other
and further documents as the Collateral Agent may request further to confirm
this and to transfer ownership of the Patents and Copyrights to the Collateral
Agent for the benefit of the Secured Creditors.
ARTICLE VI.
PROVISIONS CONCERNING ALL COLLATERAL
A. Protection of Collateral Agent's Security. Each Assignor will do
nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at such Assignor's own expense to the extent and in the
manner provided in the Credit Agreement; all policies or certificates with
respect to such insurance (and any other insurance (other than employee benefit
insurance) maintained by such Assignor): (i) shall be endorsed to the Collateral
Agent's satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and naming each
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of the Banks, the Agent and the Collateral Agent as additional insureds); and
(ii) shall state that such insurance policies shall not be cancelled or revised
without 30 days' prior written notice thereof by the insurer to the Collateral
Agent; and certified copies of such policies shall be deposited with the
Collateral Agent upon request by the Collateral Agent. If any Assignor shall
fail to insure its Inventory and Equipment in accordance with the preceding
sentence, or if any Assignor shall fail to so endorse and deposit all policies
with respect thereto, the Collateral Agent shall have the right (but shall be
under no obligation) to procure such insurance and such Assignor agrees to
promptly reimburse the Collateral Agent for all costs and expenses of procuring
such insurance. All proceeds of any insurance shall be deposited in the Cash
Collateral Account pending application thereof pursuant to the Credit Agreement
or pursuant hereto. The Collateral Agent shall, at the time such proceeds of
such insurance are distributed to the Secured Creditors, apply such proceeds in
accordance with Section 7.4. Each Assignor assumes all liability and
responsibility in connection with the Collateral acquired by it and the
liability of such Assignor to pay the Obligations shall in no way be affected or
diminished by reason of the fact that such Collateral may be lost, destroyed,
stolen, damaged or for any reason whatsoever unavailable to such Assignor.
B. Warehouse Receipts Non-negotiable. Each Assignor agrees that if any
warehouse receipt or receipt in the nature of a warehouse receipt is issued with
respect to any of its Inventory, such warehouse receipt or receipt in the nature
thereof shall not be "negotiable" (as such term is used in Section 7-104 of the
Uniform Commercial Code as in effect in any relevant jurisdiction or under other
relevant law).
C. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
D. Financing Statements. Each Assignor agrees to execute and deliver
to the Collateral Agent such financing statements, in form reasonably acceptable
to the Collateral Agent, as the Collateral Agent may from time to time
reasonably request or as are necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first priority
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby all in accordance with the Uniform
Commercial Code as enacted in any and all relevant jurisdictions or any other
relevant law. Each Assignor will pay any applicable filing fees, recordation
taxes and related expenses relating to its Collateral. Each Assignor hereby
authorizes the Collateral Agent to file any such financing statements without
the signature of such Assignor where permitted by law.
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ARTICLE VII.
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
A. Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions and
may:
a. personally, or by agents or attorneys, immediately take possession
of the Collateral or any part thereof, from such Assignor or any other
Person who then has possession of any part thereof with or without notice
or process of law, and for that purpose may enter upon such Assignor's
premises where any of the Collateral is located and remove the same and use
in connection with such removal any and all services, supplies, aids and
other facilities of such Assignor;
b. instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent and may exercise any and all remedies of such Assignor in
respect of such Collateral;
c. withdraw all moneys, instruments and other securities in the Cash
Collateral Account and/or in any other cash collateral account for
application to the Obligations in accordance with Section 7.4;
d. sell, assign or otherwise liquidate any or all of the Collateral or
any part thereof in accordance with Section 7.2, or direct the relevant
Assignor to sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof, and, in each case, take possession of the
proceeds of any such sale or liquidation;
e. take possession of the Collateral or any part thereof, by directing
the relevant Assignor in writing to deliver the same to the Collateral
Agent at any place or places designated by the Collateral Agent, in which
event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or places
so designated by the Collateral Agent and there delivered to the
Collateral Agent;
(y) store and keep any Collateral so delivered to the Collateral
Agent at such place or places pending further action by the Collateral
Agent as provided in Section 7.2; and
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(z) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to protect
the same and to preserve and maintain them in good condition; and
(vi) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for such
term and on such conditions and in such manner as the Collateral Agent
shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring, specific performance by such Assignor of said obligation.
B. Remedies; Disposition of the Collateral. Any Collateral repossessed
by the Collateral Agent under or pursuant to Section 7.1 and any other
Collateral whether or not so repossessed by the Collateral Agent, may be sold,
assigned, leased or otherwise disposed of under one or more contracts or as an
entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
to the right of the relevant Assignor or any nominee of such Assignor to acquire
the Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by such requirements shall be
made upon not less than 10 days' written notice to the relevant Assignor
specifying the time and place of such sale and, in the absence of applicable
requirements of law, shall be by public auction (which may, at the Collateral
Agent's option, be subject to reserve), after publication of notice of such
auction not less than 10 days prior thereto in two newspapers in general
circulation in the City of New York. To the extent permitted by any such
requirement of law, the Collateral Agent may bid for and become the purchaser of
the Collateral or any item thereof, offered for sale in accordance with this
Section without accountability to the relevant Assignor. If, under mandatory
requirements of applicable law, the Collateral Agent shall be required to make
disposition of the Collateral within a period of time which does not permit the
giving of notice to the relevant Assignor as hereinabove specified, the
Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such mandatory requirements of
applicable law. Each Assignor agrees to do or cause to be done all such other
acts and things as may be reasonably necessary to make such sale or sales of all
or any portion of the Collateral valid and binding and in compliance with any
and all applicable laws, regulations, orders,
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writs, injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
C. Waiver of Claims. Except as otherwise expressly provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and the Assignor hereby further waives, to the extent permitted
by law:
a. all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
b. all other requirements as to the time, place, and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now, or hereafter in force under any
applicable law in order to prevent or delay the enforcement of this
Agreement or the absolute sale of the Collateral or any portion
thereof, and each Assignor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the
benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
D. Application of Proceeds. 1. All moneys collected by the Collateral
Agent (or, to the extent any other Security Document to which the Assignor is a
party requires proceeds of Collateral under such agreement to be applied in
accordance with the provisions of this Agreement, the Pledgee or Collateral
Agent under such other agreement) upon any sale or other disposition of the
Collateral, together with all other moneys received by the Collateral Agent
hereunder, shall be applied as follows:
a. first, to the payment of all Obligations owing the Collateral Agent
(or any other Indemnitee, in the case of clause (v) referenced below) of
the type provided in clauses (iii), (iv) and (v) of the definition of
Obligations;
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b. second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Primary Obligations shall be paid to the Secured Creditors as provided in
Section 7.4(e), with each Secured Creditor receiving an amount equal to its
outstanding Primary Obligations or, if the proceeds are insufficient to pay
in full all such Primary Obligations, its Pro Rata Share of the amount
remaining to be distributed;
c. third, to the extent proceeds remain after the application pursuant
to the preceding clauses (i) and (ii), an amount equal to the outstanding
Secondary Obligations shall be paid to the Secured Creditors as provided in
Section 7.4(e), with each Secured Creditor receiving an amount equal to its
outstanding Secondary Obligations or, if the proceeds are insufficient to
pay in full all such Secondary Obligations, its Pro Rata Share of the
amount remaining to be distributed; and
d. fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i), (ii) and (iii) and following the
termination of this Agreement pursuant to Section 10.9 hereof, to the
relevant Assignor or as required by applicable law.
2. For purposes of this Agreement (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the
Credit Document Obligations, all principal of, and interest on, all Loans, all
Unpaid Drawings theretofore made (together with all interest accrued thereon)
the aggregate Stated Amounts of all Letters of Credit issued under the Credit
Agreement, and all Fees and (ii) in the case of the Interest Rate Protection
Obligations, all amounts due under the Interest Rate Protection or Other Hedging
Agreements (other than indemnities, fees (including, without limitation,
attorneys' fees) and similar obligations and liabilities) and (z) "Secondary
Obligations" shall mean all Obligations other than Primary Obligations.
3. When payments to Secured Creditors are based upon their respective
Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall
be applied (for purposes of making determinations under this Section 7.4 only)
(i) first, to their Primary Obligations and (ii) second, to their Secondary
Obligations. If any payment to any Secured Creditor of its Pro Rata Share of any
distribution would result in overpayment to such Secured Creditor, such excess
amount shall instead be distributed in respect of the unpaid Primary Obligations
or Secondary Obligations, as the case may be, of the other Secured Creditors,
with each Secured Creditor whose Primary Obligations or Secondary Obligations,
as the case may be, have not been paid in full to receive an amount equal to
such excess amount multiplied by a fraction the numerator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of such
Secured Creditor and the denominator of which is the unpaid Primary Obligations
or Secondary Obligations, as the case may be, of all Secured Creditors entitled
to such distribution.
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4. Each of the Secured Creditors agrees and acknowledges that if Bank
Creditors are to receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued under the Credit Agreement (which shall only
occur after all outstanding Loans and Unpaid Drawings with respect to such
Letters of Credit have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the Bank Creditors, as cash security for the repayment of
obligations owing to the Bank Creditors as such. If any amounts are held as cash
security pursuant to the immediately preceding sentence, then upon the
termination of all outstanding Letters of Credit, and after the application of
all such cash security to the repayment of all Obligations owing to the Bank
(creditors after giving effect to the termination of all such Letters of Credit,
if there remains any excess cash, such excess cash shall be returned to the
Administrative Agent to the Collateral Agent for distribution in accordance with
Section 7.04(a) hereof.
5. Except as set forth in Section 7.04(d) hereof, all payments
required to be made hereunder shall be made (i) if to the Bank Creditors, to the
Administrative Agent under the Credit Agreement for the account of the Bank
Creditors, and (ii) if to the Other Creditors, directly to the Other Creditors.
6. For purposes of applying payments received in accordance with this
Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) upon the Other
Creditors for a determination (which the Administrative Agent and the Other
Creditors agree (or shall agree) to provide upon request of the Collateral
Agent) of the outstanding Primary Obligations and Secondary Obligations owed to
the Bank Creditors or the Other Creditors, as the case may be, unless it has
actual knowledge (including, by way of written notice from a Bank Creditor or an
Other Creditor) to the contrary, the Administrative Agent, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written notice
from any Other Creditor) to the contrary, the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Interest Rate Protection or Other
Hedging Agreements are in existence.
7. It is understood that each Assignor shall remain liable to the
extent of any deficiency between the amount of the proceeds of the Collateral
and the aggregate amount of the sums referred to in clauses (i), (ii) and (iii)
of Section 7.4(a) with respect to the relevant Assignor.
E. Remedies Cumulative. Each and every right, power, and remedy hereby
specifically given to the Collateral Agent shall be in addition to every other
right, power and remedy specifically given under this Agreement, the Interest
Rate Protection or Other Hedging Agreements, the other Credit Documents now or
hereafter existing at law, in equity or by statute and each and every right,
power and remedy whether specifically herein given or otherwise existing, may be
exercised from time to time or simultaneously and as often and in such order as
may be deemed expedient by the Collateral Agent. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of the exercise
of one shall not be deemed a waiver of the right to exercise
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any other or others. No delay or omission of the Collateral Agent in the
exercise of any such right, power or remedy and no renewal or extension of any
of the Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an acquiescence
therein. No notice to or demand on any Assignor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Collateral Agent to any other or
further action in any circumstances without notice or demand. In the event that
the Collateral Agent shall bring any suit to enforce any of its rights hereunder
and shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.
F. Discontinuance of Proceedings. In case the Collateral Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding, shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case the relevant
Assignor, the Collateral Agent and each holder of any of the Obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Collateral Agent shall continue as if no
such proceeding had been instituted.
ARTICLE VIII.
INDEMNITY
A. Indemnity. 1. Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each Secured Creditor and
their respective successors, permitted assigns, employees, agents and servants
(hereinafter in this Section 8.1 referred to individually as "Indemnitee," and
collectively as "Indemnitees") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all reasonable costs, expenses or disbursements (including
reasonable attorneys' fees and expenses) (for the purposes of this Section 8.1
the foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any Interest Rate Protection or
Other Hedging Agreement, any other Credit Document or any other document
executed in connection herewith or therewith or in any other way connected with
the administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the
Collateral (including, without limitation, latent or other defects, whether or
not discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
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of injury to or the death of any Person (including any Indemnitee), or property
damage), or contract claim; provided that no Indemnitee shall be indemnified
pursuant to this Section 8.1(a) for losses, damages or liabilities to the extent
caused by the gross negligence or willful misconduct of such Indemnitee. Each
Assignor agrees that upon written notice by any Indemnitee of the assertion of
such a liability, obligation, damage, injury, penalty, claim, demand, action,
suit or judgment, the relevant Assignor shall assume full responsibility for the
defense thereof. Each Indemnitee agrees to use its best efforts to promptly
notify the relevant Assignor of any such assertion of which such Indemnitee has
knowledge.
2. Without limiting the application of Section 8.1(a), each Assignor
agrees, jointly and severally, to pay, or reimburse the Collateral Agent for any
and all reasonable fees, costs and expenses of whatever kind or nature incurred
in connection with the creation, preservation or protection of the Collateral
Agent's Liens on, and security interest in, the Collateral, including, without
limitation, all fees and taxes in connection with the recording or filing of
instruments and documents in public offices, payment or discharge of any taxes
or Liens upon or in respect of the Collateral, premiums for insurance with
respect to the Collateral and all other reasonable fees, costs and expenses in
connection with protecting, maintaining or preserving the Collateral and the
Collateral Agent's interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral,
3. Without limiting the application of Section 8.1(a) or (b),each
Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Assignor in this Agreement, any Interest Rate
Protection or Other Hedging Agreement, any other Credit Document or in any
writing contemplated by or made or delivered pursuant to or in connection with
this Agreement, any Interest Rate Protection or Other Hedging Agreement or any
other Credit Document.
4. If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
B. Indemnity Obligations Secured by Collateral; Survival. Any amounts
paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Letters of
Credit and all Interest Rate Protection or Other Hedging Agreements and the
payment of all other Obligations and notwithstanding the discharge thereof.
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ARTICLE IX.
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Agents" shall have the meaning provided in the recitals to this
Agreement.
"Agreement" shall have the meaning provided in the preamble to this
Agreement.
"Assignor" shall have the meaning provided in the preamble to this
Agreement.
"Bank Creditors" shall have the meaning provided in the preamble to
this Agreement.
"Banks" shall have the meaning provided in the recitals to this
Agreement.
"Cash Collateral Account" shall mean a non-interest bearing account
maintained with, and in the sole dominion and control of, the Collateral Agent
for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2.
"Collateral" shall have the meaning provided in Section 1.1(a).
"Collateral Agent" shall have the meaning provided in the preamble to
this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including
without limitation all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection or Other Hedging Agreements, all management contracts, all NRTC
Agreements and all contracts pursuant to which any Assignor provides DirecTV
services).
"Copyrights" shall mean any U.S. or foreign copyright owned by any
Assignor, including any registrations of any Copyrights, in the U.S. Copyright
Office or the equivalent thereof in any foreign jurisdiction, as well as any
application for a U.S. or foreign copyright registration now or hereafter made
with the U.S. Copyright Office or the equivalent thereof in any foreign
jurisdiction by any Assignor.
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EXHIBIT J
Page 47
"Credit Agreement" shall have the meaning provided in the recitals to
this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor and any and
all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement or any payment default under any Interest Rate
Protection or Other Hedging Agreement and shall in any event, without
limitation, include any payment default on any of the Obligations after the
expiration of any applicable grace period.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Goods" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1.
"Instrument" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Interest Rate Protection Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article IX.
"Interest Rate Protection or Other Hedging Agreements" shall have the
meaning provided in the preamble to this Agreement.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in
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Page 48
manufacturing, processing, packaging or shipping same; in all stages of
production -- from raw materials through work-in-process to finished goods --
and all products and proceeds of whatever sort and wherever located and any
portion thereof which may be returned, rejected, reclaimed or repossessed by the
Collateral Agent from any Assignor's customers, and shall specifically include
all "inventory" as such term is defined in the Uniform Commercial Code as in
effect on the date hereof in the State of New York, now or hereafter owned by
any Assignor.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention, lessor's interest in a financing
lease or analogous instrument, in, of, or on any Assignor's property.
"Marks" shall mean all right, title and interest in and to any U.S. or
foreign trademarks, service marks and trade names now held or hereafter acquired
by any Assignor, including any registration or application for registration of
any trademarks and service marks in the United States Patent and Trademark
Office, or the equivalent thereof in any State of the United States or in any
foreign country, and any trade dress including logos and/or designs used by any
Assignor in the United States or any foreign country.
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, indemnities, fees
and interest thereon) of the Borrower and each Assignor owing, to the Bank
Creditors, now existing or hereafter incurred under, arising out of or in
connection with any Credit Document and the due performance and compliance by
the Borrower and each Assignor with the terms of each such Credit Document (all
such obligations and indebtedness under this clause (i), except to the extent
consisting of obligations or indebtedness with respect to Interest Rate
Protection or Other Hedging Agreements, being herein collectively called the
"Credit Document Obligations"); (ii) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, indemnities, fees
and interest thereon) of the Borrower and each Assignor owing to the Other
Creditors now existing, or hereafter incurred under, arising out of or in
connection with any Interest Rate Protection or Other Hedging Agreement (all
such obligations and indebtedness under this clause (ii) being herein
collectively called the "Interest Rate Protection Obligations"); (iii) any and
all sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities referred to in clauses (i), (ii) and (iii) above, after an Event
of Default shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or otherwise
disposition of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement.
"Other Creditors" shall have the meaning provided in the preamble to
this Agreement.
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Page 49
"Patents" shall mean any U.S. or foreign patent to which any Assignor
now or hereafter has title and any divisions or continuations thereof, as well
as any application for a U.S. or foreign patent now or hereafter made by any
Assignor.
"Primary Obligation" shall have the meaning provided in Section
7.4(b).
"Pro Rata Share" shall have the meaning provided in Section 7.4(b).
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, including, without
limitation, all rights to payment under any of DirecTV service contracts,
whether now in existence or arising from time to time hereafter, including,
without limitation, rights evidenced by an account, note, contract, security
agreement, chattel paper, or other evidence of indebtedness or security,
together with (a) all security pledged, assigned, hypothecated or granted to or
held by such Assignor to secure the foregoing, (b) all of any Assignor's right,
title and interest in and to any goods or services, the sale of which gave rise
thereto, (c) all guarantees, endorsements and indemnifications on, or of, any of
the foregoing, (d) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection therewith, (a) all
books, records, ledger cards, and invoices relating thereto, (i) all evidences
of the filing of financing statements and other statements and the registration
of other instruments in connection therewith and amendments thereto, notices to
other creditors or secured parties, and certificates from filing or other
registration officers; (g) all credit information, reports and memoranda
relating thereto and (h) all other writings related in any way to the foregoing.
"Requisite Creditors" shall have the meaning provided in Section 10.2.
"Secondary Obligation" shall have the meaning provided in Section
7.4(b).
"Secured Creditors" shall have the meaning provided in the preamble to
this Agreement.
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Page 50
"Termination Date" shall have the meaning provided in Section 10.9.
"Trade Secret Rights" shall have the meaning provided in Section 5.1.
ARTICLE X.
MISCELLANEOUS
A. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be in writing (including telegraphic, telex, facsimile transmission
or cable communication) and shall be delivered, mailed, telegraphed, telexed,
facsimile transmitted or cabled, addressed:
1. if to any Assignor, at its address set forth opposite its signature
below;
2. if to the Collateral Agent:
Fleet National Bank
Mail Stop MA0FD03D
1 Federal Plaza
Boston, MA 02110
Attention: Mark Bernier
Telephone No.: (617) 346-4347
Facsimile No.: (617) 346-4345;
3. if to any Bank Creditor, either (x) to the Administrative Agent, at
the address of the Administrative Agent specified in the Credit Agreement
or (y) at such address as such Bank Creditor shall have specified in the
Credit Agreement;
4. if to any Other Creditor, directly to the Other Creditors at such
address as the Other Creditors shall have specified in writing to the
Borrower and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. All such notices
and communications shall, when mailed, telegraphed, telexed, facsimile
transmitted or cabled or sent by overnight courier, be effective on the third
Business Day following deposit in the U.S. mails, certified, return receipt
requested, when delivered to the telegraph company, cable company or on the day
following delivery to an overnight courier, as the case may be, or sent by telex
or facsimile device, except that notices and communications to the Collateral
Agent shall not be effective until received by the Collateral Agent.
B. Waiver; Amendment. None of the terms and conditions of this
Agreement may be
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Page 51
changed, waived, modified or varied in any manner whatsoever unless in writing
duly signed by each Assignor and the Collateral Agent (with the consent of the
Required Banks or, to the extent required by Section 12.12 of the Credit
Agreement, all of the Banks); provided, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class (as defined below)
of Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors of such Class of
Secured Creditors. For the purpose of this Agreement the term "Class" shall mean
each class of Secured Creditors, i.e., whether (x) the Bank Creditors as holders
of the Credit Document Obligations or (y) the Other Creditors as the holders of
the Interest Rate Protection Obligations. For the purpose of this Agreement, the
term "Requisite Creditors" of any Class shall mean each of (x) with respect to
the Credit Document Obligations, the Required Banks and (y) with respect to the
Interest Rate Protection Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection or
Other Hedging Agreements.
C. Obligations Absolute. The obligations of each Assignor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor, except to
the extent that the enforceability hereof may be limited by any such event, (b)
any exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection or Other Hedging Agreement, except as specifically
set forth in a waiver granted pursuant to Section 10.2; or (c) any amendment to
or modification of any Credit Document or any Interest Rate Protection or Other
Hedging Agreement or any security for any of the Obligations, whether or not any
Assignor shall have notice or knowledge of any of the foregoing, except as
specifically set forth in an amendment or modification executed pursuant to
Section 10.2.
D. Successors and Assigns. This Agreement shall be binding upon each
Assignor and its successors and assigns and shall inure to the benefit of the
Collateral Agent and each Secured Creditor and their respective successors and
assigns; provided, that no Assignor may transfer or assign any or all of its
rights or obligations hereunder without the prior written consent of the
Collateral Agent. All agreements, statements, representations and warranties
made by each Assignor herein or in any certificate or other instrument delivered
by such Assignor or on its behalf under this Agreement shall be considered to
have been relied upon by the Secured Creditors and shall survive the execution
and delivery of this Agreement, the other Credit Documents and the Interest Rate
Protection or Other Hedging Agreements regardless of any investigation made by
the Secured Creditors or on their behalf.
E. Headings Descriptive. The headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
F. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or
311
EXHIBIT J
Page 52
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
G. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
H. Assignor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of each Assignor under or with
respect to any Collateral.
I. Termination; Release. 1. After the Termination Date, this Agreement
shall terminate (provided that all indemnities set forth herein including,
without limitation, Section 8.1 hereof shall survive such termination) and the
Collateral Agent, at the request and expense of the respective Assignor, will
promptly execute and deliver to such Assignor a proper instrument or instruments
(including Uniform Commercial Code termination statements on form UCC-3)
acknowledging the satisfaction and termination of this Agreement, and will duly
assign, transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of its Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitment and all
Interest Rate Protection or Other Hedging Agreements have been terminated, no
Note is outstanding (and all Loans have been paid in full), all Letters of
Credit have been terminated (or cash collateralized to the Collateral Agent's
satisfaction) and all other Obligations then owing have been paid in full.
2. In the event that any part of the Collateral is sold in connection
with a sale permitted by the Credit Agreement or is otherwise released at the
direction of the Required Banks (or all the Banks if required by Section 12.12
of the Credit Agreement) and the proceeds of such sale or sales or from such
release are applied in accordance with the terms of the Credit Agreement, such
Collateral will be sold free and clear of the Liens created by this Agreement
and the Collateral Agent, at the request and expense of the respective Assignor,
will duly assign, transfer and deliver to such Assignor (without recourse and
without any representation or warranty) such of the Collateral of such Assignor
as is then being (or has been) so sold or released and as may be in the
possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement.
3. At any time that an Assignor desires that Collateral be released as
provided in the foregoing Section 10.9(a) or (b), it shall deliver to the
Collateral Agent a certificate signed by its chief financial officer or another
authorized senior officer stating that the release of the respective
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Page 53
Collateral is permitted pursuant to Section 10.9(a) or (b). If requested by the
Collateral Agent (although the Collateral Agent shall have no obligation to make
any such request), the relevant Assignor shall furnish appropriate legal
opinions (from counsel, which may be in-house counsel, acceptable to the
Collateral Agent) to the effect set forth in the immediately preceding sentence.
The Collateral Agent shall have no liability whatsoever to any Secured Creditor
as the result of any release of Collateral by it as permitted by this Section
10.
J. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Collateral Agent.
K. The Collateral Agent. The Collateral Agent will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by the parties hereto and each
Secured Creditor, by accepting the benefits of this Agreement, acknowledges and
agrees that the obligations of the Collateral Agent as holder of the Collateral
and interests therein and with respect to the disposition thereof, and otherwise
under this Agreement, are only those expressly set forth in this Agreement. The
Collateral Agent shall act hereunder on the terms and conditions set forth in
Section 11 of the Credit Agreement.
L. Limited Obligations. It is the desire and intent of each Assignor,
the Collateral Agent and the Secured Creditors that this Agreement shall be
enforced against each Assignor to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
If and to the extent that the obligations of each Assignor under this Agreement
shall be adjudicated to be invalid of unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers, which laws would determine the solvency of
any Assignor by reference to the full amount of the Obligations at the time of
the execution and delivery of this Agreement), then the amount of the
Obligations of such Assignor shall be deemed to be reduced and such Assignor
shall pay the maximum amount of the Obligations which would be permissible under
the applicable law.
M. Conflict. In the event of any conflict between any provision of
this Agreement and any provision of the Collateral Assignment of Marketing and
Distribution Agreements, dated as of July 7, 1997, between the Borrower and the
Collateral Agent, as acknowledged and agreed to by the NRTC and Hughes, the
relevant provision of this Agreement shall govern.
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Page 54
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
GOLDEN SKY SYSTEMS, INC.,
as an Assignor
605 West 47th Street
Suite 300
Kansas City, MO 64112
By /s/ Robert B. Weaver
------------------------------
Name: Robert B. Weaver
Title: President
Accepted and Agreed to:
FLEET NATIONAL BANK,
as Collateral Agent
By /s/ Paula H. Lang
------------------------------
Name: Paula H. Lang
Title: Senior Vice President
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Page 55
ANNEX C
SCHEDULE OF INVENTORY
AND EQUIPMENT LOCATIONS
CORPORATE OFFICE
605 W. 47th Street
Kansas City, MO
COLORADO OFFICE
Avon, CO
Eagle/Vail Business
(Center) Park
40814 U.S Highway 6
Avon, CO 81620
KANSAS OFFICES
Chanute, KS
Wal-Mart Plaza
2506 S. Santa Fe
Chanute, KS 66720
Coffeyville, KS
206 W. 8th Street
Coffeyville, KS 67337
Coffeyville, KS
903-907 W. 11th Street
Coffeyville, KS 67337
Independence, KS
112 W. Myrtle Street
Independence, KS 67301
Pittsburgh, KS
522 N. Broadway
Pittsburgh, KS 66782
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Page 56
MISSOURI OFFICES
Moberly, MO
1011 C North Morley
Moberly, MO 65270
Hannibal, MO
102 Steamboat Bend
Shopping Ctr.
Hannibal, MO
Hannibal, MO
102 Steamboat Bend #12
Shopping Ctr.
Hannibal, MO
Corporate Apartment Rent
Apt. 702
Richmond, MO
105 East Main
Suite 1
Richmond, MO 64085
NEVADA OFFICES
Las Vegas, NV
Rancho Santa Fe Center
5081 N. Rainbow, Ste. 106
Las Vegas, NV 89103
OKLAHOMA OFFICES
Bartlesville, OK
554 S.E. Washington
546 S.E. Washington
Bartlesville, OK
McAlester, OK
142 E Carl Albert Parkway
Tandy Town Shopping Ctr
McAlester, OK
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Page 57
Claremore, OK
514 North Lynn Riggs
U.S. Hwy 66
Claremore, OK 74017
TENNESSEE OFFICES
Camden, TN
148 Highway 641 N
Camden, TN 38320
Martin, TN
643 N. Lindell St.
Ste. A
Martin, TN 38237
Martin, TN-Warehouse
Jackson St.
Martin, TN 38237
Paris, TN
110 Fentress
Paris, TN 38242
TEXAS OFFICES
Center, TX
202 Tenaha Street
Center, TX
Dallas, TX
11453 Newkirt Street
Dallas, TX 75229
Sequin
256 West Court
Sequin, TX 78155
Victoria, TX
6703 N. Navarro
Victoria, TX 77904
317
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Page 58
Flower Mound, TX
Towne View Plaza
1900 Long Prairie Road
Suite 148
Flower Mound, TX 75028
Lubbock, TX
4210 82nd Street
Lubbock, TX 79423
Livingstone, TX
2114 Hwy 190 West
Livingstone, TX 77351
Office Warehouse
Commerce Business Park
MINNESOTA OFFICES
Mankato, MN
1400 Madison Ave.
Suite 624
Mankato, MN 56001
New Ulm, MN
1 South Minnesota Street
New Ulm, MN 56073
Winona, MN
1157 Gilmore Ave.
Winona, MN 55987
Alexandria, MN
1224 N. Nokomis N.E.
Suite 111
Alexandria, MN 56308
Houston, MN
113 S. Grant Street
Houston, MN 55943
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Page 59
MICHIGAN OFFICES
Battle Creek, MI
Capital Centre
2545 Capital Ave.
Suite 120
Battle Creek, MI 49015
Cadillac, MI
2124 N. Mitchell Drive
Cadillac, MI 49601
Traverse City, MI
3289 W. South Airport Rd.
Traverse City, MI 49684
FLORIDA OFFICES
Port Charlotte, FL
2486 A Tamiami Trail
Port Charlotte, FL 33952
Cape Coral, FL
2126 Del Prado Blvd.
Units 1,2,3&4
Cape Coral, FL 33904
IOWA OFFICE
Marshalltown, IA
Marshalltown Retail Center
3109 S. Center Street
Unit 2
Marshalltown, IA 50158
UTAH OFFICE
Park City, UT
1612 W. Ute Blvd.
Suite 106
Park City, UT 84098
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Page 60
OREGON OFFICE
Klamath Falls, OR
2650 Washburn Way
Suite 140
Klamath Falls, OR 97603
NORTH DAKOTA OFFICE
Fargo, ND
3033 13th Ave. S.W.
Fargo, ND 58103
WISCONSIN OFFICE
Menomonie, WI
1400 N. Broadway Street
Menomonie, WI 54751
MONTANA OFFICES
Billings, MT
2219 Grand Avenue
Billings, MT 59102
Havre, MT
437 First Street
Havre, MT 59501
Missoula, MT
Northgate Plaza
1900 Sherwood St.
Suite 115
Missoula, MT 59802
320
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Page 61
ANNEX D
TRADE AND FICTITIOUS NAMES
None registered or filed. The Company utilizes for recognition the
abbreviation of the name Golden Sky Systems, Inc. as GSS.
321
EXHIBIT J
Page 62
ANNEX E
LIST OF MARKS
None registered or filed. See attached for logo utilized in general
business use, marketing and various types of advertising.
322
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Page 63
[GOLDEN SKY SYSTEMS, INC. LETTERHEAD]
323
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Page 64
ANNEX F
LIST OF PATENTS AND APPLICATIONS
None.
324
EXHIBIT J
Page 65
ANNEX G
to
SECURITY AGREEMENT
LIST OF COPYRIGHTS AND APPLICATIONS
A. GOLDEN SKY SYSTEMS, INC.
None.
325
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Page 66
ANNEX H
to
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST IN
UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Assignor], a [ ] corporation (the "Assignor") with
principal offices at__________________________________, hereby assigns and
grants to Fleet National Bank, as Collateral Agent, with principal offices at
[ ] (the "Assignee"), a security interest in (i) all of the Assignor's
right, title and interest in and to the United States trademarks, trademark
registrations and trademark applications (the "Marks") set forth on Schedule A
attached hereto, (ii) all of the Assignor's right, title and interest in and to
the United States patents (the "Patents") set forth on Schedule B attached, in
each case together with (iii) all Proceeds (as such term is defined in the
Security Agreement referred to below) and products of the Marks and Patents,
(iv) the goodwill of the businesses symbolized by the Marks and (v) all causes
of action arising prior to or after the date hereof for infringement of any of
the Marks and Patents or unfair competition regarding the same.
THIS ASSIGNMENT is made to secure the full and prompt performance and
payment of all the Obligations of the Assignor, as such term is defined in the
Security Agreement between the Assignor and the Assignee, dated as of
____________, 1997 (as amended from time to time, the "Security Agreement").
Upon the occurrence of the Termination Date (as defined in the Security
Agreement), the Assignee shall, upon such satisfaction, execute, acknowledge,
and deliver to the Assignor an instrument in writing releasing the security
interest in the Marks and Patents acquired under this Assignment.
This Assignment has been granted in conjunction with the security
interest granted to the Assignee under the Security Agreement. The rights and
remedies of the Assignee with respect to the security interest granted herein
are without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Assignment are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
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Page 67
ANNEX H
to
SECURITY AGREEMENT
IN WITNESS WHEREOF, the undersigned have executed this Assignment as
of the ____ day of _________, 1997.
[ASSIGNOR],
Assignor
By___________________________________
Name:
Title:
FLEET NATIONAL BANK, as
Collateral Agent, Assignee
By___________________________________
Name:
Title:
327
EXHIBIT J
Page 68
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of __________, 1997, before me personally came
_______________________, who, being by me duly sworn, did state as follows: that
he is ________________ of [Assignor], that he is authorized to execute the
foregoing Assignment on behalf of said corporation and that he did so by
authority of the Board of Directors of said corporation.
____________________________
Notary Public
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EXHIBIT J
Page 69
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of __________, 1997, before me personally came
_______________________, who, being by me duly sworn, did state as follows: that
he is ________________ of Banque Paribas, that he is authorized to execute the
foregoing Assignment on behalf of said corporation and that he did so by
authority of the Board of Directors of said corporation.
____________________________
Notary Public
329
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Page 70
SCHEDULE A
MARK REG. NO REG. DATE
330
EXHIBIT J
Page 71
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
331
EXHIBIT J
Page 72
ANNEX I
to
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [ASSIGNOR], a [ ] corporation (the "Assignor"),having, is
chief executive office at , is the owner of all right, title
and interest in and to the United States copyrights and associated United States
copyright registrations and applications for registration set forth in Schedule
A attached hereto;
WHEREAS, FLEET NATIONAL BANK, as Collateral Agent, having its
principal offices at Mail Stop MA0FD03D, 1 Federal Street, Boston MA 02110 (the
"Assignee"), desires to acquire a security interest in, and lien on, said
copyrights and copyright registrations and applications therefor and the
goodwill of the business symbolized by said copyrights; and
WHEREAS, the Assignor is willing to assign to the Assignee, and to
grant to the Assignee a security interest in and lien upon the copyrights and
copyright registrations and applications therefor described above;
NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and subject to the terms and conditions of the Security
Agreement, dated as of July , 1997, between the Assignor and the Assignee(as
amended from time to time, the "Security Agreement"), the Assignor hereby
assigns to the Assignee, and grants to the Assignee a security interest in and a
lien upon, the copyrights and copyright registrations and applications therefor
set forth in Schedule A attached hereto and the goodwill of the business
symbolized by said copyrights.
This Assignment has been granted in conjunction with the security interest
granted to the Assignee under the Security Agreement. The rights and remedies of
the Assignee with respect to the security interest granted herein are without
prejudice to, and are in addition to those set forth in the Security Agreement,
all terms and provisions of which are incorporated herein by reference. In the
event that any provisions of this Assignment are deemed to conflict with the
Security Agreement, the provisions of the Security Agreement shall govern.
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Page 73
Executed at New York, New York, the __ day of _________, 1997.
[ASSIGNOR],
Assignor
By____________________
Name:
Title:
FLEET NATIONAL BANK, as
Collateral Agent, Assignee
By_____________________
Name:
Title:
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EXHIBIT J
Page 74
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of __________, 1997, before me personally came
_______________________, who, being duly sworn, did depose and say that he is
________________ of [Assignor], that he is authorized to execute the foregoing
Assignment on behalf of said corporation and that he did so by authority of the
Board of Directors of said corporation.
____________________________
Notary Public
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Page 75
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of __________, 1997, before me personally came
_______________________, who, being duly sworn, did depose and say that he is
________________ of [Assignor], that he is authorized to execute the foregoing
Assignment on behalf of said corporation and that he did so by authority of the
Board of Directors of said corporation.
____________________________
Notary Public
335
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Page 76
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
336
EXHIBIT J
Page 77
EXHIBIT C to the
Security Documents Acknowledgment
COLLATERAL ASSIGNMENT OF MARKETING
AND DISTRIBUTION AGREEMENT
THIS COLLATERAL ASSIGNMENT OF MARKETING AND DISTRIBUTION AGREEMENTS (the
"Agreement") is made as of this 7th day of July, 1997 by and between Golden Sky
Systems, Inc. (hereinafter referred to as "Borrower" or "Assignor"), and Fleet
National Bank, as Collateral Agent for the Banks party to the Credit Agreement
referred to below (hereinafter referred to "Assignee"), in accordance with the
following facts and understandings of the parties hereto.
(a) Assignor is in the business of providing direct broadcast services
and related equipment pursuant to those certain NRTC/Member Agreement for
Marketing and Distribution of DBS Services listed in Exhibit A hereto, with
their respective exhibits and any amendments thereto, the "NRTC Agreements") by
and between Assignor and the National Rural Telecommunications Cooperative
("NRTC").
(b) Pursuant to that certain Credit Agreement dated as of July 7,
1997, among Assignor, the financial institutions party thereto, Banque Paribas,
as Syndication Agent and as Managing Agent and Fleet National Bank, as
Administrative Agent and as Managing Agent (as such the "Credit Agreement" may
be amended, modified, extended, renewed, replaced, restated, supplemented,
restructured or refinanced from time to time), and in connection with the
closing of the transactions contemplated thereby, Assignor has assigned to
Assignee all of its rights in the NRTC Agreements, and NRTC and DIRECTV, INC.
("DIRECTV"), the successor rights holder to Hughes Communications Galaxy, Inc.
have consented to the assignment as set forth herein.
(c) In connection with the closing of the transactions contemplated by
the Credit Agreement and the assignment by Assignor to Assignee of the NRTC
Agreements, Assignor has entered and may enter into various Credit Documents and
Interest Rate Protection or Other Hedging Agreements (as such terms are defined
in the Credit Agreement).
(d) As a material inducement for the banks entering into the
Agreement, Assignor has agreed to secure its obligations under the Credit
Documents and Interest Rate Protection or Other Hedging Agreements by, among
other things, collaterally assigning its right, title and interest in and to the
NRTC Agreements with the consent of NRTC and DIRECTV.
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Page 78
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for such other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Assignor and Assignee do hereby agree
as follows:
(1) ASSIGNMENT. As security for Assignor's performance of its
obligations under the terms and provisions of the Credit Documents and the
Interest Rate Protection or Other Hedging Agreements, Assignor hereby assigns to
Assignee as collateral security, all of Assignor's right, title and interest in
and under the NRTC Agreements, including all warranties and guarantees of NRTC
under the NRTC Agreements, and all rights and interest of Assignor under any
payment issued in connection with or paid pursuant to the NRTC Agreements;
provided, however, that Assignee shall not exercise any rights under the NRTC
Agreements unless and until the occurrence of an "Event of Default" as defined
below, and until the occurrence of any such Event of Default, Assignor shall be
fully entitled to all rights and benefits thereunder.
(2) RIGHTS UPON DEFAULT. If an Event of Default (as that term is
defined in Section 3, below) shall occur, Assignee may, at its option by written
notice to Assignee and NRTC, succeed to Assignor's rights and obligations under
the NRTC Agreements. If Assignee shall elect to succeed to the rights and
obligations of Assignor under the NRTC Agreements, upon receipt of written
notice from Assignee to NRTC, NRTC and DIRECTV shall continue to perform their
obligations under the NRTC Agreements in favor of Assignee or Assignee's
designee (which designee shall be subject to the prior written consent of NRTC
and DIRECTV as provided for in the NRTC Agreements and meets NRTC's requirements
for affiliation or membership which are in effect at the time of such notice,
which consent shall not be unreasonably withheld) in the manner and by the dates
provided for in the NRTC Agreements in all respects, as if Assignee or
Assignee's designee were originally a party to the NRTC Agreements, NRTC and
DIRECTV may rely on written notice from Assignee as to the occurrence of an
Event of Default, and shall not be held liable to Assignor or Assignee for
actions taken in reliance thereon. Any designee of Assignee must submit an
application for affiliation or membership to the NRTC, to the extent such
designee is not already a NRTC affiliate or member, and have the application
approved in accordance with the requirements for affiliation or membership which
are then in effect prior to such designee becoming entitled to the benefits of
the NRTC Agreements as provided in this Section 2, to the extent required by the
NRTC at such time. In addition, Assignee's designee shall be required prior to,
or concurrent with, assumption of the rights and obligations of Assignor, to pay
in full all amounts then due and owing to NRTC pursuant to the NRTC Agreements.
(3) EVENT OF DEFAULT. As used in this Agreement, the term "Event of
Default" shall mean:
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Page 79
3.1 NONPAYMENT. The failure of Assignor to pay principal,
interest (if applicable) or other amounts due or payable in accordance with the
terms of the Note when the same shall become due and payable, or to make any
other required payment under any other obligation of Assignor to Assignee, and
such failure remains unremedied within five (5) days following receipt by
Assignor of written notice from Assignee of such failure to pay;
3.2 NONPERFORMANCE. Except as set forth in any other provisions
of this Section 3, the breach of, or other failure of Assignor to duly perform
or observe any term, covenant or agreement set forth in this Agreement on its
part to be performed or observed and any such failure shall remain unremedied
for thirty (30) days following receipt by Assignor of written notice for
Assignee of such breach or other failure;
3.3 BANKRUPTCY. An adjudication of the Assignor as bankrupt or
insolvent; the institution by Assignor (by petition, application, answer,
consent or otherwise) of any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, liquidation, or similar
proceedings related to the Assignor under the laws of any jurisdiction; or the
institution of any such proceeding (by petition, application or otherwise)
against Assignor if such proceeding remains undismissed for a period of ninety
(90) days;
3.4 ADMISSION. The admission in writing of Assignor's inability
to pay any of its debts as the same mature;
3.5 ASSIGNMENT. The making of an assignment for the benefit of
Assignor's creditors;
3.6 RECEIVERSHIP, ETC. The application of Assignor for or consent
by Assignor to the appointment of a receiver, trustee or similar custodian for
Assignor, or for all or any substantial part of its property; or the appointment
of such receiver, trustee, or similar officer without the application or consent
of Assignor, as the case may be, and if such appointment continues undischarged
for a period of ninety (90) days;
3.7 SALE OR TRANSFER. The sale or transfer of substantially all
of Assignor's assets and properties, except as specifically provided for in the
Note or Security Agreement;
3.8 LEVY. The issuance or levy of any judgment, writ, warrant of
attachment or execution, or similar process in the amount of $40,000.00 or more,
against substantially all of the property of Assignor and if such judgment, writ
or similar process is not released, vacated or fully bonded within thirty (30)
days after its issue or levy; and
3.9 BREACH OF CREDIT DOCUMENTS. Any other act or event
constituting an event or default as set forth in the Credit Documents that shall
remain unremedied for a period in excess of the
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EXHIBIT J
Page 80
applicable cure period provided for in the Credit Documents and the Interest
Rate or Other Hedging Agreements for a period of thirty (30) days after receipt
of written notice by Assignor from Assignee of such event of default, whichever
is less.
(4) RIGHT TO CURE. NRTC agrees that it shall provide Assignor and
Assignee with copies of any written notice of default by Assignor in the
performance of its obligations under the NRTC Agreements. Assignee shall have
the right, but not the obligation, to cure Assignor's default under the NRTC
Agreements. Assignee shall have thirty (30) days following receipt of the
written notice of default of NRTC in which to cure, and NRTC agrees that it
shall not ??? the NRTC Agreements or take any other action which it may be
entitled to take as a result of such default unless Assignee and Assignor fail
to cure the default within such thirty (30) day period.
(5) NO OTHER ASSIGNMENT. Assignor hereby represents and warrants to
Assignee that Assignor has not assigned, pledged, granted an interest in, or
otherwise encumbered or transferred any interest in the NRTC Agreements to any
other party, and Assignor further agrees that from and after the date hereof,
except for the security interest in the NRTC Agreements granted to Assignee
under the Credit Documents, Assignor shall not assign, pledge, grant a security
interest in, or otherwise encumber or transfer any interest in the NRTC
Agreements to any other party without Assignee's (and NRTC's and DIRECTV's)
prior written consent.
(6) MISCELLANEOUS PROVISIONS.
6.1 BENEFITS OF AGREEMENT. Nothing contained in this Agreement,
in the Credit Documents or in the Interest Rate Protection or Other Hedging
Agreements, is intended or shall be construed or applied so as to confer upon
any person other than the parties herein and their respective heirs, personal
representatives, successors and assigns, any right, remedy, or claim under or by
reason of this Agreement, the Credit Documents or in the Interest Rate
Protection or Other Hedging Agreements, or any covenant, condition, or agreement
hereof. Covenants, conditions and agreements contained in this Agreement shall
??? to and shall be for the sole and exclusive benefit of the parties hereto and
their respective heirs, personal representatives, successors and assigns.
6.2 SUCCESSORS AND ASSIGNS. All of the covenants, conditions and
agreements contained in this Agreement by or on behalf of the parties hereto,
shall bind their respective heirs, personal representatives, successors and
assigns, whether ??? expressed or not.
6.3 NOTICE. All notices, requests, demands or other
communications under this agreement shall be in writing. Notice shall be
sufficiently given for all purposes as follows:
(a) PERSONAL DELIVERY. When personally delivered to the
recipient, Notice is effective on delivery.
80
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EXHIBIT J
Page 81
(b) CERTIFIED MAIL. When mailed certified mail, return receipt
requested, Notice is effective on receipt, if delivery is confirmed by a return
receipt.
(c) OVERNIGHT DELIVERY. When delivered by Federal Express,
Airborne, United Parcel Service, or DHL WorldWide Express, charges prepaid or
charged to the sender's account, Notice is effective on delivery, if delivery is
confirmed by the delivery service.
(d) TELEX OR FACSIMILE TRANSMISSION. When sent by telex or fax to
the last telex or fax number of the recipient known to the party giving notice,
Notice is effective of receipt, provided that (a) a duplicate copy of the notice
is promptly given by first-class or certified mail or by overnight delivery, or
(b) the receiving party delivers a written confirmation or receipt. Any notice
given by telex or fax shall be deemed received on the next business day if it is
received after 5:00 p.m. (recipient's time) or on a nonbusiness day.
Addresses for purpose of giving notice are as follows:
To NRTC National Rural Telecommunications Cooperative
2201 Cooperative Way, Suite 400
Homdon, VA 20171
Attention: Chief Executive Officer
co: Steven T. Berman
Senior Vice President, Business Affairs & General Counsel
Facsimile No.: (703) 787-3355
To DIRECTV: _____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
To Assignee: Fleet National Bank
Mail Stop MA0FD03D
1 Federal Plaza
Boston, MA 02110
Attention: Mark Bernier
To Assignor: _____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
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Page 82
With copy (which, standing alone, shall not constitute notice)
to:
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
Any correctly addressed notice that is refused, unclaimed, or
undeliverable because of an act or omission of the party to be notified shall be
deemed effective as of the first date that said notice was refused, unclaimed,
or deemed undeliverable by the postal authorities, messenger, or overnight
delivery service.
Any party may change its address or telex or fax number by giving the
other party notice of the change in any manner permitted by this Agreement.
(6.4) ENTIRE AGREEMENT. This Agreement, the Credit Documents and
the Interest Rate Protection or Other Hedging Agreements, represent the entire
Agreement and understanding between Assignor and Assignee with respect to the
subject matter hereof and supersede all other prior agreements. In order to be
effective, any modification or amendment to this Agreement must be in writing
and signed by the parties to be charged.
(6.5) SEVERABILITY. Should one or more of the provisions
contained in this Agreement be held invalid, illegal or unenforceable in any
respect, the validity, legality or enforceability or the remaining provisions
contained herein shall not in any way be effected or impaired thereby.
(6.6) CHOICE OF LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York. Any dispute
that arises under or relates to this Agreement shall be resolved in the courts
of the State of New York or of the United States of the Southern District of New
York.
(6.7) COUNTERPARTS. This agreement may be signed in any number of
counterparts with the same effect as if the signatures of each counterpart were
upon the same instrument.
(6.8) ATTORNEY'S FEES. In the event of any dispute between the
parties out of or in connection with this Agreement, whether or not such
disputes result in litigation, the Borrower shall pay the reasonable attorney's
fees and costs incurred by the Assignee.
(6.9) TIME. Unless otherwise agreed, time is of the essence of
each and every provision of this Agreement.
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Page 83
(6.10) WAIVER. No delay or omission in the exercise of any right
or remedy by any party shall be construed as a waiver, nor shall the waiver of
any term or condition contained in this Agreement by any party be construed as a
waiver of any subsequent breach or failure of the same term and condition or
waiver of any other term or condition contained in this Agreement.
(6.11) RECITALS/EXHIBITS. All recitals contained in the
introductory paragraphs in this Agreement and on exhibits hereto are
incorporated herein by this reference and made a part hereof.
(6.12) AMBIGUITIES. Each party and its counsel have participated
fully in the review and revision of this Agreement. Any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not apply in interpreting this Agreement.
This Agreement has been executed and delivered as of the date set
forth above.
ASSIGNOR: ASSIGNEE:
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Its:________________________ Its:________________________
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Page 84
Exhibit A
NRTC AGREEMENTS
1. NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and TV Tennessee, Inc. (formerly Rural TV Tennessee,
Inc.), dated as of July 12, 1993, as amended (Contract No. 1035), as
assigned to Golden Sky Systems, Inc. ("GSS") pursuant to an Application
for Assignment, effective as of November 22, 1996.
2. NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and TV Tennessee, Inc. (formerly Rural TV Tennessee,
Inc.), dated as of July 12, 1993, as amended (Contract No. 1035), as
assigned to Aurora Cable TV, Inc., pursuant to an Application for
Assignment, effective as of June 30, 1996, and as assigned to GSS
pursuant to an Application for Assignment effective as of November 16,
1996.
3. NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Total Telephone Company, Inc., dated as of October 16,
1992, as amended (Contract No. 0479), as assigned to Images DBS Kansas,
LLC, pursuant to an Application of Assignment, effective as of May 23,
1994, and as assigned to GSS pursuant to an Application of Assignment,
effective as of February 12, 1997.
4. NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Total Telephone Company, Inc., dated as of October 16,
1992, as amended (Contract No. 0075), as assigned to Images DBS
Oklahoma, LLS, pursuant to an Application of Assignment, effective as
of May 23, 1994, and as assigned to GSS pursuant to an Application of
Assignment, effective as of February 12, 1997.
5. NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Direct Satellite TV, Limited, dated as of June 3,
1993, as amended (Contract No. 1030), assigned to GSS pursuant to an
Application for Assignment, effective as of February 28, 1997.
6. NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Thunderbolt Systems, Inc., dated as of August 10,
1992, as amended (Contract No. 1078), assigned to GSS pursuant to an
Application for Partial Assignment, effective as of March 11, 1997.
7. NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC
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PAGE 85
and Deep East Texas Telecommunications, Inc., dated as of April 30,
1993, as amended (Contract No. 1012), assigned to GSS pursuant to an
Application for Assignment, effective as of April 11, 1997.
8. NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and Western Montana DBS, Inc., d/b/a Rocky Mountain DBS,
dated as of May 4, 1993, as amended (Contract No. 1079), assigned to
GSS pursuant to an Application for Partial Assignment, effective as of
May 1, 1997.
9. NRTC/Member Agreement for Marketing and Distribution of DBS Services
between NRTC and TEG-DBS Services, Inc., dated as of December 16, 1992,
as amended (Contract No. 1076), assigned to GSS pursuant to an
Application for Assignment effective as of November 23, 1994, and as
assigned to GSS pursuant to an Application for Assignment effective as
of June 12, 1997.
10. Any other agreement between the Assignor (or any of its subsidiaries or
any person acquired by the Assignor or any of its subsidiaries) and the
NRTC.
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Page 86
The undersigned hereby acknowledge that they have read the foregoing
Collateral Assignment of Marketing and Distribution Agreements (the "Collateral
Assignment"), agree to be bound by the terms thereof, including but not limited
to the terms contained in Sections 1, 2, 4 and 6 of said Collateral Assignment,
and consent to the assignment by Assignor of its rights under the NRTC
Agreements, as provided in Section 1 of the Collateral Assignment. Each of the
undersigned further acknowledges that a security interest in the NRTC Agreements
has validly been granted to Assignor.
NRTC hereby confirms that, as of the date hereof, Assignor (i) is a
NRTC affiliate in good standing, (ii) is in full compliance with its payment and
other obligations under each of the NRTC Agreements and (iii) is not otherwise
in default under any of the NRTC Agreements.
The persons signing on behalf of each of the undersigned is a duly
authorized officer of the entity for which he or she is signing, and has the
power to execute this instrument on behalf of such entity.
NATIONAL RURAL DIRECTV, INC., the successor rights
TELECOMMUNICATIONS holder to Hughes Communications
COOPERATIVE Galaxy, Inc.
By:______________________________ By:______________________________
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
Date:______________________, 19__ Date:______________________, 19__
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Page 87
ANNEX I
to Security Documents Acknowledgment
COLLATERAL ASSIGNMENT ACKNOWLEDGMENT
See attached.
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Page 88
COLLATERAL ASSIGNMENT ACKNOWLEDGMENT
May 8, 1998
To the Agents and each of the Banks
party to the Credit Agreement
referred to below:
Ladies and Gentlemen:
Reference is made to (i) the Amended and Restated Credit Agreement,
dated as of July 7, 1997, amended and restated as of May 8, 1998, among Golden
Sky Holdings, Inc. ("Holdings"), Golden Sky Systems, Inc. (the "Borrower"), the
financial institutions party thereto, Banque Paribas, as Syndication Agent,
Fleet National Bank, as Administrative agent, and General Electric Capital
Corporation, as Documentation Agent (as so amended and restated and as further
amended, modified or supplemented from time to time, the "Credit Agreement"),
pursuant to which, among other things, the Total Commitment was increased from
$100,000,000 to $150,000,000 and (ii) the Collateral Assignment of Marketing and
Distribution Agreements, dated as of July 7, 1997 (as amended, modified and
supplemented from time to time, including, without limitation, as modified
hereby, the "Collateral Assignment of Marketing and Distribution Agreements")
made by the Borrower, as Assignor under, and as defined in, the Collateral
Assignment of Marketing and Distribution Agreements, in favor of Fleet National
Bank, as Collateral Agent and Assignee for the benefit of the Secured Creditors
(as defined in the Collateral Assignment of Marketing and Distribution
Agreements), as acknowledged and agreed to by the NRTC and DirecTV, Inc.
(DirecTV, Inc. together with the Borrower, Fleet National Bank and the NRTC, the
"Collateral Assignment Parties"). Unless otherwise indicated herein, capitalized
terms used but not defined herein shall have the respective meanings set forth
in the Credit Agreement.
I. COLLATERAL ASSIGNMENT OF MARKETING AND DISTRIBUTION AGREEMENTS
1. Each of the Collateral Assignment Parties hereby acknowledges the
Credit Agreement and the transactions contemplated thereby.
2. Each of the Collateral Assignment Parties hereby acknowledges and
agrees, and represents and warrants, that on and after the occurrence of, and
after giving effect to, the Restatement Effective Date, (i) it remains party to
the Collateral Assignment of Marketing and Distribution Agreements and (ii) the
Collateral Assignment of Marketing and Distribution Agreements shall remain in
full force and effect with respect to each of the Collateral Assignment Parties.
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Page 89
II. MISCELLANEOUS PROVISIONS
1. This Collateral Assignment Acknowledgment may be signed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which counterparts when executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
2. This Collateral Assignment Acknowledgment is limited as specified
and shall not constitute an acceptance, consent or waiver of any other provision
of the Collateral Assignment of Marketing and Distribution Agreements or any
other Credit Document.
3. THIS ACKNOWLEDGMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
* * *
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Page 90
IN WITNESS WHEREOF, each of the undersigned has caused this Collateral
Assignment Acknowledgment to be duly executed and delivered as of the date first
above written.
GOLDEN SKY SYSTEMS, INC.
By: /s/ Robert B. Weaver
-----------------------------------------
Name: Robert B. Weaver
Title: Chief Financial Officer
ACKNOWLEDGED AND AGREED:
FLEET NATIONAL BANK,
as Collateral Agent
By: /s/ Christopher A. Swindell
-----------------------------------------
Name: Christopher A. Swindell
Title: Vice President
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Page 91
ACKNOWLEDGED AND AGREED:
NATIONAL RURAL
TELECOMMUNICATIONS
COOPERATIVE
By: /s/ Steven T. Berman
-----------------------------------------
Name: Steven T. Berman
Title: Senior Vice President, Business Affairs
and General Counsel
DIRECTV, INC., the successor rights
holder to Hughes Communications Galaxy, Inc.
By:
-----------------------------------------
Name:
Title:
351
EXHIBIT K
OFFICER'S SOLVENCY CERTIFICATE
I, the undersigned, Chief Financial Officer of Golden Sky Systems,
Inc., do hereby certify on behalf of Golden Sky Systems, Inc. that:
1. This Certificate is furnished to the Banks pursuant to Section
4.15(a) of the Amended and Restated Credit Agreement, dated as of July 7, 1997,
amended and restated as of May __, 1998, among Golden Sky Holdings, Inc., Golden
Sky Systems, Inc., various financial institutions from time to time party
thereto (the "Banks"), Banque Paribas, as Syndication Agent, Fleet National
Bank, as Administrative Agent, and General Electric Capital Corporation, as
Documentation Agent (such Amended and Restated Credit Agreement, as in effect on
the date of this Certificate, being herein called the "Credit Agreement").
Unless otherwise defined herein, capitalized terms used in this Certificate
shall have the meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(1) "Fair Value"
The amount at which the assets, in their entirety, of the Borrower
would change hands between a willing buyer and a willing seller, within
a commercially reasonable period of time, each having reasonable
knowledge of the relevant facts, with neither being under any
compulsion to act.
(2) "Present Fair Salable Value"
The amount that could be obtained by an independent willing seller from
an independent willing buyer if the assets of the Borrower are sold
with reasonable promptness under normal selling conditions in a current
market.
(3) "New Financing"
The Indebtedness incurred or to be incurred by the Borrower under the
Credit Documents (assuming the full utilization by the Borrower of the
Commitments) and the other Documents and all other financings
contemplated by the Documents, in each case after giving effect to the
Transaction and the incurrence of all financings contemplated
therewith.
(4) "Stated Liabilities"
The recorded liabilities (including contingent liabilities that would
be recorded in accordance with generally accepted accounting principles
("GAAP")) of the Borrower
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at May __, 1998 after giving effect to the Transaction, determined in
accordance with GAAP consistently applied, together with, without
duplication, the amount of all New Financing.
(5) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities reasonably likely to result
from pending litigation, asserted claims and assessments, guaranties,
uninsured risks and other contingent liabilities of the Borrower after
giving effect to the Transaction (exclusive of such contingent
liabilities to the extent reflected in Stated Liabilities), as
identified and explained in terms of their nature and estimated
magnitude by an officer of the Borrower.
(6) "Will be able to pay its Stated Liabilities and Identified
Contingent Liabilities, as they mature"
For the period from the date hereof through the seventh anniversary of
the Restatement Effective Date, the Borrower will have sufficient
assets and cash flow to pay their respective Stated Liabilities and
Identified Contingent Liabilities as those liabilities mature or
otherwise become payable.
(7) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the seventh anniversary of
the Restatement Effective Date, the Borrower after consummation of the
Transaction and all Indebtedness (including the Loans) being incurred
or assumed and Liens created by the Borrower in connection therewith,
is a going concern and has sufficient capital to ensure that it will
continue to be a going concern for such period and to remain a going
concern.
3. For purposes of this Certificate, I or officers of the Borrower
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below.
(1) I have reviewed the financial statements referred to in Section
6.05(a) of the Credit Agreement.
(2) I have reviewed the unaudited pro forma consolidated balance sheet
of the Borrower and its Subsidiaries referred to in Section 6.05(a) of
the Credit Agreement.
(3) I have made inquiries of certain officers of the Borrower who have
responsibility for financial and accounting matters regarding (i) the
existence and amount of Identified Contingent Liabilities associated
with the business of the
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Borrower and its Subsidiaries, (ii) whether the unaudited pro forma
consolidated financial statements referred to in paragraph (b) above
are in conformity with GAAP applied on a basis substantially consistent
with that of the audited financial statements as at December 31, 1997
and (iii) whether omitted notes to the unaudited consolidated financial
statements delivered pursuant to Section 6.05(a) of the Credit
Agreement would have disclosed any new information, except to update
amounts included in the notes to the December 31, 1997 audited
consolidated financial statements.
(4) I have knowledge of and have reviewed to my satisfaction the Credit
Documents and the other Documents, and the respective Schedules and
Exhibits thereto.
(5) With respect to Identified Contingent Liabilities, I:
1. inquired of certain officials the Borrower who have
responsibility for legal, financial and accounting matters as
to the existence and estimated liability with respect to all
contingent liabilities known to them;
2. confirmed with officers the Borrower that, to the best of such
officers' knowledge, (i) all appropriate items were included
in Stated Liabilities or the listing of Identified Contingent
Liabilities and that (ii) the amounts relating thereto were
the maximum estimated amount of liabilities reasonably likely
to result therefrom as of the date hereof; and
3 I hereby certify that, to the best of my knowledge, all
material Identified Contingent Liabilities that may arise from
any pending litigation, asserted claims and assessments,
guarantees, uninsured risks and other Identified Contingent
Liabilities of the Borrower and its Subsidiaries (exclusive of
such Identified Contingent Liabilities to the extent reflected
in Stated Liabilities) have been considered in making the
certification set forth in paragraph 4 below, and with respect
to each such Identified Contingent Liability the estimable
maximum amount of liability with respect thereto was used in
making such certification.
(6) I have examined the Projections relating to the Borrower and its
Subsidiaries which have been previously delivered to the Banks, and
have re-examined the Projections on the date hereof and considered the
effect thereon of any changes since the date of the preparation thereof
on the results projected therein. After such review, I hereby certify
that in my opinion the Projections are reasonable and attainable
(although actual results may differ from the Projections and no
representation is made that the Projections will in fact be attained)
and the Projections support the conclusions contained in paragraph 4
below.
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(7) I have made inquiries of certain officers of the Borrower and their
Subsidiaries who have responsibility for financial reporting and
accounting matters regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause the Borrower after
giving effect to the Transaction and the related financing transactions
(including the incurrence of the New Financing), to (i) have assets
with a Fair Value or Present Fair Salable Value that are less than the
sum of Stated Liabilities and Identified Contingent Liabilities; (ii)
have Unreasonably Small Capital; or (iii) not be able to pay its Stated
Liabilities and Identified Contingent Liabilities as they mature or
otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify on behalf of
the Borrower and its Subsidiaries that, after giving effect to the Transaction
and the related financing transactions (including the incurrence of the New
Financing), it is my informed opinion that (i) the Fair Value and Present Fair
Salable Value of the assets of the Borrower and its Subsidiaries taken as a
whole (each on a consolidated basis), exceed its Stated Liabilities and
Identified Contingent Liabilities; (ii) the Borrower does not have Unreasonably
Small Capital; and (iii) the Borrower will be able to pay its Stated Liabilities
and Identified Contingent Liabilities, as they mature or otherwise become
payable.
* * *
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IN WITNESS WHEREOF, I have hereto set my hand this ___ day of May,
1998.
GOLDEN SKY SYSTEMS, INC.
By:
-------------------------------
Name: Robert B. Weaver
Title: Chief Financial Officer
356
EXHIBIT L
FORM OF CONSENT LETTER
[Letterhead of Agent for Service of Process]
[Date]
To the Agents and the
Banks party to the
Credit Agreement referred to below:
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement, dated
as of July 7, 1997, amended and restated as of May __, 1998, among Golden Sky
Holdings, Inc. ("Holdings"), Golden Sky Systems, Inc. (the "Borrower"), the
Banks (the "Banks") party thereto from time to time, Banque Paribas, as
Syndication Agent ("Banque Paribas"), Fleet National Bank, as Administrative
Agent (Fleet National Bank together with Banque Paribas, the "Agents"), and
General Electric Capital Corporation, as Documentation Agent, (as such Amended
and Restated Credit Agreement may be modified, supplemented or amended from time
to time, the "Credit Agreement").
Pursuant to Section 12.08 of the Credit Agreement, each of Holdings and
the Borrower has irrevocably designated, appointed and empowered the
undersigned, Corporation Service Company, with offices currently located at 80
State Street, Albany, Nev York 12207, as its authorized designee, appointee and
agent to receive, accept and acknowledge for and on its behalf, and in respect
of its property, service of any and all legal process, summons, notices and
documents which may be served in any such action or proceeding with respect to
the Credit Agreement or any other Credit Document (as defined in the Credit
Agreement) brought in the courts of the State of New York or of the United
States of America for the Southern District of New York.
The undersigned hereby informs you that it irrevocably accepts such
appointment as agent as set forth in Section 12.08 of the Credit Agreement and
agrees with you that the undersigned (i) shall inform the Administrative Agent
promptly in writing of any change of its address in New York City, (ii) shall
perform its obligations as such process agent in accordance with the provisions
of Section 12.08 of the Credit Agreement and (iii) shall forward promptly to
Holdings or the Borrower, as the case may be, any legal process, summons,
notices and documents received by the undersigned in its capacity as process
agent.
As process agent, the undersigned, and its successor or successors,
agree to discharge
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the above-mentioned obligations and will not refuse fulfillment of such
obligations under Section 12.08 of the Credit Agreement.
Very truly yours,
CORPORATION SERVICE SYSTEM
By __________________________
Name:
Title
358
EXHIBIT M
BORROWING BASE CERTIFICATE AS OF [DATE]
To: The Banks party to the Amended and Restated Credit
Agreement, dated as of July 7, 1997, amended and
restated as of May ____ , 1998, among Golden Sky
Holdings, Inc., Golden Sky Systems, Inc., the financial
institutions party thereto, Banque Paribas, as
Syndication Agent, Fleet National Bank, as
Administrative Agent, and General Electric Capital
Corporation, as Documentation Agent (the "Credit
Agreement")
1. Qualified Paying Subscribers Amount
All subscribers (other than subscribers to the MDU Business)
to DirecTV that are located in the Borrower's and its
Subsidiaries' DirecTV Franchise areas and who have paid all
amounts due within 60 days of the initial due date thereof.
2. Subscribers to be Acquired(7)
In connection with any Permitted Acquisition, the number of
subscribers to DirecTV service to be acquired as such number
shall be certified to the Banks in the Permitted Acquisition
Notice
3. Total Subscribers
(Sum of No. 1 and No. 2)
- --------
(7) Only if Borrowing Base is being determined in connection with
a Loan being made to finance a Permitted Acquisition. The
number of subscribers to be acquired listed herein shall be
as certified in the relevant Permitted Acquisition Notice.
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4. Borrowing Base
Sum of (i) the product of (x) No. 3 and (y) $1,200 if on or
before December 31, 1999 and $1,100 thereafter, plus (ii)
$15,000,000 in the case of a Borrowing of Loans incurred to
finance Permitted Acquisitions $
5. Outstanding Principal Amount of Term Loans and Revolving
Loans $
6. Letter of Credit Outstandings $
7. Outstanding Principal Amount of all other Net Adjusted
Consolidated Indebtedness $
8. Borrowing Base Surplus (Deficiency) (No. 4 minus the sum of
Nos. 5, 6 and 7) $
The undersigned hereby certifies on behalf of the Borrower and not in
his or her individual capacity that all of the information provided above is
true and correct as of the date first above written.
* * *
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IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her hand
this ___ day of ____________,___.
GOLDEN SKY SYSTEMS, INC.
By: ________________________________
Name:
Title:
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EXHIBIT N
BANK ASSIGNMENT AND ASSUMPTION AGREEMENT
Date ______________ , 19__
Reference is made to the Amended and Restated Credit Agreement
described in Item 2 of Annex I hereto (as such Credit Agreement may hereafter be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"). Unless defined in Annex I hereto, terms defined in the Credit
Agreement are used herein as therein defined. __________________ (the
"Assignor") and ________________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I hereto (the "Assigned Share") of all of
the outstanding rights and obligations under the Credit Agreement relating to
the facilities listed in Item 4 of Annex I hereto, including, without
limitation, (x) in the case of any assignment of all or any portion of the Total
Revolving Loan Commitment, all rights and obligations with respect to the
Assigned Share of such Total Revolving Loan Commitment and of the Revolving
Loans and Letters of Credit Outstandings relating thereto, (y) in the case of
any assignment of a Term Loan Commitment, all rights and obligations with
respect to the Assigned Share of such Total Term Loan Commitment, and (z) in the
case of any assignment of Term Loans, all rights and obligations with respect to
the Assigned Share of such Term Loans. After giving effect to such sale and
assignment, the Assignee's Revolving Loan Commitment, Term Loan Commitment and
the amount of the outstanding Term Loans owing to the Assignee will be as set
forth in Item 4 of Annex I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or the
other Credit Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any of the Credit
Parties or the performance or observance by the Credit Parties of any of their
obligations under the Credit Agreement or the other Credit Documents to which
they are a party or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit
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analysis and decision to enter into this Assignment and Assumption Agreement;
(ii) agrees that it will, independently and without reliance upon the Agents,
the Assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) confirms that it
is an Eligible Transferee under the Credit Agreement; (iv) appoints and
authorizes the Administrative Agent and the Collateral Agent to take such action
as administrative agent and collateral agent on its behalf and to exercise such
powers under the Credit Agreement and the other Credit Documents as are
delegated to the Administrative Agent and the Collateral Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; [and]
(v) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank[; and (vi) to the extent legally entitled to do so,
attaches the forms described in Section 12.04(b) of the Credit Agreement].(1)
4. Following the execution of this Bank Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Bank Assignment and Assumption Agreement shall be the
date of execution hereof by the Assignor and the Assignee and the receipt of the
consent of the Agents and the Borrower pursuant to Section 12.04(b) of the
Credit Agreement and receipt by the Agents of the assignment fee referred to in
such Section 12.04(b) (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Bank
Assignment and Assumption Agreement, have the rights and obligations of a Bank
thereunder and under the other Credit Documents and (ii) the Assignor shall, to
the extent provided in this Bank Assignment and Assumption Agreement, relinquish
its rights and be released from its obligations under the Credit Agreement and
the other Credit Documents.
6. It is agreed that the Assignee shall be entitled to (w) all interest
on the Assigned Share of the Loans at the rates specified in Item 6 of Annex I;
(x) all Commitment Commission (if applicable) on the Assigned Share of the
Aggregate Unutilized Commitment at the rate specified in Item 7 of Annex I
hereto; and (y) all Letter of Credit Fees (if applicable) on the Assignee's
participation in all Letters of Credit at the rate specified in Item 8 of Annex
I hereto, which, in each case, accrue on and after the Settlement Date, such
interest and, if applicable, Conunitment Commission and Letter of Credit Fees,
to be paid by the Administrative Agent directly to the Assignee. It is further
agreed that all payments of principal made on the Assigned Share of the Loans
which occur on and after the Settlement Date will be paid directly by the
Administrative Agent to the Assignee. Upon the Settlement Date, the Assignee
shall pay to the Assignor an amount specified by the Assignor in writing which
represents the Assigned Share of the principal amount of the respective Loans
made by the Assignor, and the Assignee's share of any Letter of Credit
- --------
(1) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
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Outstandings incurred pursuant to the Credit Agreement which are outstanding on
the Settlement Date, net of any closing costs, and which are being assigned
hereunder. The Assignor and the Assignee shall make all appropriate adjustments
in payments under the Credit Agreement for periods prior to the Settlement Date
directly between themselves on the Settlement Date.
7. THIS BANK ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Bank Assignment and Assumption
Agreement, as of the date first above written, such execution also being made on
Annex I hereto.
Accepted this _____ day [NAME OF ASSIGNOR],
of _____________ , 19__ as Assignor
By: _________________________________
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By: _________________________________
Name:
Title:
Acknowledged and Agreed:
BANQUE PARIBAS,
as Syndication Agent
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
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Page 5
FLEET NATIONAL BANK,
as Administrative Agent
By: ___________________________________
Name:
Title:
GOLDEN SKY SYSTEMS, INC.
By: ___________________________________
Name:
Title:
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Page 6
ANNEX I
ANNEX FOR BANK ASSIGNMENT AND ASSUMPTION AGREEMENT
1. Borrower: Golden Sky Systems, Inc.
2. Name and Date of Credit Agreement:
Amended and Restated Credit Agreement, dated as of July 7, 1997, amended and
restated as of May , 1998 (as modified, supplemented or amended from time to
time) among Golden Sky Holdings, Inc., Golden Sky Systems, Inc., the Banks from
time to time party thereto, Banque Paribas, as Syndication Agent, Fleet
National Bank, as Administrative Agent, and General Electric Capital
Corporation, as Documentation Agent.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
Outstanding
Revolving Loan Term Loan Principal
Commitment Commitment of Term Loans
a. Aggregate Amount $ $ $
for all Banks ----------------------- --------------------- ----------------
b. Assigned Share -----------------------% --------------------% ----------------%
c. Amount of Assigned Share $ $ $
----------------------- --------------------- -----------------
5. Settlement Date:
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Page 7
ANNEX I
6. Rate of Interest As set forth in Section 1.08 of the Credit
to the Assignee: Agreement (unless otherwise agreed to by the
Assignor and the Assignee)(1)
7. Commitment Commission As set forth in Section 2.01(a) of the Credit
to the Assignee: Agreement (unless otherwise agreed to by the
Assignor and the Assignee)(2)
8. Letter of Credit As set forth in Section 2.01(c) of the Credit
Fees to the Assignee: Agreement (unless otherwise agreed to by the
Assignor and the Assignee)(3)
9. Notice:
ASSIGNOR:
- --------
(1) The Borrower and the Administrative Agent shall direct the entire amount
of the interest to the Assignee at the rate set forth in Section 1.08 of
the Credit Agreement, with the Assignor and Assignee effecting the agreed
upon sharing of the interest through payments by the Assignee to the
Assignor.
(2) Insert "Not Applicable" in lieu of text if no portion of the Total
Revolving Loan Commitment or Total Term Loan Commitment is being assigned.
Otherwise, the Borrower and the Administrative Agent shall direct the
entire amount of the Commitment Commission to the Assignee at the rate set
forth in Section 2.01(a) of the Credit Agreement, with the Assignor and
the Assignee effecting the agreed upon sharing of Commitment Commission
through payment by the Assignee to the Assignor.
(3) Insert "Not Applicable" in lieu of text if no portion of the Total
Revolving Loan Commitment is being assigned. Otherwise, the Administrative
Agent shall direct the entire amount of the Letter of Credit Fees to the
Assignee at the rate set forth in Section 2.01(c) of the Credit Agreement,
with the Assignor and the Assignee effecting the agreed upon sharing of
Letter of Credit Fees through payment by the Assignee to the Assignor.
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Page 8
ANNEX I
______________________________
______________________________
______________________________
______________________________
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
______________________________
______________________________
______________________________
______________________________
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
______________________________
______________________________
______________________________
______________________________
Attention:
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Page 9
ANNEX I
Reference:
ASSIGNEE:
______________________________
______________________________
______________________________
______________________________
Reference:
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Page 10
ANNEX I
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By __________________ By _____________________
___________________ _____________________
(Print Name and Title) (Print Name and Title)