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Sample Business ContractsHome: Sample Business Contracts:
CONFORMED COPY
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$150,000,000
TERM LOAN AGREEMENT
AMONG
SIRIUS SATELLITE RADIO INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
LEHMAN BROTHERS INC.,
AS ARRANGER
LEHMAN COMMERCIAL PAPER INC.,
AS SYNDICATION AGENT
AND
LEHMAN COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF JUNE 1, 2000
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<PAGE>
TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS............................................................................................1
1.1 Defined Terms.......................................................................................1
1.2 Other Definitional Provisions......................................................................26
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.......................................................................27
2.1 Commitments........................................................................................27
2.2 Procedure for Borrowing............................................................................27
2.3 Optional Term Loans................................................................................27
2.4 Repayment of Loans.................................................................................29
2.5 Repayment of Loans; Evidence of Debt...............................................................29
2.6 Commitment Fees, etc...............................................................................30
2.7 Termination or Reduction of Commitments............................................................30
2.8 Optional Prepayments...............................................................................30
2.9 Mandatory Prepayments..............................................................................31
2.10 Conversion and Continuation Options...............................................................32
2.11 Minimum Amounts and Maximum Number of Eurodollar Tranches.........................................32
2.12 Interest Rates and Payment Dates..................................................................33
2.13 Computation of Interest and Fees..................................................................33
2.14 Inability to Determine Interest Rate..............................................................34
2.15 Pro Rata Treatment and Payments...................................................................34
2.16 Requirements of Law...............................................................................36
2.17 Taxes.............................................................................................37
2.18 Indemnity.........................................................................................39
2.19 Illegality........................................................................................39
2.20 Change of Lending Office..........................................................................40
2.21 Replacement of Lenders under Certain Circumstances................................................40
SECTION 3. REPRESENTATIONS AND WARRANTIES........................................................................41
3.1 Financial Condition................................................................................41
3.2 No Change..........................................................................................41
3.3 Corporate Existence; Compliance with Law...........................................................41
3.4 Corporate Power; Authorization; Enforceable Obligations............................................42
3.5 No Legal Bar.......................................................................................42
3.6 No Material Litigation.............................................................................42
3.7 No Default.........................................................................................42
3.8 Ownership of Property; Liens.......................................................................42
3.9 Intellectual Property..............................................................................43
3.10 Taxes.............................................................................................43
3.11 Federal Regulations...............................................................................43
3.12 Labor Matters.....................................................................................43
3.13 ERISA.............................................................................................44
3.14 Investment Company Act; Other Regulations.........................................................44
3.15 Subsidiaries......................................................................................44
3.16 Use of Proceeds...................................................................................44
3.17 Environmental Matters.............................................................................44
3.18 Accuracy of Information, etc......................................................................46
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3.19 Security Documents................................................................................46
3.20 Solvency..........................................................................................47
3.21 Licenses; Permits; etc............................................................................47
3.22 FCC Compliance, etc...............................................................................47
SECTION 4. CONDITIONS PRECEDENT..................................................................................48
4.1 Conditions to Loans................................................................................48
SECTION 5. AFFIRMATIVE COVENANTS.................................................................................51
5.1 Financial Statements...............................................................................51
5.2 Certificates; Other Information....................................................................52
5.3 Payment of Obligations.............................................................................53
5.4 Conduct of Business and Maintenance of Existence, etc..............................................53
5.5 Maintenance of Property; Insurance.................................................................54
5.6 Inspection of Property; Books and Records; Discussions.............................................54
5.7 Notices............................................................................................54
5.8 Environmental Laws.................................................................................55
5.9 Additional Collateral, etc.........................................................................55
5.10 Further Assurances................................................................................57
5.11 Transfer of FCC Licenses..........................................................................57
5.12 Maintenance of a Ground Spare Satellite...........................................................57
5.13 Guarantees........................................................................................57
SECTION 6. NEGATIVE COVENANTS....................................................................................57
6.1 Financial Condition Covenants......................................................................58
6.2 Limitation on Indebtedness.........................................................................59
6.3 Limitation on Liens................................................................................60
6.4 Limitation on Fundamental Changes..................................................................62
6.5 Limitation on Disposition of Property..............................................................62
6.6 Limitation on Restricted Payments..................................................................63
6.7 Limitation on Investments..........................................................................63
6.8 Limitation on Optional Payments and Modifications of Debt Instruments, etc.........................64
6.9 Limitation on Transactions with Affiliates.........................................................65
6.10 Limitation on Sales and Leasebacks................................................................66
6.11 Limitation on Changes in Fiscal Periods...........................................................66
6.12 Limitation on Negative Pledge Clauses.............................................................66
6.13 Limitation on Restrictions on Subsidiary Distributions............................................66
6.14 Limitation on Lines of Business...................................................................67
6.15 Limitation on Amendments to Loral Agreement.......................................................67
6.16 Limitation on License Subsidiary..................................................................67
6.17 Limitation on Hedge Agreements....................................................................67
SECTION 7. EVENTS OF DEFAULT.....................................................................................67
SECTION 8. THE AGENTS............................................................................................70
8.1 Appointment........................................................................................70
8.2 Delegation of Duties...............................................................................71
8.3 Exculpatory Provisions.............................................................................71
8.4 Reliance by Agents.................................................................................71
8.5 Notice of Default..................................................................................72
8.6 Non-Reliance on Agents and Other Lenders...........................................................72
8.7 Indemnification....................................................................................72
8.8 Agent in Its Individual Capacity...................................................................73
8.9 Successor Administrative Agent.....................................................................73
8.10 Authorization to Release Liens and Guarantees.....................................................74
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8.11 The Arranger; the Syndication Agent...............................................................74
SECTION 9. MISCELLANEOUS.........................................................................................74
9.1 Amendments and Waivers.............................................................................74
9.2 Notices............................................................................................76
9.3 No Waiver; Cumulative Remedies.....................................................................77
9.4 Survival of Representations and Warranties.........................................................77
9.5 Payment of Expenses................................................................................77
9.6 Successors and Assigns; Participations and Assignments.............................................78
9.7 Adjustments; Set-off...............................................................................81
9.8 Counterparts.......................................................................................81
9.9 Severability.......................................................................................82
9.10 Integration.......................................................................................82
9.11 GOVERNING LAW.....................................................................................82
9.12 Submission To Jurisdiction; Waivers...............................................................82
9.13 Acknowledgments...................................................................................83
9.14 Confidentiality...................................................................................83
9.15 Release of Collateral and Guarantee Obligations...................................................84
9.16 Accounting Changes................................................................................84
9.17 Delivery of Lender Addenda.........................................................................85
9.18 Effectiveness......................................................................................85
9.19 WAIVERS OF JURY TRIAL.............................................................................85
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iii
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ANNEXES:
A Pricing Grid
SCHEDULES:
3.4 Consents, Authorizations, Filings and Notices
3.15 Subsidiaries
3.19(a)-1 UCC Filing Jurisdictions
3.19(a)-2 UCC Financing Statements to Remain on File
3.19(a)-3 UCC Financing Statements to be Terminated
3.21 Licenses
4.1(d) FCC Licenses
6.2(d) Existing Indebtedness
6.3(f) Existing Liens
EXHIBITS:
A Form of Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E-1 Form of Legal Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
E-2 Form of Legal Opinion of Patrick Donnelly, Esq.
E-3 Form of Legal Opinion of Wiley, Rein & Fielding
F Form of Note
G Form of Exemption Certificate
H Form of Lender Addendum
I Form of Borrowing Notice
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iv
<PAGE>
TERM LOAN AGREEMENT, dated as of June 1, 2000, among SIRIUS SATELLITE
RADIO INC., a Delaware corporation (the "Borrower"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the "Lenders"), LEHMAN BROTHERS INC., as advisor, lead arranger and book
manager (in such capacity, the "Arranger"), LEHMAN COMMERCIAL PAPER INC., as
syndication agent (in such capacity, the "Syndication Agent"), and LEHMAN
COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower wishes to establish a credit facility to provide
financing for its working capital needs, capital expenditures and general
corporate purposes; and
WHEREAS, the Lenders are willing to make such credit facility available
upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.
"Additional Senior Debt": with respect to the Borrower, any
Indebtedness (other than Subordinated Debt) incurred after May 4, 2000, provided
that:
(a) in the case of any incurrence of Additional Senior Debt
in an aggregate principal amount in excess of $5,000,000, the Borrower
shall have furnished to the Administrative Agent a certificate of a
Responsible Officer of the Borrower to the effect that immediately
before and immediately after giving effect to such incurrence, no
Default or Event of Default shall have occurred and be continuing;
(b) no more than $500,000,000 aggregate principal amount of
such Indebtedness shall be secured by any assets of any Loan Party;
(c) up to $75,000,000 aggregate principal amount of such
Indebtedness may provide for principal payments prior to the final
maturity date of the Loans, so long as such Indebtedness consists of
Capital Lease Obligations that have a Weighted Average Life that is
greater than the Weighted Average Life of the Loans;
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2
(d) except as set forth in clause (c) above, such
Indebtedness shall not provide for scheduled principal payments on or
prior to the final maturity date of the Loans;
(e) such Indebtedness (taking into account any interest rate
protection in respect thereof) shall not bear cash interest at a per
annum rate in excess of 14.5% per annum; and
(f) such Indebtedness shall not be issued or incurred in the
syndicated loan markets.
"Adjusted Pre-Sac Cash Flow": for any period, (a) Pre-Sac Cash Flow for
such period less (b) the product of (i) the number of Subscribers that canceled
their subscriptions or failed to renew their expiring subscriptions during such
period multiplied by (ii) the Subscription Acquisition Cost Per Subscriber for
such period.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 25% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent and the
Administrative Agent.
"Agreement": this Term Loan Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": for Base Rate Loans, 4.00%; and for Eurodollar
Loans, 5.00%; provided, that on and after the first Adjustment Date, the
foregoing margins will be determined pursuant to the Pricing Grid; provided,
further, that the margins set forth in this definition and in the Pricing Grid
shall be subject to increase as set forth in Section 6.1(c).
"Arranger": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d), (e) or (g) of Section 6.5) which yields gross proceeds to
the Borrower or any of its Subsidiaries (valued at the initial principal amount
thereof in the case of non-cash proceeds
<PAGE>
3
consisting of notes or other debt securities and valued at fair market value in
the case of other non-cash proceeds) in excess of $2,000,000.
"Assignee": as defined in Section 9.6(c).
"Assignor": as defined in Section 9.6(c).
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Reference Lender as its prime or base rate in
effect at its principal office in New York City (the Prime Rate not being
intended to be the lowest rate of interest charged by the Reference Lender in
connection with extensions of credit to debtors); "Base CD Rate" shall mean the
sum of (a) the product of (i) the Three-Month Secondary CD Rate and (ii) a
fraction, the numerator of which is one and the denominator of which is one
minus the C/D Reserve Percentage and (b) the C/D Assessment Rate; and
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Reference Lender from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it. Any change
in the Base Rate due to a change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of interest is
based upon the Base Rate.
"Benefitted Lender": as defined in Section 9.7(a).
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble hereto.
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4
"Borrowing Date": any Business Day specified by the Borrower as the
date on which the Borrower requests the Lenders to make Loans hereunder.
"Borrowing Notice": with respect to any request for borrowing of Loans
hereunder, a notice from the Borrower, substantially in the form of, and
containing the information prescribed by, Exhibit I, delivered to the
Administrative Agent.
"Business Day": (a) for all purposes other than as covered by clause
(b) below, a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close and (b) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (a) and which is also a day for trading by and between banks
in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person for the acquisition or leasing
(pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period, and including FCC Licenses and other Satellite Radio Assets to the
extent that the acquisition of such FCC Licenses or other Satellite Radio Assets
permits the Borrower or any of its Subsidiaries to avoid purchasing fixed or
capital assets that would otherwise be required, but excluding any expenditures
made with common stock or PIK Preferred Stock (other than Disqualified Stock) of
the Borrower in connection with any Permitted Acquisition) which are required to
be capitalized under GAAP on a balance sheet of such Person. Capital
Expenditures shall be deemed to include any amount expended (other than common
stock or PIK Preferred Stock (other than Disqualified Stock) of the Borrower
issued in connection with a Permitted Acquisition) for the acquisition of any
Person that holds fixed or capital assets (including FCC Licenses and other
Satellite Radio Assets, subject to the limitations described above) to the
extent that the purchase of such assets directly by the Borrower or any
Subsidiary would constitute a Capital Expenditure.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
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5
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services ("S&P") or P-2
by Moody's Investors Service, Inc. ("Moody's"), or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; and (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"C/D Assessment Rate": for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
maintained by the Federal Deposit Insurance Corporation (the "FDIC") classified
as well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12 C.F.R. 'SS'
327.4 (or any successor provision) to the FDIC (or any successor) for the FDIC's
(or such successor's) insuring time deposits at offices of such institution in
the United States.
"C/D Reserve Percentage": for any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board, for
determining the maximum reserve requirement for a Depositary Institution (as
defined in Regulation D of the Board as in effect from time to time) in respect
of new non-personal time deposits in Dollars having a maturity of 30 days or
more.
"Change of Control": the occurrence of any of the following events: (a)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), excluding
the Permitted Investors, shall become, or obtain rights (whether by means of
warrants,
<PAGE>
6
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 35% of the outstanding common stock of the Borrower; (b) 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 of 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 Borrower; (c) the board of directors of the
Borrower shall cease to consist of a majority of Continuing Directors; (d) the
Borrower shall cease to own and control, of record and beneficially, directly,
100% of each class of outstanding Capital Stock of the License Subsidiary free
and clear of all Liens (except Liens created by the Pledge Agreement); or (e) a
Specified Change of Control.
"Closing Date": the date on which the conditions precedent set forth in
Section 4.1 shall have been satisfied, which date shall be not later than the
last day of the Commitment Period.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"Collateral Agent": The Bank of New York, in its capacity as collateral
agent under the Intercreditor Agreement, and any successor in such capacity.
"Collateral Agreement": the Collateral Agreement to be executed and
delivered by the Borrower, substantially in the form of Exhibit A, as the same
may be amended, supplemented or otherwise modified from time to time.
"Commitment": as to any Lender, the sum of the Tranche A Term Loan
Commitment and the Optional Term Loan Commitment of such Lender.
"Commitment Fee Rate": (a) 0.50% per annum for the period from October
15, 2000 through December 31, 2000, (b) 1.00% per annum for the period from
January 1, 2001 through March 31, 2001 and (c) 1.25% per annum for the period
from April 1, 2001 through May 31, 2001.
"Commitment Period": the period commencing on the date hereof and
ending on November 30, 2000 (the "Initial Commitment Termination Date"),
provided that (a) the Borrower may, at its option, elect, in a notice given as
herein provided to the Administrative Agent during the 30-day period commencing
on October 1, 2000, to extend the availability of the Commitments and the end of
such period to May 31, 2001 (such date, if so elected, the "Extended Commitment
Termination Date") and (b) the Initial Commitment Termination Date or the
Extended Commitment Termination Date, as the case may be, will, at the request
of the Borrower, in a notice given as herein
<PAGE>
7
provided to the Administrative Agent during the 15-day period commencing on the
date that is 30 days prior to the Initial Commitment Termination Date or the
Extended Commitment Termination Date, as the case may be, be extended for up to
45 days if, prior to the Initial Commitment Termination Date or the Extended
Commitment Termination Date, as the case may be, the Borrower has successfully
launched two satellites but has not completed the Technology Testing.
"Commonly Controlled Entity": an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"Communications Act": the Communications Act of 1934, and any similar
or successor federal statute, and the rules and regulations of the FCC
thereunder, all as amended and as the same may be in effect from time to time.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer, substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
Memorandum to be furnished to the initial Lenders in connection with the
syndication of the Tranche A Term Loan Facility.
"Consolidated Current Assets": of any Person at any date, all amounts
(other than cash and Cash Equivalents) that would, in conformity with GAAP, be
set forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of such Person and its Subsidiaries at such date.
"Consolidated Current Liabilities": of any Person at any date, all
amounts that would, in conformity with GAAP, be set forth opposite the caption
"total current liabilities" (or any like caption) on a consolidated balance
sheet of such Person and its Subsidiaries at such date, but excluding, with
respect to the Borrower, the current portion of any Funded Debt of the Borrower
and its Subsidiaries.
"Consolidated EBITDA": of any Person for any period, Consolidated Net
Income of such Person and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b)
Consolidated Interest Expense, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness of such Person and its Subsidiaries, (c)
depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any
extraordinary, unusual or non-recurring expenses or losses (including, whether
or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets outside of
the ordinary course of business) and (f) any other non-cash charges, and minus,
to the extent included in the
<PAGE>
8
statement of such Consolidated Net Income for such period, the sum of (a)
interest income (except to the extent deducted in determining Consolidated
Interest Expense), (b) any extraordinary, unusual or non-recurring income or
gains (including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the sales of
assets outside of the ordinary course of business) and (c) any other non-cash
income, all as determined on a consolidated basis; provided that for purposes of
calculating Consolidated EBITDA of the Borrower and its Subsidiaries for any
period, (i) the Consolidated EBITDA of any Person acquired by the Borrower or
its Subsidiaries during such period shall be included on a pro forma basis for
such period (assuming the consummation of such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the first day
of such period) if the consolidated balance sheet of such acquired Person and
its consolidated Subsidiaries as at the end of the period preceding the
acquisition of such Person and the related consolidated statements of income and
stockholders' equity and of cash flows for the period in respect of which
Consolidated EBITDA is to be calculated (A) have been previously provided to the
Administrative Agent (with copies for each Lender) and (B) either (1) have been
reported on without a qualification arising out of the scope of the audit by
independent certified public accountants of nationally recognized standing or
(2) have been found acceptable by the Administrative Agent and (ii) the
Consolidated EBITDA of any Person Disposed of by the Borrower or its
Subsidiaries during such period shall be excluded for such period (assuming the
consummation of such Disposition and the repayment of any Indebtedness in
connection therewith occurred on the first day of such period).
"Consolidated Interest Expense": of any Person for any period, total
interest expense (including that attributable to Capital Lease Obligations) of
such Person and its Subsidiaries for such period with respect to all outstanding
Indebtedness of such Person and its Subsidiaries (including, without limitation,
all commissions, discounts and other fees and charges owed by such Person with
respect to letters of credit and bankers' acceptance financing and net costs of
such Person under Hedge Agreements in respect of interest rates to the extent
such net costs are allocable to such period in accordance with GAAP).
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any period, there shall be excluded (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Subsidiary of the Borrower
or is merged into or consolidated with the Borrower or any of its Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary of the
Borrower) in which the Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar distributions
and (c) the undistributed earnings of any Subsidiary of the Borrower to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at
<PAGE>
9
the time permitted by the terms of any Contractual Obligation (other than under
any Loan Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Working Capital": at any date, the difference of (a)
Consolidated Current Assets of the Borrower on such date less (b) Consolidated
Current Liabilities of the Borrower on such date.
"Continuing Directors": the directors of the Borrower on the Closing
Date, after giving effect to the transactions contemplated hereby, and each
other director of the Borrower, if, in each case, such other director's
nomination for election to the board of directors of the Borrower is recommended
by at least 662/3% of the then Continuing Directors in his or her election by
the shareholders of the Borrower.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Investment Affiliate": as to any Person, any other Person that
(a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.
For purposes of this definition, "control" of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
"Default": any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied (including, in any event, a "Default" under and as defined in any
Indenture and any Subordinated Debt Document).
"Derivatives Counterparty": as defined in Section 6.6.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Disqualified Stock": means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is one year after the final
maturity date of the Loans, except to the extent that such Capital Stock is
solely redeemable with, or solely exchangeable for, any Capital Stock of such
Person that is not Disqualified Stock.
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10
"Dollars" and "$": lawful currency of the United States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States of America.
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, binding guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, applicable judicial
decisions applying principles of common law) of any international authority,
foreign government, the United States, or any state, local, municipal or other
governmental authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human
health, or employee health and safety, as has been, is now, or may at any time
hereafter be, in effect.
"Environmental Permits": any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations required under
any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day, the aggregate
(without duplication) of the maximum rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period, the rate per annum determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the first day
of such Interest Period appearing on Page 3750 of the Telerate screen as of
11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.
"Eurodollar Loans": Loans for which the applicable rate of interest is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
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11
Eurodollar Base Rate
---------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date.
"Event of Default": any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
difference, if any, of (a the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) the amount of the decrease, if any, in Consolidated Working
Capital for such fiscal year, (iv) the aggregate net amount of non-cash loss on
the Disposition of Property by the Borrower and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of business),
to the extent deducted in arriving at such Consolidated Net Income and (v) the
net increase during such fiscal year (if any) in deferred tax accounts of the
Borrower minus (b) the sum, without duplication, of (i) the amount of all
non-cash credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount actually paid by the Borrower and its Subsidiaries in cash
during such fiscal year on account of Capital Expenditures (minus the principal
amount of Indebtedness incurred in connection with such expenditures and minus
the amount of any such expenditures financed with the proceeds of any
Reinvestment Deferred Amount), (iii) all optional prepayments of the Loans
during such fiscal year, (iv) the aggregate amount of all regularly scheduled
principal payments of Funded Debt (including, without limitation, the Loans) of
the Borrower and its Subsidiaries made during such fiscal year (other than in
respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (v) the amount of the
increase, if any, in Consolidated Working Capital for such fiscal year, (vi) the
aggregate net amount of non-cash gain on the Disposition of Property by the
Borrower and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income, and (vii) the net decrease during such
fiscal year (if any) in deferred tax accounts of the Borrower.
"Excess Cash Flow Application Date": as defined in Section 2.9(c).
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in respect of
which either (a) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would,
in the good faith judgment of the Borrower, result in adverse tax consequences
to the Borrower.
"Facility": each of (a) the Tranche A Term Loan Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Loan Facility") and
(b) the
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12
Optional Term Loan Commitments, if any, and the Optional Term Loans made
thereunder (the "Optional Term Loan Facility").
"FCC": the Federal Communications Commission (or any successors thereto
or an analogous Governmental Authority).
"FCC Licenses": Licenses issued by the FCC permitting the transmission
of satellite radio communications and activities related thereto, including,
without limitation, the placement of satellites in orbit, the operation of an
uplink facility and the construction and operation of terrestrial repeating
transmitters.
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Fourth Satellite": the collective reference to the fourth FS-1300
spacecraft to be delivered to the Borrower under the Loral Agreement and any
replacement satellite thereof.
"FQ1", "FQ2 ", "FQ3", and "FQ4": when used with a numerical year
designation, means the first, second, third or fourth fiscal quarter,
respectively, of such fiscal year of the Borrower (e.g., FQ1 2003 means the
first fiscal quarter of the Borrower's 2003 fiscal year, which quarter ends
March 31, 2003).
"Funded Debt": with respect to any Person, all Indebtedness of such
Person of the types described in clauses (a) through (e) of the definition of
"Indebtedness" in this Section.
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"FYE 2002": the four consecutive fiscal quarters of the Borrower's 2002
fiscal year ending December 31, 2002.
"GAAP": generally accepted accounting principles in the United States
of America as in effect from time to time.
<PAGE>
13
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee": as defined in Section 5.13.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit), if to induce the
creation of such obligation of such other Person the guaranteeing person has
issued a reimbursement, counter indemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any Property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
Property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Hedge Agreements": all interest rate or currency swaps, caps or collar
agreements, foreign exchange agreements, commodity contracts or similar
arrangements entered into by the Borrower or its Subsidiaries providing for
protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than trade
payables incurred in the ordinary course of such Person's business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all
<PAGE>
14
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to Property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such Property), (e)
all Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under
acceptance, letter of credit or similar facilities, (g) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock of such Person (other than by the issuance
of additional Capital Stock), (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above;
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on Property (including,
without limitation, accounts and contract rights) owned by such Person, whether
or not such Person has assumed or become liable for the payment of such
obligation, (j) for the purposes of Section 7(e) only, all obligations of such
Person in respect of Hedge Agreements and (k) the liquidation value of any
preferred Capital Stock of such Person or its Subsidiaries that (i) is
mandatorily redeemable on any date prior to the date which one year after the
final maturity date of the Loans and (ii) is held by any Person other than the
issuer thereof and its Wholly Owned Subsidiaries.
"Indemnified Liabilities": as defined in Section 9.5.
"Indemnitee": as defined in Section 9.5.
"Indentures": the collective reference to the Senior Discount Note
Indenture, the Senior Note Indenture and any other indenture from time to time
in effect governing Indebtedness of the Borrower.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Intercreditor Agreement": an amended and restated intercreditor
agreement among the trustee for the Senior Discount Notes, the trustee for the
Senior Notes, the Administrative Agent and the Collateral Agent, substantially
similar to the existing intercreditor agreement, dated as of May 15, 1999, and
otherwise in form and
<PAGE>
15
substance reasonably satisfactory to the Administrative Agent, and to which
other creditors of the Borrower may become parties as contemplated by such
intercreditor agreement and by Section 6.2(f) of this Agreement, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or shorter, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day that is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest Period
and (d) as to any Loan, the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless 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 immediately preceding
Business Day;
(ii) any Interest Period that would otherwise extend beyond
the Maturity Date shall end on the Maturity Date; and
(iii) any Interest Period 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.
"Investments": as defined in Section 6.7.
"Lehman Entity": any of Lehman Commercial Paper Inc. or any of its
affiliates (including Syndicated Loan Funding Trust).
16
<PAGE>
"Lender Addendum": with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit H, to be executed and delivered
by such Lender on the Closing Date as provided in Section 9.17.
"Lenders": as defined in the preamble hereto.
"Licenses": as defined in Section 3.21.
"License Subsidiary": the collective reference to (a) Satellite CD
Radio, Inc., a Delaware corporation, and (b) any other direct or indirect
Subsidiary of the Borrower (i) that holds FCC Licenses and engages in no other
business and (ii) all of the Capital Stock of which is pledged to the Collateral
Agent, for the benefit of the Secured Parties, pursuant to the Pledge Agreement.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan": any Tranche A Term Loan or Optional Term Loan made by any
Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Intercreditor Agreement, the Syndication Letter Agreement, any Guarantees and
the Notes.
"Loan Parties": the Borrower and each Subsidiary of the Borrower that
is a party to a Loan Document.
"Loan Percentage": as to any Lender at any time, the percentage which
such Lender's Commitments then constitutes of the aggregate Commitments (or, at
any time after the Closing Date, the percentage which the aggregate principal
amount of such Lender's Loans then outstanding constitutes of the aggregate
principal amount of the Loans then outstanding).
"Loral Agreement": the collective reference to (a) the Amended and
Restated Contract, dated as of June 30, 1998, between the Borrower (formerly
known as CD Radio Inc.) and Space Systems/Loral, Inc. and (b) any other
agreement with respect to the construction and delivery of a Fourth Satellite,
in each case as the same may be amended, supplemented or otherwise modified from
time to time in accordance with Section 6.15.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or prospects of
the Borrower and its
<PAGE>
17
Subsidiaries taken as a whole, provided that, for purposes of this clause (a),
neither of the following shall constitute a Material Adverse Effect: (i) an
increase in the cost of installing terrestrial repeating transmitters or (ii)
the failure of one of the Borrower's satellites so long as the Fourth Satellite
is, at the time of such failure, complete or under contract to be constructed,
or (b) the validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Agents, the Collateral Agent or the
Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"Maturity Date": the earlier of (a) the fifth anniversary of the
Closing Date and (b) December 31, 2005.
"Moody's": as defined in the definition of "Cash Equivalents" in this
Section 1.1.
"Mortgages": each of the mortgages and deeds of trust, if any, made by
any Loan Party in favor of, or for the benefit of, the Collateral Agent, in a
form reasonably satisfactory to the Administrative Agent.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset which is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
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18
"Non-Excluded Taxes": as defined in Section 2.17(a).
"Non-U.S. Lender": as defined in Section 2.17(d).
"Note": any promissory note evidencing any Loan.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender (or, in
the case of Specified Hedge Agreements, any affiliate of any Lender), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, any Specified Hedge Agreement or
any other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees, charges
and disbursements of counsel to the Administrative Agent or to any Lender that
are required to be paid by the Borrower pursuant hereto) or otherwise; provided,
that (i) obligations of the Borrower or any Subsidiary under any Specified Hedge
Agreement shall be secured and guaranteed pursuant to the Security Documents
only to the extent that, and for so long as, the other Obligations are so
secured and guaranteed and (ii) any release of Collateral or guarantors effected
in the manner permitted by this Agreement shall not require the consent of
holders of obligations under Specified Hedge Agreements.
"Optional Term Loan": as defined in Section 2.3(a).
"Optional Term Loan Amendment": an amendment to this Agreement, in form
and substance acceptable to the Borrower, the Administrative Agent and the
Optional Term Loan Lenders parties thereto, executed and delivered pursuant to
Section 2.3 to establish an Optional Term Loan Tranche.
"Optional Term Loan Commitment": as to any Optional Term Loan Lender,
the obligation of such Lender, if any, to make an Optional Term Loan to the
Borrower hereunder in a principal amount not to exceed the amount set forth in
the Optional Term Loan Amendment related thereto.
"Optional Term Loan Lender": each Lender which has an Optional Term
Loan Commitment or which is the holder of an Optional Term Loan.
"Optional Term Loan Request": as defined in Section 2.3(a).
"Optional Term Loan Tranche": as defined in Section 2.3(a).
<PAGE>
19
"Other Taxes": any and all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 9.6(b).
"Payment Office": the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": any acquisition made by the Borrower so long
as, with respect to any such acquisition, the following conditions are
satisfied:
(a) no Default or Event of Default shall have occurred and be
continuing or would result from such acquisition;
(b) the consideration for such acquisition shall consist solely
of (i) the common stock or PIK Preferred Stock (other than Disqualified
Stock) of the Borrower and (ii) cash in amount not to exceed the lesser
of (A) 10% of the purchase price for such acquisition and (B)
$5,000,000, provided that, in any event, the cash consideration paid
for all acquisitions in any fiscal year of the Borrower shall not
exceed $5,000,000;
(c) neither the Borrower nor any of its Subsidiaries shall assume
or otherwise become liable for any Indebtedness in connection with such
acquisition, other than Indebtedness of any Person outstanding on the
date on which such Person becomes a Subsidiary or its assets are
acquired by the Borrower, provided that (i) such Indebtedness was not
created in connection with, or in anticipation of, such acquisition and
(ii) such Indebtedness is otherwise permitted by Section 6.2;
(d) in the event that the aggregate fair market value of the
consideration payable in respect of any acquisition exceeds $50,000,000
on the date such acquisition is agreed to, the Borrower shall, prior to
the public announcement of such acquisition, (i) furnish to the
Administrative Agent evidence reasonably satisfactory to the
Administrative Agent that such acquisition would not result in the
rating otherwise in effect with respect to any of the Borrower's
outstanding rated Indebtedness being withdrawn, downgraded, placed
under review with negative implications or on watch for possible
downgrade by S&P or Moody's and (ii) if requested by the Administrative
Agent and reasonably obtainable by the Borrower, furnish to the
Administrative Agent an opinion of an independent investment bank of
national standing reasonably satisfactory to the Administrative Agent
to the effect that such acquisition would not, taken as a
<PAGE>
20
whole, have material negative implications with respect to the
Commitments or Indebtedness hereunder; and
(e) the aggregate consideration payable for all such
acquisitions, measured as of the date each such acquisition is agreed
to, shall not exceed $750,000,000, provided that the aggregate
consideration payable for all such acquisitions may be increased from
$750,000,000 to (i) $1,000,000,000 if the average closing price of a
share of the Borrower's common stock (as reported in the Wall Street
Journal or such other source as is reasonably acceptable to the
Borrower and the Administrative Agent and as adjusted for stock splits,
stock dividends, reverse stock splits and similar events) on the 20
successive trading days immediately preceding a public announcement of
such acquisition (the "Average Closing Price") is greater than $50 and
less than or equal to $75, (ii) $1,500,000,000 if the Average Closing
Price is greater than $75 and less than or equal to $100 and (iii)
$2,000,000,000 if the Average Closing Price is greater than $100.
"Permitted Investors": the collective reference to Apollo Investment
Fund IV, L.P., Blackstone Management Associates III L.L.C., their respective
Affiliates on the date hereof or any successor to such Persons as the holders of
the Borrower's 9.2% Series A Junior Cumulative Convertible Preferred Stock, 9.2%
Series B Junior Cumulative Convertible Preferred Stock and/or 9.2% Series D
Junior Cumulative Convertible Preferred Stock.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"PIK Preferred Stock": preferred stock of the Borrower issued after the
date hereof, provided that (a) dividends on such preferred stock shall only be
payable in additional shares of such preferred stock, (b) immediately before and
immediately after giving effect to such issuance, no Default or Event of Default
shall have occurred and be continuing and (c) substantially final drafts of the
documentation governing any such preferred stock, showing the terms thereof,
shall have been furnished to the Administrative Agent at least ten Business Days
prior to the date of issuance of such preferred stock.
"Plan": at a particular time, any employee benefit plan that is covered
by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement": a second amended and restated pledge agreement
among the Borrower, the trustee for the Senior Discount Notes, the trustee for
the Senior Notes, the Administrative Agent and the Collateral Agent,
substantially similar to the existing amended and restated pledge agreement,
dated as of May 15, 1999, and
<PAGE>
21
otherwise in form and substance reasonably satisfactory to the Administrative
Agent, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
"Pre-Sac Cash Flow": for any period, the sum of (a) Consolidated EBITDA
for such period plus, without duplication and to the extent deducted in
determining Consolidated EBITDA, (b) marketing expenses, corporate overhead and
non-cash operating expenses for such period.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Projections": as defined in Section 5.2(c).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of the Borrower or any of its Subsidiaries.
"Reference Lender": Deutsche Bank, New York Office.
"Refinancing Indebtedness": as defined in Section 6.8(a).
"Register": as defined in Section 9.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reinvestment Deferred Amount": with respect to any Reinvestment Event,
the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith that are not applied to prepay the Loans or
reduce the Commitments pursuant to Section 2.9(b) as a result of the delivery of
a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Default or Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale or Recovery Event to acquire assets useful in its business.
<PAGE>
22
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire assets
useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment Event,
the earlier of (a) the date occurring nine months after such Reinvestment Event
and (b) the date on which the Borrower shall have determined not to, or shall
have otherwise ceased to, acquire assets useful in the Borrower's business with
all or any portion of the relevant Reinvestment Deferred Amount, provided that
with respect to any Reinvestment Event arising from the failure of a satellite
or a launch vehicle, the date referred to in clause (a) shall be extended so
long as, during such extension, there is in effect an executed contract for the
construction of a replacement satellite or launch vehicle, as applicable, and
the parties thereto are diligently pursuing such construction.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. 'SS' 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments and (b) thereafter, the aggregate unpaid
principal amount of the Loans then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"Responsible Officer": the chief executive officer, president,
treasurer, senior vice president and general counsel or chief financial officer
of the Borrower, but in any event, with respect to financial matters, the chief
financial officer or treasurer of the Borrower.
"Restricted Payments": as defined in Section 6.6.
"Satellite Radio Assets": all assets, rights (contractual or otherwise)
and properties, whether tangible or intangible, used or useful in connection
with the business of building, launching and operating a satellite radio
broadcast system and activities (including marketing activities) incidental or
ancillary thereto.
"S&P": as defined in the definition of "Cash Equivalents" in this
Section 1.1.
<PAGE>
23
"SEC": the Securities and Exchange Commission (or successors thereto or
an analogous Governmental Authority).
"Security Documents": the collective reference to the Pledge Agreement,
the Collateral Agreement, any Mortgage and all other security documents
hereafter delivered to the Collateral Agent granting a Lien on any Property of
any Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.
"Secured Parties": as defined in the Collateral Agreement.
"Senior Discount Note Indenture": the Indenture, dated as of November
26, 1997, between the Borrower (formerly known as CD Radio Inc.) and The Bank of
New York (as successor to IBJ Whitehall Bank and Trust Company), as Trustee,
together with all instruments and other agreements entered into by the Borrower
in connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 6.8.
"Senior Discount Notes": the Borrower's 15% Senior Secured Discount
Notes due 2007 in an aggregate principal amount at maturity equal to
$296,930,000 issued pursuant to the Senior Discount Note Indenture.
"Senior Note Indenture": the Indenture, dated as of May 15, 1999,
between the Borrower (formerly known as CD Radio Inc.) and United States Trust
Company of New York, as Trustee, together with all instruments and other
agreements entered into by the Borrower in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with Section 6.8.
"Senior Notes": up to $200,000,000 in aggregate principal amount of the
Borrower's 14-1/2% Senior Secured Notes due 2009 issued pursuant to the Senior
Note Indenture.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Solvent": with respect to any Person, as of any date of determination,
(a) the amount of the "present fair saleable value" of the assets of such Person
will, as of such date, exceed the amount of all "liabilities of such Person,
contingent or otherwise", as of such date, as such quoted terms are determined
in accordance with applicable federal and state laws governing determinations of
the insolvency of debtors, (b) the present fair saleable value of the assets of
such Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts become
absolute and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and (d)
such Person will be able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim" means any
(x) right to
<PAGE>
24
payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control", or like event, as
defined in any Indenture, Subordinated Debt Document or any other document
evidencing or governing Indebtedness permitted by Section 6.2(f) or (g).
"Specified Hedge Agreement": any Hedge Agreement entered into by (a)
the Borrower or any of its Subsidiaries and (b) any Lender or any affiliate
thereof, as counterparty.
"Subordinated Debt": with respect to the Borrower, any Indebtedness
incurred after May 4, 2000, provided that:
(a) in the case of any incurrence of Subordinated Debt in an
aggregate principal amount in excess of $5,000,000, the Borrower shall
have furnished to the Administrative Agent a certificate of a
Responsible Officer of the Borrower to the effect that immediately
before and immediately after giving effect to such incurrence, no
Default or Event of Default shall have occurred and be continuing;
(b) such Indebtedness shall have no scheduled principal payments
prior to the date that is one year after the final maturity of the
Loans;
(c) such Indebtedness shall not be secured by any assets of any
Loan Party;
(d) such Indebtedness (taking into account any interest rate
protection in respect thereof) shall not bear cash interest at a per
annum rate in excess of 14.5% per annum;
(e) no covenant or default contained in the Subordinated Debt
Documents governing or evidencing such Indebtedness shall be more
restrictive than those contained in this Agreement;
(f) the Obligations constitute "Senior Indebtedness" (or any
comparable concept) under and as defined in the Subordinated Debt
Documents; and
(g) the Subordinated Debt Documents governing or evidencing such
Indebtedness shall contain subordination terms that, in the reasonable
determination of the Administrative Agent, are no less favorable to the
Lenders than those customarily applicable, at the time of issuance of
such Indebtedness, to offerings of comparable subordinated debt.
<PAGE>
25
"Subordinated Debt Documents": all indentures, instruments, agreements
and other documents governing or evidencing Subordinated Debt.
"Subscriber Acquisition Cost Per Subscriber": for any period, a
fraction the numerator of which is the Subscriber Acquisition Costs for such
period and the denominator of which is the number of Subscribers as at the last
day of such period.
"Subscriber Acquisition Costs": for any period, those marketing and
selling expenses and capitalized costs incurred in the generation of Subscribers
during such period, including, but not limited to, sales commissions,
advertising and promotional expenses, rebates on equipment and other equipment
subsidies.
"Subscribers": subscribers for the satellite radio services provided by
the Borrower and its Subsidiaries (a) from whom the Borrower has received at
least one payment for radio service (including, for purposes of this definition,
payments for radio service received from automotive manufacturers), (b) whose
account balance is not more than 60 days past due, measured from the invoice due
date thereof, without giving effect to any extensions thereof, and (c) who have
not canceled their subscription or failed to renew their expiring subscription.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Syndication Letter Agreement": the letter agreement, dated as of June
1, 2000, among the Borrower, the Administrative Agent, the Syndication Agent and
the Arranger relating to the syndication of the Tranche A Term Loan Facility.
"Technology Testing": a test of the Borrower's satellite audio service
using broadcasts from two satellites and, to the extent available, terrestrial
repeaters, in both urban/suburban and rural environments, which achieves overall
system performance that meets or exceeds the specifications agreed to by the
Borrower and its satellite, system design, automotive and receiver manufacturing
technology partners, as certified by a Responsible Officer of the Borrower and
accepted by the Administrative Agent (which acceptance shall not be unreasonably
withheld, conditioned or delayed). The specifications will require, among other
things, that the Borrower's signal achieve at least FM-quality music and provide
for aggregate signal availability appropriate for a consumer electronics
product. In addition, the Borrower's service shall provide at a minimum an FM
Quality Signal for its music channels in a variety of urban, suburban
<PAGE>
26
and rural areas notwithstanding weather and foliage conditions. For purposes of
this definition, the term "FM Quality Signal" shall mean a signal which is
capable of providing sound quality typical of that experienced in automobiles
using a typical consumer-oriented receiver tuned to the most popular radio
stations in the top 50 radio markets.
"Tranche A Term Loan Commitment": as to any Tranche A Term Loan Lender,
the obligation of such Lender to make a Tranche A Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth under the
heading "Tranche A Term Loan Commitment" opposite such Lender's name on Schedule
1 to the Lender Addendum delivered by such Lender, or, as the case may be, in
the Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original aggregate amount of the Tranche A Term Loan Commitments is
$150,000,000.
"Tranche A Term Loan Lender": each Lender which has a Tranche A Term
Loan Commitment or is the holder a Tranche A Term Loan.
"Tranche A Term Loans": as defined in Section 2.1.
"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"Weighted Average Life": when applied to any committed revolving credit
facility or any Indebtedness, at any date, the number of years obtained by
dividing (a) the sum of the products obtained by multiplying (i) the amount of
each then remaining scheduled commitment reduction or, as the case may be,
installment, sinking fund or other scheduled payment of principal, including
payment at final maturity, in respect thereof, by (ii) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such reduction or payment, by (b) the aggregate maximum commitment
to lend then in effect under such committed revolving credit facility or, in
cases other than committed revolving credit facilities, the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate
or other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Borrower and its Subsidiaries not defined in Section 1.1 and
accounting terms partly
<PAGE>
27
defined in Section 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. Subject to the terms and conditions hereof, the
Tranche A Term Loan Lenders severally agree to make term loans ("Tranche A Term
Loans") to the Borrower on the Closing Date in a principal amount for each
Tranche A Term Loan Lender not to exceed the amount of such Lender's Tranche A
Term Loan Commitment. The Tranche A Term Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.2 and 2.10.
2.2 Procedure for Borrowing. The Borrower shall deliver to the
Administrative Agent a Borrowing Notice (which Borrowing Notice must be received
by the Administrative Agent prior to 10:00 A.M., New York City time, one
Business Day prior to the anticipated Closing Date) requesting that the Lenders
make the Loans on the Closing Date. The Loans shall initially be Base Rate
Loans. Upon receipt of such Borrowing Notice the Administrative Agent shall
promptly notify each Lender thereof. Not later than 12:00 Noon, New York City
time, on the Closing Date each Lender shall make available to the Administrative
Agent at the Funding Office an amount in immediately available funds equal to
the Loans to be made by such Lender. The Administrative Agent shall make
available to the Borrower, not later than 2:00 P.M., New York City time, on the
Closing Date, the aggregate of the amounts made available to the Administrative
Agent by the Lenders, in like funds as received by the Administrative Agent.
2.3 Optional Term Loans. (a) Subject to the terms and conditions
hereof, the Borrower may, with the consent of the Required Lenders, at any time
and from time to time prior to Closing Date, establish one or more additional
term loan tranches (each, an "Optional Term Loan Tranche") pursuant to which
term loans ("Optional Term Loans") may be made on the Closing Date; provided,
however, that, unless otherwise consented to by the Administrative Agent, the
aggregate Commitments of all Lehman Entities shall not, after giving effect to
each such Optional Term Loan Tranche, exceed $25,000,000. Each Optional Term
Loan Tranche shall be in a principal amount of at least $5,000,000, and all
Optional Term Loan Tranches shall not exceed $50,000,000 in the aggregate. The
Borrower shall request the establishment of an Optional Term Loan
<PAGE>
28
Tranche by delivery to the Administrative Agent of a written request therefor
(an "Optional Term Loan Request") which shall be promptly distributed by the
Administrative Agent to the Lenders. Each Optional Term Loan Request shall (i)
set forth the aggregate principal amount of the requested Optional Term Loan
Tranche and (ii) be accompanied by such information as the Administrative Agent
shall reasonably request for use in syndication of the requested Optional Term
Loans. All Optional Term Loans shall have the same terms and conditions as are
applicable to Tranche A Term Loans hereunder, including, without limitation, the
amortization schedule, the Maturity Date, the Applicable Margin, the Commitment
Fee Rate, the procedures for borrowing and the borrowing conditions; provided,
however, that the Administrative Agent or the Optional Term Loan Lenders may
require, in connection with any Optional Term Loan Amendment relating to any
Optional Term Loan Tranche, that the Borrower or any of its Subsidiaries provide
additional collateral security for the Loans.
(b) The Borrower may offer to any existing Lender, or to one or more
additional banks, financial institutions or other entities reasonably acceptable
to the Administrative Agent, the opportunity to participate in all or a portion
of an Optional Term Loan Tranche.
(c) The effectiveness of any Optional Term Loan Tranche shall be
contingent upon (i) execution and delivery by the Administrative Agent and the
Borrower of an Optional Term Loan Amendment relating to such Optional Term Loan
Tranche, (ii) execution and delivery by each Lender providing Optional Term Loan
Commitments under such Optional Term Loan Tranche of a Lender Addendum, with
such changes thereto as are necessary to reflect that such Lender Addendum
relates to the Optional Term Loan Amendment rather than this Agreement, pursuant
to which each such Lender becomes a party to the Optional Term Loan Amendment
relating to such Optional Term Loan Tranche, (iii) execution and delivery by the
Borrower (and, if applicable, any of its Subsidiaries) of such amendments to the
Security Documents or such other documents as the Administrative Agent
reasonably deems necessary or desirable to grant to the Collateral Agent, for
the benefit of the Secured Parties, a perfected security interest in any
Property of the Borrower or any of its Subsidiaries in which a security interest
is required to be granted in accordance with the Optional Term Loan Amendment
executed for such Tranche and (iv) receipt by the Administrative Agent of such
corporate resolutions and officer's certificates of the Borrower and legal
opinions of counsel to the Borrower as the Administrative Agent shall reasonably
request with respect thereto, in each case, in form and substance reasonably
satisfactory to the Administrative Agent. In the case of any Lender Addendum
with respect to an Optional Term Loan Amendment executed by any Person that was
not theretofore a Lender, upon the effectiveness of such Optional Term Loan
Amendment such Person shall be a party hereto and a Lender hereunder. The
Borrower and the Administrative Agent agree to negotiate in good faith any
Optional Term Loan Amendment relating to any Optional Term Loan Tranche.
(d) No Lender shall have any obligation to participate in any Optional
Term Loan Tranche unless it agrees to do so in its sole discretion.
<PAGE>
29
2.4 Repayment of Loans. The Loans of each Lender shall mature in
consecutive quarterly installments, commencing on March 31, 2003, each of which
shall be in an amount equal to such Lender's Loan Percentage multiplied by the
percentage set forth below opposite such installment of the aggregate principal
amount of Loans made on the Closing Date:
<TABLE>
<CAPTION>
Installment Percentage
----------- ----------
<S> <C>
March 31, 2003 0.25%
June 30, 2003 0.25%
September 30, 2003 0.25%
December 31, 2003 0.25%
March 31, 2004 2.25%
June 30, 2004 2.25%
September 30, 2004 2.25%
December 31, 2004 2.25%
March 31, 2005 22.50%
June 30, 2005 22.50%
September 30, 2005 22.50%
Maturity Date 22.50%
</TABLE>
2.5 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the principal amount of the Loans of such Lender in installments
according to the amortization schedule set forth in Section 2.4 (or on such
earlier date on which the Loans become due and payable pursuant to Section 7).
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.12.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall maintain
the Register pursuant to Section 9.6(d), and a subaccount therein for each
Lender, in which shall be recorded (i) the amount of each Loan made hereunder
and any Note evidencing such Loan, the Type of such Loan and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
<PAGE>
30
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.5(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower and the payments by the Borrower therein recorded;
provided, however, that the failure of any Lender or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance with the
terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will promptly execute and deliver to such
Lender a promissory note substantially in the form of Exhibit F (a "Note") with
appropriate insertions as to date and principal amount; provided, that delivery
of Notes shall not be a condition precedent to the occurrence of the Closing
Date or the making of the Loans on the Closing Date.
2.6 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee for the
period from and including October 15, 2000 to the Closing Date, computed at the
Commitment Fee Rate on the Commitments of such Lender, payable quarterly in
arrears on the last day of each March, June, September and December and on the
date of expiration or termination of the Commitments, commencing on the first of
such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates from time to time agreed to in writing by the
Borrower and the Administrative Agent.
2.7 Termination or Reduction of Commitments. The Borrower shall have
the right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate any of the Commitments or, from time to time, to reduce the
amount of any of the Commitments. Any such reduction shall be in an amount equal
to $1,000,000, or a whole multiple thereof, and shall reduce permanently the
applicable Commitments then in effect.
2.8 Optional Prepayments. (a) The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty
(except as otherwise provided in this Section 2.8 and in Section 2.18), upon
irrevocable notice delivered to the Administrative Agent at least three Business
Days prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of Base Rate Loans, which notice shall specify the
date and amount of such prepayment, and whether such prepayment is of Eurodollar
Loans or Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on any
day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.18. Upon receipt
of any such notice the Administrative Agent shall promptly notify each Lender
thereof. If any such notice is given, the amount specified in such
<PAGE>
31
notice shall be due and payable on the date specified therein, together with
accrued interest to such date on the amount prepaid. Partial prepayments shall
be in an aggregate principal amount of $1,000,000 or a whole multiple thereof.
(b) Each optional prepayment in respect of the Loans on or prior to the
third anniversary of the Closing Date shall be accompanied by a prepayment
premium equal to (i) if such prepayment is made on or prior to the first
anniversary of the Closing Date, 5% of the principal amount of such prepayment,
(ii) if such prepayment is made after the first anniversary of the Closing Date
and on or prior to the second anniversary of the Closing Date, 3% of the
principal amount of such prepayment and (iii) if such prepayment is made after
the second anniversary of the Closing Date and on or prior to the third
anniversary of the Closing Date, 1% of the principal amount of such prepayment.
Any prepayment of the Loans upon the refinancing thereof (whether with proceeds
of equity or Indebtedness) or upon the occurrence of a Change of Control shall
be deemed to be an optional prepayment; provided, however, that the prepayment
premium applicable to any prepayment of the Loans upon the occurrence of a
Change of Control shall, notwithstanding the foregoing, be equal to 1% of the
principal amount of such prepayment.
2.9 Mandatory Prepayments. (a) If any Indebtedness shall be incurred by
the Borrower or any of its Subsidiaries (excluding any Indebtedness incurred in
accordance with Section 6.2 as in effect on the date of this Agreement), then,
on the date of such incurrence, the Loans shall be prepaid, and/or the
Commitments shall be reduced, by an amount equal to the amount of such Net Cash
Proceeds. The provisions of this Section do not constitute a consent to the
incurrence of any Indebtedness by the Borrower or any of its Subsidiaries.
(b) If on any date the Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof, on the date of
receipt by the Borrower or such Subsidiary of such Net Cash Proceeds, the Loans
shall be prepaid, and/or the Commitments shall be reduced, by an amount equal to
the amount of such Net Cash Proceeds; provided, that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales and Recovery
Events (other than Recovery Events arising from satellite or launch failures)
that may be excluded from the foregoing requirement pursuant to a Reinvestment
Notice shall not exceed $5,000,000 at any one time outstanding and (ii) on each
Reinvestment Prepayment Date the Loans shall be prepaid, and/or the Commitments
shall be reduced, by an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event. The provisions of this Section do
not constitute a consent to the consummation of any Disposition not permitted by
Section 6.5.
(c) If, for any fiscal year of the Borrower commencing with the fiscal
year ending December 31, 2002, there shall be Excess Cash Flow, then, on the
relevant Excess Cash Flow Application Date, the Loans shall be prepaid, and/or
the Commitments shall be reduced, by an amount equal to 50% of such Excess Cash
Flow.
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Each such prepayment and commitment reduction shall be made on a date (an
"Excess Cash Flow Application Date") no later than five days after the earlier
of (i) the date on which the financial statements of the Borrower referred to in
Section 5.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
2.10 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that if a Eurodollar Loan is converted on any day other
than the last day of the Interest Period applicable thereto, the Borrower shall
also pay any amounts owing pursuant to Section 2.18. The Borrower may elect from
time to time to convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least three Business Days' prior irrevocable notice of
such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no Base Rate Loan may be converted into a
Eurodollar Loan (i) when any Event of Default has occurred and is continuing and
the Administrative Agent has, or the Required Lenders have, determined in its or
their sole discretion not to permit such conversions or (ii) after the date that
is one month prior to the Maturity Date. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.
(b) Subject to Section 2.14, the Borrower may elect to continue any
Eurodollar Loan as such upon the expiration of the then current Interest Period
with respect thereto by giving irrevocable notice to the Administrative Agent,
in accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loans, provided that no Eurodollar Loan may be continued as such (i)
when any Event of Default has occurred and is continuing and the Administrative
Agent has, or the Required Lenders have, determined in its or their sole
discretion not to permit such continuations or (ii) after the date that is one
month prior to the Maturity Date, and provided, further, that if the Borrower
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso, such
Loans shall be converted automatically to Base Rate Loans on the last day of
such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.
2.11 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal
to $5,000,000 or a whole multiple of $500,000 in excess thereof and (b) no more
than five Eurodollar Tranches shall be outstanding at any one time.
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2.12 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day on which it is
outstanding at a rate per annum equal to the Base Rate in effect for such day
plus the Applicable Margin in effect for such day.
(c) (i) If all or a portion of the principal amount of any Loan shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), all outstanding Loans (whether or not overdue) (to the extent
legally permitted) shall bear interest at a rate per annum that is equal to the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section plus 2%, and (ii) if all or a portion of any interest
payable on any Loan or any fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to Base Rate Loans plus 2%, in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.
2.13 Computation of Interest and Fees. (a) Interest and fees, payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to Base Rate Loans on which
interest is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.12(a).
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2.14 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the last day of the then current Interest Period with
respect thereto, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent (or the Required Lenders, as the case may be, which they
agree to do as soon as circumstances allow), no further Eurodollar Loans shall
be made or continued as such, nor shall the Borrower have the right to convert
Loans to Eurodollar Loans.
2.15 Pro Rata Treatment and Payments. (a) The borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee, and any reduction of the Commitments of the Lenders, shall be
made pro rata according to the respective Loan Percentages of the Lenders. Each
payment in respect of principal or interest in respect of the Loans and each
payment in respect of fees payable hereunder shall be applied to the amounts of
such obligations owing to the Lenders pro rata according to the respective
amounts then due and owing to the Lenders. Each principal prepayment of the
Loans shall be allocated among the Lenders pro rata based on the principal
amount of Loans held by such Lenders and shall be applied to the installments of
such Loans pro rata based on the remaining outstanding principal amount of such
installments. Amounts prepaid on account of the Loans may not be reborrowed.
(b) The application of any payment of Loans (including optional and
mandatory prepayments) shall be made, first, to Base Rate Loans and, second, to
Eurodollar Loans. Each payment of the Loans shall be accompanied by accrued
interest to the date of such payment on the amount paid.
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made
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without setoff or counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the Administrative Agent, for the account
of the Lenders, at the Payment Office, in Dollars and in immediately available
funds. Any payment made by the Borrower after 12:00 Noon, New York City time, on
any Business Day shall be deemed to have been made on the next following
Business Day. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(d) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon |
