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$115,000,000
CREDIT AGREEMENT
among
CD RADIO INC.
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent and as a Bank
Dated as of June 30, 1998
Arranged By
BANCAMERICA ROBERTSON STEPHENS
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS...................................................................1
1.1 Certain Defined Terms.....................................................1
1.2 Other Interpretive Provisions............................................15
1.3 Accounting Principles....................................................16
ARTICLE II
THE TERM LOANS............................. 17
2.1 Amounts and Terms of Commitments........................................17
2.2 Loan Accounts...........................................................17
2.3 Procedure for Borrowing.................................................17
2.4 Conversion and Continuation Elections...................................18
2.5 Voluntary Termination or Reduction of Commitments.......................19
2.6 Optional Prepayments....................................................19
2.7 Mandatory Prepayments of Loans; Mandatory Commitment Reductions.........20
(a) Asset Dispositions..........................................20
(b) Payments on Overall Contract................................20
(c) General.....................................................20
(d) Reduction of Commitment.....................................20
2.8 Repayment................................................................20
2.9 Interest.................................................................20
2.10 Fees....................................................................21
(a) Arrangement, Agency Fees.....................................21
(b) Commitment Fees.............................................21
2.11 Computation of Fees and Interest.......................................21
2.12 Payments by the Company................................................22
2.13 Payments by the Banks to the Agent.....................................22
2.14 Sharing of Payments, Etc...............................................23
2.15 Security...............................................................23
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY..................24
3.1 Taxes...................................................................24
3.2 Illegality..............................................................25
3.3 Increased Costs and Reduction of Return.................................25
3.4 Funding Losses..........................................................26
3.5 Inability to Determine Rates............................................27
3.6 Reserves on Offshore Rate Loans.........................................27
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3.7 Certificates of Banks...................................................27
3.8 Substitution of Banks...................................................27
3.9 Survival................................................................27
ARTICLE IV
CONDITIONS PRECEDENT..........................28
4.1 Conditions of Initial Loans.............................................28
(a) Credit Agreement; Pledge Agreement and Support Agreement....28
(b) Overall Contract............................................28
(c) Resolutions; Incumbency.....................................28
(d) Organization Documents; Good Standing.......................28
(e) Interest Rate Protection....................................28
(f) No Disruption of Financial and Capital Markets..............29
(g) Support Agreement...........................................29
(h) Legal Opinions..............................................29
(i) Payment of Fees.............................................29
(j) Collateral Documents........................................29
(k) Solvency Opinion............................................30
(l) Reserved....................................................30
(m) Satisfaction of Remarketing Agent...........................30
(n) Insurance...................................................30
(o) Certificate.................................................30
(p) No Default..................................................31
(q) Other Documents.............................................31
4.2 Conditions to All Borrowings............................................31
(a) Notice of Borrowing.........................................31
(b) Continuation of Representations and Warranties..............31
(c) No Existing Default.........................................31
(d) No Future Advance Notice....................................31
(e) Progress Payments...........................................31
(f) Satisfaction of Remarketing Agent...........................31
ARTICLE V
REPRESENTATIONS AND WARRANTIES..................... 32
5.1 Corporate Existence and Power; Compliance with Laws.....................32
5.2 Corporate Authorization; No Contravention...............................32
5.3 Governmental Authorization..............................................32
5.4 Binding Effect..........................................................32
5.5 Litigation..............................................................33
5.6 No Default..............................................................33
5.7 ERISA Compliance........................................................33
5.8 Certain Documents.......................................................34
5.9 Taxes...................................................................34
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5.10 Margin Regulations.....................................................34
5.11 Labor Matters ......................................................34
5.12 Year 2000 Matters......................................................34
5.13 Title to Properties....................................................35
5.14 Financial Condition....................................................35
5.15 Material Adverse Effects...............................................35
5.16 Environmental Matters..................................................35
5.17 Collateral Documents...................................................36
5.18 Regulated Entities.....................................................36
5.19 No Burdensome Restrictions.............................................36
5.20 Copyrights, Patents, Trademarks and Licenses, etc......................36
5.21 Subsidiaries...........................................................37
5.22 Insurance..............................................................37
5.23 Solvency...............................................................37
5.24 Full Disclosure........................................................37
ARTICLE VI
AFFIRMATIVE COVENANTS......................... 37
6.1 Financial Statements....................................................37
6.2 Certificates; Other Information.........................................38
6.3 Notices.................................................................38
6.4 Preservation of Corporate Existence, Etc................................40
6.5 Maintenance of Property.................................................40
6.6 Maintenance of Approvals................................................40
6.7 Insurance...............................................................41
6.8 Payment of Obligations..................................................41
6.9 Progress Payments ......................................................41
6.10 Compliance with Laws...................................................41
6.11 Compliance with ERISA..................................................41
6.12 Inspection of Property and Books and Records...........................42
6.13 Environmental Laws.....................................................42
6.14 Use of Proceeds ......................................................42
6.15 Further Assurances.....................................................42
ARTICLE VII
NEGATIVE COVENANTS........................... 43
7.1 Consolidated Net Worth..................................................43
7.2 Limitation on Liens.....................................................43
7.3 Disposition of Assets...................................................44
7.4 Consolidations and Mergers..............................................45
7.5 Loans and Investments...................................................45
7.6 Assignment of Launch Vehicle Sale Contract..............................46
7.7 Transactions with Affiliates............................................46
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7.8 Use of Proceeds ..................................................... 46
7.9 Contingent Obligations................................................. 46
7.10 Joint Ventures........................................................ 47
7.11 Lease Obligations..................................................... 47
7.12 Restricted Payments................................................... 47
7.13 ERISA................................................................. 47
7.14 Change in Business.................................................... 48
7.15 Accounting Changes.................................................... 48
7.16 Clear Market.......................................................... 48
7.17 Modification of Overall Contract...................................... 48
7.18 Year 2000 Matters..................................................... 48
ARTICLE VIII
EVENTS OF DEFAULT........................... 48
8.1 Event of Default ......................................................48
(a) Non-Payment.................................................48
(b) Representation or Warranty..................................48
(c) Specific Defaults...........................................49
(e) Other Defaults..............................................49
(f) Cross-Default...............................................49
(g) Insolvency; Voluntary Proceedings...........................49
(h) Involuntary Proceedings.....................................49
(i) ERISA.......................................................50
(j) Monetary Judgments..........................................50
(k) Non-Monetary Judgments......................................50
(l) Change of Control...........................................50
(m) Loss of Approvals or Consents...............................50
(n) Material Adverse Change.....................................50
(o) Priority....................................................51
(p) Overall Contract............................................51
(q) Collateral..................................................51
8.2 Remedies ......................................................51
8.3 Rights Not Exclusive....................................................51
8.4 Certain Financial Covenant Defaults.....................................52
ARTICLE IX
THE AGENT................................52
9.1 Appointment and Authorization; "Agent"..................................52
9.2 Delegation of Duties....................................................52
9.3 Liability of Agent......................................................52
9.4 Reliance by Agent.......................................................53
9.5 Notice of Default.......................................................53
9.6 Credit Decision ........................................................53
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9.7 Indemnification of Agent................................................54
9.8 Agent in Individual Capacity............................................54
9.9 Successor Agent.........................................................55
9.10 Withholding Tax........................................................55
9.11 Collateral Matters.....................................................56
ARTICLE X
MISCELLANEOUS..............................57
10.1 Amendments and Waivers.................................................57
10.2 Notices................................................................58
10.3 No Waiver; Cumulative Remedies.........................................58
10.4 Costs and Expenses.....................................................58
10.5 Company Indemnification................................................59
10.6 Survival; Defense......................................................60
10.7 Marshalling; Payments Set Aside........................................60
10.8 Successors and Assigns.................................................61
10.9 Assignments, Participations, etc.......................................61
10.10 Confidentiality ......................................................62
10.11 Set-off...............................................................63
10.12 Automatic Debits of Fees..............................................63
10.13 Notification of Addresses, Lending Offices, Etc.......................63
10.14 Counterparts..........................................................63
10.15 Severability..........................................................64
10.16 No Third Parties Benefited............................................64
10.17 Governing Law and Jurisdiction........................................64
10.18 Waiver of Jury Trial..................................................64
10.19 Entire Agreement......................................................65
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SCHEDULES
Schedule 2.1 Commitments
Schedule 5.5 Litigation
Schedule 7.2 Permitted Liens
Schedule 7.9 Contingent Obligations
Schedule 10.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Pledge Agreement
Exhibit B Form of Support Agreement
Exhibit C Form of Notice of Borrowing
Exhibit D Form of Notice of Conversion/Continuation
Exhibit E Form of Compliance Certificate
Exhibit F-1 Form of Legal Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
Exhibit F-2 Form of Legal Opinion of Willkie Farr & Gallagher
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Promissory Note
Exhibit I Form of Remarketing Agent Certificate
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<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of June 30, 1998, among CD
RADIO INC., a Delaware corporation (the "Company"), Bank of America National
Trust and Savings Association, a national banking association ("BofA"), as a
Bank and as administrative agent for the Banks (in such capacity, the "Agent").
WHEREAS, the Banks have agreed to make available to the Company a
secured term loan credit facility upon the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of
any business or division of a Person, (b) the acquisition of in excess of
50% of the capital stock, partnership interests, membership interests or
equity of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary) provided that the
Company or a Subsidiary is the surviving entity.
"Affected Bank" has the meaning specified in Section 3.8.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities,
membership interests, by contract, or otherwise.
"Agent" means BofA in its capacity as agent for the Banks hereunder,
and any successor agent arising under Section 9.9. 1
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"Agent-Related Persons" means BofA and any successor agent arising
under Section 9.9, together with their respective Affiliates (including, in
the case of BofA, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on
Schedule 10.2 or such other address as the Agent may from time to time
specify.
"Agreement" means this Credit Agreement.
"Applicable Margin" means
(i) with respect to Base Rate Loans, .75%; and
(iii) with respect to Offshore Rate Loans, 1.75%.
"Arranger" means BancAmerica Robertson Stephens, a Delaware
corporation.
"Assignee" has the meaning specified in subsection 10.9(a).
"Assignment and Acceptance" has the meaning specified in Section
10.9(a).
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost
of internal legal services and all reasonable disbursements of internal
counsel.
"Bank" means BofA, in its capacity as a lender hereunder, and any other
financial institution from time to time party hereto (collectively, the
"Banks").
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. ss. 101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
above the latest Federal Funds Rate; and (b) the rate of interest in effect
for such day as publicly announced from time to time by BofA as its
"reference rate." (The "reference rate" is a rate set by BofA based upon
various factors including BofA's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing
some loans, which may be priced at, above, or below such announced rate.)
Any change in the reference rate announced by BofA shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
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"BofA" has the meaning specified in the preamble hereto.
"Borrowing" means a borrowing hereunder consisting of Loans of the same
Type made to the Company on the same day by the Banks under Article II,
and, other than in the case of Base Rate Loans, having the same Interest
Period.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City or San Francisco are authorized
or required by law to close and, if the applicable Business Day relates to
any Offshore Rate Loan, means such a day on which dealings are carried on
in the applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule
or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a
bank.
"CERCLA" has the meaning specified in the definition of "Environmental
Laws."
"Change of Control" means (i) any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), shall become, or
obtain rights (whether by means or warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of more than 40% of the
outstanding common stock of the Company or (ii) the board of directors of
the Company shall cease to consist of a majority of Continuing Directors.
"Charge" has the meaning specified in Section 8.4.
"Closing Date" means the date on which all conditions precedent set
forth in Section 4.1 are satisfied or waived by all Banks (or, in the case
of subsection 4.1(j), waived by the Person entitled to receive such
payment).
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Collateral" means all has the meaning specified in the Pledge
Agreement.
"Collateral Documents" means, collectively, (i) the Pledge Agreement
and the Support Agreement and all other security agreements, mortgages,
deeds of trust, patent and trademark assignments, lease assignments,
guarantees and other similar
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agreements between the Company or any Subsidiary and the Banks or the Agent
for the benefit of the Banks now or hereafter delivered to the Banks or the
Agent pursuant to or in connection with the transactions contemplated
hereby, and all financing statements (or comparable documents now or
hereafter filed in accordance with the Uniform Commercial Code or
comparable law) against the Company or any Subsidiary as debtor in favor of
the Banks or the Agent for the benefit of the Banks as secured party, and
(ii) any amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.
"Commitment" means, as to all Banks, aggregate Commitments of one
hundred fifteen million dollars ($115,000,000) and, as to any Bank, such
Bank's Pro Rata Share of the aggregate Commitment. The Commitments as of
the Closing Date shall be as set forth on Schedule 2.1.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit E.
"Consolidated Net Worth" means, at a particular date, all amounts which
would be included under shareholders' equity on a consolidated balance
sheet of the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP as at such date, plus (i) preferred stock
issued by the Company whether or not included in shareholders' equity and
(ii) all accrued but unpaid dividends on preferred stock issued by the
Company.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "primary obligations") of another Person
(the "primary obligor"), including any obligation of that Person (i) to
purchase, repurchase or otherwise acquire such primary obligations or any
security therefor, (ii) to advance or provide funds for the payment or
discharge of any such primary obligation, or to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net
worth or solvency or any balance sheet item, level of income or financial
condition 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 any such primary obligation against loss in respect thereof
(each, a "Guaranty Obligation"); (b) with respect to any Surety Instrument
issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; or (c) to
purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related
document or obligation requires that payment for such materials, supplies
or other property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other property is ever made
or tendered, or such services are ever performed or tendered. The amount of
any Contingent Obligation shall, in the case of Guaranty Obligations, be
deemed equal to the stated or determinable amount of the primary obligation
in respect of
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which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof, and in the case of other Contingent Obligations shall be equal to
the maximum reasonably anticipated liability in respect thereof.
"Continuing Directors" means the directors of the Company on the
Closing Date, and each other director, if, in each case, such other
director's nomination for election to the board of directors of the Company
is recommended by at least 66- 2/3% of the then Continuing Directors.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its
property is bound.
"Conversion/Continuation Date" means any date on which, under Section
2.4, the Company (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Disposition" means (i) the sale, lease, conveyance or other
disposition of property, other than sales or other dispositions expressly
permitted under subsection 7.3(a) or 7.3(b), and (ii) the sale or transfer
by the Company or any Subsidiary of the Company of any equity securities
issued by any Subsidiary of the Company and held by such transferor Person.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Eligible Assignee" means a commercial bank or a financial institution,
a fund, or other accredited investor (as defined in Regulation D of the
Securities Act) that is engaged in the making, purchasing or otherwise
investing, in commercial loans in the ordinary course of business.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type
of relief, resulting from or based upon the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental,
placement, spills, leaks,
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discharges, emissions or releases) of any Hazardous Material at, in, or
from Property, whether or not owned by the Company.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with
all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and
land use matters; including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act, the
Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act,
the Federal Resource Conservation and Recovery Act, the Toxic Substances
Control Act, the Emergency Planning and Community Right-to-Know Act and any
similar Requirement of Law of any Governmental Authority having
jurisdiction over the Company or its business.
"Environmental Permits" has the meaning specified in subsection
5.16(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of
intent to terminate, the treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the
Company or any ERISA Affiliate.
"Estimated Remediation Costs" means all costs associated with
performing work to remediate contamination of real property or groundwater,
including engineering and other professional fees and expenses, costs to
remove, transport and dispose of contaminated soil, costs to "cap" or
otherwise contain contaminated soil, and costs to pump and treat water and
monitor water quality.
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"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances specified
in Section 8.1.
"Event of Loss" means, with respect to any property including, without
limitation, Launch Vehicles, any of the following: (a) any loss,
destruction or damage of such property; (b) any pending or threatened
institution of any proceedings for the condemnation or seizure of such
property or for the exercise of any right of eminent domain; or (c) any
actual condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such property, or confiscation of such property or
the requisition of the use of such property.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Business Day opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such
day will be the arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York City time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.10(a).
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to
the circumstances as of the Closing Date.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other
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entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Hazardous Materials" means all those substances that are regulated by,
or which may form the basis of liability under, any Environmental Law,
including any substance identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous constituent, special
waste, hazardous substance, hazardous material, or toxic substance, or
petroleum or petroleum derived substance or waste.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business on ordinary
terms); (c) all non-contingent reimbursement or payment obligations with
respect to Surety Instruments; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets
or businesses; (e) all indebtedness created or arising under any
conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person
(even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of
such property); (f) all obligations with respect to capital leases; (g) all
indebtedness referred to in clauses (a) through (f) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property (including
accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (a) through
(g) above. For all purposes of this Agreement, the Indebtedness of any
Person shall include all recourse Indebtedness of any partnership or joint
venture or limited liability company in which such Person is a general
partner or a joint venturer or a member.
"Indemnified Liabilities" has the meaning specified in Section 10.5.
"Indemnified Person" has the meaning specified in Section 10.5.
"Independent Auditor" has the meaning specified in subsection 6.1(a).
"Initial Date" means, for purposes of Section 3.1, in the case of BofA,
the date of its execution and delivery of this Agreement, in the case of an
Agent other than BofA, the date such successor becomes an Agent pursuant to
Section 9.9, and, in the case of each Bank other than BofA, the date of the
Assignment and Acceptance pursuant to which it becomes a Bank.
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"Insolvency Proceeding" means, with respect to any Person, (a) any
case, action or proceeding with respect to such Person before any court or
other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or foreign
law, including the Bankruptcy Code.
"Interest Payment Date" means, as to any Offshore Rate Loan, the last
day of each Interest Period applicable to such Loan and, as to any Base
Rate Loan, the last Business Day of each calendar quarter, provided,
however, that if any Interest Period for an Offshore Rate Loan exceeds
three months, the date that falls three months after the beginning of such
Interest Period and after each Interest Payment Date thereafter is also an
Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two, three
or six months thereafter as selected by the Company in its Notice of
Borrowing or Notice of Conversion/Continuation; provided that:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to the
following Business Day unless, in the case of an Offshore Rate Loan,
the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall
end on the preceding Business Day;
(ii) any Interest Period pertaining to an Offshore Rate Loan
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;
(iii) no Interest Period for any Loan shall extend beyond the
Maturity Date; and
(iv) during the first two months following the Closing Date,
the Company may select an Interest Period ending less than one month
after the Borrowing Date or Conversion/Continuation Date of such Loan.
"Investments" has the meaning specified in Section 7.5.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
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"Joint Venture" means a partnership, limited liability company, joint
venture or other legal arrangement (whether created by contract or
conducted through a separate legal entity) now or hereafter formed by the
Company or any of its Subsidiaries with another Person in order to conduct
a common venture or enterprise with such Person.
"Launch Vehicles" means the satellite launch vehicles described in the
Launch Vehicle Sale Contract.
"Launch Vehicle Sale Contract" means Article 7 of the Overall Contract.
"Lending Office" means, as to any Bank, the office or offices of such
Bank specified on Schedule 10.2, or such other office or offices as the
Bank may from time to time notify the Company and the Agent.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, any financing
lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the Uniform Commercial
Code or any comparable law) and any contingent or other agreement to
provide any of the foregoing, but not including the interest of a lessor
under an operating lease.
"Loan" means an extension of credit by a Bank to the Company under
Article II, and may be a Base Rate Loan or an Offshore Rate Loan (each, a
"Type" of Loan).
"Loan Documents" means this Agreement, any Notes, the Collateral
Documents, the Fee Letter and all other documents delivered to the Agent or
any Bank in connection with the transactions contemplated by this
Agreement.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Company or the
Company and its Subsidiaries taken as a whole; (b) a material impairment of
the ability of the Company to perform under any Loan Document; or (c) a
material adverse effect upon (i) the legality, validity, binding effect or
enforceability against the Company of any Loan Document, or (ii) the
perfection or priority of any Lien granted under the Pledge Agreement.
"Maturity Date" shall mean September 30, 1999.
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"Multiemployer Plan" means a "multiemployer plan", within the meaning
of Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"Net Proceeds" means, as to any Disposition by a Person, proceeds in
cash, checks or other cash equivalent financial instruments as and when
received by such Person, net of: (a) the direct costs relating to such
Disposition excluding amounts payable to such Person or any Affiliate of
such Person, (b) sale, use or other transaction taxes paid or payable by
such Person as a direct result thereof, and (c) amounts required to be
applied to repay principal, interest and prepayment premiums and penalties
on Indebtedness secured by a Lien on the asset which is the subject of such
Disposition. "Net Proceeds" shall also include proceeds paid on account of
any Event of Loss, net of (i) all money actually applied to repair or
reconstruct the damaged property or property affected by the casualty,
condemnation or taking, (ii) all of the costs and expenses reasonably
incurred in connection with the collection of such proceeds, award or other
payments, and (iii) any amounts retained by or paid to parties having
superior rights to such proceeds, awards or other payments.
"Note" means a promissory note executed by the Company in favor of a
Bank pursuant to subsection 2.2(b), in substantially the form of Exhibit H.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit C.
"Notice of Conversion/Continuation" means a notice in substantially the
form of Exhibit D.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by the Company
to any Bank, the Agent, or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum determined by the Agent as follows:
Offshore Rate = [LIBOR or IBOR (for Interest Periods under 1 month)]
----------------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (but only to the
extent actually applicable to any Bank) under regulations issued from time
to time by the FRB for determining the maximum reserve requirement
(including any
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emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities");
"IBOR" means the rate of interest per annum determined by the Agent as
the rate at which dollar deposits in the approximate amount of BofA's
Offshore Rate Loan for such Interest Period would be offered by BofA's
Grand Cayman Branch, Grand Cayman B.W.I. (or such other office as may be
designated for such purpose by BofA), to major banks in the offshore dollar
interbank market at their request at approximately 11:00 a.m. (New York
City time) two Business Days prior to the commencement of such Interest
Period; and
"LIBOR" means the rate of interest per annum determined by the Agent to
be the arithmetic mean (rounded upward to the next 1/16th of 1%) of the
rates of interest per annum notified to the Agent by the Reference Bank as
the rate of interest at which dollar deposits in the approximate amount of
the amount of the Loan to be made or continued as, or converted into, an
Offshore Rate Loan by such Reference Bank and having a maturity comparable
to such Interest Period would be offered to major banks in the London
interbank market at their request at approximately 11:00 a.m. (London time)
two Business Days prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate.
"Organization Documents" means, for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.
"Other Taxes" means any present or future stamp, court or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with
respect to, this Agreement or any other Loan Documents.
"Overall Contract" means the Amended and Restated Contract,
SS/L-TP9003- 02, dated June 30, 1998, between the Company and SS/L.
"Participant" has the meaning specified in subsection 10.9(d).
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"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under
ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Company sponsors, maintains,
or to which it makes, is making, or is obligated to make contributions, or
in the case of a multiple employer plan (as described in Section 4064(a) of
ERISA) has made contributions at any time during the immediately preceding
five (5) plan years.
"Permitted Liens" has the meaning specified in Section 7.2.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Company sponsors or maintains or to which the Company
makes, is making, or is obligated to make contributions and includes any
Pension Plan.
"Pledge Agreement" means the Pledge Agreement to be executed and
delivered by the Company, substantially in the form of Exhibit A, as the
same may be amended, supplemented or otherwise modified from time to time.
"Property" means any facility or property owned, leased or operated by
the Company or any of its Subsidiaries.
"Pro Rata Share" means, as to any Bank at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at
such time of such Bank's Commitment divided by the combined Commitments of
all Banks.
"Reference Bank" means BofA.
"Remarketing Agent" means Loral Space & Communications Ltd.
"Replacement Bank" has the meaning specified in Section 3.8.
"Reportable Event" means, any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Required Banks" means at any time Banks then holding more than 50% of
the then aggregate unpaid principal amount of the Loans, or, if no amounts
are outstanding, Banks then having more than 50% of the aggregate amount of
the Commitments.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a
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Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"Responsible Officer" means the chief executive officer, the president
or chief financial officer of the Company, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of the Company, or any other officer having substantially the
same authority and responsibility.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Senior Secured Discount Notes" means the 15% Senior Secured Discount
Notes due 2007 of the Company, in an aggregate principal amount not to
exceed $297,000,000.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities)
as such value is established and liabilities evaluated for purposes of
Section 101(31) of the Bankruptcy Code; (b) the present fair saleable value
of the property of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature; and (e) such Person is
not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute unreasonably small capital.
"SS/L" means Space Systems/Loral, Inc.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests or
other equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or more of
the Subsidiaries of the Person, or a combination thereof. Unless the
context otherwise clearly requires, references herein to a "Subsidiary"
refer to a Subsidiary of the Company.
"Support Agreement" means the Agreement to be executed and delivered by
the Agent and the Remarketing Agent, substantially in the form of Exhibit
B, as the same may be amended, supplemented or otherwise modified from time
to time.
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"Surety Instruments" means all letters of credit (including standby and
commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds and similar instruments.
"Taxes" means any and all present or future taxes, levies, assessments,
imposts, duties, deductions, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of each Bank and
the Agent, respectively, (i) taxes imposed on or measured by its net income
and franchise taxes imposed in lieu of taxes imposed on or measured by net
income by the jurisdiction (or any political subdivision or taxing
authority thereof or therein) under the laws of which such Bank or the
Agent, as the case may be, is organized or maintains a lending office, (ii)
United States withholding taxes imposed under laws in effect on the Initial
Date with respect to such Bank or the Agent or under laws in effect on the
date a Bank changes its Lending Office (other than pursuant to a request of
the Company) except to the extent that such Bank's assignor, if any, was
entitled, at the time of assignment or such Bank was entitled, at the time
it changes its applicable Lending Office, to receive additional amounts
from the Company pursuant to Section 3.1; provided, however, that United
States withholding taxes imposed under laws in effect on the Initial Date
with respect to the Remarketing Agent, as successor to the Banks under the
Support Agreement, shall be Taxes for the purposes of this Agreement and
(iii) United States withholding taxes that are attributable to the Bank's
or the Agent's failure to comply with Section 9.10.
"Term Loan" has the meaning specified in Section 2.1.
"Type" has the meaning specified in the definition of "Loan."
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." each means the United States of America.
"Wholly Owned Subsidiary" means any corporation in which (other than
directors' qualifying shares required by law) 100% of the capital stock of
each class having ordinary voting power, and 100% of the capital stock of
every other class, in each case, at the time as of which any determination
is being made, is owned, beneficially and of record, by the Company, or by
one or more of the other Wholly Owned Subsidiaries, or both.
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1.2 Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and the
word "through" means "to and including."
(iv) The term "property" includes any kind of
property or asset, real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks by way of
consent, approval or waiver shall be deemed modified by the phrase "in its/their
sole discretion."
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Company, the Remarketing Agent and the Banks, and are the products of all
parties. Accordingly, they shall not be construed against the Banks or the Agent
merely because of the Agent's or Banks' involvement in their preparation.
1.3 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial
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computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company.
ARTICLE II
THE TERM LOANS
2.1 Amounts and Terms of Commitments. Each Bank severally agrees, on
the terms and conditions set forth herein, to make loans to the Company (each
such loan, a "Term Loan") from time to time on any Business Day during the
period from the Closing Date to the Maturity Date in an aggregate amount not to
exceed such Bank's Pro Rata Share of the Commitment. Amounts borrowed as Term
Loans which are repaid or prepaid by the Company may not be reborrowed.
2.2 Loan Accounts. (a) The Loans made by each Bank shall be evidenced
by one or more loan accounts or records maintained by such Bank in the ordinary
course of business. The loan accounts or records maintained by the Agent and
each Bank shall be conclusive absent manifest error of the amount of the Loans
made by the Banks to the Company and the interest and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Company hereunder to pay any amount owing
with respect to the Loans.
(b) Upon the request of any Bank made through the Agent, the
Loans made by such Bank may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall endorse on the schedules annexed
to its Note(s) the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with respect thereto.
Each such Bank is irrevocably authorized by the Company to endorse its Note(s)
and each Bank's record shall be conclusive absent manifest error; provided,
however, that the failure of a Bank to make, or an error in making, a notation
thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under any such Note to such Bank.
2.3 Procedure for Borrowing. (a) Each Borrowing shall be made upon the
Company's irrevocable written notice delivered to the Agent in the form of a
Notice of Borrowing (which notice must be received by the Agent prior to 11:00
a.m. (New York City time) (i) three Business Days prior to the requested
Borrowing Date, in the case of Offshore Rate Loans and (ii) one Business Day(s)
prior to the requested Borrowing Date, in the case of Base Rate Loans)
specifying:
(A) the requested Borrowing Date, which shall be a Business
Day;
(B) the Type of Loans comprising the Borrowing; and
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(C) the duration of the Interest Period applicable to such
Loans included in such notice. If the Notice of Borrowing fails to specify the
duration of the Interest Period for any Borrowing comprised of Offshore Rate
Loans, such Interest Period shall be three months;
provided, however, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than (i)
three Business Days prior to the Closing Date, in the case of Offshore Rate
Loans, and (ii) 11:00 a.m. (New York City time) on the Closing Date, in the case
of Base Rate Loans.
(b) The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of the Company at the
Agent's Payment Office by 11:00 a.m. (New York City time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent by wire transfer in accordance with written instructions provided to the
Agent by the Company of like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent
shall otherwise consent, there may not be more than three different Interest
Periods in effect.
2.4 Conversion and Continuation Elections. (a) The Company may, upon
irrevocable written notice to the Agent in accordance with subsection 2.4(b):
(i) elect, as of any Business Day, in the case of
Base Rate Loans, or as of the last day of the applicable Interest Period, in the
case of Offshore Rate Loans, to convert any such Loans into Loans of any other
Type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Loans (or any part thereof) having Interest
Periods expiring on such day.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 11:00 a.m.
(New York City time) at least (i) three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as Offshore Rate Loans or (ii) one Business Day in advance of the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or
continued;
(iii) the Type of Loans resulting from the proposed
conversion or continuation; and
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(iv) other than in the case of conversions into Base
Rate Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable
to Offshore Rate Loans, the Company has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans, or if any Default or Event
of Default then exists, the Company shall be deemed to have elected to convert
such Offshore Rate Loans into Base Rate Loans effective as of the expiration
date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of
a Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, unless the Agent shall otherwise consent, there may not be more than
three different Interest Periods in effect.
2.5 Voluntary Termination or Reduction of Commitments. The Company may,
upon not less than three Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
amount of $5,000,000 or any multiple of $1,000,000 in excess thereof; unless,
after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, the then-outstanding principal amount of the Loans would
exceed the amount of the combined Commitments then in effect. Once reduced in
accordance with this Section, the Commitments may not be increased. Any
reduction of the Commitments shall be applied to each Bank according to its Pro
Rata Share. All accrued commitment fees to, but not including the effective date
of any reduction or termination of Commitments, shall be paid on the effective
date of such reduction or termination.
2.6 Optional Prepayments. (a) Subject to Section 3.4, the Company may,
at any time or from time to time, upon not less than three Business Days'
irrevocable notice for Offshore Rate Loans, or by irrevocable notice by 11:00
a.m. (New York City time) on the day of repayment for Base Rate Loans, to the
Agent, ratably prepay Loans in whole or in part, in minimum amounts of
$5,000,000 or any multiple of $1,000,000 in excess thereof. Such notice of
prepayment shall specify the date and amount of such prepayment and the Type(s)
of Loans to be prepaid. The Agent will promptly notify each Bank of its receipt
of any such notice, and of such Bank's Pro Rata Share of such prepayment. If
such notice is given by the Company, the Company shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest except for Base Rate Loans to
each such date on the amount prepaid and any amounts required pursuant to
Section 3.4.
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(b) Upon the making of any optional prepayment under this
Section 2.6, the Loan of each Bank shall automatically be reduced by an amount
equal to such Bank's ratable share of the aggregate of principal repaid,
effective as of the earlier of the date that such prepayment is made or the date
by which such prepayment is due and payable hereunder. All accrued commitment
fees to, but not including the effective date of any reduction or termination of
Commitments, shall be paid pursuant to Section 2.10(b).
2.7 Mandatory Prepayments of Loans; Mandatory Commitment Reductions.
(a) Asset Dispositions. If the Company or any Subsidiary shall at any time or
from time to time make or agree to make a Disposition, or shall suffer an Event
of Loss, then (i) the Company shall promptly notify the Agent of such proposed
Disposition or Event of Loss (including the amount of the estimated Net Proceeds
to be received by the Company or such Subsidiary in respect thereof) and (ii)
promptly upon, and in no event later than three Business Days after, receipt by
the Company or the Subsidiary of the Net Proceeds of such Disposition or Event
of Loss, the Company shall prepay the Loans in an aggregate amount equal to the
amount of such Net Proceeds.
(b) Payments on Overall Contract. If any payments are received
by the Company under the Overall Contract, 100% of such payments shall be
applied on the date of such payment toward the prepayment of the Loans.
(c) General. Any prepayments pursuant to this Section 2.7
shall be applied first to any Base Rate Loans then outstanding and then to
Offshore Rate Loans with the shortest Interest Periods remaining. The Company
shall pay, together with each prepayment under this Section 2.7, accrued
interest except for Base Rate Loans on the amount prepaid and any amounts
required pursuant to Section 3.4.
(d) Reduction of Commitment. Upon the making of any mandatory
prepayment under this Section 2.7, the Loan of each Bank shall automatically be
reduced by an amount equal to such Bank's ratable share of the aggregate of
principal repaid, effective as of the earlier of the date that such prepayment
is made or the date by which such prepayment is due and payable hereunder. All
accrued commitment fees to, but not including the effective date of any
reduction or termination of Commitments, shall be paid pursuant to Section
2.10(b).
2.8 Repayment. The Company shall repay the Loans in full on the
Maturity Date.
2.9 Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Offshore Rate or the Base Rate, as the case may be, plus the
Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any prepayment
of Loans except for Base Rate Loans under Section 2.6 or 2.7 for the portion of
the Loans so prepaid and upon payment (including prepayment) in full thereof
and, during the existence of any Event of
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Default, interest shall be paid on demand of the Agent at the request or with
the consent of the Required Banks.
(c) Notwithstanding subsection (a) of this Section, while any
Event of Default exists or after acceleration, the Company shall pay interest
(after as well as before entry of judgment thereon to the extent permitted by
law) on the principal amount of all outstanding Loans, at a rate per annum which
is determined by adding 3% per annum to the Applicable Margin then in effect for
such Loans and, in the case of Obligations not subject to an Applicable Margin,
at a rate per annum equal to the Base Rate plus 3%; provided, however, that, on
and after the expiration of any Interest Period applicable to any Offshore Rate
Loan outstanding on the date of occurrence of such Event of Default or
acceleration, the principal amount of such Loan shall, during the continuation
of such Event of Default or after acceleration, bear interest at a rate per
annum equal to the Base Rate plus 3%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event the Company shall pay such Bank interest at the highest rate
permitted by applicable law.
2.10 Fees. (a) Arrangement, Agency Fees. The Company shall pay an
arrangement fee to the Arranger for the Arranger's own account, and shall pay an
agency fee to the Agent for the Agent's own account, as required by the letter
agreement ("Fee Letter") between the Company and the Arranger and Agent dated
May 27, 1998.
(b) Commitment Fees. The Company shall pay to the Agent for
the account of each Bank a commitment fee on the actual daily unused portion of
such Bank's Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily utilization for that
quarter as calculated by the Agent, equal to 1/2 of one percent per annum. Such
commitment fee shall accrue from the Closing Date to the Maturity Date and shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December commencing on September 30, 1998 through the
Maturity Date, with the final payment to be made on the Maturity Date. The
commitment fees provided in this subsection shall accrue at all times after the
above-mentioned commencement date, including at any time during which one or
more conditions in Section 4.2 are not met.
2.11 Computation of Fees and Interest. (a) All computations of interest
for Base Rate Loans when the Base Rate is determined by BofA's "reference rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year). Interest
and fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
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(b) Each determination of an interest rate by the Agent shall
be conclusive and binding on the Company and the Banks in the absence of
manifest error.
(c) If any Reference Bank's Commitment terminates (other than
on termination of all the Commitments), or for any reason whatsoever the
Reference Bank ceases to be a Bank hereunder, that Reference Bank shall
thereupon cease to be a Reference Bank, and the Offshore Rate shall be
determined on the basis of the rates as notified by the Administrative Agent.
2.12 Payments by the Company. (a) All payments to be made by the
Company shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Company shall be made
to the Agent for the account of the Banks at the Agent's Payment Office, and
shall be made in dollars and in immediately available funds, no later than 11:00
a.m. (New York City time) on the date specified herein. The Agent will promptly
distribute to each Bank its Pro Rata Share (or other applicable share as
expressly provided herein) of such payment in like funds as received. Any
payment received by the Agent later than 2:00 p.m. (New York City time) shall be
deemed to have been received on the following Business Day and any applicable
interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full to the Agent, each Bank shall repay to the Agent on demand such
amount distributed to such Bank, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Bank
until the date repaid.
2.13 Payments by the Banks to the Agent. (a) Unless the Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date of
such Borrowing, that such Bank will not make available as and when required
hereunder to the Agent for the account of the Company the amount of that Bank's
Pro Rata Share of the Borrowing, the Agent may assume that each Bank has made
such amount available to the Agent in immediately available funds on the
Borrowing Date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Company on such date a corresponding
amount. If and to the extent any Bank shall not have made its full amount
available to the Agent in immediately available funds and the Agent in such
circumstances has made available to the Company such amount, that Bank shall on
the Business Day following such Borrowing Date
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make such amount available to the Agent, together with interest at the Federal
Funds Rate for each day during such period. A notice of the Agent submitted to
any Bank with respect to amounts owing under this subsection (a) shall be
conclusive, absent manifest error. If such amount is so made available, such
payment to the Agent shall constitute such Bank's Loan on the Borrowing Date for
all purposes of this Agreement. If such amount is not made available to the
Agent on the Business Day following the Borrowing Date, the Agent will notify
the Company of such failure to fund and, upon demand by the Agent, the Company
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a Loan
on such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.14 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment pro rata with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.11) with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Banks following any such purchases or repayments.
2.15 Security. All obligations of the Company and the Subsidiaries
under this Agreement, the Notes and all other Loan Documents shall be secured in
accordance with the Collateral Documents.
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ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes. (a) Any and all payments by the Company to each Bank or the
Agent under this Agreement and any other Loan Document shall be made free and
clear of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or
withhold any Taxes from or in respect of any sum payable hereunder to any Bank
or the Agent, then:
(i) the sum payable shall be increased as necessary
so that, after making all required deductions and withholdings for Taxes
(including deductions and withholdings applicable to additional sums payable
under this Section 3.1), such Bank or the Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made;
(ii) the Company shall make such deductions and
withholdings; and
(iii) the Company shall pay the full amount deducted
or withheld to the relevant taxing authority or other authority in accordance
with applicable law.
(c) The Company agrees to indemnify and hold harmless each
Bank and the Agent for the full amount of any Taxes or Other Taxes (including
without limitation any Taxes or Other Taxes imposed on amounts payable under
this Section 3.1) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days after the date the Bank or the Agent makes written demand
therefor.
(d) Within 30 days after the date of any payment by the
Company of Taxes or Other Taxes, the Company shall furnish to each Bank or the
Agent the original or a certified copy of a receipt evidencing payment thereof,
or other evidence of payment satisfactory to such Bank or the Agent.
(e) Any Bank shall use reasonable efforts (consistent with
legal and regulatory restrictions) to change the jurisdiction of its Lending
Office if such change would avoid the need for, or reduce the amount of, any
payment required to be made pursuant to Section 3.1(b) or Section 3.1(c), and,
if such change in the sole judgment of such Bank is not otherwise
disadvantageous to such Bank.
(f) If a Bank receives a refund in respect of any Taxes to
which it has been indemnified by the Company or with respect to which the
Company has paid additional amounts pursuant to this Section 3.1, it shall
within 30 days from the date of such receipt pay over such refund to the Company
(but only to the extent of indemnity payments made, or
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additional amounts paid, by the Company under this Section 3.1 with respect to
the Taxes giving rise to such refund), net of all out-of-pocket expenses of such
Bank and without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund); provided, however, that the Company,
upon the request of such Bank, agrees to repay the amount paid over to the
Company (plus penalties, interest or other charges) to such Bank in the event
such Bank is required to repay such refund to such Governmental Authority.
3.2 Illegality. (a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to the Company through
the Agent, any obligation of that Bank to make Offshore Rate Loans shall be
suspended until the Bank notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any
Offshore Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under Section 3.4, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Offshore Rate Loan. If the Company is
required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Bank, in the amount of
such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Bank through the Agent that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
3.3 Increased Costs and Reduction of Return. (a) Except as to taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto (it being understood that the
Company shall not have any liability for any taxes, levies, assessments,
imposts, duties, deductions, fees, withholdings or similar charges, and all
liabilities with respect thereto, except as provided in Section 3.1), if any
Bank determines that, due to either (i) the introduction of or any change (other
than any change by way of imposition of or increase in reserve requirements
included in the calculation of the Offshore Rate or in respect of the assessment
rate payable by any Bank to the FDIC for insuring U.S. deposits) in or in the
interpretation of any law or regulation or (ii) the compliance by that Bank with
any guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Bank of agreeing to make or making, funding or maintaining any
Offshore Rate Loans, then the Company shall be liable for, and shall from time
to time, upon demand (with a copy of such demand to be sent to the Agent), pay
to the Agent for the account of
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such Bank, additional amounts as are sufficient to compensate such Bank for such
increased costs.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Bank (or its Lending Office) or any corporation controlling
the Bank with any Capital Adequacy Regulation, affects or would affect the
amount of capital required or expected to be maintained by the Bank or any
corporation controlling the Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitment, loans, credits or obligations
under this Agreement, then, upon demand of such Bank to the Company through the
Agent, the Company shall pay to the Bank, from time to time as specified by the
Bank, additional amounts sufficient to compensate the Bank for such increase.
3.4 Funding Losses. The Company shall reimburse each Bank and hold each
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert
a Loan after the Company has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation;
(c) the failure of the Company to make any prepayment in
accordance with any notice delivered under Section 2.6;
(d) the prepayment (including pursuant to Section 2.7) or
other payment (including after acceleration thereof) of an Offshore Rate Loan on
a day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.4 of any Offshore
Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Banks under this Section and
under subsection 3.3(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
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3.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable pursuant to subsection 2.9(a) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Banks of funding such Loan, the
Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans, as the case may
be, hereunder shall be suspended until the Agent revokes such notice in writing.
Upon receipt of such notice, the Company may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted by it. If the Company does not
revoke such Notice, the Banks shall make, convert or continue the Loans, as
proposed by the Company, in the amount specified in the applicable notice
submitted by the Company, but such Loans shall be made, converted or continued
as Base Rate Loans instead of Offshore Rate Loans, as the case may be.
3.6 Reserves on Offshore Rate Loans. The Company shall pay to each
Bank, as long as such Bank shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount of each Offshore
Rate Loan equal to the actual costs of such reserves allocated to such Loan by
the Bank (as determined by the Bank in good faith, which determination shall be
conclusive), payable on each date on which interest is payable on such Loan,
provided the Company shall have received at least 15 days' prior written notice
(with a copy to the Agent) of such additional interest from the Bank. If a Bank
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be payable 15 days from receipt of such notice.
3.7 Certificates of Banks. Any Bank claiming reimbursement or
compensation under this Article III shall deliver to the Company (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Bank hereunder and such certificate shall be conclusive and binding on
the Company in the absence of manifest error.
3.8 Substitution of Banks. Upon the receipt by the Company from any
Bank (an "Affected Bank") of a claim for compensation under Section 3.3 or 3.6,
the Company may: (i) request the Affected Bank to use its best efforts to obtain
a replacement bank or financial institution satisfactory to the Company and to
the Agent (a "Replacement Bank") to acquire and assume all or a ratable part of
all of such Affected Bank's Loans and Commitment; (ii) request one more of the
other Banks to acquire and assume all or part of such Affected Bank's Loans and
Commitment; or (iii) designate a Replacement Bank. Any such designation of a
Replacement Bank under clause (i) or (iii) shall be subject to the prior written
consent of the Agent (which consent shall not be unreasonably withheld).
3.9 Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.
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ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions of Initial Loans. The obligation of each Bank to make
its initial Loan hereunder is subject to the following conditions:
(a) Credit Agreement; Pledge Agreement and Support Agreement.
The Agent shall have received (i) this Agreement, executed and delivered by the
Agent, the Company and each Bank listed on Schedule 2.1, (ii) the Pledge
Agreement, executed and delivered by the Company and (iii) the Support
Agreement, executed and delivered by the Company, the Agent and the Remarketing
Agent.
(b) Overall Contract. The Agent shall have received the
Overall Contract, executed and delivered by the parties thereto, in form and
substance satisfactory to the Agent.
(c) Resolutions; Incumbency. The Agent shall have received:
(i) copies of the resolutions of the board of
directors of the Company authorizing the transactions contemplated hereby,
certified as of the Closing Date by the Secretary of the Company; and
(ii) a certificate of the Secretary of the Company
certifying the names and true signatures of the officers of the Company
authorized to execute, deliver and perform, as applicable, this Agreement, and
all other Loan Documents to be delivered by it hereunder.
(d) Organization Documents; Good Standing. The Agent shall
have received each of the following documents:
(i) the articles or certificate of incorporation and
the bylaws of the Company as in effect on the Closing Date, certified by the
Secretary of the Company as of the Closing Date; and
(ii) a good standing certificate for the Company from
the Secretary of State (or similar, applicable Governmental Authority) of its
state of incorporation and each state where the Company is qualified to do
business as a foreign corporation as of a date not more than seven days prior to
the Closing Date;
(e) Interest Rate Protection. The Company shall have entered
into and implemented interest rate cap or collar derivative contracts with
respect to the full principal amount of the Term Loans for the purpose of
protecting against fluctuations in interest rates or the exchange of notional
interest obligations, either generally or under specific contingencies, with
terms and conditions satisfactory to the Agent.
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(f) No Disruption of Financial and Capital Markets. There
shall not have been any disruption or adverse change in the financial or capital
markets generally or in the bank syndication market in particular which the
Arranger, in its judgment, deems material.
(g) Support Agreement. All conditions to the effectiveness of
the Support Agreement shall have been fulfilled.
(h) Legal Opinions. The Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Paul, Weiss, Rifkind,
Wharton & Garrison, counsel to the Company, substantially in the form of Exhibit
F-1;
(ii) the legal opinion of Willkie Farr & Gallagher,
counsel of the Remarketing Agent, substantially in the form of Exhibit F-2; and
(iii) any other legal opinions reasonably requested
by the Agent.
Each such legal opinion shall cover such matters incident to the transactions
contemplated by this Agreement as the Agent may reasonably require.
(i) Payment of Fees. The Agent shall have received evidence of
payment by the Company of all accrued and unpaid fees, costs and expenses to the
extent then due and payable on the Closing Date, together with Attorney Costs of
BofA to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute BofA's reasonable
estimate of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between the Company and BofA); including any such costs,
fees and expenses arising under or referenced in Sections 2.10 and 10.4.
(j) Collateral Documents. The Agent shall have received the
Collateral Documents, executed by the Company, in appropriate form for
recording, where necessary, together with:
(i) acknowledgment copies of all UCC-l financing
statements filed, registered or recorded to perfect the security interests of
the Agent for the benefit of the Banks, or other evidence satisfactory to the
Agent that there has been filed, registered or recorded all financing statements
and other filings, registrations and recordings necessary and advisable to
perfect the Liens of the Agent for the benefit of the Banks in accordance with
applicable law;
(ii) written advice relating to such Lien and
judgment searches as the Agent shall have requested, and such termination
statements or other documents as may be necessary to confirm that the Collateral
is subject to no other Liens in favor of any Persons (other than Permitted
Liens);
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(iii) all certificates and instruments representing
the Collateral;
(iv) evidence that all other actions necessary or, in
the opinion of the Agent, desirable to perfect and protect the first priority
security interest created by the Collateral Documents have been taken;
(v) funds sufficient to pay any filing tax or fee in
connection with any and all UCC-1 financing statements; and
(vi) evidence that all other actions necessary or, in
the opinion of the Agent or the Banks, desirable to perfect and protect the
first priority Lien created by the Collateral Documents, and to enhance the
Agent's ability to preserve and protect its interests in and access to the
Collateral, have been taken.
(k) Solvency Opinion. The Agent shall have received a solvency
opinion from the Chief Financial Officer of the Company, in form and substance
satisfactory to the Agent.
(l) Reserved.
(m) Satisfaction of Remarketing Agent. The Remarketing Agent
shall have certified in writing to the Agent that it is satisfied that all of
the conditions in this Section 4.1 have been met or, in the alternative, that it
consents to any waivers of such conditions and confirms its obligations under
the Support Agreement notwithstanding such waivers, substantially in the form of
Exhibit I.
(n) Insurance. The Agent shall have received insurance
certificates (i) satisfying the requirements of Section 6.7 and (ii) confirming
insurance in effect in sufficient amount, in the Agent's sole judgment, to cover
the construction of the Launch Vehicles to the satisfaction of the Remarketing
Agent.
(o) Certificate. A certificate signed by a Responsible
Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in
Article V are true and correct on and as of such date, as though made on and as
of such date;
(ii) no Default or Event of Default exists or would
result from the initial Borrowing; and
(iii) since March 31, 1998, there has occurred no
event or circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
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(p) No Default. The Agent shall have received a certificate of
a Responsible Officer of the Company certifying that no default has occurred
under the Launch Vehicle Sale Contract.
(q) Other Documents. The Agent shall have received such other
approvals, opinions, documents or materials as the Agent may request.
4.2 Conditions to All Borrowings. The obligation of each Bank to make
any Loan to be made by it (including its initial Loan) is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Notice of Borrowing. The Agent shall have received (with,
in the case of the initial Loan only, a copy for each Bank) a Notice of
Borrowing.
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on and as
of such Borrowing Date with the same effect as if made on and as of such
Borrowing Date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and correct
as of such earlier date).
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing.
(d) No Future Advance Notice. Neither the Agent nor any Bank
shall have received from the Company any notice that any Collateral Document
will no longer secure on a first priority basis future advances or future Loans
to be made or extended under this Agreement.
(e) Progress Payments. The Agent and the Banks shall be
satisfied that the Company shall have sufficient liquidity to pay the component
of progression payments due to SS/L under the Launch Vehicle Sale Contract or
scheduled to come due prior to the next advance of the Term Loans and which are
not to be paid out of the proceeds of the Term Loans.
(f) Satisfaction of Remarketing Agent. The Remarketing Agent
shall have certified in writing to the Agent that it is satisfied that all of
the conditions in this Section 4.2 have been met or, in the alternative, that it
consents to any waivers of such conditions and confirms its obligations under
the Support Agreement notwithstanding such waivers, substantially in the form of
Exhibit I.
Each Notice of Borrowing submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the date of each
such notice and as of each Borrowing Date, that the conditions in this Section
4.2 are satisfied.
ARTICLE V
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REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank
that:
5.1 Corporate Existence and Power; Compliance with Laws. The Company:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification; and
(d) is in compliance with all Requirements of Law.
5.2 Corporate Authorization; No Contravention. The execution, delivery
and performance by the Company of this Agreement and each other Loan Document to
which the Company is party, have been duly authorized by all necessary corporate
action, and do not and will not:
(a) contravene the terms of any of the Company's Organization
Documents;
(b) conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any Contractual
Obligation to which the Company is a party or any order, injunction, writ or
decree of any Governmental Authority to which the Company or its property is
subject; or
(c) violate any Requirement of Law.
5.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for filings in connection with the Liens granted
to the Agent under the Collateral Documents) is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Company or any of its Subsidiaries of this Agreement or any other
Loan Document.
5.4 Binding Effect. This Agreement and each other Loan Document to
which the Company is a party constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
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5.5 Litigation. Except as specifically disclosed in Schedule 5.5, there
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or thereby;
or
(b) if determined adversely to the Company or its
Subsidiaries, would reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
5.6 No Default. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company or from the grant or
perfection of the Liens of the Agent and the Banks on the Collateral. As of the
Closing Date, neither the Company nor any Subsidiary is in default under or with
respect to any Contractual Obligation in any respect which, individually or
together with all such defaults, could reasonably be expected to have a Material
Adverse Effect, or that would, if such default had occurred after the Closing
Date, create an Event of Default under subsection 8.1(e).
5.7 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best knowledge
of the Company, nothing has occurred which would cause the loss of such
qualification. The Company and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability
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under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Company
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Company
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
5.8 Certain Documents. The Company has delivered to the Agent a
complete and correct copy of the Overall Contract, including any amendments,
supplements or modifications thereto.
5.9 Taxes. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
5.10 Margin Regulations. Neither the Company nor any Subsidiary is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
5.11 Labor Matters. Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against the Company or any of its Subsidiaries pending or, to the
knowledge of the Company, threatened; (b) hours worked by and payment made to
employees of the Company and its Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable Requirement of Law dealing with
such matters; and (c) all payments due from the Company or any of its
Subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of the Company or the relevant
Subsidiary.
5.12 Year 2000 Matters. On the basis of a comprehensive review and
assessment of the Company's systems and equipment and inquiry made of the
Company's material suppliers, vendors and customers, the Company reasonably
believes that the "Year 2000 problem" (that is, the inability of computers, as
well as embedded microchips in non- computing devices, to perform properly,
including performance of date-sensitive functions with respect to certain dates
prior to and after December 31, 1999), including costs of remediation, could not
reasonably be expected to result in a Default or Event of Default or to have a
Material Adverse Effect. The Company has developed feasible contingency plans
adequately to ensure uninterrupted and unimpaired business operation in the
event of failure of its own or a third party's systems or equipment due to the
Year 2000 problem, including those of vendors, customers and suppliers, as well
as a general failure of or interruption in its communications and delivery
infrastructure. Except for any reprogramming referred to above, the computer
systems of the Company and its Subsidiaries are and, with ordinary
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course upgrading and maintenance, will continue for the term of this Agreement
to be, sufficient for the conduct of their business as currently conducted.
5.13 Title to Properties. The Company and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
5.14 Financial Condition. The unaudited consolidated financial
statements of the Company and its Subsidiaries dated March 31, 1998, and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for the fiscal quarter ended on that date:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, subject to ordinary, good faith year end audit
adjustments;
(ii) fairly present the financial condition of the
Company and its Subsidiaries as of the date thereof and results of operations
for the period covered thereby; and
(iii) show all material indebtedness and other
liabilities, direct or contingent, of the Company and its consolidated
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Contingent Obligations.
5.15 Material Adverse Effects. Since March 31, 1998, there has been no
Material Adverse Effect.
5.16 Environmental Matters. (a) The on-going operations of the Company
and each of its Subsidiaries comply in all respects with all Environmental Laws,
except such non-compliance which would not (if enforced in accordance with
applicable law) result in a Material Adverse Effect.
(b) The Company and each of its Subsidiaries have obtained all
licenses, permits, authorizations and registrations required under any
Environmental Law ("Environmental Permits") and necessary for their respective
ordinary course operations, all such Environmental Permits are in good standing,
and the Company and each of its Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits.
(c) None of the Company, any of its Subsidiaries or any of
their respective present property or operations, is subject to any outstanding
written order from or agreement with any Governmental Authority, nor subject to
any judicial or docketed administrative proceeding, respecting any Environmental
Law, Environmental Cl |
